2010 (6) TMI 324 - HC - Companies Law

Restoration of the name of the petitioner company to the Register of Companies maintained by the Registrar of Companies Held that - The restoration of the company s name to the Register maintained by the respondent will be subject to the payment of ₹ 75,000 as exemplary costs, payable to the common pool fund of the Official Liquidator. In addition, further costs of ₹ 22,000 be paid to the Registrar of Companies. Costs be paid within three weeks from today. The restoration of the petitioner company s name to the Register will be subject to the petitioner filing all outstanding documents required by law and completion of all formalities, including payment of any late fee or any other charges which are leviable by the respondent for the late filing of statutory returns. The name of the company, its directors and members shall then, as a consequence, stand restored to the Register of the Registrar of Companies, as if the name of the company had not been struck off, in accordance with section 560(6) of the Companies Act, 1956

Summary

Issues:
Restoration of company's name to Register of Companies under section 560(6) of the Companies Act, 1956.

Analysis:
The petitioner company sought restoration of its name to the Register of Companies maintained by the Registrar of Companies under section 560(6) of the Companies Act, 1956. The company's name was struck off the Register due to defaults in statutory compliances, specifically the failure to file annual returns and balance sheets since its incorporation. The Registrar of Companies followed the procedure under section 560, issuing notices as required by the Act and publishing the company's name in the Official Gazette. The petitioner argued that the company had been active since its incorporation, providing evidence of board meeting minutes and financial statements. However, discrepancies were noted regarding the company's registered office address, potentially leading to non-receipt of notices due to the company's default.

The petitioner attributed the failure to file required documents to the illness and subsequent demise of the Whole Time Director, resulting in neglect of compliance-related matters until 2009. The petitioner also mentioned ongoing litigation in the High Court of Orissa related to land trespassing issues. The respondent did not object to the company's revival, subject to fulfilling all outstanding statutory requirements and paying applicable fees. The petitioner cited the limitation period under section 560(6) as justification for the restoration petition.

In the judgment, the court referenced relevant legal precedents, emphasizing the importance of allowing companies, members, and creditors the opportunity to revive a struck-off company within the statutory period. The court highlighted the necessity of restoring a company's name to the Register when litigation involving the company is pending. Additionally, the court discussed the implications of Rule 94 of the Companies (Court) Rules, 1959, regarding the payment of costs to the Registrar of Companies.

The court expressed disapproval of the casual handling of compliance matters by the company over fourteen years, emphasizing the need for responsible business conduct. The judgment mandated the payment of exemplary costs to the Official Liquidator's common pool fund and additional costs to the Registrar of Companies for restoration. The restoration was conditional upon fulfilling all legal requirements, including late fees, and completion of formalities. The court granted liberty to the respondent to pursue penal action against the company for alleged non-compliance with section 162 of the Companies Act, 1956. Ultimately, the petition was disposed of with specific directives for cost payments and restoration procedures.