2010 (4) TMI 600 - HC - Companies Law

Restoration of the name of the petitioner No. 1 on the Register of Companies seeked - Held that - Counsel for the respondent does not have any objection to the revival of the company, subject to the petitioners filing all outstanding statutory documents, i.e., annual returns for the period 30-9-1999 to 30-9-2008, and balance sheets for the period 31-3-1999 to 31-3-2008, along with the filing and additional fee, as applicable on the date of actual filing. The certificates of No Objection of the Directors and the shareholders, to the restoration of the name of the company to the Register maintained by the Registrar of Companies, have been placed on record as well. Consequently, the restoration of the company s name to the Register maintained by the Registrar of Companies will be subject to the payment of ₹ 22,000 as costs, payable to the Registrar of Companies within 3 weeks from today. The impugned order dated 31-5-2007 for striking off the name of the petitioner-company shall then stand set aside.

Summary

Issues:
- Restoration of company name on the Register of Companies under section 560(6) of the Companies Act, 1956.
- Default in statutory compliances leading to striking off the company's name from the Register.
- Lack of show-cause notice and opportunity of being heard before striking off the name.
- Petitioner's claim of being an active company and maintaining requisite documentation.
- Counsel for respondent not objecting to revival subject to filing outstanding statutory documents.
- Interpretation of section 560(6) of the Companies Act and necessity for restoration in the interest of justice.
- Responsibility for statutory compliances and negligence on the part of the firm of Chartered Accountants.
- Requirement to pay costs for restoration and completion of formalities for reinstatement.

Analysis:
The judgment dealt with a petition seeking the restoration of a company's name on the Register of Companies under section 560(6) of the Companies Act, 1956. The company, engaged in automobile and vehicle trading, had its name struck off for defaults in statutory compliances, specifically for not filing balance-sheets and annual returns for several years. The petitioners contended that they were active, had maintained documentation, and were not served with show-cause notices. The court noted the importance of ensuring statutory compliances and held that negligence in this regard was not solely the fault of the Chartered Accountant firm but also the management's responsibility. Despite the lapse, the court found it appropriate to set aside the order striking off the company's name, emphasizing the company's functioning status.

The judgment referenced the Bombay High Court decision in Purushottamdass v. Registrar of Companies, highlighting the objective of section 560(6) to provide an opportunity for revival within 20 years in the interest of justice. The court acknowledged the need for care in compliance but ultimately allowed the petition for restoration, subject to the payment of costs and completion of formalities. The order directed the payment of costs to the Registrar of Companies and outlined the requirements for reinstating the company's name on the Register, including the payment of any late fees or charges.

In conclusion, the court granted liberty to the respondent for further action regarding alleged defaults in compliance with the Companies Act, 1956. The judgment underscored the significance of meeting statutory obligations, the responsibility of management in ensuring compliance, and the legal provisions governing the restoration of a company's name on the Register of Companies.