TMI Blog2022 (10) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... strar. In Rules, incorporation of requirement of moving application is obvious, because allotment of DIN number is prerequisite for appointment of directors, therefore, moving application by person assumes more significance because it is identity which is carried by the director over his shoulder during his stint as director of the company, therefore, such important identification cannot be sacrificed suo motu or at the instance of any misrepresentation. It needs verification of e-record and affording opportunity of hearing in some contingencies especially when the matter pertains to obtaining DIN in a Wrongful Manner or by Fraudulent Means. So far as application of Sections 164 and 167 of the Act of 2013 is concerned from the Act of 2013 itself it appears that Section 164 of the Act of 2013 was made applicable from 1st May, 2014 whereas Section 167 of the Act of 2013 was made applicable w.e.f. 7th May, 2018 and it is settled in lay that unless statute is made applicable retrospectively, its application would be prospective in nature. In some of the cases, alleged default appears to be of 2015-16 and 2016-17, therefore, three consecutive years have not been lapsed so as to attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Sharma , for the petitioners in W. P. Nos. 1541, 11364, 11390, 13025, 14131, 14171 and 15500 of 2020 and 8652 of 2021. Abhisehk Singh Bhadoriya , for the petitioners in W. P. Nos. 9026, 13005, 13203, 14950 and 16147 of 2020 and 8046 of 2021. Rajendra Jain , for the petitioner in W. P. No 13759 of 2020. Nakul Khedkar , for the petitioners in W. P. Nos. 592 and 3792 of 2022. Arun Dudawat , for the petitioner in W. P. No. 20137 of 2020. Praveen Kumar Niwaskar , Assistant Solicitor General : For the Respondent No. 1 in all the writ petitions. ORDER 1. Regard being had to the similitude of controversy, all the writ petitions referred above were heard analogously and decided by this common order. For convenience's sake, facts of writ petition No.15683/2020 are taken into consideration. 2. The instant petition (W.P.No.15683/2020) under Article 226 of Constitution of India is preferred preferred by the petitioners seeking following reliefs: a) That, the impugned order Annexure P-1 under section 164(2) of the Companies Act, 2013 in relation to the petitioner may kindly be directed to be quashed and the name of the petitioner as a Disqualified Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also deactivated. It is worth mentioning the fact that other companies in which petitioners are directors are doing normal business and their statutory returns namely financial statements and annual returns are regularly filed. 6. On 13-09-2017, respondents posted a list of disqualified directors of the struck off companies all over the country with a separate list of companies having registered office under the jurisdiction of various offices of respondents across India with the title List of Disqualified Directors under Section 164(2)(a) of the Act of 2013 and said list shows petitioners are disqualified to act as directors in all the companies w.e.f. 01-11-2018. Based upon the event of striking off the name of company -Kanchan Creation Ltd., respondents declared the petitioners disqualified to act as director in the company having their registered office inter alia in the State of Madhya Pradesh and consequently, petitioners who are directors in other companies also have been disqualified under Section 164(2)(a) of the Act of 2013, their DIN is deactivated and their name appeared in the list of disqualified directors in all the companies. DIN is prerequisite in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners that in some cases, respondents issued show cause notice to the petitioners but that was in respect of alleged violation of Section 137 of the Act of 2013 (Copy of financial statements to be filed with Registrar) and now respondents deactivated DIN, therefore, purpose and content of show cause notice and final order (by way of impugned order) are different, therefore, on the basis of show cause notice on some different ground, instant impugned order cannot be passed on some ground other than the one in show cause notice {Referred: CCE Vs. Ballarpur Industries Ltd., 2007 (215) ELT 489 (SC) and CCE Vs. GAS Authority of India Ltd., 2008 (232) ELT 7 (SC)}. 12. It is also submitted by learned counsel for the petitioners that a person cannot be punished for the same offence twice because punishment for non filing of financial statements and annual returns is prescribed under Sections 92 and 137 of the Act of 2013 and if any liability or punishment is incurred under the said provision then provision of rule 11 of Rules of 2014 read with Sections 164(2) and 167(1) of the Act of 2013 cannot be applied to punish a person again on same set of alleged irregularities. