2021 (7) TMI 566 - Tri - Companies Law

Seeking restoration of name of company which was struck off by the Registrar of Companies, Uttar Pradesh - section 252(3) of the Companies Act, 2013 read with Rule 87A of the National Company Law Tribunal Rules, 2016 - the company is a living entity and also has certain assets which necessitate restoration of name - HELD THAT - The documents relied upon by the Appellant unmistakably demonstrate that the Appellant Company is a living entity. The Appellant has been able to satisfy this bench that it has certain assets which necessitate and justify the restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable - As per several decisions of various courts it should only be an exceptional circumstance that court should refuse restoration where the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight. It is therefore the Registrar of Companies, the Respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the Company has not been struck off from the Registrar of Companies and take all consequential actions such as change of Company's status from 'Strike Off' to 'Active' (for e-filing) etc. - Application allowed.

Summary

Issues:
1. Restoration of name of a company struck off by the Registrar of Companies.
2. Compliance with statutory requirements under the Companies Act, 2013.
3. Just and equitable grounds for restoration of the company's name.
4. Direction for filing outstanding statutory documents and payment of costs.

Issue 1: Restoration of Name of the Company
The appeal was filed for the restoration of the name of a company that was struck off by the Registrar of Companies due to default in statutory compliances. The company, engaged in various business activities, was declared a Dormant Company under Section 455(1) of the Companies Act, 2013. The appellant argued that despite financial constraints and management engagements in the field of education, the company had been continuously conducting business. It was emphasized that the company had substantial assets, indicating its ability to restart operations.

Issue 2: Compliance with Statutory Requirements
The Registrar of Companies (ROC) stated that the company's name was struck off after following due procedures under Section 248 of the Companies Act, 2013. The ROC dissolved the company as it failed to file annual returns and balance sheets post-2016. Income Tax Authorities confirmed non-compliance with statutory and regulatory requirements from the financial year ending on 31.03.2017 onwards. The appellant submitted audited balance sheets and income tax returns to demonstrate the company's ongoing operations and financial status.

Issue 3: Just and Equitable Grounds for Restoration
The Tribunal examined the provisions of Section 252 of the Companies Act, 2013, concerning the restoration of a company's name. It was deemed in the interest of the company, its shareholders, and creditors to order the restoration of the company's name. The appellant successfully proved the existence of assets justifying restoration. The Tribunal emphasized that denying restoration solely based on failure to file annual returns would be unjust, citing court decisions that support restoration in such cases.

Issue 4: Direction for Compliance and Payment
The Tribunal directed the ROC to restore the company's name and change its status from 'Strike Off' to 'Active.' The appellant was instructed to file all outstanding statutory documents within thirty days of restoration. Additionally, a cost of ?50,000 was imposed for the revival of the company, to be paid online. The Registrar of Companies was tasked with publishing the restoration order in the Official Gazette and verifying/approving a notice to be published in a leading newspaper.

In conclusion, the appeal was disposed of with the restoration of the company's name subject to compliance with prescribed procedures and payment of costs, ensuring transparency and legal adherence in the restoration process.