2022 (10) TMI 642 - Tri - Companies Law

Seeking restoration of its name in the Register of Companies (RoC), Vijayawada for the State of Andhra Pradesh - Section 252(1) of the Companies Act, 2013 - HELD THAT - The material available on record indicates that the failure of the Company to furnish the statutory returns with the RoC was not intentional. Apparently the Company has been carrying on its operations as the financial statements would indicate. Unless the Company's name is restored, it will prejudicially affect its prospects and adversely influence the Directors in their future endeavours. The Shareholders of the Company as well as the Applicant are keen to carry on and perform the objects of the Company in right earnest. There have been substantial investments in the project. The Company is continuing its business. Unless the name of the Company is restored in the Register of Companies, it would suffer financially and may go out of business. The directors of the company would also face disqualification. The name of the Company should be restored in the Register of Companies - Application allowed.

Summary

Issues: Application for restoration of company name in Register of Companies.

Analysis:
1. The application was filed under Section 252(1) of the Companies Act, 2013 seeking restoration of the company's name in the Register of Companies. The company, involved in property consulting and online marketing, failed to file annual returns for FY 2019-2020 due to technical issues, leading to its name being struck off by the Registrar of Companies, Andhra Pradesh.

2. The applicant, the Promoter cum Shareholder, submitted audited financial statements and bank statements to prove the company's existence and regular operations. The Registrar of Companies filed a report stating the company's non-compliance with filing requirements and issued notices for strike off, which were duly published and communicated to stakeholders.

3. The Tribunal noted that the company's failure to file statutory returns was not intentional, as evidenced by its ongoing operations and financial statements. Restoring the company's name was deemed crucial to safeguard its financial interests, prevent director disqualification, and maintain shareholder confidence. The Tribunal ordered the restoration of the company's name in the Register of Companies.

4. The restoration was subject to conditions, including filing pending financial statements and returns, payment of costs, delivering a certified copy of the order to the Registrar of Companies, and publication of the order in the Official Gazette. The status of directors was to be restored, and non-compliance with the conditions would nullify the restoration order.

5. The Tribunal emphasized that the restoration order did not limit the Registrar of Companies' authority to take action for any other violations by the company. The decision aimed to facilitate the company's continuity, compliance with legal obligations, and protection of stakeholders' interests while ensuring accountability for future compliance.