Allowed

M/S Gerbera Trade and Investment Private Limited v. the Registrar of Companies, Maharashtra

Bombay HC13 Jun 2013CP/106/2013

Case brief

AI extract

What is this about?

The High Court allowed the PETITIONER to restore its name on the Register of Companies. Struck off under the Simplified Exit Scheme due to non-filing of returns, the company obtained shareholder resolution. The Court applied a liberal approach to restoration under Section 560(6), noting the company owns land and has pending litigation, ordering necessary compliance within stipulated timelines.

What did the court decide?

Petitioner to restore name on ROC register; submit documents, obtain DINs, and file returns within four months and eight weeks respectively; pay costs.

M/S Gerbera Trade and Investment Private Limited Vs the… — Company and Corporate | Bombay HC (2013)

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16-CP-106-13

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY PETITION NO.106 OF 2013

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M/s. Gerbera Trade & Investment Private Limited ....Petitioner. Versus The Registrar of Companies ...Respondent.

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...Respondent.

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Mr. Mayur Khandeparkar i/by Jamshed Ansari, advocates for the Petitioner.

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Mr. C.J.Joy, advocate for the respondent.

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CORAM : RANJIT MORE, J.

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DATED : June 13, 2013.

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P.C.:

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Heard the learned counsel appearing for the respective

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parties.

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2 By this company petition, petitioner-Company prays that respondent be directed to restore the name of the petitioner-Company on the record of Registrar of Companies under the provisions of Section 560(6) of the Companies Act, 1956.

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3 Petitioner-Company was incorporated as a private limited company with an authorized capital of Rs.5 lakhs on 16.8.1995. In the month of August, 2005, the scheme known as Simplified Exit Scheme (SES 2005) was introduced by the Government of India, Ministry of Corporate Affairs, New Delhi to enable defunct companies to get their names struck off from the Register of Companies under Section 560 of the Companies Act, 1956. In pursuant of this scheme, petitionerCompany applied on 31^st August, 2005 along with requisite fees. Petitioner-Company's s application was considered by the respondent's office and accordingly, name of the petitioner-Company was struck off. Notification to that effect was also published.

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4 In petition, the Petitioner-Company has made out the case that the petitioner-Company's name was struck off due to non filing of the statutory returns for the period from 2002-2003 to 2011-12. When the Petitioner-Company realized that it's name was struck off in pursuance of the application made under the said SES, 2005, Petitioner/Company filed an affidavit and all allegations made against the respondent are withdrawn. In this affidavit, manager of the petitioner-Company has stated that the company owns 14 Acres 39 R of land in Village: Shindawane,

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Taluka: Haveli, District: Pune. It is also mentioned that the petitionerCompany is indebted to one Zaveri Laser Prints Private Limited and it has an intention to pay the dues of the said company and in this regard, recovery suit is already pending in the Bombay City Civil Court.

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5 The petition was opposed by the respondent on the ground that the name of the petitioner company was struck off at its instance and, therefore, petitioner/Company is not aggrieved person within the meaning of Section 560(6) of the Companies Act, 1956. Respondent in this regard relied upon the judgment of the Madras High Court in Company Petition No.31 of 2012.

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6 Petitioner/Company thereafter has filed further affidavit. Specific averment is made in this affidavit that the Extraordinary General Meeting of the shareholders of the company was held on 7^th November, 2012 in which resolution was passed wherein the members/shareholders of the petitioner company consented for restoration/revival of the name of the petitioner/Company under Section 560(6) of the Companies Act, 1956. Said resolution is annexed along with the said affidavit.

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4 16-CP-106-13

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7 In the light of averments made in the further affidavit along with the copy of the resolution passed in Extraordinary General Meeting of the Shareholders held on 7^th November, 2012, objection of the respondent that the petition is not moved by the shareholders can not be sustained.

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8 In the aforesaid circumstances, the learned counsel for the respondent, on instructions, makes a statement that he will leave the issue of setting aside the order of striking off the name of the petitionerCompany from the Register of Companies to the discretion of the Court.

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9 Under Section 560(6) of the Companies Act, 1956, company's name can be restored to the Register of Companies on a petition being presented by the company or a member or a creditor thereof. The restoration can be done provided, the petition is filed within a period of limitation of 20 years from the publication of Notification. If the Court is satisfied that at the time of striking off Company's name, it was carrying on business or in operation, restoration can also be done for just reasons.

