2019 (10) TMI 1382 - Tri - Companies Law

Seeking restoration of the name of the Company in the Register of Companies, West Bengal - Section 252 (3) of the Companies Act, 2013 for restoration of the name of the Company in the Register of Companies, West Bengal - HELD THAT - The company is not earning any revenue from operations since its incorporation i.e. from 2012-13 to 2017-18 and therefore, has not earned any profits. There are no fixed assets in the company. Hence, perusal of the financial statements does not reveal that the Company was carrying on its business operations for the purposes of furthering the objects mentioned in its Memorandum of Association. A copy of statement of Bank Account is seen produced on side of the appellant, annexed as Annexure A-7 . The Company's Memorandum of Association produced along with the appeal, indicates that the Company was incorporated to carry on the business of real estate and as developers, and builders. The entries in the bank statement do not reflect transactions which evidence carrying on of business operations of the Company. So, the bank statements also do not help in strengthening the contention on the side of the appellant that the Company is a going concern. No Income Tax Return Acknowledgments are seen produced on side of the appellant. The above said discussions lead to a conclusion that on the date of the striking off the name of the Company, it was not doing any kind of business for which the Company was incorporated. The Company not doing any business as on the date of striking off therefore, possibility of attempts of siphoning of funds to evade tax by the Company or other stakeholders in the Company cannot be ruled out from the peculiar nature and circumstances brought out in the case in hand. Section 252(3) of the Companies Act, 2013 confers upon the Tribunal ample power to order restoration of a Company whose name has been struck off from the Register of Companies, if the Company, at the time of its name being struck off was carrying on its business or was in operation or it is otherwise just that the name of the Company be restored on the register - in the present case, there is no just reason to restore the Company's name on the Register of Companies. Since the Company seems to be not an active Company and not carrying on the business for which it was incorporated, the appeal is liable to be dismissed. Appeal dismissed.

Issues Involved:
1. Restoration of the company's name in the Register of Companies under Section 252(3) of the Companies Act, 2013.
2. Compliance with statutory requirements for filing annual returns and financial statements.
3. Determination of whether the company was carrying on business or in operation at the time of striking off.
4. Examination of financial statements and bank transactions to assess business activity.
5. Application of judicial principles for restoration of a company's name.

Detailed Analysis:

1. Restoration of the Company's Name:
This appeal was filed by MPH Infrastructure Private Limited under Section 252(3) of the Companies Act, 2013, seeking restoration of its name in the Register of Companies, West Bengal. The company was struck off by the Registrar of Companies (ROC) due to non-filing of financial statements and annual returns.

2. Compliance with Statutory Requirements:
The appellant admitted that the company failed to file the necessary financial statements and annual returns from 2012-13 to 2017-18 due to inadvertent mistakes and lack of knowledge by the person responsible. The ROC struck off the company's name after following the procedure under Section 248 of the Companies Act, 2013, due to non-compliance.

3. Determination of Business Activity:
The appellant claimed that the company was active and in operation, supported by balance sheets and profit and loss accounts. However, the ROC contended that the company had not filed any financial statements or annual returns, leading to the presumption that it was not carrying on any business.

4. Examination of Financial Statements and Bank Transactions:
The Tribunal examined the financial statements from 2012-13 to 2017-18, which showed no revenue from operations and consistent losses. The bank statements did not reflect any business transactions. The Tribunal concluded that the company was not carrying on business or in operation at the time of striking off.

5. Application of Judicial Principles:
The Tribunal referred to the principles laid down by the Hon'ble National Company Law Tribunal, New Delhi, and the Hon'ble NCLAT, emphasizing that restoration under Section 252(3) requires proof that the company was carrying on business or in operation. The Tribunal found no evidence to support the appellant's claim that the company was active or operational.

Conclusion:
The Tribunal dismissed the appeal, concluding that there was no just reason to restore the company's name on the Register of Companies. The company was not active and not carrying on the business for which it was incorporated. The appeal was dismissed with no order as to costs.

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