2021 (1) TMI 651 - Tri - Companies Law

Revival Order for Brilliant Fire & Safety Solutions Pvt Ltd under Companies Act, 2013

Ambadas Balvanthrao Kulkarni Versus The Registrar of Companies

The Tribunal ordered the revival of M/s. Brilliant Fire & Safety Solutions Private Limited under Section 252(3) of the Companies Act, 2013. Despite ... Seeking revival of the Company with minimum or nil penalty for the delay and to waive off the additional fee payable an account of filing of Annual Returns/Reports with the ROC, Karnataka till FY 2018-19 - HELD THAT:- It is not in dispute that the Registrar of Companies is conferred with power U/s. 248(1) to strike off the Company, if the Company has failed to commence its business within one year of its incorporation or a Company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any Application within such period for obtaining the status of a dormant Company U/s. 455. However, Section 248(6) states that the Registrar of Companies, before finally striking off Company, has to satisfy himself that sufficient provision has been made for the realization of all amounts due to the Company and for the payment or discharge of its liabilities and obligations by the Company within a reasonable time, and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company. Though the impugned order striking off the Company was in accordance with law, the Tribunal has to take into consideration of bona fide contentions of Petitioner seeking to restore the name of Company, by taking a lenient view of the issue in the interest of justice and ease of doing business, instead of rigidly interpreting the law on the issue. In the instant case the Promoters and Directors being involved in the continuous development in the field of fire-fighting equipment were not able to concentrate on the Company's compliances part. Unless the revival order is made the Company and the Promoters will suffer irreparable loss and no purpose would be served in preventing it from continuing its business, since in the FY 2018-19 it had a Turnover of ₹ 54.32 lakh. This would not be in the interest of any of the stakeholders. It is also not in dispute that the instant Company Petition is filed in accordance with law; there are no investigations pending against the Company. The Respondent has not opposed the Petition; and left the issue to the Tribunal to consider the case subject to terms and conditions. Therefore, the interest of justice and fairness would be met if the name of Company is restored as prayed for subject to conditions imposed. Issues:1. Revival of a company under Section 252(3) of the Companies Act, 2013.2. Consideration of reasons for strike off and revival of the company.3. Compliance with statutory provisions for restoration of the company's name.Issue 1: Revival of the CompanyThe Company Petition was filed seeking the revival of M/s. Brilliant Fire & Safety Solutions Private Limited under Section 252(3) of the Companies Act, 2013. The Petitioner requested the ROC, Karnataka to revive the Company with minimum or nil penalty for the delay and to waive off additional fees for filing Annual Returns/Reports till FY 2018-19. The Registrar of Companies had initiated action under Section 248(1) of the Act due to non-filing of Balance Sheets or Annual Returns for the years 2016-17 to 2017-18, leading to a notice in Form STK-1 for strike off. The Respondent followed due procedure under Section 248(5) and struck off the Company's name. However, the Tribunal considered the Petitioner's contentions, the Company's turnover, and the interest of stakeholders. It was noted that the Company had been continuously doing business and the Promoters were involved in fire-fighting equipment development, justifying revival to prevent irreparable loss.Issue 2: Consideration of Reasons for Strike Off and RevivalThe Tribunal acknowledged the Registrar's power under Section 248(1) to strike off non-compliant companies. However, it emphasized the need to balance legal requirements with the interests of justice and ease of doing business. Despite the lawful strike off, the Tribunal considered the Petitioner's genuine reasons for non-compliance, the Company's business activities, and the absence of pending investigations or opposition from the Respondent. The Tribunal concluded that restoring the Company's name was in the interest of justice and fairness. The order for revival included specific directions for compliance, restoration of DINs, payment of costs, and resumption of business operations.Issue 3: Compliance with Statutory Provisions for RestorationThe Tribunal, after considering the pleadings and provisions of the Companies Act, 2013, ordered the restoration of the Company's name in the Register maintained by the Registrar of Companies, Karnataka. The restoration included consequential actions, filing of statutory documents with prescribed fees, and personal compliance by the Company's representative. Additionally, the Company was directed to pay a cost of Rs. 10,000 to the Central Government, deliver a certified copy of the order to the Registrar of Companies, and resume business operations promptly upon restoration. The order emphasized that it pertained to specific violations leading to the strike off and did not preclude further legal actions for any other offenses committed by the Company.In conclusion, the Tribunal's judgment in this case highlights the importance of balancing legal requirements with fairness and the interests of stakeholders. The decision to revive the Company under specific conditions showcases a pragmatic approach to resolving compliance issues while enabling business continuity.