This article has been written by Ishika rawat , a student studying LLB from Asian law college , Noida. The author is 1st year law student.

INTRODUCTION

The registrar of companies plays a very significant role in the management of the company . The registrar role is not just limited to the specific boundaries but is more than that .

POWER OF THE REGISTRAR OF THE COMPANIES

Power to call for information , inspect books and conduct inquiries 

Section 206 (1) provide that if the registrar on a scrutiny of any document filed by a company or on any information received by him , is of the opinion that any other further information or explanation or any further document relating to the company is necessary , he may require the company to  furnish in writing such information or explanation or to produce such documents. The registrar will give written notice to the company for that purpose specifying to provide the desired information or documents within a reasonable time . 

• The registrar may by any other notice call on the company to produce for his inspection such further book of accounts , books , papers and explanation if :-

1. The company fails to furnish the information or explanation within the time specified .
2. The registrar is of the opinion that the information or explanation is not adequate 
3. The registrar is satisfied with the unsatisfactory state of affairs exists in the company and does not disclose a full and fair statement of the information.

The registrar shall specify the time and place for production of books etc . before serving the notice the registrar shall record the reason in writing for issuing such notice as provided under section 206 (3).

Under section 206 (4) if the registrar is satisfied on the basis of information available with or furnished to him or on a representation made to him by any person that :- 

1. The business of the company is being carried on for a fraudulent or unlawful purpose .
2. Not in compliance of this act .
3. If the grievance of the investor are not being addressed .

 He may call the company to furnish in writing any information or explanation on matter specified in an order within such time as specified . the registrar shall inform the company of the allegation made against it by a written order and carry out such inquiry as he deem fit after providing the company the reasonable opportunity to be heard. Central government may direct the registrar or inspector appointed by it for the purpose to carry out the inquiry under this sub section ( proviso to section 206 (4) ).

The central government may :-

1. If it is satisfied that the circumstances so warrant , direct inspection of books and paper of a company by the registrar or inspector appointed .
2. Having regard to the circumstances by general or specific order , authorise any statutory authority to carry out the inspection of books of account of a company or class of companies .

Power of the registrar to remove name from registrar of companies { defunct companies }

• Section 248 of the companies act 2013 provide that there may be a reasonable cause for the registrar to believe that (A) a company  has failed to commence its business within one year of its incorporation , (c) the company is not carrying on any business for two immediately preceding financial years and has not applied under section  455 for obtaining the status of the dormant company . in such situation , the registrar has send a notice to the company and all its director telling them that he has the intention to remove the name of the company from the registrar. They are accordingly called upon to send their representatives along with copies of relevant documents within 30 days from the date of the notice .
• The directors are also not liable for their failure to maintain the routine of the company which to the knowledge of the registrar is already defunct though actual striking off had been postponed for one reason or another . The court may order the winding up of the company without it being restored to the registrar .
• The name of the company was struck off the registrar on petition by chairman of the company , who made the petition under the bonafide belief that company  had no assets . 

Restriction on making application under section 248 {section :- 249}

An application under section 248(2) on behalf of a company for removal of its name is not to be made if during the previous three month the company  :- 

1. Has changed its name or shifted its registered office from one state to another .
2. Has made a disposal for value of property or rights held by it immediately before its trade ceased or the company has been otherwise carrying on business for the disposal for gain in the normal course trading or otherwise carrying on business.
3. Has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under section 248 or deciding whether to do so or concluding the affairs of the company or complying with any statutory requirement .
4. Has made an application to the tribunal for sanctioning of the of a compromise or arrangement and the matter has not been finally concluded .
5. Is being wound up under chapter 20 whether voluntarily or by the tribunal .

Effect of a company notified as dissolved 

 Under section 250 of the companies act 2013 provide  , where a company becomes dissolved under this section , it has to cease to operate as a company from the date of notice of dissolution . Its certificate of registration is deemed to be cancelled except for the purpose of realising the amount due to it and for the payment or discharge of its liabilities or obligations .

Fraudulent application for the removal of the names 

Under section 251 of the companies act 2013 provide , where it is found that an application has been made by the company with the object of evading its liabilities or with the intention of deceiving its creditors or to defraud any other person , the person in charge of the company incur liability even if the company has been notified as dissolved . They become jointly and severally to any person who incurred to any person who incurred loss or damage as a result of the company being notified as dissolved . They are punishable as a fraud in the manner provided under section 447 . The registrar may also recommend prosecution of the person responsible for filing fraudulent application .

APPEAL TO TRIBUNAL AND RESTORATION

Any person aggrieved by the order of dissolution under section 248 may file an appeal to the tribunal .the period available is three year from the date of the order . If the tribunal is of opinion that the removal of the name was not justified because no applicable ground was there , it may order the restoration of the name of the company in the register of companies . Before making such an order , the tribunal has to give a reasonable opportunity of being heard and to make representation to the registrar , the company and all the person concerned .

If the registrar is satisfied that the name of the company happen to be struck off either inadvertently or on the basis of incorrect information furnished by the company or its directors and therefore it deserve to be brought back to the register , he can make an application to the tribunal within 3 years from the date of the order of striking off for an order of restoration . The company has to file a copy of the tribunals order of restoration with the registrar within 30 days of the date of order . The registrar will then put back the name on the register and issue a fresh certificate of incorporation .

Case :- Bhogilal v. Registrar of Joint stock company 

The creditor of the defunct company filed a petition for restoration of the name . The petitioner alleged that he had obtained a decree against the company a day before the publication of the notification . The director of the company on being asked by the registrar misinformed him that the company was not in operation . It was also found that the entire share capital of the company was not called up and that the uncalled capital was sufficient to satisfy the decree. Holding that it was just and equitable to restore the name of the company to the register , the court observed : “no steps were taken to discharge the liability which the company owned to the petitioner . The effect of the order of the order of removal would be to make it difficult for the petitioner the fruits of the decree . Had the registrar known that the company was actually defending a suit , it is extremely unlikely that he would have ordered the name of the company to be removed from the register”.

An officer of the company who was instrumental in getting the company struck off was held to have “locus standi” .He was not aggrieved when he activated the process of starting off . He could become aggrieved subsequently . The act require the applicant to be aggrieved at the time of his application . Restoration operate retrospectively . It produces “as you were position”. An illustration of retrospective operation is Boxco Ltd ,re : A company in ignorance of the fact that it has been struck off the register , created a legal charge on two of its properties . On an application by the company the court restored it to the register and gave the order retrospective effect so as to validate the charge and their registration . The effects of the restoration have been thus stated in a case . It is clear from the section that on the restoration of the company back to register after its being struck off the consequence is as though it had never been struck off the register .The company will be deemed to have had its existence althrough . Another consequence is that the rights of all parties would be as through there had been no cessation or interruption in the existence of the company on account of the striking off and the subsequent restoration .

BIBLIOGRAPHY

1}  The companies act 2013

2}  Company law and practice by Dr. G.K. Kapoor and Dr. Sanjay Dhamija

3} company law by Avtaar Singh

Aishwarya Says:

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems to secondinnings.hr@gmail.com

Join our  Whatsapp Group for latest Job Opening