Company name restored to register after striking off order reversed under Section 252(3) despite filing failures

NCLAT set aside the striking off order and restored the company's name to the ROC register. The company was struck off after failing to file annual returns since 2006, but NCLAT found the company had assets and liabilities and was carrying on business. Under Section 252(3) of Companies Act 2013, restoration was justified as the company was operational when struck off. The ROC itself requested directions for filing pending returns rather than opposing restoration. NCLAT held that despite management's failure to file statutory documents, restoration with penalty levy would serve justice and prevent irreparable hardship to the company.

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Issues Involved:
1. Delay in filing the appeal.
2. Legitimacy of the company's operations and financial activities.
3. Justness of restoring the struck-off company to the Register of Companies.
4. Compliance with statutory requirements and filing of pending documents.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The appellant received the certified copy of the impugned order on 16.02.2021 and filed the appeal on 15.03.2021, within 45 days. The delay was attributed to the COVID-19 pandemic. The tribunal, considering the Supreme Court's order for the extension of limitation due to the pandemic, allowed the appeal and condoned the delay without costs.

2. Legitimacy of the Company's Operations and Financial Activities:
The appellant company claimed continuous operation since incorporation, supported by financial statements, a lease agreement, income tax returns, and bank statements. However, the tribunal noted the following:
- No income tax returns filed after the assessment year 2006-07.
- Bank statements showed no significant transactions from 08.06.2015 to 31.12.2019.
- Balance sheets indicating revenue from operations seemed prepared post-striking off.
The tribunal observed that the company failed to provide sufficient evidence of operations during the defaulting years and utilization of the leased plot.

3. Justness of Restoring the Struck-off Company to the Register of Companies:
The tribunal referred to Section 252(3) of the Companies Act, 2013, which allows restoration if the company was carrying on business or in operation or if it is just to restore. The tribunal cited previous judgments, emphasizing that the term "or otherwise" should not be used to restore companies not complying with statutory requirements or indulging in unlawful activities. The tribunal concluded that the company's striking off was justified due to non-compliance and lack of operations.

4. Compliance with Statutory Requirements and Filing of Pending Documents:
The appellant argued that the company had substantial assets and liabilities, with continuous business operations hindered by external factors like construction and the pandemic. The appellant contended that the company intended to comply with statutory requirements and file pending returns. The tribunal noted that the Registrar of Companies and the Income Tax Department did not oppose the restoration but required the company to file all pending documents.

Conclusion:
The appellate tribunal allowed the appeal, set aside the impugned order, and directed the restoration of the company's name to the Register of Companies, subject to the filing of all outstanding documents and payment of costs. The tribunal emphasized the importance of compliance with statutory requirements and the justness of restoration in the interest of the company and stakeholders. The restoration was conditional upon the payment of Rs. 40,000 to the Prime Minister Relief Fund and completion of all statutory formalities.

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