2021 (5) TMI 410 - Tri - Companies Law

Restoration of name of the Company in the Register of Companies maintained by the Respondent - Company has failed to file its Financial Statements and Annual Returns for six Financial Years from 2013-2014 to 2018-2019 - Section 252(1) of the Companies Act, 2013 - HELD THAT - The Appellant Company has been active since its incorporation and maintains all the requisite papers. However due to the old age of the Directors, they could not manage the day to day affairs of the Company and gradually the Company was shrunk. The Appellant Company did not receive any show cause notice from the Respondent nor any opportunity of being heard was given. With regard to the submissions of the Appellant that the Respondent failed to send the notices, did not give a fair chance to make representations, did not give any opportunity of being heard, we find that the Respondent issued Notice in Form STK-1 and STK-5 dated 19.07.2018. The name of the Company was also published on the website of Ministry on 19.07.2018 as well as in leading newspapers Times of India and Maharashtra Times on 21.07.2018 and in the Official Gazette on 04.08.2018. Finally, the dissolution order was also published on the website of the Ministry vide STK-7 on 12.09.2018. The contentions of the Appellant are thus frivolous and cannot be accepted - Further it is observed that despite the Company being active Appellant it does not have a Bank Account. This prima facie indicates that the Company was not carrying on any commercial activity. However, the Appellant submitted that after complying with all the pending statutory filings, the Company would seek voluntary striking off. Thus, in the interest of justice the name of the Company may be restored in the Register of Companies maintained by the Respondent to accord it an opportunity to complete all pending filings - application allowed.

Summary

Issues:
1. Restoration of Company's name in the Register of Companies.
2. Failure to file Financial Statements and Annual Returns.
3. Allegations of lack of fair chance to represent before striking off.
4. Company's activity status and lack of a Bank Account.
5. Order for restoration and compliance conditions.

Issue 1: Restoration of Company's name in the Register of Companies
The Appellant filed a Petition under Section 252(1) of the Companies Act, 2013 seeking restoration of the Company's name in the Register of Companies. The Company was incorporated in 1960 and had failed to file Financial Statements and Annual Returns for six consecutive financial years. The Appellant argued that the Respondent did not provide a fair opportunity to represent before striking off the Company's name.

Issue 2: Failure to file Financial Statements and Annual Returns
The Company had not filed Financial Statements and Annual Returns for the financial years 2013-2014 to 2018-2019. The Appellant claimed that despite efforts to file the required forms, the Respondent published a notice under section 248(5) of the Act, leading to the Company's name being struck off and dissolved without proper representation.

Issue 3: Allegations of lack of fair chance to represent before striking off
The Appellant contended that they were not given a fair chance to respond before the Company's name was struck off. However, the Respondent submitted a sequence of events leading to the striking off, including issuing notices and publishing the Company's name on various platforms for objections. The Tribunal found the Appellant's contentions regarding lack of notice to be frivolous.

Issue 4: Company's activity status and lack of a Bank Account
Despite being an active Company, the Appellant did not have a Bank Account, raising doubts about its commercial activities. The Tribunal noted this discrepancy but allowed the restoration of the Company's name on the condition that all pending filings are completed and a voluntary striking off application is made after compliance.

Issue 5: Order for restoration and compliance conditions
The Tribunal allowed the Appellant's appeal, setting aside the order striking off the Company's name. The restoration was subject to conditions, including filing pending financial statements and returns, paying costs, and publishing the order in the official gazette. Failure to comply with the conditions would nullify the restoration order.

In conclusion, the Tribunal granted the appeal for restoration of the Company's name in the Register of Companies, emphasizing the importance of compliance with pending filings and statutory requirements. The judgment highlighted the need for proper representation and adherence to regulatory obligations to maintain transparency and accountability in corporate governance.