2021 (5) TMI 614 - Tri - Companies Law

Restoration of name of respondent company in the Register of Companies - Section 252 of the Companies Act, 2013 - HELD THAT - The appellant has submitted sufficient evidence that it has been in operation during the period preceding strike off, therefore, it could not be termed as a defunct company as per Section 252 of the Act. Thus, taking into consideration the provisions of Section 252(1) 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 it is just to do so, can restore the name of the Company, in the Register and in the interest of all stakeholders, including the Appellant itself, who seeks restoration of the name of the Company in the register maintained by Registrar of Companies, the company deserve to be restored. The Public Notice of Registrar of Companies, striking off the name of the company, is hereby declared illegal and set aside - Appeal allowed.

Issues:
- Appeal against striking off the name of a company under Section 252 of the Companies Act, 2013.
- Company's claim of being in operation during the period preceding the strike off.
- Appellant's submission of evidence to demonstrate operational status.
- Discretion of the Tribunal under Section 252(1) to restore the name of the company.
- Legal requirements for restoration including filing of outstanding documents and payment of fees.

Analysis:
The appellant, a shareholder of a company, filed an appeal against the striking off of the company's name under Section 252 of the Companies Act, 2013. The company was incorporated as a Private Limited Company and its name was struck off by the Registrar of Companies for not filing Financial Statements and Annual Returns for the Financial Years 2015 onwards. The appellant contended that the company was operational during this period and provided evidence to support this claim, including audited financial statements, cash flow statements, bank statements, and income tax returns. The Registrar of Companies had no objection to restoring the company's name if all pending statutory documents were filed along with the requisite late filing fee. The Income Tax Department did not file any reply in this matter.

The Tribunal considered the grounds under Section 252 of the Companies Act, 2013, which require the company to be carrying on business or in operation at the time of striking off, or where restoration is deemed just. The appellant successfully demonstrated that the company was in operation before the strike off, thus meeting the criteria under Section 252(1) for restoration. The Tribunal, exercising its discretion, ordered the restoration of the company's name to the Register of Companies. This decision was made in the interest of all stakeholders, including the appellant seeking restoration. The Tribunal declared the Public Notice of striking off the company's name as illegal, and set it aside. The company was directed to file all outstanding documents with proper fees, pay additional fees as required by law, and make a payment to the Prime Minister's Relief Fund. Once these formalities are completed, the company's name will be restored to the Register as if it had not been struck off initially.

In conclusion, the Tribunal allowed the appeal, declared the striking off of the company's name as illegal, and ordered the restoration of the company's name to the Register of Companies. All necessary formalities, including filing of documents and payment of fees, were outlined for the restoration process to be completed successfully. The order was to be served to the concerned parties for compliance.

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