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M/S. Nash Swimming Pool Experts Private Limited, v. Union of India

Kerala HC1 Dec 2021WP(C)/14962/2021

Case brief

AI extract

What is this about?

The High Court set aside the order rejecting an appeal filed by petitioners against a penalty for delayed filing of commencement of business declaration. Relying on the Supreme Court's order extending limitation during the pandemic, the court held the appeal was within time and directed reconsideration on merits.

What did the court decide?

Set aside the rejection order (Ext.P7) and directed the 2nd respondent to reconsider the appeal filed by the petitioners on merits.

M/S. Nash Swimming Pool Experts Private Limited, Vs… — Company and Corporate | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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WEDNESDAY, THE 1^ST DAY OF DECEMBER 2021 / 10TH AGRAHAYANA, 1943

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WP(C) NO. 14962 OF 2021

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PETITIONERS:

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1 M/S. NASH SWIMMING POOL EXPERTS PRIVATE LIMITED, ISSAC ARCADE, NELLIKKUZHI P.O., KOTHAMANGALAM, ERNAKULAM 686 691, REPRESENTED BY ITS DRECTOR, SHRI. SHAMON PULLAMANGALAM YOYAKEY.

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2 SHAMON PULLAMANGALAM YOYAKEY, PULLAMANGALAM (H), NELLIKKUZHI P.O., ERAMALLOR, ERNAKULAM 686 691.

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BY ADVS. P.J.MATHEW EBIN MATHEW AKHILA SHOJI

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RESPONDENTS:

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1 UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, "A WING", SHASTRI BHAVAN, RAJENDRA PRASAD ROAD, NEW DELHI 11001. 2 THE REGIONAL DIRECTOR, SOUTHERN REGION, MINISTRY OF CORPORATE AFFAIRS, SHASTRIBHAVAN, BLOCK I, VTH FLOOR, 26, HADDOWS ROAD, CHENNAI-600006. 3 THE ADJUDICATING OFFICER, REGISTRAR OF COMPANIES KERALA AND LAKSHDWEEP, FIRST FLOOR, COMPANY LAW BHAVAN, THRIKKAKARA KOCHI, KERALA 682 021. 4 REGISTRAR OF COMPANIES KERALA AND LAKSHADWEEP, FIRST FLOOR, COMPANY LAW BHAVAN, THRIKKAKARA KOCHI, KERALA 682 021.

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R1-4 BY ADV SRI.KRISHNADAS P.NAIR, CGC SRI.S.MANU, ASGI

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.14962/2021

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JUDGMENT

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Dated this the 1^st day of December, 2021

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The petitioners have filed this writ petition aggrieved by Exts.P4 and P7 orders. The petitioners seeks to declare that the fine imposed by the 3^rd respondent-Adjudicating Officer is arbitrary and disproportionate to the gravity of the defect committed by the petitioners.

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The 1^st petitioner-Company was unable to file declaration of Commencement of Business within 180 days from the date of incorporation. Therefore, the 3^rd respondent imposed a penalty of Rs.50,000/- to the 1^st petitioner-Company and Rs.10,000/- to the 2^nd petitioner as a defaulting Officer, invoking Section 454(3) of the Companies Act, 2013, as per Ext.P4. The petitioners ought to have filed appeal against

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WP(C).No.14962/2021

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Ext.P4 order within 16 days, that is by 18.04.2020. The petitioners filed appeal only on 10.06.2021. The appeal filed by the petitioners stand rejected as per Ext.P7 communication of the 2^nd respondent. Ext.P7 states that the appeal was filed with a delay of 433 days, which is beyond the prescribed limitation period of 60 days, in terms of Section 454(6) of the Act and hence the appeal stands rejected.

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The learned counsel for the petitioners submitted that the petitioners could file Ext.P5 appeal on 10.06.2021 only due to the Covid-19 pandemic. The Hon'ble Apex Court in Re : Cognizance of Extension of Limitation, had extended the time for filing appeals from time to time. In the circumstances, Ext.P7 order cannot stand the scrutiny of law, contended the petitioners.

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The learned Central Government Counsel entered appearance and resisted the writ petition. The Central Government Counsel controverted all the material allegations contained in the writ petition. The petitioners have admittedly

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WP(C).No.14962/2021

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defaulted in filing a declaration of Commencement of Business within 180 days from the date of the incorporation. When that default is admitted, there is no reason to file any appeal against the imposition of penalty, contended the learned Central Government Counsel. On the other hand, the learned counsel for the petitioners would point out that the delay in filing the declaration of commencement of business was only by one day, for which exorbitant amount has been imposed as penalty.

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I have heard the learned counsel for the petitioners

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and the learned Central Government Counsel representing the respondents.

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From the pleadings it is evident that the period for filing Ext.P5 expired on 18.04.2020. The petitioners could file the appeal only on 10.06.2021. The learned Central Government Counsel would submit that the appeal was actually received by the respondents only on 16.06.2021. From the order In Re : Cognizance For Extension Of

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WP(C).No.14962/2021

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Limitation [2021 (5) KHC 508 (SC)] , the Hon'ble Apex Court has held that in computing the period of limitation for any suit, appeal, application or proceedings, the period from 15.03.2020 till 02.10.2021 shall stand excluded and that the balance period of limitation remaining as on 15.03.2021 shall become available with effect from 03.10.2021. The petitioners appeal is therefore within time in view of the orders passed by the Apex Court.

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Therefore, Ext.P7 order cannot stand the scrutiny of law. Ext.P7 is therefore set aside. The 2^nd respondent is consequently directed to reconsider the Ext.P5 appeal filed by the petitioners on merits.

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The writ petition is disposed of as above.

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Sd/- N. NAGARESH JUDGE

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WP(C).No.14962/2021

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APPENDIX OF WP(C) 14962/2021

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PETITIONER'S EXHIBITS:

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Exhibit P1	TRUE COPY OF	THE CERTIFICATE OF
	INCORPORATION IS RESPONDENT.	SUED BY THE IST
Exhibit P2	A TRUE COPY OF ASSOCIATION OF COMPANY.	THE MEMORANDUM OF THE IST PETITIONER
Exhibit P3	TRUE COPY OF	THE DECLARATION FOR
	COMMENCEMENT OF B NO. INC-20A ALONG	USINESS FILED IN FORM WITH THE RECEIPT.
Exhibit P4	TRUE COPY OF THE 3RD RESPONDENT 454/10A /704/2020	ORDER PASSED BY THE BEARING NO. ROC/S- DATED 19.02.2020.
Exhibit P5	TRUE COPY OF THE PETITIONERS BEFOR	APPEAL FILED BY THE E THE 2ND RESPONDENT
	DATED 10/06/20201 FORM ADJ.	IN THE PRESCRIBED
Exhibit P6	TRUE COPY OF THE IN MISCELLANEOUS IN SMW(C) NO. 3 SUPREME COURT OF I	ORDER DATED 27/04/2021 APPL. NO. 665 OF 2021 OF 2021 OF HONBLE NDIA.
Exhibit P7	SCREEN SHOT OF UPLOADED IN THE RESPONDENT.	THE REJECTION ORDER WEBSITE OF THE 2ND

M/S. Nash Swimming Pool Experts Private Limited, v. Union of India

Case brief

What is this about?

What did the court decide?

M/S. Nash Swimming Pool Experts Private Limited, v. Union of India

Case brief

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