2021 (1) TMI 513 - Tri - Companies Law

Restoration of name of the Petitioner Company on the Register maintained by the Registrar of Companies - direction to ROC to remove disqualification of the Directors of the Company - Section 252 (3) of the Companies Act, 2013, R/w Rule 87A of the NCLT (Amendment) Rules, 2017 - 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 order striking off the Company was in accordance with law, the Tribunal has to take into consideration the bona fide contentions of Petitioner seeking to restore the 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 the Tribunal to consider the case subject terms and conditions. The Company is a going concern and striking of its name would affect the business as well as various stakeholders and employees. The Member of the Company has undertaken that post restoration of the Company in the books of Registrar of Companies, Bangalore, the Company will complete the Annual filings due for the past years and carry on the business in its ordinary course - the interest of justice would be met if the name of Company is restored as prayed for. The Registrar of Companies, Karnataka, the Respondent herein, is ordered 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 consequential action taken by Registrar of Companies, which includes restoration of DINs of its Directors - application allowed.

Summary

Issues:
- Restoration of company name on the Register maintained by the Registrar of Companies, Karnataka.
- Seeking direction to remove disqualification of the directors of the company.
- Compliance with statutory requirements and ease of doing business.

Analysis:
1. Restoration of Company Name:
- The case involved a Company Petition seeking restoration of the company's name on the Register maintained by the Registrar of Companies. The company had faced disqualification due to non-filing of necessary documents, leading to its name being struck off by the Registrar of Companies.
- The Applicant/Petitioner argued that the non-filing was unintentional and attributed to negligence on the part of the professionals handling compliance matters. The Registrar of Companies did not oppose the restoration, subject to compliance with pending statutory returns and payment of costs.
- The Tribunal considered the bona fide contentions of the Petitioner and the impact of the company's name being struck off on its business and stakeholders. It noted that no investigations were pending against the company and that restoration would not cause prejudice to any party.

2. Compliance and Ease of Doing Business:
- The Tribunal analyzed the relevant provisions of the Companies Act, 2013, particularly Section 248, which empowers the Registrar of Companies to strike off a company under certain conditions. However, it also noted the requirement for the Registrar to ensure provision for the realization of amounts due and discharge of liabilities before striking off.
- Emphasizing the principle of ease of doing business, the Tribunal decided to restore the company's name, subject to specific conditions. These conditions included filing pending statutory documents, payment of costs, and resuming business operations promptly post-restoration.

3. Directions and Conclusion:
- The Tribunal, exercising powers under Section 252(3) of the Companies Act, 2013, issued directions for the restoration of the company's name. These directions included restoring all consequential actions, filing statutory documents with prescribed fees, and compliance monitoring by the company's representative.
- Additionally, the Tribunal ordered the payment of a specified cost to the Central Government, publication of the order in the official Gazette, and a directive for the company to resume business operations promptly post-restoration.
- The judgment aimed to balance the interests of justice, ease of doing business, and compliance with statutory requirements, ensuring that the restoration of the company's name would not hinder any future actions by the Registrar of Companies for other violations.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal considerations, and the Tribunal's decision regarding the restoration of the company's name on the Register maintained by the Registrar of Companies.