CASE STUDY - REVIVAL OF STRUCK OFF COMPANIES

CASE STUDY
 - REVIVAL OF STRUCK OFF COMPANIES
Short Summary:
In this Flash editorial, the author begins by referring the provisions of section 252 of Companies Act, 2013 relating to Revival of Companies Struck off from the record of the Registrar. The main thrust of the article, however, is upon the ‘DISCUSSION ON CASES DECIDED BY NCLT IN 2017 U/S 252 FOR REVIVAL OF COMPANIES”
As per date available on NCLT website approx 20 application has been decided by the Hon’ble NCLT u/s 252 for revival of Struck off Companies, among 20 decision the ratio of rejection and approval is equal (50-50).
This is article no. 254 of the series of editorials written by the author on corporate laws {Including Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.

In this editorial the author shall discuss the (i) Decisions of NCLT; (ii) penalties impose by NCLT; (iii) Directions given by NCLT;(iv) Basis of acceptance and rejection of applications etc.
Introduction:
At the end of the June, 2017 ROC has struck off the 100,000 (One Lakh) Companies from its record. List of Companies struck off from record of ROC available at below given link[1]. Even Our Hon’ble Prime Minister Mr. Narender Modi  in his speech at ICAI on CA day has confirmed that scrutiny of 300,000 (Three Lakh) Companies are going on, which can be struck off u/s 248(1).
The companies which struck off by the ROC includes (i) Companies having Assets, (ii) Companies having liability (iii) Companies working but not met with ROC compliance (filing of AOC-4/ MGT-7) (iv) Non working Companies.
As the Companies which was not functioning are pleased with the decision of struck off their Companies by ROC itself, on the other hand Companies which was running or having assets or both are under difficulty to get it revive from the NCLT. Companies which have liabilities in these cases creditors get exaggerated by the decisions of ROC can file application with NCLT for revival and to claim amount from the Companies.
As due to such mass struck off by ROC many applications have filed by the Companies with NCLT for revival of Companies.

DECISIONS OF NCLT

A.    Case Law Detail:
Case Name
Mahabharat Builders & Developers Ltd. Vs. ROC Mumbai
Bench Name
The National Company Law Tribunal (NCLT), Mumbai Bench
Date of Order
20th July, 2017
Section
252(3)

Grounds of Revival in case Struck off on Suo-moto by the Company:
Fact of the Case:
I.      Petitioner……….. The Company strike off on the application of the Company itself vides order dated: 02.01.2015.

II.      Petitioner………..Company filed the application for strike off due to recession. Now owing to favorable market conditions, since the management is interested to start a new project for housing development, the directors and shareholders of the Company have come together and decided to carry on business mentioned in the objective of the Company.

Decision of NCLT:
The provision u/s 252(3) could be invoked only when the Company is struck off from the Register of Companies on the following ground:
        i.            Either inadvertently or on misinformation furnished by the Company or its directors or;
      ii.            Or if any application comes from any member/workman with a grievance saying that this company was struck off while carrying on business.
It is on face appears that Company has been struck off on the application given by the Company, now it is not the case of applicant it was struck off inadvertently or on misinformation given by Company or its directors, it is also not the case of the applicant that this company is still carrying business,
so now the market conditions are favorable, Company wants to restore the company, which is not permissible u/s 252(3).
THIS PETITION FAILS AND THE SAME IS DISMISSED.

B.    Case Law Detail:
Case Name
  I.            Kasak Abasan Pvt Ltd. Vs ROC , WB
II.            Manish Awana Vs ROC, WB
III.            Mohit Parikh Vs. ROC,WB
IV.            Sheikh Nuruzzaman Vs ROC,WB
V.            Manoj Kumar Agarwal Vs ROC, WB
Bench Name
The National Company Law Tribunal (NCLT), Kolkata Bench
Date of Order
28th July, 2017
19th July, 2017
26th May, 2017
26th May, 2017
26th April, 2017
Section
252
Basis of Case
Basis was same in all the above mentioned 5 cases, given below

Fact of the Case:
I.       Petitioner……….. Company strike off by ROC suo-moto.
II.       Respondent…… ROC submitted his report with the statement showing calculation of filing fees and additional fees payable for e-filing the pending documents. If the status of company allowed to become ‘Active’ the petitioner company may be directed to file all its arrear documents including Financial statement and annual report till the F.Y. 2016 with normal filing fee and additional fees.

