2021 (4) TMI 1065 - Tri - Companies Law

Seeking to restore status/name of the Company - seeking 252 (3) of the Companies Act, 2013 - HELD THAT - It is not in dispute that the Registrar of Companies is conferred with power U/s. 248(1) to strike off the Company, if the Company has failed to commence its business within one year of its incorporation or a Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any Application within such period for obtaining the status of a dormant Company U/s. 455. However, Section 248(6) states that the Registrar of Companies, before finally striking off Company, has to satisfy himself that sufficient provision has been made for the realization of all amounts due to the Company and for the payment or discharge of its liabilities and obligations by the Company within a reasonable time, and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company. 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 left the issue to Tribunal to consider the case subject terms and conditions. The Directors/Shareholders of the Company has undertaken to file all the returns, statements and documents that are required under the Companies Act, 2013 within the prescribed time. Therefore, in the interest of justice would be met, if the name of Company is restored as prayed for, however, subject to conditions mentioned below. The Registrar of Companies, Karnataka, the Respondent herein, is directed to restore the name of the Company in the Register maintained by the Registrar of Companies, Karnataka as if its name had not been struck off from the rolls of the Register, with restoration of all other consequential actions taken by the Registrar of Companies - petition disposed off.

Summary

Issues Involved:
1. Restoration of company status from strike off to Active under Section 252(3) of the Companies Act, 2013.
2. Non-filing of audited financial statements and annual returns leading to strike off.
3. Compliance with statutory requirements and restoration conditions.
4. Exercise of powers by the Tribunal for ease of doing business.

Issue 1: Restoration of Company Status:
The case involved a petition filed under Section 252(3) of the Companies Act, 2013 seeking to restore the status of a company from strike off to Active. The petitioner, a financial consultancy firm, had its name struck off due to non-filing of financial statements and annual returns for two consecutive years. The petitioner contended that the lapse was unintentional and sought restoration to resume business activities.

Issue 2: Non-filing of Financial Statements:
The Registrar of Companies initiated action under Section 248(1) against the company for not filing balance sheets or annual returns from 2011-12 to 2018-19. The company failed to respond to notices, leading to its name being struck off. The petitioner argued that the non-compliance was inadvertent and provided assurances to rectify the filings upon restoration.

Issue 3: Compliance and Restoration Conditions:
The Tribunal considered the provisions of Section 248(6) which require the Registrar to ensure adequate provision for liabilities before striking off a company. Despite the legal basis for the strike off, the Tribunal leaned towards restoring the company's name, given the absence of investigations, lack of opposition from the respondent, and undertakings by directors/shareholders to fulfill pending obligations within the prescribed time.

Issue 4: Exercise of Tribunal's Powers:
In exercising its powers under Section 252(3) of the Companies Act, 2013, the Tribunal balanced the legal requirements with the interest of justice and ease of doing business. The Tribunal directed the restoration of the company's name with specific conditions, including filing statutory documents, payment of costs, and resumption of business operations promptly post-restoration.

By considering the bona fide contentions of the petitioner and the principles of ease of doing business, the Tribunal ordered the restoration of the company's name, subject to compliance with specified conditions and requirements within the stipulated timelines.