CFSS can’t be Extended on Grounds of Delay in Re-activation of DIN: HC

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  • Last Updated on 26 May, 2023

delay in re-activation of DIN

Case Details: Spread Infotech Consultants (P.) Ltd. v. Ministry of Corporate Affairs - [2023] 150 155 (HC-Delhi)

Judiciary and Counsel Details

    • Prathiba M. Singh, J.
    • Vansh Gandotra, Adv. & Ravinder Singh Chauhan for the Petitioner.
    • Ajay Digpaul, CGSC, Kamal R. DigpaulMs Swati Kwatra, Advs. for the Respondent.

Facts of the Case

In the instant case, the petitioner company’s name was struck off from the Register of Companies due to non-filing of requisite documents and consequently, the DIN/DIRs of both its directors were suspended.

In the meantime, in light of the COVID-19 pandemic, the Ministry of Corporate Affairs introduced the Companies Fresh Start Scheme (CFSS), 2020 to allow a fresh start for defaulting companies and directors of such companies. Meanwhile, the petitioner company was restored.

Subsequently, the petitioner filed a petition requesting the reactivation of its directors’ DIN. However, one director’s DIN was restored after the last date of the CFSS Scheme viz, on 31-12-2020. Consequently, the filing of the balance sheet could not be done as the DIN of both directors was required.

In response, the petitioner filed an instant writ petition praying that the benefit of the CFSS scheme ought to be allowed and delay in filing ought to be condoned. The petitioner had been a consistent defaulter in filing documents and forms for several years.

Thus, CFSS could not be extended beyond the date of operation inasmuch as there were a large number of companies, which were disqualified and if benefit under CFSS was extended to such companies beyond the date, the said scheme would be completely unworkable.

High Court Held

The High Court observed that the petitioner was conscious of the deadlines under the CFSS and ought to have taken its remedies, but had chosen not to do so. Consequently, the Court determined that extending the benefits of the CFSS scheme to the petitioner would not be appropriate.

The High Court held that since the DIN was restored only after the order was passed by the Court, the petitioner would be permitted to submit the necessary documents and forms along with the requisite fee, in accordance with the Companies Act and Rules. However, there would be no prosecution for the delay in filing the documents.

List of Cases Referred to

    • Ravinder Singh Chauhan v. Ministry of Corporate Affairs [W.P. (C) 6886 of 2020, dated 24-9-2020] (para 8).

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