Madras High Court
Dhinesh Kumar vs Union Of India on 9 February, 2021
W.P.No.34032 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 09.02.2021
CORAM:
THE HONOURABLE MR. JUSTICE ABDUL QUDDHOSE
W.P.No.34032 of 2018
and W.M.P.No.39527 of 2018
Dhinesh Kumar ... Petitioner
Vs.
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 – 600 006. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India, for
issuance of a Writ of Certiorarified Mandamus to call for the records of the 2nd
respondent relating to the impugned order dated 01.11.2017 uploaded in the
website of the 1st respondent in so far as the petitioner herein is concerned with
(DIN) Director Identification Number :02810208, under section 164(2)(a) of
the Companies Act, and quash the same as illegal, arbitrary, illegal and devoid
of merit and may direct the respondents to activate the Director Identification
Number and Digital Signature of the petitioner or get appointed or re-appointed
as director of any company without any hindrance.
For Petitioner : Ms.P.Stella Mary
For Respondents : Ms.K.B.Arul, CGSC
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W.P.No.34032 of 2018
ORDER
This writ petition has been filed challenging the disqualification of the
petitioner as Director under Section 164(2)(a) of the Companies Act, 2013 on
the ground that he has not submitted his financial statements or annual returns
for three financial years consecutively. The petitioner has challenged the
impugned order dated 01.11.2017 passed by the second respondent on the
ground that without affording opportunity to the petitioner, the said order has
been passed.
2.Mr.K.B.Arul, learned Central Government Standing Counsel for the
respondents accepts notice on behalf of the respondents.
3.Heard Ms.P.Stella Mary, learned counsel for the petitioner and
Mr.K.B.Arul, learned Central Government Standing Counsel for the
respondents.
4.It is also contended by the learned counsel for the petitioner that the
impugned order has been passed in violation of the provisions of the Companies
Act, 2013 and therefore the said order is bad in law.
https://www.mhc.tn.gov.in/judis/
W.P.No.34032 of 2018
5.The issue raised in this writ petition was considered by the Hon'ble
Division Bench of this Court by its order dated 09.10.2020 in W.A. No.569 &
Ors. of 2020 in the case of Meetgelaveetil Kaitheri Muralidharan Versus
Union of India & Another and in paragraphs 36 and 38, it has been held as
follows :
36. As is evident from the above, Rules 9 and 10
deals with the application for allotment of DIN. Rule 10 (6)
specifies 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.
https://www.mhc.tn.gov.in/judis/
W.P.No.34032 of 2018
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.
38. 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.
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W.P.No.34032 of 2018
6.The case on hand stands on the same footing. In the instant case, also,
no notice was given to the petitioner before disqualifying him as a Director of
M/s.I Pack Software Private Limited.
7.For the foregoing reasons, the ratio laid down by the Hon'ble Division
Bench of this Court, dated 09.10.2020 in W.A. No.569 & batch applies to the
facts of the instant case also.
8.Accordingly, the impugned order dated 01.11.2017 passed by the
second respondent disqualifying the petitioner as a Director of M/s.I Pack
Software Private Limited under Section 164(2)(a) of the Companies Act, 2013
is hereby set aside in the terms indicated in the aforesaid judgment and the writ
petition is allowed. No costs. Consequently, connected miscellaneous petition
is closed.
09.02.2021
Index : Yes / No
Internet : Yes / No
Speaking/Non-speaking order
pam
https://www.mhc.tn.gov.in/judis/
W.P.No.34032 of 2018
ABDUL QUDDHOSE, J.
pam
To
1.The Secretary,
Union of India,
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 – 600 006.
W.P.No.34032 of 2018
09.02.2021
https://www.mhc.tn.gov.in/judis/
