M/S Medtech Pharma (India) Pvt. ... vs Registrar Of Companies
2010 Latest Caselaw 2021 Del

              IN THE HIGH COURT OF DELHI AT NEW DELHI

                        COMPANY JURISDICTION

                  COMPANY PETITION NO. 241 of 2009
                                AND
                       CO. APPLN. NO.85/2010

                                             Reserved on : 22-03-2010
                                   Date of pronouncement: 19-04-2010

M/s Medtech Pharma (India) Pvt. Ltd.
                                                       ...........Petitioner
                        Through M/s       H.D.Sharma   & J.K.Sharma,
                        Advocates

                                 Versus

Registrar of Companies                       .........Respondent
                 Through Mr. V.K.Gupta, Dy. Registrar of Companies



CORAM :

       HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA

1.     Whether Reporters of local papers may be allowed to see the
       judgment? Yes
2.     To be referred to the Reporter or not? Yes
3.     Whether the judgment should be reported in the Digest? Yes


SUDERSHAN KUMAR MISRA, J.

1. This petition has been filed under S.560(6) of the

Companies Act, 1956, seeking restoration of the name of the company

on the Register of Companies maintained by the Registrar of

Companies. M/s Medtech Pharma (India) Private Ltd. was incorporated

under the Companies Act, 1956 on 17th March, 1998 vide Certificate of

Incorporation No. 55-92763 as a private limited company with the

Registrar of Companies, NCT of Delhi and Haryana.

2. The main business of the petitioner company is stated to

be of cost and freight agents with pharmaceutical companies operating

in Delhi.

3. The Registrar of Companies, i.e the respondent herein,

struck the petitioner company‟s name off the Register due to defaults

in statutory compliances, namely, annual returns for the period

30.09.2000 to 30.09.2008 and balance sheets for the period

31.03.2000 to 31.03.2008. Consequently, the Registrar of Companies

initiated proceedings under S.560 of the Companies Act, 1956, for the

purpose of striking the name of the company off the Register

maintained by the Registrar of Companies. It is stated by counsel for

the respondent that the procedure prescribed under S.560 of the

Companies Act, 1956 was followed, notices as required under

S.560(1), S.560(2), S.560(3) and, ultimately, under S.560(5) were

issued, and that the name of the petitioner company was published in

the Official Gazette on 23rd June, 2007 at S.No. 10629.

4. The petitioners state that the petitioner company has been

active since incorporation, and has also been maintaining all the

requisite documentation, as per the provisions of the Companies Act,

1956. In support of this statement, a copy of the annual return for the

year 2007-2008, a balance sheet as at 31st March, 2008, and copies of

income tax returns for the assessment years 2004-05 to 2009-10 have

been annexed to this petition.

5. It is further stated by the counsel for the petitioner that

the petitioner company did not receive any show cause notice, nor was

it afforded any opportunity of being heard before the aforesaid action

was taken by the respondent. On examination of the petition, the

annexures thereto and the respondent‟s reply, it appears the address

of the registered office of the petitioner company in the records of the

respondent is correct. In the circumstances, the petitioner is presumed

to have been served with the requisite notices under S.560 of the

Companies Act by the respondent.

6. The petitioner avers that the accounts of the petitioner

company were prepared and audited every year, and that the

company had engaged the services of an Accountant to perform the

task of filing the returns with the office of the Registrar of Companies.

It is submitted that, after incorporation, the petitioner company did

not get much business, and that there were frequent changes in the

company‟s staff, including the Accountant, and therefore, the returns

and other necessary documents were not filed with the Registrar of

Companies, even though the same had been prepared and even

signed by the Managing Director. It is further submitted that it was

only sometime in May 2009 that the fact of non-filing of the returns

and other documents with the respondent, as well as the fact that the

petitioner company‟s name had been struck off the Register

maintained by the respondent, was known to the petitioner company,

when it was left „high and dry‟ due to frequent changes in its hired

Accountant and other staff.

7. Counsel for the respondent does not have any objection to

the revival of the company, subject to the petitioner filing all

outstanding statutory documents, i.e. annual returns for the period

30.09.2000 to 30.09.2008 and balance sheets for the period

31.03.2000 to 31.03.2008, along with the filing and additional fee, as

applicable on the date of actual filing. The certificates of „No Objection‟

of the Directors, to the restoration of the name of the company to the

Register maintained by the respondent, have also been placed on

record.

