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2017 (2) TMI 1346 - Tri - Companies LawSeeking restoration of the name of the petitioner company as struck off by the Registrar of Companies - proof of conducting busniss - Held that - As seen from the documents available on record that the company was carrying on its business and was operative at the time of its name struck off from the register. The assumption of Registrar of Companies that the company was not in operation was clearly erroneous. Besides it is seen that the appeal has been filed within the stipulated period prescribed under Section 252 of the Act. Needless to say that Income Tax Department and ROC have raised no specific objection against the restoration of the Company subject to filing of statutory returns with fees as prescribed. Besides nobody would be prejudiced by the restoration of the name of the Company. Accordingly, this appeal is allowed. The notification published in the Official Gazette of India dated 08.07.2017 and the order dated 30.06.2017 in so far as the name of the appellant company shown as at entry No. 1967 bearing CIN No. U28998DL2002PTC114525 is hereby declared illegal and is set aside
Issues Involved:
1. Restoration of the company's name struck off by the Registrar of Companies. 2. Compliance with statutory requirements and non-filing of annual returns and financial statements. 3. Validity of the Registrar's action under Section 248 of the Companies Act, 2013. 4. Justification for restoration under Section 252 of the Companies Act, 2013. 5. Conditions and consequences of the restoration of the company's name. Issue-wise Detailed Analysis: Restoration of the company's name struck off by the Registrar of Companies: The directors of Arora Buildwell Private Limited filed an appeal under Section 252(3) of the Companies Act, 2013, seeking restoration of the company's name, which was struck off by the Registrar of Companies, NCT of Delhi and Haryana. The company was originally incorporated as Purshottam Ispat Private Limited on 11.03.2002 and later changed to Arora Buildwell Private Limited on 07.03.2005. Compliance with statutory requirements and non-filing of annual returns and financial statements: The company's name was struck off due to its failure to file statutory returns and other documents since the financial year ending 31.03.2014. The petitioner claimed that the failure to file these documents was inadvertent and without mala fide intent, citing the illness and subsequent death of a key director as a contributing factor. The company had prepared and audited its financial statements for the relevant years and submitted various documents to prove ongoing operations, including income tax returns, service tax returns, and bank statements. Validity of the Registrar's action under Section 248 of the Companies Act, 2013: The Registrar of Companies (ROC) struck off the company's name following a directive from the Ministry of Corporate Affairs and after issuing a notification under Section 248(5) in the Official Gazette dated 08-07-2017. The ROC presumed the company was not operational due to the non-filing of balance sheets and annual returns since 31.03.2014. Justification for restoration under Section 252 of the Companies Act, 2013: Under Section 252, the Tribunal can restore a company's name if it was carrying on business or in operation at the time of being struck off, or if it is otherwise just to restore it. The Tribunal found that the company was operational based on the submitted financial statements, tax returns, and other documents. The ROC and the Income Tax Department did not object to the restoration, provided the company filed its pending documents and paid the requisite fees. Conditions and consequences of the restoration of the company's name: The Tribunal ordered the restoration of the company's name, subject to the company filing all outstanding documents and paying any late fees and a cost of ?25,000 to the Prime Minister Relief Fund. The restoration would place the company and all other persons in the same position as if the name had not been struck off. The Tribunal also granted liberty to the ROC to proceed with penal action against the company for any compliance defaults. Conclusion: The appeal was allowed, and the company's name was ordered to be restored to the Register of Companies, subject to compliance with the specified conditions. The Tribunal emphasized that the restoration was in the interest of justice, given the company's ongoing operations and the timely filing of the appeal. The petition was disposed of accordingly, and a copy of the order was to be served to the parties.
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