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2023 Supreme(Mad) 2897

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
C.SARAVANAN, J.
M/s. S.M.I.L.E. Micro Finance Ltd., Rep. by its M.D. Mr.V.T.Prabhakaran – Appellant
Versus
M/s. Fathi Softward (Pvt.) Ltd., Formerly M/s.Trinity Signal Technology Pvt. Ltd. – Respondents
C.R.P.(MD)No.176 of 2023 and C.M.P.(MD)No.830 of 2023
Decided on : 16-06-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr.P.S.Raman for Mr.K.Hemakarthikeyan
For the Respondent: Mr.V.Ramakrishnan

Headnote:

Companies Act - Suit Proceedings - Sections 248, 250 - The court held that even if the name of the Company is struck off from the Register of Companies, its registration shall be deemed to have been cancelled from such date. However, there is no embargo for the suit to be filed or to be continued for the purpose of realizing the amounts due to the Company and for the payment or discharge of the liabilities or obligations of the Company. The court also emphasized that the Company, whose name has been struck off from the Register of Companies, cannot carry on any business, but the proceedings initiated for realizing the amount due to the Company can be proceeded.

Fact of the Case:

The petitioner, the first defendant in the suit, filed a Memo stating that the first respondent/plaintiff Company does not exist as it has been struck off from the Register of Companies under Section 248 of the Companies Act, 2013. The petitioner sought to dismiss the suit proceedings in O.S.No.7 of 2016 on this ground.

Finding of the Court:

The court found that the suit proceedings cannot be short-circuited merely because the plaintiff's name has been struck off from the Register of Companies. It held that there is no case made out for striking off the plaint solely based on the company's name being struck off from the Register of Companies.

Issues: The main issue was whether the suit proceedings in O.S.No.7 of 2016 should be dismissed due to the first respondent/plaintiff Company being struck off from the Register of Companies under Section 248 of the Companies Act, 2013.

Ratio Decidendi: The court's decision was based on the interpretation of Sections 248 and 250 of the Companies Act, 2013, which clarified that even if the name of the Company is struck off from the Register of Companies, its registration shall be deemed to have been cancelled from such date. The court emphasized that there is no embargo for the suit to be filed or to be continued for the purpose of realizing the amounts due to the Company and for the payment or discharge of the liabilities or obligations of the Company.

Final Decision: The Civil Revision Petition was dismissed by the court, and it was held that there was no merit in the petition. The court also directed the disposal of the application filed under Order VII Rule 11 of C.P.C. on merits and in accordance with the law.

ORDER :

Prayer :- Civil Revision Petition is filed under Article 227 of the Constitution of India, to call for the records in O.S.No.7 of 2016, pending on the file of the V Additional District Judge, Madurai, and set aside the docket order passed on 21.12.2022, by which the Memo filed by the petitioner in O.S.No.7 of 2016 has been rejected and pass an order holding that the suit proceedings in O.S.No.7 of 2016 as having been abated.

The petitioner herein is the first defendant in O.S.No.7 of 2016, pending on the file of the V Additional District Court, Madurai. The suit has been filed by the first respondent/plaintiff for the following relief:-

    ''[a] granting a decree for rendition of accounts, directing the defendant to render a true and proper accounts for the usage of the software Program of the plaintiff in the various branches of the defendant from 05.04.2007 till date and pay the legitimate amount that may be found due to the plaintiff together with a reasonable interest that may be fixed by this Hon'ble Court.

[b] directing the defendants herein to pay to the plaintiffs the costs of this action; and

[c] granting such other and further reliefs, which this Hon'ble Court may deem fit and proper in the facts and circumstances of this case and thus render justice.''

2. The specific case of the petitioner is that the first respondent/plaintiff Company has been struck off from the Register of Companies maintained by the Registrar of Companies, Ministry of Corporate Affairs, under Section 248 of the Companies Act, 2013, as early as 29.06.2017. It is therefore submitted that the petitioner herein, who is the first defendant before the V Additional District Court, Madurai, filed a Memo dated 04.03.2022 on 08.04.2022, on the ground that the first respondent/plaintiff does not exist as Company in the eye of law. Therefore, the plaint is liable to be struck off.

3. The Memo filed by the petitioner reads as under:-

    ''MEMO FILED ON BEHALF OF THE 1st DEFENDANT

The 1st Defendant above named begs to submit as follows:-

1. The Plaintiff has filed the suit in O.S.No.7/2016 seeking a decree for rendition of accounts directing the 1st Defendant to render a true and proper accounts for the usage of the software program of the Plaintiff in various branches of the 1st Defendant from 05.04.2007 till date and pay the legitimate amount that may be found due to the Plaintiff together with a reasonable interest that may be fixed by this Hon'ble Court.

2. It has now come to the knowledge of the 1st Defendant that the Plaintiff company has been struck off from the register of companies as early as on 29.06.2017 and its certificate of incorporation has been cancelled. However, the said fact has not been disclosed by the Plaintiff. In this regard, the following documents are filed along with this memo as annexures.

(i) A copy of the notice dated 07.04.2017 issued by the Registrar of Companies in proceedings in File No: ROC/CHN/DR(SK)/1/PVT.ACT/STK-5 under Section 248(1) of the Companies Act, 2013 (the name of the Plaintiff Company is at Sl.No.1452)

(ii) A copy of the notice of striking off and dissolution dated 05.07.2017 issued under Section 248(5) of the Companies Act, 2013 by the Registrar of Companies in proceedings in File No: ROC/CHN/STK-7/1/2017 annexed herewith. (name of the Plaintiff company is at Sl.No.1043)

3. The Plaintiff in the present suit is a Company specialized in creating software programmes. It is trite law that a company gets a right to sue or be sued only when it is incorporated. In the absence of incorporation under the Companies act, an association of persons or body of persons would not get themselves converted into a juristic person viz a Company.

4. It is submitted that with the striking off the name of the Plaintiff Company, the legal and corporate entity enjoyed by the Company under the Companies Act is completely denuded. Therefore, for all purposes, the Plaintiff company became non-existing in the eye of law as early as in 2017.

5. It is

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