IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF OCTOBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B. VEERAPPA WRIT PETITION NOS.45170-72 OF 2019 (GM-RES) BETWEEN:
1. Dhamodharan Kathirvel, S/o Khathirvel B.S, Aged about 46 years, R/at 69/A, Lakshmi Nivas, Rama Temple Road End, New Thippasandra, Bengaluru – 560075.
DIN No:03022823.
2. Narendra Kumar Krishnappa Koyram, S/o K.R.Krishnappa, Aged about 46 years, R/at No.41/3, A-005, M.V Periwinkle Apartments, Royal Enclave Layout, Srirampura, Jakkur Bengaluru – 560064.
DIN No.03029615.
3. Nagaraja Chikkaiah Banda, S/o Chikkaiah Banda, Aged about 46 years, R/at No.#4104, Shobha Ruby Apartment, Tumkur Road, Near 8th Mile Tumkur Road, Nagasandra, Bengaluru – 560073. DIN No.03022817.
(By Sri.Sharath S Gowda, Advocate) AND 1. Union of India Represented by Ministry of Corporate Affairs, By its Secretary, Shastri Bhawan, Dr.Rajendra Prasad Road, New Delhi – 110001.
2. Registrar of Companies E Wing, 2nd Floor, Kendriya Sadan, Koramangala, Bengaluru – 560034.
(By Sri.Mallan Goud H, CGSC) ... Petitioners ... Respondents These Writ Petitions are filed under Articles 226 and 227 of the Constitution of India praying to declare that Section 164(2)(a), 167 of the Companies Act, 2013 and the press release dated 06.09.2017 at Annexure-A, QUA Directors of Private Limited Company is unconstitutional, is in violation and in contravention of the provisions of part III of the Constitution of India and etc.
These Writ Petitions coming on for Preliminary Hearing, this day, the Court made the following:
ORDER Heard Sri.Mallan Goud H, CGC for respondents.
2. The petitioners in the above Writ Petitions sought for direction; a) Declaring that Section 164(2)(a), 167 of the Companies Act, 2013 and the press release dated 06.09.2017 at Annexure A, qua directors of Private Limited Company is unconstitutional, is in violation and in contravention of the provisions of Part III of the Constitution of India; b) Directing the respondents to unblock the DIN (Directors Identification Number) of the Petitioners and remove the disqualification shown at Annexure B, B1 and B2 respectively; c) Directing the respondents to give opportunity or relief to make default good.
3. Learned counsel for the parties jointly submit that the controversy involved in the present Writ Petitions is squarely covered by an order dated 12.06.2019 passed in W.P.No.52911/2017 and connected matters.
4. In view of the aforesaid submission and for the reasons assigned by a Bench of this Court in the aforesaid order, the writ petitions are disposed off on same terms and 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 petitioner is director of public companies or private companies, such a disqualification being bad in law, the Writ petition is 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 petition is dismissed.
(iii) If the disqualification of the director 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, he stand disqualified under the Act;
(iv) Where the disqualification of the director 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 petition is allowed to the aforesaid extent only;
(v) The writ petition, 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 the director whose disqualification has been quashed by this Court;
(vii) The 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, the writ petitions are dismissed reserving liberty to the 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 petitions are disposed off.
Sd/- JUDGE NBM