NCLAT recalibrates cost payable for restoring name of struck-off company in Register of Companies

Background of the Appeal

The matter arose from an appeal filed by Ganton Projects Private Limited before the National Company Law Appellate Tribunal, Principal Bench, New Delhi challenging an order dated 11.03.2026 passed by the NCLT, New Delhi Bench, Court-V in proceedings under Section 252(3) of the Companies Act, 2013 read with Rule 87A of the NCLT Amendment Rules, 2017.

The NCLT had:

  • Allowed restoration of the company’s name in the Register of Companies; but
  • Directed the company to pay a cost of ₹10,00,000 to the Registrar of Companies (RoC).

The appeal before the NCLAT did not question the restoration itself; the grievance was confined to the quantum and basis of the cost imposed by the NCLT.

Incorporation, Change of Name and Strike-off

  • The company was originally incorporated as M/s Ganton Aviation Private Limited on 07.09.2011.
  • Subsequently, it changed its name in accordance with law to M/s Ganton Projects Private Limited.
  • The company’s name was struck off from the Register of Companies on 07.06.2017.

The strike-off was linked to persistent non-compliance with statutory reporting and tax obligations:

  • Non-filing of Income Tax Returns since incorporation;
  • Non-filing of balance sheets and annual returns in the MCA-21 system;
  • Non-reflection of PAN in the Income Tax e-filing portal.

These factors were treated by the NCLT as serious and continuous defaults, leading to the company’s removal from the Register.

Pending Financial Liability and Litigation

At the same time, the company had an outstanding liability arising out of proceedings before the Delhi High Court:

  • In OMP No. 754 & 859 of 2011, by order dated 16.12.2011, the High Court recorded a financial liability of ₹1 crore on the part of the company pursuant to a settlement arrangement.
  • Execution proceedings, bearing EX-Execution No.124/2017 titled “Anova Infracon Pvt. Ltd. & Anr. vs. M/s Ganton Limited & Anr.”, were pending before the District and Sessions Court, South Saket, New Delhi, where the company figured as a judgment debtor.

The assessee contended that its struck-off status was hampering its ability to defend or participate effectively in these execution proceedings.

Proceedings Before the NCLT

In the petition under Section 252(3) of the Companies Act, 2013, the company advanced, in essence, the following grounds:

  • The non-filing of balance sheets, annual returns and Income Tax Returns since incorporation was due to inadvertence and oversight.
  • The company held assets and had legal rights in immovable properties in its own name, making restoration necessary to protect such interests.
  • Pending execution proceedings arising from the Delhi High Court’s order dated 16.12.2011 warranted restoration so that the company could properly engage in the litigation as a judgment debtor.

The NCLT, after considering these aspects, concluded that:

  • Restoration of the company’s name was justified, particularly in view of ongoing litigation.
  • However, given the extended period of non-compliance since incorporation and non-filing of statutory documents and returns, this constituted a serious lapse.
  • On this reasoning, the NCLT imposed an “exemplary cost” of ₹10,00,000, payable to the RoC, as a condition for restoration.

Grounds of Challenge Before the NCLAT

In the appeal, the company restricted its challenge to the imposition of cost of ₹10,00,000. The primary contentions were:

  1. Disproportionate and Irrational Cost
    • The amount of ₹10,00,000 was argued to be excessive and not proportionate to either the defaults or the actual costs incurred by the RoC.
    • The NCLT had not provided a reasoned computation or basis for arriving at this figure.