Interim Stay – Disqualification of Director- Without Revival of Company – “High Court”
Interim Stay –
Disqualification of Director- Without Revival
of Company –
“High Court”
NOTE:
Whatever,
author shall discuss under this article, one thing is clear i.e. “High Court” is
not pronouncing order for remove the disqualification of Directors. High Court
as per latest judgments pronounced only “Interim Stay” on disqualification of
Directors.
Short Summary:
In this Flash editorial,
the author begins by referring the provisions of Interim Stay on Disqualification of Director. While, MCA has issued
Condonation of Delay scheme, 2018 as an opportunity to Disqualified Directors
to remove their Disqualification. However, even after the scheme there are many
questions/ difficulties in the mind of professionals and Corporates. In this
article author endeavor to solve those queries. Like:
I.
How to get interim stay on Disqualification of
Director, in situation:
§ When a person having Directorship in Struck off Company / Companies
only.
§ When a person having Directorship in Struck off and Active
Company both
Company both
§ When a person having Directorship only in Active Companies
Author has already issued some articles/ editorial
on the Topic Disqualification of Director, Link of the same shall be given at
the end of this article.
How to get Interim Stay on
Disqualification of Director:
I. When a person having Directorship in “Struck off Company/ies”
First: There
is no way out under Companies Act, 2013 for removal of Disqualification of
Directors.
Second: As there is no way out under Companies Act, 2013,
Ministry of Corporate Affairs came out with a scheme “Condonation of Delay Scheme,
2018”
According
to this scheme a person by availing this scheme and if made compliance
according to the scheme his Disqualification shall be removed by the ROC.
However, even after the scheme a person having Directorship in the “Struck off
Company” not able to get his disqualification removed. Because, this CODS is
applicable on all the Defaulting Companies (Other than the Companies which have been struck off).
Third: As Struck
off Company can’t avail the CODS, 2018. However, they are having following
below mentioned 2 (two) ways:-
1.
To file an application
with NCLT for revival of Company, if received revival order from NCLT then
avail the CODS, 2018.
2.
If Director doesn’t want
to revive the Company, however want to remove the disqualification. Then file a
Writ Petition with “HON’BLE HIGH COURT”.
Above mentioned conditions can be understand
easily by the below mentioned Chart.
Chart on Situation Third:
In this editorial author shall endeavor to through
lights on the situation Third- Part II- If Director doesn’t want to revive the
Company, however want to get Interim Stay on disqualification.
In This Situation:
a)
Company has been struck
off by the ROC due to non filing of Financial Statement or Annual Return with
ROC.
b)
Directors don’t want to
file application with NCLT for revival of Company as the Company not having any
business from previous 3 financial year or directors don’t want to continue the
business in the Company.
c)
Directors want to avail
the CODS scheme to remove their disqualification; however due to strike off
status they are not able to do so.
d)
Directors even want to
Close / Strike Off the Company voluntarily also, if opportunity given to them.
Case Law
Court
|
Hon’ble Delhi High Court
|
Parties
|
Pradeep Jain V/s Union of India And ORS.
|
Hon’ble Justice
|
Mr. Justice Vibhu Bakhru
|
Even many other orders have been passed by the
Hon’ble High Courts on the above mentioned issue on the same facts.
|
FACATURAL BACKGROUND:
I. Name of the petitioner
has been mentioned in the list of Disqualified Director issued by the Registrar
of Companies
II. The Company has not
carried out business for past three years.
III. Company’s Bank Account
is also not in operation for past three years.
IV. The petitioner also did
not file the requisite returns as required under Companies Act, 2013.
V.
The petitioner becomes
disqualified u/s 164(2).
RELIEF WANT FROM THE HON’BLE HIGH COURT:
I.
Allow the Company to
avail CODS, 2018.
II.
Allow the Company for
voluntarily dissolution u/s 248(2)
III.
Allow the Company to
file all the pending documents with ROC.
IV.
Remove the
Disqualification of Directors Permanently.
DECISION OF HON’BEL “HIGH COURT”::
The Hon’ble High Court has passed the
following order on the basis of above mentioned fact. The Court directs as under:
Company shall file the below mentioned documents and application with Registrar of Companies in
hard copies.
a)
The petitioner
may file all the requisite returns in relation to the company to avail the
CODS-2018. (All the pending documents required to be filed with ROC with additional
fees)
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. (Documents of
voluntary Strike off Company)
c)
The petitioner
would also make a necessary application under CODS-2018 alongwith the requisite
charges. (CODS form with fees Rs. 30,000/-)
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.
Conclusion:
One can opine that if any director
of struck off Company want to avail the benefit of CODS-2018 or want to get
interim stay on 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.
Is the scheme of CODS 2018 still applicable??
ReplyDeleteWe had the same issue and we had filed a writ petition in Hon'ble High Court of K'nataka , But still we are not able to remove disqualification from Roc now they are saying that it has stayed by Supreme court ! Is that true >? Coz i have paid the money to file writ in court !
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