2021 (10) TMI 386 - Tri - Companies Law

Seeking restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies - Section 252 of the Companies Act, 2013 - HELD THAT - It is seen that the appellant has failed to produce the audited balance sheet to show the company had revenue from operation for the immediate two preceding financial years when the name of the company was struck off by the RoC. It is further seen that the Appellants in the Memo of Appeal admit this fact that there is no revenue from operation from financial Year 2014-15 to 2019-2020. Therefore, the appellant company has failed to produce any document to show that the appellant company had revenue from operation or carrying on business at the time when the name of the company was struck off by the Registrar of Companies or even prior to that. The action taken by the RoC under Section 560(5) of the Companies Act, 1956, to wind up the company is upheld - the name of the company could not be restored - appeal dismissed.

Issues:
- Restoration of the name of the Appellant Company in the register maintained by the Registrar of Companies, NCT of Delhi & Haryana under Section 252 of the Companies Act, 2013.
- Failure to file Financial Statements and Annual Returns leading to the striking off of the company's name.
- Lack of notice from the Registrar of Companies under Section 248 of the Companies Act, 2013.
- Claim of continuous business operation and possession of immovable properties by the Appellant Company.
- Lack of revenue from operations and failure to produce audited balance sheets.
- Interpretation of the term "or otherwise" in the context of restoration of a struck-off company.

Analysis:
1. The appeal was filed seeking restoration of the Appellant Company's name in the register maintained by the Registrar of Companies, NCT of Delhi & Haryana. The company had failed to file its Financial Statements and Annual Returns since incorporation, leading to its name being struck off by the Respondent under Section 560(5) of the Companies Act, 1956.

2. The Appellant claimed that the failure to comply with statutory requirements was unintentional due to lack of professional support and guidance. They expressed readiness to submit the outstanding Financial Statements and Annual Returns. The Appellant also highlighted their awareness of the company's existence after receiving notices from a government undertaking regarding dues related to a leased property.

3. The Appellant argued that they did not receive any notice from the Registrar of Companies under Section 248 of the Companies Act, 2013, which was necessary before striking off the company's name. They presented evidence of continuous business operation and possession of immovable properties, stating that the restoration of the company's name would benefit the government in terms of taxes.

4. The Respondent, however, contended that the Appellant failed to submit Annual Returns and Balance Sheets, and no documents were filed to obtain the status of a "Dormant Company" under Section 560 of the Companies Act, 1956. The Respondent pointed out the absence of revenue from operations in the financial statements, questioning the Appellant's claim of conducting business.

5. The Tribunal noted the Appellant's admission of no revenue from operations for several financial years and the lack of documents proving business activity when the company's name was struck off. Referring to previous judgments, the Tribunal emphasized the requirement for a company to be carrying on business or in operation for restoration, which was not established in this case.

6. Considering the circumstances and legal precedents, the Tribunal declined to interfere with the Registrar of Companies' action under Section 560(5) of the Companies Act, 1956, and dismissed the appeal. The decision was based on the lack of evidence showing business activity during the relevant period, leading to the rejection of the restoration plea.

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