Delhi High Court Judgment On Director Disqualification

Introduction:

The Hon'ble Delhi High Court (Court), on 4 November 2019, pronounced its judgment on the issue of disqualification of directors of companies which had failed to file their returns / financial statements for a period of 3 (three) or more consecutive years, as prescribed under section 164 (2) (a) read with section 167 of the Companies Act, 2013 (Act).

Section 164 (2) (a) of the Act provides that a person who is a director of a company that has failed to file its financial statements or annual returns for a period of three consecutive financial years shall face disqualification. Further, section 167 provides that the office of a director shall become vacant in case such person faces any disqualification(s) under section 164.