Registrar's decision to strike off non-operational company upheld, with dissenting restoration order

The case involved the legality of the Registrar of Companies' decision to strike off a company's name for non-operation. The company admitted to being non-functional and non-operational, leading to the strike-off. The Tribunal found no procedural deficiencies in the Registrar's actions. Despite arguments for restoration based on potential operations, the majority upheld the strike-off. However, a dissenting member allowed the appeal, restoring the company's name subject to meeting statutory obligations and costs.

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Issues Involved:
1. Legality of the Registrar of Companies' action in striking off the company's name.
2. Whether the company was carrying on business or in operation at the relevant times.
3. Justification for restoring the company's name on the register of companies.
4. Compliance with procedural requirements under Section 248 and Section 252 of the Companies Act, 2013.

Issue-wise Detailed Analysis:

1. Legality of the Registrar of Companies' Action:
The Registrar of Companies (ROC) issued a notice under Section 248 of the Companies Act, 2013, proposing to strike off the company's name due to non-operation for two financial years and failure to obtain dormant company status. The company admitted to not filing balance sheets and annual returns due to market conditions and technical difficulties. The ROC followed the legal procedure, including issuing a notice and waiting for the company's representation. The company's name was struck off on 29.08.2018, and a public notice was issued on 31.08.2018. The Appellate Tribunal found no illegality or procedural deficiency in the ROC's actions.

2. Whether the Company was Carrying on Business:
The company admitted in its reply dated 24.07.2018 that it was not operational at the time of the notice and had not been functioning for the previous four years. The company’s income tax returns for the assessment years 2014-15 to 2017-18 showed 'Nil' gross income and tax paid. The Tribunal concluded that the company was non-functional and non-operational when the notice was issued.

3. Justification for Restoring the Company's Name:
Under Section 252(3) of the Companies Act, 2013, a company can be restored if it was carrying on business or if it is just to restore it. The appellant argued that improved power supply and available infrastructure made it viable to restart operations. However, the Tribunal found no convincing reasons for the company's non-operation and noted the failure to apply for dormant status or file necessary documents. The Tribunal emphasized fairness and justice, concluding that no just grounds were presented for restoring the company's name.

4. Compliance with Procedural Requirements:
The ROC complied with Section 248 by issuing a notice, waiting for the company’s representation, and following the stipulated time frame. The appellant's claim of antedating the notice was not substantiated with evidence. The Tribunal confirmed that the ROC's actions were legally sound and procedural requirements were met.

Separate Judgments Delivered:
One member of the Tribunal dismissed the appeal, upholding the ROC's decision and finding no reason to interfere with the NCLT, Chennai Bench's order. However, another member differed, emphasizing that the company had valuable assets and potential for restarting operations. This member argued that the failure to file returns was due to inadvertence and deficient advice, and restoration was just and proper, subject to compliance with statutory requirements and payment of costs.

Conclusion:
The appeal was ultimately allowed by the dissenting member, setting aside the NCLT's order and restoring the company's name on the condition of fulfilling statutory requirements and paying costs.

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