IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.56061 OF 2018 & WRIT PETITION NOS.56604-607 OF 2018(GM-RES) Between:
1. Sri.Perampalli Nekkar Prasanna Kumar Rao, S/o Mr.Gopalakrishna Rao, Aged about 45 years, R/at ‘Sri Krishna’, Ajjarakad, Udupi District, Karnataka – 576 101.
Director Identification No.05228592 2. Mr.Syed Naushad Iqbal, S/o Mr.Syed Hayat Ahmed, Aged about 43 years, R/at No.25, P.M.Basti, 3rd Lane, Shibpur, Houwrah, West Bengal – 711 102.
Director Identification No.05234500 3. Mr.Dandina Nagaraja Rajeeva, S/o Mr.Nagaraja Srinivasa, Aged about 45 years, R/at No.781, 20th Cross, 16th Main, 2nd Stage, BSK Bengaluru, Karnataka – 560 070.
Director Identification No.03328502 4. Mr.Rocky Fernandes, S/o Raymond Fernandes, Aged about 64 years, R/at No.9, Piramal Apartments, Flat No.7, S.V.Road, Goregaon West, Mumbai – 400 062.
Director Identification No.03328327 5. Mr.Ronald Fernandes, S/o Mr.Raymond Fernandes, Aged about 46 years, R/at Rose Cottage, Vidyaranya Marg, Kaduettu, Udupi, Karnataka – 576 101.
Director Identification No.03328334 … Petitioners (By Sri.Prasanna V.R, Advocate) And:
1. Union of India, Ministry of Corporate Affairs ‘A’ Wing, Shastri Bhavan, Rajendra Prasad Road, New Delhi – 110 001.
2. The Registrar of Companies ‘E’ Wing, 2nd Floor, Kendriya Sadana, Koramangala, Bangalore – 560 034.
(By Smt.M.C.Nagashree, CGC) …Respondents These Writ Petitions are filed under Articles 226 and 227 of the Constitution of India, praying to quash the provisions of Section 164(2) of the Companies Act, 2013 on the grounds of being arbitrary, discriminatory and as being violative of Articles 14, 19 and 21 of the constitution vide Annexure-B and etc.
These Writ Petitions coming on for Preliminary Hearing in ‘B’ Group, this day, the Court made the following:-
ORDER Learned counsel for the parties jointly submit that the controversy involved in the instant petitions is squarely covered by an order dated 12.06.2019 passed in W.P.No.52911/2017 and connected matters.
2. 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 of 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 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.
3. Accordingly, the writ petitions are disposed of.
Sd/- JUDGE dn/-