IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B. VEERAPPA WRIT PETITION NO.41633 OF 2019 (GM-RES) BETWEEN:
Raghunandan Gundmi, Age: 31 years, S/o Shri. Shashikanth Gundmi, R/at No.201, 17th Cross, Opp. BBMP Ward Office, M C Layout, Vijayanagar, Bengaluru – 560 040.
(By Sri.Ashok A Deshpande, Advocate) AND 1. Union of India Represented by Union Secretary, Ministry of Corporate Affairs, Shastri Bhawan, New Delhi – 110001.
2. The Registrar of Companies E Wing, 2nd Floor, Kendriya Sadan, Koramangala, Bengaluru – 560034.
(By Smt.Prema Hatti, CGC) ... Petitioner ... Respondents This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to declare that Section 164(2)(a) of the Companies Act, 2013 and the list at Annexure-D, QUA Directors of the company is unconstitutional, is in violation and in contravention of the provisions of Part III of the Constitution of India, and direct the respondents to enable the DIN (Directors Identification Number) of the petitioner being 02331860 and remove the disqualification shown at Annexure-D and further direct the respondents to treat the petitioner as a qualified Director and restraining the respondents from treating or taking any steps treating the petitioner as disqualified directors 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 sought for direction; a) Declaring that Section 164(2)(a) of the Companies Act, 2013 and the list at Annexure-D, QUA Directors of the company is unconstitutional, is in violation and in contravention of the provisions of Part III of the Constitution of India, and direct the respondents to enable the DIN (Directors Identification Number) of the petitioner being 02331860 and remove the disqualification shown at Annexure-D and further direct the respondents to treat the petitioner as a qualified Director and restraining the respondents from treating or taking any steps treating the petitioner as disqualified directors; b) Issue an appropriate writ, order or a direction in the nature of a writ of Certiorari quashing and setting aside the list of disqualified directors at Annexure-D, issued by the Respondents for removal of the name of the Petitioner from and permit the petitioner to act as Director in any company without any hindrance; c) Issue appropriate Writ, Order or Direction, thereby directing the respondents to give opportunity or relief to make default good.
2. Learned counsel for the parties jointly submit that the controversy involved in the present Writ Petitions is squarely covered by an order dated 16.08.2019 passed in W.P.No.4502/2019.
3. 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 petition is disposed off.
Sd/- JUDGE NBM