2000-(001)-CLJ -0115 -CLB Companies Act Judgements

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2000-(001)-CLJ -0115 -CLB

RAVI CONSTRUCTIONS, ENGINEERS AND CONTRACTORS v. REGISTRAR OF COMPANIES AND ANOTHER.

Company Petition No. 354/141/SRB/99, decided on August 18, 1999.

BEFORE THE COMPANY LAW BOARD, SOUTHERN REGION BENCH, CHENNAI

T. K. SESHADRI, Advocate, for the petitioner.

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ORDER

K. K. BALU, MEMBER – This is a petition filed under section 141 of the Companies Act, 1956 (hereinafter referred to as ‘the Act’) on 3.2.1999 by Ravi Constructions (hereinafter called the petitioner) for condonation of delay and extension of time for filing the particulars of charge created by Karnataka Telecom Ltd. (hereinafter referred to as the ‘lendee company’) on 14.4.1993 for Rs. 39,02,081 in favour of the petitioner. The particulars of the said creation of charge should have been filed with the Registrar of Companies, Karnataka, in terms of section 126 of the Act on or before 14.5.1993, whereas, the same were filed on 2.12.1998 with the Registrar of Companies by the petitioner. The Registrar of Companies by letter, dated 23.12.1998 advised the petitioner to approach the Company Law Board under section 141 of the Act for condonation of delay of 5 years 7 months. He has further directed the petitioner to file the relevant Form Nos. 8 and 13 in triplicate along with the agreement duly signed by both the parties. Hence this petition.

2. The lendee company on whom a copy of this petition has been served by the petitioner has neither filed any reply nor appeared before this Bench inspite of the notice of hearing, dated 23.6.1999.

3. The Registrar of Companies, Karnataka, by his report, dated 13.5.1999 informed this Bench that he has no objection for condonation of delay. However, by his report, dated 6.7.1999, he reported that the defect in Form Nos. 8 and 13 in respect of non-execution of the said-Form by the lendee company will be rectified at the time of the registration of the said Form, if the delay is condoned by this Bench. He has further requested that a suitable direction may be included in the order of this Bench, so that the enforecability would become mandatory. The Registrar of Companies in his further report, dated 12.8.1999 submitted that if the petition is not maintainable for non-compliance of rule 6(d) of the Companies (Central Government) General Rules and Forms, the petition may be dismissed.

4. Shri T. K. Seshadri, Advocate, appearing for the petitioner, has submitted that as on 25.1.1997, a sum of Rs. 39,02,081 is payable by the company on account of construction of various buildings by the petitioner pursuant to the agreements, dated 14.4.1993 and 19.1.1994 respectively. The petitioner has lien over the property for unpaid balance amount in respect of the construction completed by the petitioner, which is evident from the letter, dated 21.4.1994 addressed by the tendee company. As per clause (c) of sub-section (3) of section 125 of Act, a charge on any immovable property or any interest therein created is required to be registered with the Registrar of Companies. The petitioner was under the bona fide belief that the lendee company would have taken steps to have the charge registered under section 125 of the Act, but the lendee company failed to file Form Nos. 8 and 13 with the Registrar of Companies. In the process, there has been a delay of five years and seven months in filing the charge. He further submitted that it shall be the duty of the lendee company under section 134 of the Act to file the particulars of every charge created by the lendee company with the Registrar of Companies for registration. The agreements, dated 14.4.1993 and 19.1.1994 setting out the terms and conditions regarding construction of buildings and payment by the company are duly signed on behalf of the company. The relevant rules under the Companies (Central Government) General Rules and Forms, as on the date of the agreements, do not stipulate that Form Nos. 8 and 13 should be signed both by the petitioner and lendee company. The particulars of charge once registered would relate back to the date of creation of such charge, when the forms are not required to be signed by both the parties. The lendee company has failed to discharge its duty in filing the particulars of charge before the Registrar of Companies, which caused prejudice to the interests of the petitioner. In these circumstances, he prayed for condoning the delay by this Bench for filing particulars of the charge before the Registrar of Companies, Karnataka.

5. I have carefully considered the averments made in the petition, documents enclosed thereon and submissions made by the petitioner, besides the various reports submitted by the Registrar of Companies, Karnataka. It is observed that Form 8 filed before the Registrar of Companies, Bangalore, does not contain the requisite particulars including the amount secured by the charge, extent and operation of the charge, etc., prescribed under Companies (Central Government) General Rules and Forms. Though it is not material, Form 8 suffers from a legal requirement stipulated under rule 6(d), Accordingly, Form 8 should be signed on behalf of the company and the charge holder. In the present case, admittedly, this requirement is not duly met. The arguments advanced by counsel for the petitioner in this behalf are not convincing. Moreover, it is observed from the letter, dated 28.7.1998 of Government of Karnataka addressed to the Board for Industrial & Financial Reconstruction produced by the petitioner that the lendee company had become a sick company and that the State Government has taken a decision not to revive the sick company, but to wind up its operations. Admittedly, the petitioner has filed the Form 8 with the Registrar of Companies only on 2. 12.1998 after a delay of more than 5 years. The petitioner is aware of the imminent liquidation of the lendee company at the time of filing of Forms 8 and 13 with the Registrar. It is settled law that where the liquidation is already imminent at the time of granting extension for filing particulars of charges, it should be refused. Resinoid & Mica Products Ltd., In re (1982) 3 All ER 677 (CA). If the delay is condoned, it will defeat the interests of other creditors. For these reasons, the petition is dismissed.

6. No order as to costs.

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