IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 04TH DAY OF NOVEMBER 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.46210/2019 (GM-RES) BETWEEN:
Prashanti Malisetty, D/o. Ravi Kumar Malisetty, Aged about 35 years, Residing at No.M-1301, Lynx Block, Brigade Gateway, Malleswaram West, Bengaluru – 560 055.
… Petitioner (By Smt. B.Rajashree for Sri Saji P.John, 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, 2nd Floor, Corporate Bhavan, GSI Post, Tattiannaram, Bandlaguda, Nagole, Hyderabad, Telengana – 500 068.
.... Respondents (By Sri Thimmanna Bhat, CGC for R1 and R2) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the provision to Section 164(2) to be unconstitutional and is in violation and in contravention of the provisions of Part-III of the Constitution of India and etc.
This Writ Petition coming on for orders this day, the Court made the following:
ORDER Sri Thimmanna Bhat, learned Central Government Counsel is directed to take notice for respondents.
Learned counsel for both parties jointly submits 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 vide order dated 12.06.2019.
Said submission is placed on record.
In view of the above, the present writ petition is disposed off in terms and conditions as under;
1. Where the disqualification of the petitioner 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 Petition is allowed and the impugned List is quashed to that extent only.
2. If the disqualification of the directors 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.
3. If the disqualification of the directors is based by taking into consideration three continuous financial years subsequent to 01.04.2014, irrespective of whether the petitioner is directors of public - 613 - companies or private companies, they stand disqualified under the Act 4. Where the disqualification of the petitioner 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.
5. 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.
6. The respondents are directed to restore the DIN of those directors whose disqualification has been quashed by this Court.
7. The petitioner who has 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 - 614 -
three years from the date of passing of the order dissolving the company under Section 248 of the Act. Hence, the Writ Petition is dismissed reserving liberty to the petitioner who is aggrieved by the dissolution of the companies under Section 248 of the Act (Struck off companies) to approach NCLT, if so advised.
8. Parties to bear their own costs.
Accordingly, the writ petition stands disposed off.
Sd/- JUDGE PN/