2021 (11) TMI 480 - Tri - Companies Law

Tribunal orders restoration of struck-off company in Register of Companies

The Tribunal ordered the restoration of a struck-off company's name in the Register of Companies maintained by ROC, Gujarat (Dadra & Nagar Haveli). ... Restoration of struck off company - striking off under Section 248 - restoration under Section 252(3) - conditional restoration subject to filing of pending statutory records and payment of fees/costs - publication of restoration in the Official Gazette - effect of restoration on pending litigationRestoration of struck off company - restoration under Section 252(3) - conditional restoration subject to filing of pending statutory records and payment of fees/costs - effect of restoration on pending litigation - The appeal for restoration of the name of the company struck off from the Register of Companies is allowed subject to specified conditions. - HELD THAT: - The Tribunal considered that the company had been struck off after compliance with the statutory procedure under Section 248 because it had not filed annual returns and financial statements and had not obtained dormant status. The appellant explained non-filing as resulting from miscommunication between auditor and management and asserted ownership of land and existence of unsecured loan obligations. A caveator disputed the company's ownership of the land and pointed to pending civil litigation. The Tribunal found that restoration would enable the company to pursue the pending Special Civil Application before the High Court and that apprehension of undue advantage to the caveator was unfounded because any rights or disputes pending before a forum would continue to be adjudicated as per law. Balancing these considerations, the Tribunal concluded that restoration was just and reasonable despite prior non-compliance, and therefore directed restoration subject to the company filing all outstanding statutory documents for the years in default, payment of prescribed fees/additional fee/fine, payment of specified costs for each year of default, delivery of a certified copy of the order to the ROC, and publication by the ROC in the Official Gazette. The Tribunal expressly limited its order to violations that led to striking off and left open the ROC's power to take action for any other violations or offences committed prior to or during striking off. [Paras 9, 10]Allowed; Registrar of Companies directed to restore the company's name and status subject to filing pending statutory documents with prescribed fees/additional fee/fine, payment of costs for each year of default, delivery of certified copy to ROC, and publication in the Official Gazette; restoration without prejudice to ROC's power to take action for other violations.Final Conclusion: The appeal is allowed and the Registrar of Companies is directed to restore the company's name as if it had not been struck off, subject to compliance by the company with filing outstanding statutory documents, payment of prescribed fees/additional fee/fine and costs, delivery of a certified copy to the ROC and subsequent publication; the order is confined to the violations that led to striking off and does not preclude the ROC from taking action for other offences. Issues:- Restoration of struck-off company's name in Register of Companies maintained by ROC, Gujarat (Dadra & Nagar Haveli).Analysis:1. The appeal was filed under Section 252(3) of the Companies Act, 2013 for the restoration of the name of a struck-off company, M/s. CineLink Multiplex Private Limited. The Registrar of Companies (ROC) struck off the company's name due to non-filing of Annual Returns and Financial statements since 2009-10, leading to a belief that the company was not in operation. The appellant company claimed that it failed to file returns due to miscommunication between the auditor and management, resulting in the company's name being struck off without notice.2. The appellant company presented evidence of owning land worth &8377; 70,93,937.00 and an unsecured loan of &8377; 4,24,000. The company's auditor was appointed for compliance with statutory obligations but failed to file necessary returns. The appellant argued that the company's sole motive was not business operations but to utilize the land owned by the company. A Caveator opposed the restoration, claiming ownership of the land in question and pending litigation regarding the property.3. The Tribunal noted discrepancies in the ownership of the land claimed by the appellant and the failure to file Financial Statements for F.Y. 2009-10. Despite these issues, the Tribunal acknowledged a pending matter before the High Court of Gujarat involving the appellant company, necessitating the restoration of the company's name to pursue the pending litigation. The Tribunal dismissed concerns that restoration would provide undue advantage and ruled in favor of restoring the company's name for the smooth continuation of pending litigations.4. The Tribunal ordered the Registrar of Companies, Gujarat (Dadra & Nagar Haveli) to restore the company's name, directing the filing of pending statutory documents and payment of costs for revival. The appellant was instructed to ensure compliance with the order, and the ROC was directed to publish the order in the official Gazette. The restoration was limited to violations leading to the striking off of the company's name, allowing ROC to take further actions for any other violations committed by the company.5. The Company Appeal was disposed of accordingly, with provisions for the issuance of an urgent certified copy of the order upon compliance with formalities.