Condonation of Delay Scheme 2018

Every Indian wants action against others who are not in compliance with law and disregard law of land. Same time, Ministry of Corporate Affairs was forced to introduce the condonation of Delay Scheme, 2018 within 1140 days (roughly 3 years) from the conclusion of earlier such scheme. Between these two schemes, the name of lakhs of companies was removed from Registry and list of Directors 3,09,614 disqualified directors released to the public domain because of such non – compliance. With fear of legal actions, corporate India and professional India welcome this scheme with critics. The strong analysis ahead.


The Scheme is applicable to defaulting companies which has not filed its financial statements or annual returns as required under the Companies Act, 1956 or Companies Act, 2013, as the case may be, and the Rules made thereunder for a continuous period of three years.

The companies, which have been stuck off/ whose names have been removed from the register of companies under section 248(5) of the Act, are not eligible to avail the scheme. This condition is similar to such condition in earlier 2014 version of the Scheme {Para 6(ix) of COD, 2014}.

Period of Scheme

The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018

 Special Applicability

According to Para 4(v) of the COD, 2017 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.

This is simple communication that companies, whose name has been removed and have filed revival application, may have permission to access online registry only after revival order. In cases, where NCTL order revival not only company, its legal status, right and obligations, assets and liabilities including bank accounts but also DIN of its directors be restored, subject to any other disqualification.

These so restored companies may get the benefit of condonation of delay only if they restored during the period of the Scheme. After expiry of the Scheme, any restore company shall complete pending filing and apply condonation of delay as per normal procedure.

Documentary Applicability

The Scheme shall be applicable only to following documents:

  1. Annual Return [Form 20B, Form 21A and Form MGT-7]
  2. Balance Sheet or Financial Statements [Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL]
  3. Compliance Certificate [Form 66]
  4. Appointment of Auditors [Form 23B and Form ADT -1]

In case of all other documents and forms, the company shall apply for condonation of delay as per normal procedure.


The procedure shall be as follows:

  • 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.
    Due to technical issues, Actual Activation may take more time.
  • The defaulting company shall file the overdue documents in the respectively prescribed eForms paying the statutory filing fee and the additional fee payable as per section 403 of the Act read with Companies (Registration Offices and fee) Rules, 2014 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 the scheme online on the MCA21 portal. The fee for filing application form CODS is Rs.30,000/- (Rs. Thirty Thousand only).

It is advisable for companies to start filing overdue documents earliest to avoid last minute rush. The e-Form CODS 2018 would be available from 20.02.2018 or an alternate date, which will be intimated by the ministry on The Form CODS-2018 may be filed only after completion of overdue filing.

Deactivation of DIN

The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and the 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 in terms of section 164(2)(a) read with Section 167(1)(a) of the Act shall be liable to be deactivated on expiry of the scheme period.

Withdraw the prosecution

The Registrar 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.

The preamble to the scheme as mentioned in the circular has reference to Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 which prescribes that every director shall inform to the company concerned about his disqualification, if any, under section 164(2), in the form DIR-8.

Will the failure to file DIR – 8 by a director attract Section 447?

Further Action

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.

Achievement Aimed

The achievement of the scheme is to provide safety window to the companies who are about to be removed in the year 2018. However, this scheme shall also benefit the companies exempted under the proviso to rule 3(1) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016.

After completion of the Scheme, MCA should take appropriate strong actions against companies not in compliance with the law and be enjoying benefit of the proviso to rule 3(1) of the Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016. At least, the DIN of directors of such defaulting companies should be blocked for their disqualification period of 5 years.

What about Removed companies

The Scheme confirm that restoration of the companies removed from the register is possible only through judicial manner. These companies should approach NCLT.

Two submissions before MCA:

LLP Left out

Condonation of Delay seems to be a regular feature for companies but not used for LLPs. In earlier days of LLPs, many LLP failed to comply the law due to ignorance and later found it very costly affair due to the daily rate of additional fee. These LLPs are still waiting for the fee waiver in case of the additional fee. This is advisable to have such scheme once.

Request Activate DIN for LLP

Presently, any defaulting director may be a Designate Partner in an LLP. There is no concept of a disqualified designate partner in LLPs. This is advisable to activate DIN of Designated Partners and unlink it from their status of a disqualified director in the Companies Act, 2013.

Best wishes for the new year and compliance regime.


2 responses to “Condonation of Delay Scheme 2018

  1. Pingback: Condonation of Delay Scheme 2018 | Top 100 Blog Review


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