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TMI Blog2019 (12) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... e disposed by this Court where it was held that Section 164(2)(a) is read down to the extent it disqualifies the directors in other companies which are scrupulously following the requirements of law, making it clear that no directors in other companies can be disqualified without prior notice. As the Petitioner in this case is similarly placed to the Petitioners in the aforesaid batch of cases relating to the same impugned lists published in the website by the Respondents, she is entitled to identical relief that has been granted to them. Petition allowed. - W.P. No. 28698 of 2019, W.M.P. Nos. 28447 and 28450 of 2019 - - - Dated:- 1-10-2019 - THE HON'BLE MR. JUSTICE P.D. AUDIKESAVALU For Petitioner : Mr. R. Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -directors from 1.11.2016 itself before the deadline commenced wrongly fixing the first financial year from 1.4.2013 to 31.3.2014. ( b) By virtue of the new Section 164(2)(a) of the 2013 Act using the expression for any continuous period of three financial years and in the light of Section 2(41) defining financial year as well as their own General Circular No.08/14 dated 4.4.2014, the first financial year would be from 1.4.2014 to 31.3.2015, the second financial year would be from 1.4.2015 to 31.3.2016 and the third financial year would be from 1.4.2016 to 31.3.2017, whereas the second respondent clearly admitted in paras 15 and 22 of the counter affidavit that the default of filing statutory returns for the financial years c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously following the provisions of the Companies Act, have been deprived of, the principles of natural justice should have been adhered to by issuing proper notice to all the directors. (e) When the disqualification clause was not attracted to the directors of private companies under the old Act of 1956, the same cannot be allowed to take a retrospective effect under the new Act, when the provision of Section 164(2)(a) came into force only from 1.4.2014. This is also for one more reason that the failure to file the annual returns has been adequately taken care of by the penal provision under Section 92, making it clear that every officer of the company who is in default shall be punishable with imprisonment for a term which may e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o financial years, whereas for disqualification, the criteria is three financial years. Therefore, in my considered opinion, although the petitioners have not challenged the provision of Section 164(2)(a), as the respondents have not followed the principles of natural justice, extinguishing the corporate life of the directors to the extent of disqualifying them to hold the directorship in the other companies, the said provision is liable to be read down, hence, Section 164(2)(a) is read down to the extent it disqualifies the directors in other companies which are scrupulously following the requirements of law, making it clear that no directors in other companies can be disqualified without prior notice. (g) However, it is made c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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