2022 (1) TMI 911 - Tri - Companies Law

Seeking restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana - Section 252(3) of the Companies Act, 1956 - HELD THAT - The Appellant Company has failed to produce any Income Tax Returns filed, if any, by the Appellant Company. It has only placed the AS26 Forms towards TDS deposits on record. The same alone cannot be considered to indicate that it was either in operation or carrying out its business at the time of its name was struck off from the register of RoC - As rightly objected by the RoC, the Appellant Company has not filed or placed on record the copies of the Financial Statements for the Financial Years 2015-16 and 2016-17 i.e., for the two years prior to the date of its striking off to depict that the Appellant Company was in operation or carrying out its business. This Bench is of the view that the Appellant Company has failed to bring anything concrete on record, which could demonstrate that the Appellant Company was either in active operation or carrying out its business during the immediately preceding two financial years from the date of striking off or it is otherwise just and fair to restore the name of the Appellant Company in the register of RoC - the striking off action taken by the RoC against the Appellant Company under Section 248(5) of the Companies Act 2013 is upheld. Appeal dismissed.

Summary

Issues:
- Restoration of company name in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana under Section 252(3) of the Companies Act, 1956.
- Compliance with statutory requirements leading to strike off the company's name from the register.
- Justification for restoration based on company's operations and business activities.

Issue 1: Restoration of Company Name:
The Appellant Company sought restoration of its name in the register under Section 252(3) of the Companies Act, 1956. The company was initially incorporated as a Private Limited Company and later changed its name. The Registrar of Companies (RoC) struck off the company's name due to defaults in statutory compliances, specifically failure to file Financial Statements & Annual Returns since FY 2011-12.

Issue 2: Compliance with Statutory Requirements:
The Appellant Company provided documents to support its compliance efforts, including agreements, balance sheets reflecting nil revenue, Form 26AS towards TDS deposits, and bank statements. The RoC's report highlighted the company's failure to file Financial Statements for two preceding financial years and lack of revenue from operations in subsequent years.

Issue 3: Justification for Restoration:
The Tribunal analyzed the evidence presented by both parties and found the Appellant Company lacking in demonstrating active operations or business activities. The absence of ownership documents for properties, fixed assets, and financial statements for specific years raised doubts about the company's business continuity. Referring to a previous judgment, the Tribunal emphasized the need for concrete evidence to justify restoration, which the Appellant Company failed to provide. Consequently, the Tribunal dismissed the appeal, stating that there was insufficient proof of active operations or justifiable grounds for restoration.

In conclusion, the Tribunal dismissed the appeal for restoration of the company name in the register, citing the Appellant Company's failure to provide substantial evidence of ongoing operations or valid reasons for restoration. The judgment underscored the importance of meeting statutory requirements and demonstrating business activities to support restoration claims under the Companies Act.