Section 252 Company Restoration: A Practical Guide to NCLT Procedure and Director Disqualification

Director Disqualification and Restoration Under Section 252

Section 164(2) of the Companies Act, 2013 automatically disqualifies a director whose company has not filed financial statements or annual returns for three continuous financial years. In parallel, Section 248 empowers the Registrar to strike off a company that has been inactive. The combined effect: thousands of directors across India have been disqualified over the past six years, and the companies they served have been struck off the register.

Section 252 of the Companies Act is the restoration remedy. It allows the National Company Law Tribunal to restore a struck-off company to the register — reviving both the company’s legal existence and the directors’ ability to act. In my Kolkata practice, restoration petitions are among the most frequent NCLT filings we handle. Here is how the procedure actually works in 2026.

The three grounds for restoration under Section 252

1. Section 252(1) — Appeal by any aggrieved person (the company, member, creditor, or workman) within three years of the ROC’s strike-off order. The Tribunal restores if satisfied that the strike-off was not justified.
2. Section 252(3) — Application by the company, member, creditor, or workman within twenty years of publication of the strike-off in the Official Gazette. The Tribunal restores if it is “just and equitable.”
3. Section 252(1) also permits the Registrar himself to file for restoration if the strike-off was based on incorrect information.

When restoration is likely to succeed

Three factual patterns almost always succeed:

• The company was operational when struck off — bank statements, GST returns, or contracts covering the period demonstrate ongoing business.
• The company owns assets — immovable property, receivables, or investments that need to be dealt with.
• The company is a party to pending litigation — restoration is necessary to defend or continue the case.

The just-and-equitable ground is interpreted broadly by NCLT Kolkata Bench, especially where the strike-off arose from a compliance lapse rather than genuine inactivity.

Documents required for a Section 252(3) application

• Certified copy of the ROC strike-off order and Gazette publication.
• Company’s certificate of incorporation, MoA, AoA.
• Bank statements covering three years before and after strike-off (proof of operations or asset holding).
• Audited financial statements for the years of default (prepared retrospectively if necessary).
• Income tax returns filed or draft returns for the period.
• Details of assets, liabilities, and pending litigation.
• Board resolution authorising the application and appointing the authorised representative.
• Affidavit verifying the application under Form NCLT-6.
• Undertaking that all pending statutory returns and fees will be filed immediately upon restoration.

Step-by-step procedure

1. File Form NCLT-9 with the required documents at the NCLT Bench having jurisdiction over the registered office of the company.
2. Pay the prescribed fee (₹1,000 for restoration application).
3. Serve a copy of the application on the Registrar of Companies within 14 days.
4. Publish notice of the application in one English and one vernacular newspaper circulating in the state of the registered office (required per recent NCLT practice, allowing objections from any interested party).
5. Attend hearings before the Tribunal — typically two to three hearings across three to six months.
6. On order of restoration, file Form INC-28 with ROC within thirty days, along with all backlog annual filings (AOC-4 and MGT-7 for each defaulted year) and the additional fees.

Post-restoration compliance — the burden nobody warns you about

Restoration is not the end. Once the company is restored, the directors must file every backlog AOC-4 and MGT-7 for the defaulting years. Late-filing additional fees for three to five years of default typically run into ₹2 to 5 lakh per company. Directors also need to reactivate DIN via DIR-3 KYC and, if disqualified, formally seek relief on the disqualification consequences. The full cost of restoration — including counsel fee, publication, backlog filings, and disqualification remediation — often runs ₹3 to 8 lakh.

Common rejection grounds

• No proof of operational activity during the years of default.
• Application filed outside the twenty-year window under Section 252(3).
• Failure to serve ROC or complete newspaper publication.
• Non-payment of prescribed fee.
• Restoration sought purely for future tax planning — Tribunal reads this as bad faith.

Recent Kolkata Bench trends

NCLT Kolkata Bench has been visibly restorative in tone through 2025 and 2026, favouring companies with genuine business realities over strict technical compliance. Where the applicant demonstrates ongoing bank activity, GST filings, or asset ownership, restoration is granted almost as a matter of course. The Bench has been stricter on shell companies or entities where restoration is being sought purely to sell shell status.

Closing action list for a Kolkata company facing strike-off

• Act within the three-year window under Section 252(1) — it is faster and cheaper than the twenty-year 252(3) route.
• Assemble evidence of operations before filing — bank statements, GST returns, contracts.
• Budget for the backlog filing cost from the outset, not as an afterthought.
• Coordinate with the auditor to prepare retrospective financials.
• Engage counsel with recent Kolkata Bench experience — practice varies bench-to-bench.

Section 252 restoration is a genuinely available remedy. But it is procedural, evidence-heavy, and expensive at the back end. Directors who plan the application well and prepare the backlog filings in parallel come out the other side with a live company and a clean slate.