2018 (4) TMI 1843 - HC - Companies Law

Court grants relief under Condonation of Delay Scheme, 2018, for defaulting companies

The court issued notice to respondents and directed acceptance of notice on behalf of the Union of India. It referenced the Condonation of Delay Scheme, ... Submission of defaulted returns - Condonation of Delay Scheme, 2018 - High Court of Delhi has permitted the Directors to file compliance under CODS, 2018 - Applicability of of Section 164(2)(a) as well as Section 167 of the Companies Act of 2013 - HELD THAT:- In order to balance the equities while the respondents rights to argue and make the submissions are reserved and four weeks time is granted to file reply. This Court deems it appropriate to allow the petitioners to continue to hold the post of Director in the defaulting Companies as well as other Companies so that they may be able to avail the benefit of CODS, 2018 during the pendency of the writ petition. Learned Counsel further submits that on account of Company in default names having been struck off in terms of Section 248(5) of the Companies Act, 2013, the benefit of CODS, 2018 may not be allowed online. It is also prayed that they may be allowed to file hard copies of returns under CODS, 2018 and the respondents may be directed to accept the same - the prayer seems to be reasonable. Petition disposed off. Issues:1. Notice to respondents and acceptance of notice on behalf of Union of India.2. Condonation of Delay Scheme, 2018 and its application to defaulting companies.3. Disqualification of directors under Sections 164(2)(a) and 167 of the Companies Act, 2013.4. Balance of equities and granting time to file a reply.5. Permission for petitioners to continue holding director positions during the pendency of the writ petition.6. Filing of hard copies of returns under CODS, 2018 for companies struck off under Section 248(5) of the Companies Act, 2013.7. Acceptance of hard copy returns and extension of benefits under CODS, 2018.Analysis:1. The judgment begins by issuing notice to the respondents and directing Mr. Samit Bishnoi to accept notice on behalf of the Union of India in all cases, with two sets of each writ petition to be served upon him.2. Reference is made to the Condonation of Delay Scheme, 2018 (CODS, 2018) introduced by the Union of India, allowing defaulting companies to submit returns by a specified deadline. The High Court of Delhi's order in a related case is cited, permitting directors of defaulting companies to file compliance under CODS, 2018.3. The petitioners argue that they should not be disqualified under Sections 164(2)(a) and 167 of the Companies Act, 2013, as long as they file returns by the extended deadline of 30.04.2018, emphasizing that the provisions should not be strictly applied in their case.4. The judgment aims to balance equities, reserving the respondents' rights to argue and granting four weeks to file a reply, ensuring a fair opportunity for all parties to present their case.5. During the pendency of the writ petition, the court allows the petitioners to retain their director positions in both defaulting and other companies to benefit from CODS, 2018, demonstrating a practical approach to the situation.6. The issue of filing hard copies of returns under CODS, 2018 for companies struck off under Section 248(5) of the Companies Act, 2013 is raised, requesting permission to submit physical copies and directing the respondents to accept them.7. Considering the circumstances and provisions discussed, the court deems the petitioners' prayer reasonable, directing that hard copy returns for struck-off companies be accepted, and any benefits under CODS, 2018 be extended, with a reminder that this order does not establish any rights for the petitioners until final disposal of the writ petitions.