Delhi High Court - Orders
Rajesh Sharma & Anr vs Union Of India Through: Its Secretary ... on 17 March, 2021
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:22.03.2021 12:21:08
$~37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 3510/2021 & CM APPLs. 10626-27/2021
RAJESH SHARMA & ANR. ..... Petitioners
Through: Mr. Anuj Kapoor, Advocate.
versus
UNION OF INDIA THROUGH: ITS SECRETARY MINISTRY OF
CORPORATE AFFAIRS & ANR. ..... Respondents
Through: Mr. G.D. Sharma, Sr. Panel counsel
along with Mr. Akshay Kumar Singh,
Advocate. (M:9810777859)
CORAM:
JUSTICE PRATHIBA M. SINGH
ORDER
% 17.03.2021
1. The Petitioners are Directors of First Quadrant Securities Pvt. Ltd. The said company was struck off from the Register of Companies due to non-filing of balance sheets and annual returns. The Petitioners were also disqualified under Section 164(2)(a) of the Companies Act, 2013 for a period from 1st November, 2016 to 31st October, 2021. Their DIN/DSC was also deactivated.
2. Ld. Counsel for the Petitioners submits that the Petitioners wish to seek restoration of the struck off company and also wish to incorporate a new company.
3. This Court has considered the legal position relating to activation of DIN/DSC numbers of directors of defaulting companies in Anjali Bhargava (supra). The relevant portion of the said order reads:
W.P.(C) 3510/2021 Page 1 of 3Digitally Signed By:DINESH SINGH NAYAL Signing Date:22.03.2021 12:21:08
"4. There are four categories of Directors that are approaching Courts seeking setting aside of disqualification and activation of DIN/DSC numbers.
(a) to (c)..................
(d) Disqualified directors of struck off companies seeking appointment as directors in other/new companies:
The purpose of CFSS-2020 has been elucidated in the circular of the Ministry of Corporate Affairs as follows:
"In furtherance of the Ministry's Circular No 11/2020, dated 24th March, 2020 and in order to facilitate the companies registered in India to make a fresh start on a clean slate, this Ministry has decide to take certain alleviative measures for the benefit of all companies."
This scheme 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 disqualification of defaulting companies was a step which was taken sometime in 2016-17 in order to ensure that filing of regular returns and compliances are undertaken strictly as per the provisions of the Act. It was also meant to be a measure to ensure that entities that are not conducting businesses are not misused as `shell companies' for any improper activities. A substantial part of the disqualification period has already been completed. The introduction of the CFSS is itself a step for `providing a fresh start'. Under such circumstances, continuation of the disqualification would defeat the Scheme and its purpose.
5. In furtherance of the purpose of this scheme, directors of struck off companies who seek to be W.P.(C) 3510/2021 Page 2 of 3 Digitally Signed By:DINESH SINGH NAYAL Signing Date:22.03.2021 12:21:08 appointed as directors of other/new companies, ought to be provided an opportunity to avail of this scheme, provided that they have undergone a substantial period of their disqualification. The scheme clearly seeks to provide a fresh start for directors of defaulting companies who seek appointment in other companies or wish to start new businesses. Therefore, if a substantial period has passed since the disqualification of such directors, they ought to be given an opportunity to avail of the scheme."
4. Insofar as the setting up of a new company is concerned, following the judgment of this Court in Anjali Bhargava (supra), the Petitioners would fall under category 'd' as the disqualification took place in 2017 for the period from 1st November, 2016 to 31st October, 2021. A substantial period of disqualification has already been undergone.
5. Following the judgments of this Court in Mukut Pathak & Ors. v. UOI & Ors., 265 (2019) DLT 506 and Anjali Bhargava & Anr. v. UOI & Anr. [W.P.(C) 11264/2020, decided on 6th January, 2021]., the DIN/DSC of the Petitioners qua the struck off company is directed to be reactivated within a week.
6. Insofar as the restoration of the struck off company is concerned, the Petitioners, if so advised, may approach the NCLT, in accordance with law.
7. The petition is disposed of in the above terms. All pending applications are also disposed of.
PRATHIBA M. SINGH, J.
MARCH 17, 2021 Dj/AP W.P.(C) 3510/2021 Page 3 of 3