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10 Issue regarding the restoration of the company under Section 560(6) of the Companies Act, 1956 came up for consideration before the learned Single Judge of the Delhi High Court in Siddhant Garg & Anr.

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Versus Registrar of Companies & Ors. 187 (2012) Delhi Law Times 501. Observations made by him in paragraphs 13 to 15 and 23 are relevant for our purpose, which read as follows:

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“13 From a perusal of the said section, it is apparent that this Court on an application filed either by the company or by any shareholder or by a creditor can restore the company, provided it is carrying on business or if this Court is convinced that it is 'just' to restore the

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company

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14 Keeping in view the explicit language of Section 560(6) of the Act, this Court is of the view that it must exercise its discretion to restore a company, after looking at all the circumstances of the case. This Court is of the opinion that a petition under Section 560(6) needs to be allowed unless there are special circumstances against restoration. In fact, it should be the Court's endeavour to support revival of a company rather than otherwise. The Chancery Division (Companies Court) in Re Priceland Ltd., Waltham Forest London Borough Council v. Registrar of Companies & Ors., (1997) 1 BCLC 467 (Ch.D) has held as under:

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“.......In other words, the exercise of discretion only arises after the Court has been satisfied that (a) the company was at the time of striking off carrying on business or in operation, or (b) otherwise that it is just that the company be restored. The first of these amounts to the Court being satisfied that the registrar's reasonable beliefs which were the basis for the original order striking the company off, were not in fact correct.

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The second means that, prima facie, the Court has been persuaded that it is just to restore. In either case it seems to me that, absent special circumstances, restoration should follow. Exercising the discretion against restoration should be the exception, not the rule.” (Page 476)

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Once the Court has acquired jurisdiction on the basis that the new applicant's interests make restoration 'just' it would be harsh indeed to refuse the relief sought because some other third party may be inconvenienced by it.

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These considerations lead me to the view that the Court should be very wary of refusing restoration so as to penalize a particular

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applicant or in a possibly futile attempt to safeguard the special interests of a single or limited class of affected persons. It would need a strong case to justify a refusal on these grounds.................. (Page 477)

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(Emphasis supplied)

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15 Further in the opinion of this Court, the expression 'just' would mean that it is fair and prudent from a commercial point of view to restore the company. The Court has to examine the concept of 'justness' not exclusively from the prospective of a creditor or a shareholder or a debtor, but from the prospective of the society as a whole. Once this Court is convinced that it is just to restore the company, then to refuse the relief because some third party may be inconvenienced by it, would be harsh.

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23 As a matter of law, it cannot be said that where the company's name has been struck off on an application filed under Simplified Exit Scheme, the company can not be restored. In fact, the Madhya Pradesh High Court in VI Brij Fiscal Services P. Ltd. v. Registrar of Companies, (2010) 155 Comp. Cas. 157 (MP) has restored a company which

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had been struck off under the Simplified Exit Scheme.”

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Facts of the Siddhant Garg's case (Supra) and the facts of the present case are similar and, therefore, the above observations are squarely applicable to the present case. That apart, petitioner-Company in its affidavit has stated that it owns 14 Acres 39 R of land in Village: Shindawane, Taluka: Haveli, District: Pune. and there is one recovery suit pending against the petitioner company in the Bombay City Civil Court. It is also stated that the petitioner company sincerely wants to repay that debt.

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11 In these circumstances, in my opinion and in the interest of justice, it would be just and fair to restore the petitioner-Company's name in the register maintained by the Registrar of Companies.

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12 Petitioner-Company shall submit all the requisite documents as required within four months from today with the Office of the Registrar of Companies. The Petitioner-Company shall obtain directors identification numbers and file all statutory returns/compliances electronically within the above period.

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13 The Petitioner-Company shall make compliance of statutory provisions by filing requisite documents within a period of eight weeks from the date of receipt of this order.

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14 In case of the petitioner- Company failing to comply with the above directions, the respondent shall be at liberty to initiate fresh proceedings under Section 560 of the Companies Act, 1956, if so advised, against the petitioner-Company.

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15 Accordingly, the company petition is allowed in terms of prayer clauses (a), (b) and (c), subject to payment of cost of Rs.10,000/- to be paid to the respondent.

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(RANJIT MORE, J.)

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M/S Gerbera Trade and Investment Private Limited v. the Registrar of Companies, Maharashtra

Case brief

What is this about?

What did the court decide?

M/S Gerbera Trade and Investment Private Limited v. the Registrar of Companies, Maharashtra

Case brief

What is this about?

What did the court decide?

What the court decided

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