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2016 (8) TMI 391 - CALCUTTA HIGH COURT

2016 (8) TMI 391 - CALCUTTA HIGH COURT - TMI - Restoration of company name struck off - Held that:- A company, or any member or creditor as felt aggrieved by the Company having been struck off the Register, the Court might, on an application made by the Company, member or creditor, before expiry of 20 years from the date of publication in the official Gazette of the notice of striking off, the Court might pass orders and/or directions for placing the Company in the same position as nearly as may .....

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ster, the Court could not have been satisfied that the Company was carrying on business or was in operation. The directors including the applicant under Section 560(6) had asserted to the contrary. The Order dated 13th November, 2014 does not disclose the reasons for arriving at the finding that it was just that the Company be restored to the Register. In any case, an application could have been filed under Section 560(6) only if a Company, or any member or creditor felt aggrieved by the Company .....

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ustice INDIRA BANERJEE And Justice SAHIDULLAH MUNSHI For the Appellant : Mr. Ratnanko Banerjee, Sr. Adv., Mr. Kuldeep Mullick, Adv., Mr. Chhandak Dutta, Adv. For the Respondent : Mr. S. N. Mookherjee, Sr. Adv., Mr. Nikhil Jhunjhunwala, Adv., Mr. V.V.V. Sastry, Adv., Mr. Sayantan Basu, Adv. JUDGEMENT INDIRA BANERJEE, J.: This appeal is against an Order dated 21st July, 2015 passed by the learned Company Court, recalling an earlier order dated 13th November 2014, passed on a petition under Section .....

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vestments made by Meghdoot had ceased to have any value, and were written off by the directors of Meghdoot. On the basis of the said application, the name of Meghdoot was struck off from the Register of Companies. According to the appellants, the value of investments written off by the Directors of Meghdoot rose and the economic position of the company changed subsequently. However, by that time the name of Meghdoot had already been struck out. Viswanath Agarwal, an erstwhile Director of Meghdoo .....

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restore the name of the company in the Register, in the list of Active Companies, within a fortnight from date, subject to the company paying ₹ 90,000/- to the Registrar of Companies, West Bengal. From the said Order dated 13th November 2014, it appears that the attention of the learned Company Court was not drawn to the fact that the name of Meghdoot had been struck off from the Register, on the application of the directors of Meghdoot, including Viswanath Agarwal, who had filed the appl .....

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the company, Abha Devi Agarwal and Ishan Agarwal had affirmed an affidavit and furnished an indemnity bond along with the application for striking off the name of the company, wherein they had categorically asserted that the company had no assets and no liabilities. Further, in the affidavit and in the indemnity bond, it had also been clearly mentioned that the company had been inoperative for the last one year and did not intend to do any business or commercial activity in future. By the Order .....

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e Order dated 13th November 2014, the learned Company Court accepted the grounds of objection to the application under Section 560(6) filed by Viswanath Agarwal, and in particular, the ground that the applicant, Viswanath Agarwal was neither a shareholder nor a creditor of the Company. The learned Company Court found, in effect, that Calcutta Investment Ltd. being a shareholder of Meghdoot who had accepted the name of Meghdoot being struck off, Calcutta Investment ought to have been given notice .....

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accept that a Company whose name had been struck off on its own invitation, 6 or 7 years ago, should be permitted to apply under the said provision for the striking off to be undone. In such a situation, only a creditor or a shareholder of the Company could have applied, provided ofcourse the application was made within 20 years from the date on which the Company s name had been struck off. The learned Company Court rightly took note of the fact that the petition under Section 560(6) had not be .....

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en recalled by the order under appeal. Mr. Banerjee referred to Basanti Cotton Mills (1998) P. Ltd. and Ors. Vs. Nirendranath Kar and Anr. reported in [2012] 175 Comp Cas 462 (Cal) where a Division Bench held that an order of the Single Bench under Section 560 of the Companies Act, 1956 would be appealable under Clause 15 of the Letters Patent, if it was a final order deciding a controversy or deciding any right of a party. In support of his submission, Mr. Banerjee cited Shah Babulal Khimji Vs. .....

