IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 04TH DAY OF NOVEMBER 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.42816/2019 (GM-RES) BETWEEN:
Swarnapadme Consulting LLP., Registered Office at No.9, White Acres, Channasandra Main Road, Whitefield, Bengaluru – 560 067, Represented by Designated partner Ms.Priya Rajagopalan.
… Petitioner (By Sri Vivekananda, Advocate For Smt. V. Gangabai, Advocate) AND:
1. Union of India, Represented by Ministry of Corporate Affairs, Shastri Bhawan, Dr.Rajendra Prasad Road, New Delhi – 110 001.
2. Registrar of Companies, E-Wing, 2nd Floor, Kendriya Sadan, Koramangala, Bengaluru – 560 034.
.... Respondents (By Sri Thimmanna Bhat, CGC for R1 and R2) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the notice dated 16.03.2018, vide Annexure-A issued by the respondents by virtue of which the petitioner has been put to defunct status for allegedly not carrying business operations under Section 75 of the Limited Liability Partnership Act, 2008 read with Rule 37(1)(a) of the Limited Liability Partnership Rules, 2009 and etc.
This Writ Petition coming on for orders this day, the Court made the following:
ORDER Sri Thimmanna Bhat, learned Central Government Counsel is directed to take notice for the respondents.
2. Learned counsel for the petitioner files a memo dated 04.11.2019, seeking to dismiss prayer ‘a’ of the writ petition as not pressed for time being.
Said memo is placed on record.
3. In view of the memo, the prayer ‘a’ of the writ petition is dismissed as not pressed for time being.
4. The petitioner filed the present writ petition for writ of mandamus directing the respondents to change the status of the petitioner from the “Defunct” to “Active” in its records and website as sought for in the representation dated 14.08.2019 given by the petitioner as per Annexure-B.
5. It is the case of the petitioner that the petitioner is a Limited Liability Partnership (LLP) which is engaged in the business of consultancy in the FENG SHUI (in Chinese thought) a system of laws considered to govern spatial arrangement and orientation in relation to the flow of energy (chi) and whose favourable or unfavourable effects are taken into account when designing buildings. It is further contended that the petitioner (LLP) had a nominal revenue of Rs.3,54,000/- till 2016. However, due to financial crisis, it failed to earn any revenue in the year 2017. Since the petitioner was very much occupied in developing its business activity and since it had no revenue for the year 2017, it failed to upload its Statement of Account and Solvency (i.e. LLP-8) and Annual Returns (i.e. LLP-11) for the period of 2016 and 2017. Even today the petitioner LLP is an ongoing concern and is actively involved in business.
6. It is further case of the petitioner that on 16.03.2018, since the petitioner LLP failed to upload its Statement of Account and Solvency and Annual Returns for the period of 2016 and 2017, the respondents were under the impression that the petitioner has stopped its operation and also business and had issued a notice vide Annexure-A seeking representation form from the petitioner, failing which, the name of the petitioner would be removed from the register of Limited Liability Partnership. On receipt of the said notice, the petitioner within a period of 30 days, has filed the Statement of Accounts and Solvency and Annual Returns for financial year of 2016 and 2017 within the time notified, it was under the bonafide impression that it has complied with the statutory provisions and as such, did not find it necessary to give reply to the said notice dated 16.03.2018.
7. It is further case of the petitioner that on 23.05.2018, when the petitioner tried to file Statement of Accounts and Solvency and Annual Returns for the year 2018, the petitioner came to know that the respondents without issuing any notice and thereby without providing any opportunity of hearing have changed the petitioner LLP from active to defunct status. Therefore, the petitioner is before this Court for the relief sought for.
8. I have heard learned counsel for the parties to lis.
9. Sri Vivekananda, learned counsel for Smt.V.Gangabai, learned counsel for the petitioner reiterating the grounds urged in the writ petition contended that inspite of the representation made by the petitioner as per Annexure-B dated 14.08.2019, requesting the respondents to restore the status of the company from ‘defunct’ to ‘active’, till today, the respondents have not taken any action. Because of the inaction of the respondents, the petitioner LLP is driven before the Court for the relief sought for. Therefore, he sought to allow the writ petition.
10. Per contra Sri Thimmanna Bhat, learned CGC for respondents rightly and fairly submits that the representation of the petitioner will be considered by respondent Nos.1 and 2 and appropriate orders will be passed in accordance with law.
Said submission is placed on record.
11. Having heard learned counsel for the parties, it is the case of the petitioner that though the petitioner LLP is on going concern and actively involved in the business, due to financial problems, not uploaded Statement of accounts, Solvency and Annual Returns for the period of 2016 and 2017. The respondents under the impression that the petitioner has stopped its operation and also business issued a notice to the petitioner LLP. In response to the said notice, the petitioner filed the Annual Returns and intimated that the petitioner has complied the statutory provisions. The respondent without giving an opportunity, changed petitioner’s status from ‘active’ to ‘defunct’. Therefore, the petitioner made representation to the respondents as per Annexure-B. It is well settled that ‘whenever an aggrieved party made representation to the concerned Registrar of Companies, requesting the authority concerned to restore the petitioner company status as ‘active’ from ‘defunct’, it is the duty and obligation on the part of the respondent to consider the representation and pass appropriate order in accordance with law. Same has not been done in the present case. Therefore, the petitioner has made out a case to issue writ of mandamus as prayed for in the writ petition.
12. In view of the above, the writ petition is allowed. The respondent No.2 is hereby directed to consider the representation of the petitioner dated 14.08.2019 as per Annexure B and pass appropriate order in accordance with law within a period of one month from the date of receipt of copy of this order.
Accordingly, the writ petition is disposed off.
Sd/- JUDGE PN/