The Supreme Court Struck off an appeal for restoration of the company’s name as defunct cannot be maintained by one whose status as director is disputed.
The initial incorporation of the Company was in the name of Basanti Cotton Mills Private Limited with three Directors, namely Gopal N. Dave, Nikhil Basant Lal Merchant, Paresh Basant Lal Merchant and the authorized share capital of the Company was Rs.10,00,000/ divided into 1,00,000 equity shares of Rs.10 each. The name of the Basanti Cotton Mills Private Limited was changed to Basanti Cotton Mills (1998) Private Limited on 3rd March, 2000. The last annual return and audited accounts were filed with the Registrar of Companies for the financial year 2002-2003. The name of the Company in terms of Section 560 (5) of the Act, 1956 was struck off by the Registrar of Companies, West Bengal on 27th January, 2006 at the instance of the respondents (Directors of the Company).
Counsel for the respondents submitted that for all practical purposes, the name of the Company was struck off way back and the paid up share capital as per last balance sheet of 2003 is reduced to Rs.7000/ in terms of Section 3 of the Act 1956, such companies are deemed to be defunct companies and sixteen years have rolled after the date of striking off the name of the Company in the year 2006, there is hardly any justification to restore the name of the Company at this stage, particularly, when there are no operations of the said Company all throughout.
The division bench of Justice Ajay Rastogi and Justice B.V. Nagarathna observed that the Division Bench of the High Court under the impugned judgment has proceeded on the basis of the facts referred to in the affidavit in opposition filed by the RoC while recording a finding regarding the locus of the appellant in assailing the order of the Registrar striking of the name of the Company under Section 560(5) of the Act, 2003 and, at this stage, it is difficult to place reliance on the documents placed by the appellant to claim himself to be one of the Directors of the Company.
Taking into consideration the material available on record and the finding of fact which has been recorded by the Division Bench of the High Court under the judgment impugned, the court found no reason to interfere.
Case title: Nirendra Nath Kar v/s Gopal Navin Bhai Dave & Ors.
Citation: Civil appeal no(s). 4448 of 2015