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Condonation of Delay Scheme 2018 for Disqualified Directors
By Sumes Dewan Managing Partner Lex Favios

The MCA, vide General Circular dated December 18, 2017, has introduced the Condonation of Delay Scheme, 2018 to provide an opportunity for disqualified Directors to regularise compliance by filing overdue documents with additional fee.

In the month of September 2017, the MCA had clamped down on companies, and disqualified approximately 3,09,614 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 in terms of provisions of section 164(2) read with section 167(1)(a) of the Companies Act, 2013. The list of disqualified directors was accordingly made available online on the portal of MCA. 

As a result of the same, had been a spate of representations from industry, defaulting companies and their directors seeking an opportunity for the defaulting companies to become compliant and normalize operations. In response to the same, the Condonation Scheme, 2018 has been announced. Below are the salient features of the Scheme:

  • Applicability – the Scheme is applicable to all defaulting companies (other than the companies which have been stuck off/whose names have been removed from the register of companies under section 248(5) of the Companies Act, 2013). A defaulting company is permitted to file its overdue documents which were due for filing till June 30, 2017 in accordance with the provisions of the Scheme.
  • Procedure - In the case of defaulting companies whose names have not been removed from register of companies:-

    • The DINs of the disqualified directors de-activated at present shall be temporarily activated during the validity of the scheme to enable them to file the overdue document.
    • The defaulting company shall file the overdue documents in the respectively prescribed eForms 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 30,000/- (INR Thirty Thousand Only) as prescribed under the Companies (Registration Offices and Fee) Rules, 2 014 well before the last date of the 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) read with 167(1)(a) of the Companies Act, 2013 shall be liable to be deactivated on expiry of the scheme period.


  • In the event of defaulting companies whose names have been removed from the Register of companies under section 248 of the Companies Act, 2013 and which have filed applications for revival under section 252 of the Companies Act, 2013 up to the date of this scheme, the Director’s DIN shall be reactivated only NCLT order of revival subject to the company having filing of all overdue documents.


The full text of the General Circular can be accessed on the MCA portal.

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