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IN THE HIGH COURT OF MADHYA PRADESH
Anand Pathak, J.
Abbas Maru & Another v. The Union of India & Another
Writ Petitions No. 15683 of 2020, 8554 of 2019, 8639 of 2022, 7409 of 2019, 9735 of 2019, 10117 of 2019, 10118 of 2019, 12004 of 2019, 12015 of 2019, 16510 of 2019, 16512 of 2019, 17916 of 2019, 18310 of 2019, 24521 of 2019, 24528 of 2019, 26221 of 2019, 1541 of 2020, 1794 of 2020, 1799 of 2020, 3674 of 2020, 4985 of 2020, 4987 of 2020, 6128 of 2020, 8703 of 2020, 8790 of 2020, 8883 of 2020, 8886 of 2020, 9026 of 2020, 11364 of 2020, 11390 of 2020, 12492 of 2020, 12493 of 2020, 12497 of 2020, 12783 of 2020, 12786 of 2020, 13005 of 2020, 13025 of 2020, 13164 of 2020, 13203 of 2020, 13225 of 2020, 13426 of 2020, 13754 of 2020, 13759 of 2020, 14131 of 2020, 14171 of 2020, 14950 of 2020, 15500 of 2020, 15501 of 2020, 15651 of 2020, 16001 of 2020, 16147 of 2020, 17230 of 2020, 17435 of 2020, 17443 of 2020, 17454 of 2020, 18268 of 2020, 19972 of 2020, 12653 of 2021, 14814 of 2021, 14947 of 2021, 14962 of 2021, 26847 of 2021, 28753 of 2021, 19853 of 2020, 19454 of 2020, 18277 of 2020, 592 of 2022, 3792 of 2022, 3901 of 2022, 4792
of 2022, 7124 of 2022, 20137 of 2020, 1067 of 2021, 1070 of 2021, 2527 of 2021, 5538 of 2021, 5662 of 2021, 6595 of 2021, 8046 of 2021, 8652 of 2021 and 9982 of 2021 (Gwalior);
Decided on 9.6.2022
(1) Companies Act, 2013 -- S. 164 (2) -- Companies (Appointment and Qualification of Directors) Rules, 2014 -- R. 11 -- disqualification of director -- cancellation or deactivation of Director's Identification Number -- no application moved by any person -- such important identification cannot be sacrificed suo motu or at instance of any misrepresentation -- needs verification of e-record and affording opportunity of hearing in some contingencies, especially when matter pertains to obtaining DIN in wrongful manner or by fraudulent means -- before issuance of show cause notice, respondents already and impliedly deactivated DIN of petitioners -- amounts to violation of principles of natural justice -- show cause notice does not include trappings of R. 11 -- impugned order passed u/ss. 164 (2) and 167 (1) -- Ss. 164 and 167 do not deal with cancellation of DIN -- resorting to them for cancellation/deactivation of DIN is arbitrary and illegal -- deactivation of DIN is provided only under R. 11 -- applying grounds mentioned in R. 11 and treating them to be grounds u/ss. 164 (2) and 167 (1) would lead to anomaly, arbitrariness and illegality -- S. 164 applicable from 1.5.2014 and S. 167 applicable from 7.5.2018 -- in some cases, alleged default appears to be of 2015-16 and 2016-17 -- three consecutive years not lapsed -- liability or rigours of S. 164 (2) not attracted -- DIN cannot be cancelled or deactivated resorting to S. 164 or 167. 2007 (215) ELT 489 (SC) and 2008 (232) ELT 7 (SC) followed. [2018] 146 CLA 168 (Mad.), [2019] 149 CLA 286 (Guj.), [2019] 152 CLA 393 (Kar.), [2020] 159 CLA 267 (All.), [2020] 156 CLA 42 (Del.), 2020(3) ADJ 645, [2021] 224 Comp. Cases 552 (Cal.), [2021] 3 KHC 550, [2020] 159 CLA 277 (Mad.) and [2021] 224 Comp. Cases 514 (Cal.) relied on. AIR 1976 SC 133, AIR 1954 SC 496 and (2011) 7 SCC 639 referred to.
