Court declares striking off company name as illegal; orders restoration to Register of Companies. The court declared the order striking off the company's name as non est, illegal, and void ab initio. The company's name was ordered to be restored to the ...
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Court declares striking off company name as illegal; orders restoration to Register of Companies.
The court declared the order striking off the company's name as non est, illegal, and void ab initio. The company's name was ordered to be restored to the Register of Companies as if it had never been struck off. The judgment emphasized the significance of procedural compliance and adherence to statutory requirements in matters of striking off company names from the register under the Companies Act, 1956.
Issues: Restoration of company's name on the Register of Companies under section 560(5) of the Companies Act, 1956.
Analysis: The petitioner-company sought to restore its name on the Register of Companies after it was struck off by the Registrar of Companies under section 560(5) of the Companies Act, 1956. The company had been incorporated in 1975 and faced financial difficulties leading to a temporary suspension of business activities. Despite paying off dues to secured creditors and filing all pending returns through e-filing, the Registrar of Companies issued notices under section 560(1), (2), and (3) of the Act, ultimately striking off the company's name from the Register.
The court noted that the ground for striking off the company's name was non-existent as the company had filed up-to-date returns through e-filing in February 2007. The Registrar's notice did not comply with the mandatory provisions of section 560(3) of the Act, which required publication in the Official Gazette and sending a notice to the company by registered post before striking off the name. The Registrar did not wait for the statutory three-month period before passing the order, violating the Act's provisions.
Consequently, the court declared the impugned order as non est, illegal, and void ab initio. The order striking off the company's name was quashed, and the company's name was ordered to be restored to the Register of Companies as if it had never been struck off. The judgment highlights the importance of procedural compliance and adherence to statutory requirements in matters of striking off company names from the register under the Companies Act, 1956.
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