2010 (4) TMI 597 - HC - Companies Law

Restoration of the name of the company on the Register of Companies maintained by the Registrar of Companies seeked - Held that - Counsel for the respondent does not have any objection to the revival of the company, subject to the petitioner filing all outstanding statutory documents, i.e., annual returns for the period 30-9-2000 to 30-9-2008, balance sheets for the period 31-3-2000 to 31-3-2008, along with the filing and additional fee, as applicable on the date of actual filing. The certificates of No Objection of the Directors, to the restoration of the name of the company to the Register maintained by the respondent, have also been placed on record. Consequently, the restoration of the petitioner s name to the Register maintained by the respondent will be subject to the payment of costs of ₹ 25,000, and the completion of all formalities, including payment of any late fee or any other charges which are leviable by the respondent for the late deposit of statutory documents.

Summary

Issues:
1. Restoration of the name of the company on the Register of Companies under section 560(6) of the Companies Act, 1956.
2. Default in statutory compliances leading to striking off the company's name from the Register by the Registrar of Companies.
3. Lack of show-cause notice and opportunity of being heard before the action was taken.
4. Compliance with the limitation period stipulated by section 560(6) of the Companies Act, 1956.
5. Responsibility for ensuring statutory compliances and negligence on the part of the Company Secretary.
6. Payment of costs for restoration and completion of formalities for reinstatement on the Register of Companies.
7. Liberty granted to the respondent for penal action against the petitioner for alleged default in compliance with section 162 of the Companies Act, 1956.

Analysis:

1. The petition filed under section 560(6) of the Companies Act, 1956 sought the restoration of the company's name on the Register of Companies. The company was incorporated as a private limited company but faced striking off by the Registrar of Companies due to defaults in statutory compliances, specifically for not filing balance-sheets and annual returns for certain periods.

2. The Registrar initiated proceedings under section 560 of the Companies Act, 1956, following the prescribed procedure and issuing necessary notices. The petitioner claimed to have been active since incorporation and maintained required documentation. However, the company's name was struck off without receiving a show-cause notice or an opportunity to be heard.

3. The petitioners argued that the company had been diligent in its operations and provided evidence of financial statements and tax returns. They also stated that the petition was within the limitation period specified by the Companies Act, 1956.

4. The responsibility for statutory compliances and the role of the Company Secretary came into question. It was revealed that the Company Secretary failed to file necessary documents with the Registrar of Companies, leading to the company's name being struck off. The court emphasized the management's accountability for ensuring compliance.

5. Despite the company's operational status and profitability, the court acknowledged the need for greater care in meeting statutory obligations. The judgment highlighted the importance of fulfilling requirements under sections 159 and 200 of the Companies Act, 1956.

6. The court ordered the restoration of the company's name to the Register of Companies, subject to the payment of costs and completion of formalities, including any late fees. The reinstatement was contingent on meeting all necessary obligations and charges levied by the Registrar.

7. Additionally, the court granted liberty to the respondent to take penal action against the petitioner for alleged non-compliance with section 162 of the Companies Act, 1956. The judgment concluded by disposing of the petition and related applications in accordance with the outlined terms.