Company name struck off register for persistent non-compliance

The Tribunal upheld the Registrar's decision to strike off the company's name from the register under Section 248 of the Companies Act, 2013. The Tribunal found that the Registrar followed the necessary procedures and that the company's persistent failure to comply with statutory obligations justified the strike-off. Despite the Applicant's arguments, the Tribunal dismissed the application, emphasizing the company's prolonged non-compliance as the basis for upholding the strike-off decision.

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Issues Involved:
1. Legality of the strike-off procedure under Section 248 of the Companies Act, 2013.
2. Compliance with procedural requirements under Section 248(5) and (6) of the Companies Act, 2013.
3. Applicability of Section 403(1) of the Companies Act, 2013 regarding filing of annual returns.
4. The necessity of following Section 455(4) of the Companies Act, 2013.
5. The company's failure to maintain statutory compliance and the implications thereof.

Issue-wise Detailed Analysis:

1. Legality of the strike-off procedure under Section 248 of the Companies Act, 2013:
The Applicant challenged the strike-off order on the grounds that the Registrar did not follow the due procedure as required under Section 248(5) and (6). The Tribunal noted that Section 248 allows the Registrar to strike off a company’s name if it fails to commence business within one year of incorporation or is not in operation for two preceding financial years. The Tribunal concluded that the Registrar's action was within the legal framework provided by Section 248.

2. Compliance with procedural requirements under Section 248(5) and (6) of the Companies Act, 2013:
The Tribunal examined whether the Registrar adhered to procedural requirements before striking off the company’s name. Section 248(5) mandates that the Registrar must issue a notice and publish it in the Official Gazette before striking off a company's name. Section 248(6) requires the Registrar to ensure all liabilities are settled. The Tribunal found that the Registrar had issued the necessary notices and satisfied himself that the company had no borrowings or third-party liabilities, thus complying with the statutory requirements.

3. Applicability of Section 403(1) of the Companies Act, 2013 regarding filing of annual returns:
The Applicant argued that under the first proviso to Section 403(1), the company was allowed to file annual returns with an additional fee up to 27.07.2017, and thus the strike-off was premature. However, the Tribunal noted that the company had not filed its Balance Sheet and Annual Returns since 2006, and despite ample time, failed to comply with statutory requirements. Therefore, the strike-off was justified.

4. The necessity of following Section 455(4) of the Companies Act, 2013:
The Applicant contended that the Registrar should have proceeded under Section 455(4) instead of Section 248. The Tribunal clarified that the Registrar has the discretion to initiate action under either section if a company fails to file annual returns for two consecutive years. The Tribunal emphasized that it cannot direct the Registrar on which section to apply, as long as the action falls within the Companies Act, 2013.

5. The company's failure to maintain statutory compliance and the implications thereof:
The Tribunal highlighted that the company's persistent failure to file its Balance Sheet and Annual Returns since 2006 indicated non-compliance with statutory obligations. The Tribunal noted that even if the company's name were restored, it would be futile as the company was not prepared with the necessary documents. Consequently, the Tribunal found no merit in the Applicant's arguments and upheld the Registrar’s decision to strike off the company’s name.

Conclusion:
The Tribunal dismissed the application, finding no legal infirmities in the Registrar’s order under Section 248 of the Companies Act, 2013, thereby upholding the strike-off of the company’s name from the register. The Tribunal emphasized that the company’s prolonged non-compliance with statutory requirements justified the Registrar’s action.

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