2020 (11) TMI 683 - Tri - Companies Law

Restoration of the name of the Respondents Company in the register maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT - The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act, 2013 which includes that, if it is just and equitable to restore the name of the respondent- company in the Registrar of Companies, it may direct the RoC to restore the name in its Register - The appellant Income-tax hasbeen able to satisfy this Bench that they are the aggrieved party within the meaning of Sec.252(1) read with Section 252(3) of Companies Act, 2013 and great prejudice will be caused to Revenue and public at large, if the name of the respondent company is not restored back. The Appellant has filed its affidavit of service on 05.02.2020, wherein it states that service through publication was effected through newspapers Financial Express and Jansatta on 30.01.2020 on the Respondent Company and its Directors in pursuance of the order of this Tribunal. It is further stated that in spite of proper service to the respondent nos. 2 to 4, none appeared. Hence, the case was proceeded ex-parte against the said Respondents vide order dated 03.03.2020. On 15.10.2020 respondents 2 to 4 put in appearance and both the sides agreed to revival of the respondent company - The Income Tax Department is an aggrieved party within the meaning of section 252(1) and a creditor under Section 252(3) as it has to recover tax demand and penalty from the respondent company and great prejudice will be caused to the Appellant if the name of the respondent company is not restored back. In the above circumstances, this appeal is allowed. The Registrar of companies is therefore directed to restore the name of the Respondent Company in their Register - Application allowed.

Summary

Issues:
1. Restoration of the name of a company in the register maintained by the Registrar of Companies.
2. Just and equitable restoration of the name of the respondent company.
3. Appellant's satisfaction as an aggrieved party under the Companies Act, 2013.
4. Compliance with the restoration order and consequential effects.

Detailed Analysis:
1. The appeal was filed by the Income-tax Department for the restoration of the name of a company, M/s. M.B. Jewellers Pvt Ltd, in the register maintained by the Registrar of Companies. The company's name was struck off due to non-compliance with statutory returns, despite being in operation. The appellant sought restoration under Section 252(3) of the Companies Act, 2013.

2. The appellant Income Tax Department alleged that the respondent company failed to fully disclose cash deposits during the De-monetisation period, leading to scrutiny assessments and pending proceedings. The appellant argued that despite being struck off, the company remains obligated to fulfill its statutory obligations, including filing returns and undergoing assessment.

3. The Income Tax Department contended that restoration of the company's name was essential for framing assessments, recovering taxes, and pursuing further proceedings. The appellant satisfied the tribunal that it was an aggrieved party under Sections 252(1) and 252(3) of the Companies Act, 2013. Failure to restore the name would cause great prejudice to the revenue and the public interest.

4. The tribunal, after considering the arguments and evidence presented, allowed the appeal. It directed the Registrar of Companies to restore the name of the respondent company in the register. The restoration was to be treated as if the name had never been struck off, in accordance with Section 248(1) of the Companies Act, 2013. Additionally, the freezing of the company's bank account was ordered to be immediately set aside to enable the resumption of business operations. The respondent was given one week to comply with the restoration order and its consequential effects.

Overall, the tribunal disposed of the petition by granting the appeal, emphasizing the importance of restoring the company's name to fulfill its obligations and prevent prejudice to the appellant and the public interest.