Company name restoration granted by Tribunal subject to statutory requirements and cost payment within 3 months

The Tribunal allowed the petition for restoration of the company's name in the Register of the Registrar of Companies (ROC), subject to the company fulfilling all statutory requirements and paying a specified cost within three months. The decision emphasized a liberal approach towards restoration, following the principle that restoration should be the rule rather than the exception, as supported by legal precedents.

---

---

Issues Involved:
1. Restoration of the company's name in the Register of the Registrar of Companies.
2. Jurisdiction and procedural compliance by the Registrar of Companies.
3. Justification for non-compliance and failure to file statutory documents.
4. Legal precedents and interpretation of Section 560 of the Companies Act, 1956.
5. Conditions for restoration and future compliance requirements.

Issue-wise Detailed Analysis:

1. Restoration of the Company's Name in the Register of the Registrar of Companies:
The applicant company sought the restoration of its name in the Register of the Registrar of Companies (ROC), Kanpur, Uttar Pradesh. The company argued that the ROC acted without jurisdiction in striking off its name and issuing a Gazette Notification under Section 560(5) of the Companies Act, 1956. The company contended that it was capable of fulfilling its commitments and restarting its business, and that there would be no loss to anyone if its name was restored.

2. Jurisdiction and Procedural Compliance by the Registrar of Companies:
The applicants claimed they were unaware of the proceedings undertaken by the ROC for striking off the company's name. They argued that they did not receive any notice as required under Section 560(1) or Section 560(2) of the Companies Act, 1956. The ROC, in its report, stated that the company did not file any statutory documents despite sufficient notices and opportunities. The ROC provided evidence of communications sent to the company, informing it about the impending Gazette Notification.

3. Justification for Non-compliance and Failure to File Statutory Documents:
The applicant company admitted that due to technical problems, it failed to file Form No. 18 for the change in its registered office and Form-2 for the return of allotment of shares. The company also did not file annual returns or statutory documents with the Ministry of Corporate Affairs or the ROC since 1997. Despite these lapses, the company argued that it never gave up on its business plans and had substantial assets and commitments to restart its operations.

4. Legal Precedents and Interpretation of Section 560 of the Companies Act, 1956:
The applicant's counsel cited a decision of the Hon'ble Delhi High Court in Company Appeal No. 25/2012, which emphasized a liberal interpretation of Section 560(6) of the Companies Act, 1956. The court observed that restoration of a company's name should be the rule, and refusal should be an exception. The court also noted that a statutory period of 20 years is provided for seeking restoration, and successful restoration would deem the company to have continued in existence.

5. Conditions for Restoration and Future Compliance Requirements:
The Tribunal considered the rival contentions and decided to adopt a liberal approach for allowing the restoration of the company's name. The Tribunal directed the company to make all statutory compliances and file its statutory returns under the Companies Act, 1956 and 2013, within three months from the receipt of the order. Additionally, the company was ordered to pay a cost of Rs. 25,000 to the Central Government through the ROC, Kanpur, as a precondition for restoration.

Conclusion:
The Tribunal allowed the petition for restoration of the company's name in the Register of the ROC, provided that the company complies with all statutory requirements and pays the specified cost within the stipulated time. The decision was based on the principle that restoration should be the norm, and refusal should be an exception, as established by judicial precedents.

---