Section 164 lays down a list of events/ situations which attracts disqualification of a person to hold or continue directorship in companies. Sub- section (1) thereof provides the grounds on account of the personal incapacity of the person, whereas, sub- section (2) talks about disqualification of a director on account of a corporate default. The significance of this provision gets enlarged once one sees the provisions of Section 167(1). Section 167(1) leads to immediate vacation of an office of director if the person incurs any of the disqualifications mentioned in Section 164. Therefore, for the purpose of Section 167(1), sub- section (1) and (2) of Section 164 appears in same footing irrespective of the fact that the former is a result of personal incapacity and the latter is of a case of default at corporate level. 
Though the aforesaid provisions have undergone some changes vide the Amendment Act, the onerous requirement of automatic vacation of office in non- defaulting companies still remains. Furthermore, the provisions do not provide any leeway/ exclusion to the non- executive directors despite their non- executive role in the organization making it more onerous to those directors. Even the period of six months given to a new director to make the default good seems to be possible only in respect of default related to non- filing of annual returns/ financial statements but not for default in repayment of deposits/ debentures etc. 
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