Company Name Restored After Being Struck Off for Non-Filing Under Section 248(5) Due to Inadvertent Non-Compliance

NCLAT Principal Bench allowed company's appeal for restoration of struck name from ROC register. Company was struck off for non-filing of financial statements and annual returns under Section 248(5) of Companies Act, 2013. Tribunal found non-compliance was inadvertent due to director's father's illness and lack of professional guidance, with expired chartered accountant. Company demonstrated readiness to comply with statutory provisions upon restoration. NCLAT held no prejudice would result from restoration as company was not a shell entity or involved in fund syphoning. Name ordered restored subject to fulfilling compliance requirements.

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Issues Involved:
1. Legitimacy of striking off the Appellant Company by the ROC under Section 248(5) of the Companies Act, 2013.
2. Justification for restoration of the Appellant Company's name under Section 252(3) of the Companies Act, 2013.

Summary:

Issue 1: Legitimacy of striking off the Appellant Company by the ROC under Section 248(5) of the Companies Act, 2013.

The Appellant Company, incorporated in 1981, was struck off by the ROC, Delhi & Haryana, under Section 248(5) of the Companies Act, 2013, due to non-filing of Financial Statements and Annual Returns. The Tribunal dismissed the appeal, noting the absence of any material document demonstrating that the appellant was still in possession of its property or conducting business. The Tribunal relied on the decision in *Alliance Commodities Private Limited Vs. Office of Registrar of Companies, West Bengal*, which emphasized that restoration of a company's name should not be arbitrary and must be justified by the company's operational status or other equitable grounds.

Issue 2: Justification for restoration of the Appellant Company's name under Section 252(3) of the Companies Act, 2013.

The Appellant argued that the company holds substantial assets and the non-compliance was due to the ill health and subsequent death of the key managing director and the lack of legal guidance. The Appellant presented additional evidence, including financial statements, water bills, and electricity bills, to substantiate their claim of ongoing possession and intent to resume operations. The Tribunal acknowledged that the company is not a shell company and holds valuable assets, making it just and equitable to restore its name. The Tribunal referenced multiple cases, including *Durga Builders (P) Ltd Vs ROC* and *Dashmesh Impex Pvt. Ltd. & Ors. Vs ROC*, where companies with substantial assets were restored despite non-filing of returns due to exceptional circumstances.

Conclusion:

The Tribunal found that the non-compliance was inadvertent and unintentional, and the Appellant is ready to comply with statutory provisions. The Tribunal directed the ROC to restore the Appellant Company's name, subject to payment of costs and filing of all pending returns. The ROC retains the right to take punitive actions for non-filing/late filing of statutory returns/documents. The appeal was allowed to the extent of restoring the company's name.

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