TMI Blog2021 (1) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... rt) which was filed for restoration of the name of the Company Shri Laxmi Spinners Pvt. Ltd. which Company had been struck off by the Respondent ROC after following necessary procedure under Section 248 of the Companies Act. 2. The Appeal had come up before Division Bench of this Tribunal and the Hon ble Member (Judicial) and Hon ble Member (Technical) delivered divergent Judgements on 26th November, 2020. The Hon ble Members recorded a note on same date asking Registrar to place the record before the Hon ble Acting Chairperson together with copies of the Judgements for constituting appropriate Bench/nominating Hon ble 3rd Member for rendering his opinion/decision in the Appeal. When the Registrar put up the note before the Hon ble Acting Chairperson, on the administrative side, the Hon ble Acting Chairperson on 27th November, 2020 directed that in view of split verdict, let the Appeal be placed before me for opinion. This is how the Appeal came to be placed before me on judicial side on 18th December, 2020. Respondent had not appeared and I heard learned Senior Counsel for Appellant and reserved the matter for Judgement. Before the proceedings on 18.12.2020 could be signed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2013 and the National Company Law Appellate Tribunal Rules, 2016 (NCLAT Rules, 2016) to see if there is a procedure prescribed in this context. 7. Section 419 of the Companies Act, 2013 deals with Benches as regards NCLT and Sub-Section (5) may be referred. Section 419(5) reads as under:- (5) If the Members of a Bench differ in opinion on any point or points, it shall be decided according to the majority, if there is a majority, but if the Members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President for hearing on such point or points by one or more of the other Members of the Tribunal and such points or points shall be decided according to the opinion of the majority of Members who have heard the case, including those who first heard it. Thus this Sub-Section provides (as regards NCLT) that when the Members differ, they shall state the point or points on which they differ and when the matter is referred to other Member/s, the point or points shall be decided according to the opinion of the majority. Similar provision does not appear to be there with regard to the Appellate Tribunal. 8. Sub-S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decided in accordance with the opinion of such Judges or of the majority (if any) of such Judges. (2) Where there is no such majority which concurs in a judgment varying or reversing the decree appealed from, such decree shall be confirmed: Provided that where the Bench hearing the appeal is composed of two or other even number of Judges belonging to a Court consisting of more Judges than those constituting the Bench and the Judges composing the Bench differ in opinion on a point of law, they may state the point of law upon which they differ and the appeal shall then be heard upon that point only by one or more of the other Judges, the such point shall be decided according to the opinion of the majority (if any) of the Judges who have heard the appeal including those who first heard it. (3) Nothing in this section shall be deemed to alter or otherwise affect any provision of the letters patent of any High Court. 11. Applicability of Section 98 of CPC in the context of Section 23 of the Travancore Cochin High Court Act, 1125 had come up for consideration before Constitution Bench of the Hon ble The Supreme Court of India in Civil Appeal No.201/2005 Pankajakshi and Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law, the Division Bench may order that the matter or question of law be referred to a Full Bench. Needless to say, it should be a question of law on which there is no binding precedent. 57. Under Section 23 of the Travancore-Cochin High Court Act, 1125, if the Division Bench disagrees either on law or facts, the Chief Justice is required to refer the matter or matters of disagreement for the opinion of another Judge and the case will be decided on the opinion of the majority hearing the case. 12. Thus, in the absence of specific provision, if by me Section 98(2) of CPC is to be adopted relying on principles of natural justice, then, when there is no majority in a Judgement varying or reversing the decree against which the Appeal has been filed, such decree is required to be confirmed if point of law is not the cause of difference. I have gone through the Judgements of the Hon ble Members of this Tribunal where they have recorded divergent Judgements. The difference between the Hon ble Members does not appear to be on point of law. No point of law or difference on point of law is recorded. The Hon ble Members have considered the facts involved and different views are on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have