Company name restored to register after tribunal finds substantial assets and liabilities prove operational status

The NCLAT Principal Bench set aside the NCLT Delhi order dated 24.09.2021 and restored the appellant company's name to the RoC register. The tribunal held that since the company possessed substantial assets and liabilities, it could not be deemed non-operational. The restoration was granted subject to statutory compliances, while the RoC retained authority to pursue punitive measures against the company and its directors for non-filing or late filing of statutory returns.

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Issues Involved:
1. Restoration of the Company's name in the Register of Companies.
2. Compliance with statutory requirements and filing of financial documents.
3. Determination of whether the Company was carrying on business or in operation.

Summary:

Restoration of the Company's name in the Register of Companies:
The appeal was filed u/s 421 of the Companies Act, 2013, against the NCLT order dated 24.09.2021, which dismissed the plea for restoring the name of Agerson Telecommunications Private Limited in the Register maintained by the Registrar of Companies (RoC). The RoC had struck off the Company's name u/s 560(5) of the Companies Act, 1956, for failing to file Financial Statements and Annual Returns since incorporation. The Appellants argued that the non-compliance was unintentional due to a lack of professional support and that they were unaware of the Company's existence until they received notices from RIICO regarding dues for a leased plot.

Compliance with statutory requirements and filing of financial documents:
The Appellants submitted that they were ready to comply with the statutory requirements and file the necessary financial documents. They provided provisional financial statements for the years ending 31.03.2015 to 31.03.2020, a copy of the Lease Deed dated 15.10.1988, and notices from RIICO. The RoC countered that no records of Annual Returns and Balance Sheets were submitted by the Company since its incorporation, and no documents were filed to obtain the status of a "Dormant Company" u/s 560 of the Companies Act, 1956.

Determination of whether the Company was carrying on business or in operation:
The NCLT dismissed the appeal, noting that there was no revenue from operations in the immediately preceding two financial years and relied on the judgment in `Alliance Commodities Private Limited' Vs. `Office of Registrar of Companies-West Bengal'. The Appellants distinguished their case from `Alliance Commodities Private Limited', arguing that their Company was not a shell company and had substantial assets and liabilities, including a leased property and plant and machinery.

Judgment:
The NCLAT found that the Company had substantial assets and liabilities, and it could not be said that the Company was not carrying on any business or operations. The NCLAT set aside the NCLT order dated 24.09.2021 and restored the name of the Company in the Register of Companies, subject to the following compliances:
1. Payment of costs of Rs. 2,00,000/- to the RoC within eight weeks.
2. Filing of all Annual Returns and Balance Sheets along with requisite charges/fees and late fees/charges as applicable.

The RoC was also given the liberty to take any other steps, punitive or otherwise, under the Act for non-filing/late filing of statutory returns/documents against the Company and Directors. The appeal was allowed to the extent mentioned above.

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