In the midst of flow of various relaxation on compliance and postponement in enforcing various new provisions, Ministry of Corporate Affairs have introduced a much-needed scheme for the defaulting companies for their documents, return, records, etc. pending to be filed with MCA21 Registry irrespective of the year of default by availing the facility of Companies Fresh Start Scheme, 2020 [CFSS]. This scheme has been introduced by way of circular dated 30/03/2020 and includes various benefits for the defaulting companies as it waives off additional fees to be paid on account of delayed filing, introduced immunity clause against the prosecution or adjudication against such delay in filing, provide a chance for getting rid of prosecution, if undergoing any, and many other relaxation. Central government has used its power under Section 460 of the Companies Act, 2013 [hereinafter referred to as ‘2013 Act’] read with Section 403 for condoning the delay in case of late filing and waiving additional fees clause which means now the defaulting companies can complete their filings only by paying off normal fees and no additional fees will be levied on them.

In the present write-up, we shall be analysing the relaxation and extensions of the said circular and will be explaining the intent and benefit of such circular.


The scheme is applicable to all defaulting companies who have defaulted in filing any e-form, documents, returns etc. provided such defaulting company does not fall in any of the category mentioned below-

  1. Companies to which action for final notice of striking off the name u/s 248 of the 2013 Act has been initiated by the Registrar of Companies [termed as designated authority in the circular],
  2. Companies which have voluntarily applied for the strike off by filing of e-from STK-2,
  3. Companies which have amalgamated under a scheme of arrangement or compromise duly approved by Hon’ble National Company Law Tribunal,
  4. Companies whose application has been filed under Section 455 for obtaining of Dormant status
  5. Vanishing Companies, and
  6. Companies where any matter related to increase of authorised share capital or charge is involved. 

Validity of Scheme

Validity of scheme is from 01.04.2020 till 30.09.2020

Concept of Immunity

The government has come up with new e-form for Application for Issue of Immunity Certificate [e-Form CFSS 2020] which has to be filed by the defaulting company only after filing the overdue documents, records, e-form, etc. with the Registrar of Company to  obtain the immunity certificate against any legal action for such delay in filing. The said application has to be made after the closure of the scheme, provided all the submissions of E Forms, documents, etc have been approved or taken on record by the authority, but not later than expiry of six (6) months from the closure of the scheme on 30th September, 2020.

The application for immunity certificate cannot be made by such companies or officers in default whose appeal is pending before any competent court or authority against any notice issued or complaint filed or any order passed by the court or adjudicating authority for violation of any provision under the Companies Act in respect to default in statutory filing. Precisely, this will be the case where Adjudication has taken in respect of non-filing and default has not been made good since the adjudication order was passed and appealed before the Regional Director. Making good of the default in case of Adjudication is not a pre-requisite unlike in case of Compounding. It depends on order or directions given by Adjudicating Authority.

For such defaulting companies, if they want to avail the facility of CFSS immunity clause, they have to first withdraw such appeal from the competent court or authority and then only they can make an application for grant of immunity along-with proof of such withdrawal of appeal. Though, filing facility is not having any restriction and they can file any documents, e-forms, etc. availing CFSS and avoid additional fees.

In furtherance to above provisions, no immunity will be granted by the central government in the following circumstances-

  1. Existence of case relating to the management dispute pending in any court of law,
  2. Order for conviction has been issued by any court of law, or
  3. Penalty order has been passed by Adjudicating Authority under Section 454 of the 2013 Act, and no appeal has been preferred.

In case of filing of documents or returns which have already been made by the companies with the additional fees before the commencement date of this scheme, such companies cannot avail the benefit of Immunity under this scheme and no refund of such additional fees, if any paid can be claimed by such companies. On the other hand, where there is default in filing and penalty order has been passed, and no appeal has been preferred, it has been kept out of the purview of immunity clause. Although, in cases where still there is a time and due date for filing such an appeal falls between 01.03.2020 to 31.05.2020, extension of 120 days can be availed and company after completing filing under CFSS can make an appeal mentioning therein the fact that the default has been made good by taking the benefit of CFSS and therefore the order of adjudicating authority must be quashed.

Extension of period for appeal against any order of Adjudicating Authority and the Immunity clause

In the present circular, ministry have also provided an extension of additional 120 days from the last due date for filing of appeal under Section 454 to the Regional Director in relation to those cases where due to delay in filing order has been passed for imposing penalty. But, the said extension is only applicable in those cases where last due date for filing of an appeal falls between 01st March, 2020 and 31st May, 2020 which means any of those cases wherein due date for filing of an appeal was either prior to 01st March, 2020 or is after 31st May, 2020, the extension is not available. It indirectly means that the cases in which penalty order has been passed by Adjudicating Authority on account of delay in filing and no appeal has been preferred, immunity clause does not apply and only remedy that company can take is to file an appeal, if they have sufficient time left including extension of 120 days. Again, this can be constitutionally challenged as the defaulting companies are getting immunity against any further prosecution in respect to delay in filing in CFSS while companies that did filing with additional fees are not having such advantage.

Also, it has been clarified therein the circular that during the extended period of 120 days there will not be any legal action taken for not abiding by order of the adjudicating authority.

One thing that needs clarity is whether this extension period of 120 days is also applicable on those cases where there was default in filing (not cases of delayed filing) and penalty order was passed by Adjudicating Authority and having its appeal date between 01.03.2020 to 31.05.2020? As the circular para 6 sub-para (vi) has used the phrase ‘in all cases where due to delay associated in filing’ which in plain manner includes only those cases where belated filing was done and adjudication order was passed.

Hopefully, keeping in mind the intent of Ministry we can presume that phrase ‘delay associated in filing’ includes every case of appeal, whether it’s a case of belated filing or default in filing.

Grant of Immunity Certificate and its effect

Pursuant to language of circular in paragraph (viii), Designated Authority i.e. Registrar of Companies based on the declaration in e-Form CFSS and its satisfaction, will be issuing Immunity Certificate. Subsequent to such granting of immunity, designated authority is bound to withdraw any pending prosecution going against the company in any court of law or any proceeding of adjudication except the matters in which conviction order has been passed or penalty order has been passed and no appeal has been made. It again makes it clear that immunity will be provided only on those cases where appeal was pending and has been withdrawn. If no appeal is made prior to this scheme, no immunity will be given. While, in cases, where there is time to file appeal (including 120 days) it is advisable to file such an appeal after completing filing under CFSS and mentioning the prayer for quashing of order of Adjudicating Authority.

Scheme for Inactive Companies

Pursuant to sub-para (xi) of Para 6, defaulting inactive companies can file an application in e-form MSC-1 for obtaining status of Dormant or for strike off under Section 248 of the 2013 Act, simultaneously to filing of documents under CFSS, 2020. It means even inactive companies have to file pending returns anyhow before obtaining status of dormant or strike. Though, strike off provisions specifically provides the companies to file annual e-forms up to the end of financial year in which the company ceases to carry on its business operation, and therefore, one can presume that necessity for filing of documents in CFSS will be up to the year of operation in case of inactive companies making an application for strike off.


The circular providing scheme to the defaulting companies is a saviour for them to get relaxation in respect of filing without paying heavy additional fees and burden free from the thought of prosecution. This is truly a welcoming step of government during this COVID 19 turmoil and all defaulting companies are having good time to make them compliant and obtain immunity from prosecution or adjudication proceedings in respect to such filings.


  • Ayushi Sharma
    Reply April 4, 2020 at 9:34 am

    Challan generated by MCA will be of that of normal fees only or once we have to pay then refund will be granted upon filing of CFSS form?

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