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2023 (3) TMI 248 - HC - Companies LawSeeking directions to the Respondents to allow benefit of Companies Fresh Start Scheme (CFSS) in respect of overdue filings to the Petitioner who could not avail the benefit of filing under CFSS-2020 by 31st December, 2020 - HELD THAT - After the Petitioner company was incorporated in the year 2003, only one Balance Sheet/ Annual Return was filed. There is no explanation whatsoever for non-filing of the documents and the balance sheets for more than a decade by the company. This led to the company being struck off and disqualification of the directors in 2017. The Petitioner has chosen to get the company restored only in 2019 and the DIN restored in September, 2020 after filing of a writ petition. If there was any delay in processing of the DIN restoration pursuant to the orders, which were passed by this Court in RAVINDER SINGH CHAUHAN VERSUS MINISTRY OF CORPORATE AFFAIRS ANR 2020 (9) TMI 1285 - DELHI HIGH COURT , the Petitioner ought to have availed of its remedies in accordance with law to ensure restoration of the DIN during the subsistence of CFSS. The Petitioner cannot be seen as being recalcitrant in its filing of documents and forms and choose to seek extension of benefits of CFSS, which is merely an alleviating measure. The said Scheme starts by saying that the alleviating measure has been introduced by the government primarily in view of the COVID-19 pandemic and was extended in view of the same. The Petitioner has been a consistent defaulter in filing the documents and forms including the balance sheets for over several years. Thus, the CFSS cannot be extended in this manner beyond the date of operation inasmuch as there were a large number of companies, which were disqualified and if benefit under CFSS is extended to such companies beyond the date, the said scheme would be completely unworkable. The Petitioner was quite conscious of the fact that it had to file its documents and balance sheets in time, but has chosen not to do so. Thus, the long delay by the Petitioner cannot be completely sought to be condoned by the two or three months delay in restoring the DIN by the ROC. The Petitioner was conscious of the deadlines under the CFSS and ought to have taken its remedies, but has chosen not to do so. In view of the same, this would not be a case of an extension the benefit of the CFSS scheme to the Petitioner - considering that the DIN was restored only after the order was passed by the Court in above cited case, the documents and forms shall be permitted to be submitted by the Petitioner along with requisite fee in accordance with the Companies Act and Rules. Petition disposed off.
Issues:
- Petitioner seeking benefit of Companies Fresh Start Scheme (CFSS) - Restoration of company and directors' DINs - Delay in restoration of DIN affecting CFSS benefit eligibility Analysis: 1. The petitioner, a company struck off for non-filing of documents, sought directions to avail the benefit of CFSS for overdue filings. The company was restored after being struck off, and the DIN of one director was also restored after a delay. 2. The court noted the history of non-compliance by the petitioner, leading to the strike-off in 2017 and subsequent restoration in 2019. The delay in restoring the DIN post-court order in 2020 was highlighted, questioning the petitioner's diligence in seeking CFSS benefits. 3. The petitioner argued for CFSS benefits, citing compliance efforts post-restoration. However, the respondent contended that extending CFSS benefits post-scheme deadline would favor defaulting companies, contrary to the scheme's purpose. 4. The court emphasized the petitioner's prolonged non-compliance and the critical nature of timely filings. It rejected extending CFSS benefits due to the petitioner's awareness of deadlines and failure to act promptly. 5. Ultimately, the court allowed document submissions with fees as per law but denied CFSS benefits extension. No prosecution for filing delays was imposed due to the unique circumstances. The petition and pending applications were disposed of accordingly.
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