2021 (1) TMI 866 - Tri - Companies Law

Restoration of name of the company in the Register maintained by the Registrar of Companies, Mumbai - Section 252 (1) of the Companies Act, 2013 - HELD THAT - The Bench is satisfied that the Company has Revenue from operations is ₹ 7,64,000/-, Fixed assets of ₹ 52,07,691/-, Cash and Cash equivalent is ₹ 15,452/-, Sundry Debtors is ₹ 2,45,654/-, Other Current Assets is ₹ 1,75,258/- and Long-Term borrowings is ₹ 54,40,124/-, and Profit of ₹ 14,206/- for year ended 31.03.2019 and Revenue from operations is ₹ 1,70,440/-, Fixed assets of ₹ 52,07,691/-, Cash and Cash equivalent is ₹ 26,343/-, Sundry Debtors is ₹ 3,42,158/-, Other Current Assets is ₹ 2,58,349/- and LongTerm borrowings is ₹ 55,77,416/-, and Profit of ₹ 32,160/- for year ended 31.03.2018. As observed above, the books of the Petitioner Company reflect 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. The Respondent is directed to restore the name of the Petitioner company in the Register of Companies subject to payment of a sum of ₹ 50,000/- as cost payable in the account of PM-CARES fund within thirty days from the date of receipt of copy of this order - Application allowed.

Issues:
1. Restoration of company's name in the Register maintained by the Registrar of Companies, Mumbai under Section 252(1) of the Companies Act, 2013.
2. Non-filing of Financial Statements and Annual Returns for multiple financial years.
3. Lack of notice and opportunity before striking off the company's name.
4. Operational status and assets of the company.
5. Compliance with Companies Act, 2013 requirements.

Issue 1: Restoration of Company's Name
The petition sought restoration of the company's name in the Register maintained by the Registrar of Companies, Mumbai. The company had been incorporated for the business of job work of machine embroidery and had failed to file Financial Statements and Annual Returns for seven consecutive financial years. The petitioner argued that the company was active, operational, and maintaining all necessary documents as per the provisions of the Companies Act, 2013. The audited accounts submitted showed the company's revenue, assets, liabilities, and profits, indicating its intention to continue operations. The Tribunal found merit in the petition and ordered the restoration of the company's name in the Register.

Issue 2: Non-filing of Financial Statements and Annual Returns
The petitioner acknowledged the failure to file Financial Statements and Annual Returns for several financial years, attributing it to personal and financial difficulties faced by the directors. The delay in filing was unintentional, and the company had not applied for dormant status under Section 248(2) of the Companies Act, 2013. Despite the non-filing, the company had been filing Income Tax Returns with the Income Tax Department. The Tribunal noted the reasons provided by the petitioner for the lapses in filing and considered the company's active involvement in business operations as evidenced by the submitted audited accounts.

Issue 3: Lack of Notice and Opportunity
The petitioner contended that they had not received any notice from the Respondent Registrar before the company's name was struck off. The Registrar had issued notices and published the intention to strike off the company's name, but the petitioner claimed they were unaware of such actions and thus could not respond or provide reasons for non-striking off. The Tribunal observed the sequence of events leading to the striking off of the company's name as explained by the Respondent Registrar but found in favor of the petitioner due to the lack of representation against the strike-off action.

Issue 4: Operational Status and Assets
The company demonstrated its operational status by submitting audited accounts for multiple financial years, showing revenue, assets, liabilities, and profits. The Tribunal reviewed the financial details provided and concluded that the company was actively involved in business operations, holding assets and liabilities, and generating profits. This evidence supported the decision to restore the company's name in the Register maintained by the Registrar of Companies, Mumbai.

Issue 5: Compliance with Companies Act, 2013
The Tribunal considered the compliance of the company with the provisions of the Companies Act, 2013, despite the lapse in filing Financial Statements and Annual Returns. The petitioner emphasized the inadvertent nature of the delay in filing and the company's continued operations and maintenance of necessary documents. The Tribunal, after reviewing the submissions and financial records, found that the company deserved to have its name restored in the Register of Companies maintained by the Respondent Registrar. The order directed the restoration of the company's name subject to specified conditions, including payment of costs and filing of pending financial statements and returns within a set timeframe.

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