Striking off of Company name : Restoration requires proof that the company was in business at the time of striking off

NCLT Directs Restoration of Comfort Zone Real Estate Developers Pvt. Ltd. to Companies Register. Tribunal Orders Revival Upon Proof of Business Operations and Compliance Undertakings

News Report: The National Company Law Tribunal's Mumbai Bench has directed the Registrar of Companies, Goa, to restore the name of Comfort Zone Real Estate Developers Private Limited to the Register of Companies. This decision comes after the company's name was struck off due to non-compliance with statutory filing requirements under the Companies Act, 2013.

The Tribunal, led by Judicial Member Sh. Mohan Prasad Tiwari and Technical Member Sh. Charanjeet Singh Gulati, ruled in favor of the appellant, Sylvia Bangera, a director and shareholder of the company. The company was initially removed from the register due to its failure to file audited financial statements and annual returns from the financial year ending March 2014 to March 2019.

The Tribunal recognized that the Registrar of Companies acted correctly in striking off the company’s name. However, upon reviewing the appeal, it was satisfied that Comfort Zone Real Estate Developers was actively engaged in business operations at the time of the strike-off. The company provided evidence of its assets and demonstrated its potential for business revival if restored.

The decision mandates the company to pay a cost of INR 1,00,000 to the Ministry of Corporate Affairs and comply with statutory filing obligations. The Tribunal emphasized that the restoration does not absolve the company of any liabilities for previous violations and instructed that all pending financial statements and annual returns be filed promptly.

The Tribunal's order underscores the conditions necessary for the restoration of a company’s name under Section 252(3) of the Companies Act, 2013, highlighting the importance of demonstrating ongoing business operations and the capability to revive the business.

The Registrar of Companies is to update the company’s status from “Strike Off” to “Active” upon completion of compliance requirements, including the payment of costs and filing of past due documents.

Bottom Line:

Restoration of company's name in the register of companies under Section 252(3) of the Companies Act, 2013 requires proof that the company was carrying on business or in operation at the time of striking off and a demonstration of capability to revive its business.

Statutory provision(s): Section 252(3), Section 248, Section 92, Section 137 of the Companies Act, 2013

Sylvia Bangera v. Registrar of Companies, (NCLT)(Mumbai Bench) : Law Finder Doc id # 2765851