2022 (1) TMI 168 - Tri - Companies Law

Seeking to restore the name of the Company in the ROC - Section 252 of the Companies Act 2013 - HELD THAT - A perusal of the various documents more particularly the Income Tax Acknowledgment for the Assessment Year 2014-2015 to 2019 - 2020 would show that the Company has paid tax and further a perusal of the bank statements for the period from 01.09.2014 would show that the Company has done various transactions which manifest the fact that the Company was active and running preceding two years from the date of strike off. Taking into consideration the provisions of Section 252 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 there is a running business as on the date when the name of the Company was struck off and also keeping in consideration that it is just to do so can restore the name of the Company in the register and in the interest of all the stakeholders including members of the Company its employees as well as the revenue and the Applicant itself who seeks restoration of the name of the Company in the register being maintained by RoC. The Application is allowed subject to the directions imposed.

Summary

Issues:
Application under Section 252 of the Companies Act, 2013 to restore the name of a struck-off company.

Analysis:
The Application was filed by a shareholder seeking to restore the name of the company, which was struck off by the Registrar of Companies due to non-filing of financial statements and annual returns. The company, engaged in the business of handicrafts, faced challenges as key personnel responsible for filings had passed away, leading to non-compliance. The Applicant argued that the company remained operational, solvent, and generated revenue, providing evidence such as income tax returns, audited financials, bank statements, and GST returns to support their claim.

The Tribunal considered the evidence presented by the Applicant, including tax filings, bank statements showing transactions, and other financial documents, indicating the company's active status before the strike-off. Relying on Section 252 of the Companies Act, 2013, the Tribunal exercised discretion to restore the company's name, emphasizing the interests of stakeholders, employees, and revenue. The Tribunal issued directions for the Registrar of Companies to change the company's status to "Active," subject to the company fulfilling statutory compliances within 30 days of restoration.

Additionally, the Tribunal imposed a cost of ?50,000 for revival, restricted alienation of assets until compliance, and clarified that directors disqualified under Section 164 would not be automatically reinstated. The company was required to submit an affidavit of compliance within two months and shareholders had to provide an undertaking regarding the use of accounts during demonetization. The Tribunal's order did not limit the Registrar's power to take action for late filings or non-compliance with the Companies Act, 2013.

In conclusion, the Tribunal allowed the Application on specified terms, emphasizing the need for compliance with statutory requirements, financial obligations, and regulatory directives to ensure the company's reinstatement and continued operations.