TMI Blog2019 (10) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 becomes vacant as he incurs the disqualification specified under Section 164 which inter alia includes ineligibility for appointment as a Director of a Company in the absence of allotment of DIN read with Rule 2(1)(d) of the Rules, which defines DIN as an identification number allotted to an 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. Order set aside - the execution application is held to be non maintainable - M/s H.S. Tuli Sons Builders Pvt. Ltd. (decree holder) shall be at liberty to recover the amount owed to it by the petitioner in accordance with law. - CR NO.14395 OF 2018 (O&M) - - - Dated:- 7-2-2019 - MR B.S. WALIA, J. For The Petitioner : Mr. Arun Gosain, Advocate, Counsel For The Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion 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 23.03.2018 as were taken on record vide order dated 18.08.2018, the same had not been dealt with by the learned Executing Court while deciding the objections. 4. Learned counsel for the petitioner relied on the provisions of Section 149 to 172 of the Act as also Rule 2(1)(d) of the Act (Appointment and Qualification of Director), Rules, 2014 as referred to in the written submissions / arguments. Learned counsel made categorical reference to Section 152 of the Act as per which no person can be appointed as a Director of a company in the absence of allotment of DIN under Section 154 besides Section 164 which stipulates disqualifications for appointment as a Director and Section 167 which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 original register containing the resolution of M/s H.S. Tuli and Sons Builders Pvt. Ltd. dated 03.03.2016 learned counsel for the petitioner stated that he did not press the objection w.r.t. resolution not being of M/s H.S. Tuli and Sons Builders Pvt., Ltd. 7. Plea of the petitioner that none of the Directors of M/s H.S. Tuli Sons Builders Pvt. Ltd. possessed DIN or had applied for the same was frankly conceded by Shri Tuli to be the correct factual position. However, he argued that the objection with regard to non possession of DIN was not taken in the objections dated 21.10.2017 and that an objection not taken before the Executing C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 contract. Dispute between the parties was referred to arbitration leading to passing of award dated 19.02.2001 by Shri S.S. Goyal. Claims raised therein were partly allowed and ₹ 8,18,247.09 was awarded along with interest @ 12% per annum on the awarded amount w.e.f. 04.10.1980 to the date of decree / date of realisation whichever was earlier. 11. It needs noticing here that on the death of Shri Harbans Singh Tuli, Sole Proprietor, all his legal heirs joined together and incorporated M/s Harbans Singh Tuli S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cree-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. Thereupon, vide order dated 05.11.2018 the Executing Court held that as on 29.10.2018 an amount of ₹ 30,54,570.17 was the amount payable by the petitioner-JD to the respondent/decree-holder, accordingly, the amount paid by the judgment-debtor to the decree-holder was not in tune with the orders passed by Hon ble the Supreme Court. 16. I have considered the position as noted above as also the submissions of learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 2009) and rules made thereunder; A perusal of Section 266 A of the Companies Act, 2006 reveals that every p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in view of non possession of DIN by either of the Directors, as non possession of 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. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non possession of DIN yet the fact remains that written submissions/arguments dated 23.03.2018 were filed by the petitioner before the learned Executing Court and the same were taken on record by the learned Executing Court vide order dated 18.08.2018. In paragraph No. 2 of the said written submissions/arguments filed on behalf of 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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