Company restoration after strike-off may be allowed, but prior action can bar settlement scheme relief and impose strict filing conditions.
The Company Law Settlement Scheme, 2010 did not extend to companies against which action under section 560(5) had already commenced, so prior striking-off proceedings and Gazette publication barred reliance on the Scheme. Restoration of a struck-off company under section 560(6) remained available where the petition was within the statutory period and revival was justified on the facts, but restoration was made conditional on filing all outstanding statutory documents, paying exemplary and additional costs, and completing required formalities. The text also notes that further penal action could be pursued for continuing filing defaults.
Issues: (i) Whether the petitioners could claim the benefit of the Company Law Settlement Scheme, 2010 despite prior initiation of action under section 560(5) of the Companies Act, 1956. (ii) Whether the company's name should be restored to the register under section 560(6) of the Companies Act, 1956 and on what terms.
Issue (i): Whether the petitioners could claim the benefit of the Company Law Settlement Scheme, 2010 despite prior initiation of action under section 560(5) of the Companies Act, 1956.
Analysis: The Scheme expressly excluded companies against which action under section 560(5) had already been initiated by the Registrar of Companies. The record showed that proceedings for striking off had commenced and the company's name had already been published in the Official Gazette before the Scheme came into force. The petitioners therefore could not invoke the Scheme to avoid the consequences of prior default.
Conclusion: The petitioners were not entitled to the benefit of the Company Law Settlement Scheme, 2010.
Issue (ii): Whether the company's name should be restored to the register under section 560(6) of the Companies Act, 1956 and on what terms.
Analysis: Restoration under section 560(6) depends on a petition being brought within the statutory period and on the Court being satisfied that revival is justified. The petition was filed within twenty years of publication of the striking-off notice. The company was shown to be functioning, and the Court treated restoration as appropriate but subject to compliance with outstanding statutory filing obligations. In view of prolonged defaults, ordinary costs were found insufficient and exemplary costs were imposed, together with further costs to the Registrar of Companies. Liberty was also reserved to initiate penal action for non-compliance with filing obligations under the Companies Act, 1956.
Conclusion: The company's name was restored to the register, subject to filing of all outstanding documents, payment of costs, and completion of formalities.
Final Conclusion: The petition succeeded to the extent that restoration of the company was ordered, but the relief was conditioned on compliance with statutory filings and payment of substantial costs, while the attempt to rely on the settlement scheme failed.
Ratio Decidendi: A company struck off under section 560 of the Companies Act, 1956 may be restored under section 560(6) within the statutory period if the Court is satisfied that revival is justified, but a settlement scheme excluding companies already proceeded against under section 560(5) cannot be invoked to defeat such prior action.
TaxTMI 
AI Drafter ✕
TaxTMI 
