Pranav B Prem

The National Company Law Tribunal (NCLT), Kochi Bench, comprising Judicial Member Vinay Goel and Technical Member Madhu Sinha, has refused to restore the name of M/s. Sakthan Builders and Developers (India) Private Limited to the Register of Companies, observing that the company had remained completely dormant since its incorporation and had failed to comply with statutory filing obligations. The Tribunal emphasized that “mere intention expressed by the appellant to regularize filings or revive business at this stage cannot be a ground to restore the name of a company that has remained completely dormant since incorporation.”

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Background of the Case

The appeal under Section 252 of the Companies Act, 2013 was filed by Mr. Biju V.A, one of the directors of the company, seeking restoration of the name of M/s Sakthan Builders and Developers (India) Private Limited, which had been struck off by the Registrar of Companies (RoC), Kerala and Lakshadweep on June 16, 2017, under Section 248(5) of the Companies Act. The company was incorporated on October 6, 2010, with its registered office at Ernakulam, Kerala, for the purpose of carrying out land development, construction, and related business activities. However, since incorporation, the company had not carried on any significant business except for the purchase of land on December 2, 2010, after which its operations remained stagnant.

The appellant contended that the striking off was done without affording an opportunity of hearing and that the non-filing of returns occurred due to lack of coordination with professionals and unawareness of filing requirements. He further stated that the company intended to regularize its filings and revive its business operations.

Response by the Registrar of Companies

In its reply, the RoC, Kerala, submitted that the company’s name was struck off after due process. A notice in Form STK-1 had been issued on March 31, 2017, granting 30 days to respond. Since no reply was received, a public notice in Form STK-5 was published in newspapers on May 10–11, 2017, and in the Official Gazette on May 13, 2017. Subsequently, the company’s name was struck off from the Register and notified in the Gazette on July 15, 2017. The RoC further stated that the company had continuously failed to file balance sheets and annual returns since FY 2010–11, thereby violating Sections 220 and 159 of the Companies Act, 1956, and later Sections 137 and 92 of the Companies Act, 2013. The striking-off was therefore justified as the company had remained inactive and non-compliant for several years.

Tribunal’s Findings

After examining the submissions and evidence, the NCLT found that the company had remained inactive since its inception and had not carried on any business activities except for owning immovable property. The Bench observed that mere ownership of property without any evidence of commercial transactions or revenue generation cannot be construed as “carrying on business” or “in operation” under Section 252(3) of the Companies Act, 2013.

The Tribunal rejected the appellant’s contention that lack of awareness or coordination justified the prolonged non-compliance, holding that the Companies Act imposes a continuing duty on companies and directors to ensure timely statutory filings, irrespective of operational status. The order stated:  “There is no explanation as to why the company did not commence its business after incorporation. Once the company was incorporated, it was the statutory duty of its directors and shareholders to comply with the provisions of the Companies Act in letter and spirit. The non-action or inaction on the part of the company speaks volumes in itself.” The Bench further noted that once the RoC had issued the requisite notices before striking off the name, it was the responsibility of the directors to respond and explain the reasons for non-compliance. Since the appellant failed to produce any evidence of active business or procedural irregularity in the striking-off process, the Tribunal found no sufficient justification to restore the company’s name.

The NCLT Kochi Bench held that the legislative intent behind Section 248 of the Companies Act is to cleanse the Register of defunct and non-operational entities, and restoration can only be ordered if credible evidence exists showing that the company was active or operational at the time of strike-off. As no such evidence was presented, the Tribunal dismissed the appeal, denying the restoration of the company’s name. However, it granted the appellant liberty to pursue remedy under Section 248(8) of the Companies Act, 2013, which allows for other limited reliefs even after a company’s name has been struck off.

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The order was delivered on November 11, 2025, by the NCLT Kochi Bench, comprising Member (Judicial) Vinay Goel and Member (Technical) Madhu Sinha.

Appearance

For the Appellant: Ms. KPS Suresh, Advocate

For the Respondent: Authorised Representative of RoC

Cause Title: Mr. Biju V A V. Registrar Of Companies, Kerala & Lakshadweep

Case No: Company Appeal (C/Act)/02/KOB/2025

Coram: Judicial Member Vinay Goel, Technical Member Madhu Sinha