In its earnest drive towards taming ‘Corruption’ the Govt. took a very stern action on errant Companies and as a result in 2017 alone 2.2 lakh companies were struck off and 3.1 lakh Directors were barred for 5 years as their DINs were deactivated.
PROVISIONS FOR RESTORATION/REVIVAL:
There were certain provisions which can be availed to restore the name of removed companies.
1#: Under the provisions of section 252(3) of the Companies Act, an appeal can be filed to The Tribunal within 3 years from the date of order of the RoC. The company, the members, the workmen, or the creditors, anyone can appeal.
2#: Any aggrieved party can file an application to the National Company Law Tribunal before the expiry of 20 years from the publication of the Notice.
3#: A Writ Petition can be filed in the concerned court for a reprieve.
4#: A new window introduced as the Condonation of Delay Scheme, 2018, was a one-time settlement opportunity for all except those who have been struck off u/s 248(5).
On analysis, it’s clear that the companies were either ignorant or confused by the ambiguities in the Companies Act, 2013, which led to such a huge number of strike-offs.
Divya Gupta (Market Analyst, MUDS Management Pvt. Ltd)
RESTORATION THROUGH APPLICATION TO NCLT:
- All aggrieved companies who have been struck off can apply. It can be done by the
– Company or
– Any member or
– Creditor or
- It had to be done within the period of 20 years from the publication of the Notice in the Official Gazette.
STEP BY STEP GUIDANCE:
STEP 1#: Rule 87A(1) Preparation of Petition- Form No. NCLT 9 will have to be filled for the petition.
STEP 2#: Rule 87A(2) Submission of the petition- A copy will have to be forwarded to the NCLT at least 15 days prior to the hearing.
STEP 3#: Rule 87A(3) Hearing by NCLT- NCLT will hear all parties and take note of the objections.
Thereafter, if the NCLT was satisfied that the concerned company was carrying on business at the time of being struck off, it can restore the name of the company.
STEP 4#: Rule 87A(4)- Directions by NCLT- After restoration NCLT shall direct that
– A certified copy had to be given to the RoC within 30 days from the date of the order.
– The RoC will then publish the said order in the Official Gazette.
– The applicant will bear the expenses.
– Company will also comply by filing the Financial Statements and Annual Returns as required by Companies Act,2013, in the stipulated time given by the RoC.
STEP 5#: Filing of order with RoC:
The Company then will have to file the copy of order with the RoC within 30 days from the date of the order.
STEP 6#: Publishing of order in Official Gazette-
The RoC then shall get the order published in the Official Gazette.
STEP 7#: The Final Step:
The company will comply with the requirements of the Companies Act, 2013, and file all the Financial statements and Annual Returns.
CASE-STUDY: NCLT reverses RoC’s order:
Poly Auto System Pvt. Ltd. Vs RoC Delhi, Principal Bench at New Delhi-
# Tribunal ruled that the RoC had to comply with all the procedures before striking off the name of the company from the register.
# The Tribunal opined that the Roc cannot take a casual approach towards any company without taking into consideration their assets and liabilities.
# The Tribunal ordered the restoration of the Company’s name after it had complied fully by filing all the documents. The RoC conceded as it had no objections towards the company after compliance.
- The companies need to adhere to all the prescribed rules to keep itself safe and progressive.
- Once an action was initiated, they have to contact, consult and act in haste.
- They shall weigh all the options before taking a concrete step.
- Once the company is out of crisis, it had to treat this as a learning experience and be cautious at all times.
Problems are surmountable if diagnosed and treated early; the struck-off companies’ priority should be seeking the best advice and acting upon it swiftly.
Shweta Gupta (Founder and CEO, MUDS)
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