2021 (11) TMI 954 - Tri - Companies Law

Seeking restoration of name of the company in the register maintained by the respondent/Registrar of Companies - section 252 of the Companies Act, 2013 - HELD THAT - The applicant is seeking restoration of its name in the register as maintained by the Registrar of Companies by relying up on the just ground as contemplated under section 252(3) of the Companies Act, 2013. It was submitted by learned counsel for the applicant that the company has no different viable opportunity in the agricultural field of power plant and under the present condition, the applicant wants to continue the same business as well as to establish the ownership of the property with the intent to save the assets of the company. Taking into consideration the provisions of section 252 of the Companies Act, 2013 and more particularly the just ground as envisaged under sub-section (3) of section 252 of the Companies Act, the name of the applicant-company is ordered to be restored in the register maintained by the respondent, subject to the directions imposed. Application allowed.

Summary

Issues:
Application for restoration of company name under section 252 of the Companies Act, 2013 after strike off under section 560(5) of the Companies Act, 1956.

Detailed Analysis:

1. Background and Company Details:
The application filed sought the restoration of the company's name, M/s. Fragrant Farms and Exports P. Ltd., in the register maintained by the Registrar of Companies after it was struck off. The company was incorporated in 1994 with specific objectives related to agricultural and horticultural activities, manufacturing, and exports. Financial statements were not filed as required, leading to the strike off.

2. Contentions of the Applicant:
The applicant argued that the company was not defunct as presumed by the Registrar, as it had assets and liabilities, had subscribed capital, and prepared financial statements up to March 2008. The applicant also highlighted the purchase of agricultural land for business purposes and expressed the intent to file all outstanding statutory documents upon restoration.

3. Registrar's Objections:
The Registrar of Companies raised objections regarding non-filing of annual returns and balance sheets, lack of statutory compliance, and absence of proof of business activity during the default period. The Registrar contended that all procedural requirements were followed before striking off the company's name.

4. Legal Grounds for Restoration:
The Tribunal considered the "just" ground under section 252(3) of the Companies Act, 2013 for restoration. Citing legal precedents, the Tribunal emphasized the concept of "justness" as equitable, fair, and reasonable, considering the circumstances and societal impact. The order for restoration was made based on these legal principles.

5. Directions for Restoration:
The Tribunal ordered the restoration of the company's name in the register, subject to specific directions. These included filing statutory documents, payment of costs, restrictions on asset disposal, compliance affidavit submission, and a shareholder undertaking regarding financial transactions during demonetization. The order did not automatically restore disqualified directors and did not limit the Registrar's power for further actions.

6. Conclusion:
The application for restoration was allowed based on the provided terms and directions, ensuring compliance with statutory requirements and financial obligations. The detailed analysis considered legal provisions, factual circumstances, and equitable considerations to reach a just decision in the matter.