TMI Blog2024 (3) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the appellant claims to have carried commercial transactions with a view to establish a relationship with DPIL in order to commence its operations in consonance with the objectives of the appellant company and had amassed substantial assets but due to the fact DPIL went into insolvency in the year 2017, the company suffered a loss. On going through the auditor reports for the financial years 2016- 17, 2017-18, 2018-19, 2019-20, 2020-21 which show the Non-Current Liabilities to the tune of Rs.7,36,23,359/-; Current Liabilities to the extent of Rs.88.00 Crores; Non-Current Assets to the extent of Rs.06.00 Crores (approximately), the Current Assets of Rs.25.94 Crores, the Fixed Assets of Rs.56.32 Crores; the Loan Advances of Rs.25.93 Cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant could not demonstrate it was in operation or carrying on its business or it was otherwise just to restore the name of the company. 2. The Ld. NCLT gave the following reasoning in its order : - 7. After hearing submissions of both the parties and perusing the documents including the ROC s report placed on record, this Bench observes that the Appellant Company has produced Balance Sheet for the Financial Year 2015-16 only, which too depicts NIL revenue from its operations. Further, the Company has not filed or produced Balance Sheet for the Financial Year 2016-17 and 2017-18 i.e; 2 years prior to the period when its name was struck from the register of RoC on 29.10.2019, Similarly, the Bank statement filed by the Appellants only p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business or in operation, the Tribunal had vast powers to order restoration of Company on the ground or otherwise . This term or otherwise has been judiciously used by the legislature to arm the Tribunal to order restoration of a struck off company within the permissible time limit to take care of situations where it would be just and fair to restore company in the interest of company and other stakeholders. Such instances can be innumerable. However, this term or otherwise cannot be interpreted in a manner that makes room for arbitrary exercise of power by the Tribunal when there is specific finding that the Company has not been in operation or has not been carrying on business in consonance with the objects of the Company. A Shell Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith this appeal the financial statement reflecting the company had fixed and non-current assets, including the amount lying with the bank account and the appellant company admitted that it was their bonafide mistake in not filing the financial statements and in fact the company was to start fresh business in the year 2017 on a land belonging to one M/s Diamond Power Infrastructure Limited but since such company viz DPIL had gone into liquidation, the Chartered Accountant who was common for both the appellant company and DPIL, also inadvertently did not file financial statements for appellant company for the years 2016-17 and 2017-18, which led to striking of name of the appellant company from the register of the companies. 5. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to safeguard the interest of the appellant and its stake holders. In Ramesh Kumar Chidlangya Anr. Vs. Roc Anr. 2020 SCC online NCLAT 895, it was held the pendency of litigation warranted restoration of name of the company to Registrar of Companies, so as to safeguard the interest of the company and its stakeholders . 8. Though the Ld. NCLT had relied upon the Judgment of this Tribunal in the matter Alliance Commodities Private Limited vs. Office of Registrar of Companies West Bengal, Company Appeal (AT) No. 20 of 2019 (supra) to dismiss the appeal of the appellant but in the present case the appellant has substantial assets and was in the process of starting its business with M/s Diamond Power Infrastructure Limited (DPIL) howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey have a fixed substantial asset worth crores. The company is still sole absolute owner and in possession of the property situated at Bhakti Bhavan Estate, Kulri, Mussoorie and if the company s name is not restored then, of course, it would result to an irreparable loss and prejudice to the appellant and the fixed assets of company would be a deadlock and would result in wastage of property which is, of course, contrary to the public policy. Admittedly the property is free from all encumbrances. 25. For the reasons aforesaid we find it just and equitable to restore the name of the appellant company to the record of ROC and thus we set aside the impugned order dated 27.05.2022 passed by the Ld. NCLT and direct the ROC, New Delhi to restore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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