2022 (1) TMI 67 - Tri - Companies Law

Seeking restoration of the name of the Company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana (RoC) - Section 252(3) of the Companies Act, 2013 - HELD THAT - The Appellant Company has placed on record the Audited Balance sheets for the financial years 2015-16, 2016-17 2017-18 which depict NIL revenue from operations. This clearly demonstrates that the Company was not in operation or carrying out its business at the time of striking off. Further, the appellants have enclosed particulars of some agricultural land, which they intend to purchase for development work. However, the Appellant Company has neither produced or placed any Sale Deed(s) on record to depict ownership over any property nor any other document to indicate real estate development in furtherance of its objectives - the Appellant Company is not holding any Fixed Asset, which could justify its case. The appellant company has placed on record an Income Tax Acknowledgement Receipt for the financial year 2020-21 only, which relates to the period after the date of striking off the Company s name in the register of ROC. Therefore, no reliance can be placed on such a receipt to demonstrate that the Appellant Company was either in operation or carrying out its business at the time of its name was struck off from the register of RoC. This Bench is of the view that the Appellant Company has failed to bring anything concrete on record, which could demonstrate that the Appellant Company was either in active operation or carrying out its business during the immediately preceding two financial years from the date of striking off or it is otherwise just and fair to restore the name of the Appellant Company in the register of RoC - Appeal dismissed.

Summary

Issues:
Restoration of company name in the register maintained by RoC under Section 252(3) of the Companies Act, 2013.

Detailed Analysis:
The appeal was filed by M/s. Taru Project Private Limited seeking restoration of its name in the register maintained by the Registrar of Companies (RoC) under Section 252(3) of the Companies Act, 2013. The company was struck off by RoC due to defaults in statutory compliances, specifically the failure to file financial statements and annual returns since the financial year 2013-14. The appellant claimed to be involved in real estate projects and provided documents to support its claim, including audited financial statements, income tax return acknowledgment, and particulars of agricultural land intended for development projects. However, the RoC argued that the striking off was legal and justified as the company had not been carrying out operations for two consecutive financial years. The Income Tax Department confirmed no outstanding demands or pending proceedings against the company.

Upon review of the submissions and documents, the tribunal found that the company's audited balance sheets showed nil revenue from operations for the relevant years, indicating a lack of business activity. Although the appellant presented plans for real estate development, no concrete evidence of ownership or progress in projects was provided. Additionally, the income tax acknowledgment receipt submitted related to a period after the company's name was struck off, offering no proof of ongoing business activities at the time. Citing a judgment by the Hon'ble NCLAT, the tribunal emphasized the requirement for a struck-off company to demonstrate active business operations or justify restoration on just and fair grounds.

Ultimately, the tribunal concluded that the appellant failed to establish its active operation or business activities during the preceding financial years or provide sufficient grounds for restoration. As a result, the appeal was dismissed, and the striking off action by RoC under Section 248(5) of the Companies Act, 2013 was upheld. The tribunal highlighted the importance of concrete evidence to support restoration claims and ensure fairness in such cases.