2020 (12) TMI 646 - Tri - Companies Law

Restoration of name of the Company in the Register of Companies maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT - It is not in dispute that the Registrar of Companies is conferred with power U/ s. 248(1) to strike off the Company, if the Company has failed to commence its business within one year of its incorporation or a Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any Application within such period for obtaining the status of a dormant Company U/ s. 455. However, Section 248(6) states that the Registrar of Companies, before finally striking off Company, has to satisfy himself that sufficient provision has been made for the realization of all amounts due to the Company and for the payment or discharge of its liabilities and obligations by the Company within a reasonable time, and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company. Though the impugned striking off the Company was in accordance with law, the Tribunal has to take into consideration of bona fide contentions of Petitioner seeking to restore name of Company, by taking a lenient view of the issue in the interest of justice and ease of doing business, instead of rigidly interpreting the law on the issue. It is also not in dispute that the instant Company Petition is filed in accordance with law; there are no investigations pending against the Company; the Respondent has not opposed the Petition; and left the issue to Tribunal to consider the case subject terms and conditions. The interest of justice would be met, if the name of Company is restored - the Respondent herein, is directed to restore the name of the Company in the Register maintained by the Registrar of Companies, Karnataka as if its name had not been struck off from the rolls of the Register, with restoration of all other consequential actions taken by Registrar of Companies in pursuance to the impugned action - application allowed.

Summary

Issues:
1. Restoration of the name of the Company in the Register of Companies under Section 252(3) of the Companies Act, 2013.

Analysis:
The Company, engaged in providing healthcare services, faced striking off from the Register of Companies due to non-filing of annual returns and financial statements. The Registrar of Companies initiated action under Section 248(1) of the Companies Act, 2013, as the Company failed to file necessary documents. The Company, through its shareholder, filed a petition seeking restoration, citing reasons such as the absence of a full-time Company Secretary and the unfortunate demise of a Promoter Director. The Company contended that non-filing was unintentional and sought restoration to protect stakeholders' interests.

The Registrar of Companies, Karnataka, did not oppose the main petition but detailed the procedural compliance followed before striking off the Company's name. The Respondent highlighted that no cause was shown by the Company or its Directors against the notices sent, leading to the Company's removal from the Register. The Respondent clarified that there were no inquiries or complaints against the Company, but the DIN of disqualified Directors might not be restored due to pending legal matters.

The Tribunal, considering the economic challenges due to the pandemic, emphasized the ease of doing business and the interest of justice. It acknowledged the Registrar's power to strike off non-compliant companies but also recognized the bona fide contentions of the Petitioner seeking restoration. The Tribunal decided to restore the Company's name, subject to conditions like filing statutory documents, payment of costs, and resuming business operations promptly. The judgment aimed to balance legal compliance with practical considerations to facilitate the Company's revival and protect stakeholders' interests effectively.