REVIVAL/ RESTORATION OF STRUCK -OFF COMPANIES U/S 252 BY NCLT

REVIVAL/ RESTORATION OF STRUCK -OFF COMPANIES U/S 252 BY NCLT

In this article, it is specifically discussed about the “Revival/ Restoration of Struck off Companies under section 248 of the Companies Act (the Act)” under Section 252 of the Companies Act, 2013 read with National Company Law Tribunals Rules, 2016 (As amended till 05-07-2017) by making an appeal to Tribunal.

Through notification issued on 05^th July 2017, the Central Government hereby amends by inserting rule 87A in National Company Law Tribunals Rules, 2016 called “National Company Law Tribunal (Amendment) Rules, 2017”.

http://www.mca.gov.in/Ministry/pdf/Rules_28122016.pdf

Rule 87A inserted after Rule 87- “Appeal or Application under Section 252 (1) and 252(3), of the Act”

Where Section 252 of Companies Act, 2013: Appeal to Tribunal by any person aggrieved by the order of Registrar under Section 248 (Power of Registrar to remove the name of the company from Register of Companies).

In brief, some light is thrown on Section 248 of the Act read with the Companies (Removal of Names of the Companies from the Register of Companies) Rules, 2016

SECTION 248: In case the Registrar of the Companies (ROC) has reasonable cause to believe that:

(1)  A company failed to start the business within one year of its incorporation; or

(2)  A company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455;

ACTIONS:

The ROC must, specifying the intention to remove the name of the company from the register of companies: send a notice in form STK-2 requiring the directors and companies to make representation with supporting documents against the proposal of ROC in form STK-3 and form STK-4. Such representation with supporting documents, if any,  is required to be submitted  within period of 30 days from the date of from STK-2;

(i)        intimate simultaneously concern regulatory authorities like income-tax authorities, central excise authorities, service tax authorities seeking objections if any, within 30 days of receipt of the notice;

(ii)              publish in form STK-5 in the website of MCA;

(iii)            publish in the Official Gazette; and

(iv)            publish in form STK-5A in leading English news in the English language and newspapers of vernacular language;

In case, no representation or no objections from any quarter is received within 30 days from the day of such notices, ROC can strike off the name of the company from the register of companies.  After struck off, ROC is required to publish as a notice in Form STK-7 about the dissolution in the Official Gazette and at the website of the MCA.

NOW, AS PER THE PROVISIONS OF SECTION 252 OF COMPANIES ACT 2013 AND NCLT AMENDED RULES, 2017.

WHO CAN FILE APPLICATION FOR RESTORATION OF NAMES?

1.      Any person aggrieved by order under section 248,

2.      Registrar of Company himself

3.      By Company

4.      By member

5.      By creditor

6.      By workmen

Appeal (Section 252(1) read with Rule 87A)

(i) ANY PERSON aggrieved by the order of the Registrar under section 248 (Name of company struck off) 

§  May within 3 years from the date of order file An appeal to National Company Law Tribunal (Tribunal) (In form NCLT-9) for the restoration of Name of Company in the Register of Companies.

A copy of the appeal with supporting documents is to be served to Registrar and any other person as per the direction of Tribunal at least 14 days before the date of hearing is fixed for appeal.

The Tribunal may pass the order for restoration of the name of the Company if satisfied that basis of grounds was not justified by Registrar after giving an opportunity of being heard/after due representations by registrar within 14 days.

§  Tribunal may pass order as may deem fit, after hearing the appeal.

(ii) If registrar believes that name of the company is struck off:

1.       Inadvertently; or

2.       on the basis of incorrect information furnished by the company or its directors;

The REGISTRAR can also file an application within 3 years from the date of the order of dissolving Company to Tribunal for the restoration of the name of the Company. (In form NCLT-9).

If satisfied, the Tribunal may pass the order for restoration of the name of the Company.

Application (Section 252(3) read with Rule 87A)

 A  COMPANY/MEMBER/CREDITOR/WORKMEN can also file application

§  Feels aggrieved by company

§  To Tribunal for restoration of name of the Company (In form NCLT-9)

§  Within 20 years from the publication of the order in the official Gazette.

Grounds on which application can be filed under Section 252 (3)

An application so made will be accepted, if the Tribunal is satisfied that the company was, at the time of its name being struck off, carrying on business or in operation or otherwise it is just that the name of the company is restored to the register of companies.

If satisfied, the Tribunal may pass the order for restoration of the name of the company.

OVERLOOK OF GENERAL PROCEDURE

1. The general headings in all proceedings before the Tribunal, in all advertisements and notices, shall be in FORM No. NCLT-4
2. Filing of appeal or application in Form NCLT-9
3. appeal or application shall be verified by an affidavit in FORM NCLT-6
4. Every Party may appear before tribunal in person or through authorised representative, appearance through Memorandum of Appearance in FORM NCLT-12
5. Serving of appeal or application to  Registrar or other Regulatory authorities as per direction of ROC  14 days before date of hearing
6. Notice to be issued to the tribunal to the opposite party shall be in FORM NCLT-5
7. Hearing By Tribunal of Both parties
8. Issue of Directions by Tribunal to parties
9. Filing order with ROC within prescribed time frame
10. Publication in Official Gazette.

RESTORATION

§  Order so passed by the Tribunal must be filed  in form INC-28 with the Registrar within 30 days from the date of the order and on receipt of the order; and

§  

The Registrar is required to cause the name of the company to be restored to the register of companies and issue a fresh certificate of incorporation.

COMPLIANCE TO BE DONE

After the Tribunal passes an order for restoration:

§  Certified Copy of order to be filed with Registrar, within 30 days of the date of the order. 

§  shall be filed by the company in form INC-28 along with fee

§  Registrar shall do, in his official name and seal, publish the order in the Official Gazette; from notice of such delivery,

§  The Company to comply with pending filing of financial statements and annual returns with Registrar complying with Companies Act, 2013 and rules thereof;

§  Restoration costs to be paid to the registrar by appellant or applicant unless the Tribunal directs otherwise.

Hope this is article simplifies the conceptuality.

DISCLAIMER: The entire contents of this document have been developed on the basis of relevant information and are purely the views of the authors. Though the authors have made utmost efforts to provide authentic information however, the authors expressly disclaim all or any liability to any person who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document. READER SHOULD SEEK APPROPRIATE COUNSEL FOR THEIR OWN SITUATION. I SHALL NOT BE HELD LIABLE FOR ANY OF THE CONSEQUENCES DIRECTLY OR INDIRECTLY.

Hope my article helps you all for conceptual and procedural clarity. Any other suggestions /opinions are welcomed. Free to contact me for specific formats

 

CS ANJALI GORSIA

 (MEM NO: A49601)

(Author-CS Anjali Gorsia, Company Secretary in Practice from Nagpur (Maharashtra) and can be contacted at csanjali.gorsia@gmail.com)