Delhi High Court sets aside director Disqualification, ordered reactivation of DIN and DSC [Read Order]

Delhi High Court - director disqualification - ordered reactivation - DIN - DSC - Taxscan

The Delhi High Court set aside the director’s disqualification and ordered reactivation of Director Identification Number (DIN) and Digital Signature Certificate (DSC).

The petitioners are the directors of two Companies namely Bhargava Films Pvt. Ltd. and Talent Scanner Pvt. Ltd. The Petitioners were disqualified as directors in respect of Bhargava Films Pvt. Ltd. due to non-filing of balance-sheet and other returns with the Registrar of Companies. The company was also struck off from the Register of Companies. The disqualification occurred on 1st November, 2016.

The prayer of the petitioners is that their DIN and DSC be reactivated to permit them to avail of the Companies Fresh Start Scheme, 2020 (CFSS-2020).

There are four categories of Directors that are approaching Courts seeking setting aside of disqualification and activation of DIN/DSC numbers.

Firstly, directors who have been disqualified prior to 7th May 2018, qua other companies in addition to the defaulting company.

Secondly, directors who have been disqualified post 7th May 2018, qua other `active’ companies.

Thirdly, directors of ‘active’ companies who have been disqualified.

Lastly, Disqualified directors of struck off companies seeking appointment as directors in other/new companies.

The CFSS 2020 has been introduced in view of the COVID-19 pandemic with the aim to enable a fresh start to defaulting companies and directors of such companies. The CFSS-2020 was last extended till 31st December 2020. If the scheme is extended beyond 30th December, 2020, directors who fall in any of the categories mentioned above ought to be given an opportunity to avail of the same.

The single judge bench of Justice Prathiba M. Singh observed that the Petitioners in the present petition fall in category in respect of directors who have been disqualified prior to 7th May 2018, qua other companies in addition to the defaulting company.

The court held that the Petitioners’ DIN or DSC in respect of Talent Scanner Pvt. Ltd., would be liable to be reactivated and the Petitioners would not be treated as suspended from the position of directors in Talent Scanner Pvt. Ltd.

However, the court said that in respect of Bhargava Films Pvt. Ltd. is concerned, the Petitioners are permitted to file the relevant documents and seek condonation of delay in accordance with the applicable laws and regulations, if the same is permissible.

The petitioners are the directors of two Companies namely Bhargava Films Pvt. Ltd. and Talent Scanner Pvt. Ltd. The Petitioners were disqualified as directors in respect of Bhargava Films Pvt. Ltd. due to non-filing of balance-sheet and other returns with the Registrar of Companies. The company was also struck off from the Register of Companies. The disqualification occurred on 1st November, 2016.

The prayer of the petitioners is that their DIN and DSC be reactivated to permit them to avail of the Companies Fresh Start Scheme, 2020 (CFSS-2020).

There are four categories of Directors that are approaching Courts seeking setting aside of disqualification and activation of DIN/DSC numbers.

Firstly, directors who have been disqualified prior to 7th May 2018, qua other companies in addition to the defaulting company.

Secondly, directors who have been disqualified post 7th May 2018, qua other `active’ companies.

Thirdly, directors of ‘active’ companies who have been disqualified.

Lastly, Disqualified directors of struck off companies seeking appointment as directors in other/new companies.

The CFSS 2020 has been introduced in view of the COVID-19 pandemic with the aim to enable a fresh start to defaulting companies and directors of such companies. The CFSS-2020 was last extended till 31st December 2020. If the scheme is extended beyond 30th December, 2020, directors who fall in any of the categories mentioned above ought to be given an opportunity to avail of the same.

The single judge bench of Justice Prathiba M. Singh observed that the Petitioners in the present petition fall in category in respect of directors who have been disqualified prior to 7th May 2018, qua other companies in addition to the defaulting company.

The court held that the Petitioners’ DIN or DSC in respect of Talent Scanner Pvt. Ltd., would be liable to be reactivated and the Petitioners would not be treated as suspended from the position of directors in Talent Scanner Pvt. Ltd.

However, the court said that in respect of Bhargava Films Pvt. Ltd. is concerned, the Petitioners are permitted to file the relevant documents and seek condonation of delay in accordance with the applicable laws and regulations, if the same is permissible.

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