Tribunal restores company name in Register after RoC's procedural lapses, imposes compliance conditions

The Tribunal allowed the appeal, directing the restoration of the company's name in the Register of Companies due to procedural lapses by the RoC. The company was found to have substantial assets and ongoing litigations, contradicting the RoC's assertion of non-operation. The Tribunal imposed a cost on the Appellant and specified conditions for compliance, including filing annual returns and balance sheets within eight weeks of restoration.

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Issues Involved:
1. Legality of the striking off the company's name by the Registrar of Companies (RoC).
2. Compliance with Section 248 of the Companies Act, 2013.
3. Consideration of the company's operational status and pending litigations.
4. Restoration of the company's name in the Register of Companies.
5. Consequential reliefs and penalties.

Issue-wise Detailed Analysis:

1. Legality of the Striking Off:
The Appellant contended that the striking off of the company's name by the RoC was done without providing any opportunity of hearing or prior notice, which is against the principles of natural justice. The Tribunal noted that the Respondent No. 1 (RoC) struck off the company's name due to non-filing of financial statements and IT returns for the past decade, deeming the company defunct. However, the Tribunal found that the company had substantial movable and immovable assets and was involved in ongoing litigations, indicating it was operational.

2. Compliance with Section 248 of the Companies Act, 2013:
The Appellant argued that the procedure adopted by the RoC was contrary to Section 248(1) of the Companies Act, 2013, which mandates issuing a notice before striking off a company's name. The RoC claimed to have sent notices under Section 248(1) and published the dissolution notice as per procedure. The Tribunal observed that the RoC did not provide sufficient opportunity for the company to respond, thereby violating the procedural requirements of Section 248.

3. Consideration of Operational Status and Pending Litigations:
The Appellant highlighted that the company was involved in various litigations, including cases before the Supreme Court, indicating it was not dormant. The Tribunal acknowledged the company's involvement in multiple legal proceedings and its substantial assets, which contradicted the RoC's claim of the company being non-operational. The Tribunal also noted that the company had been making efforts for revival and was contesting various cases to protect its interests.

4. Restoration of the Company's Name:
The Tribunal set aside the order of the National Company Law Tribunal (NCLT) and directed the restoration of the company's name in the Register of Companies. The Tribunal emphasized that the company should be given an opportunity to rectify its records and continue its operations, considering its substantial assets and ongoing litigations.

5. Consequential Reliefs and Penalties:
The Tribunal imposed a cost of Rs. 50,000 on the Appellant to be paid to the RoC within eight weeks. The company was directed to file all its annual returns and balance sheets, along with requisite charges and late fees, within eight weeks of restoration. The Tribunal also allowed the RoC to take any punitive or other steps under the Companies Act, 2013, for non-filing or late filing of statutory returns/documents.

Conclusion:
The Tribunal allowed the appeal, set aside the impugned order dated 08.10.2021, and directed the restoration of the company's name in the Register of Companies, subject to compliance with specified conditions. The Tribunal's decision was based on the company's substantial assets, ongoing litigations, and the procedural lapses by the RoC.

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