GROUNDS OF REVIVAL OF COMPANIES
GROUNDS OF REVIVAL OF
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“What are the Conditions required to
be satisfied by NCLT before issue order for revival of Name of Company.”
In this editorial author
discuss the decisions of Hon’ble National Company Law Tribunal (NCLT), New Delhi, Principal Bench in case of S. K.
Bajaj Rubber Private Limited v/s ROC Delhi. This article contains Ground on
which a Company can be revive by application in NCLT.
This is article no. 251 of the series of editorials
written by the author on corporate laws {Including Companies Act,
2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.
Case Law Detail:
Case Name
|
S. K. Bajaj Rubber Private Limited v/s ROC Delhi
|
Bench Name
|
The National Company Law Tribunal (NCLT), Principal Bench
|
Date of Order
|
08th August, 2017
|
Section
|
252(3)
|
Factual Background:
1.
Petition filed by the S. K. Bajaj
Rubber Pvt Ltd and challenges the order of ROC for strike off the name of the
Company. ROC exercises his power for strike off of Companies.
Under
Companies Act, 2013 ROC has power to strike off the name of Company on the
below mentioned two grounds:
248. (1) Where the Registrar has
reasonable cause to believe that—
(a) a company has failed to commence
its business within one year of its incorporation; [or]
(b) a company is not carrying on any
business or operation for a period of two immediately preceding financial years
and has not made any application within such period for obtaining the status of
a dormant company under section 455,
2.
Respondent….The
ROC struck off its name from the register on account of default in statutory
compliances vide official Gazette Notification dated 31.05.2007.
3.
Petitioner….The
Company is active since inception and filed Financial with ROC upto 2003.
4.
Respondent….
The Company has not filed financial statement as per the Act, contravene the
provision of the Act compelling the ROC to believe that Petitioner was not
carrying on any business or was not in operation.
Profit
and Loss account shown by the petitioner in petition not showing any business
except sale of Rs. 1.5 lac in 2009.
Company
produced IT return only for the year 2008-09 shows that company is not carrying
out any business as the time of strike off.
5.
Hon’ble
NCLT…. We have learned counsel for the parties and
have perused the paper book with their able assistance. The provisions
concerning restoration of the name of the company has been incorporate in
section 252 of Act, 2013 which is pari material to section 5620 of Act, 1956.
Provisions relating Section 252:
Section
252(1):
Statutory
Provisions: 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:
Section
252(3):
A
company, or any member or creditor or workman thereof feels aggrieved by the
company having its name struck off from the register of companies, the Tribunal
on an application made by the
company, member, creditor or workman before the expiry of twenty years from the
publication in the Official Gazette of the notice under sub-section (5) of
section 248 may, if satisfied that the company was, at the time of its name
being struck off, carrying on business or in operation or otherwise it is just
that the name of the company be restored to the register of companies, order
the name of the company to be restored to the register of companies, and the
Tribunal may, by the order, give such other directions and make such provisions
as deemed just for placing the company and all other persons in the same
position as nearly as may be as if the name of the company had not been struck
off from the register of companies.
Decision of the HON’BLE BENCH:
When we examine the facts of the present case, it
becomes evident if any Company, or any member or creditor feels aggrieved by
the order of ROC before expiry of 20 years. Section 252(3) contemplates that
one of the three conditions are required to be satisfied before exercising
jurisdiction to restore company to its original name on the register of the ROC
namely:
I.
That the Company at the time of its
name was struck off was carrying on business.
II.
Or it was in operation or
III.
It is otherwise just that the name of
Company be restored on the register.
When we apply the aforesaid statutory parameters to the
facts of present case it not shown that when it was struck off it was infact
carrying on business or it was in operation.It filed Annual Return in 2003
‘thus we find that section 252(3) would not come to the rescue of the petitioner.
This
Petition fails and the same is dismissed with costs of Rs. 10,000/-.
Conclusion:
In the above case the Hon’ble NCLT has decided that, where an application
for restoration of company was made by petitioners and petitioner doesn’t fall
in any of the criteria given under Section 252(3) such application cannot be
accepted and dismissed the petition
As per language of Section 252(3) “It
is otherwise just that the name of Company be restored on the register. Here the question,
v
Whether ‘having assets at the
time of strike off” or ‘Liabilities at the time of strike off’ fall under
condition no. 3?
v What
is the ground fall under condition No.3?
Disclaimer:
The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION.
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