2019 (5) TMI 1471 - AT - Companies Law

Restoration of name of Company Shaila Real Estate Developers Pvt Ltd in the Register of Companies - HELD THAT - The NCLT took note of the appeal which was filed before it and the NCLT observed that ROC has not made any adverse observations or objections except praying that the statutory required documents need to be complied with. There is no dispute that STK 7 was issued on 30.6.2017 after issue of STK 5. The appellant has not filed the copy of the STK 5. The number and date of STK5 is referred in STK 7. STK5 is published and the notice gives chance to the concerned company to still show cause. In the present matter NCLT has observed the fact that ROC followed due process to strike off the name of the company, was not disputed. When ROC issued notices to the appellant, the appellant never responded. As such the subsequent efforts to show that the appellant was in business or in operation or that it has property was never taken up with the ROC to find any fault of the action taken by ROC. The appellant has pointed out an agreement of sale of 2010 but there is no supporting sale deed to show that the transaction was even completed and property has been purchased by the company. NCLT has already observed that nothing is shown as carrying out work on any such land. In fact nothing is shown indicating possession and use of any such land. Merely showing an agreement of sale of 2010 which was before 2011 till when the earlier returns were filed would not be enough - We are not impressed by pointing out by such old sale agreement, and balance sheet now prepared when Company has been struck off. The appellant has not made out a case to show that the appellant was in business or that the company was in operation, when the company was struck off or that there is any just ground why the name of the company should be restored. Appeal dismissed - decided against appellant.

Summary

Issues involved:
1. Restoration of company name to Register of Companies under Section 252 of the Companies Act, 2013.

Detailed Analysis:
1. The National Company Law Tribunal (NCLT) dismissed the appeal filed by the Appellants to restore the name of the company to the Register of Companies. The Appellant claimed that the non-filing of statutory returns was due to inadvertence and lack of competent professionals, with no malicious intent. The Appellant argued that the company had short-term borrowings and tangible assets, justifying the restoration. The Appellant submitted a provisional balance sheet and profit and loss account for a specific period to support their claim. The Appellant also cited judgments of NCLAT to emphasize the importance of restoring the name of a company with immovable property under Section 252(3) of the Companies Act, 2013.

2. The Respondent No.2, representing the Income Tax Department, highlighted that the company had not filed income tax returns for several years. The company was struck off on 30th June 2017, and the Respondent pointed out that the company reported minimal to no income for certain years. The Respondent presented evidence regarding the company's financial status and compliance history.

3. The NCLT's impugned order considered the appeal and observed that the ROC had not raised significant objections apart from the need for statutory compliance. The NCLT reviewed various documents, including income tax returns, bank statements, and financial statements. The NCLT noted the lack of revenue generation in previous years and the absence of ongoing business operations based on the evidence presented. Consequently, the NCLT dismissed the appeal as the Appellants failed to demonstrate active business operations in the preceding financial years.

4. The Appellant argued that despite having an agreement of sale for immovable property, the NCLT disregarded this evidence by claiming no work had been carried out on the land. The Appellant referenced specific documents, including the balance sheet and the sale agreement, to support their contention that the company should be reinstated due to the immovable property ownership.

5. The NCLT emphasized that the Appellant did not provide sufficient evidence to prove ongoing business activities or valid reasons for restoring the company name. The NCLT noted that the ROC had followed due process in striking off the company's name, and the Appellant had not responded to notices or taken steps to rectify the situation. Ultimately, the NCLT rejected the appeal, concluding that the Appellant failed to establish grounds for restoring the company name based on the presented evidence.