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2019 (10) TMI 377

..... r - Section 266 A of the Companies Act, 2006 - HELD THAT:- A perusal of Section 266 A of the Companies Act, 2006 reveals that every person intending to be appointed as a Director of a company or a Director of Company appointed before commencement of the Companies Amendment Act, 2006 was required to make an application for allotment of Director Identification Number to the Central Government and that every director appointed before the commencement of the Companies Amendment Act, 2006 was required to make the application within 60 days of the commencement of the said Act to the Central Government - Further Rule 2(1)(d) of the aforementioned Rules stipulates Director Identification Number as a requirement not only for any person to be appointed as Director but also for an existing Director of a company for the purpose of his identification as a Director of a company. A person not possessing a DIN under Section 154 of the Act is not eligible to be appointed as a Director or to continue as a Director of a Company as he incurs a disqualification for appointment as a Director in terms of Section 164(1)(h) of the Act and in terms of Section 167 of the Act, the office of such a Director be .....

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..... dated 03.03.2016 was held to be valid, the execution proceedings could not have been continued without getting M/s H.S. Tuli and Sons Builders Pvt. Ltd revived. 3. Learned counsel for the petitioner further contended that the execution application was also not maintainable on account of having been filed by a person not competent to do so as neither the Directors constituting the Board of Directors of M/s H.S. Tuli and Sons, Builders Pvt Ltd nor Shri Harkrishen Singh Tuli who claimed to be the Managing Director of M/s H.S. Tuli & Sons Builders Pvt. Ltd. possessed Director Identification Number (DIN) as per requirement of the Companies Act, 2013 (for short the Act ) nor for that matter had any mention been made in the resolution or in the execution application of the DIN of respective Directors, therefore none of the Directors of M/s H.S. Tuli and Sons Builders Pvt. Ltd. were competent to transact any business on behalf of the respondent/decree-holder. Learned counsel contended that despite the plea of incompetence to file the execution application having been raised in the objections and elaborated in the written submissions/ arguments filed before the Executing Court on 23.03. .....

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..... the Memorandum and Articles of Association of the company being its Managing Director notwithstanding that the company i.e. M/s H.S. Tuli and Sons Builders Pvt. Ltd had been dissolved on 30.06.2017 as in view of the provisions of Section 250 of the Act, the right of a company to recover the amount owed to it subsists even after dissolution. It needs to mention here that Sh. Tuli had on February 01,2019, produced the original resolution book of M/s H.S. Tuli and Sons Builders Pvt. Ltd. containing resolution dated 03.03.2016 in support of the plea that he was duly authorized in terms of resolution passed by the Board of Directors of M/s H.S. Tuli and Sons Builders Pvt. Ltd. and that copy of the resolution attached with the execution application contained an inadvertent typographical error in mentioning the resolution to be of M/s Harbans Singh Tuli and Sons Builders Pvt. Ltd. Original Register containing resolution book of M/s H.S. Tuli and Sons Builders Pvt. Ltd. containing resolution dated 03.03.2016 was shown to learned counsel for the petitioner besides, photocopy of the same duly signed by Shri Tuli was handed over to learned counsel for the petitioner. On perusal of the origin .....

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..... cipal/decretal amount and on the said amount an interest at the rate of 12% per annum simple is to be paid by the JD to the decree holder till 01.10.2003 and thereafter, at the rate of 9% per annum simple till the payment in full and final and the amount to be paid by the JD s is first to be adjusted towards the interest and then towards the principal. Sh. Tuli contended that order dated 04.10.2006 was not challenged by the petitioner and had thus attained finality, consequentially, the same plea could not be re-agitated again by way of objections before the Executing Court. 9. Brief facts of the case leading to the filing of the revision petition are that a contract for construction of married accommodation for JCOs and ORs at Dharamshala was executed between M/s Harbans Singh Tuli and Sons, Sole Proprietor and the Union of India on 30.03.1978 with the work to be completed by 11.10.1980. 10. Union of India cancelled the contract on 04.10.1980, took over all stocks and material lying at the site and got the unfinished work executed through another contractor allegedly on account of the respondent/decreeholder having failed to execute the work as per the terms and conditions of the .....

