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2020 (6) TMI 813 - AT - Insolvency and BankruptcyImposition of cost of Rs. 7 Lakhs for restoration of name of company - Appellant had not filed Annual Returns since incorporation. - Restoration of the name of the Company was allowed by the NCLT subject to payment of costs Rs. 7 Lakhs. HELD THAT - The Impugned Order does not show as to why such a huge costs of Rs. 7 lakhs have been imposed. Mr. Prakash K. Pandya, Practising Company Secretary states that this Tribunal may substitute the costs imposed by any reasonable amount. Going through the matter, it appears to us that in the facts of the case, in place of Rs. 7,00,000/-, costs should be Rupees One Lakh Fifty Thousand only/- . In the Impugned Order, in place of Rs. 7,00,000/- read Rs.1,50,000/- .
Issues:
Challenge to imposition of costs of Rs. 7 Lakhs by National Company Law Tribunal in Impugned Order dated 07th January, 2020. Analysis: The Appellate Tribunal heard the appeal against the Impugned Order pronounced by the National Company Law Tribunal, Mumbai Bench, which imposed costs of Rs. 7 Lakhs on the Appellant in a case where the company was struck off for not filing Annual Returns since its incorporation. The Appellant challenged only the portion of the Impugned Order related to the costs imposed. The Appellant argued that the costs were unreasonably high and requested the Tribunal to substitute the amount with a more reasonable sum. The Impugned Order allowed the restoration of the company's name upon payment of the imposed costs. However, the Appellate Tribunal found the amount of Rs. 7 Lakhs to be excessive in the circumstances of the case. The Practising Company Secretary representing the Appellant proposed that the costs be reduced to a more reasonable amount. After considering the matter, the Tribunal decided to substitute the costs from Rs. 7,00,000/- to Rs. 1,50,000/-, stating that the reduced amount was more appropriate given the facts of the case. The Tribunal clarified that its Order reducing the costs would not prevent the Registrar of Companies (RoC) from recovering other statutory penalties, dues, or filings that the Appellant was liable to pay as per the law. Therefore, the Appeal was disposed of with the modified costs of Rs. 1,50,000/- being upheld.
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