Case Note & Summary
The appeal arose from an order dated 11.03.2026 by the National Company Law Tribunal (NCLT) concerning the restoration of the registration of Ganton Projects Private Limited, which had been struck off due to non-compliance with statutory filing requirements. The Appellant challenged the imposition of ₹ 10,00,000 as exemplary costs, arguing it was excessive and unjustified. The company was incorporated on 07.09.2011 and had failed to file necessary returns since its inception, leading to its name being struck off on 07.06.2017. The Tribunal noted that the Appellant had a financial liability of ₹ 1 Crore as per a prior High Court order. The Appellant contended that the cost imposed was disproportionate and violated principles of natural justice. The Tribunal acknowledged the Appellant's arguments but emphasized that ignorance of law was not a valid defense for non-compliance. Ultimately, the Tribunal found the original cost excessive and reduced it to ₹ 5,00,000, allowing the appeal in part. The Appellant was directed to pay the adjusted amount of ₹ 3,00,000 after considering a prior deposit of ₹ 2,00,000. All interlocutory applications were closed.
Headnote
A) Company Law - Restoration of Company Name - Justification of Cost Imposition - Companies Act, 2013, Section 252(3) - The Tribunal found the imposition of ₹ 10,00,000 as exemplary costs to be disproportionate and lacking rational basis, reducing it to ₹ 5,00,000 to meet the ends of justice. The Appellant's failure to file statutory returns was considered a serious lapse, but the cost imposed was not commensurate with the actual costs incurred (Paras 15-16).
Issue of Consideration
Whether the imposition of exemplary costs of ₹ 10,00,000 for the restoration of the company's name was justified and proportionate.
Final Decision
The Tribunal reduced the exemplary cost from ₹ 10,00,000 to ₹ 5,00,000, directing the Appellant to pay the adjusted amount of ₹ 3,00,000 after considering a prior deposit of ₹ 2,00,000.
Law Points
- Restoration of company name
- Imposition of costs
- Compliance with statutory obligations
- Proportionality in penalties
