Restoration of struck off company upheld where statutory conditions were met and res judicata did not bind non-parties.

Restoration of a struck off company under Section 560(6) is a discretionary remedy that should ordinarily be granted where the company was in operation and restoration is just. A third party cannot block restoration merely by alleging prejudice to its monetary claim, especially where an alternative remedy remains available in execution, and the balance sheet evidence prima facie supported creditor status. The plea of res judicata failed because the earlier restoration proceedings were between the company and the ROC, while the later applicants were not parties or privies to that lis. On these grounds, the challenge to restoration was rejected.

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Issues: Whether the appellant could resist restoration of the struck off company under Section 560(6) of the Companies Act, 1956 on the grounds of lack of locus, alleged collusion and the bar of res judicata.

Analysis: The right to seek restoration under Section 560(6) is a discretionary remedy, ordinarily to be granted where the company was in operation and restoration is just. The appellant's grievance that restoration would prejudice its position under the arbitral awards did not by itself make restoration unjust, particularly when an alternate remedy remained available to it in execution. The creditors who sought restoration had supported their claim by the company's balance sheet, which prima facie established their status as creditors. The plea of res judicata also failed because the earlier restoration proceedings were between the company and the ROC, whereas the applicants in the later petition were not parties to that lis. The earlier order therefore did not bind them.

Conclusion: The appellant had no sufficient ground to prevent restoration of the company, and the order restoring the company was upheld.

Final Conclusion: The challenge to restoration was rejected, and the appeal failed.

Ratio Decidendi: Restoration of a struck off company under Section 560(6) should ordinarily be allowed if the statutory conditions are met, and a third party cannot defeat restoration merely by showing potential prejudice to its own monetary claim unless a strong case of injustice is made out; res judicata applies only against parties or privies to the earlier decision.

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