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rwal and Viswanath Agarwal had resigned from the company and Arvind Parasramka being the appellant No. 2, Mrs. Shabana Khatoon and Mrs. Gita Prasad had become directors of the Company. Mr. Banerjee submitted that new persons had come into the management of the company and shares of the company had been transacted for valuable consideration. The company was functional doing business in compliance with all regulatory requirements. Steps had also been taken for filing Income Tax Returns which were .....

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bmitted that the company had instituted proceedings before the Company Law Board, Calcutta and filed complaints before the Income Tax Department, Police Authorities and Serious Fraud Investigation Office (SFIO) against the misdeeds of the persons controlling Calcutta Investment, being the respondent No. 2. The application of Calcutta Investment for recalling the order dated 13th November, 2011 was by way of a counter blast. Mr. Banerjee argued that the application for restoration had been made b .....

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rn before an Executive Magistrate, to the effect that the company had not carried on any business and had no assets or liabilities. Mr. Banerjee argued that, after the Company had been struck off, there could be no question of existence of the company or its directors. The same director who had applied under the Exit Scheme, applied for restoration of the name of the Company, within the period provided under Section 560(6) of the Companies Act. Section 560(6) of the Companies Act does not howeve .....

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earlier written off, had appreciated and could now be in the market at good price, which would be in the interest of all stake holders. Mr. Banerjee argued that, in the application under Section 560(6), it was also pleaded that there had not been any change in management after the date on which the name of the company was struck off. The assertion is irrelevant since there could be no question of change in management when there was no existence of the Company. It was also pleaded that the Direct .....

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r the directors of the company to take steps for filing any e -Form with the Registrar of Companies for their resignation or of cooperating with the company to ensure that the company became active. Documents like Annual Returns and Balance Sheets of the year ending 31st March, 2006 and subsequent years could not be filed with the Office of the Registrar of Companies as the status of the company had been struck off. There was no company in existence. Mr. Banerjee argued that notice had not been .....

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n application under Section 560(6) of the Companies Act, 1956. Section 560(6) does not require any notice to shareholders. Mr. Banerjee argued that the learned Company Court had gone beyond the scope and ambit of Section 560(6) of the Companies Act, 1956. The impugned order was therefore without jurisdiction and perverse. In Dasaprakash P. Ltd. Vs. Registrar of Companies reported in [2012] 175 Comp Cas 248 (Mad), a Single Bench of the Madras High Court held that a company voluntarily striking of .....

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gh Court was contrary to the judgment of other High Courts and in particular the unreported judgment of the Karnataka High Court dated 8th February, 2013 in the case of Sri Mukambika Agricultural Estates and Forest Industries Pvt. Ltd. The Karnataka High Court did not consider the question of whether a company voluntarily applying for striking off its name from the Register of Companies under a fast track scheme could be said to be aggrieved by the removal of its name from the Register of Compan .....

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t holds 9% shareholding in Meghdoot Services Limited. It cannot therefore be affected by the order of restoration of the company. Mr. Banerjee has attributed malafide motive to the applicant, Calcutta Investment, contending that it suffered no legal grievance. In support of his contention that Calcutta Investment was not an aggrieved party, Mr. Banerjee cited Re : Sidebotham (XIV ChD 458). Mr. Banerjee also cited Thammanna Vs. K. Veera Reddy & Ors. reported in (1980) 4 SCC 62. The propositio .....

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ated 13th November, 2014. Calcutta Investment cannot be termed as an aggrieved party. Mr. Banerjee argued that Calcutta Investment had come to Court with unclean hands. Mr. Banerjee submitted that the application for recalling of the Order dated 13th November, 2014 was a counterblast to the pending company petition before the Company Law Board and a mischievous attempt to prevent the Company Law Board from making an enquiry into the serious management oppression and criminal acts by persons in t .....

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, 1956 could not have been bypassed to take the benefit of the Simplified Exit Scheme to strike itself off. Mr. Banerjee finally argued that the definition of Company under Section 560(6) would have to be given a wider meaning to include directors who were directors at the time of the company being struck off. Mr. S. N. Mukherjee, appearing on behalf of the respondent No. 2 submitted and rightly that the restoration Order dated 13th November, 2014 had adversely affected the respondent No. 2 in t .....

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by the company having been struck off the register, the Court, on an application made by the company, member or creditor before the expiry of twenty years from the publication in the Official Gazette of the notice aforesaid, may, if satisfied that the company was, at the time of the striking off, carrying on business or in operation or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register; and the Court may, by the o .....

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