IMPORTANT POINT
The main legal point established is that specific allegations and opportunities for defense are crucial in determining liability for wilful default, and the concept of continuing offence and appointment dates are relevant in director's liability.

JUDGMENT :

Sabyasachi Bhattacharyya, J:-

1. The present review application has been filed by the writ petitioner in W.P.O. No. 26 of 2021 against an order dated January 24, 2023, whereby the said writ petition, along with other similar writ petitions, were dismissed on contest without any costs. The review application has been filed on the strength of a Division Bench judgment passed in appeals preferred by the present petitioner along with other unsuccessful writ petitioners from the said order of the Single Judge. The Learned Division Bench, while disposing of the appeal of the petitioner, granted liberty to the petitioner to approach this Court for a review of its order dated January 24, 2023. The petitioner’s primary ground is that this Court did not take into consideration the fact that the petitioner was not a Director of the Borrower-Company, that is, the EMC Limited at the relevant point of time, being the financial year 2016-2017, to which the allegations of wilful default pertained, but was only appointed as a Director of the Borrower-Company in the year 2018. The said omission according to the petitioner is an error apparent on the face of record justifying the prayer for review.

2. The primary defence of the respondents, apart from the fact that the said fact was not brought to the notice of this Court or reflected in the order under review, is that the EMC Infrastructure Limited, of which the petitioner was a Director at the relevant point of time, and the borrower-Company EMC Limited are one and the same. From the records of the Registrar of Companies, the petitioner Swapan Kumar Datta is shown to be a Director of the EMC Limited since September 24, 2014. In the absence of any rectification of such entry, it is argued that the petitioner could not avoid liability for the relevant period. The respondents argue that this Court should lift the corporate veil and look into the alleged nexus between the wilful defaults committed by the different group companies of the borrower-Company and the role of the petitioner who is alleged to be dishonest and to hold a key managerial post in the entire group of companies aligned with the borrower-Company.

3. Learned senior counsel appearing for the respondents also contends that the act of wilful default is not confined to a single transaction of the year 2016-2017 but is a continuing offence due to non-repayment of the debt and non-regularisation of the account till date. Under Section 166 of the Companies Act, 2013, it is argued, the Director of a Company has a fiduciary duty to ensure that the business of the Company is not conducted contrary to the interest of the shareholders or contrary to the public interest.

4. The respondents argue that the definition of “unit” under Article 2.1.2 of the Master Circular of Wilful Default published by the Reserve Bank of India includes individuals, juristic persons and also persons who are in charge and responsible for the management of the affairs of the business enterprises. The involvement of the present petitioner cannot be denied, it is contended.

5. Since the petitioner did not raise any individual issue before either Committee, that is, the Wilful Defaulter Identification Committee or the Review Committee, the said issues cannot be raised now, it is argued.

6. At the outset, the objection as to maintainability of the review application taken by the respondents on the ground that the present issue was never raised at the time of hearing before the first Court is required to be dealt with, since it hits at the root of the review jurisdiction of this Court.

7. The respondents are undoubtedly correct in contending that the arguments made before the Division Bench are not reflected to have been advanced before the Single Judge, as evident from the order under review dated January 24, 2023. All the writ petitioners in the bunch of writ petitions which were decided by the Single Judge were represented by the same set of counsel. The arg