Sandhyavalli Vinjamuri vs Union Of India
2023 Latest Caselaw 1732 AP

                                    1

      HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
            MAIN CASE No.: W.P. No. 6798 of 2023
                     PROCEEDING SHEET

Sl.
                                             ORDER

No.     DATE
04    29.03.2023   RNT, J

                   1)    Ms. P. Laxmi Priyamvitha, Advocate,
                   representing        Smt.     G.    Sumathi,    learned

Counsel for the Petitioner, submits that the Petitioner was Director in two companies and one of those Companies was struck off due to non-compliance with the statutory provisions of Section 164 of the Companies Act, 2013 [„Act‟] by not filing the annual statement for three [03] consecutive financial years after the amendment in 2014. Her submission is that, the DIN of the Petitioner has been deactivated on that ground.

2) Placing reliance on the judgment of this Court in Sri Rahul Balmoori Vs. Union of India and another in W.P. Nos. 11434, 11941, 12240, 13780, 14963, 14992, 15139, 15856 & 16161 of 2021, decided on 05.08.2021, and Smt. Sumana Devabhakthini Vs. The Ministry of Corporate Affairs and another in W.P. No. 12237 of 2020, decided on 10.08.2020, as also Rules 10 and 11 of the Companies (Appointment of Directors) Rules, 2014 [„Rules‟], she submits that, since the

Petitioner‟s case is not covered under Rule 11 of the Rules and consequently the deactivation of the DIN of the Petitioner is illegal.

3) It is further submitted that the three [03] financial consecutive years, in the present case, are from 2015-2016 to 2021- 2022, with respect to M/s. RAVINS IT SOLUTIONS PRIVATE LIMITED, pursuant to which, that Company was struck out and the Petitioner Director‟s DIN was deactivated, but in another Company, in which the same Petitioner is also Director, namely, M/s. WELLFARE BUILDINGS AND ESTATES PRIVATE LIMITED, is still active, but because of deactivation of the Petitioner‟s DIN, the Petitioner is not able to file the financial statement of that other Company as well.

4) Ms. Divya Ditla, learned Central Government Counsel for Respondent No.1, requests for time to file the counter affidavit.

5) The submissions of the Petitioner‟s Counsel are based on the aforesaid two judgments, in which prima facie, this Court finds that Section 167 of the Act, did not find consideration.

6) As per Section 167(1), "the office of a director shall become vacant in case (a) he

incurs any of the disqualifications specified in Section 164", but, its proviso, further provides that, "where he incurs disqualification under sub-section (2) of section 164, the office of the director shall become vacant in all the companies, other than the company which is in default under that sub-section".

7) Prima facie, from a bare reading of Section 167(1)(a) proviso, it transpires that the post of the Director would become vacant not only in the defaulting Company but also in other Companies of which the Director of the defaulting Company is also the Director.

8) The matter requires consideration.

9) Post on 12.04.2023, as requested, to enable the learned Counsels for the parties to address on the aforesaid aspect.

10) The counter affidavit may be filed by the respondent by the next date.

_______ RNT, J SM/MKK..