2024 (10) TMI 296 - AT - Companies Law

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

Aster Venture Pvt. Ltd. Versus Registrar of Companies, Mumbai

NCLAT Principal Bench set aside NCLT order and restored company name in ROC register. Company incorporated in 2007 failed to file financial statements and ... Seeking to restore the name of the company in the Register of Companies maintained by the Registrar of Companies, Mumbai - company had failed to file its Financial Statements and Annual Returns for the Financial Years w.e.f. 31.03.2014 to 31.03.2018, i.e. for five years - HELD THAT:- In the present case, the company was incorporated in the year 2007 and admittedly, they had filed Audited returns/Accounts till 2013 and has an asset of Rs. 3 Crores, as on 20.04.2008 viz. 30,000 Convertible Preference Shares of Rs. 1000/- each as on 20.04.2008 and that the Appellant company would not be able to recover such amount from M/s Victoria Enterprises Limited in case the name of the Appellant company is not restored. The medical history of one of the Directors of the company showing the reason for not filing of the returns and for nil also gone through. operation of the company during the period from 2014 till 2019. Thus no prejudice shall be caused to anyone if the name of the company is restored. The impugned order dated 14.10.2019 passed by the Ld. NCLT in CP No. 1437/2019 is thus set aside and the name of the said company M/s Aster Venture Pvt. Ltd. is restored in the Register of Companies as maintained by Registrar of Companies subject to fulfilment of compliances fulfilled - appeal allowed. 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 nameAnalysis: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.