2019 (10) TMI 1482 - Tri - Companies Law

Seeking to restore the name of the Company in the Register of Companies - Section 252 (3) of the Companies Act, 2013 - HELD THAT - Taking into consideration the provisions under Section 252(3) of the Companies Act, 2013 which vests this Tribunal with a discretion where the Company whose name has been struck off and such Company is able to demonstrate that a running business was being pursued or its was in operation as on the date when the name was struck off, or otherwise it is just to do so, the Tribunal can restore the name of the Company in the Register of the Registrar of Companies. In the instant case the shareholder has enunciated and elaborated that some litigations are pending since long against the Company, its directors and shareholders whose continuity will be affected by striking off name of the Company. The Company deserves to be restored - Appeal allowed.

Summary

Issues:
1. Restoration of a company's name in the Register of Companies under Section 252(3) of the Companies Act, 2013.

Analysis:
The appeal before the National Company Law Tribunal, Jaipur involved two shareholders seeking the restoration of a company's name in the Register of Companies. The company, a Private Limited Company, had its name struck off due to non-compliance with the Companies Act, 2013. The shareholders contended that the default in compliance was since 1995, citing disputes among shareholders as a reason. They highlighted pending litigations against the company, its directors, and shareholders, emphasizing the impact of striking off the company's name on their continuity. The shareholders also pointed out the non-compliance of the company's directors with the High Court's order regarding filing statutory returns. The Registrar of Companies acknowledged the court order to restore the company but emphasized the need for filing pending financial statements and annual returns.

The tribunal considered Section 252(3) of the Companies Act, 2013, which provides discretion to restore a company's name if it was carrying on business, in operation, or if restoration is deemed just. In this case, the tribunal noted the pending litigations and the potential adverse effects on stakeholders if the company's name remained struck off. Therefore, in the interest of stakeholders, including the appellants seeking restoration, the tribunal ordered the restoration of the company's name in the Register of Companies. The company and its directors were directed to file all outstanding documents with proper fees, including additional fees, and comply with all formalities. A cost of ?10,000 was imposed to be paid to the Prime Minister's National Relief Fund, with the directors being jointly/severally liable if the company failed to pay. Any liabilities determined by authorities, such as the Income Tax Department, were to be addressed according to applicable laws.

Consequently, the tribunal allowed the appeal, setting aside the striking off of the company's name and ordering its restoration in the Register of Companies. The restoration was to be treated as if the name had never been struck off, in accordance with Section 248 of the Companies Act, 2013. The order was to be served to the concerned parties for compliance.