Court overturns company name removal, citing procedural faults The court quashed the Gazette Notification that struck off the company's name from the Register of Companies under section 560(5) of the Companies Act, ...
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Court overturns company name removal, citing procedural faults
The court quashed the Gazette Notification that struck off the company's name from the Register of Companies under section 560(5) of the Companies Act, 1956. The Registrar of Companies' actions were deemed unjustified as they did not adhere to the prescribed procedure, failing to provide proper notices and warnings before the strike-off. The company's continuous operation, supported by financial records, demonstrated its functionality, leading to the reinstatement of the company's name in the Register of Companies as Gautam Buddha Hospital and Research Institute (P.) Ltd.
Issues: 1. Quashing of Gazette Notification striking off company's name from Register of Companies under section 560(5) of the Companies Act, 1956.
Analysis: The petitioner sought to quash the Gazette Notification that struck off the name of the company from the Register of Companies under section 560(5) of the Companies Act, 1956. The company, initially registered as Gautam Buddha Children's Hospital Private Limited, faced disputes among directors leading to a request for name strike-off. However, some directors later sought to continue operations under a new name. The company presented audited financial statements from 2003 to 2008, demonstrating continuous operation. The Registrar of Companies, acting on government instructions due to non-filing of statutory returns, struck off the company's name. The petitioner argued that the company was functional, and the strike-off lacked proper procedure and notice as mandated by section 560 of the Companies Act.
The Registrar of Companies contended that the company failed to file statutory returns from inception and that the strike-off was justified based on director's initial request and government instructions. Despite no withdrawal of the strike-off request, the Registrar proceeded with the action. However, the court found the Registrar's actions unjustified as they contravened section 560 requirements. The Registrar failed to follow the prescribed procedure of sending notices and warnings before striking off a company's name, rendering the action illegal and non est.
The court held that the strike-off notification was to be quashed, reinstating the company's name in the Register of Companies. The company's continuous operation, evidenced by financial records and bank transactions, proved it was not defunct. The Registrar's oversight of subsequent name change application and failure to consider the legal implications of the name change further invalidated the strike-off decision. The court concluded that the strike-off was illegal and non est, ensuring the company's name remained as Gautam Buddha Hospital and Research Institute (P.) Ltd. in the Register of Companies.
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