IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.12.2021 CORAM THE HONOURABLE MR. JUSTICE M. DHANDAPANI W.P. Nos. 26107 & 26150 of 2021 and W.M.P. Nos. 27558, 27559, 27602, 27604 & 27605 of 2021 WP No. 26107 of 2021 and WMP Nos. 27558 & 27559 of 2021 Chittanai Amjed Ahmed .. Petitioner Versus
1. Union of India Represented by the Ministry of Corporate Affairs A Wing, Shastri Bhawan Rajendra Prasad Road New Delhi – 110 001
2. Registrar of Companies, Chennai Block No. 6, B Wing 2nd Floor Shastri Bhawan 26 Haddows Road Chennai – 600 034 .. Respondents WP No. 26150 of 2021 and WMP Nos. 27602, 27604 & 27605 of 2021
1. Sadasivam
2. Nirmala Sadasivam .. Petitioners Versus
1. Union of India Represented by its Secretary Ministry of Corporate Affairs Shastri Bhawan Dr. Rajendra Prasad Road New Delhi – 110 001
2. Registrar of Companies
1st Floor, Ashok Pingley Bhawan Municipal Corporation Nehru Chowk, Bilaspur Chattisgarh – 495 001 .. Respondents WP No. 26107 of 2021:- Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, calling for the records of the 2nd respondent relating to the impugned order dated 18.12.2018 uploaded and hosted of the website of the 1st respondent insofar as the petitioner herein is concerned, quash the status “Disqualfied under Section 164(2)” as illegal, arbitrary and devoid of merit and consequentially direct the respondents herein to permit the petitioner to get reappointed as director of any company or appointed as Director in any other company without any hindrance.
WP No. 26150 of 2021:- Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorarified Mandamus, calling for the records of the respondents, culminating in the undated impugned order published on 28.11.2019 by the second respondent in the official website of the 1st respondent wherein the petitioners were disqualified to function as Directors (DIN Nos.02415291 and 02456254) and quash the same and direct the second respondent to restore the writ petitioners as Directors within a time frame to be fixed by the Hon'ble Court.
WP No. 26107 of 2021 For Petitioner : Mr. Keerthikiran Murali For Respondents : Mr. A. Prakash Additional Central Government Standing Counsel For Petitioner : Mr.K. Ashok Kumar For Respondents : Mr. A. Prakash Additional Central Government Standing Counsel
COMMON ORDER
The prayer made in these writ petitions is to issue a Certiorarified Mandamus, calling for the records of the respective respondents in so far as it relates to the publication of the list of disqualified Directors in which the names of the respective petitioners are included and the consequential deactivation of their Director Identification Number (DIN).
2. According to the petitioners, the respondents herein released a list of disqualified directors under Section 164(2)(a) of the Companies Act, 2013, disqualifying them as directors of the various companies, in which, names of the petitioners were also included. In other words, the respondents, disqualified the petitioners as Directors for non-filing of financial statements or annual returns for continuous period of three financial years by the defaulting companies on whose board, the petitioner (s) is/are serving as a Director. According to the petitioners, by virtue of such disqualification, they could not be appointed or reappointed as director in any other company for a period of 5 years.
Therefore, assailing the orders of disqualification mainly on the ground that such orders have been passed in gross violation of principles of natural justice, the present writ petitions are filed.
3. Today, when the writ petitions are taken up for consideration, the learned counsel appearing for the petitioners jointly submitted that the issue involved herein is no longer res integra. Earlier, this Court by order dated 03.08.2018 in WP. No. 25455 of 2017 etc. batch, in Bhagavan Das Dhananjaya Das case reported in (2018) 6 MLJ 704, allowed those writ petitions and set aside the orders dated 08.09.2017, 01.11.2017, 17.12.2018, etc. passed by the Registrar of Companies, disqualifying the petitioners therein to hold the office of directorship of the companies under Section 164(2)(a) of the Companies Act, which came into effect from 01.04.2014. Thereafter, yet another set of disqualified directors approached this court by filing WP.No.13616 of 2018 etc. batch (Khushru Dorab Madan v. Union of India) which were dismissed by order dated 27.01.2020. The said order of the learned single judge was challenged by some of the petitioners therein before the Division Bench of this Court in W.A. No. 569 of 2020, etc. batch (Meethelaveetil Kaitheri Muralidharan v. Union of India, 2020 SCC OnLine Mad 2958 : (2020) 6 CTC 113), which after elaborately dealt with the issue as to whether the Registrar of Companies is entitled to deactivate the Director Identification Number (DIN), allowed those writ appeals on
09.10.2020, the relevant passage of which, are profitably, extracted below:
"41. As is evident from the above, Rules 9 and 10 deals with the application for allotment of DIN. Rule 10(6) specifies that the DIN is valid for the life time of the applicant and shall not be allotted to any other person. Rule 11 provides for the cancellation or surrender or deactivation of the DIN. It is very clear upon examining Rule 11 that neither cancellation nor deactivation is provided for upon disqualification under Section 164(2) of CA 2013. In this connection, it is also pertinent to refer to Section 167(1) of CA 2013 which provides for vacating the office of director by a director of a Defaulting Company. As a corollary, it follows that if a person is a director of five companies, which may be referred to as companies A to E, if the default is committed by company A by not filing financial statements or annual returns, the said director of company A would incur disqualification and would vacate office as director of companies B to E. However, the said person would not vacate office as director of company A. If such person does not vacate office and continues to be a director of company A, it is necessary that such person continues to retain the DIN. In this connection, it is also pertinent to point out that it is not possible to file either the financial statements or the annual returns without a DIN. Conse
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