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Nirendra Nath Kar vs Gopal Navin Bhai Dave & Ors.

Civil Appeal · 2022 INSC 1039Decided 29 Sept 2022
Civil Appeal No.4448 of 2015
Ajay Rastogi · B.V. Nagarathna · C.T. Ravikumar as the second judge

Background

Basanti Cotton Mills Private Limited was struck off the Register of Companies in 2006 under Section 560(5) of the Companies Act, 1956, at the instance of its original directors, after it had stopped filing returns since 2002-03. Nirendra Nath Kar, claiming to be a director appointed later, applied in 2010 to have the company's name restored, and a Single Judge of the Calcutta High Court allowed this. On appeal, the Division Bench reversed that order, holding that Kar's own documents (mainly DIN filings from 2008, well after the strike-off) did not establish he was ever validly appointed a director, so he had no standing ("locus") to seek restoration.

Decision Breakdown

The Supreme Court examined the Registrar of Companies' own records, which showed only three original directors and no valid Form 32 (the statutory form confirming a new director's appointment) for Kar or the others he claimed were his co-directors. The Court noted the company's last balance sheet showed a paid-up capital of only Rs.7,000, making it a defunct company under the Act, and that 16 years had passed since the strike-off with no operations shown at any point. Finding no error in the High Court's fact-finding on Kar's lack of locus standi, the Supreme Court dismissed the appeal with no order as to costs.

Lesson Learnt

A person who wants to challenge a company's removal from the register must first be able to prove, through the Registrar's own official records (not just self-filed digital identification forms), that they actually hold a valid, properly documented position such as director. Courts will not restore standing based on incomplete or unilateral filings made years after the disputed event.

Official source (sci.gov.in)View Judgment (PDF)

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