The court disposed of a writ petition seeking quashing of the Registrar of Companies' order disqualifying the petitioner as a director. Relying on a recent Division Bench judgment, the court allowed the petition and set aside the impugned order.
The writ petition is allowed; the impugned order dated 04.09.2017 disqualifying the petitioner is set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 11.12.2020
CORAM
THE HONOURABLE MRS. JUSTICE PUSHPA SATHYANARAYANA
W.P.No.18272 of 2020
and
W.M.P.Nos.22651 & 22652 of 2020
Ramnath Sriram ..Petitioner
Vs.
1. The Union of India,
Represented by its
Ministry of Corporate Affairs,
Shastri Bhawan,
Dr. Rajendra Prasad Road,
New Delhi - 110 001.
2. The Registrar of Companies,
Puducherry,
No.7, 2 nd Floor,
Karuvadikuppam Main Road,
Senthamarai Nagar,
Puducherry – 605 003. ..Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India praying for a Writ of Certiorarified Mandamus calling for the records of the 2nd respondent relating to the impugned order dated 04.09.2017 passed by the 2nd respondent insofar as the petitioner is concerned and quash the same as illegal, arbitrary and consequently, direct the respondents to allow the petitioner to be appointed or reappointed as a Director of any Company.
Mr.K.Thirukumaran, learned Central Government Standing Counsel takes notice for the respondents.
"41. As is evident from the above, Rules 9 and 10 deals with the application for allotment of DIN. Rule 10(6) specifies that the DIN is valid for the life time of the applicant and shall not be allotted to any other person. Rule 11 provides for the cancellation or surrender or deactivation of the DIN. It is very clear upon examining Rule 11 that neither cancellation nor
deactivation is provided for upon disqualification under Section 164(2) of CA 2013. In this connection, it is also pertinent to refer to Section 167(1) of CA 2013 which provides for vacating the office of director by a director of a Defaulting Company. As a corollary, 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. In this connection, it is also pertinent to point out that it is not possible to file either the financial statements or the annual returns without a DIN. Consequently, the director of Defaulting Company A, in the above example, would be required to retain the DIN so as to make good the deficiency by filing the respective documents. Thus, 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.
allowed, in the terms indicated in the aforesaid judgment. No costs. Consequently, connected miscellaneous petitions are closed.
Sd/-
Assistant Registrar
//True Copy//
Sub Assistant Registrar
To
1. The Ministry of Corporate Affairs, Union of India
Shastri Bhawan,
Dr. Rajendra Prasad Road,
New Delhi - 110 001.
2. The Registrar of Companies,
Puducherry,
No.7, 2 nd Floor,
Karuvadikuppam Main Road,
Senthamarai Nagar,
Puducherry – 605 003.
+1cc to M/s.Arun Karthik Mohan, Advocate, S.R.No.40994
W.P.No.18272 of 2020
MJB(CO)
RV(04/01/2021)
2 issues framed by the court
Whether the Registrar of Companies is vested with the jurisdiction to disqualify a petitioner as a director by quashing the relevant notification.
Whether the petitioner is entitled to the appointment or re-appointment of a Director of any company.
Colour shows how this judgement treated each authority
1 provisions across 1 enactments
Ramnath Sriram
Union of India
Registrar of Companies, Puducherry
PUSHPA SATHYANARAYANA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
