2015 (2) TMI 757 - HC - Companies Law

Court Grants Petition to Restore Company Name under Companies Act

The court allowed the petition for restoration of the company name under Section 560(6) of the Companies Act, 1956. The company's name would be restored ... Restoration of company name - striking off register - statutory non-filing of annual returns and balance sheets - remedies under Section 560(6) of the Companies Act, 1956 - filing of outstanding statutory documents and payment of prescribed and additional fees - conditional restoration subject to costsRestoration of company name - statutory non-filing of annual returns and balance sheets - filing of outstanding statutory documents and payment of prescribed and additional fees - conditional restoration subject to costs - Whether the name of the company struck off the Register can be restored under Section 560(6) of the Companies Act, 1956 and on what terms. - HELD THAT: - The company was struck off the register after notices were issued for failure to file annual returns and balance sheets for multiple years. The petitioner explained non-filing as attributable to the part time accountant leaving employment and produced an affidavit. The Registrar of Companies, while maintaining that statutory procedure for striking off had been followed, indicated no objection to restoration provided all outstanding statutory documents (annual returns and balance sheets for the years identified) are filed along with the prescribed fees and additional fees as applicable on the date of actual filing. The Court accepted the petition for restoration subject to specified conditions: payment of costs and compliance by the company with filing obligations and fee payment; upon receipt of the costs the ROC to change the company's status to 'Active' and the petitioner to effect all statutory compliances thereafter. The order implements conditional restoration rather than an unconditional reinstatement, tying restoration to both payment of costs and retrospective compliance with filing and fee requirements. [Paras 11, 12, 13, 14]Petition allowed; name of the company restored on the Register subject to payment of costs of Rs. 75,000 within two weeks and filing of all outstanding statutory documents and payment of prescribed and additional fees; on receipt of costs ROC to change status to 'Active'.Final Conclusion: The petition for restoration of the company's name under Section 560(6) is allowed on conditions: payment of costs and completion of all statutory filings with applicable fees, after which the ROC shall restore the company's status to Active. Issues: Restoration of Company Name under Section 560(6) of the Companies Act, 1956Detailed Analysis:Issue 1: Petition for Restoration of Company NameThe petition was filed under Section 560(6) of the Companies Act, 1956 for the restoration of the name of the company M/s Posh Exports (P) Ltd in the Register of the Registrar of Companies. The Petitioner Company, incorporated in 1997, had its name struck off due to failure to file requisite statutory documents.Issue 2: Grounds for RestorationThe Petitioner Company contended that it had been continuously engaged in business since incorporation, dealing with Textile, Fabrics, Handloom & General Goods. The decision to seek revival was prompted by the potential for good business in the construction segment. The Board of Directors acknowledged the oversight in not filing necessary documents and committed to rectifying the non-compliance.Issue 3: Registrar's Response and Non-ComplianceThe Registrar of Companies had struck off the company's name for non-filing of Annual Returns and Balance Sheets from 1999 to 2006. The Petitioner Company attributed this lapse to the departure of the part-time accountant responsible for the filings. The Registrar disputed the Petitioner's claim of following due procedure before striking off the name.Issue 4: Conditions for RestorationUpon submission of an affidavit by the Petitioner Company explaining the non-filing, the Registrar did not object to restoration, subject to the filing of all outstanding statutory documents from 1999 to 2013 and payment of prescribed fees. The court allowed the petition for restoration on the condition of paying costs amounting to Rs. 75,000 within two weeks.Issue 5: Restoration and ComplianceWith the payment of costs, the name of the Petitioner Company would be restored on the Register of the Registrar of Companies, changing its status to 'Active.' The company was required to fulfill all statutory compliances by filing the necessary documents with the requisite fees and additional charges as applicable.In conclusion, the petition for restoration of the company name under Section 560(6) of the Companies Act, 1956 was allowed, contingent upon meeting the specified conditions and payment of costs. The judgment emphasized the importance of statutory compliance and rectifying non-filing discrepancies to ensure the company's legal standing and operational continuity.