Company struck off for non-filing returns gets restoration after tribunal applies Shailendra Bafna precedent for mental healthcare business

The NCLAT Chennai allowed an appeal by a company struck off from the RoC register for failure to file returns. The company sought restoration to the register and permission to file remaining financial returns without additional fees. The tribunal held that the CODS Scheme 2018 was not applicable as it addresses director disqualification, not company strike-off situations. Considering the company's mental healthcare services business, existing creditors and loans, and hospital setup process, the tribunal applied the Shailendra Bafna precedent and granted restoration.

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Issues Involved:
1. Restoration of the Company's name in the Register of the Registrar of Companies (RoC).
2. Applicability of the Condonation of Delay Scheme (CODS) 2018.
3. Compliance with statutory requirements under the Companies Act, 2013.
4. Payment of requisite and late charges/fees.
5. Punitive steps for non-filing/late filing of statutory returns/documents.

Summary:

Restoration of the Company's Name:
The Appellant, represented by Mr. K. Gaurav Kumar, sought to restore the name of Manasanthi Mental Health Care Private Limited in the Register of the RoC, Chennai, which was struck off due to non-filing of Annual Returns and Balance Sheets. The NCLT dismissed the Application, leading to this appeal.

Applicability of CODS 2018:
The Appellant argued that the Hon'ble Madras High Court had exempted them from using Section 252 of the Companies Act for revival and allowed them to use the CODS Scheme 2018. The Appellant claimed that the Scheme was applicable to companies struck off and whose directors had filed writ petitions. They contended that asking them to pay penalties under both CODS and Section 252 would constitute "Doctrine of Double Jeopardy."

Compliance with Statutory Requirements:
The Respondent, represented by Mr. Avinash Krishnan Ravi, argued that the Appellant failed to file Annual Returns and Financial Statements for several financial years, thus violating Sections 92(4) and 137 of the Companies Act, 2013. The company was struck off under Section 248(5) of the Act. The Respondent also stated that the CODS Scheme 2018 did not confer any specific privilege for the restoration of struck-off companies.

Payment of Requisite and Late Charges/Fees:
The Tribunal noted that the CODS Scheme 2018 was meant for providing an opportunity for disqualified directors to become compliant but was not applicable to the facts of this case. The Appellant consented to comply with all provisions of the law and pay the requisite charges/fees as well as late charges/fees.

Punitive Steps for Non-Filing/Late Filing:
The Tribunal directed the Appellant to pay a cost of Rs. 1 Lakh to the RoC, Chennai, within 4 weeks. After restoration of the company's name, the Appellant must file all Annual Returns and Balance Sheets and pay the requisite charges/fees within 4 weeks thereafter. The RoC is free to take any punitive steps for non-filing/late filing of statutory returns/documents against the company and its directors.

Conclusion:
The appeal was allowed, and the impugned order was set aside with specific directions for compliance and payment of costs and fees. The Registry was directed to upload the judgment on the Appellate Tribunal's website without delay.

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