2021 (1) TMI 518 - Tri - Companies Law

Restoration of name of the company in the Register maintained by the Respondent - Section 252(3) of the Companies Act, 2013 - HELD THAT - It is evident from the plea of the Applicant that the Applicant Company seeking for restoration of its name in the register as maintained by RoC is not seriously pressing the validity of the process undertaken by the RoC in striking off the name of the Applicant Company as envisaged under Section 248 of the Companies Act, 2013 read with attendant Rules. However, the Applicant is seeking restoration of its name in the register as maintained by RoC by relying up on the ground that the Applicant Company as of date is carrying on the business for which it was incorporated and it is in operation and in the circumstances, it is just that the name of the Company should be restored on the Register of Companies as maintained by the Respondent. From the report filed by the Respondent, it is evident that the Applicant Company was struck off on 25.10.2019 and for the two years immediately preceding 25.10.2019, the Applicant company has placed sufficient documents to show that they were carrying business - Applicant Company has filed sufficient documents in order to demonstrate that the Company is active and carrying on the business and also in view of the fact that there is no significant objections raised by the Respondent ROC, in relation to the restoration of the name of the Company, this Tribunal is of the view that the name of the Applicant Company is required to the restored in the Register maintained by the Respondent RoC. Thus, taking into consideration the provisions of Section 252 of the Companies Act, 2013 which vests this Tribunal with a discretion where the Company whose name has been struck off and such Company is able to demonstrate that there is a running business as on the date when the name was struck off and also keeping in consideration that it is just to do so can restore the name of the Company in the register and in the interest of all the stakeholders including members of the Company, its employees as well as the revenue and the Applicant itself who seeks restoration of the name of the Company in the register being maintained by ROC and in the above said circumstances the Application is allowed subject to the directions imposed. Within a period of 15 days from the restoration of the Applicant Company's name in the register being maintained by the RoC, the Applicant/ petitioner will file inter alia its annual returns and balance sheets as well other compliances statutorily required to be made under the Companies Act, 2013 for the period from which there has been default with requisite charges/fees as well as additional fee/late charges - application allowed.

Summary

Issues:
Application for restoration of company name struck off by Respondent under Section 248 of Companies Act, 2013.

Analysis:
The Applicant, a shareholder of the company, filed an Application seeking restoration of the company's name in the Register maintained by the Respondent after it was struck off under Section 248 of the Companies Act, 2013. The Applicant Company was incorporated in 2014 with a specific business objective related to software solutions. The Applicant claimed that the company had been actively operating and had filed its Annual Returns until a certain financial year, failing to submit the Balance Sheet due to inadvertence, leading to the striking off of its name by the Respondent.

The Respondent, RoC, Coimbatore, reported that the Applicant Company was struck off in 2019. The Respondent did not object significantly to the restoration of the company's name, requesting certain conditions to be met, including proving business operations, filing financial statements, and providing an undertaking regarding the use of company accounts during demonetization.

The Applicant provided evidence of the company's business activities, financial statements, and income tax returns for multiple assessment years, demonstrating its continued operation. The Tribunal noted the company's tax payments and active business status before being struck off. Considering the evidence and lack of objections from the Respondent, the Tribunal decided to restore the Applicant Company's name in the Register maintained by the Respondent.

The Tribunal directed the Applicant Company to fulfill certain conditions post-restoration, including filing necessary returns, depositing funds for fees and charges, refraining from disposing of assets, and submitting an affidavit of compliance. The order clarified that the restoration did not automatically reinstate disqualified directors and did not limit the Respondent's power to take action for late filings. The shareholders were also required to submit an Undertaking regarding the use of company accounts during demonetization.

In conclusion, the Application for restoration was allowed by the Tribunal, subject to the specified directions and conditions to ensure compliance with statutory requirements under the Companies Act, 2013.