2020 (12) TMI 961 - Tri - Companies Law

Restoration of name of Excellent Cooling Services Pvt. Ltd. struck off by the Registrar of Companies, Uttar Pradesh - Section 252(3) of the Companies Act, 2013 read with Rule 87A of the National Company Law Tribunal Rules, 2016 - HELD THAT - The Appellant has been able to satisfy this bench that it has certain assets which necessitate and justify the restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would neither be just nor equitable. As per several decisions of various courts it should only be an exceptional circumstance that court should refuse restoration where the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight. The Registrar of Companies, the Respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the Company has not been Struck off from the Registrar of Companies and take all consequential actions such as change of Company's status from 'Strike Off to 'Active' (for e-filing) etc. - Application allowed.

Summary

Issues:
Appeal for restoration of name of a company struck off by Registrar of Companies due to default in statutory compliances.

Analysis:
The appeal was filed under Section 252(3) of the Companies Act, 2013 for restoration of the name of a company struck off by the Registrar of Companies, Uttar Pradesh. The Appellant company, engaged in various activities as per its Memorandum of Association, had its name struck off due to default in filing Financial Statements and Annual Returns. The Appellant argued that despite being active and maintaining necessary documents, lack of professional guidance led to non-compliance. The Appellant presented bank statements to show regular transactions, indicating ongoing operations.

The Registrar of Companies stated that the company was dissolved after following due process, including issuing a Show Cause notice which received no response from the company or its directors. The Income Tax Authorities mentioned pending dues against the company, but also acknowledged the filing of Income Tax Returns. The Appellant submitted Audited Balance Sheets showing revenue and assets, demonstrating the company's operational status and ability to restart business.

After considering the submissions, the Tribunal found that the Appellant company, involved in various activities, had not filed annual returns and balance sheets. However, the documents provided proved the company's existence and operations. The Tribunal analyzed Section 252 of the Companies Act, 2013 and concluded that restoration of the company's name would be in the interest of shareholders and creditors, ordering the Registrar to restore the name and change the status to 'Active'.

The Tribunal highlighted the provision of Section 252, emphasizing that restoration should be just and equitable if the company has assets warranting it. Refusing restoration solely for failure to file annual returns was deemed excessive. The Registrar was directed to restore the company's status, subject to filing statutory documents and payment of specified costs within a set timeframe.

The Tribunal further instructed the Appellant to publish notices regarding the restoration, with specific directions for payment of costs, publication in Official Gazette, and verification of published notices. The appeal was disposed of with the restoration of the company's name and necessary actions to be taken by the Registrar of Companies.