2008 (2) TMI 632 - HC - Companies Law

Court grants restoration of company name after petitioner demonstrates positive business developments

Zalak Cold Storage (P.) Ltd., In re

The court granted the petitioner's prayer for restoration of the company's name to the register, pursuant to section 560(6) of the Companies Act, 1956. ... Restoration of company name - Held that:- The court is satisfied with the submission made by Mr. Pahwa and since the present petition is moved within the prescribed time limit and there is no objection from any corner, the prayer made by the petitioner in the present petition is hereby granted. The petitioner is hereby directed to comply with the provisions contained in rules 93 and 94 of the Companies (Court) Rules, 1959. The petitioner is hereby directed to deliver certified copy of the order within 14 days from the date of the order, and on such delivery, the Registrar of Companies do, in his official name, advertise the order in the gazette of the State Government as well as issue public advertisements in the two newspapers, namely, 'The Indian Express' - English daily and 'Loksatta-Jansatta' - Gujarati daily, both Ahmedabad editions. For meeting with these expenses the petitioner is hereby directed to deposit a sum of ₹ 10,000 with the Registrar of Companies and further pay counsel fees which is quantified to ₹ 3,500. Issues:Petition for restoration of a company under section 560(6) of the Companies Act, 1956.Analysis:1. The petitioner, a former director of a company, filed a petition seeking restoration of the company to the register of companies under section 560(6) of the Companies Act, 1956. The company, engaged in the cold storage business, faced viability issues due to the unavailability of low-pressure natural gas supply despite initial confirmation from ONGC. Consequently, the company had to cease operations, leading to its name being struck off the register by the Registrar of Companies as per section 560(5) of the Act.2. Over time, there were positive developments regarding the availability of natural gas supply, with ONGC indicating willingness to allocate gas to the company. The petitioner also acquired land for setting up a new cold storage plant. These developments prompted the petitioner to seek restoration of the company's name to the register maintained by the Registrar of Companies, emphasizing the potential business and employment opportunities the new plant could bring.3. The petitioner asserted that no creditors, secured or unsecured, existed at present, and there were no statutory creditors. Additionally, the petitioner had obtained approval from ONGC for gas supply and had purchased land for the new plant. It was argued that restoration of the company's name would benefit both the company and the public interest by facilitating business growth and job creation.4. The Registrar of Companies expressed no objection to the restoration of the company's name, provided that the petitioner fulfilled all due statutory requirements, including filing necessary returns, paying fees, and complying with other formalities within the stipulated time frame. The petitioner agreed to adhere to these conditions as outlined by the Registrar of Companies in a letter dated 18-2-2008.5. Considering the provisions of section 560(6) of the Companies Act, 1956, and the compliance with requirements specified by the Registrar of Companies, the court granted the prayer made by the petitioner in the petition. The petitioner was directed to fulfill certain obligations, including delivering a certified copy of the order, advertising the order in the state gazette and newspapers, depositing a specified sum with the Registrar of Companies, and paying counsel fees to the standing counsel representing the Registrar of Companies.6. In conclusion, subject to the specified directions and observations, the court allowed the petition for the restoration of the company's name to the register maintained by the Registrar of Companies, acknowledging the positive developments and potential benefits associated with the revival of the cold storage business.