2020 (7) TMI 185 - HC - Companies Law

Validity of undated document disclosing a DIN status which shows that the petitioner has been disqualified by the Registrar of Companies under Section 164(2) of the Companies Act, 2013 - HELD THAT - On perusing the relevant documents, although the impugned DIN Status indicating the disqualification of the petitioner by the ROC is not dated, paragraph 6 of the writ petition states that the petitioner had renewed his digital signature (DSC) on 17th January, 2020. The petitioner came to know of the impugned document in March, 2020 which has been stated in paragraph 6 of the writ petition. It can therefore be assumed that the impugned document is after January, 2020 and before March, 2020 when the petitioner came to know of it. Section 168(2) of the 2013 Act is very clear. The resignation of a Director takes immediate effect from the date on which the notice of resignation is received by the company. Hence there is no question of such resignation not being accepted by the company as was the case made out in the reply received by the petitioner on 19th March, 2016. The resignation of the petitioner came into immediate effect on 18th March, 2016 with the letter of the petitioner - the petitioner is entitled to an injunction restraining the respondents from giving any effect to the disqualification/DIN Status of the petitioner or acting in terms thereof. Petition disposed off.

Summary

Issues:
Challenge to disqualification under Section 164(2) of the Companies Act, 2013 based on resignation, immediate effect of resignation under Section 168(2), reliance on Delhi High Court order, entitlement to injunction against disqualification/DIN Status.

Analysis:
The petitioner challenged an undated document revealing disqualification by the Registrar of Companies under Section 164(2) of the Companies Act, 2013. The petitioner, a director of four companies, contended that only one company was in default, and submitted a resignation letter effective from 18th March, 2016, which was rejected due to high liabilities. The petitioner relied on Section 168(2) stating immediate resignation effect upon receipt by the company and cited a Delhi High Court order setting aside disqualification upon resignation from directorship.

Upon perusal, the court noted the petitioner renewed the digital signature on 17th January, 2020, and became aware of the disqualification document between January and March 2020. Emphasizing Section 168(2) for immediate resignation effect, the court found the petitioner's resignation effective from 18th March, 2016, supported by a lawsuit seeking declaration of non-directorship. The court aligned with the Delhi High Court order as the petitioner resigned before disqualification, without being informed of the disqualification reasons.

Consequently, the court granted an injunction restraining respondents from enforcing the disqualification/DIN Status, directing the petitioner to communicate the order to respondents for compliance through a website copy. The petitions were disposed of, with provision for urgent certified website copies upon formalities completion.