2020 (9) TMI 901 - Tri - Companies Law

Appeal granted to restore company name struck off illegally under Companies Act, 2013

M/s JAIHIND STONES PRIVATE LIMITED Versus REGISTRAR OF COMPANIES & ANOTHER, UNION OF INDIA

The Tribunal allowed the appeal, deeming the striking off of the company's name as illegal. The company's name was ordered to be restored to the Registrar ... Striking off the name of the company from the ROC - Section 252 of the Companies Act, 2013 - grounds contemplated under section 252 of Companies Act, 2013, are that the company was carrying on business or was in operation at the time of striking off its name, and where it appears “just” to the Adjudicating Authority that the name of the company is to be restored to the Register of Companies and the Section 252(1) of the Act - HELD THAT:- The Appellant has submitted sufficient evidence that it has been in operation during the period preceding strike off, therefore it could not be termed as a defunct company as per section 252 of the Act. Thus, taking into consideration the provisions of Section 252(1) of the Companies Act,2013, which vests this Tribunal with a discretion where the Company, whose name has been struck off, and such Company is able to demonstrate that it is just to do so, can restore the name of the Company, in the Register and in the interest of all stakeholders, including the Appellant itself, who seeks restoration of the name of the Company in the register maintained by Registrar of Companies, the company deserve to be restored. The Public Notice of Registrar of Companies,striking off the name of the company,is hereby declared illegal and set aside. The restoration of the company’s name to the Register of Registrar of Companies is ordered subject to its filing of all outstanding documents with proper filing fees along with additional fees required under law and completion of all formalities - Appeal allowed. Issues:Appeal against striking off company's name under Section 252 of Companies Act, 2013.Analysis:The appellant, a Private Limited Company, appealed against the striking off of its name by the Respondent under Section 248(1) of the Companies Act, 2013. The company was incorporated in 1995 with authorized share capital of Rs. 80,00,000 divided into 8,00,000 equity shares of Rs. 10 each. The issued, subscribed, and paid-up share capital was Rs. 71,17,700 divided into 7,11,770 equity shares of Rs. 10 each. The main objects of the company included discounting bills, advancing money on goods security, and receiving goods for sale on consignment basis. The Respondent struck off the company's name due to non-compliance with filing Financial Statements and Annual Returns for the years 2015-16 to 2017-18, indicating the business was not operational.The appellant provided evidence of being operational, including audited financial statements, bank statements, and income tax returns for the relevant period. The Registrar of Companies (ROC) had no objection to restoring the company's name upon filing pending statutory documents with late fees. The Income Tax Department did not file a reply. The grounds under Section 252 of the Companies Act, 2013, required demonstrating that the company was in operation at the time of striking off its name, justifying restoration. The Tribunal had the discretion to restore the company's name if it was just to do so and in the interest of stakeholders.Considering the evidence presented, the Tribunal allowed the appeal, declaring the striking off of the company's name as illegal. The restoration of the company's name to the Register of Registrar of Companies was ordered upon filing outstanding documents with proper fees, including late fees, and payment of Rs. 25,000 to the Prime Minister's Relief Fund. The company's name would stand restored as if it had not been struck off under Section 248(1) of the Companies Act, 2013. The petition was allowed and disposed of accordingly, with orders to serve copies of the order to the parties involved.