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2019 (4) TMI 738 - AT - Companies LawRestoration of name of the 2nd respondent to the register of the Registrar of Companies - modification of master data by modifying the status from Strike Off to Active - Held that - As per Section 252 of Companies Act, 2013 a company can be restored only on the direction of Hon ble NCLT within a period of three years from the date of the order of the Registrar. The appellants are entitled to file company petition/appeal before the Tribunal under Section 252(3) of Companies Act, 2013. Therefore, the appellants can file petition/appeal under Section 252(3) of the Act. 1st respondent while submitting his reply seems to have only dealt with Section 252(1) of the Companies Act, 2013 and have not dealt with Section 252(3) of the Companies Act, 2013 on the basis of which the appellants are seeking relief for restoration of the name of company which has been struck. As per Section 248(6) of the Companies Act, 2013, the Registrar, before passing of order under Section 248(5), have to satisfy himself that sufficient provision has been made for the realisation of all amount due to the company and for payment or discharge of its liabilities and obligations and, if necessary, to obtain undertaking from the appellant and the assets of the company will be made available for payment. By not responding to the ROC of its notice, the appellants shall not be relieved from the responsibility which they were bound to give in the shape of undertaking under this provision. Seeing the balance sheets and the company s huge investment which the company is having since 2011 and there are large amount of the loan and advances, it is possible that creditors could also be aggrieved persons, feeling aggrieved of company s name being struck off, may file an application for restoration of company s name, if its name is not restored. Thus it would be just and equitable to restore the name of the company to even avoid further legal proceedings. The name of Respondent No.2 company shall be restored to the Register of Companies - appeal disposed off.
Issues Involved:
1. Legality of striking off the company's name by the Registrar of Companies (ROC) under Section 248 of the Companies Act, 2013. 2. Validity of the company's claim that it was operational and filing statutory returns. 3. NCLT's decision to dismiss the appeal for restoration of the company's name. 4. Compliance with Section 252(3) of the Companies Act, 2013 for restoration of the company's name. Detailed Analysis: 1. Legality of Striking Off the Company's Name: The ROC struck off the name of the company under Section 248 of the Companies Act, 2013, citing non-filing of statutory returns and financial statements since 2013. The ROC issued a notice on 7th April 2017, giving the company 30 days to file objections, but no response was received, leading to the company's name being struck off on 9th June 2017. 2. Validity of the Company's Claim of Being Operational: The appellants argued that the company was operational and had internal disputes that delayed the filing of statutory returns. They submitted balance sheets, income tax returns, and evidence of long-term borrowings. However, the NCLT found that the company did not file statutory returns after 2013 and noted that the directors' report for the financial years 2013-14 to 2015-16 indicated no business operations or revenue generation. 3. NCLT's Decision to Dismiss the Appeal: The NCLT dismissed the appeal, stating that the company was a sham and not engaged in any business. The NCLT emphasized that the company failed to file statutory returns despite having prepared financial statements and income tax returns. The Tribunal concluded that the company did not provide valid reasons for restoration and upheld the ROC's decision. 4. Compliance with Section 252(3) of the Companies Act, 2013: The appellants filed the appeal under Section 252(3), which allows for the restoration of a company's name if it was operational at the time of being struck off or if it is just to restore the name. The Tribunal noted that the company had significant investments and loans, suggesting it was operational. The Tribunal found that the ROC did not consider these aspects and that it would be just to restore the company's name to avoid further legal proceedings. Conclusion: The Tribunal quashed the NCLT's order and directed the restoration of the company's name to the register of companies, subject to the following conditions: - Payment of costs of ?1 lakh to the ROC within 30 days. - Filing of all annual returns and balance sheets for the period ending 31st March 2014 to date within 30 days of restoration. - Payment of requisite charges and late fees. The ROC is free to take further punitive actions under the Companies Act, 2013 for non-filing or late filing of statutory returns/documents. The appeal was disposed of with no order as to costs.
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