2020 (11) TMI 161 - Tri - Companies Law

Restoration of name of company in the Register of Companies - section 252(3) of the Companies Act, 2013 read with Rule 87A of the National Company Law Tribunal Rules, 2016 - HELD THAT - The Appellant has been able to satisfy this bench that it has certain assets which necessitate and justify the 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. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable. As per several decisions of various courts it should only be an exceptional circumstance that court should refuse restoration where the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight. The Respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the Company has not been struck off from the Registrar of Companies and take all consequential actions such as change of Company's status from 'Strike Off to 'Active' (for e-filing), restoration of status of DIN etc. - Application allowed.

Summary

Issues Involved:
- Restoration of name of a company struck off by the Registrar of Companies
- Compliance with statutory requirements for restoration
- Just and equitable grounds for restoration
- Assets and operations of the company
- Jurisdiction of the National Company Law Tribunal

Analysis:

The judgment pertains to an appeal filed for the restoration of a company's name that was struck off by the Registrar of Companies due to default in statutory compliances. The Appellant Company, engaged in educational and hostel facilities, failed to file financial statements and annual returns, resulting in its dormant status. The company claimed inadvertent reasons and lack of professional guidance for non-compliance. The Registrar of Companies maintained that the company was struck off after providing a reasonable opportunity to be heard and due process under the Companies Act, 2013.

The Income Tax Authorities reported that the company was not found at its registered address during verification. However, the Appellant presented audited balance sheets showing substantial assets, indicating ongoing operations. The Tribunal acknowledged the company's existence and the dispute over the address was not a ground to deny restoration. The Tribunal examined the provisions under Section 252 of the Companies Act, 2013, and found it in the interest of shareholders and creditors to restore the company's name.

The Tribunal emphasized that the restoration should be just and equitable, considering the assets and circumstances of the company. Refusing restoration solely based on failure to file annual returns would be excessive. The Registrar of Companies was directed to restore the company's name and change its status from 'Strike Off' to 'Active.' The company was instructed to file pending statutory documents within thirty days of restoration, along with prescribed fees. Additionally, a cost of ?50,000 was imposed for revival, to be paid online.

Furthermore, the Appellant was required to provide a certified copy of the order to the Registrar of Companies for publication in the Official Gazette. The company was directed to publish a notice in a leading newspaper, subject to RoC approval. The RoC was tasked with publishing the restoration in the Official Gazette at the Appellant's expense. The appeal was disposed of accordingly, ensuring compliance with statutory requirements and just restoration of the company's name.