De-registered companies seeking relief add to NCLT workload

MUMBAI: The Mumbai chapter of the National Company Law Tribunal (NCLT), already facing a deluge of default cases, is now saddled with a very different problem — salvaging de-registered companies. The dedicated bankruptcy court has reinstated at least 50 companies in the run-up to Diwali, bringing relief to thousands of employees whose salaries could not be paid when the bank accounts of the derecognised entities were frozen. A few months ago, the Registrar of Companies (RoC) in Mumbai had struck about 50,000 companies off the list of active establishments, citing non-compliance with norms. A company is mandated to file its balance sheet every year to the RoC, a wing of the Ministry of Corporate Affairs. About 30,000 of these cases are expected to come before the NCLT in the next few months, a senior government official familiar with the matter told ET. These would be from Mumbai, Pune, and Goa. “Those unlisted companies have not filed their balance sheet in the past two years. Despite repeated reminders, they have failed to do so. Now, they are free to challenge the ROC decision before the NCLT,” said another government source. Companies getting relief from the NCLT now have to file balance sheets with the ROC within a stipulated deadline. NCLT Mumbai is receiving about 10 such new petitions daily. “It has reversed the orders of the ROC in 50-60 cases decided so far, as those companies have given written undertakings to comply with the norms,” said one of the sources cited above. Some of the considerations for granting relief included non-compliance due to inefficiency, clean bank account statements, and documentation on other tax compliances, such as the Sales Tax, Income Tax, and the Central Excise. As the country’s commercial capital, Mumbai is home to many small to large companies. There are four-member judges in two NCLT Mumbai benches — MK Shrawat, BSV Prakash Kumar, and Bhaskara Pantula Mohan (judicial members), and V Nallasenapathy (technical member). Soon, there would be two new benches at the Mumbai NCLT courts, adding two more judges, ET had reported earlier.
Source: ET