Krishna Kumar Rungta vs Union Of India And Others
2021 Latest Caselaw 5604 Cal

                       In the High Court at Calcutta
                      Constitutional Writ Jurisdiction
                               Appellate Side


The Hon'ble Justice Sabyasachi Bhattacharyya



                          WPA No. 4347 of 2020
                          IA No: CAN 1 of 2021

                          Krishna Kumar Rungta
                                    Vs.
                         Union of India and others.


For the applicant                   :     Mr. Shaunak Mitra,
                                          Mr. Sidhartha Sharma,
                                          Ms. Ujjaini Chatterjee,
                                          Mr. Arjun Asthana

For the respondents                 :     Mr.   Krishnaraj Thaker,

Mr. Tanoy Chakraborty, Mr. Goutam Shroff, Mr. Siddharth Shroff

For the Union of India : Mr. Avinash Kankni

Hearing concluded on : 05.10.2021

Judgment on : 08.11.2021

Sabyasachi Bhattacharyya, J:-

In Re: CAN 1 of 2021

1. The present application has been filed for recall of an Order dated

March 8, 2021 passed by this court in WPA No. 4347 of 2020.

2. Learned counsel appearing for the applicant submits that the

applicant was not impleaded as a party to the writ petition, for which

the points raised in the recall application could not be properly

represented before the court when the order under recall was passed.

Learned senior counsel for the applicant contends that the limited

scope of the writ petition itself, bearing WPA No. 4347 of 2020, was re-

activation of the Directors Identification Number (DIN) of the writ

petitioner. The premise of such contention was centered around the

deactivation of the writ petitioner's DIN and the reliefs sought in the

writ petition pertained to the same. It is further contended that, in

terms of the Master Circular dated February 10, 2012 (Annexure-G at

page 55 of the Recall Application), if there is a management dispute in

respect of a company, till such dispute is settled, the documents filed

by the company and the contesting group of directors will not be

approved/registered/recorded and will thus not be available in the

registry for public viewing.

3. Hence, it is contended that although the applicant is not aggrieved

with the portion of the order under recall whereby the DIN of the writ

petitioner was re-activated, the other part of the said order, whereby

the operation of the order dated June 24, 2016 passed by the

Registrar of Companies holding that till the management dispute was

settled, the documents filed by the company and by its contesting

groups of directors would not be approved/registered/recorded and

not be available in the registry for public viewing was also set aside,

ought to be recalled.

4. It is submitted by learned senior counsel appearing for the applicant

that the said order dated June 24, 2016, which is appearing as

Annexure P-6 at page 25 of the writ petition, has no nexus with the

re-activation of DIN, since the management dispute pertaining to the

Tirupathi Properties & Investment Private Limited still persists and

the company is marked as having a management dispute even as on

date.

5. Learned counsel appearing for the writ petitioner controverts such

submissions and submits that the Circular dated February 10, 2012

clarifies that wherever there is management dispute, the company is

required to mandatorily file the attachment relating to cause of

cessation along with Form 32 with the ROC concerned, irrespective of

the ground of cessation. Hence, as a result of the re-activation of the

writ petitioner's DIN, the ROC could not refuse to approve, register

and record or prevent the documents filed by the writ petitioner from

being available in the registry for public viewing. Such portion of the

order, as challenged in the present recall application, was a necessary

consequence of the re-activation of the writ petitioner's DIN, it is

argued.

6. It appears from the provisions of the Circular dated February 10, 2012

that Clause 2 thereof merely stipulated that wherever there is a

management dispute, the company is required to mandatorily file the

attachment relating to cause of cessation along with Form 32 with the

ROC concerned irrespective of the ground of cessation.

7. Clause 3 thereof stipulates that on receipt of complaint, the ROC

concerned will examine the same and mark the company as having

'management dispute'. Also, the ROC will issue a letter to the

company and the parties to settle the matter amicably or get an

order/interim order from a court or tribunal of competent jurisdiction.

It further provides that, till such dispute is settled, the documents

filed by the company and by the contesting group of directors will not

be approved/registered/recorded and, thus, will not be available in

the registry for public viewing.

8. Upon a consideration of the clauses of the said Circular dated

February 10, 2012, it is seen that the first paragraph thereof clarifies

that previous circulars were superseded thereby.

9. However, Clause 2 does not, in any manner, affect the independent

operation of Clause 3 of the Circular dated February 10, 2012, which

specifically empowers the ROC to withhold the

approval/registration/recording of the documents filed by the

company and by the contesting group of directors and from those

being available in the registry for public viewing.

