IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF OCTOBER, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.46842 OF 2019 (GM-RES) BETWEEN:
Alex Michael S/o Alese Michael, Aged 49 years, R/o Ligoriya Cottage, Kuree Puzha PO, Perinad, Quilon, Kerala – 691 601. (DIN NO.02302449) (By Sri. Nagaraja R.C., Advocate) AND:
1. Union of India Represented by Secretary, Ministry of Corporate Affairs, Shastri Bhawan, Dr. Rajendra Prasad Road, New Delhi – 110 001.
2. Registrar of Companies Bengaluru ‘E; Wing, 2nd Floor, Kendriya Sadana, Kormangala, Bengaluru – 560 034.
... Petitioner 3. M/s. Maarstech Info Solutions Private Limited, Registered Office at No.92, Z-Square, 5th Floor, Jyothi Nivas College Road, 5th Block, Koramangala Industrial Area, Bengaluru – 560 095.
Rep. by its Director.
… Respondents (By Sri. Thimmanna Bhat, CGC for R1 & R2;
V/o dated 18.10.2019 notice to R3 dispensed with) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the notice or press release dated 06.09.2017 Annexure-A and 12.09.2017 Annexure-B whereby the name of the petitioner has been included in the list of disqualified directors entry at Page No.713, Point No.19056 Alex Michael Annexure-C for alleged violation of Section 164 2 A of the Companies Act, 2013 and etc., This Writ Petition coming on for Preliminary Hearing this day, the Court made the following:
ORDER The petitioner in the above writ petition has sought for the following reliefs:
“a) A writ of certiorari or any other appropriate writ, order or direction in the nature thereof quashing the notice/press release dated 06.09.2017 (Annexure-A) & 12.09.2017 (Annexure-B), whereby the name of the petitioner has been included in the list of disqualified directors entry at page No.713, Point No.19056 (Alex Michael) (Annexure C) for alleged violation of Section 164 (2) (A) of the Companies Act, 2013.
b) For issuance of writ, order or direction in the nature of mandamus directing the respondents to remove the names of the petitioner from notices/press release dated 06.09.2017 and 12.09.2017 “The declaration of Petitioner as disqualified under Section 164 (2) (A) of the Companies Act, 2013 being unconstitutional and in violation of fundamental, statutory rights and principles of natural justice.
c) Issue a writ, order or direction in the nature of writ of certiorari or any other appropriate writ, order or direction in the nature thereby directing the respondent Nos.1 and 2 herein to permit the petitioner to continue as director of any company without any hindrance.
d) Issue a writ, order or direction in the nature of writ of certiorari or any other appropriate writ, order or direction in the nature thereby directing respondent Nos.1 and 2 herein to restore the director identification number (DIN) – 02302449 to the petitioner.
e) Pass Ad-interim ex-parte orders staying operation of list of disqualified directors issued by respondent No.1 disqualifying the petitioner from acting as director of companies listed during the pendency of this petition.
f) Any other writ of mandamus/certiorari or any other writ or order as this Hon’ble may deem fit in the circumstances of the case in the interest of justice.”
2. Learned counsel for the parties jointly submit that the controversy involved in the present writ petition has already been considered and decided by this Court in W.P.No.52911/2017 and connected matters dated 12.06.2019.
3. The said submission is placed on record.
4. In view of the above submission, present writ petition is also disposed off in the same terms with the following directions:
(i) Where the disqualification of the petitioners is based by taking into consideration any financial year “prior to 01.04.2014 as well as subsequent thereto” while reckoning continuous period of three financial years under Section 164(2) (a) of the Act, irrespective of whether the petitioners are directors of public companies or private companies, such a disqualification being bad in law, the Writ petitions are allowed and the impugned list is quashed to that extent only;
(ii) If the disqualification of the petitioners is based by taking into consideration any financial year prior to 01.04.2014 only i.e., the disqualification has occurred under the provisions of the 1956 Act in respect of the public companies, the writ petitions are dismissed.
(iii) If the disqualification of the directors is based by taking into consideration of three continuous financial years subsequent to 01.04.2014, irrespective of whether the petitioners are directors of public companies or private companies, they stand disqualified under the Act;
(iv) Where the disqualification of the directors is based by taking into consideration any financial year prior to 01.04.2014 in respect of private companies, such disqualification being bad in law, the writ petitions are allowed to the aforesaid extent only;
(v) The writ petitions, wherein the challenge is also made to the vires of Section 164(2)(a), and/or 167(1)(a) and/or proviso to Section 167(1)(a) of the Act, are dismissed to the aforesaid extent;
(vi) The respondents are directed to restore the DIN of those directors whose disqualification has been quashed by this Court;
(vii) Those petitioners who have challenged only the striking off of the companies in which they are directors have an alternative remedy of filing a proceeding before National Company Law Tribunal (NCLT) under Section 252 of the Companies Act, 2013, which provides for an appeal to be filed within a period of three years from the date of passing of the order dissolving the company under Section 248 of the Act. Hence, those writ petitions are dismissed reserving liberty to those petitioners who are aggrieved by the dissolution of the companies under Section 248 of the Act (struck off companies) to approach NCLT, if so advised;
(viii) Parties to bear their own costs.
Accordingly, the writ petition is disposed off.
Sd/- JUDGE dn/-