2024 (9) TMI 251 - Tri - Companies Law

Restoration of the Company s name i.e. M/s. Era Financial Services (India) Limited in the Register of Companies maintained by Registrar of Companies Uttar Pradesh - Section 252(1) of the Companies Act 2013 - HELD THAT - An appeal u/s 252(1) can be filed by any aggrieved person in case the company is dissolved by the ROC u/s 248 by initiating proceedings as provided u/s 248(1) but when a company gets its name struck off from the Register of Companies certain aggrieved persons can only file application u/s 252(3). The provision for a company getting its name struck off is provided u/s 248(2). Therefore filing of appeal by any aggrieved person against the action of the ROC dissolving the company u/s 248 is provided u/s 252(1) for which limitation period is 3 years. However filing of application u/s 252(3) is provided only by certain persons on getting aggrieved against the company having its name struck off which may happen when a company gets its name struck off as per the provisions of section 248(2) for which longer period of limitation of 20 years are provided. Thus when a Company is struck off by the ROC as per the provision of section 248(1) on violation of certain provisions of the Companies Act provision for revival of the company is provided u/s 252(1) and when a Company is struck off u/s 248(2) on its application to ROC having discharged its liabilities and passing of special resolution by the shareholders provision for revival of the company is provided u/s 252(3). In the present case under appeal also STK-1 dated 18.07.2022 was issued by the ROC after finding that the subscription which the company had undertaken to pay at the time of incorporation of the Company and a declaration to this effect has not been filed within 180 days of its incorporation under sub-section (1) of section 10A which is in violation of section 248(1)(d). Therefore the ROC after giving notice u/s 248(5) vide STK-5 dated 30.08.2022 struck off the Company from the Register of the Companied by issuing notification in STK-7 dated 18.10.2022 from the date of publication of this notification in the Gazette of India and the said company was dissolved as mentioned at serial no 1750 of the list attached with STK-7 dated 18.10.2022. The instant appeal allowed to the extent of directing the ROC Uttar Pradesh Kanpur to restore the name of the appellant Company on the Register of Companies in the same position as nearly as may be as if the name of the company had not been struck off from the Registrar Of Companies changing the status of the appellant Company from struck off to active and take such further action against the Appellant Company with respect to late payment of subscription as provided under section 10A of the Companies act 2013 and any other violations of statutory provisions if any detected after revival of the company. Appeal disposed off.

Summary

Issues Involved:
1. Validity of the appeal under Section 252(3) of the Companies Act, 2013.
2. Compliance with Section 10A of the Companies Act, 2013.
3. Restoration of the company's name in the Register of Companies.
4. Payment of penalties and costs for restoration.

Detailed Analysis:

1. Validity of the Appeal under Section 252(3) of the Companies Act, 2013:
The Tribunal examined whether the appeal filed under Section 252(3) is maintainable. The appeal was filed by the appellant company against the striking off of its name by the Registrar of Companies (ROC) under Section 248(1) due to non-compliance with Section 10A. The Tribunal noted that Section 252(1) allows an aggrieved person to file an appeal if the company is dissolved by the ROC under Section 248(1), while Section 252(3) is applicable when the company itself requests to be struck off under Section 248(2). The Tribunal concluded that the appeal should have been filed under Section 252(1) and not Section 252(3). However, the Tribunal cited the Supreme Court's decision in P.K. Palanisamy vs N. Arumugam & Anr, stating that wrong citation of the provision does not invalidate an appeal if the court has jurisdiction. Thus, the appeal was considered under Section 252(1) and found to be maintainable.

2. Compliance with Section 10A of the Companies Act, 2013:
The ROC struck off the company's name due to non-compliance with Section 10A, which mandates the filing of a declaration regarding the payment of subscription amount within 180 days of incorporation. The appellant company argued that it could not comply due to financial difficulties caused by the COVID-19 pandemic. The Tribunal acknowledged the impact of the pandemic on the company's ability to meet regulatory obligations. The appellant also submitted an undertaking to comply with any penalties related to the failure to pay the subscription amount for shares upon incorporation.

3. Restoration of the Company's Name in the Register of Companies:
The Tribunal considered the facts and circumstances, including the impact of the COVID-19 pandemic on the company's operations. The Tribunal directed the ROC to restore the name of the appellant company in the Register of Companies, changing its status from "struck off" to "active." The restoration is subject to the appellant complying with all pending statutory requirements under the Companies Act, 2013, and the Income Tax Act, 1961.

4. Payment of Penalties and Costs for Restoration:
The Tribunal ordered the appellant company to pay a cost of Rs. 20,000/- to the ROC and an additional Rs. 20,000/- to the Prime Minister National Relief Fund. The ROC is to give effect to the restoration order only after verifying the payment of these costs. The appellant company is also directed to file all statutory forms, documents, and returns within 45 days from the date of restoration.

Conclusion:
The Tribunal allowed the appeal, directing the ROC to restore the appellant company's name in the Register of Companies, subject to compliance with statutory requirements and payment of costs. The order emphasizes the importance of adhering to regulatory obligations and provides a pathway for the company to rectify its non-compliance and resume operations.