2019 (6) TMI 770 - Tri - Companies Law

Appeal Denied: Company Name Restoration Rejected under Companies Act

VSP BUSINESS SOLUTIONS INDIA P. LTD. AND ANOTHER Versus REGISTRAR OF COMPANIES, WEST BENGAL

VSP BUSINESS SOLUTIONS INDIA P. LTD. AND ANOTHER Versus REGISTRAR OF COMPANIES, WEST BENGAL - [2019] 214 Comp Cas 493 (NCLT - Kol) Issues:- Appeal for restoration of company's name in Register of Companies under section 252(3) of the Companies Act, 2013.- Compliance with statutory requirements for filing financial statements and annual returns.- Company's operations and business activities during the relevant period.- Impact on directors and associated companies due to the company's struck-off status.Analysis:Issue 1: Appeal for restoration of company's nameThe appeal was filed under section 252(3) of the Companies Act, 2013 by a member of the company seeking restoration of the company's name in the Register of Companies, West Bengal. The Registrar of Companies struck off the company's name due to defaults in filing financial statements and annual returns for multiple years.Issue 2: Compliance with statutory requirementsThe Registrar of Companies justified the strike-off under section 248 of the Companies Act, 2013, stating the company failed to file financial statements and annual returns since 2014. The company argued that the defaults were unintentional due to lack of knowledge and staff in the initial years of operation.Issue 3: Company's operations and business activitiesThe Tribunal analyzed financial statements from 2014 to 2017, revealing no revenue from operations and consistent losses. The company's expenses were limited to office administration costs, indicating a lack of active business operations. The appellant's submissions of ITR acknowledgments and bank statements did not demonstrate business activities.Issue 4: Impact on directors and associated companiesThe appellant highlighted the adverse effects on directors and associated companies due to the struck-off status. Business contracts were pending execution, affecting operations. However, the Tribunal found no evidence that the company was actively engaged in business at the time of strike-off.Conclusion:The Tribunal dismissed the appeal, citing that the company was not actively carrying out business operations as required for restoration under section 252(3) of the Companies Act, 2013. The lack of business activity and financial losses indicated that restoration was not justified. The decision aligned with previous judgments emphasizing the necessity of active business operations for restoration.