2009 (10) TMI 522 - HC - Companies Law

Restoration of name on the Register of Companies seeked - Held that - All that is shown is a notice dated 6-7-2007, which does not mention the fact that within three months of the same cause is to be shown to the contrary. As a matter of fact, the Registrar of Companies did not even wait for the statutory three months period before passing the order, rather the final order in the matter was passed on 31-7-2007, itself striking off the name of the company from the Register of Companies which was published in the Gazette of India dated 18-8-2007. Even the gazette publication is within a month and 12 days of the notice dated July 6, 2007 and thus there has been complete violation of the provisions of sub-section (3) of section 560 of the Act. Apart from the same the fact that up to date statutory returns had already been filed in the month of February, 2007, itself has not been taken note of by the Registrar of Companies and thus he has issued the notice under sub-section (3) of section 560 of the Act which is contrary to the records available with him at the relevant time. In the above circumstances, the impugned order dated 31-7-2007, contained in the Gazette of India dated 18-8-2007, is non est, illegal and void ab initio which cannot stand and it is, accordingly, quashed. The name of the company shall thus stand restored to the Register of Companies as though it had never been struck off from the same.

Summary

Issues:
Restoration of company's name on the Register of Companies under section 560(5) of the Companies Act, 1956.

Analysis:
The petitioner-company sought to restore its name on the Register of Companies after it was struck off by the Registrar of Companies under section 560(5) of the Companies Act, 1956. The company had been incorporated in 1975 and faced financial difficulties leading to a temporary suspension of business activities. Despite paying off dues to secured creditors and filing all pending returns through e-filing, the Registrar of Companies issued notices under section 560(1), (2), and (3) of the Act, ultimately striking off the company's name from the Register.

The court noted that the ground for striking off the company's name was non-existent as the company had filed up-to-date returns through e-filing in February 2007. The Registrar's notice did not comply with the mandatory provisions of section 560(3) of the Act, which required publication in the Official Gazette and sending a notice to the company by registered post before striking off the name. The Registrar did not wait for the statutory three-month period before passing the order, violating the Act's provisions.

Consequently, the court declared the impugned order as non est, illegal, and void ab initio. The order striking off the company's name was quashed, and the company's name was ordered to be restored to the Register of Companies as if it had never been struck off. The judgment highlights the importance of procedural compliance and adherence to statutory requirements in matters of striking off company names from the register under the Companies Act, 1956.