Aitreya Sports Company, is a company primarily engaged in the wholesale business of trading footwear, sports apparel and sports equipment. It holds various franchise-based stores across India. The management of the Compa

Answer 3(b) The facts of the case were similar to the case decided in Reebok India Company Vs. Union of India & Ors . The brief facts of the case are that the Registrar of Companies vide order dated 07-08-2020 rejected the conversion of the petitioner's company from an "Unlimited Liability Company" to a "Limited Liability company". This order was in challenge in the present petition. The Division Bench of the Hon'ble Delhi High Court in its order dated 03-03-2020 had only directed the RoC to decide the application of the petitioner afresh in accordance with law. As of today, there is no challenge to the 2016 Regulations. This Court is of the opinion that since the 2016 Amendment Regulation was only curative in nature and only intended to protect the interest of the creditor, the amended rules, therefore, must apply to the application which are pending with RoC and the same must apply to the applications of the petitioner/company. The right of the petitioner for conversion from unlimited company to limited company has not been taken away. In fact, the petitioner/company had no vested right to be granted a certificate of conversion to a limited liability company. The rules have only become more stringent in as much as the RoC has additional criteria to satisfy himself regarding the net worth of the company and as to whether any the investigation/inspection is pending against the company or not and only on being satisfied, permission for conversion can be granted. Viewed in this light, the reasons given by the RoC for rejecting the application of the petitioner on the ground that various prosecutions have been filed by the Serious Fraud Investigation Organisation against the petitioner for the offences under the Companies Act and the IPC and that the e-form 27 which was to be filed with the RoC was not in compliances with Rule 37 of the 2016 Rules cannot be said to be so perverse especially keeping in mind the interest of the shareholders and the interest of the creditors. The RoC has also observed that the petitioner/company has suffered substantial financial losses and has a net deficit in current liabilities over the assets in excess of ₹2100 Crores. The Registrar was also not provided with an NOC or undertaking from all the shareholders to support the conversion application and the petitioner did not even issue a public advertisement inviting objections from various creditors/stakeholders on the issue of conversion. The anxiety on the part of the Registrar of Companies that the creditors and the stakeholders should not be left high and dry cannot be said to be completely unjustified. Accordingly, the writ petition is dismissed. Delhi High Court Denies Reebok's Shift to Limited Liability Status. Accordingly, Aitreya Sports Company will not succeed in its writ petition.