2021 (1) TMI 814 - Tri - Companies Law

Tribunal grants partial appeal for company name restoration under specified conditions

The Tribunal partially allowed the appeal for restoration of the company's name in the ROC register. Despite the appeal being filed under the wrong ... Restoration of the name of the company in the Register of the ROC - name has been struck off on the ground of failure in filing Financial Statements & Annual Return - section 252(3) of the Companies Act, 2013 - HELD THAT:- On perusal of the record, it is found that the appeal is filed under section 252(3) of the Companies Act, 2013. While, going through the section 252(3) of the Companies Act, it is found that the instant provision is made when the company is struck of voluntarily on the behest of the Promoter(s)/Director(s), whereas, section 252(1) of the Companies Act, provides that, when the company is struck of by the Registrar of Companies on the failure in filing of statutory returns by the Company. Hence, instant application would not lie under section 252(3) of the Companies Act, 2013; rather, it would lie under section 252(1) of the Companies Act, 2013 - When the Company is struck off for non-compliance of the statutory requirement, in that event, the application ought to be filed under section 252(1) of the Companies Act, 2013, however, the Appellant filed this application under section 252(3) of the Companies Act, 2013, which is applicable when the Company is struck off on the request of the Company by filing an application under section 248(2) of the Act. Time Limitation - HELD THAT:- It is pertinent to mention herein that the Hon'ble Supreme Court has extended the period of limitation, who's limitation is getting expired in the lockdown period. The said order of the Hon'ble Supreme Court passed on 23.03.2020 in Suo Motu Writ Petition (Civil) No. 3/2020 [2020 (5) TMI 418 - SC ORDER]. The order passed by the Hon'ble Supreme Court, the instant Appeal is conditionally allowed i.e. to dispose off the available assets and to discharge the unsettled obligations of the Company and after that the Appellant will get the name of the Company 'Struck off' from the register of companies maintained by the ROC - the instant Appeal is partially allowed and the Registrar of Companies, Ahmedabad, Gujarat is directed to restore the name of the Company in the Register of Companies upon Appellant's complying with the conditions imposed - application allowed in part. Issues:Restoration of company's name in ROC register, Misquoting of relevant section under Companies Act, 2013, Applicability of Companies Fresh Start Scheme (CFSS-2020), Extension of limitation period due to Covid-19 lockdown.Analysis:The appellant, a shareholder of the company, filed an appeal seeking restoration of the company's name in the Register of the ROC after it was struck off for failure to file financial statements and annual returns. The company, active since its incorporation in 1978, faced challenges leading to non-compliance with statutory requirements, resulting in the ROC's action. The appeal also aimed to benefit from the Companies Fresh Start Scheme (CFSS-2020) to rectify overdue filings without additional fees.The Tribunal noted that the appeal was filed under the wrong section of the Companies Act, as it should have been under section 252(1) instead of 252(3). However, citing a Supreme Court judgment, the Tribunal proceeded to treat the application under section 252(1) due to the misquoting of the section by the appellant. The application was time-barred as it was filed after three years from the date of strike off by the ROC in 2017.Considering the Covid-19 lockdown and the subsequent extension of limitation periods by the Supreme Court, the Tribunal conditionally allowed the appeal. The company's name would be restored in the ROC register upon the appellant fulfilling certain conditions, including filing overdue statutory returns, publishing a notice, paying a specified amount to the Central Government, clearing dues with the Income Tax Department, and complying with all statutory requirements.In conclusion, the Tribunal partially allowed the appeal, directing the Registrar of Companies, Ahmedabad, Gujarat, to restore the company's name in the register subject to the appellant meeting the specified conditions within the stipulated time frame. Compliance with the conditions outlined by the Tribunal was necessary for the restoration of the company's name in the ROC register.