Delhi High Court
Indian Explosives Ltd. vs Registrar Of Companies on 21 April, 2010
Author: Sudershan Kumar Misra
IN THE HIGH COURT OF DELHI AT NEW DELHI
COMPANY JURISDICTION
COMPANY PETITION NO. 185 OF 2008
Date of Decision: 21-04-2010
In the matter of:-
Indian Explosives Ltd. .........Petitioner
Through : Ms. Sriparna Chatterjee & Mr.
Soumitra Chatterjee, Advocates
Versus
Registrar of Companies .........Respondents
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?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
SUDERSHAN KUMAR MISRA, J. (ORAL)
1. This petition has been filed under S.560(6) of the
Companies Act, 1956, seeking restoration of the name of H.N.
Explosives Pvt. Ltd. to the Register of Companies maintained by the
Registrar of Companies.
2. H.N. Explosives Pvt. Ltd. was incorporated under the
Companies Act, 1956 on 17th April, 1989 as a private limited company
with the Registrar of Companies, NCT of Delhi and Haryana.
3. The petitioner herein is Indian Explosives Ltd, and is stated
to be a creditor of the erstwhile company H.N.Explosives Pvt. Ltd.
4. The Registrar of Companies, i.e the respondent herein,
struck the name of H.N.Explosives Pvt. Ltd. off the Register on the
ground of non-filing of returns. The requisite notification was duly
published in the Official Gazette on 23rd June, 2007 at S.No.6403.
5. It is the petitioner's case that it had acquired the business
in explosives of ICI India Ltd. in 1999. Earlier, on 29th May, 1991, ICI
India Ltd. had entered into an agreement with H.N.Explosives Pvt.
Ltd., whereby the erstwhile company was appointed the
distribution/consignment agent of ICI India Ltd. By this agreement,
H.N. Explosives Pvt. Ltd was given charge of keeping the goods of ICI
India Ltd. in its godown and, for that, it was entitled to a certain
commission. On 17th May, 1999, the petitioner company, i.e. Indian
Explosives Ltd., was incorporated and, on 29th May, 1999, became a
joint venture with ICI India Ltd. and Orica Investment Pvt. Ltd. Since
the business in explosives of ICI India Ltd. was acquired by the
petitioner company under the aforesaid joint venture, it became
entitled to claim and receive all sums due and payable by
H.N.Explosives Pvt. Ltd. to ICI India Ltd. Consequently, disputes
between the petitioner and H.N. Explosives Pvt. Ltd. were referred to
arbitration sometime in 2002, and ultimately, a sum of Rs.81,76,360/-
was awarded on 14th March, 2007 against the erstwhile H.N.
Explosives Pvt Ltd. and in favour of the petitioner.
6. It is the petitioner's case that since H.N. Explosives Pvt.
Ltd. was struck off from the Register of Companies by the respondent
on 23.06.2007, therefore, it has become impossible for the petitioner
to execute the said award against that company. This stand is also
affirmed by the respondent in reply.
7. A petition for restoration of the name of a company to the
Register of Companies under Section 560(6) of the Companies Act,
1956 can only be made by the company, a member or a creditor. A
creditor is entitled to maintain a petition for restoration only if he was
a creditor at the time the name of the company was struck off from
the Register of Companies. Here, the arbitration award in favour of the
petitioner was rendered on 14th March, 2007, i.e. before the date of
the Gazette Notification notifying that the name of H.N. Explosives Pvt.
Ltd. has been struck off the Register of Companies. It is clear that the
amount claimed by the petitioner was against an incorporated
company, which was a legal entity recognized under the Companies
Act, 1956, and the arbitration award in question was also rendered
against such a company. When H.N. Explosives Pvt. Ltd. was struck off
from the Register of Companies by the respondent, it ceased to exist.
Although, the liability of persons falling within the ambit of the first
proviso to Section 560(5), who were directors, managers, officers
exercising any power of management and members of the erstwhile
company can nevertheless be enforced; however, in this case, the
liability in terms of the award is that of the company itself and not of
any individual mentioned in Section 560(5). Consequently, under the
circumstances, the petitioner, in whose favour the award has been
rendered, is left without a remedy to effect recovery against the
erstwhile company H.N. Explosives Pvt. Ltd.
8. In Umedbhai Jhaverbhai v. Moreshwar Keshav & Ors,
AIR 1954 Madhya Bharat 146, the Madhya Pradesh High Court,
construing the corresponding provision S.247(6) the Companies Act,
1913, restored the name of a company that had been struck off from
the Register, as a suit for recovery which had been instituted before
the company's name had been struck off, was still pending. It held,
inter alia, in paragraph 8 thereof that;
"...when a suit is actually pending against a company
and is being contested by it at the time of the
removal of its name from the register, it is proper to
direct restoration of the name of the Company
particularly when the Directors were aware of the
fact of the contested litigation and were actually
taking part in it."
To my mind, the above ratio would be equally applicable to the instant
case of a company which was in existence when the arbitral award was
rendered.
9. Notice in this petition was issued to the Directors of
H.N.Explosives Pvt. Ltd., which has been duly served. However, there
is no appearance on their behalf, despite such service.
10. Seeing that this petition was moved on 14th May, 2008, i.e.
well within the stipulated period of limitation for initiation of
proceedings under S.560, Companies Act, 1956, which is twenty years
from the date of publication of the notice striking off the name of the
company from the Register, to my mind, this is a fit case for the
exercise of the powers of this Court under S.560(6) of the Companies
Act, 1956.
11. The name of the company H.N.Explosives Pvt. Ltd., its
directors and members stands restored to the Register maintained by
the Registrar of Companies, as if the name of the said company had
not been struck off, in accordance with S.560(6) of the Companies Act,
1956.
12. A certified copy of this order be delivered to the
respondent for registration within 30 days.
13. The petition is allowed on the above terms.
SUDERSHAN KUMAR MISRA, J.
APRIL 21, 2010
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