IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 02ND DAY OF DECEMBER, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.51469 OF 2019 (GM-RES) BETWEEN:
MAHALINGAPPA RAMEGOWDA, S/O RAMEGOWDA, AGED ABOUT 44 YEARS, NO.42, SRI SAMRUDHI, IST MAIN, IST CROSS, RHBCS LAYOUT, BHAVANI NAGAR, MALLATHA HALLI, BANGALORE-560056. ...PETITIONER (BY SRI D VIJAYAKUMAR, ADVOCATE) AND:
1. UNION OF INDIA, REP. BY ITS SECRETARY, MINISTRY OF CORPORATE AFFAIRS, 4TH FLOOR, A WING, SHASTRI BHAVAN, NEW DELHI-110001.
2. THE REGISTRAR OF COMPANIES, 2ND FLOOR, E WING, KENDRIYA SADAN, KORAMANGALA, BENGALURU-560034. …RESPONDENTS (BY SMT.ANUPAMA HEGDE, CGC) **** THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE DISQUALIFICATION OF PETITIONER FROM BEING DIRECTOR OF A COMPANY UNDER SECTION 164(2)(a) OF THE COMPANIES ACT, 2013, AS HAS BEEN INDICATED IN THE DIN STATUS OF THE PETITIONER ON THE MCA WEBSITE (ANNX-F).
THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER Learned counsel for the petitioner submitted that the controversy involved in the present writ petition is already considered and decided by an order dated 12.06.2019 passed in W.P.No.52911/2017 and connected cases.
2. The said submission is placed on record.
3. In view of the above and for the reasons assigned by a Bench of this Court in the aforesaid order, the present writ petition is disposed of on the 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 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.
BSR Sd/-
JUDGE