RESTORATION OF STRUCK OFF COMPANY

[Mr. M. GOVINDARAJAN]

Section 560 of the Companies Act, 1956 deals with the power given to Registrar to strike defunct company off register.  Section 560 (5) of the Act deals with the procedure for striking off a name of the company. Section 560(6) of the Act provides that if a company, or any member or creditor, thereof, feels aggrieved by the  company having been struck off the register, the Court on an application made by the company, member or creditor before the expiry of twenty years from the publication in the official gazette of the notice aforesaid may, if satisfied that the company was, at the time of striking off, carrying on business or an operation or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register; and the Court may, by the order, give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.

In ‘Posh Exports Private Limited V. Registrar of Companies’ 2015 (2) TMI 757 - DELHI HIGH COURT  the petitioner company was incorporated as a private company with effect from 12.05.1997.  The Board of Directors in the meeting held on 20.02.2014 noticed that necessary documents had not been filed with the Registrar of Companies. When the documents were sought to be filed on website of the Ministry of Corporate Affairs, the Directors came to know that name of the petition company has been struck off for the failure to file requisite statutory documents, vide notice dated 23.06.2007. The petitioner company decided to take steps in the present petition and seek revival of the company.

In the present petition the petitioner contended that the balance sheet of the company were prepared from time to time.  But the management has recently found that none of the balance sheets and the statutory records has been filed with the Registrar of Companies.  It is further contended that the accountant of the petitioner company did not co-ordinate and the part time accountant of the company who was dealing with the said work, left the employment of the petitioner company.

The Registrar of Companies contended that the petitioner company has not filed its statutory documents since its incorporation.  Accordingly, the notice dated 31.05.2007 was issued for striking off the name of the company from the Register of Companies under Section 560 (5) of the Act. The petitioner company has not filed its statutory documents i.e., Annual Returns from 1999 to 2013 and Balance sheets for the years 2000, 2003 to 2013 and also the petitioner company has made the default for non filing which is contravention of Section 159 and 220 of the Companies Act, 1956.

In response to the submissions of the Registrar, the petitioner company filed an affidavit that the non filing of the aforesaid Annual Return and the Balance Sheets was because the part time Accountant of the Petitioner Company, who was dealing with the said work, left the employment of the petitioner company.

In view of the affidavit filed by the petitioner company, the Registrar of Companies informed that they have no objection with the restoration of the name of the company subject to the petitioners filing of all outstanding statutory documents from the years 1999 to 2013 and balance sheets as on 2000, 2003 to 2013 and also the other documents with the requisite fees as well as additional fees as applicable on the date of actual filing of the documents.  The certificates of ‘No Objection’ of the Directors as well as those of the shareholders, to the restoration of the name of the company to the Register maintained by the Registrar, have been placed on record as well.

The Company Law Board allowed the petition of the petitioner company, subject to the payment of costs of ₹ 75,000/- the name of the petitioner company as restored on the Register of the Registrar of Companies subject to the company filing all the statutory documents and returns for the outstanding period along with the prescribed fees in accordance with the law. The name of the petitioner company, its directors and members shall, as a consequence, stand restored to the Register of the Registrar of Companies, as if the name of the company had not been struck off, in accordance with Section 560 (6) of the Companies Act, 1956.

The object of Section 560 (6) of the Companies Act is to give a chance to the company, its members and creditors to revive the company which has been struck off by the Registrar of Companies, within a period of 20 years and to give them an opportunity of carrying on the business only after the company judge was satisfied that such restoration is necessary in the interests of justice.