1984 (4) TMI 247 - HC - Companies Law

Summary

Issues Involved:
1. Locus standi of the petitioners.
2. Justification for the restoration of the company's name.
3. Compliance and future directions post-restoration.

Summary:

1. Locus Standi of the Petitioners:
The petitioners sought an order u/s 560(6) of the Companies Act, 1956, to restore the name of M/s. Bulakidas Mohta and Co. (P.) Ltd. to the register of companies. The court examined whether the petitioners had the right to file the petition. According to sub-section (6) of section 560, a company, member, or creditor can apply for restoration within 20 years from the publication of the notice of striking off. The petitioners, being shareholders since 1950, were deemed members u/s 41 of the Companies Act. The court concluded that the petitioners had the locus standi to file the petition within the stipulated period.

2. Justification for the Restoration of the Company's Name:
The company ceased operations due to the liquidation of Laxmi Bank, which held an equitable mortgage on the company's assets. The official receiver took custody of these assets, leading to the company's inability to function and subsequent striking off in 1968. The petitioners argued that the company's name was struck off due to unavoidable circumstances, including the involvement of one director in the Laxmi Bank fraud case. The court noted that the official receiver had continued to pay lease money and had applied for lease renewal, indicating ongoing operations. The court found it equitable and just to restore the company's name, considering the interests of creditors and members.

3. Compliance and Future Directions Post-Restoration:
The court directed that upon restoration, the company must present audited statements for the period from 1959 to the date of the order within six months. Additionally, the company was instructed to increase its share capital by Rs. 5 lakhs. A compliance report was to be submitted by October 8, 1984. The petitioners were ordered to bear the costs of the proceedings concerning the official receiver.

Conclusion:
The court granted the relief sought in Company Petition No. 6 of 1981, ordering the restoration of M/s. Bulakidas Mohta and Co. (P.) Ltd. to the register of companies, with specific compliance requirements to be fulfilled within six months.