2020 (6) TMI 725 - HC - Companies Law

Disqualification of Director of the Company - Section 164(2)(a) of the Companies Act, 2013 - deactivation of Director Identification Number (DIN) - HELD THAT - Issue decided in the case of SRI. EMANI VENKATAPHANINDRA SATYA KRISHNA VERSUS THE MINISTRY OF CORPORATE AFFAIRS 2019 (7) TMI 1686 - TELANGANA HIGH COURT where it was held that as the impugned orders in present writ petitions disqualifying the petitioners as Directors under Section 164(2)(a) of the Act, have been passed considering the period prior to 01.04.2014, the same cannot be sustained, and are liable to be set aside to that extent. The present writ petition is allowed.

Summary

Issues:
Challenge of disqualification as Director under Section 164(2)(a) of the Companies Act, 2013 and deactivation of Director Identification Number (DIN).

Analysis:
The present writ petition challenges the action of the 2nd respondent, The Registrar of Companies, in disqualifying the petitioners as Directors of the Company under Section 164(2)(a) of the Companies Act, 2013, and deactivating their Director Identification Number (DIN). The learned Counsel for the petitioners argued that the matter is covered by a common order dated 18.07.2019, in a previous case, and requested the writ petition to be allowed based on that order. The Assistant Solicitor General representing the respondents agreed that the previous order covers the issue at hand. The Court referred to the previous order and held that the impugned orders disqualifying the petitioners as Directors and deactivating their DINs were passed based on events before 01.04.2014, making them unsustainable. Consequently, the Court set aside the disqualification and directed the activation of the petitioners' DINs to enable them to function as Directors in companies other than those struck off. The Court clarified that the Registrar could still take appropriate action for violations under Section 164(2) of the Act post-01.04.2014 and for violations of Rule 11 of the Rules. The petitioners were also given the option to seek alternative remedies if aggrieved by the striking off of their companies under Section 248 of the Act. All writ petitions were allowed in line with the previous order.

In conclusion, the present writ petition challenging the disqualification as Director under Section 164(2)(a) of the Companies Act, 2013, and deactivation of DIN was allowed based on a previous common order. The Court set aside the disqualification and directed the activation of the petitioners' DINs, allowing them to function as Directors in active companies. The Registrar was granted the authority to take appropriate actions for violations post-01.04.2014 and for Rule 11 violations. The petitioners were also given the option to seek alternative remedies if dissatisfied with the striking off of their companies. The miscellaneous petitions, if any, were closed without costs.