2023 (1) TMI 460 - AT - Companies Law

Striking off Company s name from the Register of Companies - defaults in statutory compliances namely failure to file financial statements and annual returns - Section 248 (5) of the Companies Act 2013 - HELD THAT - The Company being in the Real Estate Development and Construction and having regard to the fact that the Company in this Appeal has come out with the plea that in the event of revival of the Company and the restoration of name of the Company in the Register maintained by the ROC it shall file all outstanding statutory documents namely the financial statements for the financial years and also the annual returns along with the file fees and the additional fees as applicable on the date of the actual filing on a careful consideration of the contentions advanced by both sides this Tribunal by exercising of sound discretion deems it just and proper to restore the name of the Appellant Company however on payment of cost of Rs. 50, 000/- for the laches and omissions on part of the Appellant Company s management. Before parting of the case this Tribunal observes that the restoration of the name of the Company is subject to filing of all the outstanding documents required by law and completion of all statutory formalities including payment of any late fee for the outstanding period and any other charges leviable by ROC and also payment of cost of Rs. 50, 000/- to be paid to the Prime Minister s Relief Fund within two weeks from today and produce the said receipt for verification before the Respondent. The name of the Company shall stand restored on the Register of Registrar of the Companies as if the name of the Company was not struck off in accordance with Section 248 (5) of the Companies Act 2013 - Appeal allowed.

Summary

Issues:
Challenging an order for striking off a company's name from the register due to statutory non-compliances.

Analysis:
1. The appeal challenged an order by the Adjudicating Authority where the company's name was struck off from the register due to failure in statutory compliances. The company, engaged in Real Estate Development and Construction, faced issues with filing financial statements and annual returns from 2014 onwards, leading to the Registrar of Companies initiating action under Section 248(5) of the Companies Act, 2013.

2. The Appellant's counsel presented various documents to support the company's business activities, including financial statements, bank statements, and board resolutions. Despite challenges, the company continued to pay lease rent for land leased by IDCO, conducted board meetings, and audited financial statements post-2016. The counsel highlighted the company's efforts to comply with statutory requirements and its engagement in business activities.

3. The Respondent's counsel emphasized the legal process followed, including issuing show cause notices and publishing notifications before striking off the company's name. Referring to legal precedents, the counsel argued for the imposition of fines if the company were to be given an opportunity for restoration, citing the importance of complying with the law.

4. The Tribunal, after considering the arguments from both sides, decided to restore the company's name in the register. The decision was based on the company's business nature, its commitment to filing outstanding documents, and the payment of a fine for previous lapses. The restoration was subject to fulfilling all statutory requirements, paying applicable fees, and submitting proof of payment to the Prime Minister's Relief Fund.

5. The judgment highlighted the importance of compliance with statutory formalities, including filing outstanding documents and paying necessary fees. By allowing the appeal with specified conditions, the Tribunal aimed to reinstate the company's status as if its name was never struck off, emphasizing the need for adherence to legal obligations and the restoration process.

This detailed analysis of the judgment provides a comprehensive overview of the legal issues, arguments presented, and the Tribunal's decision regarding the restoration of the company's name in the register.