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2018 Supreme(Kar) 108

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
VINEET KOTHARI, J.
Mr. Yenugu Krishna Murthy S/O Late Y.Surya Prakash Rao - Petitioner
Versus
Union of India Represented By Ministry of Corporate Affairs - Respondent
W.P.NO.7819, 7820, 7821 of 2018 (GM-RES)
Decided On : 26-02-2018

Advocates Appeared:
For the Petitioner: Sri S.Vivekananda, Adv.

Headnote:COMPANIES ACT, 2013 [C.A. No. 18/2013]Sections 164(2)(a), 167 - Disqualification of Directors - For not filing financial statements and annual returns - Constitutional validity of Section 164(2) - Merely because provisions of Section 164(2)(a) or Section 167 of Act operates harshly against Director of defaulting company does not render it ultra vires or foundation less.

       CONSTITUTION OF INDIA - Article 226 - Writ petition - Maintainability - Petitioners while applying for DIN (Directors Identification Number) were shown ' disqualified' by Registrar of Companies under Section 164(2) of Companies Act, 2013 on website of MCA (Ministry of Corporate Affairs) - Neither any show-cause notice nor adjudication order served to them by Registrar of Companies - Petitioners only on basis of DIN (Director Identification Number) status shown on website of MCA cannot invoke extraordinary jurisdiction under Article 226 - Writ petition is premature and not maintainable.

ORDER :

1. The petitioners-Mr.Yenugu Krishna Murthy in W.P.No.7819/2018, Mr.Devarunda Manjegowda Purnesh in W.P.No.7820/2018 and Mr.Manjunath Krishnarajanagar Manikyam in W.P.No.7821/2018 have approached this Court by filing the present writ petitions on 15.02.2018 with the following prayers:

“(i) Issue appropriate Writ, Order or Direction, declaring that Section 164(2)(a) of the Companies Act, 2013 and the press release dated 06.09.2017 at Annexure-A, qua directors of Private Limited Company is unconstitutional, is in violation and in contravention of the provisions of Part III of the Constitution of India; and/or

(ii) Issue appropriate writ, order or direction for removal of the name of the Petitioner from the list of disqualified directors at Annexure C, issued by the Respondents and permit the Petitioner to act as director in any company without any hindrance;

(iii) Issue appropriate writ, order or direction directing the Respondents to unblock the DIN (Directors Identification Number) of the petitioner and remove the disqualification shown at Annexure-B;

(iv) Issue appropriate Writ, Order or Direction, thereby directing the Respondents to give opportunity and / or relief to make default good;

(v) Direct the Respondents to permit the Petitioners to apply under the “Condonation of Delay Scheme, 2018” and

(vi) Pass such other and/or further orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”

2. Learned counsel for the petitioners Mr.S.Vivekananda submitted before the Court that the Ministry of Corporate Affairs, Government of India, on their website vide Annexure-B while giving the DIN (Directors Identification Number) status qua the petitioners they were shown as ‘Disqualified’ by the Registrar of Companies U/s.164(2) of the Companies Act, 2013. The said computer status sheet only has been produced before this Court to the writ petitions as Annexures-B and C, gives the list of other such several Directors of the Limited Companies including the names of the present petitioners, who have been Disqualified as Directors of the Board of Directors of the Limited Companies for having incurred disqualification and one of the Column in Annexure-C indicates the reason for Disqualification of five years in brief viz., “Violated Section 164(2)(a)” of the Act and the period of such Disqualification is also mentioned in the said Annexure-C.

Learned counsel also submitted that U/s.164(2)(a) of the Act, if a Company has not filed the financial statements or Annual Returns of the Company for continuous period of three financial years, the ‘Director’ of such Company incurs the ‘Disqualification’ U/s.164(2)(a) of the Act. The relevant portion of Section 164(2)(a) of the Act is quoted below for ready reference:

“164. Disqualifications for appointment of director-

(1) A person shall not be eligible for appointment as a director of a company, if –

(a) he is of unsound mind and stands so declared by a competent court;

(b) he is an un-discharged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application is pending;

(d) he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence:

(e) an order disqualifying him for appointment as a director has been passed by a Court or Tribunal and the order is in force;

(f) he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;

(g) he has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or

(h) he has not complied with sub-section(3) of section 152.

(2) No person who is or has been a director of a company which-

(a) has not filed financial stat












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