Failure To File Annual Returns Prejudicial To Shareholders: NCLT Mumbai Orders Winding Up of Realty Company

A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar made the observation while deciding a petition alleging oppression and mismanagement in the affairs of Sunshine Realtors Private Ltd.

“Non-filing of annual returns itself is prejudicial to the interest of its members, as it leads to striking off the name of the Respondent Company.”, the tribunal observed.

The petition was originally filed by shareholders of the realty company Sunshine Realtors under Sections 397 and 398 of the Companies Act, 1956, which deals with application to the tribunal for relief in cases of oppression and mismanagement. They alleged that the majority shareholders had conducted the company's affairs in a manner oppressive to minority interests, including illegal allotment of shares, improper appointments to the board, and and exclusion of minority directors from participation in the management of the company

It emerged from records of the Registrar of Companies that Sunshine Realtors had not filed its annual financial statements or annual returns since the financial year ending March 31, 2014. Owing to continuous default, the company's name was struck off from the register and was later restored only pursuant to an order passed by the tribunal on January 16, 2020. Despite restoration, the directors failed to regularize statutory filings for either the pre-strike-off or post-restoration period.

The tribunal observed that non-filing of annual returns is prejudicial to the interests of shareholders and attracts serious statutory consequences for the company. It further noted that persistent non-compliance gives rise to a presumption that mandatory annual general meetings were not held, attracting statutory consequences under the Companies Act, 2013, including disqualification and vacation of office by directors.

Holding that non-filing of annual returns is prejudicial to the interests of shareholders, and noting continued statutory non-compliance and functional deadlock, the tribunal found sufficient grounds to order winding up of the company. It appointed Megha Agrawal as the company liquidator and directed her to take possession of the company records and verify the claims.

Case Title: Shailesh Shah & Anr. Vs Sunshine Realtors Pvt Ltd. & Ors

Case Citation: 2026 LLBiz NCLT (MUM) 62

Case Number: CP 59 OF 2015

For Applicant: Advocates Mangirishh Saraf, Joshva Samuel

For Respondent: Advocates Amit Sheth, Kalias Surve