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TMI Blog2020 (9) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... rector Identification Numbers ("DIN") and Digital Signature Certificates ("DSC") have also been cancelled. In view thereof, they are unable to carry on the business and file returns etc. in the active company Koksun Papers. By the present petition, the disqualification is challenged and quashing is sought of the impugned list of disqualified directors. 4. Mr. Nikhil Verma, ld. counsel appearing for the Petitioners relies upon Sections 164(2) and 167(1)(a) of the Act to submit that the said sections were materially amended by the Companies Amendment Act, 2018, and introduction of the disqualification in proviso under Section 167(1)(a), comes into effect only on 7th May, 2018. Thus, in respect of the companies, in which the Petitioners were already directors, a conjoint reading of Section 164(2) and 167(1)(a) would show that the disqualification would not apply in a retrospective manner. Ld. counsel relies upon the judgment of this Court in Mukut Pathak & Ors. v. Union of India & Ors., 265 (2019) DLT 506. 5. The further submission of Mr. Verma is that Koksun Papers is entitled to take benefit of the Companies Fresh Start Scheme (CFSS) 2020 (hereinafter, "Scheme") dated 30th March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l companies other than the defaulting company. xxxx 113. As discussed above, the Scheme of Section 164(2) and Section 167(1)(a) of the Act was materially amended by the Companies Amendment Act, 2018 by introduction of the provisos to Section 164(2) and Section 167(1)(a) of the Act with effect from 07.05.2018. All directors who incur disqualification under Section 164(2) of the Act after the said date, would also cease to be directors in other companies (other than the defaulting company) on incurring such disqualification. However, the operation of the provisos to Section 164(2) and Section 167(1)(a) of the Act cannot be read to operate retrospectively. The proviso to Section 167(1) of the Act imposes a punitive measure on directors of defaulting companies. Such being the nature of the amendment, the same cannot be applied retrospectively. It is well settled that the Statute that impairs an existing right, creates new disabilities or obligations - otherwise than in regard to matters of procedure - cannot be applied retrospectively unless the construction of the Statute expressly so provides or is required to be so construed by necessary implication. Therefore, the office of a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the petitioners is that they were unaware of the publication of the aforesaid List till recently. He however concedes that there is no explanation offered in the petition for the delay. 4. The aforesaid submission is not acceptable. Ignorance cannot bestow any benefit on a litigant and nor can it be a ground to condone a delay of almost three years in approaching the court for relief. We may note that the petitioners had been disqualified for a period of five years commencing from 0 1.11.2016 and continuing to remain in force till 31.10.2021. By now, a little over one year of the period of disqualification is left to expire. But no steps have been taken by the petitioners to seek legal recourse in all this duration. 5. Powers of judicial review vested in the court are discretionary in nature and in particular facts and circumstances, the court can decline to exercise the said power more so, when a party approaches the court for relief with a delay of almost three years, without an explanation worth the name for the said delay. 6. For the aforesaid reasons, we decline to entertain the present petitions on the ground of delay, which are accordingly dismissed along with the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be payable. Immunity from the launch of prosecution or proceedings for imposing penalty shall be provided only to the extent such prosecution or the proceedings for imposing penalty under the Act pertain to any delay associated with the filings of belated documents................ xxx (ix) Scheme not to apply in certain cases - This scheme shall not apply :- a. to companies against which action for final notice for striking off the name u/s 248 of the Act (previously section 560 of Companies Act, 1956) has already been initiated by the Designated authority; b. where any application has already been filed by the companies for action of striking off the name of the company from the register of companies; c. to companies which have amalgamated under a scheme of arrangement or compromise under the Act; d. to vanishing companies; e. Where any increase in authorized capital is involved (Form SH-7) and also charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9);" 12. The salient features of the Scheme are: i) It has been launched to facilitate a fresh start, on a clean slate, for companies registered in India; ii) Alleviative measures under the Scheme are for the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ualification and cancellation of DINs would be a severe impediment for them in availing remedies under the Scheme, in respect of the active company. The purpose and intent of the Scheme is to allow a fresh start for companies which have defaulted. In order for the Scheme to be effective, Directors of these companies ought to be given an opportunity to avail of the Scheme. The launch of the Scheme itself constitutes a fresh and a continuing cause of action. Under such circumstances, the question of delay or limitation would not arise. The ld. Division Bench did not have an occasion in the case of Anamika Devi (supra) and Gaurav Kumar (supra) to consider this Scheme. 14. In view of the fact that in the present case, the Petitioners are directors of an active company Koksun Papers in respect of which certain documents are to be filed and the said company is entitled to avail of the Scheme, the suspension of the DINs would not only affect the Petitioners qua the company, whose name has been struck off, but also qua the company which is active. Thus, the facts and circumstances of this case are different from the facts in the case before the ld. Division Bench. 15. Considering the COV ..... X X X X Extracts X X X X X X X X Extracts X X X X
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