[Paras 23 to 29
(2) Show Cause Notice -- is foundation of imputation -- dichotomy of foundation of show cause notice vis-à-vis punishment order -- renders proceedings vulnerable in eyes of law. [Para 24
(3) Procedure -- unless statute is made applicable retrospectively, its application would be prospective in nature. [Para 27
(4) Companies Act, 2013 -- S. 164 (2) -- applicability -- would be prospectively applied. [2018] 146 CLA 168 (Mad.), [2019] 149 CLA 286 (Guj.), [2019] 152 CLA 393 (Kar.), [2020] 159 CLA 267 (All.), [2020] 156 CLA 42 (Del.), 2020(3) ADJ 645, [2021] 224 Comp. Cases 552 (Cal.), [2021] 3 KHC 550, [2020] 159 CLA 277 (Mad.) and [2021] 224 Comp. Cases 514 (Cal.) relied on. AIR 1976 SC 133, AIR 1954 SC 496 and (2011) 7 SCC 639 referred to. [Para 28
¼1½ daiuh vf/kfu;e] 2013 && èkkjk 164¼2½ && daiuh ¼funs'kdksa dh fu;qfDr vkSj vgZRkk½ fu;e] 2014 && fu- 11 && funs'kd dh fujgZrk && funs'kd igpku la[;k ¼fMu½ jí vFkok fuf"Ø;k djuk && fdlh O;fDr }kjk vkosnu ugha fd;k x;k && ,slh egRoiw.kZ igpku dks Loizsj.kk ls vFkok fdlh nqO;Zins'ku ls izsfjr gksdj u"V ugha fd;k tk ldrk && bZ-vfHkys[k dk lR;kiu djuk rFkk fdUgha vkdfLedrkvksa esa lquokbZ dk volj nsuk vko';d] fo'ks"kr% tc ekeyk lnks"kiw.kZ jhfr ;k diViw.kZ lk/ku ls fMu izkIr djus dk gks && dkj.k crkvks lwpuk tkjh fd, tkus ds iwoZ gh rFkk foof{kr :I ls izR;FkhZx.k ;kphx.k dk fMu fuf"Ø; dj pqds Fks && uSlfxZd U;k; ds fl)karksa ds vfrØe.k dh dksfV esa vkrk gS && dkj.k crkvks lwpuk esa fu-11 ds vo;o ugha && vkf{kIr vkns'k /kkjk 164 ¼2½ vkSj 167 ¼1½ ds v/khu ikfjr && /kkjk 164 vkSj 167 fMu jí djus ds ckjs esa ugha && fMu jí@ fuf"Ø; djus ds fy, mudk vkJ; ysuk euekuk vkSj voS/k && fMu fuf"Ø; djuk dsoy fu- 11 ds v/khu micaf/kr && fu- 11 esa mfYyf[kr vk/kkjksa dks ykxw dj mUgsa /kkjk 164 ¼2½ vkSj 167 ¼1½ ds v/khu vk/kkj ekuus ls fo"kerk] euekuh vkSj voSèkrk gksxh && /kkjk 164 fnukad 1-5-2014 ls ykxw rFkk /kkjk 167 fnukad 7-5-2018 ls ykxw && dqN ekeyksa esa] vfHkdfFkr O;frØe 2015&16 vkSj 2016&17 dk izrhr gksrk gS && fujarj rhu o"kZ O;ixr ugha && /kkjk 164¼2½ dk nkf;Ro vFkok dM+kbZ vkÑ"V ugha && /kkjk 164 vFkok 167 dk vkJ; ysdj fMu jí vFkok fuf"Ø; ugha fd;k tk ldrkA 2007¼215½ bZ ,y Vh 489 ¼,l lh½ rFkk 2008 ¼232½ bZ ,y Vh 7 ¼,l lh½ vuqlfjrA ¼2018] 146 lh ,y , 168 ¼enzkl½] ¼2019] 149 lh ,y , 286 ¼xqt-½] ¼2019] 152 lh ,y 393 ¼dukZ-½] ¼2020] 159 lh ,y , 267 ¼byk-½] ¼2020] 156 lh ,y , 42 ¼fnYyh½] ¼2020] ¼3½ , Mh ts 645] ¼2021] 224 daiuh dslsl 552 ¼dy-½] ¼2021] 3 ds ,p lh 550] ¼2020] 159 lh ,y , 277 ¼enzkl½ rFkk ¼2021] 224 daiuh dslsl 514 ¼dy-½ voyafcrA , vkb vkj 1976 ,l lh 133] , vkb vkj 1954 ,l lh 496 rFkk ¼2011½7 ,l lh lh 639 fufnZ"VA ¼iSjk 23 ,oa 29
¼2½ dkj.k crkvks lwpuk && vH;kjksi.k dk vk/kkj gksrh gS && naM ds vkns'k dk vk/kkj vkSj dkj.k crkvks lwpuk dk vk/kkj fHkUu&fof/k dh n`f"V esa dk;Zokgh vkyksP; gks tkrh gSA ¼iSjk 24
¼3½ izfØ;k && tc rd dkuwu Hkwry{kh :I ls ykxw ugha fd;k tk,] og Hkfo";y{kh :I ls ykxw gksxkA ¼iSjk 27
¼4½ daiuh vf/kfu;e] 2013 && /kkjk 164¼2½ && ykxw gksuk && Hkfo";y{kh :I ls ykxw gksxkA ¼2018½ 146 lh ,y , 168 ¼enzkl½] ¼2019½ 149 lh ,y , 286 ¼xqt-½ ¼2019½ 152 lh ,y , 393 ¼dukZ-½ ¼2020½ 159 lh ,y , 267 ¼byk-½] ¼2020½ 156 lh ,y , 42 ¼fnYyh½] 2020 ¼3½ , Mh ts 645] ¼2021½ 224 daiuh dslsl 552 ¼dy-½ ¼2021½ 3 ds ,p lh 550] ¼2020½ 159 lh ,y , 277 ¼enzkl½ rFkk ¼2021½ 224 dsiuh dslsl 514 ¼dy-½ voyafcrA , vkb vkj 1976 ,l lh 133] , vkb vkj 1954 ,l lh 496 rFkk ¼2011½7 ,l lh lh 639 fufnZ"VA ¼iSjk 28
ORDER
1. Regard being had to the similitude of controversy, all the writ petitions referred above were heard analogously and decided by this common order. For convenience's sake, facts of writ petition No.15683/2020 are taken into consideration.
