The main legal point established in the judgment is that the action of striking off the name of a company from the register under the Companies Act is not conclusive, and creditors have the right to seek restoration of the name of the company in the register if they can demonstrate that the striking off was done to thwart their claims.

R.V. EASWAR, J.

The prayer in this company petition is that the order and the notification striking off the name of respondent No.2-company declaring it as defunct company be set aside and the name of the company be restored and also that investigation be ordered into the affairs of the said company.

2. The petition has been filed under the following circumstances. The respondent No.2 i.e. M/s Nicholson Export and Import Pvt. Ltd. was incorporated on 7.3.1997. The registered office of the company was in Delhi. The directors of the company made an application under Section 560(1) of the Companies Act, 1956 (‘Act’) to the Registrar of Companies under the Easy Exit Scheme, 2011 for striking off the name of the company from the register of companies. The prescribed forms were also filed. The Registrar of Companies by gazette notification dated 6.8.2011 struck off the name of the company under the provisions of section 560(1) of the Act.

3. The petitioner company had lent a sum of Rs.14.80 lakhs in two installments of Rs.5 lakhs and 9 lakhs to the respondent-company in the years 2003 and 2004. These amounts were given by cheques drawn on the Punjab National Bank. It is not in dispute that the cheques were deposited with the bank and were encashed. According to the learned counsel for the petitioner, the Registrar of Companies appears to have issued the gazette notification striking off the name of the respondent company without examining whether the request of the company to strike off its name from the register was made bona fide and after repaying all the debts due to the creditors. He contends that in the balance sheet filed by the respondent company with the ROC as on 21.4.2011, only the authorised capital of Rs.1 lakh is shown on the liabilities side and an identical amount is shown as debit balance in the profit and loss account in the asset side, and that the amount advanced by the petitioner company is not reflected. It is alleged that the directors of the respondent-company have played a fraud on the petitioner-company by frittering away the funds belonging to the petitioner-company and got its name struck off from the register of companies so as to prevent the petitioner-company from taking any action against it. It is on the basis of these contentions that the prayer referred to earlier has been made in the application.

4. Mr. K.S. Pradhan, Deputy Registrar of Companies submits that the action of the ROC is well within the provisions of the Easy Exit Scheme, 2011 under which the ROC is not obliged to go beyond the documents such as the application, statement of accounts, affidavit and indemnity bond submitted by the company which desires its names to be struck off and there is no scope at that stage for a deeper examination into the same. He however, does not dispute that if any fraud or malpractice has been adopted in resorting to the provisions relating to the striking off of the companies’ name as if the provision of Section 560 have been resorted to for thwarting the claims of any creditor, has the power to give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off, by virtue of the provisions of section 560(6) of the Companies Act.

5. On a careful consideration of the matter I am of the view that the petitioner-company has made out a case for the invocation of the powers of this Court under sub-section (6) of section 560 of the Companies Act. The amount of Rs.14.80 lakhs was undisputedly advanced by the petitioner-company as loan to the respondent-company. The loan has not been repaid. It was not also disclosed in the balance sheet filed with the ROC. At the stage of examining the application for striking off the name, the ROC adopts a summary procedure and if the necessary documents furnished, he may strike off the name of the company from the register. But that does no