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Appeal to restore struck-off company dismissed by NCLT for non-compliance. Claim of winding up not enough. The appeal to restore a Private Limited Company struck off for non-compliance with filing requirements under the Companies Act, 2013 was dismissed by the ...
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Appeal to restore struck-off company dismissed by NCLT for non-compliance. Claim of winding up not enough.
The appeal to restore a Private Limited Company struck off for non-compliance with filing requirements under the Companies Act, 2013 was dismissed by the NCLT. The Appellant's claim of being misled and in the process of winding up was not deemed sufficient for restoration. The NCLT emphasized that restoration should not be granted solely for winding up purposes, especially when the company had minimal assets. The court found no merit in the arguments presented and did not award costs in the matter.
Issues: 1. Restoration of a Private Limited Company struck off from the Register of Companies for failure to file Financial Statements and Annual Returns. 2. Interpretation of Section 252 of the Companies Act, 2013 regarding the restoration of a company's name to the register. 3. Justification for restoring the name of the company only for the purpose of winding up.
Issue 1: Restoration of a Private Limited Company The Appellant Company, a Private Limited Company, was struck off from the Register of Companies for failing to file Financial Statements and Annual Returns. The Appellant claimed that they were misled by an online portal, leading to the default. The Appellant filed an application under Section 252 of the Companies Act, 2013 to restore the company, stating that they were in the process of winding up and would comply with statutory requirements. However, the NCLT dismissed the petition, prompting the appeal.
Issue 2: Interpretation of Section 252 The Counsel for the Appellant argued that even if the company was not carrying on business, restoration could be justified if it was just to do so. The NCLT considered the Registrar of Companies' counter affidavit, which detailed the company's non-compliance and the steps taken before striking off the name. The NCLT analyzed Section 252(3) and concluded that restoration should not be allowed solely for winding up purposes, especially when the company had no assets other than a nominal cash balance.
Issue 3: Justification for Restoration for Winding Up The Appellant contended that they were misled about the necessity of filing returns, but the NCLT found this to be an insufficient reason for non-compliance. The NCLT emphasized that restoration should not be granted solely for the company to undergo winding up, as it would defeat the purpose of striking off. The NCLT highlighted that the company had no assets besides a small cash balance, providing no justification for restoration. The Appellant's argument regarding the directors' DIN being affected due to the striking off was not considered as a valid ground for restoration under Section 252(3).
In conclusion, the appeal was dismissed by the NCLT, finding no substance in the arguments presented. No costs were awarded in the matter.
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