2020 (12) TMI 65 - HC - Companies Law

Activation of Director Identification Number and Digital Signature of the petitioners - get appointed or reappointed as Directors of any Company without any hindrance - HELD THAT - The Hon'ble Division Bench in MEETHELAVEETIL KAITHERI MURALIDHARAN, KAMAL ANEESMOHAMED, SATHISH KUMAR GOPAL, GOVINDASAMY BALASUBRAMANIAM, PAARI SENTHIL KUMAR, PAARI DHANALAKSHMI, VERSUS UNION OF INDIA, THE REGISTRAR OF COMPANIES TAMIL NADU, CHENNAI 2020 (10) TMI 595 - MADRAS HIGH COURT 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 that 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. Petition allowed.

Summary

Issues Involved: Challenge to the order of the second respondent regarding Director Identification Number (DIN) and Digital Signature activation for petitioners.

Analysis:
1. Disqualification of Directors under Companies Act, 2013: The issue revolved around the disqualification of Directors by the Registrar of Companies (RoC) under Section 164(2)(a) of the Companies Act, 2013. Various notifications disqualifying Directors were issued on different dates, leading to legal challenges in the court.

2. Legal Precedents: The judgment referred to previous cases where disqualified Directors had challenged the notifications. A specific case, Bhagavan Das Dhananjaya Das v. Union of India, was highlighted, where the court had set aside the notifications/orders disqualifying Directors.

3. Challenges and Dismissals: The notification dated 17.12.2018 disqualifying Directors was challenged based on previous judgments, but these challenges were dismissed by the court on different dates. The matter was further taken up in a batch of writ appeals before the First Bench of the court.

4. Judgment on Powers of RoC: The judgment in the case of Meethelaveetil Kaitheri Muralidharan v. Union of India analyzed the powers of the RoC under Sections 164 and 167(1) of the Companies Act, 2013, and Rule 14 of the Companies (Appointment and Qualifications of Directors) Rules, 2014. It was concluded that the RoC was not entitled to deactivate the DIN based on the rules and legal provisions.

5. Decision and Order: The judgment in the mentioned case allowed the appeals, setting aside the impugned order and quashing the publication of the list of disqualified directors by the RoC. It was directed that the DIN of the respective directors should be reactivated within 30 days. The RoC was granted the authority to initiate action regarding disqualification after an inquiry to determine specific default attribution to directors.

6. Final Decision: Following the precedent set by the First Bench in the Meethelaveetil Kaitheri Muralidharan case, the writ petitions in question were allowed, aligning with the judgment's terms. No costs were imposed, and connected miscellaneous petitions were closed as per the court's decision.