The Hon’ble Delhi High Court in Anant Narain v. Union of India [W.P. (C) 7280 of 2020 and CM Appls. 24543-44 of 2020, dated January 06, 2021] set aside disqualification of the directors of the defaulting Company and provided an opportunity to the disqualified directors of the struck off Company under Companies Fresh Start Scheme, 2020 (Scheme) to be appointed as directors of other/new companies, provided the directors have gone a substantial period of their disqualification.
Anant Kumar (“the Petitioner”) is the director of M/s Innowin Info Solutions Pvt. Ltd. (“the Company”) which was struck off due to non-filing of financial statements or annual return for a continuous period of three financial years. The Petitioner was disqualified under Section 164(2) of the Companies Act, 2013 (“the Companies Act”) and its Director Identification Number (“DIN”) and Digital Signature Certificate (“DSC”) had also been deactivated. The Petitioner now wants to start a new business and accordingly pray for reactivation of DIN and DSC, in view of the Scheme. Hence, this petition.
The Hon’ble Delhi High Court in W.P. (C) 7280 of 2020 and CM Appls. 24543-44 of 2020 dated January 06, 2021 held as under:
Section 167(1)(a) of the Companies Act:
“Vacation of office of a director
167(1) The office of a director shall become vacant in case-
a) he incurs any of the disqualifications specified in section 164;
Provided that where he incurs disqualification under sub-section (2) of section 164, the office of the director shall become vacant in all the companies, other than the company which is in default under that sub-section.”
Section 164(2) of the Companies Act:
“Disqualification for appointment of director
164(2) No person who is or has been a director of a company which-
(a) has not filed financial statements or annual returns for any continuous period of three financial years; or
(b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more,
shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so.
Provided that where a person is appointed as a director of a company which is in default of clause (a) or clause (b), he shall not incur the disqualification for a period of six months from the date of his appointment.”
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