8. Looking to the fact that the petitioner is a running

company, that it has filed this petition within the stipulated limitation

period, and to the decision of the Bombay High Court in

Purushottamdas & Anr (Bulakidas Mohta Co P. Ltd) v Registrar

of Companies, [1986] 60 Comp Cas 154 (Bom), in paragraph 20

thereof, wherein it has been held, inter alia, that;

"The object of section 560(6) of the Companies Act is to give a chance to the company, its members and creditors to revive the company which has been struck off by the Registrar of Companies, within a period of 20 years, and to give them an opportunity of carrying on the business only after the company judge is satisfied that such restoration is necessary in the interests of justice."

This decision has been followed by this Court in M/s

Deepsone Non-Ferrous Rolling Mills Pvt. Ltd. Vs. Registrar of

Companies, NCT of Delhi and Haryana, CP No. 285/2009; M/s

Kakku E and P Control Pvt. Ltd. & Anr. Vs. The Registrar of

Companies, NCT of Delhi and Haryana, CP No. 409/2008 and M/s

Sohal Agencies Pvt. Ltd. Vs. Registrar of Companies, NCT of

Delhi and Haryana, CP No. 297/2009.

9. To my mind, this petition deserves to be allowed, although

a greater degree of care was certainly required from the petitioner

company in ensuring statutory compliances. Looking to the fact that

annual returns and balance sheets were not filed for almost eight

years, the primary responsibility for ensuring that proper returns and

other statutory documents are filed, in terms of the statue and the

rules, remains that of the management. At the same time, since there

is the possibility of the company continuing to function, as held in

Purushottamdas & Anr (Bulakidas Mohta Co P. Ltd) v Registrar

of Companies (supra), therefore, it is only proper that the impugned

order of the respondent dated 31st May, 2007, which struck off the

petitioner‟s name from the Register of Companies, be set aside.

10. I might notice that Rule 94 of the Companies (Court)

Rules, 1959 states, inter alia, as follows;

„Unless for any special reasons that the Court shall otherwise order, the order shall direct that the petitioners do pay to the Registrar of Companies his costs of, and occasioned by, the petition.‟

11. To my mind, the expression „shall otherwise order‟ used in

Rule 94, as reproduced above, means that costs may be imposed on

the petitioning party which cover the costs of the Registrar of

Companies‟ involvement in the proceedings, but are not limited to the

same, unless the Court otherwise orders.

12. As has also been held in M/s Santaclaus Toys Pvt. Ltd v

Registrar of Companies, CP. No.271/2009, decided on 16th

February, 2010 by this Court, the facts and circumstances of this case

show that it is not merely a case where the interests of justice and

requirements of the statute would be met merely by the payment of

costs of the Registrar of Companies. It is difficult to believe that

although the petitioner company was functioning for eight years, along

with a properly staffed secretarial department, even though the same

suffered frequent changes, the management was so preoccupied with

other matters that they were unable to spare time to inquire from its

staff as to whether the annual returns and other statutory documents

were being filed. It is also equally improbable that the staff of the

company was precluded from informing the Managing Director, or

other Directors, of the fact that the statutory returns mandated under

the Companies Act are not being filed. The whole matter has obviously

been handled in a very casual manner and must be deprecated. To my

mind, such conduct does not display sound and responsible business

functioning expected of companies. The non-filing of returns and

balance sheets with the respondent had also made it impossible for

any interested party to find out about the financial health of the

company over a span of eight years.

13. For all these reasons, the restoration of the petitioner‟s

name to the Register maintained by the respondent will be subject to

the payment of Rs. 50,000/- as exemplary costs, payable to the

common pool fund of the Official Liquidator. In addition, further costs

of Rs. 11,000/- be paid to the Registrar of Companies. Costs be paid

within three weeks from today. The restoration of the petitioner‟s

name to the Register will also be subject to the completion of all

formalities, including payment of any late fee or any other charges

which are leviable by the respondent for the late deposit of statutory

documents. The impugned order dated 31st May, 2007 shall then stand

set aside. The name of the petitioner company, its directors and

members shall then, as a consequence, stand restored to the Register

of the Registrar of Companies, as if the name of the company had not

been struck off, in accordance with S.560(6) of the Companies Act,

1956.

14. Liberty is granted to the respondent to proceed with penal

action against the petitioner, if so advised, on account of the

petitioner‟s alleged default in compliance with S.162 of the Companies

Act, 1956.

15. The petition is disposed of.

SUDERSHAN KUMAR MISRA, J.

April 19, 2010