2024 (5) TMI 680 - SCH - Companies Law

SC Reinstates Company to Register; Highlights Legal Compliance and Director Responsibility Under Companies Act 2013.

R.P. CASTING PRIVATE LIMITED Versus REGISTRAR OF COMPANIES, NCT OF DELHI AND HARYANA & ANR.

The SC overturned the previous judgment, restoring the company, R.P. Casting Pvt. Ltd., to the register of companies under Section 252(1) of the Companies ... Restoration of name of the company in the records of the Registrar of Companies - HELD THAT:- Section 252(1) of the Act states that any person aggrieved by an order of the Registrar, notifying a company as dissolved under Section 248, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar. The Tribunal can direct the restoration of the name, if it is satisfied that the removal of the name of the company from the register of the companies, is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar. In the present case, the order passed by the Registrar of Companies dated 21.08.2017, directed the removal of name of the appellant/company – R.P. Casting Private Limited from the register of companies. The appeal was preferred within time. A practical rather than a technical view should be taken, while putting the appellants to terms on account of their lapses. The company/appellant – R.P. Casting Private Limited was in existence and even operative during the relevant time. The Directors of the company/appellant – R.P. Casting Private Limited were negligent in not complying with the requirements of the Companies Act, 2013 in filing annual accounts etc., and also in not responding to the notice under Section 248(1) of the Act - it is also directed that the appellant – R.P. Casting Private Limited will pay a cost of Rs.5,00,000/- to the Registrar of Companies, within a period of 60 days from today, as they were at fault, and had not complied with the provisions of law. Restoration of name in the Registrar of Companies will be subject to payment of the costs. The impugned judgment is set aside - Appeal allowed. Issues involved:The issues involved in this case include the restoration of a company's name in the register of companies, compliance with the Companies Act, 2013, and the payment of costs and potential compounding fees for failure to adhere to legal requirements.Restoration of Company Name:The Supreme Court set aside the impugned judgment rejecting the restoration of the company, R.P. Casting Private Limited, in the records of the Registrar of Companies. The appellant claimed an amount refundable from the Central Excise Department, stating that they were engaged in litigation which impacted their operations but ultimately succeeded. The Court referred to Section 252(1) of the Act, allowing appeals against the removal of a company's name from the register of companies. It was noted that the company was in existence and operative during the relevant time, leading to the restoration of R.P. Casting Private Limited in the register of companies.Payment of Costs and Compliance:While allowing the appeal for restoration, the Court found the directors of R.P. Casting Private Limited negligent in not complying with the Companies Act, 2013, by failing to file annual accounts and respond to notices. Consequently, the company was directed to pay a cost of Rs.5,00,000 to the Registrar of Companies within 60 days. The restoration of the company's name was made subject to the payment of these costs. Moreover, the company may be liable to pay compounding fees for violations of the Act, with the Registrar of Companies authorized to initiate proceedings for the same. The Court clarified that if the company had violated any other statutory enactments, relevant authorities would be entitled to take actions as per the law.Conclusion:In conclusion, the Supreme Court allowed the appeal, setting aside the impugned judgment and directing the restoration of R.P. Casting Private Limited in the register of companies. The company was instructed to pay a specified cost to the Registrar of Companies, with potential liability for compounding fees for non-compliance with the Companies Act, 2013. The decision emphasized the importance of adhering to legal requirements and highlighted the consequences of negligence by the directors of the company.