2021 (11) TMI 124 - Tri - Companies Law

Restoration of the name of the struck-off company - Section 252 of the Companies Act, 2013 - HELD THAT - It is noted that the company is owing Terrace development rights and inventory of flats constructed by it, which needs to be disposed of so as to discharge its liability. There is sufficient evidence on record to consider the prayer of revival in view of immovable property as well as pending disputes. Considering submission and documents on record, this appeal is allowed and the name of the company is restored in the Register of Companies from the date of its striking off subject to payment of cost for non-compliance of rules relating to filing the Statutory Returns and Audited Financial Statements - appeal allowed.

Issues:
- Restoration of name of struck-off company in Register of Companies.
- Failure to file Annual Returns and Financial Statements.
- Pending litigation affecting company operations.
- Company's status as a going concern.
- Compliance with statutory requirements for restoration.

Issue 1: Restoration of name of struck-off company in Register of Companies:
The appeal was filed under Section 252 of the Companies Act, 2013 for the restoration of the name of the struck-off company in the Register of Companies maintained by the ROC, Gwalior, Madhya Pradesh. The Tribunal considered the submissions and evidence, noting that the company is owing Terrace development rights and inventory of flats, which need to be disposed of to discharge its liability. The Tribunal allowed the appeal and directed the ROC to restore the original status of the company from 'Struck off to Active,' subject to compliance with certain conditions. The restoration was subject to payment of a cost of ?25,000 to be paid to the Prime Minister Relief Fund.

Issue 2: Failure to file Annual Returns and Financial Statements:
The appellant company failed to file Annual Returns and Financial Statements since the financial year 2016-17, leading to the belief by the ROC that the company was not carrying on business operations. The appellant explained that this failure was inadvertent, as the company could not continue construction work due to an injunction order from pending litigation. Despite this, the company was a going concern and had filed Income Tax Returns for multiple assessment years. The Tribunal considered these factors in allowing the restoration of the company's name in the Register of Companies.

Issue 3: Pending litigation affecting company operations:
The company was entangled in pending litigation, including a civil suit and a Special Leave Petition before the Hon'ble Supreme Court of India. The litigation had prevented the directors from filing the necessary Financial Statements and Annual Returns, contributing to the strike-off by the ROC. The Tribunal took into account the impact of the litigation on the company's operations and considered it as a mitigating factor in deciding to restore the company's name.

Issue 4: Company's status as a going concern:
The appellant company asserted that it was a going concern and had filed Income Tax Returns for multiple assessment years, indicating its operational status despite the failure to file certain statutory documents. This claim was supported by the submission of relevant documents on record. The Tribunal considered the company's status as a going concern as a significant factor in granting the restoration of its name in the Register of Companies.

Issue 5: Compliance with statutory requirements for restoration:
The Tribunal directed the appellant to file all pending statutory documents, including Annual Accounts and Annual Returns for the default financial years, along with prescribed fees and fines as per the Companies Act, 2013. The restoration of the company's name was made subject to the appellant's compliance with these statutory requirements. Additionally, the Tribunal ordered the delivery of a certified copy of the order to the ROC within thirty days and instructed the ROC to publish the order in the Official Gazette after compliance with the specified directions. The Tribunal emphasized that the restoration order would not prevent the ROC from taking appropriate actions for any other violations committed by the company.

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