NCLT Guwahati Restores Company Struck Off 15 Years Ago, Cites Asset Ownership Despite Defaults

The Guwahati Bench of the National Company Law Tribunal (NCLT) on 12 June held that mere non-filing of statutory returns cannot, by itself, justify refusal to restore a company's name to the Register of Companies when records indicate that the company continued to hold assets or carry on business operations.

Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh ordered restoration of the name of S P Investment and Development Company Pvt. Ltd. to the Register of Companies and clarified that restoration does not wipe out past statutory liabilities. The Bench held:

“The continued ownership of immovable property, the contemporaneous documents evidencing trade registrations, licences and banking relationship immediately preceding the strike-off, and the subsistence of shareholders' interests constitute sufficient grounds for restoration of the Company.”

Azizur Raja Rahman, the Director-cum-shareholder of S P Investment and Development Company, filed the petition under Section 252(3) of the Companies Act, 2013, seeking revival of the company whose name the Registrar of Companies (RoC) struck off in 2011.

He contended that the company remained operational at the time of strike-off and continued to own valuable immovable property. He also submitted that the company maintained an active bank account and held trade registrations, licences, and other documents.

The RoC, per contra, stated that it struck off the company's name in 2011 under Section 560(5) of the Companies Act, 1956, on the ground that the company did not carry on business or operations and failed to file statutory returns since incorporation. It also pointed out that the application for restoration came after a delay of nearly 15 years.

The Tribunal noted that the company continues to own immovable property, including land measuring two bighas situated at Goalgaon Village, West Garo Hills, Meghalaya, and found that revenue records show the asset remains in the company's name. It held that the existence of such property indicates that authorities cannot treat the company as a non-existent entity devoid of assets. It held:

“The existence of substantial immovable property belonging to the Company is a significant circumstance demonstrating that the Company cannot be regarded as a non-existent entity devoid of assets.”

The Bench also observed that it cannot overlook the extraordinary and prolonged defaults committed by the company. It held that restoration cannot operate in a manner that condones such lapses or exempts the company from statutory consequences flowing from them. It further clarified that restoration under Section 252 does not automatically wipe out liabilities arising from past non-compliances.

The Tribunal rejected the plea seeking waiver of statutory fees, additional fees, penalties, and grant of immunity, holding that its powers under Section 252 remain confined to restoration of the company's name. It stated that it cannot waive statutory dues prescribed under the Companies Act, 2013 and the Companies (Registration Offices and Fees) Rules, 2014.

Accordingly, the NCLT directed the RoC to restore the company's name and to change its status from “Struck Off” to “Active.”

For Petitioner: Advocate Bishal Agarwal

For Respondent: A. K. Sethi, Registrar of Companies, North Eastern Region (ROC, NER)