DIVINE Threads Pvt. Ltd. vs Registrar Of Companies

The. erstwhile directors of M/s Divine Threads Private Limited has filed the present appeal, invoking the provision of section 252 of the Companies

Act, 2013 for restoration of the name of the petitioner company in the register maintained by the Registrar of Companies, NCT of Delhi and Haryana.

As per the averments, by M/s Divine Threads Private Limited is incorporate on 14.11.2012 having its registered office at 307,0-9, Goyal Complex

Opp Sai Baba Mandir, Laxmi Nagar Delhi-110092, within the jurisdiction of this Tribunal. The Authorized Capital of the company was Rs. 1,00,00/-.

The Paid-up Capital of the company was Rs. 1,00,000/-. the main objects of the company were as to carry on the business of manufacturers,

importers and exporters, whole sale and retail dealers of and in men's, women's and children clothing and wearing apparel.

It is submitted by the appellant that a sweeping action was initiated by the ROC at the instance of MCA in striking of the names of several

Companies who had failed to file their Statutory Returns. The appellant had not filed its Annual Returns and balance sheet since 31.03.2015, thereby

giving rise to the surmise that the business of the company was not in operation. Consequently, its name was struck off by the Respondent from the

Register of Companies under Section 248 of the Companies Act, 2013, upon taking steps in accordance with law and issuing a notification in the

official Gazette. The names of the effected companies were posted on its website.

The appellant has submitted that they could not file the balance sheet and annual return since 2015 along with relevant documents with the ROC.

The appellant has further submitted that non-Compliance in filings of financial statements with registrar of Companies were because of lack of proper

professional guidance, oversight and inadvertent reasons. The company has also submitted that the company has prepared its financial statements on

timely basis.

In order to sustain the plea for restoration, the petitioner has placed before us the following documents:

i. Copies of duly Audited Financial Statement for the financial year 31.03.2016 to 31.03.2018.

ii. Copies of Acknowledgment of filing IT returns from A.Y 2018 to 2019.

It is pertinent to mention here that the income as per the balance sheet of 31.03.2018 the company has trade receivables of Rs. 1,29,283 and

inventories of Rs. 1,84,426.

The Department of Income Tax has filed their response and submitted their no objection against the restoration of the name of the company. The

RoC in its report has not raised no objection against me prayer of the appellant.

The provisions pertaining to restoration of the name of the company has been provided in Section 252 of the Companies Act, 2013 and the same

envisages that if the Tribunal is of the opinion that the removal of the name of the company from the register of the 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. Further, restoration may also be directed by the Tribunal if it is just and equitable to restore the name of the company in the

Register of Companies.

The Act itself provides for redressal of these defaults. Merely to disallow restoration on grounds of its failure to file annual returns would neither be

just nor equitable. As per several decisions of various Courts it should only be in exceptional circumstances that Court should refuse restoration where

the company has been struck off for its failure to file annual return as that would be excessive or inappropriate penalty for that oversight.

Accordingly, the appeal is allowed subject to payment of costs of Rs. 50,000/- to the Prime Minister Cares Fund. The restoration of the petitioner

company's name in the Register will be subject to their filing all outstanding documents for the defaulting years as required by law and completion of

all formalities, including payment of any late fee or other charges which are leviable by the respondent for the late filing of statutory returns. The name

of the petitioner company shall then stand restored in the Register of the Registrar of Companies, as if the name of the company had not been struck

off in accordance with Section 248(5) of the Companies Act, 2013 with all consequential effects and benefits.

The direction for freezing the Bank Account(s) of the appellant company, if on this ground, shall consequently be also set aside immediately to

enable the company to carry out its business operation. Compliance of this order for restoration shall be made by the respondent with all its

consequential effects within one week of compliance by the appellant.

The petition is disposed of accordingly.

Let the copy of the order be served to the parties.