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Condonation of Delay Scheme 2018


Companies registered under The Companies Act, 2013 are required to file their annual financial statements & annual returns with Registrar of Companies and non-filing of same is offence under the companies act, 2013.
Section 164(2) read with section 167 of the Companies Act, 2013 (w. e. from 01.04.2014) provide for disqualification of director on account of default by company in filing an annual return or financial statement for a continuous period of 3 years.
Rule 14 of The Companies (Appointment & Disqualification of Directors) Rules, 2014 prescribe that every director shall inform to the company concerned about his disqualification, if any, u/s 164(2), in form DIR-8.
Consequent upon notification of provisions of section 164(2), Ministry of Corporate Affairs (MCA) had launched a Company Law Settlement Scheme 2014 providing an opportunity to defaulting companies to clear their defaults within the time period specified therein & Following the due process as notified in Condonation of Delay Scheme.
MCA in September 2017 identified 3,09,614 directors associated with the companies that has failed to file financial statements or annual returns in the MCA21 online registry for a continuous period of 3 financial years from 2013-14 to 2015-16 in terms of provisions of Section 164(2) r/w 167(1)(a) of the Companies act, 2013 & were debarred from accessing the online registry and list of such directors was published on the website of MCA.
As a result of above action, there have been representations from industry, defaulting companies & their directors seeking an opportunity for the defaulting companies to become compliant & normalize operations. Certain affected persons have also filed writ petition before various High Courts seeking relief from disqualification.
With a view to giving opportunity for the non-complaint, defaulting companies to rectify their defaults, in exercise of its powers conferred u/s 403, 459 & 460 of the Companies act, 2013, the Central Government has decided to introduce a scheme namely “Condonation of Delay Scheme 2018” [CODS-2018]. Brief details about CODS-2018 is as below.

1.   The CODS-2018 shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018.

2.   Applicability: CODS-2018 is applicable to all defaulting companies (other than companies whose name is struck off/removed from Register of companies). A defaulting company is permitted to file its overdue documents which were due for filing till 30.06.2017.


3.   Procedure:
                     I.        The DINs of concerned disqualified directors de-activated at present, shall be temporarily activated during validity of the scheme to enable them to file the overdue documents.
                   II.        The defaulting companies shall file overdue documents in respective prescribed eforms paying statutory filing fee & additional fee payable.
                 III.        The defaulting company after filing documents under this scheme, shall seek condonation of delay by filing e-CODS online on MCA21 portal. The fee for filing application in e-Form CODS is ₹ 30,000/- (Thirty Thousand only).
                 IV.        The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents & the eform 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.

4.   Scheme apply to certain Documents only:
                     I.        Form Number 20B/MGT-7- Form for filing annual return by a company having share capital.
                   II.        Form 21A/MGT-7- Particulars of Annual return for a company not having share capital.
                 III.        Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL) - Forms for filing Balance Sheet/Financial Statement and profit and loss account.
                 IV.        Form 66 - Form for submission of Compliance Certificate with the Registrar.
                   V.        Form 238/ADT-1- Form for intimation for Appointment of Auditors.

5.   The Registrar concerned shall withdraw the prosecution(s) pending, if any, before the concerned Court(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.

6.   At the conclusion of the Scheme, the Registrar shall take all necessary actions under the Companies Act, 1956 / 2013 against the companies who have not availed themselves of this Scheme and continue to be in default in filing the overdue documents.

7.   The e-Form CODS 2018 would be available from 20.02.2018 or an alternate date, which will be intimated by the ministry on www.mca.gov.in. The stakeholder should complete the necessary procedural requirements and file overdue documents without waiting for the availability of the e-CODS form.

MCA General Circular No 16/2017


www.cajd.co.in
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