2012 (10) TMI 1227 - HC - Companies Law

Summary

Issues Involved:
1. Restoration of the petitioner-Company to the register of Companies u/s 560(6) of the Companies Act, 1956.
2. Compliance with mandatory provisions of Section 560 of the Companies Act, 1956.
3. Justification for restoring the Company's name to the register of Companies.

Summary:

Restoration of the petitioner-Company to the register of Companies u/s 560(6) of the Companies Act, 1956:
The petitioner-Company sought restoration to the register of Companies by setting aside the Gazette Notification dated 2nd - 8th June, 2007. The Company was incorporated on 22.4.1988 and had ceased operations in 1995. BICICO took over the assets of the Company in 2002 due to outstanding liabilities. The Company applied under the OTS Scheme in 2009 and paid Rs. 87,67,055/- to BICICO, receiving a No Dues Certificate on 31.3.2010. The petitioner claimed that notices u/s 560(1), (2), and (3) were never received, leading to the filing of the present petition.

Compliance with mandatory provisions of Section 560 of the Companies Act, 1956:
The Registrar of Companies argued that the Company had not submitted statutory returns since 1990 and was not carrying on business since 1995. Notices were issued u/s 560(1) on 29.11.2006, u/s 560(2) on 21.2.2007, and u/s 560(3) on 29.3.2007. The Company failed to respond, leading to its name being struck off. The intervenor-respondent contended that the Company had violated several provisions of the Companies Act, including failing to maintain books of accounts, hold annual general meetings, file annual returns, appoint statutory auditors, and hold regular meetings.

Justification for restoring the Company's name to the register of Companies:
The intervenor-respondent highlighted that the Company's assets and liabilities, including the land, had been sold by the co-owners and shareholders before the petition was filed. The petitioner suppressed this fact and falsely claimed that the Company had taken a loan to clear dues. The Court noted that the Company had not been operational for 17 years and that the sale of assets and liabilities indicated that the Directors had washed their hands of the Company. The Court also considered the serious allegations of criminal activities against the Company and its Directors.

Conclusion:
The Court found no merit in the petition, noting that the Company was defunct and its Directors had sold all its assets and liabilities. The Court dismissed the petition, stating that there were no just and reasonable grounds for restoring the Company's name to the register of Companies.