Court Grants Interim Stay on Director Disqualification Notices

The court granted an interim stay on disqualification notices issued to a director under Section 164(2)(a) of the Companies Act, 2013 for default in submitting returns. The court directed activation of the Director Identification Number (DIN) and allowed the petitioner to avail the Condonation of Delay Scheme, 2018 for removal of disqualification. The petitioner was instructed to submit fees, comply with the CODS Scheme, 2018, and upon fulfillment, the names of disqualified directors would be removed. The writ petition was disposed of with orders for removal of names within two weeks of fee submission.

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Issues:
Disqualification of directors under Section 164(2)(a) of the Companies Act, 2013 for default in submitting returns for three financial years.
Petition seeking quashing of the disqualification notices dated September 6, 2017, and September 12, 2017.
Activation of Director Identification Number (DIN) of the petitioner.
Availability of Condonation of Delay Scheme, 2018 (CODS Scheme, 2018) for seeking removal of disqualification.
Requirement to comply with CODS Scheme, 2018 for restoration of directorship.
Directions issued by the court regarding submission of fees, compliance with CODS Scheme, 2018, and removal of names from the list of disqualified directors.

Analysis:
The judgment pertains to a writ petition filed by a director of a company, challenging the disqualification notices issued under Section 164(2)(a) of the Companies Act, 2013 due to default in submitting returns for three consecutive financial years. The petitioner sought the quashing of the said notices dated September 6, 2017, and September 12, 2017. The court granted an interim stay on these notices and directed the respondents to activate the Director Identification Number (DIN) of the petitioner.

The respondents informed the court that the deficiencies attributed to the directors had been addressed, and attention was drawn to the Condonation of Delay Scheme, 2018 (CODS Scheme, 2018) enabling defaulters to seek removal of disqualification. The court was informed that to avail the benefits of the CODS-2018, the petitioners needed to fill up the CODS Form, pay a fee of Rs. 30,000, and file the required returns. The petitioner expressed the intention to avail the CODS Scheme, 2018.

In light of the submissions, the court directed the petitioner to submit the requisite fees within two weeks, following which the respondents would take steps to remove the names of the petitioners from the list of disqualified directors. The court clarified that since the petitioners had already submitted the deficient returns, there was no need to resubmit them along with the writ petition. The orders regarding the removal of names would be posted on the website and communicated to the petitioners within two weeks from the deposit of the requisite form and fees. The writ petition was disposed of accordingly.

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