Madras High Court
Mohammed Akmaluddin vs Union Of India on 24 September, 2021
W.A.Nos.454 and 457 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24.09.2021
CORAM
THE HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA
and
THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY
W.A.Nos.454 and 457 of 2021
and
C.M.P.Nos.1793, 1794, 1797 & 1799 of 2021
Mohammed Akmaluddin .. Petitioner in W.A.No.454/2021
Shabna Raheem Khan .. Petitioner in W.A.No.457/2021
Vs.
1. Union of India,
Represented by its Secretary,
Ministry of Corporate Affairs,
Shastri Bhawan,
Dr.Rajendra Prasad Road,
New Delhi-110 001.
2. The Registrar of Companies,
Tamil Nadu, Chennai,
Block No.6, B Wing, 2nd Floor,
Shastri Bhawan,
26, Haddows Road,
Chennai – 600 006. .. Respondents in both W.Ps.
***
Prayer in W.A.No.454/2021: Writ Appeal filed under Clause 15 of
the Letters Patent praying to set aside the order dated 27.01.2020
passed in W.P.No.18877 of 2019.
Prayer in W.A.No.457/2021: Writ Appeal filed under Clause 15 of
the Letters Patent praying to set aside the order dated 27.01.2020
passed in W.P.No.18878 of 2019.
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W.A.Nos.454 and 457 of 2021
***
For Petitioner in : Mr.Mohan Prasad
both W.Ps. For M/s.Viruksham Legal
For Respondents : Mr.J.Madhanagopal Rao
in both W.Ps. Central Government Standing Counsel
COMMON JUDGMENT
(delivered by PUSHPA SATHYANARAYANA, J.)
These Writ Appeals have been filed challenging the order passed
in W.P.Nos.18877 and 18878 of 2019 dated 27.01.2020, wherein the
order of the second respondent dated 01.11.2017 was challenged,
insofar as the appellants/writ petitioners are concerned, and
consequential direction was sought for to direct the respondents to
permit the appellants/writ petitioners to get reappointed as Directors of
any Company or appointed as Director in any company without any
hindrance.
2. Heard the learned counsel on either side and perused the
materials placed before this Court.
3. The learned counsel appearing for the appellants/writ
petitioners requested that a judgment may be passed, in the same line
as that of the First Division Bench passed in W.A.No.569 of 2020 etc.
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W.A.Nos.454 and 457 of 2021
batch (Meethelaveetil Kaitheri Muralidharan V. Union of India,
2020 SCC OnLine Mad 1958).
4. The Hon'ble First Bench of this Court in W.A.No.569 of 2020,
etc. batch (Meethelaveetil Kaitheri Muralidharan V. Union of India,
2020 SCC OnLine Mad 1958) dealt with the powers of the RoC in the
light of Sections 164 and 167(1) of the Companies Act, 2013 and Rule
14 of the Companies (Appointment and Qualifications of Directors)
Rules, 2014 and also has elaborately considered as to whether the RoC
is entitled to deactivate the Director Identification Number (DIN) by
referring to the Rules 19, 10 and 11 of the said 2014 Rules and held as
follows :
"41. 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
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W.A.Nos.454 and 457 of 2021
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.
*****
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."
5. In the light of the decision of the Hon'ble First Bench of this
Court in Meethelaveetil Kaitheri Muralidharan's case (supra), these
writ appeals are allowed, in the terms indicated in the aforesaid
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W.A.Nos.454 and 457 of 2021
judgment. No costs. Consequently, connected miscellaneous petitions
are closed.
[P.S.N., J.] [K.R., J.]
24.09.2021
Index : Yes / No
Internet: Yes
rsi
To
1. Union of India,
Represented by its Secretary,
Ministry of Corporate Affairs,
Shastri Bhawan,
Dr.Rajendra Prasad Road,
New Delhi-110 001.
2. The Registrar of Companies,
Tamil Nadu, Chennai,
Block No.6, B Wing, 2nd Floor,
Shastri Bhawan,
26, Haddows Road,
Chennai – 600 006.
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W.A.Nos.454 and 457 of 2021
PUSHPA SATHYANARAYANA, J.
and
KRISHNAN RAMASAMY, J.
rsi
W.A.Nos.454 and 457 of 2021
and
C.M.P.Nos.1793, 1794, 1797 & 1799 of 2021
24.09.2021
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