recorded my opinion on the merits of the Appeal. Opinion on merits The Appellant filed Appeal CA 6/2020 before the learned NCLT, Copy of the Appeal is at Annexure A-11 (Page 182). The Appellant claimed to be Managing Director of the Company Shri Laxmi Spinners Pvt. Ltd. The Appellant claimed that the Company was in the business of spinning, weaving and in the business of buying and selling raw or finished cotton, wool, etc. products. Appellant claimed before NCLT that the Company has fixed assets as mentioned in para 4.9. It was claimed that the Company did not file Balance Sheets and Annual Returns since incorporation (see para 4.10 of Annexure A-11) (This is not correct as according to ROC, Returns were not filed since 2015). The Appellant claimed that this happened in the absence of expert professional guidance. Appellant claimed that a Consultant was there but he did not have knowledge of Company law. Appellant claimed that the Company has no activity as of now and in any event, we should have filed the NIL Report at least . The Appellant claimed that ROC had issued Notice under Section 248(1) dated 11th May, 2018 proposing to strike off the name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the arguments for the Appellant that it was just and equitable to restore the name of the Company under Section 252(3). The learned NCLT recorded the submissions that the Company as on date was not carrying on business and was not having any production activity and there was no sales activity. Impugned Order recorded that the Appellant has only expressed that they would start business again as conditions were improving. The NCLT considered the documents filed and observed that the Income Tax Returns were filed but not the Returns required to be filed with ROC. The conclusion drawn in para 11 of the Impugned Judgement is as under:- 11. Thus, after conscientious perusal of the documents filed by the Applicant Company, this Tribunal is satisfied that the Applicant Company is not carrying on its business during the time when the Company was struck off from the Register maintained by the Respondent and also no cogent reasons or any documents are produced before this Tribunal in order to substantiate that the Company was carrying on its business or it is just to revive / restore the name of the Company to the Register as maintained by the Respondent. Thus, the Appeal came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the matter of Indian Expositions Ltd. vs. ROC Company Petition 185 of 2008 dated 21st April, 2010 passed by the Hon ble High Court of Delhi in Company jurisdiction to submit that Hon ble High Court held that when litigation was pending prior to the striking off the name of the Company, the name should be restored. The Judgement shows that, in that matter the Petitioner who moved the High Court as the Petitioner had an award in its favour but could not execute the same as the name of the Company was struck off. Reliance is also placed on the Judgement in the matter of Umed Bhai Jhaverbhai vs. Moreshwar Keshav reported in AIR 1954 MB 146. In that matter, the Applicant had money to recover from the concerned mill and Suit was pending to recover the amount when ROC struck off the Company. On the Petition of such Applicant and facts, the name was directed to be restored. Clearly, those would be persons relying on Section 252(1) of the Companies Act. The Appellant has referred to a few other Judgements of this Tribunal also in this regard. As such, I refer to the cases which are said to be basis for claim that the name requires to be restored. The written submissions filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Annual Report 2017 2018. The other earlier Returns also appear to be having similar endorsements. Thus, what is put on record is that the Company was not having any pending litigations which would impact its financial position. This being the record before me, I do not find it proper to take the bare words as recorded in the arguments filed before this Tribunal to claim that there were litigations pending and that the litigations were of such a nature that it would be just to restore the name of the Company. 22. As regards the assets, the Appellant has claimed that the Company has a property on its name and also filed a Valuation Report (Annexure A-6 colly) claiming that the market value of the property which is known as Laxmi Mills Factory Building and Guest House Building is worth more than ₹ 8 Crores. Again if the Annual Report of 2017 2018 is to be referred at Page 167, there is Balance Sheet as on 31.03.2018. In the Column of Assets, there is entry of Non-current assets . There is reference to (a) Fixed assets . Against Tangible Assets there is mention of the amount of ₹ 12,86,637/- as on 31.03.2018. The column mentions Note No.8 for particulars. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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