Company Struck Off by the ROC: Restoration Through the NCLT

Can a company struck off by the ROC be restored?

Yes. Section 252 of the Companies Act 2013 gives two routes back. Under section 252(1), any person aggrieved by the Registrar's order dissolving the company under section 248 can appeal to the NCLT within three years of that order. If the NCLT finds that the strike-off was not justified, because the grounds on which the Registrar acted did not exist, it orders restoration. Under section 252(3), the company, any member, any creditor or any workman who feels aggrieved can apply within twenty years of the publication of the strike-off notice in the Official Gazette, and the NCLT may restore the name if the company was carrying on business or was in operation at the time of strike-off, or if it is otherwise just to restore it.

In both routes the NCLT hears the Registrar before deciding. When it restores the company, the company is deemed to have continued in existence as if its name had never been struck off, and the NCLT can give directions to put the company and everyone else in the same position as if it had not been removed. That is what lets the company operate its bank account, enforce its contracts and hold its property again.

Restoration is not automatic, and it is not a formality. The NCLT expects proof that the company was alive, or a good reason why it should be brought back, and it almost always attaches conditions. Most applications by companies that were genuinely trading succeed once those conditions are accepted; applications by shell companies with nothing to show tend to fail.

Why did the ROC strike off the company?

Section 248(1) allows the Registrar to remove a company's name on four grounds. The company failed to commence business within one year of incorporation. The company has not been carrying on any business or operation for the two immediately preceding financial years and has not applied for dormant status. The subscribers did not pay the subscription money and the declaration of commencement of business was not filed within 180 days of incorporation under section 10A. Or, after a physical verification under section 12(9), the company is found not to be carrying on any business or operation.

In practice, the Registrar infers the second ground from non-filing. A company that has not filed financial statements (Form AOC-4) and annual returns (Form MGT-7 or MGT-7A) for two or more years looks dormant on the MCA's records, whether or not it is. Since 2017 the Ministry of Corporate Affairs has run large strike-off drives against such companies, and many trading businesses were caught because their accountants stopped filing or the directors assumed the filings did not matter for a small private company.

Before striking off, the Registrar must send a notice in Form STK-1 to the company and all its directors at their recorded addresses, giving thirty days to make a representation, and then publish a public notice in Form STK-5 on the MCA website and in the Official Gazette, and in newspapers. After that, the Registrar strikes off the name and publishes the final notice in Form STK-7. Notices often go to old registered office addresses or directors' outdated email IDs, which is why so many owners learn of it late. A separate route, section 248(2), lets the company itself apply for strike-off in Form STK-2; those applications are now processed centrally by the MCA's Centre for Processing Accelerated Corporate Exit (C-PACE).

What does a strike-off do to the company and its directors?

From the date of the Gazette notice, the company ceases to operate as a company and its certificate of incorporation is deemed cancelled, under section 250, except for the purpose of realising amounts due to it and paying or discharging its liabilities. In practice, banks restrict operation of the company's accounts, the company cannot enter into new contracts, file new suits in its own name, bid for tenders or execute documents for its property, and GST registration and tax refunds run into trouble.

Liabilities do not disappear. Section 248(7) says the liability of every director, manager, officer and member of the dissolved company continues and may be enforced as if the company had not been dissolved. A struck-off company's directors can still be pursued for its dues, and pending proceedings by tax authorities or creditors do not simply vanish. The NCLT's power to wind up the company is also preserved under section 248(8).

Directors face a separate problem. Under section 164(2)(a), a person who is or has been a director of a company that has not filed financial statements or annual returns for any continuous three financial years is not eligible to be reappointed as director of that company or appointed in any other company for five years. Following the strike-off drives, the MCA disqualified directors of struck-off companies and deactivated their Director Identification Numbers. A director disqualified this way finds he cannot continue on the boards of his other, perfectly compliant companies either. Restoration of the struck-off company is often the first step in sorting this out.

Which route applies to you: section 252(1) or section 252(3)?

The two routes differ in who can use them, how long you have, and what the NCLT looks at.

The provisions that govern restoration

Which NCLT bench do I file in for a Delhi, Noida or Gurugram company?

You file before the NCLT bench having jurisdiction over the state where the company's registered office is. For a company registered in Delhi, that is the NCLT New Delhi, which has several benches; the Registrar concerned is the ROC Delhi (which also covers Haryana). For a company registered in Noida, Ghaziabad or elsewhere in Uttar Pradesh, the appeal goes to the NCLT Allahabad bench, and the Registrar is the ROC Kanpur. A company registered in Gurugram or Faridabad falls under the NCLT Chandigarh bench, with the ROC Delhi as Registrar.

