2023 (3) TMI 1018 - AT - Companies Law

Seeking restoration of the name of the company in the Registrar of Companies, Chhattisgarh - Section 252 of the Companies Act, 2013 - HELD THAT - The NCLT has recorded that in this case, Registrar of Companies, Chhattisgarh also did not have objection for restoration of the Company s name in the Register. However, in view of the fact that the Audited Annual Accounts of the Company for the Financial Years 2012-2013, 2013-14, 2014-15, 2015-16, 2016-17 2017-18 and Income Tax Return of the Company for the Financial Years 2012-2013, 2013-14, 2014-15, 2015-16, 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 (Cuttack Bench, Cuttack) as well as Registrar of Companies, Chhattisgarh, is not sustainable in law. The name of the Appellant Company be restored to the Register of Companies subject to the compliances imposed - application allowed.

Summary

Issues involved:
The issues involved in this case include the appeal under Section 421 of the Companies Act, 2013, filed by the Appellant against the order of the National Company Law Tribunal (Cuttack Bench, Cuttack) dismissing the Company Petition (Appeal) and striking off the name of the company.

Facts and Arguments:
The Appellant company, incorporated as a Private Limited Company, had active business operations, filed income tax returns, and held regular meetings. Due to disruptions in a remote area, the company faced challenges in complying with mandatory requirements. The Respondent struck off the company's name for non-compliance without proper notice or investigation. The Appellant sought restoration based on owning valuable assets and intentions to discharge liabilities.

Legal Submissions:
The Appellant argued that the company's assets and intentions to continue business justified restoration. They contended that non-filing of financial statements did not imply cessation of business operations. The Appellant planned to file all outstanding statutory documents upon restoration. Citing legal precedent, they emphasized that restoration is the rule rather than the exception.

Respondent's Position:
The Respondent stated that the company failed to file annual returns and balance sheets for several years, leading to the strike-off. They argued that the company did not conduct business for two financial years and did not apply for dormant status, justifying the strike-off as per the law.

Judgment:
The Appellate Tribunal found that the company possessed substantial assets and was actively engaged in business, contrary to the strike-off reasons. The Tribunal set aside the NCLT's order and directed the restoration of the company's name in the register. The Appellant was instructed to pay costs, file pending documents, and comply with statutory requirements post-restoration. The Registrar of Companies was granted authority to take further steps for non-compliance.

Conclusion:
The Appellate Tribunal allowed the appeal, emphasizing the company's active business status and substantial assets. Restoration was ordered with specified conditions to ensure compliance with legal obligations post-revival. The judgment highlighted the importance of proper investigation and notice before striking off a company's name.