2020 (11) TMI 290 - Tri - Companies Law

Restoration of the name of the Applicant Company in the Register of Companies - Section 252 of the Companies Act, 2013 - HELD THAT - It is evident from the plea of the Applicant that the Applicant has not questioned the process undertaken by the RoC in striking off the name of the Appellant Company as envisaged under Section 248 of the Companies Act, 2013 read with attendant Rules. However, the Applicant is seeking restoration of its name in the register as maintained by RoC by relying up on the ground that the Applicant Company as of date is carrying on the business for which it was incorporated and it is in operation and in the circumstances, it is just that the name of the Company should be restored on the Register of Companies as maintained by the Respondent. Further, a perusal of the GST Returns and the bank statement of the Company also goes on to show that the Company has been doing business. However, even though it will not absolve the Company from filing the necessary returns and documents and adhere to the provisions of Companies Act, 2013 as an onus is placed on the Company to strictly comply with the provisions of Companies Act, 2013 without any let, in the instant case the Company has demonstrated mitigating circumstances. Thus, taking into consideration the provisions of Section 252 of the Companies Act, 2013 which vests this Tribunal with a discretion where the Company whose name has been struck off and such Company is able to demonstrate that there is a running business as on the date when the name was struck off and also keeping in consideration that it is just to do so, can restore the name of the Company in the register, subject to conditions imposed. Application allowed.

Summary

Issues:
- Application filed under Section 252 of the Companies Act, 2013 for restoration of the name of the Applicant Company.
- Grounds for striking off the name of the Company by the Respondent under Section 248 of the Companies Act, 2013.
- Plea for restoration of the Company's name on the Register of Companies.
- Evidence presented by the Applicant to support the claim of ongoing business operations.
- Consideration of mitigating circumstances by the Tribunal.
- Directions issued by the Tribunal upon allowing the Application.

Analysis:

The judgment before the National Company Law Tribunal, Chennai Bench involves an Application filed under Section 252 of the Companies Act, 2013 by a Company seeking restoration of its name after being struck off by the Respondent under Section 248 of the Act. The Applicant, a private limited company engaged in the business of Oil and Gas Burners, presented its case through its Authorized Representative, highlighting the inadvertent omission in filing financial statements and annual returns due to staff changes and lack of professional guidance.

Upon reviewing the submissions, the Tribunal considered the plea of the Applicant and the Respondent's report. The Applicant did not challenge the process of striking off but sought restoration based on ongoing business operations. The Applicant provided evidence including bank statements, income tax returns, and GST filings to demonstrate its business activities despite compliance lapses.

The Tribunal acknowledged the Company's financial challenges and competitive industry dynamics, noting the mitigating circumstances. Considering the provisions of Section 252 of the Companies Act, 2013, the Tribunal exercised its discretion to restore the Company's name in the register. This decision aimed to protect stakeholders' interests, including employees, members, and revenue concerns, while ensuring compliance with statutory requirements.

In granting the Application, the Tribunal issued specific directions to the Company. These included filing pending returns and balance sheets, depositing funds for statutory payments, refraining from asset disposal, and submitting an affidavit of compliance within a specified timeframe. Additionally, the Tribunal highlighted that the restoration did not automatically reinstate disqualified directors and preserved the Respondent's authority to enforce compliance against the Company and its Directors.

Overall, the Tribunal allowed the Application for restoration, subject to the outlined directions and compliance requirements, emphasizing the importance of statutory adherence and transparency in business operations.

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