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Mohi | Updated: May 22, 2019 | Category: DIN

Removal of Director Disqualification After COD Scheme

Many directors have been disqualified over the last few years by  Ministry of Corporate Affairs for not performing or following the rules & regulations mentioned under Companies Act. Each director has their unique Director Identification Number. But once director get disqualified, their Director Identification number also get deactivated. Almost Lakhs of DIN were deactivated which caused damage to corporate sector. So in this article we will follow the step by step process of how to remove Directors Disqualification

These strict steps were taken by the Government

  • for non-filing of financial statement or Annual Return for continuously 3 years as per the provisions of the Companies Act, 1956 and the Companies Act, 2013.
  • If the Directors are failed to  repaid debts or to redeem any debt for more than 1 year

Directors disqualification for companies was categorized under 3 headings:

  • Defaulting companies-  where company was active but disqualification happened due to non-filing of financial statement or annual return
  • Genuine companies with legal business but with disqualified status as director of this company is director of some other struck-off companies
  • Struck off companies

Many directors were seeking for relief. Government provided revival opportunity to the defaulting company and reactivation of DIN by issued one scheme named Condonation of Delay Scheme which was available till May, 2018 in first 2 above mentioned categories. But MCA circulated one notification according to which if the defaulting companies are removed and petition has been filed before the Tribunal, then these companies were allowed to pursue even after expiration of the Scheme.

In case of Striking off companies, only writ is the option.  After the expiration of Condonation of Delay Scheme, many disqualified directors made propositions before the High Court and NCLT for reactivation of their DIN and companies revival. So, under Article 226, a Writ Petition was filed to set aside MCA notification related to directors disqualification and for revival of companies and reactivation of DIN.

Grounds for Writ Petition ofDirectors Disqualification

  • Opportunities shall be provided to petitioner to justify himself if disqualifications under section 164(2), happened without serving notice or without giving any chance to be heard as this is violation of natural justice under Article 14 of the constitutional Law of India.
  • Serving of notice is important before direct disqualification. There are many small companies and businesses that are not very well versed with everything due to lack of professional guidance. These kinds of companies deserve to be heard.

High court may pass stay order in such cases or can provide interim relief.

Reactivation of the DIN can be done after filing writ petition copy, stay order, to the concerned authority.

Removal of Director Disqualification

Procedural Steps for Activation of DIN after expiry of CODS

  • Writ petition Filing– Petition shall be filed by disqualified director against the order under article 226 before Hon’ble High court with all the required documents attached.
  • Appeal in NCLT– For restoration of name, an appeal shall be filed before the National Company Law Tribunal. Under section 252 of companies Act, 2013, appellant companies shall file appeal with all the requisites documents to restore name in case of struck-off name from the list.
  • Order- Once Company will get order for reactivation of DIN and revival of struck-off company, Appellant shall file all statutory documents with ROC and whatever is required shall be done.
  • Penalty-After all the compliances and payment of penalty, if any imposed by Appellant, ROC is required to raise ticket on MCA21 portal through Change Requirement Form (CRF). ROC also needs to upload copy of the said order on the portal. After validation, the deactivated DIN will get reactivate.

Documents required with Writ Petition:

  • Writ petition should be in proper format
  • Notice of Motion
  • Memo of parties shall be attached which shall include petitioner names, address, designation etc…
  • List of dates, synopsis of matter and events;
  • Circumstances which lead to non-compliance of filing of statutory documents;
  • Status of company and directors seeking restoration;
  • Prayer clause for setting aside the publication issued by ROC i.e. Impugned List of Disqualified Directors under Section 164 (2) (a) of the Companies Act, 2013;
  • Copy of press release/impugned notice issued by ROC listing disqualified directors;
  • List of all companies in which Appellant is Director;
  • Stay application under Section 151 of CPC;

Documents required for DIN reactivation (Directors Disqualification)

  • Application before the NCLT or the Petition before HC as the case may be
  • Overdue Documents as per Section 403
  • e-CODS on MCA 21 portal

So to get interim relief against director disqualification, writ petition shall be filed in high court against the order with the help of Lawyer. For more information you can contact us on LawyerINC.

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Advocate Mohi Kumari has got 9+ years of experience in practicing law independently all over India. She has completed her Master in Laws from Rajiv Gandhi National University Of law, as well she has done Post Graduate diploma in Cyber Laws from Asian School of Cyber Laws and Diploma in Corporate Laws from Bharati Vidyapeeth Deemed University.

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