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How to Apply for Directors’ Disqualification without Reviving Strike-Off Company?

Disqualification of directors can refer a situation in which a person is restricting from holding the office of director in any company. Under disqualification, a person cannot be appointed as a director in any company in a specified time period. Before going to details first you need to understand the term Director of the company.

A Director can be any person who acts on behalf of the company as the company is an artificial person and cannot work itself and cannot be entered into any transaction physically, there is no qualification which has been defined under the Companies Act, and anyone can become a director of a company. Director can be counted as an agent of the company who works on behalf of the company.

Understand the Disqualification of Directors

Companies Act, 2013- Section 164, contains the provisions in which the registrar can disqualify a person as a director. The situations are as follows

These are the situations under which a person cannot be appointed as a director:-

  1. If he is of unsound mind;
  2. If he is an undischarged insolvent;
  3. In case he has applied to be adjudicated as an insolvent;
  4. If sentenced for imprisonment for seven years or more;
  5. Any order of the court;
  6. Any offense of related party;
  7. Non-compliance of subsection (3) of section 152 of Companies Act, 2013;
  8. Non-compliance of sub-section (1) of section 165;
  9. Non-filing of annual returns or financial statements for a continuous period of 3 years;
  10. Failed to repay the deposits, pay to declare dividend;
  11. Other as may be defined in law;

Section 248 provides that the company can be struck off by the ROC (Registrar of Companies) if there is any default for filing of annual accounts for 3 consecutive years. A person will be disqualified from all active companies in case any company in which he/she is a director has not complied with the provision described above.

Remove Disqualification Of Director

As we all know that In 2017 Government of India, struck off more than 2 Lacs companies to remove all inoperative companies in India from its Register resulting in the disqualification of more than 3 Lacs Directors & their Director Identification Number (DIN) was deactivated. The Government took these measures. In respect of companies which were failed to file their financial statements or Annual returns (Profit & loss account and Balance sheet) as needed under the Companies Act 2013 and Companies Act 1956.

The MCA (Ministry Of Corporate Affairs) had disqualified around 3.09 lacs directors. And comply with the regulations stated under section 164(2) and 167(1) (a) of the Act. As an additional preventive measure, the authority has blocked DIN of all the disqualified directors. And after the process, many aggrieved directors and company came out seeking clarification for the same. As a result, the ministry came out with the scheme named as ‘Condonation of Delay Scheme’, where it endows a chance to file the needed and essential documents, protect their current position and get recovery of Strike Off Company without ROC Penalty.

What are the Consequences of Disqualification?

When a person once disqualified will be restricted for a period of 5 years to be appointed again as a director in any company

His/her DIN shall be de-activated by the registrar of Companies. In other terms, one can say that he /she cannot sign any document/forms which need to be uploaded on the MCA portal.

Reappointment of Disqualified Directors

There are no provisions for the reappointment of a disqualified director. Further, he/she can only be reappointed after a period of 5 years that means after completion period of disqualification of the director.

It simply means that once disqualification has been imposed on any director in any company in which he/she is a director then he cannot be appointed as a director in any other active company. Further, he/she has to vacate his/her office immediately. A very harsh decision has been taken by MCA (ministry of corporate affairs) but thanks to the High court for giving such relief in order to remove the disqualification of the directors.

How to Remove Disqualification of Director?

Once these situations which are mentioned above arise, Directors are required to request t by a petition with NCLT in the state of jurisdiction. Once NCLT has been satisfied then an order will be issued and after director receives the order, the same had to be complied with and consequently, the status will be restored. A person can also reach to the high court to have relief for this he/she is required to file an application under Article 226 of our Indian Constitution. Also, in most of the cases the high court has passed stay order. Srinivasan & Others V/S Union of India and Bhagavan Das Dhananjaya Das V/s Union of India, are example of the some of the cases where the honorable court says that order of ROC illegal, devoid of merit, licentious and quashed it as well. There are other judgments as well where the honorable court has passed such order in favor of the Director in order to save the rights which has been provided under the Constitution of India.


To conclude above, it can be said that there are several ways/remedies available to the directors in order to save him/her if he/she has been disqualified by the ROC under the provisions mentioned in the Companies Act, 2013.