2021 (6) TMI 239 - Tri - Companies Law

Restoration of name of company in the Register of Companies - Section 252 (3) of the Companies Act, 2013 - HELD THAT - The Company has bought a land to the extent of 3500 square feet. Further, the object of the Company as stated in the MoA is that to perform civil constructions, flat promotions, real estate and infrastructure developments. Thus, the above documents shows that the Company was active and carrying on its business for the purpose of which it was incorporated. Further, from the Balance Sheet filed for the Financial Year 2018 - 2019, under the caption Current Assets, a sum of ₹ 1,82,11,775/- is shown as Inventories - the Company has been active for the period two years preceding the date of strike off and carrying on its business for the purpose of which it was incorporated. 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. The name of the company is ordered to be restored - application allowed.

Summary

Issues:
Application for restoration of a company's name struck off by the Registrar of Companies under Section 248 of the Companies Act, 2013.

Analysis:
The Application was filed by a shareholder seeking to restore the name of the Company in the Register maintained by the Registrar of Companies (RoC). The Company, engaged in civil constructions and real estate development, failed to file financial statements and annual returns from 2013-2014, leading to its strike off. The Applicant argued that the Company remained active despite economic challenges, justifying restoration.

The Respondent objected, claiming the Application lacked the Applicant's signature and an accompanying Affidavit. However, the Tribunal found these objections baseless as the Application was duly signed and supported by an Affidavit. The Income Tax Department was notified, but no representation was made on their behalf.

Evidences presented by the Applicant included income tax returns, property documents, and financial statements. The Sale Deed of 2013 showed land acquisition, aligning with the Company's objectives. The Balance Sheet indicated active operations with significant inventories. Considering Section 252 of the Companies Act, 2013, the Tribunal had discretion to restore a struck-off Company's name if it demonstrated ongoing business operations.

The Tribunal granted the Application, subject to conditions. The Company was directed to file pending returns, deposit funds for statutory payments, refrain from asset disposal, and ensure compliance with director disqualification provisions. An affidavit of compliance was required within two months. Shareholders had to submit an Undertaking regarding financial transactions during demonetization. The Tribunal's decision did not limit the RoC's authority to take action for late filings or non-compliance in the future.