Madras High Court
Arul Anbarasan vs Union Of India on 16 December, 2021
WP Nos. 25452 of 2021 etc batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 16.12.2021
CORAM
THE HONOURABLE MR. JUSTICE M. DHANDAPANI
W.P. Nos. 25452, 25453, 25322 & 25325 of 2021
and
W.M.P. Nos. 26893, 26894, 26896, 26897, 26901,
26731, 26732, 26733 & 26734 of 2021
WP No. 25452 of 2021
and
WMP Nos. 26983 & 26894 of 2021
Arul Anbarasan .. Petitioner
Versus
1. Union of India
Represented by its Secretary
Ministry of Corporate Affairs
Shastri Bhawan, Dr. Rajendra Prasad Road
New Delhi – 110 001
2. Registrar of Companies,
Tamilnadu, Chennai
Block No. 6, B Wing 2nd Floor
Shastri Bhawan 26, Haddows Road
Chennai – 600 034 .. Respondents
WP No. 25453 of 2021
and
WMP Nos. 26896, 26897 & 26901 of 2021
1. Devarayagounder Raajamanickam
2. Thangamraj ..
Petitioners
Versus
1. Union of India
https://www.mhc.tn.gov.in/judis
WP Nos. 25452 of 2021 etc batch
Represented by its
Ministry of Corporate Affairs
Shastri Bhawan
Dr. Rajendra Prasad Road
New Delhi – 110 001
2. Registrar of Companies
Tamilnadu, Coimbatore
AGT Business Park, Avinashi Road
Civil Aerodrome Post
Coimbatore – 641 014 .. Respondents
WP No. 25322 of 2021
and
WMP Nos. 26731 & 26732 of 2021
Challikattu Kesavan Revi (DIN No. 00838874) .. Petitioner
Versus
1. Union of India
Represented by its Secretary
Ministry of Corporate Affairs
Shastri Bhawan, Dr. Rajendra Prasad Road
New Delhi – 110 001
2. Registrar of Companies,
Block No. 6, B Wing 2nd Floor
Shastri Bhawan 26,
Haddows Road
Chennai – 600 034 .. Respondents
WP No. 25325 of 2021
and
WMP Nos. 26733 & 26734 of 2021
Vivek Revi (DIN No. 05211179) .. Petitioner
Versus
1. Union of India
Represented by its Secretary
Ministry of Corporate Affairs
Shastri Bhawan, Dr. Rajendra Prasad Road
https://www.mhc.tn.gov.in/judis
WP Nos. 25452 of 2021 etc batch
New Delhi – 110 001
2. Registrar of Companies,
Block No. 6, B Wing 2nd Floor
Shastri Bhawan 26,
Haddows Road
Chennai – 600 034 .. Respondents
WP No. 25452 of 2021:- Petition filed under Article 226 of the
Constitution of India, praying for issuance of a Writ of Certiorarified
Mandamus, calling for the records of the 2nd respondent relating to the
impugned order dated 17.12.2018 uploaded in the website of the 1 st respondent
insofar as the petitioner herein is concerned, quash the same as illegal,
arbitrary and devoid of merit and consequentially direct the respondents herein
to permit the petitioner to get reappointed as director of any company or
appointed as Director in any other company without any hindrance.
WP No. 26453 of 2021:- Petition filed under Article 226 of the
Constitution of India, praying for issuance of a Writ of Certiorarified
Mandamus, calling for the records of the 2nd respondent relating to the
impugned order dated 07.12.2018 uploaded in the websdite of the 1 st
respondent insofar as the petitioners herein vide DIN 06380437 nd DIN
06380441, is concerned, quash the same as illegal, arbitrary and devoid of
merit and consequentially direct the respondents herein to permit the petitioner
to get reappointed as director of any company or appointed as Director in any
other company without any hindrance.
WP No. 25322 of 2021:- Petition filed under Article 226 of the
Constitution of India, praying for issuance of a Writ of Certiorarified
Mandamus, calling for the records of the 2 nd respondent pertaining to the
impugned order dated 13.12.2019 uploaded in the website of the first
respondent and quash the same as illegal, arbitrary and devoid of merit and
consequentially direct the respondents herein to permit the petitioner to get
reappointed as director of any company or appointed as Director in any other
company without any hindrance.
