Judgment:
Ramesh Kumar Datta, J.
1. Heard learned Counsel for the petitioner and learned Central Government Counsel for the Registrar of Companies.
2. The petitioner-Company has approached this Court for restoring its name on the Register of Companies by setting aside the order dated 31.7.2007 passed by the Registrar of Companies, Bihar and Jharkhand published in the Gazette of India dated 18.8.2007 by which he has struck off the name of the Company from the Register of Companies in exercise of power under Section 560(5) of the Companies Act.
3. The brief facts of the present matter are that the Company was incorporated on 14.8.1975. The Company constructed a cold storage on freehold land of about 0.71 acres at Churamanpur, Buxar and started the business of cold storage and other allied businesses. For carrying on its business activities it had obtained secured loans from the Bihar State Financial Corporation and from the Central Bank of India, Buxar towards working capital. For several reasons when the Company started making heavy losses the Directors decided to temporarily suspend its business activities. Thereafter they took steps to liquidate the dues of the secured creditors with a view to restart the business activities afresh. With the said intention an amount of Rs. 22.69 lacs was paid to the Central Bank of India in a compromise decree in 2002 out of the funds provided by the Directors who were guarantors of the secured loans. Similarly an amount of Rs. 9.82 lacs was paid to the B.S.F.C. in terms of the O.T.S. Scheme, 2006 in full and final settlement of its dues out of the funds provided by the Directors who were creditors of the said Company. No dues certificates were issued by both the Bank and the B.S.F.C. Thereafter steps were taken to file all the pending returns right from the year 1988 and the same was done through refilling for which challans were admittedly deposited from 22.2.2007 to 28.2.2007.
4. In the meantime the Registrar of Companies issued a letter dated 27.11.2006 under Section 560(1) of the Companies Act which was followed up by the notice dated 5.1.2007 under Section 560(2) of the Act. Thereafter a notice dated 6.7.2007 under Section 560(3) of the Act was also sent to the Company giving reference to the earlier two notices stating that it was deemed to be a defunct Company and hence action under Section 560(5) of the Act shall be taken against it in accordance with the provisions of the Act. Ultimately by the impugned Gazette Notification the name of the Company has been struck off from the Register of Companies.
5. It is evident from the notice dated 6.7.2007 purporting to be a notice under Section 560(3) of the Companies Act that the ground for issuing the same was that the Company had not filed its statutory returns for more than last three years. However, on the own admission of the Registrar of Companies the Company had filed up to date returns through e-filing in the month of February, 2007 itself during the period 22.2.2007 to 28.2.2007 and thus the ground set forth in the notice was non-existent.
6. It is further evident that the said notice did not comply with the mandatory provisions of Section 560(3) of the Companies Act. Sub-sections (3) & (5) of Section 560 of the Companies Act are quoted below:
Section 560(3) If the Registrar either receives an answer from the company to the effect that it is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Official Gazette, and send to the company by registered post, a notice that, at the expiration of three months from the date of that notice, the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved.
(5) At the expiry of the time mentioned in the notice referred to in Sub-section (3) or (4), the Registrar may, unless cause to the contrary is previously shown by the company, strike its name off the register, and shall publish notice thereof in the Official Gazette; and on the publication in the Official Gazette of this notice, the company shall stand dissolved : Provided that-
(a) the liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company, shall continue and may be enforced as if the company had not been dissolved; and
(b) nothing in this Sub-section shall effect the power of the Court to wind up a company the name of which has been struck off the register.
7. From a perusal of the said Section it is evident that a notice under Sub-section (3) of Section 560 of the Act has to be published in the Official Gazette and further a notice has to be sent to the Company by registered post that at the expiration of three months from company mentioned therein will, unless cause is shown to the contrary, be struck off from the register of Companies and the company will stand dissolved. There is no such averment in the counter affidavit or in the supplementary counter affidavit filed on behalf of the Registrar of Companies that a notice under Sub-section (3) of Section 560 of the Act was ever published in the Official Gazette. In fact, this Court had specifically granted time to learned Counsel for the Registrar of Companies to state the said fact on affidavit. All that is shown is a notice dated 6.7.2007 which does not mention the fact that within three months of the same cause is to be shown to the contrary. As a matter of fact, the Registrar of Companies did not even wait for the statutory three months period before passing the order, rather the final order in the matter was passed on 31.7.2007 itself striking off the name of the Company from the register of Companies which was published in the Gazette of India dated 18.8.2007. Even the gazette publication is within a month and 12 days of the notice dated 6.7.2007 and thus there has been complete violation of the provisions of Sub-section (3) of Section 560 of the Act. Apart from the same the fact that up to date statutory returns had already been filed in the month of February, 2007 itself has not been taken note of by the Registrar of Companies and thus he has issued the notice under Sub-section (3) of Section 560 of the Act which is contrary to the records available with him at the relevant time.
8. In the above circumstances, the impugned order dated 31.7.2007 contained in the Gazette of India dated 18.8.2007 is non est, illegal and void ab initio which cannot stand and it is, accordingly, quashed. The name of the Company shall thus stand restored to the Register of Companies as though it had never been struck off from the same.