NCLT Chandigarh Refuses Revival Of Company Under S.252(3) For Lack Of Financial Records Proving Substantial Investment
Pranav B Prem
The National Company Law Tribunal (NCLT), Chandigarh Bench comprising Hon’ble Mr. Harnam Singh Thakur (Judicial Member) and Hon’ble Mr. Shishir Agarwal (Technical Member), has held that in the absence of substantial investments being reflected in a company’s balance sheet or valid financial records, revival under Section 252(3) of the Companies Act, 2013 cannot be allowed.
The petition was filed by Gurmeet Singh, legal heir of a majority shareholder of A M Financial Services Limited, seeking restoration of the company’s name in the Register of Companies as if it had not been struck off. The company, incorporated in 1993, was struck off by the Registrar of Companies (RoC) Punjab and Chandigarh on 07.07.2017 due to continuous defaults in statutory compliance, including non-filing of annual returns and financial statements since 1996–97.
The applicant argued that his late father, who held around 81.79% shares in the company, had invested heavily in Stylam Industries Ltd., a listed entity. It was submitted that the company continued to hold 1,08,600 equity shares of Stylam Industries Ltd., having significant market value, and that such investment demonstrated ongoing business interest. Relying on the NCLAT’s ruling in Urvashi Infrastructure Ltd. v. RoC, Delhi and Haryana, he contended that a legal heir of a deceased shareholder also qualifies as a “member” under Section 252(3). He further relied on Oriental Iron Casting Ltd. v. RoC & Anr., where revival was permitted based on investments reflected in financial statements.
The applicant undertook to file all pending statutory returns and documents upon restoration. He also alleged that the RoC had failed to serve notice of striking off at his father’s registered address, rendering the action arbitrary. The RoC opposed the plea, highlighting several deficiencies:
No income tax returns, audited financials, or bank statements had been filed to prove that the company was operational at the time of its striking off.
Neither the company nor its directors were impleaded as parties, though they were necessary to explain prolonged non-compliance.
The petition was filed without enclosing a succession certificate or a timely death certificate of the majority shareholder.
No board resolution or director’s undertaking was filed regarding revival and future compliance.
The Income Tax Department, however, reported that no tax dues were pending and raised no objection to the company’s restoration.
The Tribunal observed that while the applicant later filed the death certificate pursuant to directions, no succession certificate or affidavit confirming the absence of other Class I heirs was produced. Importantly, no balance sheet or valid financial statements were placed on record to substantiate the claim of substantial investment. The Bench remarked: “The mere claim of shareholding in Stylam Industries Ltd., without financial disclosures or proof of ownership by the company at the time of striking off, is insufficient.”
The NCLT also noted that long dormancy, non-impleadment of necessary parties, and absence of mandatory documents weighed against revival. It held that the discretionary jurisdiction under Section 252(3) cannot be exercised in a vacuum, especially when revival is sought without any authenticated financial records demonstrating substantial assets. Accordingly, finding no just and equitable ground for restoration, the Tribunal dismissed the petition and disposed of the case.
Appearance
For the Appellant: Mr. Vishav Bharti Gupta and Ms. Ubhai Bharti Gupta, Advocates
For ROC: Mr. Krishan Paul Dutt, ARoC
For ITD: Mr. Urvashi Dhugga, Senior Standing Counsel
Cause Title: Gurmeet Singh V. The Registrar of Companies, Punjab and Chandigarh
Case No: CP No.29/Chd/Pb/2024
Coram: Hon’ble Mr. Harnam Singh Thakur [Judicial Member], Hon’ble Mr. Shishir Agarwal [Technical Member]
