Relevant Section: Section 460 of the Companies Act 2013.

Power to Whom: Central Government have power.

Provision of Section 460 of the Companies Act, 2013

Section 460 have the overriding effect on any other section of the Companies Act, 2013, So as per Section 460, notwithstanding anything contained in companies Act-

1. where any application required to be made to the central Government under any provision of this Act in respect of any matter is not made within the time specified therein, that Government may, for reason to be recorded in writing condone the delay, and

2. where any document required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the Central Government may, for reason to be recorded in writing, condone the delay.

Applicability of Section 460 on Limited Liability Partnership (LLPs)

In exercise of power conferred in the Section 67 of the Limited Liability Partnership Act, 2008, the central Government hereby direct, vide MCA Notification dated 30.01.2020, that the provisions of  Section 460 of the Companies Act, 2013 shall apply to the Limited Liability Partnership from the date of the publication of the notification in the official Gazette i.e the date of 30.01.2020.

Refer MCA Notification dated 30.01.2020

The Central Government last Thursday published new directions to include Limited Liability Partnerships (LLPs) in the condonation of delay scheme available under the Companies Act 2013.

Section 460 under the Companies Act 2013, states that,

“a) where any application required to be made to the Central Government under any provision of this Act in respect of any matter is not made within the time specified therein, that Government may, for reasons to be recorded in writing, condone the delay; and

(b) where any document required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the Central Government may, for reasons to be recorded in writing, condone the delay. ”

Condonation of Delay Scheme came into existence in 2018 so as to provide one final opportunity to the directors of the defaulting companies who due to the reason of the non-filing of financial statements and annual returns were held liable and disqualified.

With this new directive, directors of LLPs will now get the benefit of condoning the delay.

A few months ago, MCA, with an intent to crackdown on shell companies, had disqualified more than two lakh directors of shell companies within a span of 15 days, for not filing their financial statements or annual returns for two straight years, violating provisions of the Companies Act, 2013.

Such companies/LLPs which have been struck off /whose names have been removed from the register of companies under section 248(5) of the Act can take advantage of the Scheme. On adopting the above scheme, the concerned Registrar will withdraw all the pending the prosecution(s) for all documents filed under the scheme.

“However, this scheme is without prejudice to action under section 167(2) of the Act or civil and criminal liabilities, if any, of such disqualified directors during the period they remained disqualified.”

Reference to Section 403 of the Companies Act, 2013

As per section 403

1) Any document, required to be submitted, filed, registered or recorded, or any fact or information required or authorized to be registered under this Act, shall be submitted, filed, registered or recorded within the time specified in the relevant provision on payment of such fee as may be prescribed:

Provided that any document, fact or information may be submitted, filed, registered or recorded, after the time specified in relevant provision for such submission, filing, registering or recording, within a period of two hundred and seventy days from the date by which it should have been submitted, filed, registered or recorded, as the case may be, on payment of such additional fee as may be prescribed:

Provided further that any such document, fact or information may, without prejudice to any other legal action or liability under the Act, be also submitted, filed, registered or recorded, after the first time specified in first proviso on payment of fee and additional fee specified under this section.

(2) Where a company fails or commits any default to submit, file, register or record any document, fact or information under sub-section (1) before the expiry of the period specified in the first proviso to that sub-section with additional fee, the company and the officers of the company who are in default, shall, without prejudice to the liability for payment of fee and additional fee, be liable for the penalty or punishment provided under this Act for such failure or default.

Proper Procedure to be followed for condonation of delay

1. Board Resolution to be passed at Board Meeting or by Circulation for considering the following matters-

a. to consider and approve the Application for the condonation of delay,

b. to authorize any KMPs or any director of the Company for filling application to CG,

c. to authorized any practicing professional to appear before the CG.

2. Application to be filed with CG in Form CG-1 along with the following-

a. Copy of Board resolution in which the application for condonaation of delay approved and authorized representative has appointed,

b. Proper application of condonation of delay,

c. Affidavit.,

d. Memorandum of Appearance,

e. Letter of authorization, etc

3. After filling the application the CG shall properly scrutinize the Application issue the order for accepting or rejecting the same,

4. The Order passed by CG shall be filed in Form INC-28 within 30 days from the date of passing of the order,

5. Proper fees shall be paid by the Company,

6. After this the Company shall filed the requisite document for which the application for condonation of delay was made along with proper fees and SRN of the Form INC-28.

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