2020 (2) TMI 381 - AT - Companies Law

Appellate Tribunal restores company name, imposes compliance measures

The Appellate Tribunal allowed the appeal, quashed the impugned order, and directed the restoration of the company's name to the Register of Companies, ... Striking of the name of the appellant company from Register of Companies - HELD THAT:- The Appellant has replied vide its letter dated 29.3.2017 (Page 290 of the appeal) and the said letter has the acknowledgement of ROC, Pune. Therefore, it can not be said that the appellant has not replied - Further there is nothing on record that the compliance of Section 248(6) of the Companies Act, 2016 has been made by the Respondent. This fact has also not been noted in the NCLT order. Without complying this provision the ROC vide FORM No.STK5 dated 7.4.2017 has struck off the names of the various companies including the appellant No.2 company. We note that the company is having FDR with the Bank and Performance guarantee has been given and income tax is being deposited on the interest of income. The name of the appellant No.1 company shall be restored to the Register of Companies subject to the following compliances - Appellants shall pay costs of ₹ 25,000/- to the Registrar of Companies, Pune within 30 days - Appeal allowed. Issues:1. Appeal against striking off the name of the company from Register of Companies.2. Compliance with statutory requirements under the Companies Act, 2013.3. Justification for restoring the company's name to the Register of Companies.Analysis:1. The appeal was filed against the order of the National Company Law Tribunal (NCLT) dismissing the appeal and affirming the striking off the name of the company from the Register of Companies by the Registrar of Companies (ROC), Pune. The NCLT based its decision on the company's lack of income/revenue, absence of spending on Employee Benefit Expenses, and nil fixed assets. The appellants challenged this decision, arguing that they had a Fixed Deposit Receipt (FDR) with a bank, regularly filed income tax returns, and were making efforts to start business operations.2. During the proceedings, it was revealed that the company had not filed statutory returns for more than two years as required by the Companies Act, 2013. The appellant had responded to the STK-1 notice from the ROC, acknowledging the oversight in filing regulatory returns for certain years. The appellant had an FDR with a bank, was receiving interest, and had made provisions for income tax in their Balance Sheet. The appellant had also provided a performance guarantee, showing intent to start business operations. The ROC was required to ensure compliance with Section 248(6) of the Companies Act, 2013 before striking off the company's name, which includes making provisions for liabilities and obligations.3. The Appellate Tribunal found that the appellant had taken steps to rectify the non-compliance, such as responding to the ROC's notice and maintaining financial instruments like the FDR. The Tribunal noted that the ROC had not received a reply from the company and its directors, despite the appellant's submission of a response acknowledged by the ROC. Considering these factors, the Tribunal concluded that the company's name should be restored to the Register of Companies. The Tribunal issued specific directions for compliance, including payment of costs to the ROC, filing of pending annual returns and balance sheets, and allowing the ROC to take further steps for non-compliance in the future.In conclusion, the Appellate Tribunal allowed the appeal, quashed the impugned order, and directed the restoration of the company's name to the Register of Companies, subject to specified compliances and costs.