2021 (7) TMI 1177 - Tri - Companies Law

Seeking to restore the name of the Company in the Register maintained by the Respondent/RoC - Section 252 of the Companies Act, 2013 - HELD THAT - Upon perusing the documents, it is seen that the Company has not placed on record any document to show that they have been active and carrying on its business operations immediately two years preceding the date of strike off. However, a perusal of other communications which are placed along with the written submissions discloses the fact that the Company is having future prospects of running the same for the purpose of which it was incorporated. It is significant to point out here that while considering an Application under Section 252(3) of the Companies Act, 2013, this Tribunal cannot focus only on the past activities, however, is also required to look into the future prospects of the Company and an upward movement in the business cycle of that industry which would result in the generation of revenue - It is also seen from the records produced before this Tribunal that the Company is proposing to construct a manufacturing unit and has also produced a blue print in relation to the same, which also fortifies the 'just' ground being a factor to be considered by this Tribunal in the process of deciding an Application/Appeal under Section 252(3) of the Companies Act, 2013. The Registrar of Companies, Chennai is ordered to restore the original status of the Applicant Company viz. M/s. Ferco Shutters Seating India Private Limited as if the name of the Company has not been struck off from the Register of Companies with resultant and consequential actions like changing the status of Company from strike off to Active - Application allowed.

Summary

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

Detailed Analysis:
1. Background of the Company: The application filed by the Director cum 90% Shareholder of the Company seeks restoration of the name of the Company, M/s. Ferco Shutters & Seating India Private Limited, which was incorporated in 2013 with the main object of manufacturing doors, roller shutters, and public seating systems. The company failed to file financial statements and annual returns, leading to its strike off by the Registrar of Companies.

2. Reasons for Non-Compliance: The company faced challenges due to retrospective taxation in India, causing uncertainty for foreign investors and resulting in shelving plans for a manufacturing unit. Despite efforts to revive the business in Chennai, the company's name was already struck off by the Registrar, hindering its operations.

3. Legal Grounds for Restoration: The Applicant argued for restoration based on the 'just' ground as per Section 252(3) of the Companies Act, 2013. The Applicant presented evidence, including financial statements, ITR acknowledgment, sale deed, and a proposed blueprint for future operations, to support the restoration plea.

4. Judicial Precedents: The Tribunal considered past judicial interpretations of the term 'just' in company restoration cases, emphasizing fairness, reasonableness, and future business prospects. The Tribunal highlighted the need to assess future potential and revenue generation while deciding on restoration applications.

5. Decision and Directions: After reviewing the evidence and legal provisions, the Tribunal ordered the restoration of the company's name in the register maintained by the Registrar. The order included specific directions such as filing pending compliances, payment of costs, restrictions on asset disposal, and compliance affidavit submission within a specified timeline.

6. Additional Conditions: The order clarified that restoration does not automatically reinstate disqualified directors and required an undertaking regarding the use of company accounts during demonetization. It also preserved the Registrar's authority to take action for late filings or non-compliances under the Companies Act, 2013.

7. Conclusion: The Tribunal allowed the application for restoration, subject to the outlined directions and conditions, ensuring compliance with statutory requirements and safeguarding the interests of the company, its directors, and shareholders.