Court grants urgent relief to directors by reactivating DINs & DSCs for Companies Fresh Start Scheme

The court addressed the disqualification of directors under Section 164(2)(a) of the Companies Act, the cancellation of their DINs and DSCs, the non-retrospective application of legal provisions, and the urgent relief sought to participate in the Companies Fresh Start Scheme 2020. The court granted the relief by ordering the reactivation of the DINs and DSCs within three days to enable the petitioners to comply with statutory requirements and scheme deadlines before the impending cutoff date of 30.09.2020.

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Issues:
1. Disqualification of directors under Section 164(2)(a) of the Companies Act, 2013.
2. Cancellation of Director Identification Numbers (DINs) and Digital Signature Certificates (DSCs).
3. Application of the proviso to Section 167(1)(a) of the Act retrospectively.
4. Petition seeking relief for reactivation of DINs and DSCs to avail the Companies Fresh Start Scheme 2020 (CFSS).

Issue 1: Disqualification of directors under Section 164(2)(a) of the Companies Act, 2013:
The petitioners were disqualified as directors of a company due to non-filing of statutory returns, leading to their names being included in the 'List of Disqualified Directors.' The disqualification was for a period of five years, from 01.11.2016 to 31.10.2021, as per Section 164(2)(a) of the Act. The restoration of the company's name by the National Company Law Tribunal (NCLT) did not automatically lift the disqualification of the petitioners.

Issue 2: Cancellation of Director Identification Numbers (DINs) and Digital Signature Certificates (DSCs):
The cancellation of the petitioners' DINs and DSCs was a consequence of their disqualification as directors under Section 164(2)(a) of the Act. This cancellation hindered their ability to comply with the NCLT's directions for filing requisite documents to restore the company's name and to avail the benefits of the Companies Fresh Start Scheme 2020 (CFSS).

Issue 3: Application of the proviso to Section 167(1)(a) of the Act retrospectively:
The petitioners argued that the cancellation of their DINs and DSCs was done without legal authority as the proviso to Section 167(1)(a) of the Act, which allows such cancellations, cannot be applied retrospectively. The court referred to a previous judgment that clarified the non-retrospective application of this provision and held that the cancellation of DINs and DSCs in this case was not valid.

Issue 4: Petition seeking relief for reactivation of DINs and DSCs to avail the Companies Fresh Start Scheme 2020 (CFSS):
The petitioners sought the reactivation of their DINs and DSCs to participate in the CFSS, which provided an opportunity for defaulting companies to file overdue documents without additional fees. The urgency arose from the impending deadline of 30.09.2020 to avail of the scheme. The court allowed the petition, directing the reactivation of the DINs and DSCs within three days to enable the petitioners to apply for the CFSS before the deadline.

In conclusion, the judgment addressed the disqualification of directors under the Companies Act, the cancellation of their DINs and DSCs, the non-retrospective application of relevant legal provisions, and the urgent relief sought by the petitioners to participate in the CFSS. The court granted the requested relief by ordering the reactivation of the DINs and DSCs to facilitate the petitioners' compliance with statutory requirements and scheme deadlines.

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