2020 (5) TMI 327 - Tri - Companies Law

Restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana - Appellant failed to file its Annual Returns and Financial Statements after the year ending 31.03.2015 - HELD THAT - The provisions under section 252 of the Companies Act, 2013, pertaining to restoration of the name of the Company provide that, if satisfied that the Company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company be restored to the Register of Companies, Tribunal may order the name of the Company to be restored to the Register of Companies. The Appellants through their submissions and arguments have been able to satisfy this Bench that it was in operation when its name was struck off by the RoC in its register. Further, the Appellant Company has certain assets and liabilities, which necessitate and justify restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. The Petition is allowed subject to payment of cost of ₹ 25,000 to the Prime Minister Relief Fund, the proof of which will be furnished by the Appellant to the Registry of this Tribunal within 07 days.

Issues: Restoration of Company Name in Register

1. Background and Invocation of Provisions:
The appeal was filed by a company and its ex-directors under section 252 of the Companies Act, 2013, seeking restoration of the company's name in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana.

2. Company Details and Regulatory Action:
The company was involved in the business of AMC and trading in power conditioning equipment. The Registrar of Companies struck off the company's name due to failure in filing annual returns and financial statements after 31.03.2015, indicating non-operation of the business.

3. Reasons for Non-Compliance:
The company admitted its default in statutory compliances, attributing it to lack of professional guidance and inadvertence. The company expressed willingness to file all pending audited financial statements and annual returns to resume business operations.

4. Submissions and Evidences:
The company presented evidence, including audited balance sheets, bank statements, income tax returns, and cash balances, to support its claim of having assets necessitating the restoration of its name in the RoC records.

5. Responses and Regulatory Stance:
The RoC did not object to the restoration if the company proved its business operations and filed financial statements with appropriate fees. The Income Tax Department did not file a reply despite multiple opportunities.

6. Legal Provisions and Tribunal Decision:
Under section 252 of the Companies Act, 2013, the Tribunal may order restoration of a company's name if satisfied that the company was in operation at the time of strike-off. The Tribunal found the company to be in operation and justified the restoration based on the assets and liabilities presented.

7. Tribunal's Order and Conditions:
The Tribunal allowed the petition, subject to a cost of ?25,000 to be paid to the Prime Minister Relief Fund. The company was directed to file all outstanding documents, complete formalities, and pay any late fees for restoration. The freezing of the company's bank accounts was set aside to facilitate business operations.

8. Conclusion:
The appeal was disposed of with the direction for restoration of the company's name in the RoC register, subject to compliance with specified conditions within a stipulated timeframe. The parties were to be served with a copy of the order for implementation.

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