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CS Neha R. Gupta

CS Neha R. Gupta

So as, Government come out with many initiatives in different fields and yet many more expected to come in near future. In the same line, with respect to Companies, Government has taken a big move towards non-compliance done by the Companies and their Directors. The journey began some one year back in April 2017, Registrar of Companies (ROC) started issuing notices under section 248(1) of the Companies Act 2013 to the number of Companies (exhaustive list) and the directors of the Company for removal/strike off the Companies from the register of Companies & dissolve them unless a cause is shown to the contrary within thirty days from the date of that notice.

After that, some Companies and Directors had taken the said notice under section 248(1) of the Companies Act 2013 seriously and filed an appropriate reply to their respective Registrar of Companies (ROC) and then done the necessary filings and came out of this but there were some Companies who still didn’t comply, So thereafter, in July 2017, Registrar of Companies (ROC) published the notice under section 248(5) of the Companies Act 2013 that the number of Companies (list of Companies attached with the notice) has been struck off the register of companies and the said company is dissolved. So as a result of this large amount of Companies had been struck off.

It was not an end there, after two months i.e. in September 2017, Ministry of Corporate affairs (MCA) came out with the list of disqualified directors that pursuant to section 164(2)(a) of the Companies Act 2013, the directors of the Companies which have not filed financial statements or annual returns for any continuous period of three financial years have been declared disqualified for five years. Thereafter, large number of directors disqualified and their Director Identification Number (DIN) had been deactivated.

Ministry of Corporate Affairs (MCA) have given so many opportunities to the defaulting Companies and their directors as discussed above but it began with the very inception of the Companies Act 2013 with “Company Law Settlement Scheme (CLSS) 2014” which came with vide General Circular No. 34/2014 dated 12th August 2014.

Whereas, section 164(2) of the Act read with section 167 of the Companies Act 2013, which provisions were commenced with effect from 01.04.2014, provide for disqualification of a director on account of default by a company in filing an annual return or a financial statement for a continuous period of three years.

Whereas consequent upon notification of provision of Section 164(2) of the Companies Act 2013, Ministry of Corporate Affairs (MCA) had launched a Company Law Settlement Scheme (CLSS) 2014 providing an opportunity to the defaulting companies to clear their defaults within the time period specified therein and following the due process as notified.

Whereas MCA in September 2017 published on the portal of MCA, the list of directors who failed to file the financial statements or annual returns for a continuous period of three financial year in terms of provisions of Section 164 (2) r/w 164 (1)(a) of the Companies Act 2013 and they were barred from accessing the online registry.

As a result of the above action, there had been a large number of representations from industry, defaulting companies and their directors seeking an opportunity for the defaulting companies to become compliant and normalize operations. So again with a view to giving an opportunity for the non compliant, defaulting company to rectify the defaults, the Central Government in exercise of its power conferred under the Companies Act 2013 has decided to introduced a scheme called Condonation of Delay Scheme (CODS) 2018 which came with vide General Circular No.16/2017 dated 29th December 2017 which came into effect from 01st January 2018 and shall remain in force upto 31st March 2018 which was further extended vide General Circular No. 02/2018 dated 28th March 2018 and it is extended upto 30th April 2018.

Aspects of Condonation of Delay Scheme (CODS) 2018


CODS is applicable to all defaulting Companies (other than the Companies which have been struck off/whose names have been removed from the register of Companies under section 248(5) of the Companies Act 2013. A defaulting Company is permitted to file its overdue documents which were due for filing till 30th June 2017 in accordance with the provisions of this scheme.

Defaulting Companies means a Company which has not filed its financial statements or annual returns as required under the Companies Act, 1956 or Companies Act 2013, as the case may be and the Rules made thereunder for a continuous period of three years.

Overdue Documents means the financial statements or the annual returns or other associated documents, as applicable, in the case of a defaulting company.


CODS is not applicable to filing of documents other than the Form 20B, 21A, 23AC, 23ACA, 23 AC-XBRL, 23ACA-XBRL, 23B, 66, MGT-7, AOC-4, AOC-4(CFS), AOC (XBRL), AOC-4 (non-XBRL) and ADT-1.

Procedure Followed For The Scheme:

In the case of defaulting Companies whose names have not been removed from register of Companies,-

i) The DINs of the concerned disqualified directors de-activated at present, shall be temporarily activated during the validity of the scheme to enable them to file the overdue documents.

ii) The defaulting company shall file the overdue documents in the respective prescribed e Forms paying the statutory filing fee and additional fee payable as per section 403 of the Act read with Companies (Registration Offices and fee) Rules, 2014 for filing these overdue documents.

iii) The defaulting company after filing documents under this scheme shall seek condonation of delay by filing form e-CODS 2018 online on the MCA21 portal. The fee for filing application e-form CODS is Rs.30,000/- (Rs. Thirty Thousand only)

iv) The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the e-form CODS, and these are not taken on record in the MCA21 registry and are still found to be disqualified on the conclusion of the scheme in terms of section 164(2)(a) r/w 167(1)(a) of the Act shall be liable to be deactivated on expiry of the scheme period.

v) In the event of defaulting companies whose names have been removed from the register of companies under section 248 of the Act and which have filed applications for revival under section 252 of the Act up to the date of this scheme, the Director’s DIN shall be re-activated only NCLT order of revival subject to the company having filing of all overdue documents.

E-Form Cods:

The e-Form CODS is auto-approved (STP). When an e-Form is approved/rejected by the authority concerned, an acknowledgement of the same is sent to the user in the form of an email.

Concluding Remarks:

After the conclusion of the Scheme, Government will take further actions who have not filed the overdue documents and CODS form under the scheme. So it’s one time opportunity for all the defaulting Companies and their Directors to avail this CODS scheme and become compliant and normalize operations as soon as possible as only few days remain for taking benefit of CODS scheme.

Beside this, there should also be provision for such struck off companies who do not allow availing this CODS scheme and who do not have any business since long and also doesn’t want to revive the Company through NCLT.

Disclaimer: The above views are the personal views of the author and the Readers are requested to exercise their due diligence before taking action.


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July 2024