WP No. 25325 of 2021:- Petition filed under Article 226 of the
Constitution of India, praying for issuance of a Writ of Certiorarified
Mandamus, calling for the records of the 2 nd respondent pertaining to the
impugned order dated 13.12.2019 uploaded in the website of the first
https://www.mhc.tn.gov.in/judis
WP Nos. 25452 of 2021 etc batch
respondent and quash the same as illegal, arbitrary and devoid of merit and
consequentially direct the respondents herein to permit the petitioner to get
reappointed as director of any company or appointed as Director in any other
company without any hindrance.
WP No. 25452 of 2021
For Petitioner : Mr. K.S. Selva Prakash
For Respondents : Mr. A. Prakash
Additional Central Government
Standing Counsel
WP No. 25453 of 2021
For Petitioner : Mr.K. Ashok Kumar
For Respondents : Mr. A. Prakash
Additional Central Government
Standing Counsel
WP No. 25322 of 2021
For Petitioner : Ms.Rithika.M
for M/s. Nathan & Associates
For Respondents : Mr. A. Prakash
Additional Central Government
Standing Counsel
WP No. 25325 of 2021
For Petitioner : Ms.Rithika.M
for M/s. Nathan & Associates
For Respondents : Mr. A. Prakash
Additional Central Government
Standing Counsel
https://www.mhc.tn.gov.in/judis
WP Nos. 25452 of 2021 etc batch
COMMON ORDER
The prayer made in these writ petitions is to issue a Certiorarified
Mandamus, calling for the records of the respective respondents in so far as it
relates to the publication of the list of disqualified Directors in which the names
of the respective petitioners are included and the consequential deactivation of
their Director Identification Number (DIN).
2. According to the petitioners, the respondents herein released a list
of disqualified directors under Section 164(2)(a) of the Companies Act, 2013,
disqualifying them as directors of the various companies, in which, names of
the petitioners were also included. In other words, the respondents, disqualified
the petitioners as Directors for non-filing of financial statements or annual
returns for continuous period of three financial years by the defaulting
companies on whose board, the petitioner (s) is/are serving as a Director.
According to the petitioners, by virtue of such disqualification, they could not
be appointed or reappointed as director in any other company for a period of 5
years. Therefore, assailing the orders of disqualification mainly on the ground
that such orders have been passed in gross violation of principles of natural
justice, the present writ petitions are filed.
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WP Nos. 25452 of 2021 etc batch
3. Today, when the writ petitions are taken up for consideration, the
learned counsel appearing for the petitioners jointly submitted that the issue
involved herein is no longer res integra. Earlier, this Court by order dated
03.08.2018 in WP. No. 25455 of 2017 etc. batch, in Bhagavan Das
Dhananjaya Das case reported in (2018) 6 MLJ 704, allowed those writ
petitions and set aside the orders dated 08.09.2017, 01.11.2017, 17.12.2018,
etc. passed by the Registrar of Companies, disqualifying the petitioners therein
to hold the office of directorship of the companies under Section 164(2)(a) of
the Companies Act, which came into effect from 01.04.2014. Thereafter, yet
another set of disqualified directors approached this court by filing
WP.No.13616 of 2018 etc. batch (Khushru Dorab Madan v. Union of India)
which were dismissed by order dated 27.01.2020. The said order of the learned
single judge was challenged by some of the petitioners therein before the
Division Bench of this Court in W.A. No. 569 of 2020, etc. batch
(Meethelaveetil Kaitheri Muralidharan v. Union of India, 2020 SCC
OnLine Mad 2958 : (2020) 6 CTC 113), which after elaborately dealt with
the issue as to whether the Registrar of Companies is entitled to deactivate the
Director Identification Number (DIN), allowed those writ appeals on
09.10.2020, the relevant passage of which, are profitably, extracted below:
"41. As is evident from the above, Rules 9 and 10 deals
with the application for allotment of DIN. Rule 10(6) specifies
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WP Nos. 25452 of 2021 etc batch
that the DIN is valid for the life time of the applicant and shall
not be allotted to any other person. Rule 11 provides for the
cancellation or surrender or deactivation of the DIN. It is very
clear upon examining Rule 11 that neither cancellation nor
deactivation is provided for upon disqualification under Section
164(2) of CA 2013. In this connection, it is also pertinent to
refer to Section 167(1) of CA 2013 which provides for vacating
the office of director by a director of a Defaulting Company. As
a corollary, it follows that if a person is a director of five
companies, which may be referred to as companies A to E, if the
default is committed by company A by not filing financial
statements or annual returns, the said director of company A
would incur disqualification and would vacate office as director
of companies B to E. However, the said person would not vacate
office as director of company A. If such person does not vacate
office and continues to be a director of company A, it is
necessary that such person continues to retain the DIN. In this
connection, it is also pertinent to point out that it is not possible
to file either the financial statements or the annual returns
without a DIN. Consequently, the director of Defaulting
Company A, in the above example, would be required to retain
the DIN so as to make good the deficiency by filing the
respective documents. Thus, apart from the fact that the AQD
Rules do not empower the ROC to deactivate the DIN, we find
that such deactivation would also be contrary to Section 164(2)
read with 167(1) of CA 2013 inasmuch as the person concerned
would continue to be a director of the Defaulting Company.
