2019 (6) TMI 1570 - Tri - Companies Law

Restoration of the name of the appellant Company on the Register of Companies - Section 252(3) of the Companies Act - HELD THAT - A careful evaluation of the revenue generated for the financial years starting from the financial year ending 31.03.2013 onwards it is understood that the company was not generating any income till the financial year ending 31/03/2016. However immediately before the date of struck off the appellant company it was doing some kind of business and income seen generated from the Financial year ending 31/03/2017. As per the balance sheet it is also understood that the company is doing cash transaction too. However when asked about non-production of Bank Statement the Ld. Pr. CS appearing for the appellant submits that the company has no bank account at all. So also no valid explanation given on the side of the appellant as to the non-filing of Income Tax Returns. Even in the absence of production of statement of bank account and income tax return the appellant company is found begun operation evidencing generating income. An opportunity is to be given to the appellant company as a going concern. However no valid explanation forthcoming as to non-filing of the balance sheets and annual returns for more than 5 years and no valid explanation given for operating the company without maintaining any account in the bank. The explanation that the person who was dealing with the compliance as is required under the Companies Act 2013 has left the company without intimation being found unacceptable in the absence of any supporting evidence. Non-filing of the Annual Returns and Financial Statements cannot be held as due to inadvertent mistake on the side of the appellant. The appellant company s name being found to be restored the DIN of the Company is to be activated upon the restoration of the name of the appellant company - Appeal allowed.

Issues Involved:
1. Restoration of the name of the appellant company on the Register of Companies.
2. Compliance with statutory requirements under the Companies Act.
3. Disqualification and activation of Directors' Identification Numbers (DIN).

Issue-Wise Detailed Analysis:

1. Restoration of the Name of the Appellant Company:
The appellant, M/s. Moonstar Infrabuild Private Limited, sought the restoration of its name on the Register of Companies, West Bengal, under Section 252(3) of the Companies Act. The company was struck off by the Registrar of Companies (ROC), West Bengal, due to non-filing of statutory returns, including Financial Statements and Annual Returns, since its incorporation in 2012. The appellant contended that the failure to file these documents was due to inadvertent mistakes and lack of professional knowledge. The company asserted that it is a going concern, with audited accounts and held Annual General Meetings on time. However, the ROC argued that the company was not in operation for the last three years and had reasonable cause to strike it off under Section 248 of the Companies Act, 2013.

2. Compliance with Statutory Requirements:
The appellant admitted to not filing the required statutory documents but claimed that the person responsible for compliance left the company without notice due to medical reasons. The ROC followed statutory provisions under Section 248 of the Companies Act, 2013, to strike off the company's name. The tribunal found no irregularity or illegality in the ROC's actions. However, considering the company's financial data, which showed income generation in recent years, the tribunal decided to give the company an opportunity to comply with statutory requirements. The appellant is directed to file all pending statutory documents, including Financial Statements and Annual Returns for the Financial Years 2012-13 to 2016-17, within 30 days from the date of restoration.

3. Disqualification and Activation of Directors' Identification Numbers (DIN):
The ROC disqualified the company's directors under Section 164(2) of the Companies Act, 2013, and deactivated their DINs due to non-filing of statutory returns. The Central Government's "Condonation of Delay Scheme - 2018" provided a one-time opportunity to disqualified directors, which the appellant did not avail. The tribunal agreed with the ROC's position that the activation of the company's name does not entitle the directors' DINs to be activated. The appellant's representative did not press for the activation of the directors' DINs during the arguments.

Order:
The tribunal ordered the restoration of the appellant company's name on the Register of Companies, with the following directions:
1. The ROC, West Bengal, is to restore the company's original status as if it had not been struck off.
2. The appellant company must file all pending statutory documents within 30 days from the date of restoration.
3. The company's representative must personally ensure compliance with the order.
4. Payment of a cost of Rs. 1,25,000/- for the revival of the company.
5. Delivery of a certified copy of the order to the ROC, West Bengal, within thirty days.
6. The ROC, West Bengal, to publish the order in the Official Gazette after compliance.
7. The order is confined to the violations leading to the striking off and does not preclude the ROC from taking action for other violations.

The application, Appeal No. 247/KB/2019, is disposed of accordingly. Urgent certified copies of the order may be supplied to the parties upon compliance with requisite formalities.

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