2020 (12) TMI 1135 - Tri - Companies Law

Restoration of name of the Petitioner Company on the Register of Companies maintained by the Registrar of Companies - section 252 of the Companies Act, 2013 - HELD THAT - Though, the impugned order striking off the Company was in accordance with law, the Tribunal has to take into consideration the bonafide contentions of Petitioner seeking to restore the name of Company, by taking a lenient view of the issue in the interest of justice and ease of doing business, instead of rigidly interpreting the law on the issue. It is also not in dispute that the instant Company Petition is filed in accordance with law; there are no investigations pending against the Company; the Respondent has not opposed the Petition and has left the issue to the Tribunal to consider the case subject to certain terms and conditions. It has been submitted that the Company is a going concern and it had a turnover of ₹ 47,61,996/- for the YE 31.03.2011. Striking of its name would affect the Petitioner as well as its shareholders and suffer hardship and irreparable loss. No prejudice would be caused to any party if the Company's name is restored, as prayed. The Members of the Company have undertaken that post restoration of the name of the Company in the Register of the Registrar of Companies, Bangalore, the Company will complete the Annual filings due for the past years and carry on the business in its ordinary course. The interest of justice would be met if the name of Company is restored as prayed for - application allowed.

Issues:
1. Restoration of company name on the Register of Companies.
2. Compliance with statutory requirements for restoration.
3. Consideration of bonafide contentions for restoration.
4. Decision on restoration based on company's status as a going concern.

Issue 1: Restoration of company name on the Register of Companies

The petition was filed seeking the restoration of the company's name on the Register of Companies, which was struck off due to defaults in statutory compliances. The Registrar of Companies had initiated proceedings under Section 248 of the Companies Act, 2013, resulting in the company's name being struck off and published in the Official Gazette. The petitioner requested the Tribunal to restore the company's name as if it had not been struck off.

Issue 2: Compliance with statutory requirements for restoration

The Registrar of Companies, Karnataka, did not oppose the petition and expressed willingness to restore the company's name, subject to the payment of costs incurred in the restoration process and compliance with pending statutory returns. The company was directed to file all outstanding statutory documents, including financial statements and annual returns for specific periods, along with prescribed fees within a specified timeframe.

Issue 3: Consideration of bonafide contentions for restoration

Although the order striking off the company was in accordance with the law, the Tribunal considered the petitioner's bonafide contentions for restoration. The Tribunal emphasized taking a lenient view in the interest of justice and ease of doing business. The company's active status, absence of investigations against it, and lack of opposition from the Respondent were crucial factors in the decision-making process.

Issue 4: Decision on restoration based on company's status as a going concern

The Tribunal noted that the company was a going concern with a turnover for a specific year, and the striking off its name would cause hardship to the petitioner and shareholders. Considering the interests of justice, the Tribunal decided to restore the company's name with specific conditions, including the payment of costs, compliance with statutory requirements, and resumption of business operations promptly post-restoration.

In conclusion, the Tribunal, exercising its powers under the Companies Act, 2013, directed the restoration of the company's name on the Register of Companies, subject to compliance with specified conditions. The decision aimed to balance legal requirements with the petitioner's bonafide contentions and the company's status as a going concern, ensuring justice and facilitating the ease of business operations.

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