2020 (11) TMI 327 - Tri - Companies Law

Restoration of name of the company in the Register maintained by the Registrar of Companies, Mumbai - Section 252 (3) of the Companies Act, 1956 - HELD THAT - It is observed that the Petitioner Company has Short term borrowings of ₹ 1,170, 034/-, has fixed Assets of ₹ 12,38,464/-, for the Financial Year 2017-2018 and 2016-2017 - The Company has Fixed Assets (Land) valued of ₹ 12,38,464/- in its Balance Sheet. The Company had taken on lease the premises at MAHAD MIDC, got NOC from MIDC for power supply and also obtained approval for water supply from MIDC as stated in pre-paras. The Company has also produced various approval letters from the authorities, Lease Deed with MIDC to satisfy the Bench that the Company is carrying on its business operations. The Bench is of the opinion that the Company is taking various steps towards the commencement of its production - the books of the Petitioner Company reflects that Members intend to continue its business operations of the company. Therefore, in the interest of justice the name of the company deserves to be restored in the Register of Companies maintained by the Respondent Registrar of Companies Petition allowed.

Issues:
- Restoration of company's name in the Register of Companies maintained by the Registrar of Companies, Mumbai.
- Non-filing of Financial Statements and Annual Returns for multiple financial years.
- Lack of communication regarding striking off the company's name.
- Company's active status and intention to continue business operations.
- Company's efforts towards business commencement and compliance with regulatory approvals.

Analysis:
1. Restoration of Company's Name:
The petition was filed under Section 252(3) of the Companies Act, 1956, seeking restoration of the company's name in the Register of Companies. The company, incorporated in 2013, failed to file Financial Statements and Annual Returns for five consecutive years. The petitioner argued that the company was active, maintaining necessary documents, and the non-filing was due to inadvertence.

2. Non-filing of Financial Statements:
The petitioner acknowledged the failure to file Financial Statements and Annual Returns for the relevant years. They highlighted that despite efforts to file, the company was unable to do so, resulting in the company's name being struck off without receiving any show cause notice or opportunity to be heard.

3. Lack of Communication and Compliance:
The Registrar of Companies issued notices regarding the intention to strike off the company's name, but the petitioner claimed not to have received them. The respondent's affidavit detailed the sequence of events leading to the striking off, including publication in official gazettes and newspapers. However, the petitioner argued that they were active and maintaining all requisite documents.

4. Company's Active Status and Intentions:
The petitioner emphasized the company's active status since incorporation, the infusion of personal funds to start operations, and the lack of turnover. They provided evidence of financial transactions and audited accounts to support their claim of actively being involved in business operations.

5. Efforts Towards Business Commencement:
The company demonstrated efforts towards business commencement by leasing premises, obtaining necessary approvals for power and water supply, and filing Income-Tax Returns. The tribunal noted the company's steps towards production commencement and the intention of members to continue business operations.

Conclusion:
The tribunal, after considering all facts and circumstances, allowed the petition for restoration of the company's name in the Register of Companies. The respondent was directed to restore the name subject to payment of costs and filing pending financial statements and Annual Returns within specified timelines. The decision was based on the company's intentions, efforts towards compliance, and steps taken towards business commencement, ensuring justice and regulatory adherence.

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