2013 (10) TMI 1591 - HC - Companies Law

Issues Involved:

1. Restoration of a company to the Register of Companies under Section 560(6) of the Companies Act, 1956.
2. Applicability of Section 560(6) when the company was struck off under a voluntary scheme.
3. Satisfaction of the court's criteria for restoration under Section 560(6).

Issue-wise Detailed Analysis:

1. Restoration of a Company to the Register:

The petitioner sought the restoration of a private limited company to the Register of Companies under Section 560(6) of the Companies Act, 1956. The company was initially struck off at its own request under the Easy Exit Scheme of 2011. The petitioner argued that circumstances had changed, and the company now had potential business opportunities and the ability to raise its paid-up capital to the statutory minimum.

2. Applicability of Section 560(6):

The court analyzed whether Section 560(6) could be invoked when a company was struck off voluntarily under a scheme. It was noted that the Registrar of Companies (ROC) did not strike off the company on its own motion for reasons under Section 560(1) to (5). The company had voluntarily applied for striking off under a special scheme, which did not provide for subsequent restoration under Section 560(6). The court emphasized that Section 560(6) is applicable when the ROC acts on its own motion, not when the company itself initiates the striking off.

3. Satisfaction of Court's Criteria for Restoration:

The court examined two criteria under Section 560(6): whether the company was carrying on business at the time of striking off and whether it was just to restore the company. The petitioner admitted that the company had not been operational since 2006 and had a paid-up capital of only Rs. 400, far below the required Rs. 1 lakh. The court found that these facts did not satisfy the criteria for restoration. The company's lack of operation and non-compliance with statutory capital requirements weighed against the restoration.

4. Judicial Discretion and Precedents:

The court noted that judicial discretion under Section 560(6) must be exercised judiciously. The petitioner cited several precedents, but the court found them distinguishable. In cases where restoration was granted, the applications were made by creditors or involved different factual circumstances. The court concluded that the petitioner's reliance on these cases was misplaced.

5. Conclusion and Alternative Remedies:

The court held that the petition was not maintainable under Section 560(6) due to the voluntary nature of the striking off and the lack of provision in the scheme for restoration. The petition was dismissed, but the court clarified that this order did not preclude the petitioner from seeking relief under other legal provisions or remedies. The court's decision was limited to the application under Section 560(6) and did not affect the petitioner's right to pursue other proceedings for similar reliefs.

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