Sujan Technologies Pvt. Ltd. faced serious allegations of financial mismanagement, excessive debts and non-compliance of statutory filings. The non-compliance issues led to an inspection and investigation being ordered b

According to section 248(1) of the Companies Act,2013, where the Registrar has reasonable cause to believe that- (c) a company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455 he shall send a notice to the company and all the Directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of the relevant documents, if any, within a period of thirty days from the date of the notice. Section 248(2) of the Act states that without prejudice to the provisions of sub-section (1), a company may, after extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent. members in terms of paid-up share capital, file an application in the prescribed manner to the Registrar for removing the name of the company from the register of companies on all or any of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such application, cause a public notice to be issued in the prescribed manner: Rule 3 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 provides that the Registrar of Companies may remove the name of a company from the register of companies in terms of sub-section (1) of section 248 of the Act. The rule provides that following categories of companies shall not be removed from the register of companies under this rule and rule 4, namely- (iv) Companies where inspection or investigation is ordered and being carried out or actions or such order is yet to be taken up or were complete but prosecutions arising out of such inspection or investigation is pending in the court; (v) Companies against which any prosecution for an offence is pending in any court; In the present case, while the inspection had been completed, the prosecution against the directors was still ongoing in the court at the time, the company applied for striking off its name. Hence, Sujan Technologies Pvt. Ltd. has to wait till the final verdict in the court and the rejection by ROC is valid as the removal of name from the register could not be done under the law until the pending prosecution gets resolved. Moreover, though the company has not continued with any of its business or operation for a period of two immediately preceding financial year but it has not applied for dormant status, therefore, pursuant to section 248(2), without prejudice to the provisions of sub-section (1), the company cannot file application for removal of name of company as for that company has to pay its all liabilities and then pass special resolution or needs consent of seventy-five per cent. members in terms of paid-up share capital for the same to the Registrar on the grounds specified in sub-section (1). Therefore, the application of the company filed with RoC for removal of its name is not tenable pursuant to above provisions.