Pranav B Prem

The National Company Law Tribunal (NCLT), New Delhi Bench comprising Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Shri Atul Chaturvedi (Technical Member), has held that the Tribunal does not possess the suo motu power to restore the name of a company that has been struck off from the register maintained by the Registrar of Companies. Such restoration can only be effected upon a formal application filed under Section 252 of the Companies Act, 2013 by an aggrieved company, its members, creditors, or workmen.

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The decision arose in an application (CA/442/ND/2021) filed in C.P. No. 54/ND/2014, seeking restoration of the petition which had earlier been dismissed for non-prosecution. The applicants submitted that they had only recently come to know of the dismissal order dated 01.07.2021 and had filed the present application promptly upon learning about it from the NCLT website.

According to the applicants, the dismissal occurred due to inadvertent non-appearance caused by clerical oversight and operational disruptions during the COVID-19 pandemic. It was submitted that the matter had originally been transferred from another bench and that valuation of the Respondent Company’s assets, as directed earlier, could not be completed. The applicants cited disruptions in their counsel's office and inability to track the hearing dates due to the pandemic.

However, the respondents opposed the restoration, arguing that the applicants had shown a continuous pattern of negligence and lack of seriousness. It was pointed out that despite the appointment of a valuer by the Tribunal, the petitioners failed to cooperate or participate in the process. The respondents alleged that the petitioners had effectively abandoned Respondent No. 1 (Dook Consulting Pvt. Ltd.), and in collusion with Respondent No. 7, had siphoned off its assets to form a new entity. The petitioners’ plea was described as a belated and unconvincing afterthought.

Upon considering the submissions and the procedural history of the case, the Tribunal noted that the petitioners had remained absent from multiple hearings, including on 08.12.2020 and 01.03.2021. The matter was ultimately dismissed on 01.07.2021 for want of prosecution due to over one and a half years of inaction.

The Tribunal took note of the Master Data of the company from the Ministry of Corporate Affairs portal and observed that the name of Dook Consulting Pvt. Ltd. had been officially struck off from the register. It reiterated that striking off under Section 248(5) of the Companies Act, 2013 results in the dissolution of the company, leading to the loss of legal recognition. A struck off company cannot maintain any proceedings unless it is first restored through appropriate legal means.

Referring to Section 252 of the Companies Act, the Tribunal observed that the power to restore a company’s name is strictly statutory and not exercisable suo motu. Such power must be invoked either through an appeal under Section 252(1) or by an application filed by the affected parties under Section 252(3). It cited with approval the NCLT Bengaluru’s decision in Chaitanya Manohar v. All Square Realtors India Pvt. Ltd [(2019) SCC OnLine NCLT 35807], which held that petitions under Sections 397-398 (Oppression and Mismanagement) of the Companies Act, 1956 cannot be entertained against a company whose name stands struck off, unless it is first restored.

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The Tribunal further noted that the applicants had failed to present any cogent or satisfactory explanation for their prolonged inaction and non-cooperation with the valuer. Their failure to assist in assessing the financial condition of the now non-operational company reflected a lack of seriousness, thereby rendering the restoration plea a mere afterthought. Accordingly, the Tribunal dismissed the restoration application, holding that there was no merit in the same and that the statutory scheme does not permit the Tribunal to act on its own motion for restoring struck off companies.

Appearance

For the Applicant: Mr. Rupesh Sinha, Ms. Arti Rathore, Advs

For the Respondent: Mr. Ajay Brahme, Adv. (for R2 to R6)

Cause Title: Dhirendra Pratap Singh & Anr. V.  Dook Consulting Pvt. Ltd. & Ors.

Case No: CA/442/ND/2021 IN C.P. No. 54/ND/2014

Coram: Shri Manni Sankariah Shanmuga Sundaram [Judicial Member], Shri Atul Chaturvedi [Technical Member]