2021 (11) TMI 479 - Tri - Companies Law

Tribunal Orders Restoration of Company Name & Bank Account Activation

The Tribunal allowed the appeal under section 252(1) of the Companies Act, 2013, ordering the restoration of the company's name in the Register of ... Restoration of company name - restoration under section 252(1) of the Companies Act, 2013 - deemed operation of company upon restoration - reactivation of bank accounts - compliance with statutory filings - payment of costs as condition for restoration - marking DIN as active - facilitation of addition of directors by back-end processingRestoration of company name - restoration under section 252(1) of the Companies Act, 2013 - compliance with statutory filings - Restoration of the appellant-company's name in the Register of Companies was ordered. - HELD THAT: - The Tribunal examined the appellant's averment and supporting records showing the company was operational despite non-filing of statutory returns, and noted that the Registrar of Companies and the Income-tax Department raised no objection. Applying the statutory power to restore a struck-off company, the Bench held the case fit for restoration while requiring the company to comply with the provisions of the Act by filing all required documents and fulfilling other statutory compliances within 30 days from restoration. Restoration was therefore granted subject to those compliance obligations. [Paras 8, 9, 10]The appeal is allowed and the company's name is restored in the Register of Companies, subject to statutory compliance.Deemed operation of company upon restoration - reactivation of bank accounts - Consequences of restoration: the company shall be deemed operational in all respects and its bank accounts shall function without separate direction. - HELD THAT: - The Tribunal directed that upon restoration the company shall be deemed to have been in operation as if its name had not been struck off under section 248, and expressly recorded that functioning of all bank accounts follows from restoration so that no separate order to activate bank accounts is necessary. The RoC was to give effect to the order after ensuring compliance with the conditions imposed. [Paras 10]On restoration the company is deemed operational and bank accounts shall be functional without any separate direction.Payment of costs as condition for restoration - Restoration was made conditional upon payment of specified costs to designated recipients within three weeks of receipt of certified copy of the order. - HELD THAT: - As part of the exercise of its restorative power, the Tribunal imposed costs payable to the Prime Minister's National Relief Fund, the Online Miscellaneous fee account of the Ministry of Corporate Affairs, and the NCLT Rajasthan Bar Association, Jaipur, to be tendered within the stipulated period. Effectiveness of the RoC giving effect to restoration was made contingent on verification of such payment. [Paras 9, 10]Restoration is subject to payment of the directed costs within the prescribed time and compliance verified by the RoC.Marking DIN as active - facilitation of addition of directors by back-end processing - The RoC was directed either to mark the directors' DINs as 'Active' where defaults are limited to this company, or to facilitate urgent addition of new directors by back-end processing. - HELD THAT: - Relying on the principle and directions in earlier High Court and Ministry communications referenced in the order, the Tribunal permitted the RoC to reactivate directors' DINs if the directors' defaults were confined to the company under consideration, in consonance with the stated ratio decidendi. Alternatively, the RoC was directed to enable addition of new directors under section 167(3) by back-end processing as per the Ministry's directions, to ensure the company can function post-restoration. [Paras 10]RoC shall mark DINs active where appropriate or facilitate addition of directors through back-end processing as directed.Final Conclusion: The Tribunal allowed the appeal and restored the company's name in the Register of Companies subject to payment of the directed costs and statutory compliances; upon restoration the company is deemed operational and bank accounts shall function, and the RoC is directed to reactivate directors' DINs or facilitate appointment of directors as prescribed. Issues involved:Restoration of company's name in Register of Companies and activation of bank account due to strike off notice.Detailed Analysis:The appellant, a company, filed an appeal under section 252(1) of the Companies Act, 2013, seeking restoration of its name in the Register of Companies and activation of its frozen bank account. The Registrar of Companies (RoC) had struck off the company's name due to non-compliance with statutory requirements, specifically for not filing statutory documents since 2014-15. The company, operational at the time of strike off, claimed that the omission to file returns and financial statements was inadvertent. The appellant provided evidence of its operational status during the strike-off period, including financial statements, bank statements, and income tax returns for the relevant years.The RoC had no objections to the restoration, provided the company fulfills the necessary returns filing requirements under the Companies Act, 2013. Similarly, the Income-tax Department raised no objections to the restoration, emphasizing compliance with statutory obligations. After considering the facts and submissions, the Tribunal found it appropriate to restore the company's name in the Register of Companies. The Tribunal allowed the appeal, ordering the restoration of the company's name with specified directions. These directions included the payment of costs to designated funds and associations within a stipulated timeframe.Furthermore, the Tribunal directed the company to comply with all statutory requirements within 30 days of name restoration. The restoration would render the company operational in all aspects, including bank account functionality, without the need for separate directives. The RoC was instructed to mark the DIN of directors as 'Active' and facilitate urgent addition of new directors if necessary, in line with relevant legal precedents and directives. Certified copies of the order were to be communicated to the appellant, Income-tax Department, and the RoC, Jaipur for necessary action and compliance.