Madras High Court
Ramasamy Senthilraja vs The Registrar Of Companies on 25 February, 2021
W.P. No.4244 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.02.2021
CORAM
THE HONOURABLE MR.JUSTICE ABDUL QUDDHOSE
W.P. No.4244 of 2021
and
WMP Nos.4846 and 4849 of 2021
Ramasamy Senthilraja .... Petitioner
Vs.
1. The Registrar of Companies,
The office of the Registrar of Companies,
5th Floor,
Shastri Bhavan,
No.26, Haddows Road,
Chennai,
Tamil Nadu - 600 006.
2. Union of India,
Through its Secretary,
Ministry of Corporate Affairs,
5th Floor,
A wing,
"SHASTRI BHAVAN"
New Delhi - 110 001. .... Respondents
1/7
https://www.mhc.tn.gov.in/judis/
W.P. No.4244 of 2021
Writ Petition filed under Article 226 of the Constitution of India to issue a
Writ of Certiorarified Mandamus calling for the records of the 1st
respondent relating to the impugned order dated 18.12.2018 uploaded in
the website of the 1st respondent in so far as the petitioner herein is
concerned, quash the same as illegal, arbitrary and devoid of merit and
consequentially direct the respondents herein to permit petitioner to get
reappointed as Director of any Company or appointed as Director in any
company without any hindrance.
For Petitioner : Mr.G.Sudhakar
For Respondents : Mr.V.Ashok kumar
Central Govt. Standing Counsel
ORDER
Mr.V. Ashok Kumar, learned Central Government Standing Counsel
accepts notice for the respondents.
2. 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 financial statements for three
consecutive financial years. The petitioner has challenged the impugned
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W.P. No.4244 of 2021
order dated 18.12.2018 passed by the first respondent on the ground that
without affording opportunity to the petitioner, the said order has been
passed.
3. Heard Mr.G.Sudhakar, learned counsel for the petitioner and
Mr.V.Ashok Kumar, learned Central Government Standing Counsel for the
respondents.
4. By consent of both the parties, this writ petition is taken up for
final disposal at the time of admission itself.
5. It is also contended by the learned counsel for the petitioner that
the impugned order dated 18.12.2018 has been passed in violation of the
provisions of the Companies Act, 2013 and therefore the said order is bad in
law.
6. The issue raised in these writ petitions 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 :
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W.P. No.4244 of 2021
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. 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.
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W.P. No.4244 of 2021
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.
7. 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
Director of M/s.Greenza Instrumentations Private Ltd.
8. 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.
9. Accordingly, the impugned order dated 18.12.2018 passed by the
first respondent disqualifying the petitioner as Director of M/s.Greenza
Instrumentations Private Ltd. under Section 164(2) (a) of the Companies
Act, 2013 is hereby set aside in the terms indicated in the aforesaid
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W.P. No.4244 of 2021
judgment and this writ petition is allowed. No costs. Consequently,
connected Miscellaneous Petitions are closed.
25.02.2021
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Index: Yes/ No
Internet: Yes/No
Speaking Order/Non-speaking Order
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To
1. The Registrar of Companies,
The office of the Registrar of Companies,
5th Floor,
Shastri Bhavan,
No.26, Haddows Road,
Chennai,
Tamil Nadu - 600 006.
2. The Secretary,
Union of India,
Through its Secretary,
Ministry of Corporate Affairs,
5th Floor,
A wing,
"SHASTRI BHAVAN"
New Delhi - 110 001.
https://www.mhc.tn.gov.in/judis/
W.P. No.4244 of 2021
ABDUL QUDDHOSE, J.
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W.P. No.4244 of 2021
25.02.2021
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