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The Bombay High Court recently refused to stay a 2017 circular issued by the Ministry of Corporate Affairs (MCA) related to the disqualification of directors of companies.
While doing so, the Bench of Justices SC Dharmadhikari and RI Chagla prima facie found that there was no inconsistency between the MCA Circular and Section 164(2) of the Companies Act, 2013. The Bench held,
"Prima facie, we do not think that the Circular which has been issued by Ministry of Corporate Affairs and the notice dated 7th September, 2017 is in any way inconsistent or contravening the position emerging from the plain reading of this section."
Bombay High Court
Section 164(2) places a five-year bar on re-appointment of a person as director of a company which fails to file financial statements or annual returns for a period of three continuous years.