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2021 (6) TMI 89 - Tri - Companies LawSeeking to restore the name of the company in the Register maintained by the Respondent - Section 252(3) of the Companies Act, 2013 - HELD THAT - It is evident from the plea of the Applicant that the Applicant Company seeking for restoration of its name in the register as maintained by RoC on the ground that the Applicant Company was doing business for which it was incorporated and it is in operation and in the circumstances, it is just that the name of the Company should be restored on the Register of Companies as maintained by the Respondent. It is evident that the Applicant Company was struck off on 09.08.2018 and for the two years immediately preceding 09.08.2018, it is incumbent upon the Applicant to show that the Applicant Company was active and running business. A perusal of the Income Tax Acknowledgment and also the Bank Accounts of the Company manifest the fact that the Company was active and carrying on its business activities, however has failed to file the Annual Returns and Financial Statements with the Respondent since incorporation. Under the circumstances, this Tribunal feels that it is 'just' that the name of the Company is required to be restored back in the Register maintained by the Respondent - The Applicant Company has filed sufficient documents in order to demonstrate that the Company is active and carrying on the business and substantiated that it is 'just' that the name of the Applicant Company is required to be restored. Thus, this Tribunal is of the view that the name of the Applicant Company is required to be restored in the Register maintained by the Respondent RoC. Taking into consideration the provisions of Section 252 of the Companies Act, 2013 which vests this Tribunal with a discretion where the Company whose name has been struck off and such Company is able to demonstrate that there is a running business as on the date when the name was struck off and also keeping in consideration that it is just to do so can restore the name of the Company in the register and in the interest of all the stakeholders including members of the Company, its employees as well as the revenue and the Applicant itself who seeks restoration of the name of the Company in the register being maintained by RoC. The Application is allowed.
Issues:
- Restoration of company name in the Register maintained by Respondent under Section 252(3) of the Companies Act, 2013. - Compliance requirements for filing Annual Financial Statements and Annual Returns. - Evidence of company's business activities and operation. - Discretion of the Tribunal to restore the name of the Company. - Directions for restoration and compliance post restoration. Issue 1: Restoration of Company Name The Applicant sought restoration of the company name in the Register maintained by the Respondent after it was struck off under Section 252(3) of the Companies Act, 2013. The Applicant, a Shareholder cum Director, argued that the company was active since its incorporation and regularly held Annual General Meetings. The Respondent had struck off the company's name due to non-compliance with filing requirements, leading to the present Application for restoration. Issue 2: Compliance Requirements The Applicant acknowledged the failure to file Annual Financial Statements and Annual Returns with the Respondent, attributing it to a lack of awareness and not engaging a Company Secretary for the task. The Respondent highlighted the statutory and procedural compliance lapses as the basis for striking off the company's name, emphasizing the need for the company to prove its business operations and justify the restoration request. Issue 3: Evidence of Business Activities In support of the restoration plea, the Applicant submitted evidence including Audited Financial Statements, Income Tax Acknowledgments, and Bank Statements spanning multiple financial years. Despite the compliance shortcomings, the Tribunal noted that the company was active and operational, conducting business activities as evidenced by the financial records and bank statements provided. Issue 4: Tribunal's Discretion Considering the provisions of Section 252 of the Companies Act, 2013, the Tribunal exercised its discretion to restore the company name, emphasizing the importance of demonstrating ongoing business operations at the time of striking off. The Tribunal found it just to grant the restoration based on the evidence presented by the Applicant and the mitigating circumstances surrounding the compliance failures. Issue 5: Directions for Restoration and Compliance The Tribunal granted the Application, ordering the restoration of the company's name in the Register maintained by the Respondent. Specific directions were issued, including the filing of pending returns and documents, payment of costs for revival, restrictions on asset disposal, and compliance with statutory requirements within specified timelines. The order clarified that restoration did not automatically absolve directors of disqualifications under Section 164 of the Companies Act, 2013, emphasizing the need for strict compliance with the law post-restoration. This judgment by the National Company Law Tribunal, Chennai Bench, highlights the significance of compliance with statutory requirements for companies and the discretion of the Tribunal to restore struck-off company names based on evidence of ongoing business activities. The detailed analysis of evidence, compliance lapses, and restoration directions underscores the legal principles governing company restoration proceedings under the Companies Act, 2013.
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