2020 (12) TMI 1337 - Tri - Companies Law

Restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies - Section 252(1) of the Companies Act, 2013 - HELD THAT - The Appellant Company was neither in operation nor was carrying out any substantial business. Further, the dispute between the Appellant Company with a third party cannot be a ground for non-filing of Balance Sheets or Annual Income Tax Returns - despite being in the business of real estate, the Appellant Company has failed to place or show any document relating to ownership of any fixed asset or project under development, which could justify the need of restoration of the name of the Appellant Company in the Register of Companies. This Bench is not inclined to interfere with the striking off action taken by the RoC against the Appellant Company under Section 248(5) of the Companies Act 2013 - Appeal dismissed.

Summary

Issues:
- Restoration of name of the company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana.
- Dispute with Mathura Vrindavan Development Authority affecting statutory compliances.
- Failure to file Financial Statements & Annual Returns.
- Dismissal of appeal against striking off action by RoC.

Analysis:
1. Restoration of Company Name: The appeal was filed by the company seeking restoration of its name in the register maintained by the RoC under Section 252(1) of the Companies Act, 2013. The company, engaged in real estate business, was struck off due to defaults in statutory compliances, specifically for not filing Financial Statements & Annual Returns since 31.03.2016. The company provided documents showing its operation and financial statements for the years in question.

2. Dispute Impacting Compliance: The company claimed an ongoing dispute with Mathura Vrindavan Development Authority as the reason for not filing statutory returns. It mentioned receiving an order from the High Court allowing it to approach the State Government under a specific Act. Despite approaching the State Government and sending necessary details, no response was received, leading to non-compliance with statutory requirements.

3. Failure to Comply: The bench observed that the company had minimal revenue in the financial year 2015-16 and no revenue in the subsequent years. The bank statement submitted did not show any transactions for a significant period, and no Income Tax returns were provided. The lack of substantial business operations and failure to provide essential documents regarding ownership of assets or projects raised concerns about the justification for restoration.

4. Dismissal of Appeal: The bench concluded that the company was not actively operating or conducting substantial business activities. The ongoing dispute with a third party was deemed insufficient justification for non-compliance with filing requirements. Additionally, the company's failure to demonstrate ownership of assets or projects related to its real estate business further weakened its case for restoration. Consequently, the appeal was dismissed, upholding the RoC's decision to strike off the company's name.

In summary, the tribunal dismissed the appeal for restoration of the company's name in the register maintained by the RoC, citing lack of substantial business operations, minimal revenue, failure to file necessary returns, and insufficient justification for non-compliance due to a dispute with a third party. The decision highlighted the importance of meeting statutory obligations and providing adequate documentation to support claims for restoration in such cases.