A breather for disqualified directors: Condonation of Delay Scheme, 2018

A breather for disqualified directors: Condonation of Delay Scheme, 2018

Legal & Compliance

Ravi Kariya

Ravi Kariya

6 Feb 2018, 10:22 — 6 min read

The Ministry of Corporate Affairs (MCA) in September 2017, identified more than three lakh directors associated with the companies that had failed to file financial statements or annual returns in the MCA21 online registry for a continuous period of three financial years 2013-14 to 2015-16. They were barred from accessing the online registry and a list of such directors was published on the MCA website. As a result, there has been a spate of representations from the industry, defaulting companies and their directors, seeking an opportunity for the defaulting companies to become compliant and normalise operations.


Certain affected persons have also filed writ petitions before various High Courts seeking relief from the disqualification. With a view to give an opportunity for the non-compliant, defaulting companies to rectify the default, the Central Government has decided to introduce a Scheme namely ‘Condonation of Delay Scheme 2018’ (CODS-2018).


This is a one-time opportunity for the disqualified directors to remove their disqualifications from the companies by filing the e-CODS form along with fee of INR 30,000. Disqualified directors should make the most of this scheme and remove non-compliances relating to non-filing of financials & annual returns. Professionals such as CAs, CSs, should guide and assist directors in complying with the scheme.


This scheme would to prove to be a 'saviour' for the disqualified directors. They can save themselves from disqualification arisen from the defaulting companies.


Below mentioned are the aspects with relation to the Condonation of Delay Scheme 2018.


Applicability & validity

The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018 i.e. for three months



This scheme is available to all the defaulting companies other than the companies which have been stuck off or whose names have been removed from the register of companies.


A defaulting company means as company which has not filed its financials or annual returns for a continuous period of three years with MCA.


Procedure & key aspects

  • 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.


  • The defaulting company shall file the overdue documents in the respective prescribed e-Forms paying the statutory filing fee and additional fee payable for filing these overdue documents


  • The defaulting company after filing documents under this scheme shall seek condonation of delay by filing form e-CODS attached to this scheme online on the MCA21 portal. The fee for filing application e-form CODS is INR 30,000


  • 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 shall be liable to be deactivated on expiry of the scheme period.


  • 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.


  • In the event of defaulting companies whose names have been removed from the register of companies 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.


  • The scheme shall only be applicable for following forms:
      • Form Number 208/MGT-7- Form for filing company having share capital.
      • Form 21A/MGT-7- Particulars of Annual return for the company not having share capital.
      • 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.
      • Form 66 - Form for submission of Compliance Certificate with the Registrar.
      • Form 238/ADT-1- Form for intimation for Appointment of Auditors

  • The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme subject to any Civil and Criminal Liabilities.
  • The Registrar shall take all necessary actions against the companies who have not availed themselves of this scheme and continue to be in default in filing the overdue documents.


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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker. 


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Ravi Haresh Kariya

EbizFiling.com is a motivated and progressive firm managed by like-minded people. It helps a variety of small, medium and large businesses to cater to all compliance requirements...

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