2020 (12) TMI 959 - Tri - Companies Law

Restoration of name of the company in the Register of companies maintained by Registrar of Companies - allegation that Appellant had not filed its Financial Statements and Annual Returns for the Financial Years since 2016-17, 2017-2018 and 2018-19 thereby giving rise to the surmise that the business of the company was not in operation - Section 252(3) of the Companies Act, 2013 - HELD THAT - The Appellant has submitted sufficient evidence that it has been in operation during the period preceding strike off, therefore it could not be termed as a defunct company as per section 252 of the Act. Thus, taking into consideration the provisions of Section 252(1) 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 it is just to do so, can restore the name of the Company, in the Register and in the interest of all stakeholders, including the Appellant itself, who seeks restoration of the name of the Company in the register maintained by Registrar of Companies, the company deserve to be restored. The name is restored - application allowed.

Summary

Issues:
1. Appeal against striking off company's name under Section 248(1) of the Companies Act, 2013.
2. Company's claim of being in operation during the period preceding strike off.
3. Jurisdiction of the Tribunal under Section 252(1) of the Companies Act, 2013 for restoration of company's name.

Analysis:
1. The appeal was filed against the order of striking off the company's name under Section 248(1) of the Companies Act, 2013. The Registrar of Companies had struck off the company's name due to non-filing of Financial Statements and Annual Returns for the Financial Years 2016-17, 2017-2018, and 2018-19, indicating that the business was not in operation. The Appellant challenged this decision by providing evidence of its operations during the mentioned period, including audited financial statements, bank statements, income tax returns, GST registration certificate, and lease agreement.

2. The Appellant demonstrated through various documents that it was indeed in operation, contrary to the Registrar's belief. The financial statements showed assets, revenue from operations, and expenses, while bank statements reflected transaction details and a closing credit balance. Additionally, income tax returns, GST registration, and a lease agreement further supported the claim of the company being functional. The Registrar, in response, did not object to the restoration of the company's name upon filing of pending statutory documents and late filing fees.

3. The Tribunal, considering the provisions of Section 252(1) of the Companies Act, 2013, found that the Appellant had sufficiently proven its operation during the period preceding the strike off. Section 252 allows restoration of a company's name if it is in operation or if it is just to do so. In this case, the Tribunal deemed it appropriate to restore the company's name in the interest of all stakeholders, including the Appellant. The appeal was allowed, and the name of the company was ordered to be restored to the Register of Companies upon completion of necessary formalities and payment of prescribed fees, including a contribution to the Prime Minister's Relief Fund.

This detailed analysis of the judgment highlights the issues involved, the evidence presented, and the legal reasoning behind the Tribunal's decision to restore the company's name in the Register of Companies.