2018 (8) TMI 1842 - Tri - Companies Law

Restoration of name of the company in the Register of Companies maintained by the Respondent - name was struck off on the ground of continuous non-filing of the statutory returns (which are required to be filed under the Companies Act) and company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455 - HELD THAT - The Company is not carrying any business or operation as defined u/s 248(l)(c) of the Companies Act 2013. Upon perusal of the documents affidavits submitted by the applicant company the advocate appeared for Applicant Company has also confirmed during the hearing that the company did not generate any Income/Revenue from its operations since incorporation. It is also noted that the company did not open even a bank account and till date no financial transaction taken place in the company. The company also submitted that it has neither conducted any AGM nor filed any Income Tax Returns since incorporation. Further it is also noted that the company has not submitted any of its audited balance sheets along with the petition. All the above factual details including that the company did not even open a bank account substantiate the criteria that the company is not carrying on any business or operation as defined under section 248 of the Companies Act 2013 therefore the action taken by ROC is justified and the Bench did not find any ground to interfere with action of striking off by ROC - the Bench has not found any justifiable/reasonable grounds to interfere with the action taken by the Government of India/ROC in striking off Lakhs of name of companies including the petitioner company. Petition dismissed.

Summary

Issues:
Company struck off under Section 248 of Companies Act 2013 for non-compliance with statutory filings - Petition seeking restoration of company's name in Register of Companies - Company not carrying on any business or operation - Justification for strike off by ROC - Petitioner's plea for relief denied.

Analysis:
The Company Petition was filed seeking relief against the respondent to restore the company's name in the Register of Companies due to being struck off under Section 248 of the Companies Act 2013 for failing to file Financial Statements and Annual Returns for three consecutive financial years. The Respondent provided a detailed report explaining the sequence of events leading to the strike off, including issuance of notices and publication in official gazettes and newspapers. The Respondent justified the strike off citing non-compliance with statutory requirements and the company's inactivity for two preceding financial years.

The Bench considered the submissions of both parties and reviewed the ROC report and documents. It was established that the company was not engaged in any business or operations as defined under the Companies Act 2013. The company did not generate any income, open a bank account, conduct AGM, file Income Tax Returns, or submit audited balance sheets since its incorporation. These facts confirmed that the company did not meet the criteria for carrying on business or operations, justifying the ROC's action of striking off the company's name.

The Bench emphasized that companies like the petitioner's, which do not engage in any business activities, impose burdens on the system, government, and ROC in terms of compliance and record-keeping. Such companies may also be misused for purposes other than their original incorporation. Considering the lack of justifiable grounds and practical aspects, the Bench concluded that interfering with the Government/ROC's action of striking off numerous companies, including the petitioner's, was unwarranted. Therefore, the petition seeking restoration of the company's name was dismissed.