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TMI Blog2022 (10) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... . Nos. 7409, 9735, 12004, 12015 and 17916 of 2019, 1794, 1799, 8883, 8886, 12492, 12493, 12497, 12783, 12786, 13225, 13754, 17443, 17454, 18268, 18753, 19853, 19454, 18277 and 3901 of 2020, 5538, 5862, 6595 and 9982 of 2021. Harshavardhan Topre , for the petitioner in W. P. Nos. 10117 and 10118 of 2019. Chetan Kanungo , for the petitioners in W. P. Nos. 16510 and 16512 of 2019, 14814, 14947 and 14962 of 2021 and 26847 of 2022. Alok Sharma , for the petitioner in W. P. No. 18310 of 2019. Savendra Kumar Singh , for the petitioner in W. P. Nos. 24521 and 24528 of 2019, 3674 and 6128 of 2020. Anvesh Jain , for the petitioner in W. P. Nos. 26221 of 2019, 4985, 4987, 8703, 8790, 13164, 13426, 15501, 15651, 16001, 17230, 17435 and 19972 of 2020, 1067, 1070 and 2527 of 2021. Himanshu Sharma , for the petitioners in W. P. Nos. 1541, 11364, 11390, 13025, 14131, 14171 and 15500 of 2020 and 8652 of 2021. Abhisehk Singh Bhadoriya , for the petitioners in W. P. Nos. 9026, 13005, 13203, 14950 and 16147 of 2020 and 8046 of 2021. Rajendra Jain , for the petitioner in W. P. No 13759 of 2020. Nakul Khedkar , for the petitioners in W. P. Nos. 592 and 3792 of 2022. Arun Dudawat , for the petitioner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in various industries and organizations but company did not carry out any business for past 3 years and its bank accounts were also not in operation, for preceding 3 years petitioners did not file requisite return also as required under the Act of 2013. Consequently, petitioners incurred disqualification under Section 164(2) of the Act of 2013. However, the company continued to file its return but thereafter no return were filed as the company was not carrying on any business and consequently name of the company was struck off by the ROC -Gwalior. 5. Subsequently based upon on the status of the said company, respondents disqualified the petitioners to act as directors in other companies also and their DIN were also deactivated. It is worth mentioning the fact that other companies in which petitioners are directors are doing normal business and their statutory returns namely financial statements and annual returns are regularly filed. 6. On 13-09-2017, respondents posted a list of disqualified directors of the struck off companies all over the country with a separate list of companies having registered office under the jurisdiction of various offices of respondents across India wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners themselves or by somebody else, suo motu cognizance could not have been taken for deactivation of DIN. In absence of any statutory power to exercise suo motu power by authority approach of authority to deactivate DIN was contrary to the provisions specifically under Section 164 and 167 of the Act of 2013. 10. Learned counsel for the petitioners also raised the point of violation of principle of natural justice as according to them no opportunity was afforded to them before passing such order while rule 11(e) of the Rules of 2014 specifically provides for affording opportunity of hearing. 11. It is the submission of learned counsel for the petitioners that in some cases, respondents issued show cause notice to the petitioners but that was in respect of alleged violation of Section 137 of the Act of 2013 (Copy of financial statements to be filed with Registrar) and now respondents deactivated DIN, therefore, purpose and content of show cause notice and final order (by way of impugned order) are different, therefore, on the basis of show cause notice on some different ground, instant impugned order cannot be passed on some ground other than the one in show cause notice {Refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held in favour of petitioners. They relied upon the judgments passed by different High Courts from time to time in which some cases are worth reference like Madras High Court in Bhagwan Das Vs. UOI order dated 03-08-2018 [2018] 146 CLA 168 (Mad), by Gujarat High Court in Gaurang Balvantlal Vs. UOI order dated 18- 12-2018, [2019] 149 CLA 286 (Guj), by Delhi High Court in Mukut Pathak Vs. UOI order dated 04-11-2018 [2020] 156 CLA 43 (Delhi) and all other judgments filed by Shri Sankalp Sharma Advocate along with his synopsis in writ petition No.15683/2020. Petitioners sought parity. 16. Learned counsel for the respondents opposed the prayer by way of filing reply and tried to support impugned action of respondents. He denied the factum of denial of opportunity of hearing and referred Company Law Settlement Scheme, 2014 (CLSS, 2014) vide General Circular No.34 of 2014 in which all directors and companies were given a chance for course correction to submit financial statement/annual return and to cure the defects. Therefore, all these petitioners knew the fate very well, therefore, factum of opportunity of hearing is not available to the petitioners. According to him, respondents& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein Company Law Settlement Scheme, 2014 (CLSS -2014) and/or condonation of delay scheme -2018 (COD -2018) scheme is applicable Matters wherein Company Law Settlement Scheme, 2014 (CLSS -2014) and/or condonation of delay scheme -2018 (COD -2018) is not applicable Category -VIII Matters wherein petitioners are directors in other companies apart from defaulting company Matters wherein petitioners are not directors in other companies apart from defaulting company Category -IX Matters wherein petitioners have made the default good of non-filing after obtaining interim relief from this Court. Matters wherein petitioners still in default of non-filing after obtaining interim relief from this Court. 20. Since the primary and consequential question is in respect of deactivation of DIN of petitioners by respondents, therefore, all these writ petitions have been heard together and decided by this common order. Minor deviation in facts of different petitions would not alter the nature of controversy. 21. From the perusal of the Act of 2013 and Rules of 2014, it appears that Section 152 of the Act of 2013 deals in respect of Appointment of Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or by making misleading or false information or by misrepresentation; (ii) the term "fraudulent means" means if the DIN is obtained with an intent to deceive any other person or any authority including the Central Government. (2) The Central Government or Regional Director (Northern Region), or any officer authorised by the Central Government or Regional Director (Northern Region) shall, deactivate the Director Identification Number (DIN), of an individual who does not intimate his particulars in e-form DIR-3-KYC [or the web service DIR-3-KYC-WEB as the case may be] within stipulated time in accordance with Rule 12A. (3) The de-activated DIN shall be re-activated only after e-form DIR-3-KYC [or the web service DIR-3-KYC-WEB as the case may be] is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014.]" 22. From perusal of said rule, it appears that cancellation or deactivation of DIN can be done at the instance of any person while moving an application along with fee as specified in the Rules of 2014 and that too after affording of opportunity of hearing (if cancellation or deactivation of DIN is made pursuant to clause (b) of sub-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here deals in respect of cancellation of DIN, therefore, resorting to Sections 164 and 167 of the Act of 2013 for cancellation/deactivation of DIN is arbitrary and illegal. Only source available for deactivation of DIN is provided under rule 11 of Rules of 2014. 26. Close scrutiny of Sections 164(1) and 164(2) of the Act of 2013 makes it clear that former takes care of individual act of person which may operate as disqualification whereas later provision talks about conduct of a company in which person is working as director. Basis of disqualification in both the contingencies are different and apparently contingency of Section 164(1) of the Act of 2013 and rule 11 of the Rules of 2014 may be overlapping but so far as Section 164(2) of the Act of 2013 vis a vis rule 11 of Rules of 2014 is concerned, it appears that Section 164(2) and for that matter, Section 167(1) are concerned, there are certain different set of contingencies mainly non-existent in contingencies as provided in rule 11 of the Rules of 2014. Therefore, applying the grounds mentioned in rule 11 and treating them to be the grounds available under Section 164(2) and 167(1) of the Act of 2013 would lead to anomaly and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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