2020 (2) TMI 610 - AT - Companies Law

Appellate Tribunal Overturns Company Name Removal, Emphasizes Compliance

Khetan Granite Private Limited, Jharkhand Versus Office of Registrar of Companies, Jharkhand

The Appellate Tribunal set aside the order of the National Company Law Tribunal (NCLT) affirming the striking off of the company's name from the Register ... Striking off the name of the Appellant Company from the Register of the Companies - failure to file due returns under the provisions laid down under Section 403(1) proviso-1 of Companies Act r/w Companies (Registration of Offices and Fees) Rules, 2014 - HELD THAT:- The Appellant Company is having substantial movable as well as immovable assets. Therefore, it cannot be said that the Appellant Company is not carrying on any business or operations. Hence, we are of the opinion that the order passed by the NCLT, Kolkata Bench as well as ROC, Jharkhand is not sustainable in law. The name of the Appellant Company be restored to the Register of Companies subject to the specific compliances - appeal allowed - decided in favor of appellant. Issues:1. Appeal against order striking off company name from Register of Companies.2. Failure to file Annual Returns and Financial Statements.3. Allegations of not being a going concern.4. Allegations of deliberate delay in filing.5. Lack of communication from ROC regarding striking off.6. Frozen bank account and financial implications.7. Land purchase for business development.8. Non-receipt of Show Cause Notice by the company.9. Restoration of company name and compliance requirements.Analysis:1. The appeal was filed against the order passed by the National Company Law Tribunal (NCLT) Kolkata, dismissing the appeal and affirming the order of striking off the company's name from the Register of Companies.2. The Appellant Company failed to file Annual Returns and Financial Statements as required under the Companies Act, 2013, leading to the Registrar of Companies (ROC) initiating the process of striking off the company's name.3. The NCLT found that the company's financial statements showed 'NIL' revenue generation, casting doubt on its status as a going concern, which led to the affirmation of the ROC's order.4. The Appellant argued that the delay in filing was inadvertent, submitting Audited Balance Sheets and Annual Statements for multiple financial years, along with evidence of business activities and land purchases for business development.5. The Appellant claimed they did not receive any notice from the ROC regarding the striking off, resulting in the company's bank account being frozen, causing financial difficulties.6. The ROC stated that despite issuing Show Cause Notices and public notices, no response was received from the Appellant Company, leading to the name being struck off and published in the official gazette.7. The Appellate Tribunal noted the substantial assets held by the company, including land purchases and financial records, indicating ongoing business operations, contrary to the findings of the NCLT and ROC.8. Consequently, the Tribunal set aside the impugned order, directing the restoration of the company's name with specific compliance requirements, including payment of costs and filing of overdue returns.9. The Tribunal allowed the appeal, emphasizing the need for compliance with statutory requirements post-restoration, while reserving the right for the ROC to take further punitive actions if necessary.This detailed analysis highlights the key legal and factual aspects of the judgment, addressing each issue raised in the case comprehensively.