2020 (9) TMI 444 - Tri - Companies Law

Tribunal orders restoration of company name in Register from 'Strike Off' to 'Active'

Rafey Builders Private Limited and Ors. Versus Registrar of Companies, Uttar Pradesh & Uttarakhand

The Tribunal ordered the restoration of the company's name in the Register of Companies, changing its status from 'Strike Off' to 'Active'. The company ... Restoration of name of M/s. Rafey Builders Private Limited struck off by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 read with Rule 87A of the National Company Law Tribunal Rules, 2016 - HELD THAT:- The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act 2013 which includes that, if it is just and equitable to restore the name of the company in the Registrar of Companies, it may direct the ROC to restore the name in its Register - The Appellant has been able to satisfy this bench that it has certain assets which necessitate and justify the restoration of its name in the Register of Companies. A step as stringent as what has been taken at least requires an opportunity to the appellant to take remedial measures. Merely to disallow restoration on grounds of its failure to file annual returns would be neither just nor equitable. As per several decisions of various courts it should only be an exceptional circumstance that court should refuse restoration where the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight. The Registrar of Companies, the Respondent herein, is ordered to restore the original status of the Appellant Company as if the name of the Company has not been struck off from the Registrar of Companies and take all consequential actions such as change of Company's status from 'Strike Off to 'Active' (for e-filing), restoration of status of DIN etc. Issues:Restoration of name of a company struck off by Registrar of Companies due to default in statutory compliances.Analysis:1. Background and Facts: The appeal was filed under Section 252(3) of the Companies Act, 2013 for restoration of the name of a company that was struck off by the Registrar of Companies, Uttar Pradesh. The company, engaged in real estate business, had its name struck off due to default in filing financial statements and annual returns.2. Contentions of the Appellant: The Appellant argued that the company had been active since its incorporation, maintained financial accounts, and complied with statutory filings. They presented evidence of financial statements, income tax returns, and assets to support their claim that the company was operational and had substantial assets.3. Response of Registrar of Companies: The Registrar of Companies stated that the company's name was struck off after providing due notice and opportunity to be heard. No response was received from the company or its directors, leading to the dissolution of the company.4. Judgment and Analysis: The Tribunal examined the relevant provisions under Section 252 of the Companies Act, 2013. It found that restoration of the company's name would be in the interest of shareholders and creditors. The Tribunal emphasized that restoration should be allowed if it is just and equitable, especially when the company has assets that justify restoration.5. Decision and Directions: The Tribunal ordered the restoration of the company's name in the Register of Companies, changing its status from 'Strike Off' to 'Active'. The company was directed to file all outstanding statutory documents within thirty days of restoration. Additionally, a cost of Rs. 50,000 was imposed for revival, to be paid online. The Registrar of Companies was instructed to publish the order in the Official Gazette and the company to publish a notice in a leading newspaper.6. Conclusion: The appeal was disposed of with the restoration of the company's name, subject to compliance with specified directions and payment of costs. The judgment highlighted the importance of providing an opportunity for remedial measures and not imposing excessive penalties for oversights in statutory filings.