2. The instant petition (W.P.No.15683/2020) under Article 226 of Constitution of India is preferred preferred by the petitioners seeking following reliefs :
a) That, the impugned order Annexure P-1 under section 164(2) of the Companies Act, 2013 in relation to the petitioner may kindly be directed to be quashed and the name of the petitioner as a Disqualified Director from the list of Disqualified Director by ROC -Gwalior may kindly be deleted forthwith.
B) That, the DIN No.05171973 & 05266971 of the petitioners respectively be directed to be restored/reactivated in respect for E-filing of other surviving company.
C) Any such relief as this Hon'ble Court deem fit in the present facts and circumstance of the case.
3. Grievances as echoed in the writ petition along with other similar writ petitions are that they are aggrieved by the action taken by the Registrar of Companies (ROC), Madhya Pradesh, Gwalior (respondent No.2 herein) under section 164(2) of the Companies Act, 2013 (hereinafter referred to as “the Act of 2013”) of deactivation of Director's Identification Number (DIN) of petitioners, thus, disqualifying them under section 164(2) of the Act of 2013 for a period of 5 years from 1.11.2018 to 30.10.2023 from acting as directors of the companies. Dispute originates on account of the fact that one of the companies in which petitioners were directors namely Kanchan Creation Ltd. Had its name struck off from the Register of Companies by ROC -Gwalior.
4. Precisely stated facts of the case are that petitioners were working as directors of few companies and obtained DIN from the respondents in terms of provision as per section 154 of the Act of 2013 read with rule 9/10 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (hereinafter referred to as “the Rules of 2014”). Petitioners incorporated a company -Kanchan Creation Ltd. Having CIN No.U45201MP1999PLC013727 in the State of Madhya Pradesh for the purpose of providing and managing manpower in various industries and organizations but company did not carry out any business for past 3 years and its bank accounts were also not in operation, for preceding 3 years petitioners did not file requisite return also as required under the Act of 2013. Consequently, petitioners incurred disqualification under section 164(2) of the Act of 2013. However, the company continued to file its return but thereafter no return were filed as the company was not carrying on any business and consequently name of the company was struck off by the ROC -Gwalior.
5. Subsequently based upon on the status of the said company, respondents disqualified the petitioners to act as directors in other companies also and their DIN were also deactivated. It is worth mentioning the fact that other companies in which petitioners are directors are doing normal business and their statutory returns namely financial statements and annual returns are regularly filed.
6. On 13.9.2017, respondents posted a list of disqualified directors of the struck off companies all over the country with a separate list of companies having registered office under the jurisdiction of various offices of respondents across India with the title List of Disqualified Directors under section 164(2)(a) of the Act of 2013 and said list shows petitioners are disqualified to act as directors in all the companies w.e.f. 1.11.2018. Based upon the event of striking off the name of company -Kanchan Creation Ltd., respondents declared the petitioners disqualified to act as director in the company having their registered office inter alia in the State of Madhya Pradesh and consequentl
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