2020 (10) TMI 124 - Tri - Companies Law

Restoration of the name of the company to the Register of Companies maintained by the Registrar of Companies - failure on the part of the company to file the statutory documents for Financial Year since incorporation, and also for not carrying on the business - section 252(3) of the Companies Act, 2013 - HELD THAT - The Petitioner Company holds tangible assets in the form of land admeasuring an extent of 3610 sq ft in Mira Road, Thane, which was acquired at a value of ₹ 3,87,320/- on 31.08.2007. The Company has placed on record a copy of the 7/12 register extract in support of its contention, at Annexure-3 to the Petition - Possession of an asset such as land will fall within the meaning of the expression just used in section 252(3) of the Companies Act, 2013. The land in question is located in Mira Road, within the Mumbai Metropolitan Region. The property of the Petitioner Company would be rendered bona vacantia in case the present application is not allowed, and this is not a very desirable result from the point of view of the Petitioner Company. Thus, the name of the Petitioner Company should be restored to the register and that it should be given a chance to redeem itself by filing all the pending statutory returns with the RoC - The Respondent Registrar of Companies, Maharashtra, Mumbai, is directed to restore the name of the Petitioner Company - petition allowed.

Issues:
1. Restoration of company's name in the Register of Companies.
2. Compliance with statutory requirements under the Companies Act, 2013.
3. Impact of failure to file financial statements and annual returns on company's status.
4. Director Identification Numbers (DIN) deactivation due to company's name being struck off.
5. Possession of tangible assets by the company.
6. Justification for restoration of the company's name.

Issue 1: Restoration of Company's Name in the Register of Companies
The Company Petition was filed seeking restoration of the company's name in the Register of Companies maintained by the Registrar of Companies, Mumbai. The Petitioner Company highlighted that its name was struck off due to defaults in statutory compliances and subsequent dissolution. The Tribunal analyzed the facts and directed the Registrar to restore the company's name, subject to filing pending financial statements and Annual Returns within thirty days of restoration.

Issue 2: Compliance with Statutory Requirements
The Petitioner Company failed to file financial statements and annual returns since incorporation, leading to the Registrar striking off its name. The Tribunal noted the company's efforts to rectify this by submitting Audited Accounts and Income-Tax Returns for assessment years. The restoration order mandated compliance with all applicable fees and late fees for the pending filings.

Issue 3: Impact of Non-Compliance on Company's Status
The failure to file statutory documents and conduct business activities resulted in the company's name being struck off. The Tribunal observed the absence of revenue generation or business operations based on the financial statements. However, the possession of tangible assets, particularly land, was considered significant in justifying the restoration of the company's name.

Issue 4: Director Identification Numbers (DIN) Deactivation
The Petitioner Company faced DIN deactivation for its directors due to the company's name being struck off. The Tribunal acknowledged the company's efforts to address this issue by requesting the RoC to restore the directors' details in the Company Master Data to facilitate filings, which remained pending.

Issue 5: Possession of Tangible Assets
The company held tangible assets in the form of land, which was a crucial factor in supporting the restoration plea. The Tribunal recognized the land's value and location, emphasizing that the company's assets falling under the expression "just" in the Companies Act, 2013 warranted restoration to prevent the assets from being considered bona vacantia.

Issue 6: Justification for Restoration
Considering the company's possession of tangible assets and the potential loss if not restored, the Tribunal concluded that the company should be given an opportunity to redeem itself by filing pending statutory returns. The restoration order aimed to prevent undesired consequences for the company and facilitate its compliance with regulatory requirements.

This detailed analysis of the judgment provides insights into the issues addressed by the Tribunal, emphasizing the significance of compliance, tangible assets, and the restoration of the company's name in the Register of Companies.

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