REMEDY – DISQUALIFIED DIRECTORS -Whether Company Active or Struck off

DISQUALIFIED DIRECTORS
Short Summary:
In this Flash editorial, the author begins by
referring the provisions of Condonation of Delay Scheme 2018 in relation to
allow the Defaulting Companies
(other
than the companies which have been struck off/ whose name has been removed from
the register of Companies u/s 248(5)) and Remedy
for Disqualified Directors of Struck Off Company”. To file its overdue documents which were due for
filing till 30.06.2017 in accordance with provisions of the scheme”
This is way out prescribed for Removal of
Disqualification of Directors due to non Filing of Financial Statement and
Annual Return u/s 164(2).
This is article no. 308 of the series of editorials
written by the author on corporate laws {Including Companies Act, 2013, SEBI,
RBI Regulations, IBC, LLP
Act, 2008 etc.}.
Introduction:
As MCA issued the list of approx 309,614 Director
who has been disqualified under section 164(2) and whose DIN has been blocked
by the MCA. Due to this action many representations made from industry,
defaulting companies and their directors seeking an opportunity for the
defaulting companies to become compliant and normalize operations.
With a view to give them opportunity the CG has
decided to introduce a scheme namely “Condonation of delay scheme 2018”
[CODS-2018].”
However, this scheme is applicable only on
active Companies; Struck off Companies can’t take benefit of this scheme. Therefore,
Writ petition is filed in Hon’ble High Court, Delhi in the case of Raman Nanda
V/s Union of India and ors. In this petition High Court provide way out for
removal of disqualification of directors of struck off Companies.
In this editorial
first will discuss about the scheme then about the Hon’ble High Court Order.
Time Period: The scheme shall be into
from w.e.f. 01st January, 2018 and shall remain in force upto 31st
March, 2018 (Companies have to comply with the scheme within this period of 3
months).
First: CODS Scheme
SOME DEFINITIONS TO BE USED FOR THE COMPLIANCES:
Over Due Documents
|
§
Financial Statements or
§ The Annual Returns or
§ Or documents as mentioned in below List
§ Other associated documents, as applicable, In the case of a defaulting
Company or
|
Defaulting Company
|
Company which has not filed its
- Financial Statements, or
- Annual Return
As required under the
Companies Act, 1956 or Companies Act, 2013, as the case may be, and the rules
made there under for a continuous period 3 years.
|
Forms Allowed filing under the Scheme –
Over Due Documents
S.
No.
|
Form
No.
|
Purpose
of File
|
1.
|
20B / MGT – 7
|
Annual Return by Company having Share Capital
|
2.
|
21A / MGT -7
|
Annual Return for Company not having Share
Capital
|
3.
|
23AC, ACA,
AOC-4- XBRL, non-XBRL, CFS
|
Form for filing of Balance Sheet/ Financial
Statement and Profit and Loss Account
|
4.
|
66
|
Compliance Certificate with Roc
|
5.
|
23B/ ADT-1
|
Intimation for appointment of Auditor
|
PROCEDURE TO BE
FOLLOWED FOR THE PURPOSE OF THE SCHEME
This Scheme is for the Defaulting
Companies “Whose name have not been removed from the record of the Registrar”
means the Companies which are defaulting but whose status in the record of the
ROC is Active.
STEP – I- DIN Activate
The DIN
of the disqualified directors shall be activate during the validity of the
scheme i.e. 01.01.2018 to 31.03.2018 to enable them to file the documents.
STEP – II- Filing of Pending ROC Forms
The
defaulting Company shall file the overdue documents (list mentioned above in
table form) in respective form with addition fees i.e. as per section 403
(maximum additional fees 12 time of actual fees).
STEP – III- Seeking of Scheme
After
filing documents in STEP II Company shall seek condonation of delay by filing
of e-form e-CODS 2018 with Fees Rs. 30,000/-.
EFFECT OF NON- AVAILING OF SCHEME
The DIN of Directors associated with defaulting Company that have not
done the below mentioned shall be liable to deactivated on expiry of the scheme
period.
§ Have not
filed over due documents and
§ The eform
CODS 2018 and
§ These are
not taken on record in the MCA21 and
§ Are still
found to be disqualified on the conclusion of scheme
EFFECT ON DEFAULTING COMPANIES – WHICH HAS STRUCK OFF
In case of defaulting – struck off Company have filed applications for
revival under section 252 of the Act upto the date of this scheme (i.e.
