Removal of Disqualification of Directors (in case of Struck off of name of Companies)

It has been recently seen that many companies were issued notice regarding the Struck off of the name of the company owing to their inactive status and non-filing of annual returns with MCA and consequently many directors were also disqualified for consecutive failure in compliance by the associated company.

As a relief to the directors, MCA also issued a Condonation of Delay Scheme giving an opportunity to the disqualified directors to get the disqualification removed.

Under the scheme, the defaulting company was required to file the overdue documents by paying the additional fee along with the condonation fee. However, a director having directorship in the Struck off company cannot get the disqualification removed under this scheme.

The way out

Since a director having directorship in the struck off company cannot avail the condonation scheme, there are two possible ways to get the disqualification removed, which has been discussed below:

Removal of disqualification without reviving the company.

Where a company has been struck off and the directors/members of company do not wish to revive the company, while requiring the removal of disqualification of director, they need to file a writ petition with the Hon’ble High court.

Reviving the company and removing the disqualification of the director.

Here, both the company and the directors need themselves to be revived. There can be two situations

1. Where the members of the company have valid grounds for revival of the company, they could file an application with the NCLT and then apply under the condonation scheme for removal of disqualification of directors.

2. Where the members of the company do not have grounds for revival of the company, the only remedy available is to file a Writ with the Hon’ble high court for the revival of the company and the removal of disqualification of the directorship.

(The author is a CA in practice at Delhi and can be contacted at: E-mail: abhinandansethia90@gmail.com, Mobile: +91-9811741451))