Tribunal orders company name restoration with compliance requirements and ROC authority

The Tribunal quashed the NCLT's decision and ordered the restoration of the company's name to the register of companies. The company was required to pay costs to the ROC, file all annual returns and balance sheets, and settle charges and late fees within specified timelines. The ROC retained the authority to take punitive actions for non-compliance with statutory filing requirements. The appeal was concluded without any cost orders.

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Issues Involved:
1. Legality of striking off the company's name by the Registrar of Companies (ROC) under Section 248 of the Companies Act, 2013.
2. Validity of the company's claim that it was operational and filing statutory returns.
3. NCLT's decision to dismiss the appeal for restoration of the company's name.
4. Compliance with Section 252(3) of the Companies Act, 2013 for restoration of the company's name.

Detailed Analysis:

1. Legality of Striking Off the Company's Name:
The ROC struck off the name of the company under Section 248 of the Companies Act, 2013, citing non-filing of statutory returns and financial statements since 2013. The ROC issued a notice on 7th April 2017, giving the company 30 days to file objections, but no response was received, leading to the company's name being struck off on 9th June 2017.

2. Validity of the Company's Claim of Being Operational:
The appellants argued that the company was operational and had internal disputes that delayed the filing of statutory returns. They submitted balance sheets, income tax returns, and evidence of long-term borrowings. However, the NCLT found that the company did not file statutory returns after 2013 and noted that the directors' report for the financial years 2013-14 to 2015-16 indicated no business operations or revenue generation.

3. NCLT's Decision to Dismiss the Appeal:
The NCLT dismissed the appeal, stating that the company was a sham and not engaged in any business. The NCLT emphasized that the company failed to file statutory returns despite having prepared financial statements and income tax returns. The Tribunal concluded that the company did not provide valid reasons for restoration and upheld the ROC's decision.

4. Compliance with Section 252(3) of the Companies Act, 2013:
The appellants filed the appeal under Section 252(3), which allows for the restoration of a company's name if it was operational at the time of being struck off or if it is just to restore the name. The Tribunal noted that the company had significant investments and loans, suggesting it was operational. The Tribunal found that the ROC did not consider these aspects and that it would be just to restore the company's name to avoid further legal proceedings.

Conclusion:
The Tribunal quashed the NCLT's order and directed the restoration of the company's name to the register of companies, subject to the following conditions:
- Payment of costs of Rs. 1 lakh to the ROC within 30 days.
- Filing of all annual returns and balance sheets for the period ending 31st March 2014 to date within 30 days of restoration.
- Payment of requisite charges and late fees.

The ROC is free to take further punitive actions under the Companies Act, 2013 for non-filing or late filing of statutory returns/documents. The appeal was disposed of with no order as to costs.

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