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..... 2016 filed by the Union of India was dismissed while Civil Appeal Nos.10496- 97 of 2017 filed by the respondent/decree-holder was partly allowed, interest granted by the Arbitrator was restored and the respondent/decree-holder held entitled to interest @ 12% p.a. on the award as modified by this Court vide its order dated 25.02.2016 in CR No.5770 of 2008 with the amount to be paid within three months. 15. Since the payment was not made to the respondent/decree-holder in terms of aforementioned order s of Hon ble the Supreme Court, Contempt petition was filed by the decree holder wherein as per Shri Tuli, the petitioner herein took up the stand that it had deposited the entire amount and the Court had made the payment of the entire amount due to the respondent/decree-holder. The said stand was disputed by decree-holder as according to Shri Tuli over ₹ 30 lakh was recoverable by the decree holder. Eventually, Hon ble the Supreme Court vide order dated 26.10.2018 was pleased to direct the Executing Court to pass orders as to whether the deposit already made by the respondents before it was in tune with the orders passed by the Supreme Court within 10 days from 26.10.2018. There .....

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..... t, 2006, shall make, within sixty days of the commencement of the said Act, such application to the Central Government: Provided further that every applicant, who has made an application under this section for allotment of a Director Identification Number, may be appointed as a director in a company, or, hold office as director in a company till such time such applicant has been allotted the Director Identification Number. Rule 2(1)(d) of the Companies (Appointment and Qualification of Directors) Rules, 2014:- (d) "Director Identification Number" (DIN) means an identification number allotted by the Central Government to any individual, intending to be appointed as director or to any existing director of a company, for the purpose of his identification as a director of a company: Provided that the Director Identification Number (DIN) obtained by the individuals prior to the notification of these rules shall be the DIN for the purpose of the Companies Act, 2013: Provided further that "Director Identification Number" (DIN) includes the Designated Partnership Identification Number (DPIN) issued under section 7 of the Limited Liability Partnership Act, 2008 (6 of 200 .....

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..... DIN would constitute a disqualifications under Section 164(1) (h), which lays down that a person not having been allotted a DIN under Section 154 cannot be appointed as a Director of a company and as per Section 167 the office of Director shall become vacant in case he incurs any of the disqualifications specified in Section 164. Section 167 of the Act is reproduced as under:- 167. Vacation of office of director.- (1) The office of a director shall become vacant in case- (a) he incurs any of the disqualifications specified in section 164; ……. (2) If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1), he shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both. (3) Where all the directors of a company vacate their offices under any of the disqualifications specified in sub-section (1), the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office .....

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..... the petitioner/judgment debtor it has been mentioned that the same had been filed to fortify the oral submissions addressed at the time of arguments in furtherance of the objections filed. Once the aforementioned written submissions/arguments had been taken on record then it was incumbent upon the learned Executing Court to have decided the point raised therein. 24. In the circumstances, although proceedings for effecting recovery on behalf of the company are maintainable by M/s H.S. Tuli and Sons Builders Pvt Ltd despite its name having been removed from the Register of Companies in view of Section 250 of the Act, yet in the absence of possession of DIN in terms of Section 152 read with Section 164(1)(h) and 167 of the Companies Act, 2013 read with Rule 2(1)(d) of the Companies Appointment and Qualification of Directors) Rules, 2014, the Board of Directors, which passed the resolution dated 03.03.2016 was not a valid Board on account of the Directors of M/s H.S. Tuli & Sons Builders Pvt. Ltd having incurred disqualifications of not possessing DIN, thereby vacating their office in terms of Section 167 read with Section 164(1) (h), Section 152(3) and Section 154 of the Act. Acco .....

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