Struck-off company with rental-income assets seeks RoC restoration; refusal set aside as just and equitable, appeal allowed.

The dominant issue was whether a struck-off company's name should be restored to the RoC register. The NCLAT held that restoration is "just and equitable" where the company demonstrated subsisting business realities and assets, including fixed assets generating rental income, and expressed readiness to place all financial records on record and comply with statutory requirements; the absence of objection from the Income Tax Dept supported restoration. Consequently, the NCLT order refusing restoration was set aside and the company's name was directed to be restored on the RoC register, subject to completion of requisite compliances, and the appeal was allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, despite long default in filing statutory annual returns and financial statements leading to striking off, restoration of the company's name was warranted on the ground that it was "just and equitable" having regard to the company's continuing operations, fixed assets, and revenue generation.

(ii) What conditions and safeguards should accompany restoration, including payment of costs, filing of all pending statutory documents within a fixed timeline, and preservation of the Registrar's power to initiate action for past non-compliances.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Restoration on "just and equitable" basis notwithstanding past statutory defaults

Legal framework: The Tribunal proceeded on the basis that restoration may be ordered where it is found "just and equitable" to restore the company's name, and assessed whether the company's circumstances met that threshold despite admitted non-filing defaults that led to striking off.

Interpretation and reasoning: The Tribunal noted that striking off was triggered by failure to file financial statements and annual returns for an extended period, with the last filings being for an earlier year. However, it placed decisive weight on material showing that the company had fixed assets and was generating income, including rental income and operational revenues reflected in financial statements placed on record. The Tribunal also considered the company's expressed willingness and inclination to submit all financial records and complete pending compliances upon restoration. Additionally, the Tribunal took note that there was no objection from the Income Tax Department and that the restoration application was within time, reinforcing that restoration would not be unjust on grounds of delay or competing statutory objections.

Conclusion: On the facts-continuing asset base, revenue generation, and readiness to regularise filings-the Tribunal held it "just and equitable" to restore the company's name and set aside the refusal of restoration.

Issue (ii): Conditions attached to restoration and continuing regulatory powers

Legal framework: The Tribunal treated restoration as conditional, balancing revival of the company against accountability for statutory non-compliances.

Interpretation and reasoning: While allowing restoration, the Tribunal ensured compliance discipline by imposing (a) a monetary cost payable to the Registrar within a specified period, and (b) a strict timeline for filing all pending annual returns and balance sheets after restoration, along with payment of requisite fees and applicable late fees. The Tribunal further clarified that restoration would not immunise the company or its directors from consequences of past defaults, expressly preserving the Registrar's liberty to take punitive or other steps permissible under the governing law for non-filing/late filing.

Conclusion: Restoration was granted subject to payment of costs, completion of all overdue filings within the stipulated time, and an express reservation of the Registrar's enforcement powers for past non-compliance.

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