2021 (5) TMI 608 - Tri - Companies Law

Seeking restoration of name of company in the Register of Companies, maintained by the Registrar of Companies - Section 252(3) of the Companies Act. 2013 - HELD THAT - The materials available on record indicates that the failure of the Company to furnish the statutory returns with the RoC was not intentional. Apparently the Company has been carrying on its operations as the financial statements would indicate. Unless the Company's name is restored it will prejudicially affect its prospects and adversely influence the Directors in their future endeavours. The promoters of the Company as well as the Appellant are keen to carry on and perform the objects of the Company in right earnest. There has been substantial investments in the project. The Company is continuing its business. Unless the name of the Company is restored in the Register of Companies it would suffer financially and may go out of business. The directors of the company would also face disqualification. The name of the Company should be restored in the Register of Companies - Appeal allowed.

Summary

Issues:
1. Restoration of Company's name in the Register of Companies.

Analysis:
The appeal was filed under Section 252(3) of the Companies Act, 2013 by a shareholder seeking restoration of the company's name in the Register of Companies maintained by the Registrar of Companies for the State of Andhra Pradesh. The company was struck off by the Registrar of Companies for not carrying on any business for two years and not applying for dormant status. The shareholders contended that the company was indeed operational, had valid agreements, assets, and liabilities, and regularly conducted Annual General Meetings. They assured to file all pending documents and returns required under the Act within the prescribed time limit.

The Registrar of Companies, Andhra Pradesh, filed a report stating that the company failed to file statutory returns, leading to its strike off. The Registrar had no objection to considering the restoration application, subject to the filing of pending financial statements and annual returns with costs imposed. After hearing the arguments, the tribunal found that the company's failure to furnish statutory returns was not intentional, and it had been carrying out operations. The tribunal noted the substantial investments in the project and the company's intention to continue its business. The tribunal concluded that restoring the company's name was crucial for its financial well-being and to prevent disqualification of its directors.

The tribunal allowed the appeal, setting aside the previous order and ordering the restoration of the company's name in the Register of Companies, Vijayawada, subject to conditions. The appellant was directed to file all pending financial statements and returns within two months, deliver a certified copy of the order to the Registrar of Companies, pay a specified cost towards the Prime Minister's Relief Fund, and comply with other conditions. Non-compliance would nullify the order's effect, and the Registrar retained the authority to take action against the company for any prior violations.

In conclusion, the tribunal granted the appeal, emphasizing the importance of restoring the company's name to protect its operations, investments, and directors from adverse consequences and financial losses.