2020 (10) TMI 178 - AT - Companies Law

Restoration of name of company in the Register of Companies - no return of income has been filed - issuance of SCN - HELD THAT - In the Impugned Order it is not mentioned that before passing the Impugned Order, Learned Tribunal has served the notice on the Company or its Directors. Rule, 37 of the National Company Law Tribunal Rules, 2016 also provides that the Tribunal shall issue notice to the Respondent to show cause against the Application or Petition on the date of hearing to be specified in the notice. Such notice shall be accompanied by a copy of the Application with supporting documents. The Tribunal has not issued such notice to the Appellant - In such a situation, without giving any opportunity of hearing Learned Tribunal has passed the Impugned Order. Thus, the Impugned order hereby set aside and the matter is remitted back to the Tribunal with the direction that after hearing the parties decided the Appeal under Section 252 of the Act, as per law without influence by its earlier Order - Appeal allowed by way of remand.

Summary

Issues:
1. Appeal against the Order passed by the National Company Law Tribunal restoring a company's name in the Register of Companies.
2. Lack of notice served on the company before passing the Impugned Order by the Tribunal.
3. Compliance with Section 252 of the Companies Act regarding restoration of the company's name.
4. Arguments regarding completed assessment for the year 2011-12 and lack of business activity by the company.
5. Lack of opportunity of being heard before passing the Impugned Order.

Analysis:
1. The case involves an appeal against the order of the National Company Law Tribunal (NCLT) restoring the name of a company in the Register of Companies. The appeal was filed under Section 421 of the Companies Act against the NCLT's order dated 11.11.2019. The Tribunal allowed the appeal by the Principal Commissioner of Income Tax-15 Mumbai, seeking restoration of the company's name in the register.

2. One of the key issues raised was the lack of notice served on the company before passing the Impugned Order. The appellant argued that the Impugned Order was passed without serving any notice on the company, which is a violation of the principles of natural justice. The Tribunal did not provide an opportunity for the company to be heard before making the decision.

3. The appellant's counsel highlighted the provisions of Section 252 of the Companies Act, which require the Tribunal to give a reasonable opportunity for representations and being heard to the Registrar, the company, and all concerned persons before passing any order. Rule 37 of the National Company Law Appellate Tribunal Rules, 2016 also mandates issuing a notice to the respondent to show cause against the application or petition, accompanied by supporting documents.

4. Another argument presented was regarding the completed assessment for the year 2011-12 and the lack of business activity by the company. The appellant contended that there was no valid reason to revive the struck-off company, as there were no business activities and no employees to manage the affairs. The restoration would impose a burden and penalties on the appellant, who was the ex-director and majority shareholder of the company.

5. The Tribunal found merit in the arguments raised by the appellant, noting that the Impugned Order was passed without giving the company an opportunity to be heard. As per the provisions of the Companies Act and the NCLT Rules, the Tribunal should have provided a chance for the company to present its case before making a decision. Therefore, the Impugned Order was set aside, and the matter was remitted back to the Tribunal for a fresh decision after hearing the parties involved.

This detailed analysis covers the various legal aspects and arguments presented in the judgment, addressing the issues raised in the appeal comprehensively.