Allowed

Hariharan K. R. v. Union of India

Kerala HC10 Feb 2022WP(C)/4436/2022

Case brief

AI extract

What is this about?

This judgment allowed writ petitions filed by directors seeking restoration of their Digital Signature Certificates and DINs. Relying on a previous High Court ruling, the court held that DINs cannot be deactivated solely due to disqualification under Section 164(2) of the Companies Act, 2013, and directed the Registrar to re-activate them.

What did the court decide?

Directed the 2nd respondent to re-activate the DIN numbers of the petitioners.

Hariharan K. R. Vs Union of India — Pension and Retirement Benefits | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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THURSDAY, THE 10^TH DAY OF FEBRUARY 2022 / 21ST MAGHA, 1943 WP(C) NO. 4436 OF 2022

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PETITIONER:

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HARIHARAN K. R. AGED 79 YEARS S/O. K. S. RAMA IYER, TC 2/ 1140(1), SEETHA NIVAS, KOONAMKULAM LANE, MURINJAPALAM, MEDICAL COLLEGE P. O., THIRUVANANTHAPURAM - 695 011. KERALA BY ADV RAVIKRISHNAN

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RESPONDENTS:

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1 UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, NEW DELHI,PIN - 110 001.

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2 REGISTRAR OF COMPANIES BMC ROAD, THRIKKAKKARA COCHIN, PIN - 682021.

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SRI.V.GIREESHKUMAR CGC SRI.MANU.S-ASGI

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.02.2022, ALONG WITH WP(C).4439/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos. 4436 of 2022 & 4439 of 2022

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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THURSDAY, THE 10^TH DAY OF FEBRUARY 2022 / 21ST MAGHA, 1943

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WP(C) NO. 4439 OF 2022

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PETITIONER:

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M.VISWANATHAN NAIR AGED 63 YEARS S/O. MADHAVAN PILLAI, CHAITHRA POURNNAMI, PUDUSSERY CENTRAL, KANJIKODE P. O., PALAKKAD - 678 621, KERALA.

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BY ADV RAVIKRISHNAN

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RESPONDENTS:

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1 UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS, NEW DELHI, IN - 110 001.

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2 REGISTRAR OF COMPANIES BMC ROAD, THRIKKAKKARA, COCHIN, PIN - 682 021.

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SRI.V.GIREESHKUMAR CGC SRI.MANU.S-ASGI

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.02.2022, ALONG WITH WP(C).4436/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos. 4436 of 2022 & 4439 of 2022

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JUDGMENT

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Dated this the 10^th day of February, 2022

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The petitioners in both these writ petitions seek to quash Ext.P2 and to direct the respondents to restore the Digital Signature Certificate and Director Identification Number of the petitioners.

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The petitioners state that they were Directors of certain companies. The petitioner in WP(C) No.4436/2022 was given Director Identification Number 01213276 and the petitioner in WP(C) No.4439/2022 was given Director Identification Number 06804249. Some Companies in which the petitioners were Directors failed to file annual returns/financial statements for three consecutive years and accordingly, the petitioners were disqualified to hold the post of Directors in view of Section 164(2) of the Companies Act, 2013. Consequently, the Director Identification Numbers of the petitioners were deactivated.

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WP(C) Nos. 4436 of 2022 & 4439 of 2022

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The petitioners have approached this Court

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aggrieved by the disqualification imposed on them and by the deactivation of their DIN numbers.

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The learned Assistant Solicitor General of India entered appearance and opposed the writ petitions. The learned Assistant Solicitor General of India further pointed out that as regards WP(C) No. 4439/2022, the company named Green Apple Pyro Energy Pvt. Ltd, the name of the said Company stands struck off. However, the counsel on either side submitted that issue involved in these writ petitions is covered by the judgment of this Court in Zacharia Maramkandathil Mohan and others v. Union of India and others [2021(3)KHC 550] .

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In the judgment in Zacharia Maramkandathil Mohan and others (supra), this Court held as follows:

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“1. Section 164(2) and Section 167(1) of the Companies Act, 2013 are not ultra vires Article 14 or Article 19(1)(g) of the Constitution of India.

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Disqualification of the petitioners under Section 164(2) of the Companies Act, 2013 is by

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WP(C) Nos. 4436 of 2022 & 4439 of 2022

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operation of law and the petitioners are not entitled to any opportunity of hearing in the matter.

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Section 164(2) is not retrospective in operation and only the defaults made by Companies in filing Financial Statements / Annual Returns in the financial year 2014-15 and subsequent financial years can be taken into account for disqualifying a Director under Section 164(2) of the Companies Act, 2013.

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Where disqualification of petitioners is based on any period of default prior to 01.04.2014, such disqualifications are bad in law and are hence set aside.

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The provisos inserted below Section 164(2) and Section 167(1)(a) of the Act, 2013 by the Companies (Amendment) Act, 2017 with effect from 07.05.2018 are constitutionally valid and the same being clarificatory in nature, would apply retrospectively. However, the words “ in all the companies” appearing in the proviso to Section 167(1) (a) will have only prospective operation.

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Notice under Section 455(4) of the Companies Act, 2013 is not a sine qua non for applying the provisions of Section 164(2) or 167 to the Directors of any Defaulting Company.

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The Director Identification Numbers (DINs) of the petitioners allotted under Rule 10 of the Companies (Appointments and Qualifications of Directors) Rules, 2014, are not liable to be deactivated or cancelled solely for the reason that the petitioners stand disqualified for appointment / reappointment as Directors of Companies by operation of Section 164(2).

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Consequently, there will be a direction to the respondents to re-activate the Director Identification Numbers (DINs) of the petitioners forthwith. However, it is made clear that the respondents will be at liberty

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WP(C) Nos. 4436 of 2022 & 4439 of 2022

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to cancel or deactivate the DINs of the petitioners for any reasons laid down in Rule 11 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

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Where the names of any Companies stand struck off, the petitioners in respect of such Companies are at liberty to invoke Section 252 of the Companies Act, 2013 to challenge striking off the names of their Companies from the Register of Companies and to resort to legal remedies available to them, to challenge their disqualification for holding the office of Director.”

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The case of the petitioners is squarely covered by the aforesaid judgment.

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In the said circumstances, these writ petitions are allowed

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and the 2^nd respondent is directed to re-activate the DIN numbers of the petitioners.

N.NAGARESH

JUDGE

spk

WP(C) Nos. 4436 of 2022 & 4439 of 2022

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APPENDIX OF WP(C) 4436/2022

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PETITIONER EXHIBITS

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Exhibit P1 TRUE COPY OF THE MASTER DATA PRINTED FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA SHOWING THE STATUS OF THE COMPANY.

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Exhibit P2 A COPY SHOWING THE DIN STATUS OF THE PETITIONER PRINTED FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS.

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RESPONDENT'S/S EXHIBITS : NIL

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WP(C) Nos. 4436 of 2022 & 4439 of 2022

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APPENDIX OF WP(C) 4439/2022

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PETITIONER EXHIBITS

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Exhibit P1 TRUE COPY OF THE MASTER DATA PRINTED FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA SHOWING THE STATUS OF THE COMPANY.

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Exhibit P2

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A COPY SHOWING THE DIN STATUS OF THE PETITIONER PRINTED FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS.

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RESPONDENT'S/S EXHIBITS : NIL

Hariharan K. R. v. Union of India

Case brief

What is this about?

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Hariharan K. R. v. Union of India

Case brief

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