2022 (4) TMI 1004 - AT - Companies Law

Seeking restoration of name of company in the Register of Companies - Section 252 (3) of the Companies Act, 2013 - HELD THAT - Taking note of the fact that the Appellant / Company although, prepared the Financial Statements and got the same audited, but could not file the same for the Financial Year beginning from 2006-2007 till 2019-2020 (vide paragraph 7.3 of the instant Comp App (AT) No. 51 of 2022), keeping in mind yet another prime fact that the Appellant / Company had admitted its Bonafide mistake on its part, in non-filing of Balance Sheet and Annual Return and added further that the company is ready and willing to furnish all relevant documents for the defaulted financial year(s) before the Respondent/ROC, West Bengal with Delay Fees that are applicable and in the teeth of settled legal position that the right to seek restoration of the name of the company (to be entered in the Register of Companies ) is not wiped out, as long as twenty years have not lapsed, etc., is of the considered view that on the basis of facts and circumstances of the entire conspectus of the present case, that it is just and proper to restore the Appellant / Company s name and that the failure / negligence / omissions on the part of the Appellant / Company in not filing the Statutory Annual Returns and Financial Statements in time, can be saddled with a levy of costs, to prevent an aberration of justice and to promote substantial cause of justice. The name is ordered to be restored - application allowed.

Summary

Issues Involved:
1. Striking off the company’s name by the Registrar of Companies.
2. Non-filing of financial statements and annual returns.
3. Restoration of the company's name.
4. Legal precedents and statutory provisions.

Issue-Wise Detailed Analysis:

1. Striking off the Company’s Name by the Registrar of Companies:
The Appellant's company name was struck off by the Registrar of Companies, West Bengal, based on a notice dated 11.09.2012. The company had failed to file financial statements and annual returns for multiple financial years due to an acute financial crisis, lack of coordination, and lack of information about prevailing regulations. The Deputy Registrar of Companies, West Bengal, in a report dated 24.08.2021, stated that the company had not filed balance sheets and annual returns from 31.03.2008 to 31.03.2020, leading to its name being struck off after complying with the Companies Act, 1956.

2. Non-Filing of Financial Statements and Annual Returns:
The Appellant admitted to not filing financial statements and annual returns for the financial years from 2006-2007 to 2019-2020, citing inadvertent lapse and bona fide mistake. The company was prepared to furnish all relevant documents for the defaulted financial years with applicable delay fees. The company also had tangible assets and liabilities, including property at Village Sheetalpur in District East Champaran, Bihar, and a balance of ?9,51,500/- for the financial year ending March 2018.

3. Restoration of the Company's Name:
Section 252(3) of the Companies Act, 2013, allows for the restoration of a company's name if the Tribunal is satisfied that the company was carrying on business or in operation at the time of its name being struck off, or if it is otherwise just to restore the name. The Tribunal referred to several precedents, including Purushottam Dass V Registrar of Companies and POSH Exports Pvt Ltd. V The Registrar of Companies, which upheld the right to seek restoration within 20 years and allowed restoration subject to payment of costs and filing of statutory documents.

4. Legal Precedents and Statutory Provisions:
The Tribunal cited various judgments, including Amarpreet Enterprises P Ltd. & Another V Registrar of Companies, which outlined that restoration could be made if the company was in business or operation at the time of being struck off or if it was just to restore the name. In Tweak the Future Innovations Private Limited V Registrar of Companies, the Tribunal restored the company's name, recognizing the company's operational status and the importance of developing business platforms. The Tribunal also referenced the Supreme Court's pending Civil Appeal No. 6803-6805 of 2021 in R. Narayanasamy V The Registrar of Companies, Tamil Nadu, emphasizing the obligation to file statutory annual returns.

Result:
The Appellate Tribunal allowed the appeal, setting aside the impugned order dated 15.11.2021 by the National Company Law Tribunal, Kolkata Bench. The Tribunal ordered the restoration of the Appellant company's name to the Register of Companies, subject to the filing of all outstanding relevant documents and fulfilling all statutory requirements, including the payment of ?75,000/- to the Prime Minister's Relief Fund. The restoration was to be treated as if the company's name had not been struck off, in accordance with Section 248(5) of the Companies Act, 2013.