2020 (1) TMI 241 - AT - Companies Law

Striking of the name of the appellant company from Register of Companies - disqualification of directors - HELD THAT - Undisputedly the appellants have not filed the annual returns since the financial year 2013-2014 onwards. The appellant company is regularly carrying on its business, in support filed the Auditor Reports and financial statement for the year ended 31st March, 2014 to 31st March, 2017. The order of striking of name of the company from the register of companies is certainly prejudicial to the shareholders of the company - The order is liable to be set aside and is hereby set aside.

Summary

Issues Involved:
1. Appeal against striking off the name of the company from the Register of Companies.
2. Maintainability of the appeal under Section 252(3) and Section 164(2)(a) of the Companies Act, 2013.
3. Competency of directors to maintain the appeal.
4. Failure to file annual returns and financial statements.
5. Restoration of the company's name to the Register of Companies.

Analysis:
1. The appeal was filed against the order striking off the name of the company from the Register of Companies. The National Company Law Tribunal (NCLT) Kolkata had dismissed the appeal, citing maintainability issues under Section 252(3) of the Companies Act, 2013. The appellants challenged this decision, leading to the present appeal before the National Company Law Appellate Tribunal.

2. The NCLT observed that under Section 252(3) of the Companies Act, 2013, a company, member, creditor, or workman can apply for restoration of the company's name. Additionally, under Section 164(2)(a) of the Companies Act, 2013, directors who are disqualified may not maintain the appeal. The appellants contested these grounds for dismissal, leading to a detailed argument regarding the maintainability of the appeal.

3. The appellants argued that one of the directors, who was a director of a shareholder company, was competent to maintain the appeal. They provided evidence of shareholding and directorship to support their claim. The Deputy Registrar of Companies, West Bengal, countered this argument, highlighting the company's negligence in filing annual returns and financial statements.

4. It was revealed that the company had failed to file annual returns and financial statements since the financial year 2013-2014. However, the appellants contended that the company was actively carrying on business, supported by auditor reports and financial statements for subsequent years. The Tribunal reviewed these documents and concluded that the company was indeed operational, leading to a decision that the striking off of the company's name was unjust.

5. After thorough consideration, the Tribunal set aside the impugned order, directing the restoration of the company's name to the Register of Companies. Certain conditions were imposed, including the payment of costs, filing of pending annual returns and balance sheets, and compliance with necessary charges and fees. The Registrar of Companies was also granted the authority to take further actions under the Companies Act, 2013 if needed.

This detailed analysis encompasses the key issues raised in the legal judgment, providing a comprehensive understanding of the case and its implications under the Companies Act, 2013.