2023 (8) TMI 1613 - AT - Companies Law

Restoration of name of the company in the Register of Companies - Section 252(1) of the Companies Act 2013 - HELD THAT - It is evident from the impugned order that the company petition was preferred under Section 252(1) of the Companies Act 2013. However since the date of striking off the name of the company is not mentioned it is difficult to infer as to whether the petition was filed within three years from the striking off the name of the company or not. The order does not reflect any plausible reason for passing an order for restoration. Similarly nothing has been indicated as to under what circumstances the cost of Rs.5 lakhs was imposed. It is evident that from the date of striking off the name of the company from the register of Registrar of Companies one can prefer an appeal within a period of three years from the date of striking off the name of the company. In the order impugned date of striking off under Section 248(5) of Companies Act 2013 has not been mentioned. On examination of the impugned order it is evident that though date of striking off was not mentioned the appeal was preferred after four years. The order on this issue appears to be completely vague - since the appeal was preferred under Section 252(1) of the Companies Act 2013 the learned NCLT was required to examine the appeal strictly in accordance with the provision under Section 252(1) of the Companies Act 23013. In absence of exact date of striking off it would be difficult to approve the impugned order. Moreover learned NCLT has imposed cost of Rs. 5 lakhs but no plausible reason has been given for imposing such cost. In such view of the matter there are no option but to set aside the order and remit back the matter to the NCLT for passing order afresh after affording opportunity to both the parties i.e. Appellant and ROC. Conclusion - NCLT s order did not adequately address the requirements of Section 252 of the Companies Act 2013. Matter remitted to the NCLT for passing order afresh after affording opportunity to both the parties i.e. Appellant and ROC. Appeal allowed by way of remand.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered in this judgment was whether the National Company Law Tribunal (NCLT) correctly restored the name of Vbuiltfine Properties Pvt Ltd to the register of companies, along with imposing a cost of Rs. 5,00,000/-, under Section 252(1) of the Companies Act, 2013. The Tribunal also needed to determine if the appeal was filed within the permissible time frame and whether the restoration was justified under the legal framework.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The appeal was filed under Section 252(1) of the Companies Act, 2013, which allows a company aggrieved by the Registrar's order of dissolution to appeal for restoration within three years. Section 252(3) provides that the Tribunal may restore a company if it was carrying on business at the time of being struck off or if it is otherwise just to do so.

Court's Interpretation and Reasoning

The Tribunal noted that the NCLT had allowed the petition for restoration but found the reasoning for this decision unclear, particularly regarding the timing of the appeal and the imposition of costs. The Tribunal highlighted the absence of the date when the company was struck off, which is crucial for determining the timeliness of the appeal under Section 252(1).

Key Evidence and Findings

The NCLT's order mentioned that the company had not filed financial statements and annual returns from 2011-12 to 2021-22 due to inadvertence. The company provided audited accounts for 2017-18 to 2019-20 and income tax returns for 2014-15 to 2017-18. However, the Tribunal found the NCLT's order vague in justifying the restoration and the imposition of costs.

Application of Law to Facts

The Tribunal emphasized that the NCLT should have examined whether the appeal was filed within three years of the company's name being struck off, as required by Section 252(1). Additionally, the NCLT needed to assess whether the company was carrying on business at the time of striking off or if it was just to restore the company under Section 252(3).

Treatment of Competing Arguments

The Tribunal noted the arguments from the respondent (Registrar of Companies) that the company had not conducted business for over two years and had not filed required documents since 2011. The appellant argued that the company was operational, albeit with filing lapses due to inadvertence. However, the Tribunal found the NCLT's consideration of these arguments insufficiently detailed.

Conclusions

The Tribunal concluded that the NCLT's order lacked clarity on key points, such as the date of striking off and reasons for imposing costs. The Tribunal set aside the NCLT's order and remitted the case back for a fresh decision, emphasizing the need for a detailed examination of the appeal's timeliness and justification for restoration.

SIGNIFICANT HOLDINGS

The Tribunal held that the NCLT's order did not adequately address the requirements of Section 252 of the Companies Act, 2013. Specifically, the NCLT failed to provide a clear rationale for the restoration of the company's name and the imposition of costs. The Tribunal stressed the importance of determining whether the appeal was filed within the statutory period and whether the company was operational at the time of being struck off.

The Tribunal's decision to remit the case back to the NCLT underscores the necessity for clear and reasoned judgments that adhere to statutory requirements. The Tribunal directed the NCLT to afford both parties an opportunity to present their cases fully and to issue a new order that addresses these deficiencies.