III.       Respondent……ROC submitted complete sheet of fees including additional fees.

Decision of NCLT:
Petition can be permitted only on the compliance of statutory requirements as per law, as pointed out by the ROC in its Report.
NCLT allow the petition and direct the petitioner to comply with the statutory requirement by filing the arrear documents including the Financial Statement and Annual Return.
THIS PETITION ADMITTED AND WITHOUT ANY LATE FEES.

C.    Case Law Detail:
Case Name
Furore Housing Finance and Investment(India) Ltd Vs ROC, WB
Bench Name
The National Company Law Tribunal (NCLT), Kolkata Bench
Date of Order
12th May, 2017
Section
252(3)

Petitioner is not Director, Member, Workmen or employee of the Company.

Limitation of Period for Restorations of revival of struck off Companies.
Fact of the Case:
I.     Petitioner……….. Petition filed against the order of ROC, WB dated: 10.07.2012 pursuant to strike off name of Company.
Legal Background:
Section 252(1):
Any person aggrieved by an order of the Registrar, notifying a company as dissolved under section 248, may file an appeal to the Tribunal within a period of three years from the date of the order of the Registrar and if the Tribunal is of the opinion that the removal of the name of the company from the register of companies is not justified in view of the absence of any of the grounds on which the order was passed by the Registrar, it may order restoration of the name of the company in the register of companies:
Decision of NCLT:
As per Section 252(1) any aggrieved person can file petition for restoration of name of Company with in limitation period of 3(three) years.

Hon’ble NCLT pronounce that, this appeal has been filed after a lapse of about 5(five) years from the date of the order of ROC. Therefore, appeal is time barred and liable to be dismissed as not maintainable.
THIS PETITION FAILS AND THE SAME IS DISMISSED.



Case Law Detail:
Case Name
Registrar of Companies, Gujarat V/s. Trans Housing Finance Corporation Ltd.
Bench Name
The National Company Law Tribunal (NCLT), Ahmedabad Bench
Date of Order
5th June, 2017
Section
Section 252 of Companies Act, 2013
Appeal No.
6/252/NCLT/AHM/2017

Fact of the Case:

  i.      Petitioner…….. Application is filed by ROC, Ahmedabad, Gujarat u/s 252 seeking order to restore the name of Company.
ii.      Petitioner…….. As per CAV Judgment dated 27.08.2015 Hon’ble High Court, Gujarat the amount due from the Company have to be recovered by Liquidator of Alps BPO Services Limited:
iii.      Petitioner……..The Hon’ble High Court instruct the Liquidator to restore the name of Company, thereupon Regional Director requested the ROC, Gujarat to file an application before NCLT u/s 252
iv.      Respondent…… The name of respondent company comes to be struck of from the ROC on 4.08.2011 u/s 560 of Companies Act, 1956.
Decision of NCLT:
Whether appeal is filed within period of Limitation?

The Company was struck off from ROC, Gujarat on 04.08.2011 u/s 560 of CA, 1956. This appeal filed on 28.02.2017.

Section 252(1) proviso enabled ROC to file appeal before NCLT for restoration of name of Company within a period of 3(three) years from the date of passing of order of Struck off.

The period of limitation for filing appeal by the ROC commences from date of passing of order i.e. 04.08.2011 even though it is treated that the order passed u/s 560 of old code is treated as order under Section 2489 of the Act. Therefore, this appeals is barred by limitation.
THIS PETITION FAILS AND THE SAME IS DISMISSED.

                         



[1]http://www.mca.gov.in/MinistryV2/stk7publicnotices5.html

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