2022 (12) TMI 413 - AT - Companies Law

Restoration of name of the Company - Seeking permission from this Tribunal, to file the Income Tax Returns, for the Assessment Years 2017-18, 2018-19, 2019-20 and 2020-21 - the documents were not filed before the Tribunal - HELD THAT - In the instant case, according to the Appellant, because of slow down in the Real Estate market after completing its Real Estate Projects in 2014-15, the Appellant / Company, continued to do its incidental works and continue to generate Revenue and to look after the proper Real Estate Project, but lot of money was stuck in the hands of Appellant s Debtors , for which, the Appellant/ Company, initiated proceedings and eight criminal cases (under Section 138 of the N I Act, 1881) are pending (before the various Metropolitan Magistrate Courts), against its Debtors, (ranging from Rs.1,00,000/-, Rs.15,000/-, Rs.3,00,000/-, Rs.1,15,000/-, Rs.9,00,000/-, Rs.3,00,000/-, Rs.60,000/- and Rs.22,500/- respectively), and that apart, is to recover approximately Rs.18,12,500/- from its Debtors, in respect of sums. The Appellant / Company in the instant Appeal has come out with a plea that in the event of Revival of the Company and the Restoration of name of the Company, in the Register, maintained by the Respondent, it shall file all Outstanding Statutory Documents, Viz. the Financial Statements for the Financial Years from 2016-17, 2017-18 and the Financial Statement and Annual Return 2018-19, along with the Filing Fees and the Additional Fee, as applicable on the Date of Actual Filing, and the Certified copy of the Order of Tribunal, for the Restoration of name of the Company, to the Register, maintained by the Respondent. On a careful consideration of the contentions advanced on side of the Appellant / Company, this Tribunal, taking out of the fact that the Appellant / Company has initiated various proceedings before the Criminal Courts (8 in number) against its Debtors, and is to recover approximately Rs.18,12,500/- from its Debtors and bearing in mind of the prime fact, Right to seek the name of the Company (to be entered, in the Register of Companies), is not Lost or Extinguished, as long as 20 years had not expired and apart from these, the Appellant / Company, in the instant Appeal, had unequivocally averred that in the event of Revival of the Company and Restoration of the Company s name in the Register, maintained by the Respondent, it shall file all Statutory Documents Viz. Financial Statements from 2016-17, 2017-18 and Financial Statement and Annual Return for 2018-19 along with Filing Fees and the Additional Fees, etc., in all Justness, Fairness, Equitableness and Reasonableness, by exercise of sound discretion, deems it Prudent, Just and Proper, to Restore the name of the Appellant / Company, and that Laches / Omissions / Lapses (Failures), on the part of the Appellant / Company s management, in not submitting the filing of Annual Returns and Financial Statements, in time, can be saddled with a Levy of Costs, to prevent an Aberration of Justice, and to promote Substantial Cause of Justice, otherwise, it will cause Irreparable Harm / Hardship, Inconvenience and serious Prejudice to the Appellant / Company, as opined by this Tribunal. The impugned order is set aside - appeal allowed.

Summary

Issues Involved:
1. Permission to file additional documents.
2. Restoration of the company's name to the Register of Companies.
3. Compliance with statutory requirements and payment of costs.

Issue-Wise Detailed Analysis:

1. Permission to File Additional Documents:
The petitioner sought permission to file Income Tax Returns for the assessment years 2017-18, 2018-19, 2019-20, and 2020-21, which were not previously filed before the Tribunal. The Tribunal allowed this request, emphasizing that no prejudice would be caused to the respondent and that the additional documents were necessary to prove the petitioner's case. This decision was made in the interest of substantial justice.

2. Restoration of the Company's Name to the Register of Companies:
The appellant challenged the impugned order dated 04.01.2021, passed by the National Company Law Tribunal (NCLT), New Delhi Bench, which dismissed the appeal for restoration of the company's name. The NCLT had observed that the appellant company failed to demonstrate it was in operation or carrying out significant business when its name was struck off. The Tribunal referred to Section 252(3) of the Companies Act, 2013, which allows for the restoration of a company's name if it is just and fair, even if the company was not in operation at the time of striking off.

The appellant argued that it was a compliant company, but due to unforeseen circumstances, including the deaths of key directors and inadvertence by the consultant, statutory filings were missed. The appellant also highlighted ongoing legal proceedings to recover debts amounting to Rs.18,12,500/- from its debtors, which would enable it to further its business activities.

The Tribunal considered several precedents, including decisions from the Delhi High Court and the Madras High Court, which emphasized that restoration should be ordered if it is just and fair, especially when litigation is pending by or against the company. The Tribunal also noted that the right to seek restoration is not extinguished as long as 20 years have not lapsed.

3. Compliance with Statutory Requirements and Payment of Costs:
The Tribunal ordered the restoration of the appellant company's name to the Register of Companies, subject to the filing of all outstanding statutory documents and completion of all statutory formalities, including the payment of any late fees or other charges. Additionally, the appellant was directed to pay a cost of Rs.60,000/- to the Prime Minister Relief Fund within two weeks and produce the receipt for verification.

The Tribunal emphasized that the appellant company must act with great care, caution, and utmost circumspection regarding statutory compliances in the future.

Result:
The appeal was allowed, and the impugned order dated 04.01.2021 was set aside. The notice of striking off and dissolution in Form No. STK-7 dated 29.10.2019 was also set aside. The restoration of the appellant company's name was ordered, subject to compliance with the specified conditions.