Appellate Tribunal reduces costs for company struck off due to non-filing of Annual Returns The Appellate Tribunal modified the National Company Law Tribunal's decision, reducing the imposed costs from Rs. 7 Lakhs to Rs. 1.5 Lakhs in a case where ...
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Appellate Tribunal reduces costs for company struck off due to non-filing of Annual Returns
The Appellate Tribunal modified the National Company Law Tribunal's decision, reducing the imposed costs from Rs. 7 Lakhs to Rs. 1.5 Lakhs in a case where a company was struck off for non-filing of Annual Returns. The Appellant successfully argued that the original amount was unreasonably high, leading to the adjustment. The company's name could be restored upon payment of the revised costs. The Tribunal clarified that this modification did not absolve the Appellant from other statutory obligations. The Appeal was concluded with the adjusted costs being upheld.
Issues: Challenge to imposition of costs of Rs. 7 Lakhs by National Company Law Tribunal in Impugned Order dated 07th January, 2020.
Analysis: The Appellate Tribunal heard the appeal against the Impugned Order pronounced by the National Company Law Tribunal, Mumbai Bench, which imposed costs of Rs. 7 Lakhs on the Appellant in a case where the company was struck off for not filing Annual Returns since its incorporation. The Appellant challenged only the portion of the Impugned Order related to the costs imposed. The Appellant argued that the costs were unreasonably high and requested the Tribunal to substitute the amount with a more reasonable sum.
The Impugned Order allowed the restoration of the company's name upon payment of the imposed costs. However, the Appellate Tribunal found the amount of Rs. 7 Lakhs to be excessive in the circumstances of the case. The Practising Company Secretary representing the Appellant proposed that the costs be reduced to a more reasonable amount. After considering the matter, the Tribunal decided to substitute the costs from Rs. 7,00,000/- to Rs. 1,50,000/-, stating that the reduced amount was more appropriate given the facts of the case.
The Tribunal clarified that its Order reducing the costs would not prevent the Registrar of Companies (RoC) from recovering other statutory penalties, dues, or filings that the Appellant was liable to pay as per the law. Therefore, the Appeal was disposed of with the modified costs of Rs. 1,50,000/- being upheld.
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