Jai Shankar Agrahari vs Union of India

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(All) 59

IN THE HIGH COURT OF ALLAHABAD
SUDHIR AGARWAL, RAJEEV MISRA, JJ.
Jai Shankar Agrahari and Another - Petitioners
Versus
Union of India and Another - Respondents
WRIT - C No. - 12498 of 2019, WRIT - C Nos. - 15270, 34503, 36453, 43177 of 2018, WRIT - C Nos. - 12498, 1189, 1407, 2469, 2473, 12494, 12497, 12502, 12684, 12739, 12743, 12824, 12935, 13063, 13072, 13593, 14554, 14557, 15854, 16359, 17328, 17405, 17501, 17508, 17516, 17525, 17557, 17610, 17647, 17649, 17652, 17664, 17729, 17834, 17843, 17912, 17969, 17989, 18052, 18054, 18968, 19011, 19020, 19227, 19259, 19273, 19278, 19280, 19285, 19297, 19315, 19332, 19481, 19930, 20231, 20252, 20321, 20434, 20450, 20451, 20455, 20548, 20828, 20831, 20932, 20944, 20987, 20992, 21180, 21214, 21223, 21248, 21249, 21309, 21445, 21555, 21699, 21935, 22075, 22231, 22387, 22395, 22400, 22475, 22481, 22560, 22661, 22877, 23107, 23447, 23606, 23767, 23905, 23916, 23932, 23936, 23987, 24196, 24240, 24595, 24618, 26529, 26775, 28569, 33232, 33354, 33355, 33595, 35065, 24942, 25079, 25120, 25321, 25336, 25462, 25646, 25801, 25938, 26021, 26042, 26059, 26060, 26104, 27609, 27613, 28634, 28809, 28829, 29297, 29986, 30053, 30578, 30842, 31091, 31124, 31177, 31651, 31689, 31698, 31725, 31845, 31923, 31967, 32004, 32330, 32569, 32645, 33707, 34283, 34563, 34582, 35479, 35681, 35792, 36608, 38175, 19282 of 2019
Decided On : 16-01-2020

Advocates Appeared:
For the Petitioner: Anshul Kumar Singhal, Chandan Agarwal.
For the Respondent: Sanjay Kumar Yadav, Prashant Singh Som, Sanjay Kumar Yadav, Neeru.

Headnote:
Companies Act, 2013 – Section 164 (2) – petitioners were Directors of various Companies and have been declared disqualified to continue as Directors of all the Companies in which they were Directors, under Section 164 (2) of Companies Act, 2013, for a period of five years – Petitioners, therefore, have challenged declaration made by Registrar of Companies, U.P., Kanpur publishing notice of such disqualification of petitioners specifying the period of five years and in most cases it is from 01.11.2016 to 31.10.2021 while in some cases period of five years varies but total period of disqualification is five years – Petitioners have prayed for quashing of aforesaid declaration made by ROC. They have also sought a mandamus directing respondents to reactivate petitioners' Director Identification Number and restore their names on the Roll of Directors – Held, in absence of any provision to deactivate DIN of petitioners if they have incurred disqualification under Section 164 of Act, 2013, the action of respondents and in particular of ROC, in deactivating DIN of petitioners, cannot be sustained – action of respondents in deactivating DIN of petitioners is to be quashed – Writ Petitions Partly Allowed. (Paras 81, 82, 83)
Facts of Case:
petitioners were Directors of various Companies and have been declared disqualified to continue as Directors of all the Companies in which they were Directors, under Section 164 (2) of Companies Act, 2013, for a period of five years – Petitioners, therefore, have challenged declaration made by Registrar of Companies, U.P., Kanpur publishing notice of such disqualification of petitioners specifying the period of five years and in most cases it is from 01.11.2016 to 31.10.2021 while in some cases period of five years varies but total period of disqualification is five years – Petitioners have prayed for quashing of aforesaid declaration made by ROC. They have also sought a mandamus directing respondents to reactivate petitioners' Director Identification Number and restore their names on the Roll of Directors.
Findings of Court:
Held, in absence of any provision to deactivate DIN of petitioners if they have incurred disqualification under Section 164 of Act, 2013, the action of respondents and in particular of ROC, in deactivating DIN of petitioners, cannot be sustained – action of respondents in deactivating DIN of petitioners is to be quashed.
Result: Writ Petitions Partly Allowed

JUDGMENT :

Sudhir Agarwal, J.

