2021 (1) TMI 1228 - HC - Companies Law

Disqualification of directors - Section 164 and 167 of the Companies Act, 2013 - HELD THAT - The Petitioners, being directors in two companies, following MUKUT PATHAK ORS., YOGESH KHANTWAL, AARTI KHANTWAL, AND VINEET WADHWA VERSUS UNION OF INDIA AND ANR. 2019 (11) TMI 319 - DELHI HIGH COURT , the Petitioners DIN/DSC in respect of Talent Scanner Pvt. Ltd., would be liable to be reactivated and the Petitioners would not be treated as suspended from the position of directors in Talent Scanner Pvt. Ltd. Insofar as Bhargava Films Pvt. Ltd. is concerned, the Petitioners are permitted to file the relevant documents and seek condonation of delay in accordance with the applicable laws and regulations, if the same is permissible. Petition disposed off.

Summary

Issues Involved:
1. Disqualification of directors under Sections 164 and 167 of the Companies Act, 2013.
2. Reactivation of Director Identification Number (DIN) and Digital Signature Certificate (DSC) for availing the Companies Fresh Start Scheme, 2020 (CFSS-2020).
3. Interpretation of judgments related to disqualification of directors.
4. Categories of directors seeking setting aside of disqualification and activation of DIN/DSC numbers.

Detailed Analysis:

1. Disqualification of Directors under Sections 164 and 167:
The judgment addresses the disqualification of directors of two companies due to non-filing of balance sheets and returns with the Registrar of Companies. The disqualification occurred on 1st November, 2016. The petitioners sought reactivation of their DIN and DSC to benefit from the CFSS-2020, which aimed to provide a fresh start for defaulting companies and their directors.

2. Reactivation of DIN and DSC for CFSS-2020:
The judgment cites previous cases like Mukut Pathak, Sandeep Agarwal, and Radhika Byrne to analyze the reactivation of DIN and DSC numbers under CFSS-2020 for different categories of directors. It highlights the importance of allowing directors of active companies to avail of the scheme to rectify defaults and challenges disqualifications.

3. Interpretation of Judgments on Director Disqualification:
The judgment interprets the legal aspects arising from disqualification of directors under Sections 164 and 167 of the Companies Act, 2013. It discusses the retrospective effect of statutory amendments and the implications for directors disqualified before and after 7th May 2018 based on relevant case laws.

4. Categories of Directors Seeking Relief:
The judgment categorizes directors into four groups based on the timing and nature of disqualification. It provides detailed analysis and guidelines for each category, emphasizing the need to align disqualification provisions with the objectives of the CFSS-2020 to facilitate a fresh start for defaulting companies and directors.

In conclusion, the judgment provides a comprehensive analysis of the legal issues surrounding the disqualification of directors, reactivation of DIN and DSC numbers, and the application of the Companies Fresh Start Scheme, 2020. It offers guidance for different categories of directors seeking relief and underscores the importance of aligning legal provisions with the scheme's objectives to promote compliance and facilitate a fresh start for defaulting companies and their directors.