This Appeal was filed by the Appellant being aggrieved and dissatisfied by the order passed by the National Company Law Tribunal (NCLT)[i], The Appeal was filed by Directors of the Company M/s. Durga Builders Pvt Ltd (“the Company” for short) invoking the provisions of Section 252 of the Companies Act, 2013 for restoration of the name of the Company in the Register maintained by the Registrar of Companies (the RoC) which was rejected without following due diligence.

Issue: Did the NCLT feel that there was no good justification for the Company to not file financial statements for the prior years, therefore justifying its order to strike the name of the Company?

Rule: 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 3 years from the date of the order of the Registrar 

Application: The NCLAT noted that the Appellant Company was engaged in litigation and had not filed the financial statements as a result after hearing from the parties and reviewing the pleadings made on their behalf. Additionally, the Respondent No. 1 Registrar of Companies removed the name of the Appellant Company from the Register it maintained without providing an opportunity for a hearing.The Appellant Company’s name was also removed from the Register maintained by the Respondent No. 1 Registrar of Companies without providing an opportunity for a hearing, but this is despite the fact that the Appellant Company’s bank statements from 2015 to 2018 demonstrate that the Appellant Company has had significant movable and immovable assets. Therefore, it cannot be said that the Appellant Company had no operations or was not in business. As a result, the NCLAT determined that the decision made by the NCLT (Court V, New Delhi) and the Registrar of Companies for the NCT of Delhi and Haryana was not supported by the law.

Conclusion: The NCLAT invalidated the NCLT’s contested order in the aforementioned case. The Appellant Company’s name must comply with the following requirements in order to be reinstated in the Register of Companies.

1. Within eight weeks of the date this judgement becomes final, the appellant must pay the Registrar of Companies, NCT Delhi and Haryana, a fee of Rs. 50,000 (Rupees Fifty Thousand);
2. Following the restoration of the company’s name in the RoC’s register, the company must file all of its annual returns and balance sheets. The Company must also pay the necessary fees and charges within 8 weeks of the agreement’s conclusion.

• Inspite of present orders, RoC will be free to take any other steps punitive or otherwise under the Companies Act, 2013 for non-filing/late filing of statutory returns/documents against the Company and Directors.

At this juncture, it is important to highlight the 3 major grounds of restoration i.e.,

The tribunal must satisfy that at the time of being struck off was the alleged company

1. Carrying out business or
2. Was in operation, or
3. Just the name of the Company be restored to the Registrar of Companies

From this it can be inferred that neither the RoC nor the NCLT took all factors into consideration before striking off or passing the order the validating such an Act, respectively.

[1] Company Appeal (AT) No. 154 of 2021

[2] Anant Bijay Singh and Kanthi Narahari ( Decided on 15.12.2022)