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2019 (5) TMI 1495 - AT - Companies LawRestoration of name of Petitioner Company in the name of the Register of Companies - HELD THAT - The Counsel for the Appellant referred to Judgement of the Hon ble High Court of Delhi in INDIAN EXPLOSIVES LTD. VERSUS REGISTRAR OF COMPANIES 2010 (4) TMI 1185 - DELHI HIGH COURT where the Petitioner had Arbitration Award in its favour against Company which had been struck off and it became impossible for the Petitioner to execute the Award and restoration was sought. The Hon ble High Court referred to another matter decided by the High Court of Madhya Pradesh where it was observed that when suit is pending and is being contested, it is proper to direct restoration of the name of Company, if it is removed. It would be appropriate to restore the name of the Company to the Register of Companies leaving all questions open for the Appellant and Respondents to dispute in the Writ Petition for final adjudication by the Hon ble the High Court - Striking off of the name of the Company would create difficulties for the Appellant to pursue its remedies before the High Court and in the facts of the matter, when litigation was pending, the name of the Company should not have been struck off. The name of the Appellant Company shall be restored in the Register of Companies to its original status subject to conditions imposed.
Issues Involved:
1. Dismissal of Company Petition No.23/2012 by NCLT, Allahabad. 2. Striking off the name of the Company by the Registrar of Companies (ROC). 3. Disputes among family members affecting the Company's operations. 4. Non-filing of statutory documents with the ROC. 5. Nationalization and management takeover of the Company’s assets. 6. Pending Writ Petition in the High Court regarding property disputes. 7. Restoration of the Company's name to the Register of Companies. Issue-wise Detailed Analysis: 1. Dismissal of Company Petition No.23/2012 by NCLT, Allahabad: The Appellant filed an appeal against the dismissal of its Company Petition No.23/2012 by the NCLT, Allahabad, which was initially filed under Section 560(6) of the Companies Act, 1956. The petition was dismissed by NCLT on 30.05.2018. 2. Striking off the name of the Company by the Registrar of Companies (ROC): The ROC struck off the name of the Company from the Register of Companies by an order dated 11.05.2010, which was published in the Gazette of India on 22.05.2010. The ROC issued multiple notices under Section 560 of the Companies Act, 1956, due to non-response from the Company, leading to its dissolution. 3. Disputes among family members affecting the Company's operations: The Company had been operational since 1934 but ceased operations for the last 10 years due to unfriendly relations among family members who were shareholders. This internal dispute led to the halting of business activities and failure to submit balance sheets to the ROC. 4. Non-filing of statutory documents with the ROC: The ROC claimed that the Company had not filed statutory balance sheets and annual returns for the last 10 years. The Appellant argued that the Company was not defunct and had audited accounts, but due to internal disputes, the statutory documents were not submitted. 5. Nationalization and management takeover of the Company’s assets: The management of the Company's textile undertaking was taken over by the Government of India under the "Lakshmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976" and subsequently nationalized under the "Textile Undertakings (Nationalization) Act, 1995". The Appellant claimed that only the textile division was nationalized, not the entire Company, which included other properties generating rental income. 6. Pending Writ Petition in the High Court regarding property disputes: A Writ Petition was filed in the High Court of Judicature at Allahabad challenging the Income Tax Department's release of all properties to the National Textile Corporation (NTC). The High Court kept the Writ Petition pending, awaiting the decision on the restoration of the Company's name by NCLT. 7. Restoration of the Company's name to the Register of Companies: The Appellant sought the restoration of the Company's name, arguing that the Company was operational and had properties not included in the nationalization. The NCLT observed that the management of the "Company" was taken over by the Government of India, leading to the dismissal of the petition. However, the Appellate Tribunal found that the disputes regarding property takeover were pending in the High Court and that striking off the Company's name would hinder the Appellant's ability to pursue remedies. Conclusion: The Appellate Tribunal decided to restore the name of the Company to the Register of Companies, considering the pending disputes in the High Court. It directed the Appellant to deposit costs and expenses of ?1 Lakh with the ROC and file all due and pending financial statements, annual returns, and documents within three months. The Tribunal quashed and set aside the Impugned Order, allowing the Company to be reinstated subject to compliance with the specified conditions.
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