31.03.2018). The DIN of such directors shall be re-activated only NCLT order of
revival subject to the Company having filing of all overdue documents.
WARNING:
At the conclusion of scheme i.e. 31.03.2018, the
Registrar shall take all necessary actiosn under the Companies Act, 1956/2013
against the Companies who have not availed themselves of this scheme and
continue to be in default in filing the overdue documents.
Few Questions:
I.
Whether Struck Off Companies can take benefit of
this Scheme CODS – 2018?
Solution: This
scheme can be avail by the Defaulting Company – which
has not struck off in the record of the Registrar of Companies. Therefore,
Struck Off Companies can’t take benefit of this scheme.
II.
Applicability of Scheme CODS – 2018?
Solution: This
scheme can be avail by the Defaulting Company – (other than the companies which
have been struck off/ whose names have been removed from the Register of
Companies under Section 248(5) of the
Act)
III.
Time period for avaibility of benefits of Scheme
CODS – 2018?
Solution: This scheme shall be available
for the period:
Start
from 1st January, 2018 TO End
on 31st March, 2018
IV.
Fees to be paid under Scheme CODS – 2018?
Solution: Following fees required to pay
under the Scheme:
§ Late
Filing Fees of all the Pending form i.e. ( Actual + 12 times additional Fees)
§ Fee of
e-CODS 2018 i.e. Rs. 30,000/-fsdf
V.
E-form for which this scheme can be avail?
S.
No.
|
Form
No.
|
Purpose
of File
|
1.
|
20B / MGT – 7
|
Annual Return by Company having Share Capital
|
2.
|
21A / MGT -7
|
Annual Return for Company not having Share
Capital
|
3.
|
23AC, ACA,
AOC-4- XBRL, non-XBRL, CFS
|
Form for filing of Balance Sheet/ Financial
Statement and Profit and Loss Account
|
4.
|
66
|
Compliance Certificate with Roc
|
5.
|
23B/ ADT-1
|
Intimation for appointment of Auditor
|
Second: Writ Petition
Writ
Petition “Raman Nanda V/s Union of India and ORS.
Order
by Hon’ble High Court of Delhi
Dated:
21st December, 2017
FACATURAL BACKGROUND:
i.
The Learned
counsel appearing for the petitioner unequivocally states that the Company has
not carried out any business for the past 3 years.
ii.
Its Bank
Account is also not in operation for the past 3 years.
iii.
The Petitioner
also did not file the requisite returns as required under the CA, 2013.
A. The
petitioner is desirous of availing of the CODS, 2018. However, since the
Company ahs been struck off from the Registrar of Companies, it has disabled
from availing the benefits of CODS,2018.
B. The petitioner also not in position to seek
revival of Company u/s 252 since admittedly the Company has not carried out any
business.
C. The petitioner states that, it would voluntarily
seek dissolution of the Company u/s 248(2) of the Act, if it has the opportunity
to do so.
Decision of Hon’ble High Court:
The Court Directs that the below mentioned
documents and application will not be submitted online but in hard copies to
the Registrar of Companies.
a) The petitioner may file all the requisite returns
in relation to the company to avail the CODS-2018.
b) The petitioner may also file the necessary
resolutions for voluntarily striking off the name of the Company as required
under Section 248(2) of the Act.
c) The petitioner would also make a necessary
application under CODS-2018 alongwith the requisite charges.
According to the order
above mentioned documents shall be file in Hard
Copies with Registrar of Companies.
After filing ROC shall
scrutinize the documents and if the same are found to be in order for strike
off u/s 248(5) or availing benefit of CODS-2018.
The removal of Company
from the Register u/s 248(1) would be deemed as striking off the Company /s
248(2), and application under CODS-2018 would be sympathetically considered by
the Registrar.
One can opine that if any director of struck off Company want to avail the
benefit of CODS-2018 or want to remove its disqualification can file a writ
petition in Hon’ble High Court for the same.
Disclaimer:
The
entire contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore. Users
of this information are expected to refer to the relevant existing provisions of
applicable Laws. The user of the information agrees that the information is not
a professional advice and is subject to change without notice. I assume no
responsibility for the consequences of use of such information. IN NO EVENT
SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE
RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE
INFORMATION.
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