9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 522 - HC - Companies LawDisqualification of Directors - Seeking to direct the respondents to permit the petitioners to get re-appointed as Directors of any Company or appointed in any other Company without any hindrance - HELD THAT - The issue involved in these writ petitions is no more a res integra. It is to be stated that the Registrar of Companies (RoC) has been disqualifying the Directors under Section 164(2)(a) of the Companies Act, 2013 by order dated 08.09.2017. Another list was published in the website of the first respondent on 01.11.2017 disqualifying the Directors. Yet another list of Directors were disqualified on 17.12.2018 by the RoC. 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 has 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 it was held that 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. Petition allowed.
Issues involved: Challenge to disqualification of directors under Section 164(2)(a) of the Companies Act, 2013 and the power of the Registrar of Companies (RoC) to deactivate Director Identification Number (DIN).
Analysis: 1. Disqualification of Directors: The main issue in these writ petitions was the disqualification of directors by the RoC under Section 164(2)(a) of the Companies Act, 2013. The RoC had issued notifications disqualifying directors on various dates, leading to legal challenges. Previous judgments, such as Bhagavan Das Dhananjaya Das V. Union of India, had set aside similar notifications/orders disqualifying directors, providing a legal precedent in this matter. 2. Powers of RoC: The judgment extensively discussed the powers of the RoC in disqualifying directors and deactivating their DIN. It referred to Sections 164 and 167(1) of the Companies Act, 2013, and Rule 14 of the Companies (Appointment and Qualifications of Directors) Rules, 2014. The court analyzed the rules related to the allotment, cancellation, surrender, and deactivation of DIN. It emphasized that the rules did not provide for deactivation upon disqualification under Section 164(2) of the Companies Act, 2013. 3. Reactivation of DIN: The court held that the RoC was not empowered to deactivate the DIN of directors based on disqualification. It ruled that such deactivation would be contrary to the provisions of the Companies Act, as the disqualified directors might need to retain their DIN to rectify defaults in the companies they were associated with. The judgment ordered the reactivation of DINs of the directors within 30 days of the order, following the quashing of the disqualification and deactivation by the RoC. 4. Conclusion: The judgment concluded by allowing the writ petitions in line with the previous decision of the Hon'ble First Bench of the Court. It highlighted that while the directors' DINs would be reactivated, the RoC could still initiate action regarding disqualification after conducting an enquiry to attribute specific defaults to directors. The judgment emphasized that costs were not applicable in this case, and connected miscellaneous petitions were closed as a result of the decision.
|