10. In the present case, the challenge in the writ petition was that the DIN

of the writ petitioner could not be deactivated since the writ petitioner

had complied with the requirements to be complied with by the

directors by filing annual reports and financial statements of the

concerned financial years. However, it is specifically admitted in

paragraph no. 16 of the writ petition that the petitioner is taking

appropriate steps in respect of the marking of the respondent no. 4,

that is, the Tirupathi Properties & Investment Private Limited as

having management dispute. Thus, the marking of the company as

having management dispute was not the subject-matter of the writ

petition but that of an appropriate challenge before a different forum.

A perusal of the Master Circular dated February 10, 2012 makes it

clear that Clause 3 thereof is independent of Clause 2, the latter

merely contemplating the requirement of the company to mandatorily

file the attachment relating to cause of cessation along with Form 32

of the ROC concerned, irrespective of the ground of cessation.

11. However, Clause 3 of the Circular still remains in force and restrains

the ROC from approving/registering/recording the documents filed by

the company and the directors and from making those available in the

registry for public viewing if there is an existing management dispute.

12. Although the writ petitioner succeeded in establishing in the writ

petition that the deactivation of the DIN due to non-approval of the

documents filed by the petitioners was de hors the law, since the writ

petitioner was not responsible for such non-approval, no cause of

action was made out in the writ petition for setting aside the operation

of the portion of the order dated June 24, 2016 passed by the ROC in

terms of Clause 3 of the Master Circular dated February 10, 2012.

13. In fact, since such marking of the company-in-question as having

management dispute still continues, independent of the re-activation

of the writ petitioner's DIN, the portion of the order under recall,

whereby the order of the ROC dated June 24, 2016 was set aside,

was beyond the scope of the writ petition and the dispute involved

therein. Although the writ petitioner was not responsible for non-

approval of the documents filed by the writ petitioner due to Clause 3

of the Circular dated February 10, 2012, thereby justifying the re-

activation of the DIN, the order dated June 24, 2016 passed by the

ROC retained its validity in view of the subsistence of the marking of

the said company as having 'management dispute'.

14. Thus, although the portion of the order under recall, by which the

deactivation of the writ petitioner's DIN was set aside, was justified

since there was due compliance of the liabilities of the writ petitioner

as director of the company-in-question, the latter portion of the order

under recall, setting aside the operation of the order dated June 24,

2016 of the ROC, was in contravention of the Circular dated February

10, 2012 and, thus, bad in law.

15. Since the review applicant was not impleaded as a party to the writ

petition, there was no opportunity for the said applicant to point out

the aforesaid flaw in the order under recall and/or any scope of

arguing the question as raised in the review application at the relevant

juncture, the portion of the order under recall setting aside the order

dated June 24, 2016 is required to be recalled/set aside.

16. Accordingly, CAN 1 of 2021 is allowed, thereby recalling and setting

aside the finding that it was beyond the scope of the jurisdiction of the

ROC to direct that the documents filed by the directors would not be

approved/registered/recorded and thus would not be available in the

registry for public viewing and setting aside of the operation of a

portion of the order dated June 24, 2016 by the ROC, Kolkata. The

order dated March 8, 2021 passed in WPA 4347 of 2020 is recalled

and modified to the following extent:

17. The deactivation of the DIN of Krishna Kumar Rungta, the writ

petitioner, is set aside and such DIN is re-activated. The Registrar of

Companies (ROC) shall take necessary consequential steps and permit

the writ petitioner to discharge his duties as a director of the company

being the respondent no.4 in the writ petition, that is Tirupathi

Properties and Investment Private Limited.

18. However, the part of the order dated June 24, 2016 passed by the

Registrar of Companies, Kolkata withholding the

approval/registration/recording of the documents filed by the

company and the writ petitioner and non-availability of the said

documents in the registry for public viewing, till the 'management

dispute' is settled and such marking is removed by the ROC, shall

remain in force.

19. It is made clear that, in view of the deactivation of the DIN of the writ

petitioner being set aside, the writ petitioner shall be able to discharge

his duties as a director of the Tirupathi Properties and Investment

Private Limited by filing the documents which are required to be filed

by the directors of the company statutorily. However, the bar as to

approval/registration/recording and availability in the registry for

public viewing of the documents filed by the writ petitioner or the

company shall remain in force till the 'management dispute' of the

company is settled and the marking to that effect is removed. The

order dated March 8, 2021 passed in WPA No. 4347 of 2020 is thus

modified to the extent as indicated above.

20. There will be no order as to costs.

21. Urgent certified copies of this order shall be supplied to the parties

applying for the same, upon due compliance of all requisite

formalities.

( Sabyasachi Bhattacharyya, J. )