This matters more than people think. Owners often run the business from Delhi while the registered office is still at a promoter's house in Ghaziabad or Gurugram, or the other way round. Check the registered office on the MCA master data before drafting; filing in the wrong bench wastes weeks. Our page on NCLT matters in Delhi explains how the New Delhi benches list company petitions and appeals.

What does the NCLT look at before restoring a company?

The central question is whether the company was really alive when it was struck off. In a section 252(1) appeal, the NCLT asks whether the ground relied on by the Registrar, usually that the company had not carried on business for two years, actually existed. If bank statements, GST returns, invoices and income tax returns show the company was trading during those years, the ground fails and the strike-off is set aside, even though the company was at fault in not filing its returns.

Under section 252(3), the NCLT can also restore if it is 'otherwise just'. This covers cases where the company was not trading but has a real reason to exist: it owns land or a flat, it has money in a bank account or a refund due, it is a party to pending litigation, or a creditor or workman needs it on the register to recover dues. The NCLT weighs the reason against the company's history of default.

The Registrar's reply carries weight. The ROC usually files a report stating when the notices were sent, what filings are pending, and whether it objects. Many ROCs do not oppose restoration of a genuinely trading company, subject to costs and compliance, but they do point out long defaults and any adverse information. When Advocate B.K. Singh prepares a restoration appeal, he builds the evidence year by year for exactly the period the Registrar treated as dormant, because a bench that sees a bank statement with regular business credits for each of those months has very little left to decide.

Documents for a restoration appeal or application

The NCLT decides these cases on documents. Assemble them before drafting; missing years are the commonest reason for adjournments.

How restoration works, step by step

The sequence below is for a typical appeal by the company under section 252(1). An application by a creditor or workman under section 252(3) follows the same outline.

1. Confirm the status and the dates

   Download the master data from the MCA portal, find the date of the STK-7 notice, and work out if you are still within three years of the Registrar's order. If not, the application has to be framed under section 252(3), and the grounds argued accordingly.

2. Prepare the pending accounts

   Get the accounts for all unfiled years prepared and audited, and the annual returns drafted. The NCLT will order them to be filed after restoration, and a bench is more comfortable restoring a company whose accounts are already ready.

3. Draft and file the appeal

   The appeal is drafted under section 252 and rule 87A in the prescribed form, with the company's history, the reasons for the default, the evidence of business and the relief sought. It is filed through the NCLT's e-filing portal with the court fee and supporting affidavit.

4. Serve the Registrar and attend the hearing

   A copy is served on the ROC (and usually the Regional Director) at least fourteen days before the hearing. The ROC files its report. The NCLT hears both sides; a straightforward case may be decided in one or two hearings, though listing delays vary.

5. Comply with the order

   File a certified copy of the restoration order with the ROC in Form INC-28 within thirty days, pay the costs directed, and file all pending financial statements and annual returns with the additional fees within the time the NCLT allows. The ROC then updates the company's status to active.

Missing the thirty-day window for INC-28 or the deadline for the pending filings can undo the benefit of the order, so diarise both on the day the order is pronounced and apply for the certified copy at once.

What conditions does the NCLT usually impose?

Restoration orders almost always come with terms. The standard ones are payment of costs to the Registrar or to a fund named in the order, filing of all overdue financial statements and annual returns with the prescribed additional fees within a set period (often thirty to ninety days), and compliance with any other defaults the Registrar points out. The amount of costs depends on the bench, the length of the default and the conduct of the company; it is not fixed by the rules.

Benches also sometimes add that restoration is without prejudice to any action the Registrar may take for the past defaults, which means penalties for late filing and for other non-compliance remain open. A company should budget for these in addition to the costs of the appeal. Restoration does not erase the default; it gives the company a chance to cure it.

Can a company that applied for its own strike-off be restored?

It can, but it is harder. A company that applied under section 248(2) in Form STK-2 told the Registrar, through its directors' indemnity bond in Form STK-3 and affidavit in Form STK-4, that it had no assets, no liabilities and no pending matters. If an asset or a claim later surfaces, the directors have to explain why it was not disclosed. The NCLT may still restore under section 252(3) if it is just, for instance where an old refund, a property title or a court decree in the company's favour turns up, but it looks closely at whether the original declarations were honest.

