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2020 (12) TMI 1137 - HC - Companies LawSeeking directions for reactivation of their Director Identification Numbers (DIN) and Digital Signature Certificates (DSC) - non-compliance and non-filing of balance sheets and returns of the Company for several years - disqualification from acting as Directors, under Section 164(2)(a) of the Companies Act, 2013 - HELD THAT - In the present cases, the first period of disqualification has already ended. The second period of disqualification of five years as per notice dated 15th September 2017 ends on 31st October 2021. A substantial period of the disqualification has already been undergone by the Petitioners. Re-appointment of new directors, seeking approval for the same and then filing documents of the Company under the Scheme, would be an impractical solution. Thus, while leaving the questions of law open, in the facts and circumstances of these two cases, in order to enable the Petitioners/Directors to avail of the Scheme, this Court directs that the DINs and DSC of the Petitioners be reactivated within 24 hours. Since the ld. counsel for the Registrar of Companies (ROC) are appearing before this court today, the ROC need not wait for a copy of this order in order to reactivate the DINs/ DSCs - Petition disposed off.
Issues:
Reactivation of DIN and DSC numbers for Directors of a company to avail the Companies Fresh Start Scheme 2020. Analysis: 1. The petitioners, who are Directors of a company, filed writ petitions seeking directions for the reactivation of their Director Identification Numbers (DINs) and Digital Signature Certificates (DSCs) to enable them to file necessary documents. Their numbers were deactivated due to non-compliance with filing requirements, resulting in disqualification under Section 164(2)(a) of the Companies Act, 2013. 2. The legality of the circular dated 15th September 2017, which led to disqualification, was challenged. The matters were listed before a Division Bench to be heard with similar petitions. The petitioners relied on a previous judgment and sought reactivation to utilize the Companies Fresh Start Scheme 2020. 3. The disqualification of the petitioners occurred on two occasions, leading to deactivation of DIN and DSC numbers. The petitioners sought reactivation to benefit from the Scheme, which allows companies to rectify defaults without facing penalties. 4. The Scheme, launched to assist defaulting companies, provides an opportunity to file belated documents without additional fees. The petitioners' disqualification posed a hindrance to availing of the Scheme, necessitating the reactivation of their DINs and DSCs. 5. Considering the purpose of the Scheme and the practical challenges faced by the petitioners, the court directed the reactivation of their DINs and DSCs within 24 hours. This decision aimed to enable the petitioners to benefit from the Scheme before its deadline of 31st December 2020, despite the ongoing consideration of related legal issues. 6. The judgment highlighted the importance of allowing active companies to rectify defaults and emphasized the need for directors to have the opportunity to avail themselves of the Scheme. Reactivating the DINs and DSCs was deemed necessary to facilitate a fresh start for companies facing disqualification issues. 7. The court's decision to reactivate the DINs and DSCs of the petitioners was made to align with the objectives of the Companies Fresh Start Scheme 2020, enabling the petitioners to address their filing defaults and regularize their company's operations without undue delay. 8. By reactivating the DINs and DSCs promptly, the court provided a practical solution for the petitioners to benefit from the Scheme and avoid impractical reappointment procedures. This decision balanced the interests of the petitioners with the objectives of the Scheme, ensuring a fair opportunity for companies to rectify their defaults.
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