2008 (2) TMI 632 - HC - Companies Law

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

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 name to register under section 560(6) of the Companies Act, 1956 - Compliance with Companies (Court) Rules, 1959 (rules 93 and 94) - Filing of statutory returns and payment of fees for restoration - No-objection conditioned on fulfillment of statutory formalities - Public advertisement and Gazette notification for restorationRestoration of name to register under section 560(6) of the Companies Act, 1956 - No-objection conditioned on fulfillment of statutory formalities - Petition under section 560(6) for restoration of Zalak Cold Storage (P.) Ltd. to the register of companies - HELD THAT: - The court examined the petitioner's history: incorporation, initial cessation of business due to non-allocation of natural gas, subsequent change in viability and communications from ONGC confirming allocation, and the petitioner's proposals to set up a new plant. The Registrar of Companies raised no substantive objection to restoration provided statutory formalities are complied with. The petition was filed within the prescribed time and there is no opposing party or creditor claiming prejudice. In these circumstances the court applied the discretionary jurisdiction under section 560(6) and found restoration appropriate in the interest of justice and equity. The court recorded the Registrar's conditional concurrence and made restoration subject to specified compliance requirements. [Paras 7, 8, 9]The petition for restoration is allowed and the company's name is restored to the register subject to the conditions and directions stated by the court.Compliance with Companies (Court) Rules, 1959 (rules 93 and 94) - Filing of statutory returns and payment of fees for restoration - Public advertisement and Gazette notification for restoration - Conditions and procedural requirements for restoration to be complied with by the petitioner - HELD THAT: - The court imposed specific procedural conditions as prerequisites to effecting restoration on records. The petitioner must comply with rules 93 and 94 of the Companies (Court) Rules, 1959 and file outstanding statutory returns, balance-sheet and annual returns and other requisite forms within the period mandated by the Registrar, including payment of filing and additional fees. The court directed issuance of the certified copy of the order to the Registrar within 14 days, after which the Registrar will advertise the order in the State Gazette and cause public advertisements in the two specified newspapers. The petitioner was directed to deposit the identified sum for meeting advertisement expenses and to pay quantified counsel fees to the Registrar's standing counsel, and otherwise to comply with the Registrar's letter dated 18-2-2008 as agreed in court. [Paras 8]Restoration is conditional on prompt compliance with the Companies (Court) Rules, statutory filings and fees, Gazette and newspaper advertisements and other directions specified by the court and the Registrar.Final Conclusion: The High Court allowed the petition under section 560(6) and ordered restoration of Zalak Cold Storage (P.) Ltd. to the Registrar's register, subject to compliance with rules 93 and 94 of the Companies (Court) Rules, 1959, filing of outstanding statutory returns and payment of prescribed fees, and fulfillment of the advertising and deposit directions set out in the order. 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.