2020 (10) TMI 126 - Tri - Companies Law

Restoration of name of the company in the Register of Companies maintained by the Registrar of Companies - failure to file Financial Statements and Annual Returns for more than two continuous financial years - not carrying on any business or operation for a period of immediately preceding two years - no application made for obtaining the status of Dormant Company under section 455 of the Companies Act, 2013 - section 252(3) of the Companies Act, 2013 - HELD THAT - On perusal of the records, it appears that the name of the company was struck off for the failure on the part of the company to file the statutory documents for a continuous period of more than two years, as mandatorily required under the statute and also for not carrying on the business. On hearing the submissions of the Learned Counsel appearing on behalf of Petitioner and on perusal of the Audited Accounts submitted by the Petitioner Company and the documents provided on record, the Bench has observed that the company has assets liabilities in its Books of Accounts during the immediately preceding two years from the date of striking off of its name by the Registrar of Companies - Therefore, it would be just and equitable to provide an opportunity to the company to rectify its defaults and continue the business. The prayer sought by the Petitioner company deserves to be allowed - Respondent is directed to restore the name of the Petitioner company to the Register of Companies subject to payment of a sum of ₹ 50,000/- - Petition allowed.

Summary

Issues:
1. Restoration of company name in the Register of Companies after being struck off due to defaults in statutory compliances.

Analysis:
The Company Petition was filed seeking relief against the Respondent Registrar of Companies for striking off the company's name from the Register of Companies due to defaults in filing Financial Statements and Annual Returns for more than two continuous financial years. The Petitioner argued that the defaults were due to inadvertence and provided evidence of audited accounts and other documents to support its claim. The Respondent had initiated the process of striking off the company's name, leading to its dissolution. The Court observed the company's assets and liabilities during the relevant period and found it just and equitable to provide an opportunity for rectification and continuation of business.

The Court, after considering the submissions and documents provided by the Petitioner, decided to allow the Company Petition. The Petitioner was directed to pay a cost of ?50,000 to the PM-CARES Fund within thirty days for restoration of the company's name in the Register of Companies. Additionally, the Petitioner was required to file all pending Financial Statements and Annual Returns with applicable fees within the same period. Failure to comply with these conditions would automatically vacate the order for restoration. Upon compliance, the Registrar of Companies was instructed to communicate with bank authorities for defreezing the company's accounts.

In conclusion, the judgment favored the Petitioner by allowing the restoration of the company's name in the Register of Companies, subject to fulfilling the specified conditions. The decision aimed to rectify the defaults in statutory compliances and provide an opportunity for the company to continue its business operations.