Company name restored to ROC register after striking off reversed due to medical condition and substantial assets

NCLAT Principal Bench set aside NCLT order and restored company name in ROC register. Company incorporated in 2007 failed to file financial statements and annual returns for FY 2014-2018. Despite non-compliance, NCLAT found company had filed returns till 2013, possessed assets worth Rs. 3 crores including convertible preference shares, and director's medical condition explained filing delays. Tribunal determined no prejudice would result from restoration and allowed appeal subject to compliance fulfillment.

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Issues:
- Appeal against impugned order to restore company's name in Register of Companies
- Failure to file Financial Statements and Annual Returns
- Company struck off under Section 248(1) of Companies Act, 2013
- Company's defense due to severe health condition of director
- Investment made by the company
- Just and equitable restoration of company's name

Analysis:
The appeal before the National Company Law Appellate Tribunal involved the Appellant company seeking restoration of its name in the Register of Companies after it was struck off for failing to file Financial Statements and Annual Returns. The company, incorporated in 2007, had not made statutory compliances for five years, leading to the Registrar's action under Section 248(1) of the Companies Act, 2013. The Appellant argued that the default was due to a director's severe health condition, supported by medical evidence showing the director's long-standing renal disease. Additionally, the company had made a substantial investment in another entity, emphasizing the need to recover this amount. The Appellant assured compliance with all statutory requirements upon restoration.

In a similar case, the Tribunal referred to precedents where companies with substantial assets were restored to the Register of Companies, emphasizing the importance of not causing prejudice if restoration is justified. The Tribunal highlighted that the company had filed Audited Accounts and Income Tax Returns up to a recent assessment year, indicating ongoing business operations and ownership of significant assets. Consequently, the Tribunal found it just and equitable to restore the company's name, setting aside the impugned order and imposing certain compliances, including payment of costs and filing pending returns.

Ultimately, the Tribunal allowed the appeal, directing the restoration of the company's name in the Register of Companies. The decision was based on the company's past compliance, ownership of assets, and the mitigating circumstances related to the director's health. The Tribunal outlined specific compliances for the company post-restoration, including payment of costs, filing of pending returns, and authorization for further actions by the Registrar of Companies if necessary. The judgment emphasized the equitable approach in restoring the company's name while ensuring future compliance with statutory obligations.

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