2010 (9) TMI 1302 - HC - Companies Law

Summary

Issues:
Restoration of company name under S.560(6) of the Companies Act, 1956 due to defaults in statutory compliances.

Analysis:
The petitioner company sought restoration of its name to the Register of Companies under S.560(6) of the Companies Act, 1956, after the Registrar of Companies struck off its name due to failures in filing returns and balance sheets for the financial years 2000-01 to 2005-06. The respondent followed the procedure under S.560, issuing necessary notices and publishing the company's name in the Official Gazette. The petitioner claimed to have received only one notice, but the court found no reason to doubt the service of all notices. The petitioner responded to the notice received by stating it had not received previous notices, attributing the oversight to lack of competent staff. The company filed the required documents after the name was struck off, leading to the current petition for restoration.

The petitioner admitted to not conducting business actively but being operational since 1992, regularly filing income tax returns, and holding substantial assets. The reason cited for the delay in filing statutory documents was a lack of competent personnel. The respondent did not object to the company's revival, provided all outstanding documents and fees were submitted. Referring to a Bombay High Court case, the court noted the objective of S.560(6) to allow revival within 20 years for the benefit of the company, members, and creditors, emphasizing the importance of justice in restoration decisions.

Considering the petition's timely filing within the 20-year limitation period and the principles outlined in the Bombay High Court case, the court deemed the petition deserving of approval. The court highlighted Rule 94 of the Companies (Court) Rules, 1959, allowing for deviation from the norm in ordering costs to be paid to the Registrar of Companies. Consequently, the court ordered the petitioner to pay Rs. 55,000 as costs within three weeks for the restoration of the company's name, subject to fulfilling all legal requirements and payment of any applicable fees. The restoration would result in reinstating the company, its directors, and members to the Register as if the name had not been struck off, as per S.560(6) of the Companies Act, 1956.

The court granted liberty to the respondent to take penal action against the company for alleged non-compliance with S.162 of the Companies Act, 1956. Ultimately, the petition was disposed of with the specified conditions for restoration and costs payment, ensuring compliance with all legal obligations for the company's reinstatement.