2023 (2) TMI 736 - AT - Companies Law

Seeking restoration of the name of the Company in the Register maintained by the Registrar of Companies (RoC), NCT of Delhi and Haryana - HELD THAT - In view of the fact that the Audited Financial Statements for the Financial Years from 2013-14 to 2019-20 and Audited Balance Sheets for the Financial Years 2015-16, 2016-17 2017-18 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 (New Delhi Bench, Court-II) as well as Registrar of Companies, NCT of Delhi Haryana is not sustainable in law. The name of the Appellant Company be restored to the Register of Companies subject to the compliances imposed - appeal allowed.

Summary

Issues Involved:
1. Appeal under Section 421 of the Companies Act, 2013 against the order of the National Company Law Tribunal dismissing the appeal for restoration of a company's name in the Register of Companies.
2. Whether the company was in operation at the time of striking off by the Registrar of Companies.
3. Compliance with the principles of natural justice and Section 252 of the Companies Act, 2013.
4. Substantiation of the company's operations through financial statements and business plans.
5. Just and equitable grounds for restoration of the company's name.
6. Objection or support from relevant parties like the Income Tax Department.
7. Legal sustainability of the orders passed by the National Company Law Tribunal and the Registrar of Companies.

Detailed Analysis:

1. The Appellants filed an appeal under Section 421 of the Companies Act, 2013, challenging the order of the National Company Law Tribunal dismissing their appeal for restoration of the company's name in the Register of Companies. The company, engaged in real estate business, faced the striking off of its name due to non-filing of statutory documents since 2013-14, leading to adverse effects on stakeholders.

2. The central issue revolved around whether the company was in operation at the time of striking off. The Appellants argued that they continued operations, conducted essential corporate procedures, and held meetings, while possessing valuable assets like real estate. They emphasized the need for natural justice and the curative nature of Section 252 to substantiate the company's operational status.

3. The Appellants highlighted compliance with the principles of natural justice and Section 252, urging the Tribunal not to reject the application on technical grounds but to allow submission of additional documents to prove the company's operational status at the time of striking off.

4. Substantiation of the company's operations through financial statements and business plans played a crucial role. The Appellants presented audited financial statements, balance sheets, and details of assets to support their claim of ongoing business activities and future plans for business enhancement.

5. The Tribunal assessed the just and equitable grounds for restoration, considering the company's potential irreparable losses, impact on stakeholders, and the livelihoods of directors, shareholders, creditors, and employees in case of non-restoration.

6. The response from the Registrar of Companies highlighted the reasons for striking off the company, including non-filing of documents and lack of operations for two preceding financial years. The Registrar found no just grounds for restoration, leading to the dismissal of the petition.

7. The judgment set aside the order of the National Company Law Tribunal and the Registrar of Companies, restoring the company's name with specified compliances, including payment of costs, filing of annual returns, and compliance with statutory requirements. The decision emphasized the company's substantial assets and ongoing operations as reasons for restoration.

This comprehensive analysis covers the issues involved in the legal judgment, providing a detailed understanding of the arguments presented, responses from relevant parties, and the final decision of the Appellate Tribunal.