Signal Communications & Mktg. (P) Ltd v. Registrar Of Companies, Kerala & Laks
2010-03-23
THOTTATHIL B.RADHAKRISHNAN
body2010
DigiLaw.ai
JUDGMENT 1. This review petition is filed by a company, which filed an application seeking a direction to the Registrar of Companies to restore its name in the register of companies. Allowing that application, an order of cost of `50,000/- was imposed, payable to the funds of the Union of India. This RP is only as regards the order for costs. 2. Heard. 3. The plea raised in support of the RP are two. Firstly, according to the petitioner, unless there are special reasons, the Court cannot direct payment of costs in excess of the costs envisaged in Rule 94 of the Companies (Court) Rules, 1959 (for short, "the Rules"). Secondly, the Company has 20 years to file such an application under Section 560(6) of the Companies Act, 1956, "the Act", for brevity which, according to the petitioner, is an indication that no costs in excess of that provided under Rule 94 is contemplated by the Act and the Rules. 4. Rule 94 of the Rules reads as follows:- "94. Registrar's costs of petition - Unless for any special reasons the Court shall otherwise order, the order shall direct that the petitioners do pay to the Registrar of Companies his costs of, and occasioned by, the petition." All that the aforesaid Rule means is that the Registrar of Companies is entitled to his costs of, and occasioned by, the petition for restoration of the name of a company to the Register of Companies. The Court shall direct the petitioner to pay such costs. This is the norm. A deviation from that, that is to say, a situation where the ROC is to be refused payment of such costs, can be obtained only by the Court ordering otherwise. Such an order should be supported by special reasons. Therefore, if the Court finds special reasons, it may direct that the Registrar's costs of the petition in terms of Rule 94 need not be paid by the petitioners. That Rule does not in any manner curb the power of the Court to impose an order for costs, in excess of the amount that would be otherwise payable as costs under Rule 94 of the Rules. 5.
That Rule does not in any manner curb the power of the Court to impose an order for costs, in excess of the amount that would be otherwise payable as costs under Rule 94 of the Rules. 5. Turning to the argument based on Section 560(6) of the Act, the prescription of an outer limit of 20 years for an application to restore a Company's name in the Register does not mean that an order of costs has to depend exclusively on the question whether the application was filed within a particular time frame. Imposition of an order for costs is part of judicial discretion. It has to be made depending on the facts of the given case. Any prescription as to a period of limitation for filing an application is not, by itself, decisive as to the nature of an order for costs that may be ultimately ordered by a Court in a judicial proceeding. Adverting to the order sought to be reviewed, it can be seen that specific reasons are stated for the order for costs that was imposed as per that order. That is discernible from the entire facts as noted in the judgment dated 11-12-2008, which is sought to be reviewed. It is apposite to quote the salient features of the facts from that order. It reads as follows:- "Following incorporation on 18-05-1999, going by the counter affidavit of the respondent ROC, the company did not file any returns. With an initial authorised capital of `5 lacs and paid up capital of `20,000/-, the authorised capital was, thereafter, increased to `10 lacs. The balance sheet as on 31-03-2006 would show current assets at `1,71,483-04 and current liability as `61,065.84. The ROC has submitted that the petitioner company failed to file its balance sheet and annual return from its incorporation in 1999 till 2006 and it was therefore that the company was identified as potentially defunct and hence, the provisions of section 560 were initiated and its name struck off from the register after following due procedure including publication in the Gazette. So much so, the action of the ROC in having struck off the name of the company from the register cannot be found fault with.
So much so, the action of the ROC in having struck off the name of the company from the register cannot be found fault with. The procedure prescribed under section 560 has been duly followed." Hence, it was held in the order as follows:- "Therefore, if the petitioner wants to restore its name in the register, as rightly pointed out by the ROC in his counter affidavit, the restoration could be had only on payment of substantial costs, particularly when the Registrar has completed the procedure by spending public funds, including for publication in the gazette etc. The situation is the making of the petitioner and the company was identified as potentially defunct, owing to non-filing of returns for about six years." It was accordingly that the application for direction to restore the name of the company in the Register was allowed in the following terms:- "In the said circumstances, it is ordered that the ROC will restore the name of the petitioner company in the register of companies on condition that the petitioner pays an amount of `50,000/- as costs to the funds of the Union of India including the ROC." So much so, the order for costs was imposed applying identified norms and on principles stated in that order. That does not merit interference in review. 6. With the aforesaid, there is no error apparent on the face of the record or any other ground to review the order sought to be reviewed. Review petition fails and it is dismissed. No costs.