The petitioner is before this Court calling in question

the action of the respondents in disqualifying the petitioner

from being a director of any company for a period of five

years from 01.11.2017 to 31.10.2022.

2. Heard Sri Abhinav Ramanand A., learned counsel

appearing for the petitioner and Sri H. Mallan Goud,

- 3 -

learned Central Government Counsel appearing for the

respondents.

3. Learned Central Government Counsel appearing

for the respondents would place reliance upon the order

rendered by the co-ordinate Bench of this Court, in

W.P.No.56393/2017

AND

CONNECTED

MATTERS

disposed on 12.06.2016, which considered an identical

issue of disqualification of the director and the impugned

order therein, is passed by the very same authority, to

contend that the matter is still pending consideration

before

the

Division

Bench

of

this

Court

in

W.A.No.2688/2019.

4.

The

co-ordinate

Bench

of

this

Court

in

W.P.No.56393/2017

AND

CONNECTED

MATTERS

disposed on 12.06.2016, after rendering its order draws

a summary of conclusions, which reads as follows:

- 4 -

<Part-13

Summary of Conclusions:

208. In view of the aforesaid discussion, I have

arrived at the following conclusions:

(a) It is held that Section 164(2)(a) of the

Act is not ultra vires Article 14 of the of the

Constitution. The said provision is not

manifestly arbitrary and also does not fall

within

the

scope

of

the

doctrine

of

proportionality.

Neither

does

the

said

provision violate Article 19(1)(g) of the

Constitution as it is made in the interest of

general public and a reasonable restriction

on the exercise of the said right. The object

and purpose of the said provision is to

stipulate

the

consequence

of

a

disqualification

on

account

of

the

circumstances stated therein and the same

is in order to achieve probity, accountability,

and transparency in corporate governance.

(b) That Section 164(2)(a) of the Act applies

by operation of law on the basis of the

circumstances

stated

therein,

the

said

provision does not envisage neither pre-

disqualification

any

hearing,

nor

post-

disqualification and this is not in violation of

the principles of natural justice and hence,

is

not

ultra

vires

Article

14

of

the

Constitution.

(c) That Section 164(2)(a) of the Act does not

have a retrospective operation and is therefore,

neither unreasonable nor arbitrary, in view of the

interpretation placed on the same.

- 5 -

(d) That there has been an arbitrary exercise of

power

by

the

respondent

authority

in

disqualifying the petitioners as directors of public

companies by taking into consideration the period

prior to 01.04.2014 as well as subsequent thereto

for the purpose of reckoning the continuous

period of three financial years. It is observed

that even in respect of public companies, having

regard to the nature of the consequences

envisaged under Section 164(2) of the Act as

compared to Section 274(1)(g) of the 1956 Act,

the period prior to 01.04.2014 and subsequent

thereto could not have been considered for

reckoning three continuous financial years for

disqualifying the directors of public companies.

Such disqualification is hence quashed.

(e)

Insofar

as

the

private

companies

are

concerned, disqualification on account of the

circumstances stated under Section 164(2)(a) of

the Act has been brought into force for the first

time under the Act and the consequences of

disqualification could not have been imposed on

directors of private companies by taking into

consideration any period prior to 01.04.2014 for

the purpose of reckoning continuous period of

three financial years under the said provision.

The said conclusion is based on the principle

drawn by way of analogy from Article 20(1) of the

Constitution as, at no point of time prior to the

enforcement of the Act, a disqualification based

on the circumstances under Section 164(2) of the

Act was ever envisaged under the 1956 Act vis-à-

vis directors of private companies. Such a

disqualification could visit a director of only a

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