TMI Blog2020 (9) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Government in order to give a reprieve to such companies who have defaulted in filing documents and they have been allowed to file their requisite documents and to regularize their operations, so as to not face disqualification. The Scheme also envisages non-imposition of penalty or any other charges for belated filing of the documents - The purpose and intent of the Scheme is to allow a fresh start for companies which have defaulted. In order for the Scheme to be effective, Directors of these companies ought to be given an opportunity to avail of the Scheme. The launch of the Scheme itself constitutes a fresh and a continuing cause of action. Under such circumstances, the question of delay or limitation would not arise. Considering the COVID-19 pandemic, the MCA has launched the Fresh Start Scheme-2020, which ought to be given full effect. It is not uncommon to see directors of one company being directors in another company. Under such circumstances, to disqualify directors permanently and not allowing them to avail of their DINs and DSCs could render the Scheme itself nugatory. Petition allowed. - W.P.(C) 5490/2020 & CM APPLs. 19779-80/2020 - - - Dated:- 2-9-2020 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pers for Koksun Papers, have been disqualified and their DINs and DSCs have been deactivated. As a result, Koksun Papers is not able to avail the benefit of the said Scheme. Ld. counsel thus prays that in view of the judgment in Mukut Pathak (supra) as also subsequent orders where the said judgment has been followed, the disqualification of the Petitioners be set aside. 6. On behalf of Ministry of Corporate Affairs, Mr. George, ld. counsel submits that the judgment in Mukut Pathak (supra) has been challenged by way of an appeal by the Ministry and the said LPA is pending, though no stay has been granted. Ld. counsel also relies upon the recent order passed by the ld. Division Bench in two writ petitions i.e. Anamika Devi v. Union of India. Anr.,[W.P.(C) 4356/2020, decided on 20th July, 2020] and Gaurav Kumar v. Union of India Anr., [W.P.(C) 4357/2020, decided on 20th July, 2020] to argue that the disqualification list having been notified in 2017, the challenge to the same is extremely belated, hence the writ petition deserves to be dismissed. 7. The Court has heard the ld. counsel for the parties and perused the record. The judgment in Mukut Pathak (supra), insofar a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the disqualification under Section 164(2) of the Act after 07.05.2018. However, the office of the director shall not become vacant in the company which is in default under sub-section 164(2) of the Act. 114. As discussed above, there is also much merit in the contention that the DIN and DSC of the petitioner could not be deactivated. Accordingly, the respondents are directed to reactivate the DIN and DSC of the petitioners. 8. The judgment in Mukut Pathak (supra) has been squarely followed in Kailash Singhal Anr. v. Union of India Anr., [W.P.(C) 5261/2020, decided on 14th August, 2020] and Rajendra Kumar Agrawal v. Union of India Anr., [W.P.(C). 4988/2020, decided on 24th August, 2020]. 9. Coming to the effect of the order of the ld. Division Bench in Anamika Devi (supra) and Gaurav Kumar (supra), relied upon by Mr. George the ld. Division Bench in the said two writ petitions had observed as under: 1. Both the petitions have been filed by the petitioners praying inter alia that the respondent No.1/Union of India and the respondent No.2/Registrar of Companies be directed not to treat them as disqualified Directors under the provisions of Section 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same time the Court holds that powers of judicial review are discretionary and the question of delay is to be examined in the particular facts and circumstances of each case. 11. In the present case, the facts and circumstances show that the Companies Fresh Start Scheme (CFSS) is a new scheme, which has been notified on 30th March, 2020. This Scheme was not invoked before the Ld. Division Bench. The scheme is obviously launched by the Government in order to give a reprieve to such companies who have defaulted in filing documents and they have been allowed to file their requisite documents and to regularize their operations, so as to not face disqualification. The Scheme also envisages non-imposition of penalty or any other charges for belated filing of the documents. The relevant provisions of the said Scheme are set out below: 4. In order to give such an opportunity to the defaulting companies and to enable them to file the belated documents in the MCA-21 registry, the Central Government in exercise of powers conferred under section 460 read with section 403 of the Companies Act, 2013 has decided to introduce a Scheme namely Companies Fresh Start Scheme, 2020 (CFSS-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to higher additional fee on account of delay; iii) It grants immunity from launch of prosecution or of proceedings for imposition of penalty on account of delay associated with certain filings. For the said filings, only normal fee would be payable; iv) Any defaulting company can file the belated documents, which were due for filing on any given date, as per the Scheme. Normal fee would be payable for such filing by the defaulting company under the Companies (Registration Offices and Fee) Rules, 2014 and no additional fee shall be payable; v) To the extent that any prosecution has been launched or penalty has been imposed for the delay associated with the filings of belated documents, it provides that the same shall not be launched and immunity has been provided; vi) Applications can be made for seeking immunity in respect of belated documents. Once the documents are taken on file or approved by the designated authority, such applications would have to be filed within six months from the date of closure of the Scheme; vii) To avail benefit of the Scheme, the defaulting company would have to withdraw any appeal that it may have filed against prosecutio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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