2020 (12) TMI 1179 - Tri - Companies Law

Restoration of the name of the Company in the Register maintained by the Registrar of Companies - Section 252 (3) of the Companies Act, 2013 - HELD THAT - The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act, 2013 which includes that, if it is just and equitable to restore the name of the company in the Registrar of Companies, it may direct the RoC to restore the name in its Register - The appellant has been able to satisfy this Bench that it has certain assets which necessitate and justify restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable. The restoration of the Appellant Company s name in the Register will be subject to their filing all outstanding documents for the defaulting years as required by law and completion of all formalities, including payment of any late fee or other charges which are leviable by the respondent for the late filing of statutory returns - Appeal allowed.

Issues:
1. Restoration of company name in the Register maintained by the Registrar of Companies (RoC)
2. Failure to file Financial Statements and Annual Returns leading to striking off the company's name
3. Just and equitable grounds for restoration as per Section 252 of the Companies Act, 2013
4. Evidence presented by the Appellant to justify restoration
5. Payment of costs for restoration and completion of formalities

Analysis:
1. The appeal was filed by a company seeking restoration of its name in the Register maintained by the RoC under Section 252(3) of the Companies Act, 2013. The company had an authorized capital of ?1,00,00,000 and paid-up share capital of ?30,20,200. The company was struck off by the RoC for failure to file Financial Statements and Annual Returns for the years 2014-2015 and 2015-2016, indicating a lack of business operation.

2. The company admitted its default in statutory compliances, attributing it to lack of professional guidance and inadvertence. However, the company submitted copies of the required financial documents with the petition. The company also highlighted its continuous business operation and regular filing of Income Tax Returns, presenting evidence of its financial standing and assets to support the restoration plea.

3. The Tribunal considered the provisions of Section 252 of the Companies Act, 2013, which allow restoration if it is just and equitable to do so. The Tribunal acknowledged that the company had assets warranting restoration and emphasized the need for providing an opportunity to rectify the oversight. Refusing restoration solely based on failure to file annual returns was deemed unjust, citing previous court decisions.

4. The Appellant substantiated its case by submitting audited financial statements, balance sheets, auditor's reports, income tax returns, and evidence of assets and financial transactions. The company demonstrated its financial stability and operational status, justifying the restoration of its name in the Register of Companies.

5. The Tribunal allowed the appeal, subject to the payment of costs amounting to ?25,000 to the Prime Minister Relief Fund. The restoration was contingent upon filing all outstanding documents, completing formalities, and clearing any late fees or charges. The direction to freeze the company's bank account was also set aside to enable business operations promptly upon compliance with the restoration order. The RoC was instructed to comply with the restoration order within one week of the company's compliance.

In conclusion, the Tribunal granted the appeal for restoration, emphasizing the company's assets and justifying grounds for reinstating its name in the Register of Companies. Compliance with formalities and payment of costs were mandated for the restoration process to proceed smoothly, ensuring the company's ability to resume business operations promptly.

← Previous Next →