Discretionary restoration costs require reasoned, case-specific justification and may not apply to statutory authorities performing assessment functions.

Rule 87A(4)(c) of the National Company Law Tribunal Rules, 2016 is described as conferring discretionary, rather than mandatory, power to award costs in company restoration proceedings. Costs should reflect a reasoned, case-specific assessment of expenditure caused by the proceedings and circumstances justifying recovery. The note states that costs may be inappropriate where the Income Tax Department seeks restoration of struck-off companies solely to complete pending statutory assessment functions, particularly where no basis for the quantified amount is recorded. It also notes that a 16-day filing delay falls within the 45-day condonable period under the Companies Act, 2013 where satisfactorily explained.

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Issues: (i) Whether the delay of 16 days in filing the company appeals was liable to be condoned; (ii) Whether costs of Rs. 25,000 imposed on the Income Tax Department upon restoration of struck-off companies could be sustained under Rule 87A(4)(c) of the National Company Law Tribunal Rules, 2016.

Issue (i): Whether the delay of 16 days in filing the company appeals was liable to be condoned.

Analysis: The delay fell within the maximum condonable period of 45 days under Section 421(3) of the Companies Act, 2013. The explanation regarding receipt of the impugned orders and prompt subsequent filing was accepted.

Conclusion: The delay of 16 days was condoned, in favour of the appellant.

Issue (ii): Whether costs of Rs. 25,000 imposed on the Income Tax Department upon restoration of struck-off companies could be sustained under Rule 87A(4)(c) of the National Company Law Tribunal Rules, 2016.

Analysis: Rule 87A(4)(c) confers a discretionary power to direct payment of costs occasioned by restoration proceedings; it does not mandate costs in every case. The amount must be determined through a reasoned assessment of the expenditure actually occasioned and the circumstances warranting its imposition. The restoration applications were pursued by the Income Tax Department in discharge of statutory functions to complete pending assessment proceedings, rather than by the defaulting companies. No justification or determination supporting the quantified costs was recorded, and the expenses of the Registrar of Companies in facilitating another statutory authority's functions were not shown to warrant recovery from the Department.

Conclusion: The cost directions were unsustainable and were quashed, in favour of the appellant.

Final Conclusion: Costs under Rule 87A(4)(c) require a reasoned and case-specific determination and need not be imposed where a statutory authority seeks restoration solely to discharge its statutory duties.

Ratio Decidendi: A direction for costs under Rule 87A(4)(c) of the National Company Law Tribunal Rules, 2016 is discretionary and must rest on a justified determination of expenditure occasioned by the proceedings; an unsupported uniform cost cannot be imposed.

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