2021 (3) TMI 514 - Tri - Companies Law

Seeking restoration of name of the company in the Register maintained by the Registrar of Companies, Mumbai (RoC) - Section 252 (1) of the Companies Act, 1956 - HELD THAT - On perusing the report of the Registrar of Companies, Maharashtra, Mumbai and the documents filed, it is clear that the Company has failed to file its statutory returns for the Financial year 2016-2017 till 2018-2019 (for 3 years) contrary to the provisions of the Companies Act, 2013 and the Company is not carrying on business or operation as defined u/s 248 (1)(c) of the Companies Act 2013. Further, at the time of hearing the Bench had posed query to the Petitioner to show any proof whether the Company has any existing Business but the Appellant was unable to show any proof of existing or prospective business in the Company and also the Company had no turnover for past five years. This Bench is of the view that the Company is not carrying on any business or operations and there is no infirmity in the order of the Respondent for striking off the name of the Company from the Register of Companies maintained by it. Hence this appeal is liable to be rejected. The name cannot be restored - application dismissed.

Summary

Issues:
- Restoration of company's name in the Register maintained by the Registrar of Companies, Mumbai.
- Compliance with statutory requirements under the Companies Act, 1956 and Companies Act, 2013.
- Failure to file Financial Statements and Annual Returns for the Financial Years 2016-2017 to 2018-2019.
- Allegation of lack of notice from the Respondent.
- Company's claim of being active in business operations.
- Unintentional delay in filing statutory documents.
- Observations on company's financial status and business activities.
- Justification of striking off the company's name by the Registrar of Companies.

Detailed Analysis:
1. The petition was filed seeking restoration of the company's name in the Register maintained by the Registrar of Companies, Mumbai, under Section 252(1) of the Companies Act, 1956. The company had failed to file its Financial Statements and Annual Returns for the Financial Years 2016-2017 to 2018-2019, leading to the striking off of its name from the register.

2. The Petitioner claimed that despite efforts to file the necessary documents, they were unable to do so due to the company's status being shown as struck off. They argued that the company was actively operating and not defunct, emphasizing the need for the name restoration to maintain legal status for business activities.

3. The Petitioner further contended that the delay in filing the required documents was unintentional, citing lack of knowledge and inadvertence as reasons. They provided audited accounts and Income-Tax Returns to demonstrate the company's active involvement in business operations during the relevant period.

4. The Respondent, Registrar of Companies, explained the sequence of events leading to the striking off of the company's name, including issuance of notices and publication in official gazettes and newspapers. The Respondent's affidavit countered the Petitioner's claim of lack of notice, highlighting the steps taken before the striking off.

5. Upon review, the Bench found that the company had failed to comply with statutory requirements and was not actively engaged in business operations as defined by the Companies Act, 2013. The Petitioner could not provide evidence of existing or prospective business, and the company had no turnover for the past five years.

6. Consequently, the Bench rejected the appeal for restoration of the company's name, upholding the Registrar's decision to strike off the name. The Bench emphasized the importance of companies complying with regulatory requirements and the burden placed on the system when non-compliance occurs, justifying the Registrar's action.

7. The Bench concluded that there were no justifiable grounds to interfere with the striking off of the company's name, considering practical aspects and the need for companies to fulfill statutory obligations to avoid burdening the regulatory system.

This detailed analysis covers the key issues involved in the judgment, providing a comprehensive overview of the legal proceedings and the reasoning behind the decision.