2020 (11) TMI 289 - Tri - Companies Law

Restoration of the name of the Company in the Register of Companies - Section 252(3) of the Companies Act, 2013 r/w Rule 87A of the National Company Law Tribunal (Amendment) Rules, 2017 r/w other related provisions of the Companies Act, 2013 and Companies (Removal of Names of Companies From the Register of Companies) Rules, 2016 - HELD THAT - Taking into consideration the financial statement as filed by the Applicant/Petitioner along with Income Tax Returns as pointed out above as well as the bank statement all of which establish that the Company was in operation immediately for a two year period prior to the strike off the name of the Company from the Register of Companies by the RoC. Taking into consideration the provisions of Section 252(3) of the Companies Act, 2013 under which this Application has been filed, it is deemed fit to restore the name of the Company on the file of the RoC/Respondent concerned as maintained, on the grounds that the Company has been able to demonstrate that it has been carrying on business/operations for a period of two years prior to strike off, subject to conditions imposed - application allowed.

Issues:
1. Restoration of company name struck off by RoC/Respondent.
2. Compliance with Companies Act, 2013 requirements.
3. Financial operations and filings of the Company.
4. Justification of RoC's action.
5. Decision on restoration and related directions.

Issue 1: Restoration of company name struck off by RoC/Respondent

The appellant, a shareholder of the company, approached the National Company Law Tribunal seeking restoration of the company's name, which was struck off by the RoC/Respondent. The application was made under Section 252(3) of the Companies Act, 2013, and related provisions. The company was active in providing security protection services and consultancy but failed to file financial statements and annual returns for a continuous period, leading to its name being struck off.

Issue 2: Compliance with Companies Act, 2013 requirements

The RoC/Respondent initiated action under Section 248 of the Companies Act, 2013, after the company failed to file necessary documents. The appellant argued that the company remained active and a going concern, attributing the non-compliance to the company's Chartered Accountant. The Tribunal considered the company's operational status and the need to give it a chance for revival before issuing directions for compliance with statutory requirements upon restoration.

Issue 3: Financial operations and filings of the Company

The Tribunal reviewed the company's financial history, including income tax returns and bank statements, to ascertain its operational status. Despite filing returns for previous years, the company failed to file necessary documents for a continuous period, leading to its name being struck off. The financial records presented by the appellant demonstrated the company's operational activities in the two years preceding the strike-off.

Issue 4: Justification of RoC's action

The RoC justified its action by highlighting the company's failure to comply with filing requirements and its non-availment of dormant company status under Section 455 of the Companies Act, 2013. The RoC contended that the company's non-compliance warranted the strike-off action and defended its decision as justified and necessary.

Issue 5: Decision on restoration and related directions

After considering the provisions of Section 252(3) of the Companies Act, 2013, the Tribunal deemed it appropriate to restore the company's name on the RoC's register. The Tribunal issued specific directions for compliance upon restoration, including filing annual returns, depositing funds for statutory payments, and restrictions on asset disposal. The order also clarified that restoration did not automatically restore disqualified directors and did not limit the RoC's power to proceed against the company for late filings.

The judgment by the National Company Law Tribunal, Chennai Bench, addressed the company's restoration, compliance with statutory requirements, financial operations, justification of RoC's action, and the decision on restoration along with related directions for the company's future operations and compliance.

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