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What is Condonation of Delay Scheme 2018 [CODS 2018][1]?

Condonation of Delay Scheme 2018 is a Scheme introduced by Central Government as an golden opportunity for the non-compliant defaulting companies to rectify the default, in exercise of its powers conferred under sections 403, 459 and 460 of the Companies Act, 2013. It is to be operational from January 1 to March 31, 2018, scheme to be complied within 3 months


Why this scheme?

The Condonation of Delay Scheme, which is rolled out by the Ministry of Corporate Affairs, is came as a relief for disqualified directors, and giving chance to them to do good and be a compliance compliant.

As per MCA September 2017, Around 3,09,614 Directors were recently disqualified u/s 164(2) by the Ministry of Corporate Affairs for continuing default in filing company annual return, which as a result vacation of office u/s 167 of the Act, 2013 was attracted consequently.

Aggrieved by the disqualification many disqualified Directors had made representations to the Ministry of Corporate Affairs and approached the National Company Law Tribunal and High Courts for staying order of disqualification. Taking into consideration the representations made by various stakeholders, the Central Government and Ministry of Corporate Affairs has now introduced the Condonation of Delay Scheme to provide a final opportunity for defaulting companies and Directors to regularize compliance before 31st March, 2018.


To whom this Scheme is Applicable?

All companies registered in India including private limited company, one person company, limited company, section 8 company and others are required to file annual return with the Ministry of Corporate Affairs each year.

Therefore, this Scheme applies to every Company (herein referred as 'Defaulting Company), which has not filed its financial statements or annual returns as required under the Companies Act 1956/ Companies Act 2013, for a period of 3 years.

Please note: This scheme applies to only 'Defaulting Company' whose status is still ACTIVE on MCA Portal.

It means directors (disqualified directors) of defaulting Company whose status is still active on MCA Portal have chance to remove their disqualification.


Will this scheme apply to Companies whose status is shown 'Strike OFF' on MCA portal?

NO, this scheme will not apply to defaulting companies whose names have been removed from the register of companies under section 248 of the Act


Disqualification of directors of Companies which have been struck off can be removed?

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.


What is procedure to Comply with this scheme?

i. Deactivated DIN of Defaulting directors will be activated for temporary purpose only.
ii. Defaulting Company will file 'overdue documents:'

Where overdue documents can be referred here in as:

• Financial Statements (Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC-4, AOC-4(CFS), AOC (XBRL) and AOC-4(non-XBRL)
• Annual Return (Form Number 20B/MGT-7)
• Compliance Certificate [2] (Form No 66)
• Auditor Appointment (Form 23B/ADT-1)
• Or any other associated documents as required under the Companies Act 1956/ Companies Act 2013

Please note overdue documents up to June 30, 2017, can be filed under this scheme.

The defaulting company shall file the overdue documents in the respective prescribed e-Forms paying the statutory filing fee and 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 2018 attached to this scheme along with a fee of Rs. 30,000/- (Rs. Thirty Thousand only) as prescribed under the Companies (Registration Offices and Fee) Rules, 2014 well before the last date of the scheme.

(PLEASE NOTE: E-FORM CODS 2018, will be available form 20.02.2018 or other alternate date as may be prescribed by MCA)

Where o Company have been restored after an application to NCLT, DIN of Directors of such companies will also be re-activated.


Implication of compliance under this scheme?

The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s) for all documents filed under the scheme.

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.


Implication of Non Compliance of this scheme?

The DINs of the Directors associated with the defaulting companies that have not filed their overdue documents and 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.


Specific disclosure required in E FORM CODS 2018?

Disclosure like:

Whether any appeal(s) was filed against any notice issued or complaint filed before the competent court for violation of the provisions under the Act in respect of the above mentioned document(s). lf yes, attach proof of withdrawal of such appeal.

Whether any prosecution(s) is pending in court against the company and its officers in respect of belated documents filed under the scheme. lf yes, provide details thereof as an attachment

Whether any director(s) of the company is declared as proclaimed offender or facing criminal case(s) for economic offences. lf yes, provide details of such director(s) as an attachment. Etc.

DISCLAIMER: The entire contents of this document have been developed on the basis of relevant information and are purely the views of the authors. Though the authors have made utmost efforts to provide authentic information however, the authors expressly disclaim all or any liability to any person who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document.


  • [1] http://www.mca.gov.in/Ministry/pdf/Generalcircular16_29122017.pdf
  • [2] Under Companies Act, 1956


Published by

Anjali Gorsia
(Practicing Company Secretary)
Category Corporate Law   Report

4 Likes   4 Shares   4323 Views


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