CP No. 185/2008 Page 1 of 5 IN THE HIGH COURT OF DELHI AT NEW DELHI COMPANY JURISDICTION COMPANY PETITION NO. 185 OF 2008 Date of Decision: 21-04-2010 In the matter of:- Indian Explosives Ltd. ………Petitioner Through : Ms. Sriparna Chatterjee & Mr. Soumitra Chatterjee, Advocates Versus Registrar of Companies ………Respondents Through : Mr. V.K.Gupta, Dy. Registrar of Companies CORAM : HON’BLE MR. JUSTICE SUDERSHAN KUMAR MISRA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in the Digest? SUDERSHAN KUMAR MISRA, J. (ORAL) 1. This petition has been filed under S.560(6) of the Companies Act, 1956, seeking restoration of the name of H.N. Explosives Pvt. Ltd. to the Register of Companies maintained by the Registrar of Companies. CP No. 185/2008 Page 2 of 5 2. H.N. Explosives Pvt. Ltd. was incorporated under the Companies Act, 1956 on 17th April, 1989 as a private limited company with the Registrar of Companies, NCT of Delhi and Haryana. 3. The petitioner herein is Indian Explosives Ltd, and is stated to be a creditor of the erstwhile company H.N.Explosives Pvt. Ltd. 4. The Registrar of Companies, i.e the respondent herein, struck the name of H.N.Explosives Pvt. Ltd. off the Register on the ground of non-filing of returns. The requisite notification was duly published in the Official Gazette on 23rd June, 2007 at S.No.6403. 5. It is the petitioner’s case that it had acquired the business in explosives of ICI India Ltd. in 1999. Earlier, on 29th May, 1991, ICI India Ltd. had entered into an agreement with H.N.Explosives Pvt. Ltd., whereby the erstwhile company was appointed the distribution/consignment agent of ICI India Ltd. By this agreement, H.N. Explosives Pvt. Ltd was given charge of keeping the goods of ICI India Ltd. in its godown and, for that, it was entitled to a certain commission. On 17th May, 1999, the petitioner company, i.e. Indian Explosives Ltd., was incorporated and, on 29th May, 1999, became a joint venture with ICI India Ltd. and Orica Investment Pvt. Ltd. Since the business in explosives of ICI India Ltd. was acquired by the petitioner company under the aforesaid joint venture, it became entitled to claim and receive all sums due and payable by H.N.Explosives Pvt. Ltd. to ICI India Ltd. Consequently, disputes between the petitioner and H.N. Explosives Pvt. Ltd. were referred to arbitration sometime in 2002, and ultimately, a sum of Rs.81,76,360/- CP No. 185/2008 Page 3 of 5 was awarded on 14th March, 2007 against the erstwhile H.N. Explosives Pvt Ltd. and in favour of the petitioner. 6. It is the petitioner’s case that since H.N. Explosives Pvt. Ltd. was struck off from the Register of Companies by the respondent on 23.06.2007, therefore, it has become impossible for the petitioner to execute the said award against that company. This stand is also affirmed by the respondent in reply. 7. A petition for restoration of the name of a company to the Register of Companies under Section 560(6) of the Companies Act, 1956 can only be made by the company, a member or a creditor. A creditor is entitled to maintain a petition for restoration only if he was a creditor at the time the name of the company was struck off from the Register of Companies. Here, the arbitration award in favour of the petitioner was rendered on 14th March, 2007, i.e. before the date of the Gazette Notification notifying that the name of H.N. Explosives Pvt. Ltd. has been struck off the Register of Companies. It is clear that the amount claimed by the petitioner was against an incorporated company, which was a legal entity recognized under the Companies Act, 1956, and the arbitration award in question was also rendered against such a company. When H.N. Explosives Pvt. Ltd. was struck off from the Register of Companies by the respondent, it ceased to exist. Although, the liability of persons falling within the ambit of the first proviso to Section 560(5), who were directors, managers, officers exercising any power of management and members of the erstwhile company can nevertheless be enforced; however, in this case, the liability in terms of the award is that of the company itself and not of CP No. 185/2008 Page 4 of 5 any individual mentioned in Section 560(5). Consequently, under the circumstances, the petitioner, in whose favour the award has been rendered, is left without a remedy to effect recovery against the erstwhile company H.N. Explosives Pvt. Ltd. 8. In Umedbhai Jhaverbhai v. Moreshwar Keshav & Ors, AIR 1954 Madhya Bharat 146, the Madhya Pradesh High Court, construing the corresponding provision S.247(6) the Companies Act, 1913, restored the name of a company that had been struck off from the Register, as a suit for recovery which had been instituted before the company’s name had been struck off, was still pending. It held, inter alia, in paragraph 8 thereof that; “...when a suit is actually pending against a company and is being contested by it at the time of the removal of its name from the register, it is proper to direct restoration of the name of the Company particularly when the Directors were aware of the fact of the contested litigation and were actually taking part in it.” To my mind, the above ratio would be equally applicable to the instant case of a company which was in existence when the arbitral award was rendered. 9. Notice in this petition was issued to the Directors of H.N.Explosives Pvt. Ltd., which has been duly served. However, there is no appearance on their behalf, despite such service. 10. Seeing that this petition was moved on 14th May, 2008, i.e. well within the stipulated period of limitation for initiation of proceedings under S.560, Companies Act, 1956, which is twenty years from the date of publication of the notice striking off the name of the CP No. 185/2008 Page 5 of 5 company from the Register, to my mind, this is a fit case for the exercise of the powers of this Court under S.560(6) of the Companies Act, 1956. 11. The name of the company H.N.Explosives Pvt. Ltd., its directors and members stands restored to the Register maintained by the Registrar of Companies, as if the name of the said company had not been struck off, in accordance with S.560(6) of the Companies Act, 1956. 12. A certified copy of this order be delivered to the respondent for registration within 30 days. 13. The petition is allowed on the above terms. SUDERSHAN KUMAR MISRA, J. APRIL 21, 2010 rd