When is Radhika disqualified from holding the office of director in Life Education Ltd.? Is her appointment as director of Life Education Ltd. in…

(a) Section 164 of the Companies Act, 2013 contains disqualifications of a director. A person shall not be eligible for appointment as a director of a company if he suffers from any of the disqualifications as specified under section 164. Accordingly, Section 164 (2) prescribes disqualifications which get attached to a person if he is or has been a director of a company which has committed default as under- (a) his company has not filed financial statements or annual returns for any continuous period of 3 financial years; or (b) his company has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for 1 year or more. In both the above cases of default, the director concerned shall not be eligible to be re-appointed as a director of such defaulting company or appointed in some other company for a period of 5 years from the date on which the said company has committed default. As per the fact, company, PQR Ltd. failed to file its financial statements for the following financial years 2020–21, 2021–22, 2022–23. In line with the above stated legal provisions, the director will be disqualified from 31st October, 2023 (*assuming the due date for FY 2022-23 filing was 30th October 2023 i.e. within 30 days from the AGM), because that is when the default for the third year occurs. The disqualification will last for five years, i.e., till 30th October 2028. In the case study, on 25th September 2023, the AGM of Life Education Ltd. is conducted in which Radhika was re-appointed as director. Here Radhika will be disqualified from holding the office of director from date when the default for the third year occurs i.e. from 31st October, 2023 and vacate the office in terms of Section 167 (1) (a). Radhika's appointment as director of Life Education Ltd. in September, 2024 is not valid as she is not eligible for appointment for a period of 5 years in any of the companies even though the defaulting company has set right the default by filing the relevant documents. No, Radhika's DIN will not be deactivated as disqualification under section 164 (2) is of temporary nature, and Rule 11 of Companies (Appointment and Qualifications of Directors) Rules, 2014 does not empower any authority to cancel or deactivate DIN upon disqualification under section 164 (2) . *A copy of the financial statements duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting as per section 137 of the Companies Act, 2013. Further, Section 96 of the Companies Act, 2013 states that AGM of any company shall be held within a period of six months, from the date of closing of the financial year. For FY 2022-2023, AGM is to be held by 30th September 2023 and financial statements duly adopted in the AGM to be filed with the Registrar within thirty days of the AGM i.e. by 30th October, 2023.