1. In all these writ petitions, petitioners were Directors of various Companies and have been declared disqualified to continue as Directors of all the Companies in which they were Directors, under Section 164 (2) of Companies Act, 2013 (hereinafter referred to as “Act, 2013”), for a period of five years. Petitioners, therefore, have challenged declaration made by Registrar of Companies, U.P., Kanpur (hereinafter referred to as “ROC”) publishing notice of such disqualification of petitioners specifying the period of five years and in most cases it is from 01.11.2016 to 31.10.2021 while in some cases period of five years varies but total period of disqualification is five years. Petitioners have prayed for quashing of aforesaid declaration made by ROC. They have also sought a mandamus directing respondents to reactivate petitioners' Director Identification Number (hereinafter referred to as 'DIN') and restore their names on the Roll of Directors.

2. The issues raised in all these writ petitions are common and facts are also similar, hence as agreed by learned counsel appearing in all these writ petitions for respective parties, all these petitions have been heard together and are being decided by this common judgment.

3. For the purpose of delving into pleadings and facts, with consent of parties, we have taken Writ Petition No.12498 of 2019 (Jai Shankar Agrahari vs. Union of India and another) as the leading 'writ petition' and this writ petition hereinafter would be referred to as “WP-I”.

4. W.P.-I has been filed by sole petitioner Jai Shankar Agrahari praying for issuance of writ of certiorari quashing declaration made by ROC under Section 164 (2) of Act, 2013 disqualifying him as Director of Companies from 01.11.2016 to 31.10.2020 i.e. for a period of five years. Petitioner Jai Shankar Agrahari has also prayed for issuing a writ of mandamus directing respondents to reactivate petitioner's DIN No.03266735 and DSC number and restore his name on the Rolls of Director.

5. Petitioner, Jai Shankar Agrahari, was Director of various Companies, (Private and Public) and details thereof are as under:

Sl. No.	Names of Company	Nature: whether 'Public' or 'Private'	Date of Incorporation
1.	Kashi Gramin Vikas Mutual Benefit Nidhi Limited	Public	11.03.2016
2.	Green Valley Natural Core India Private Limited	Private	21.11.2013
3.	Ujjawalkashi Micro Credit Foundation	Private	20.12.2016
4.	Sansar Mart Retails Private Limited	Private	16.04.2012
5.	Sansar Core Retails Business Private Limited	Private	18.07.2012
6.	Sansar Agrotech Land Developers Company Limited	Public	19.11.2010

6. The case set up by petitioner of W.P.1 is that all the aforesaid Companies were registered with ROC. Three Companies namely, Sansar Agrotech Land Developers Company Limited; Sansar Core Retails Business Private Limited; and, Sansar Mart Retails Private Limited, committed default by not submitting financial statements and returns for a consecutive period of three years. Petitioner thus stood disqualified to act as “Director” under Section 164 (2) of Act, 2013. This disqualification has been applied to all other Companies in which petitioner was “Director” though those Companies are/ were not in default. Before disqualifying petitioner as “Director” under Section 164 (2) of Act, 2013, no show cause notice or opportunity has been given, facts have not been verified and in a mechanical manner, petitioner's status has been shown as a “disqualified Director” and his DIN No.03266735 has been made inactive and/ or suspended. Section 164 (2) (a), which not only disqualifies a “Director” in respect of Defaulting Companies but extends the same to other Companies which have not committed default, as

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2020 Supreme(All) 59

Cases Referred (2)