CIRP Not Maintainable Against Company Struck Off From Register: NCLT Mumbai

The Mumbai Bench of the National Company Law Tribunal (NCLT) has reiterated that a Corporate Insolvency Resolution Process (CIRP) cannot be initiated against a company whose name has already been struck off from the register of companies.

It observed that once the company's certificate of incorporation is cancelled, it no longer remains a "corporate person" under the Insolvency and Bankruptcy Code.

A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar dismissed Adamji Investments Pvt Ltd's application under Section 7 of the Insolvency and Bankruptcy Code seeking initiation of CIRP against M Cons Media Marketing Pvt Ltd.

"In such circumstances, this Tribunal is of the considered view that once the certificate of incorporation of the company is cancelled by operation of Section 250, the entity ceases to remain a corporate person within the meaning of Section 3(7) of the Code. Thus, continuance of the status of a “corporate person” is foundational to the initiation of CIRP under the Code. Resultantly, an application for initiation of CIRP against a struck-off company is not maintainable in law.", the tribunal ruled.

Adamji Investments claimed that it had extended financial assistance to M Cons Media Marketing under a Memorandum of Understanding dated February 27, 2014.

Alleging a default from February 26, 2020, Adamji Investments filed the insolvency application on August 29, 2024, claiming a default of ₹11.73 crore.

The financial creditor argued that the application remained maintainable even though the company had been struck off on April 7, 2022. It contended that the Companies Act preserves certain rights and liabilities of struck-off companies and that the appearance of the company's directors through counsel cured any defect in service.

The tribunal rejected the submissions. Relying on the NCLAT's ruling in FedEx Express Transportation and Supply Chain Services (India) Pvt. Ltd. v. Zipker Online Services Pvt. Ltd., it held that a struck-off company ceases to be a corporate person and that filing an insolvency application does not automatically restore its name to the register.

It also noted that Adamji Investments had not sought restoration of the company's name before initiating insolvency proceedings.

The tribunal further held that the notice purportedly served on the corporate debtor in March 2025 was invalid because the company had ceased to exist on April 7, 2022.

"It is further observed, from the Affidavit of Service dated 25.03.2025, that the Applicant has asserted service of court notice upon the Corporate Debtor via speed post, allegedly delivered on 17.03.2025, and upon the Director of the Corporate Debtor on 15.03.2025. In view of the fact the CD has ceased to exist with effect from 07.04.2022, the purported service of notice upon the Corporate Debtor on 17.03.2025 cannot be treated as a valid service. Once the company stands dissolved, service cannot be made upon such a non-existent entity.", it noted.

The financial creditor also argued that the Supreme Court's decision in Pr. Commissioner of Income Tax v. Maruti Suzuki India Ltd. was distinguishable.

The tribunal held that those submissions did not assist the applicant in light of the later NCLAT ruling in FedEx Express. It noted that persons aggrieved by the striking off of a company have remedies under the Companies Act. Filing an application under the Insolvency and Bankruptcy Code, it held, does not automatically restore the company's name to the register.

Holding that the insolvency application was not maintainable against a struck-off company, the tribunal dismissed the petition.

For Applicant: Advocates Rohan Agarwal a/w Sankalp Anantwar, Ronak Mistry i/b SMA Law.