2022 (12) TMI 895 - AT - Companies Law

Seeking restoration of the name of the Appellant Company in the Register maintained by the Registrar of Companies (RoC), Chhattisgarh - failure to file Financial Statements Annual Returns for the period 2016-17 to 2017-18 - whether the Appellant Company is carrying on any business or operations or not? - HELD THAT - In view of the fact that the sale deeds executed in favour of the Appellant Company and Audited Balance sheet from Financial Year 2015-16 to 2018-19 as also Income Tax Return of the Appellant Company shows that the Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, we are of the view that the order passed by the National Company Law Tribunal (Cuttack Bench, Cuttack) as well as Registrar of Companies, Chhattisgarh is not sustainable in law. The impugned order passed by the National Company Law Tribunal (Cuttack Bench, Cuttack) is set aside. The name of the Appellant Company be restored to the Register of Companies subject to the compliances mentioned - Appellant shall pay costs of Rs. 50,000/- to the Registrar of Companies, Chhattisgarh within 08 (Eight) weeks from passing of this Judgment - appeal allowed.

Issues Involved:
- Appeal under Section 421 of the Companies Act, 2013 against the order of the National Company Law Tribunal (Cuttack Bench, Cuttack) dismissing the appeal for restoration of the name of the company in the Register maintained by the Registrar of Companies.
- Non-compliance with statutory requirements leading to the strike off of the company's name from the Register of Companies.
- Dispute regarding the restoration of the company's name in the Register to utilize its properties and continue business operations.
- Arguments presented by the Appellant regarding the company's assets, liabilities, and willingness to comply with conditions for restoration.
- Respondent's stance on the company's failure to file Annual Returns and Balance Sheets, leading to the strike off.
- Examination of the company's business activities, assets, and liabilities to determine if the strike off was justified.
- Decision on the appeal and the conditions imposed for the restoration of the company's name in the Register.

Analysis:
1. The appeal was filed under Section 421 of the Companies Act, 2013, challenging the order of the National Company Law Tribunal (Cuttack Bench, Cuttack) which dismissed the appeal for restoration of the company's name in the Register maintained by the Registrar of Companies. The dispute arose due to the company's non-compliance with statutory requirements, specifically the failure to file Financial Statements & Annual Returns for the period 2016-17 to 2017-18, resulting in the strike off of the company's name from the Register.

2. The Appellant, a Shareholder/Director of the company, argued that the company had assets and liabilities, including land parcels for real estate development, and had inadvertently failed to file the necessary returns due to lack of professional guidance in the initial years. The Appellant contended that the company was willing to comply with all conditions for restoration and pay any penalties imposed.

3. On the other hand, the Respondent, the Registrar of Companies, highlighted the company's failure to file Annual Returns and Balance Sheets for multiple years, leading to the issuance of notices and eventual strike off. The Respondent emphasized that despite the notices sent to the company and its directors, no response or compliance was received, justifying the strike off action.

4. After considering the arguments and examining the company's business activities, assets, and liabilities, the Appellate Tribunal found that the company possessed substantial movable and immovable assets, indicating that it was engaged in business operations. Consequently, the Tribunal concluded that the strike off was not justified, setting aside the order of the National Company Law Tribunal and directing the restoration of the company's name in the Register.

5. The Tribunal imposed certain conditions for the restoration, including the payment of costs to the Registrar of Companies, filing of all Annual Returns and Balance Sheets, and compliance with other statutory requirements within specified timelines. The Registrar of Companies was also granted the authority to take punitive actions for any future non-compliance by the company and its directors.

6. In conclusion, the appeal was allowed, and the Tribunal ordered the restoration of the company's name in the Register subject to the prescribed compliances and conditions, ensuring that the company could resume its business activities effectively.

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