2018 (3) TMI 1927 - HC - Companies Law

Disqualification as directors under Section 164(2) of the Companies Act, 2013 - non filing of financial statements and annual returns by the respective companies of which they are directors for the consecutive period of three years - Notification dated 7th September 2017 - HELD THAT - The undertaking given by the learned Counsel for the petitioners as was given in the disposed of petitions (paragraphs 8 and 9) would operate in these petitions also. By adopting the reasoning of the Court in the said order, these petitions are disposed off on identical lines - The petitioners to take immediate steps in consonance with the provisions under Section 248(2) of the said Act, 2013 and under the CODS 2018, in any case within a period of ten days from today. In order to facilitate this exercise, the operation of the impugned list, in so far as it concerns the petitioners, will remain stayed till 31/3/2018 or till such time the respondents take requisite decision with regard to the request of the petitioners made to them in consonance with the provisions under Section 248(2) of the said Act, 2013 and under the CODS 2018. Petition disposed off.

Summary

Issues:
Challenge of disqualification as directors under Section 164(2) of the Companies Act, 2013 for non-filing of financial statements and annual returns for three consecutive years.

Analysis:
The petitioners challenged their disqualification as directors under Section 164(2) of the Companies Act, 2013 due to non-filing of financial statements and annual returns for three consecutive years by the respective companies they were directors of. The respondents issued a Notification on 7th September 2017 with retrospective effect from 1st November 2016, leading to the disqualification. The petitioners sought relief from the disqualification through legal proceedings.

The respondents relied on previous judgments, including orders from the Delhi High Court and the High Court of Telangana and Andhra Pradesh, to support their stance in the present case. Additionally, a Division Bench of the Bombay High Court had previously disposed of identical petitions by granting certain reliefs to the petitioners. The petitioners expressed their desire to avail of the Condonation of Delay Scheme 2018 (CODS-2018) and undertook not to revive the companies struck off due to non-compliance in the future.

The petitioners' legal counsel submitted that, in light of the previous order by the Bombay High Court and the undertakings made by the petitioners, the current petitions should be disposed of accordingly. Both parties agreed to the disposal of the petitions by recording the undertakings of the petitioners, with the respondents retaining the liberty to pursue further legal remedies if necessary.

After reviewing the records and previous court orders, the High Court decided to dispose of the petitions in line with the undertakings given by the petitioners in the previous cases. The petitioners were directed to take immediate steps in accordance with Section 248(2) of the Companies Act, 2013, and the CODS-2018 within ten days. The operation of the disqualification list concerning the petitioners was stayed until a specified date or until the respondents made a decision regarding the petitioners' request.

The High Court ordered the petitioners to take necessary actions within ten days, including activation of their Director Identification Number (DIN) and Digital Signature Certificate (DSC) by the Registrar of Companies. The Writ Petitions were disposed of based on the terms outlined in the order, with both parties instructed to act upon the authenticated copy of the judgment for compliance.