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2023 (2) TMI 380 - AT - Companies LawSeeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), Mumbai - Respondent did not issue any notice under Section 248(1) of the Act which is mandatory in nature and a condition precedent before exercising the power of striking off under Section 248(5) of the Act - delay in filing the Balance Sheet and Annual Returns of the Company for the Financial Year 2016-17 to 2018-19 - delay due to lack of knowledge of the Compliance of the Company. HELD THAT - In view of the fact that the Balance Sheets of the Company for the Financial Years Year 2015-16, 2016-17, 2017-18 2018-19 and Income Tax Returns of the Company for the Financial Years 2016-17, 2017-18 2018-19 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, the order passed by the National Company Law Tribunal (Mumbai Bench, Court-II) as well as Registrar of Companies, Maharashtra, Mumbai is not sustainable in law. The name of the Appellant Company be restored to the Register of Companies subject to the compliances fulfilled - appeal allowed.
Issues Involved:
1. Appeal under Section 421 of the Companies Act, 2013 against the order of the National Company Law Tribunal (Mumbai Bench) dismissing a Company Petition for restoration of a company's name in the Register maintained by the Registrar of Companies. 2. Compliance with Section 248 of the Companies Act, 2013 regarding striking off the name of a company by the Registrar of Companies. 3. Allegation of non-compliance by the Appellant leading to the company's name being struck off. 4. Appellant's contention of procedural irregularities and lack of notice before striking off the company's name. 5. Appellant's claim of the company being operational and having substantial assets despite non-filing of certain documents. 6. Respondent's defense of following due process and issuing notices before striking off the company's name. 7. Tribunal's assessment of the company's business activities and assets based on financial records. 8. Decision on whether the company's name should be restored to the Register of Companies. Analysis: 1. The Appellant, a Director of a company struck off by the Registrar of Companies, filed an Appeal against the National Company Law Tribunal's order dismissing a Company Petition for restoration of the company's name. The Tribunal upheld the Registrar's decision due to the company's alleged non-compliance with Section 248 of the Companies Act, 2013. 2. The Appellant argued that the striking off was contrary to Section 248(1) of the Act, emphasizing that the company was operational and had future business prospects. The Respondent justified the action based on continuous non-filing of statutory returns and lack of business operations for two preceding financial years. 3. The Appellant contended that the non-filing of certain documents was unintentional and due to lack of compliance knowledge, asserting that the company was actively maintaining records as required by the Companies Act. 4. The Respondent defended the strike-off, citing due process followed, including issuing notices and publishing the company's name for objections. The Respondent argued that the Appellant's delay in filing statutory returns led to the company's removal from the Register. 5. The Tribunal reviewed the financial records of the company, noting substantial assets and business activities, contrary to the Registrar's assertion of non-operation. Consequently, the Tribunal set aside the earlier order and directed the restoration of the company's name to the Register, subject to specified compliances and costs. 6. The judgment highlighted the importance of statutory compliance, due process in striking off company names, and the need for accurate assessment of a company's operations before taking such actions. The decision aimed to balance regulatory requirements with the rights of companies to rectify inadvertent non-compliances and continue their business activities within the legal framework.
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