42. In light of the above analysis, we concur with the views
of the Delhi High Court in Mukut Pathak, the Allahabad High
Court in Jai Shankar Agrahari and the Gujarat High Court in
Gaurang Balvantlal Shah to the effect that the ROC is not
empowered to deactivate the DIN under the relevant rules. In
Yashodhara Shroff, the Karnataka High Court upheld the
constitutionality of Section 164(2) and proceeded to hold that a
prior or post decisional hearing is not necessary. For reasons
detailed in preceding paragraphs, we disagree with the view of
the Karnataka High Court that prior notice is not required
under Section 164(2) of CA 2013.
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WP Nos. 25452 of 2021 etc batch
43. In the result, these appeals are allowed by setting
aside the impugned order dated 27.01.2020. Consequently, the
publication of the list of disqualified directors by the ROC and
the deactivation of the DIN of the Appellants is hereby quashed.
As a corollary to our conclusion on the deactivation of DIN, the
DIN of the respective directors shall be reactivated within 30
days of the date of receipt of a copy of this order. Nonetheless,
we make it clear that it is open to the ROC concerned to initiate
action with regard to disqualification subject to an enquiry to
decide the question of attribution of default to specific directors
by taking into account the observations and conclusions herein.
No costs. Consequently, connected miscellaneous petitions are
closed."
4. The aforesaid submissions of the learned counsel for the petitioners
have been conceded on the side of the respondents. It is also submitted by
Mr. K. Ramanamurthy, learned Central Government Standing Counsel
appearing for some of the respondents in these writ petitions, on instructions,
submitted that as directed by the Division Bench of this Court, the Registrar of
Companies is in the process of conducting an enquiry to decide the extent of
default committed by the individual Directors and subject to the outcome of
such enquiry, appropriate orders will be passed. The said submission is
recorded.
5. Having regard to the above, all the writ petitions stand allowed, in
the terms as indicated in the judgment in Meethelaveetil Kaitheri
Muralidharan's case. No costs. Consequently, connected miscellaneous
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WP Nos. 25452 of 2021 etc batch
petitions are closed. It is needless to mention that the Registrar of Companies
shall conduct an enquiry taking note of the observations made by the Division
Bench of this Court, mentioned supra.
16.12.2021
Index : Yes/No
Internet : Yes/No
rli
To
1. Union of India
Represented by the
Ministry of Corporate Affairs
A Wing, Shastri Bhawan
Dr. Rajendra Prasad Road
New Delhi – 110 001
2. Registrar of Companies, Chennai
Block No. 6, B Wing 2nd Floor
Shastri Bhawan 26
Haddows Road
Chennai – 600 034
3. Registrar of Companies
Tamilnadu, Coimbatore
AGT Business Park, Avinashi Road
Civil Aerodrome Post
Coimbatore – 641 014
https://www.mhc.tn.gov.in/judis
WP Nos. 25452 of 2021 etc batch
M. DHANDAPANI, J
rli
WP Nos. 25452 of 2021 etc batch
16.12.2021
https://www.mhc.tn.gov.in/judis