Owners who closed a company voluntarily and now want to restart the business are usually better off incorporating a new entity than reviving the old one. Our page on company registration and incorporation explains the current process for that, and our post comparing a private limited company with an LLP may help choose the structure. LLPs struck off under the LLP Rules have their own restoration route before the NCLT; the provisions differ from section 252, so they need to be checked separately.

Can a creditor or workman get a struck-off company restored?

Yes. Section 252(3) expressly lets a creditor or workman apply within twenty years. This is useful when a debtor company has been struck off, sometimes deliberately, to avoid a claim. A supplier holding unpaid invoices, a lender, a landlord or a former employee owed salary can ask the NCLT to restore the company so that recovery proceedings can be brought or continued against it. Section 248(7) already preserves the personal liabilities of directors, but proceeding against the company itself, and against its assets, is often easier once it is back on the register.

Creditors who want to start insolvency proceedings against a struck-off company commonly seek restoration first, because a petition under the IBC is against a company that exists on the register. Our posts on the section 9 petition by an operational creditor and on liquidation under the IBC explain what follows once the company is restored and still does not pay. A creditor's application should attach the proof of debt, the correspondence and anything showing the company had assets or business when it was struck off.

Does restoration clear a director's disqualification and reactivate the DIN?

Not by itself, but it is usually the necessary first step. The disqualification under section 164(2) arises from the failure to file for three continuous years, not from the strike-off as such. Once the company is restored and all pending financial statements and annual returns are filed, the basis for the continuing default goes, and directors then apply to have their DIN reactivated. In many cases this follows the filing; where it does not, or where the disqualification blocks a director from other companies in the meantime, a writ petition before the High Court is the route.

A point Advocate B.K. Singh often makes to directors in this position is to sequence the steps: restoration order, INC-28, pending filings, and only then the DIN application or writ, each with copies of the earlier steps attached. A director who approaches the High Court before the company has cured its defaults is asking the court to overlook something he can fix himself. Our post on writ petitions in the Delhi High Court explains that procedure, and our post on director resignation and removal deals with the filings when a disqualified director needs to step off a board.

Common mistakes in restoration cases

• Waiting until the three years run out. After that the company must rely on section 252(3), which is still available but asks the NCLT to exercise a wider discretion.
• Filing without the pending accounts ready. The NCLT will set a short deadline for filings; accounts that take months to prepare put the restoration at risk.
• Relying only on an affidavit of business. The bench wants bank statements, GST returns and invoices for the dormant years, not a general statement that the company was trading.
• Choosing the wrong bench. The registered office decides the bench, not where the directors live or the business runs.
• Forgetting INC-28. The order does nothing on the MCA's records until the certified copy is filed with the ROC within thirty days.
• Restoring a company that should be closed. If the company has large debts and no business, restoration may only bring those claims back to life; consider proper closure instead.

When is restoration not worth it?

Restoration costs time and money, and it brings the company's compliance burden back. If the company has no assets, no business and no pending claims in its favour, and the directors' only concern is their DIN, there may be cheaper ways to deal with that. If the company has substantial debts and no prospect of paying them, restoration simply puts it back in front of its creditors, and the right course may be a properly managed closure, including voluntary liquidation or, where the company cannot pay its debts, an insolvency process.

On the other hand, where the company holds property, has money stuck in a bank account, has a refund due, has a running business or is a party to litigation that matters, restoration is usually the only practical route. A sale deed cannot be executed, a suit cannot be pursued and a bank account cannot be operated by a company that is not on the register.

What to do this week if your company has been struck off

• Download the company's master data from the MCA portal and note the strike-off date.
• Find the STK-7 Gazette notice and work out how much of the three-year period remains.
• Confirm the registered office address and the NCLT bench that covers it.
• Ask your bank for statements covering the years since the last filed return.
• Collect GST returns, income tax returns and a sample of invoices for each of those years.
• Instruct your accountant to prepare and audit the accounts for every pending year.
• List the directors whose DINs are deactivated and the other companies affected.
• Hold a board meeting (or get written consent) authorising the appeal and a signatory.

Getting the company back on the register

Restoration is one of the more predictable NCLT matters when the papers are in order: a company that can prove it was trading, has its accounts ready and accepts the usual conditions is in a good position. The cases that drag are those where the evidence of business is thin, the bench is unclear, or the company has not decided whether it really wants to continue.

If you want an advocate to check the dates, the bench and the evidence before you file, the team at B.K. Singh & Associates can look at the master data and your bank statements and tell you which route under section 252 fits. You can send the details through our online enquiry, or read more about our corporate law work in Delhi.