M/S Santaclaus Toys Pvt. Ltd. vs Registrar Of Companies
2010 Latest Caselaw 876 Del

                 IN THE HIGH COURT OF DELHI AT NEW DELHI

                           COMPANY JURISDICTION

                     COMPANY PETITION NO. 271 OF 2009

                                        Reserved On : February 03, 2010
                                   Date of Judgment : February 16, 2010


M/s Santaclaus Toys Pvt. Ltd.                     .............Petitioner
                 Through Mr. Ravi Gupta, Sr. Advocate with
                 Ms. Pushp Gupta, Advocate

                                   Versus

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

1. This petition has been filed under Section 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.

2. M/s Santaclaus Toys Pvt. Ltd. was incorporated under the

Companies Act, 1956, on 26th December, 1996, as a private limited

company with the Registrar of Companies, NCT of Delhi and Haryana.

It is stated to have carried on the business of manufacture and

distribution of toys.

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 which are required under Sections 159 and

220 of the Companies Act, 1956, namely, failure to file balance-sheets

for the period 31.03.2001 to 31.03.2009 and failure to file annual

returns for the period 30.09.2001 to 30.09.2009.

4. The respondent had initiated proceedings under Section

560 of the Companies Act, 1956, for the purpose of striking the name

of the company off the Register maintained by the respondent. It is

stated by counsel for the respondent that the procedure prescribed

under Section 560 of the Companies Act, 1956 was followed. It is

further stated that notices as required under Sections 560(1), 560(2),

560(3) and ultimately, under Section 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. 9890.

5. The petitioner claims to have been active since

incorporation, and that it has also been maintaining all the requisite

documentation, as per the provisions of the Companies Act, 1956. To

demonstrate that the company was never defunct or wound up, copies

of the audited balance sheets; trading and profit and loss accounts for

the year ending 31.03.2008; copies of the acknowledgement of

income tax returns for the assessment year 2008-09, and copies of

the provisional receipt of e-TDS statements in respect of the

assessment year 2008-09 have been annexed to this petition.

6. It is the petitioner's case 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.

7. The petitioner avers that the compliance related work of

the company was looked after by Shri Neeraj Dhamija, the Director of

the petitioner company, and that the company duly complied with the

statutory requirement of returns being filed with the office of the

Registrar of Companies till the financial year 1999-2000. It is

submitted that after that, due to the illness of Shri Dhamija's wife, the

secretarial department of the petitioner company was entrusted with

the work related to filing forms and returns with the office of the

Registrar of Companies, but that the department failed to do so,

because of the non-availability of a person having the required skills

for the same. It is further submitted that it was only in 2008 that the

fact of non-filing of the returns and other documents with the

Registrar of Companies, 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.

8. 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 from 30.09.2001

to 30.09.2009 and balance sheets for the period 31.03.2001 to

31.03.2009, along with the filing and additional fee, as applicable on

the date of actual filing through the e-filing system. Although the

certificates of 'No Objection' of the Directors, as prayed for by the

respondent, are not on record, the petitioner states in its rejoinder

that there is no objection from the other Directors to the present

petition filed by the Managing Director, Shri Neeraj Dhamija, as the

same was filed with their consent.

9. In Purushottamdas & Anr. (Bulakidas Mohta Co. P.

Ltd. vs. Registrar of Companies (1986) 60 Company Cases 154

(Bom.), the Bombay High Court, has held as follows:-

"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.

10. 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, this petition

deserves to be allowed. However, a greater degree of care was

certainly required from the petitioner company in ensuring statutory

compliances. Looking to the fact that the returns have not been filed

for a period of almost 8 years, to my mind, this is not merely a case of

mistake on the part of the secretarial department of the petitioner

company, who are its employees. The primary responsibility for

ensuring that proper returns and other statutory documents are filed,

in terms of the statute and the rules, remains that of the

management. 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. The facts and circumstances of this case show that this is

not merely a case where the interests of justice and requirements of

the Statute would be met merely by payment of the costs of the

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

company kept functioning for 8 long years along with a properly

staffed secretarial department but the Director was so pre-occupied

with his wife's illness for 8 years continuously that he was unable to

spare even a minute or two to inquire from his staff as to whether the

annual statutory returns were being filed. It is also equally

improbable that the continuing illness, described as "kidney

problems", of the Director's wife, precluded the staff of the company

from informing Mr. Neeraj Dhamija or even any of the other Directors

of the fact that statutory returns mandated under the Companies Act

are not being filed. The whole thing 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 with the Registrar of

Companies had also made it impossible for interested parties to find

out the current financial health of the company over a span of 8 years.

12. For all these reasons, the restoration of the company'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, and subject to the completion of all

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

which are leviable by the Registrar of Companies for the late deposit

of statutory documents. The impugned order for striking off the name

of the petitioner company shall then stand set aside. The name of the

petitioner company, its Directors and members shall, 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 Section 560(6) of the Companies Act, 1956.

13. The petition is disposed of.

SUDERSHAN KUMAR MISRA, J.

New Delhi February 16, 2010