2020 (10) TMI 290 - Tri - Companies Law

Appellant Company's Name Restored in Register after Compliance Review

R. Manoj Kumr, S/o V. Rajasekharan Nair Versus The Registrar of Companies

The Tribunal ordered the restoration of the Appellant Company's name in the Register of Companies under Section 252(3) of the Companies Act, 2013. The ... Restoration of name of the Company in the Register of Companies, maintained by the Registrar of Companies - Section 252(3) of the Companies Act, 2013 - HELD THAT:- The ROC submitted that the action of striking off of the name of the Company was triggered due to negligence and lack of due diligence on the part of the directors of the Company for not discharging their statutory duties in filing the statutory returns within the due date stipulated under the Companies Act and also for not responding to the several periodical notices within the notice periods. Therefore, the action of strike off of the name of company is fully substantiated within the authority under the provisions of Section 248 of the Act and deserves the protection of this Tribunal. 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 Register of Companies and take all consequential actions like change of company’s status from ‘Strike off’ to Active (for e-filing) and to intimate the bankers about restoration of the name of the company so as to defreeze its accounts/ It is further observed that by virtue of this order of restoration of name of Company in the register it will not entitle the Directors of the Company whose name in case have been disqualified by virtue of provisions of section 164 of the Companies Act, 2013 by the Respondent/RoC automatically to be restored to directorship except in accordance with law. Application allowed. Issues: Restoration of Company Name in Register of CompaniesDetailed Analysis:1. Issue of Restoration Application: The Appellant Company filed a Company Appeal seeking restoration of its name in the Register of Companies under Section 252(3) of the Companies Act, 2013, due to non-compliance with annual filing requirements.2. Business Operations: The Appellant Company is engaged in real estate business as per its Memorandum of Association and has been in operation since its incorporation in 1994.3. Non-Compliance and Strike Off: The Registrar of Companies (ROC) initiated strike off action against the company for non-filing of financial statements and annual returns from 1995 to 2016, leading to the company's name being struck off the register in 2018.4. Arguments for Restoration: The Appellant Company expressed readiness to file pending returns and undertook to pay necessary fees, citing accidental non-compliance and poor understanding of statutory requirements in recent years.5. ROC's Response: The ROC defended the strike off action, attributing it to negligence and lack of diligence on the part of the company's directors in meeting statutory obligations.6. Judicial Review: The Tribunal reviewed the appeal, considered the company's current financial status, and assessed compliance with legal provisions for restoration.7. Legal Provisions: Section 252(3) of the Companies Act, 2013 allows restoration of a company's name if it was carrying on business at the time of strike off or if restoration is deemed just.8. Tribunal's Decision: The Tribunal found merit in the appeal, ordering the restoration of the company's name in the Register of Companies with specific directives and conditions.9. Compliance and Costs: The Tribunal mandated the filing of pending documents, payment of costs to the Central Government, and submission of an undertaking regarding the company's financial transactions during demonetization.10. Enforcement and Restrictions: The Tribunal directed the company to comply with the restoration order, restricted asset disposal until compliance, and empowered the ROC to pursue further actions for any late filings or non-compliances.11. Disposal of Appeal: The Company Appeal was disposed of with detailed instructions and conditions for the restoration process, emphasizing compliance and accountability.This comprehensive analysis covers the key issues, arguments, legal provisions, judicial review, and the Tribunal's decision regarding the restoration of the company's name in the Register of Companies.