2021 (9) TMI 385 - Tri - Companies Law

Seeking restoration of name of appellant company in the register of members - section 252(3) of the Companies Act 2013 - HELD THAT - When the present case in hand is considered then it is noticed that the appellant has failed to establish this fact that at the time of striking off the name of the company the company was carrying on business or the company was in operation. That as per the audited balance sheet submitted by the appellant there was no Revenue from Operation for a period of Two immediately preceding financial years. This tribunal is not inclined to interfere with the striking off action taken by the ROC against the appellant s company under section 248 of the Companies Act 2013 - Appeal dismissed.

Issues:
1. Appeal under section 252(3) of the Companies Act, 2013 against the striking off of a company's name by the Registrar of Companies (RoC).
2. Compliance with filing annual returns and financial statements under the Companies Act, 2013.
3. Restoration of the company's name on the register maintained by RoC.
4. Interpretation of the term "or otherwise" in the context of ordering restoration of a struck-off company.

Detailed Analysis:
1. The appeal was filed by the ex-director of a company against the RoC's decision to strike off the company's name under Section 248 of the Companies Act, 2013. The company was engaged in various business activities but failed to file annual returns and financial statements, leading to the striking off. The appellant argued that the omission was not intentional and sought restoration of the company's name on the RoC's register.

2. The RoC submitted that the company had not filed balance sheets and annual returns, and there was zero revenue from operations in the last two financial years. Despite serving notice, the Income Tax Department did not respond. The appellant claimed that the company had been active since its incorporation and had maintained necessary documentation, although there were compliance issues under the Companies Act, 2013.

3. The appellant presented documents such as audit reports, balance sheets, and profit and loss accounts for multiple financial years to support the claim that the company was active. However, the financial records showed zero revenue from operations and negative reserves and surplus. The RoC confirmed that the company had not carried out any operations for two preceding financial years.

4. The tribunal referred to a judgment highlighting that restoration of a struck-off company depends on whether the company was carrying on business or in operation at the time of striking off. The term "or otherwise" was discussed, emphasizing that it should not allow arbitrary restoration of companies not complying with statutory requirements or engaging in unlawful activities. Ultimately, the tribunal declined to interfere with the RoC's decision to strike off the company's name, as the company had not demonstrated active business operations.

In conclusion, the tribunal dismissed the appeal, stating that the company had not shown it was carrying on business or in operation at the time of striking off. The interpretation of the term "or otherwise" was crucial in determining the restoration of a struck-off company, emphasizing the importance of compliance and legitimate business activities.

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