TMI Blog2020 (9) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... ed retrospectively. In the present case, admittedly, the Company itself stood struck off the register on 30.06.2017 and was restored only on 22.10.2019, and the default on its part as also that of the petitioners took place prior to 30.06.2017. This implies that the ratio of the decision in Mukut Pathak (supra) is squarely applicable to the facts of this case since it specifically clarifies that any Company or Directors committing defaults under Section 164(1) of the Act before 07.05.2018 cannot invite application of the proviso to Section 167(1)(a) of the Act and a necessary corollary thereof is that their DINs and the DSCs cannot be cancelled either. In view the fact that the petitioners, in order to apply for the CFSS, need to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any other nature or any other direction/order directing the Respondent Nos. 1 and 2 not to treat the Petitioner as disqualified directors under Section 164(2)(a) of the Companies Act, 2013 and for any consequential measures and/or effects arising/contemplated therefrom; and (d) Pass such other and further orders as this Hon'ble Court may deem fit, proper and just on the facts and circumstances of the case. 2. On 17.03.2008, when M/s Agarwal Bandhu Infra Developers Private Limited (hereinafter referred to as the Company ) was incorporated as a company, the two petitioners were appointed as its directors. Although the company continued to run smoothly for a few years and filed its statutory returns in a timely manner ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted stage, by condoning the delay insofar as it concerns any liability to pay additional fee for the delay in filing. The Scheme also promises to grant these companies immunity from any proceedings or prosecution instituted for imposing penalty on account of the delay. The window to avail of this Scheme, however, is open only till 30.09.2020 and, for this reason, the petitioners have sought the urgent intervention of this Court for a very particular purpose; they are aggrieved because they are unable to avail either the CFSS or comply with the directions of the learned NCLT, since their DINs and DSCs remain cancelled. 5. Mr. Tiwari, learned counsel for the petitioner submits that as per the directions of the learned NCLT, the sole condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion in Mukut Pathak and, therefore, the act of cancelling the DSCs and DINs of the petitioners cannot hold ground. He, therefore, prays that the petition be allowed, and the respondents be directed to forthwith activate the DINs of the petitioners as also their DSCs, which had been illegally cancelled by the respondents. 7. In their detailed counter affidavit, the respondents have neither denied that the default on the part of the petitioners and the Company took place prior to 07.05.2018, nor have they denied that the decision in Mukut Pathak (supra) is applicable to the present case. They have also not denied that pursuant to the order passed by the NCLT on 22.10.2019, the name of the Company has been restored in the register of compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffer any of the disqualifications under Section 164(2) on or after 07.05.2018, the clear implication of the provisos to Section 164(2) and 167(1)(a) of the Act are that they would demit their office in all companies other than the defaulting company. 113. As discussed above, the Scheme of Section 164(2) and Section 167(1)(a) of the Act was materially amended by the Companies Amendment Act, 2018 by introduction of the provisos to Section 164(2) and Section 167(1)(a) of the Act with effect from 07.05.2018. All directors who incur disqualification under Section 164(2) of the Act after the said date, would also cease to be directors in other companies (other than the defaulting company) on incurring such disqualification. However, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aults under Section 164(1) of the Act before 07.05.2018 cannot invite application of the proviso to Section 167(1)(a) of the Act and a necessary corollary thereof is that their DINs and the DSCs cannot be cancelled either. It is pertinent to note that though the respondents challenge to the decision in Mukut Pathak (supra) is pending before the Division Bench, since the Court of appeal has not stayed the operation of the decision itself, I see no reason to deny the benefit of this decision to the petitioners. Even otherwise, in the light of the admitted position that the CFSS can be availed only till 30.09.2020, any delay in extending the benefit of the decision in Mukut Pathak (supra) to the petitioners would cause them grave prejudice an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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