Calcutta HC upholds Disqualification of Directors u/s 164(2) of Companies Act as Public at Large cannot be put to the Whim & Fancy of Recalcitrant Directors [Read Order]
![Calcutta HC upholds Disqualification of Directors u/s 164(2) of Companies Act as Public at Large cannot be put to the Whim & Fancy of Recalcitrant Directors [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/02/Calcutta-High-Court-Disqualification-Of-Directors-Companies-Act-Public-At-Large-Whim-Fancy-Of-Recalcitrant-Directors-Taxscan.jpg "Calcutta HC upholds Disqualification of Directors u/s 164(2) of Companies Act as Public at Large cannot be put to the Whim & Fancy of Recalcitrant Directors [Read Order]")
The Calcutta High Court has upheld the disqualification of Directors u/s 164(2) Of Companies Act as Public At Large Cannot Be Put To The Whim & Fancy Of Recalcitrant Directors. The writ petitioners, Satya Narayan Banik are aggrieved by cessation of office as directors of one M/s. Hahnemann International Pvt. Ltd. The disqualification happened by operation of Section 164 (2) for...
The Calcutta High Court has upheld the disqualification of Directors u/s 164(2) Of Companies Act as Public At Large Cannot Be Put To The Whim & Fancy Of Recalcitrant Directors.
The writ petitioners, Satya Narayan Banik are aggrieved by cessation of office as directors of one M/s. Hahnemann International Pvt. Ltd. The disqualification happened by operation of Section 164 (2) for not filing balance sheets and annual returns for a continuous period of three years from the year 2014-15. The ROC has also deactivated the Director Identification Number of the petitioners for which the petitioners are aggrieved by.
The petitioners have advanced a three-fold argument challenging such disqualification. That they were not permitted to avail the benefit of the “Company’s Fresh Start Scheme of 2020” despite applying by letter dated 11th November, 2020. That the petitioners were not afforded a prior hearing before the disqualification as a directors and were hence denied principles of Natural Justice. The Registrar of Companies is not authorized to deactivate their Director Identification Numbers (DIN) of the and that such activation of DIN pursuant to the disqualification is not automatic.
The division bench of Justice Rajasekhar Mantha has held that the provisions of the 2013 Act have an overriding effect on the Companies (Appointment and Qualifications of Director) rules of 2014. The said rules can, therefore, not have any manner of application or confer in right on the petitioners, insofar as their disqualification as directors.
The court has held that deactivation of the DIN of the petitioners is not automatic. In view of the above the DIN of the petitioners shall be revived subject to the company having filed DR-9 within prescribed or extended time. The said DIN shall not be applied to entitle the petitioners to act as directors in any other company.
To Read the full text of the Order CLICK HERE
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