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the respondents opposed the prayer by way of filing reply and tried to support impugned action of respondents. He denied the factum of denial of opportunity of hearing and referred Company Law Settlement Scheme, 2014 (CLSS, 2014) vide General Circular No.34 of 2014 in which all directors and companies were given a chance for course correction to submit financial statement/annual return and to cure the defects. Therefore, all these petitioners knew the fate very well, therefore, factum of opportunity of hearing is not available to the petitioners. According to him, respondents' action is as per the provision of Section 164(2) read with Section 167(1) of the Act of 2013, therefore, no error has been committed by the respondents. Since name of the company has been struck off from the register of Registrar of Companies due to non filing of statutory documents since 2014-15 notice under Section 248(1) of the Act of 2013 was issued to the company and its directors. Subsequently the public notice was issued under Section 248(1)(4) of the Act of 2013 read with rule 3 of the Rules of 2013. In sum and substance by way of filing reply, respondents opposed the petitioners and prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me -2018 (COD -2018) scheme is applicable Matters wherein Company Law Settlement Scheme, 2014 (CLSS -2014) and/or condonation of delay scheme -2018 (COD -2018) is not applicable Category -VIII Matters wherein petitioners are directors in other companies apart from defaulting company Matters wherein petitioners are not directors in other companies apart from defaulting company Category -IX Matters wherein petitioners have made the default good of non-filing after obtaining interim relief from this Court. Matters wherein petitioners still in default of non-filing after obtaining interim relief from this Court. 20. Since the primary and consequential question is in respect of deactivation of DIN of petitioners by respondents, therefore, all these writ petitions have been heard together and decided by this common order. Minor deviation in facts of different petitions would not alter the nature of controversy. 21. From the perusal of the Act of 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btained on the strength of documents which are not legally valid or incomplete documents are furnished or on suppression of material information or on the basis of wrong certification or by making misleading or false information or by misrepresentation; (ii) the term fraudulent means means if the DIN is obtained with an intent to deceive any other person or any authority including the Central Government. (2) The Central Government or Regional Director (Northern Region), or any officer authorised by the Central Government or Regional Director (Northern Region) shall, deactivate the Director Identification Number (DIN), of an individual who does not intimate his particulars in e-form DIR-3-KYC [or the web service DIR-3-KYC-WEB as the case may be] within stipulated time in accordance with Rule 12A. (3) The de-activated DIN shall be re-activated only after e-form DIR-3-KYC [or the web service DIR-3-KYC-WEB as the case may be] is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014.] 22. From perusal of said rule, it appears that cancellation or deactivation of DIN can be done at the instance of any person while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay lead to deactivation and cancellation of DIN. Sections 164 of the Act of 2013 deals in respect of disqualification for appointment of director and Section 167 of the Act of 2013 deals in respect of vacation of office of director but it nowhere deals in respect of cancellation of DIN, therefore, resorting to Sections 164 and 167 of the Act of 2013 for cancellation/deactivation of DIN is arbitrary and illegal. Only source available for deactivation of DIN is provided under rule 11 of Rules of 2014. 26. Close scrutiny of Sections 164(1) and 164(2) of the Act of 2013 makes it clear that former takes care of individual act of person which may operate as disqualification whereas later provision talks about conduct of a company in which person is working as director. Basis of disqualification in both the contingencies are different and apparently contingency of Section 164(1) of the Act of 2013 and rule 11 of the Rules of 2014 may be overlapping but so far as Section 164(2) of the Act of 2013 vis a vis rule 11 of Rules of 2014 is concerned, it appears that Section 164(2) and for that matter, Section 167(1) are concerned, there are certain different set of contingencies mainl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allahabad (DB) 7 Naresh Poddar V. UOI [2021] 224 CompCas 552(Cal) 05/01/21 Calcutta (SB) 8 Zacharira Maramkandathil Mohan V. UOI [2021] 3 KHC 550 16/06/21 Kerala (SB) 9 Meethelaveetil Kaitheri V. UOI [2020] 159 CLA 277 (Mad) 09/10/20 Madras (DB) 10 Gautam Mehra V. UOI [2021]224Comp Cas514 (Cal) 15/10/20 Calcutta (SB) 29. Different High Courts have taken same stand that DIN cannot be cancelled or deactivated resorting to Section 164 or 167 of the Act of 2013 and for the reasons assigned into their orders. For brevity, this Court does not intend to elaborate the order further while repeating the discussion. 30. Resultantly , in the considered opinion of this Court, looking to the legal position and the judgments passed by different High Courts from time to time, this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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