RoC can’t Deactivate DIN of Director for Disqualification: Madras HC grants relief to Senior DMK Leader [Read Order]

RoC - Deactivate DIN of Director for Disqualification in Company - Madras High court - Senior DMK Leader - TR Balu - Taxscan

The Madras High Court held that the Registrar of Companies (RoC) cannot Deactivate the Director Identification Number (DIN) of Director for Disqualification in Company

The petitioner, Baalu Renukadevi and Thallikotai Raju Baalu Rajaa challenged the orders of the RoC and consequential direction is sought for to direct the respondents herein to permit the petitioners to get reappointed as Directors of any company or to get appointed as Directors of any company without any hindrance.

The Single Judge Bench of Justice Pushpa Sathyanarayan took into consideration the decision of division bench in the case of Meethelaveetil Kaitheri Muralidharan V. Union of India wherein it was held that if a person does not vacate office and continues to be a director of a company, it is necessary that such person continues to retain the DIN. In this connection, it is also pertinent to point out that it is not possible to file either the financial statements or the annual returns without a DIN. Consequently, the director of the Defaulting Company would be required to retain the DIN so as to make good the deficiency by filing the respective documents. Thus, apart from the fact that the AQD Rules do not empower the ROC to deactivate the DIN, such deactivation would also be contrary to Section 164(2) read with 167(1) of CA 2013 inasmuch as the person concerned would continue to be a director of the Defaulting Company.

Therefore, the court while allowing the petition ruled that the DIN of the respective directors shall be reactivated within 30 days and it is open to the ROC concerned to initiate action with regard to disqualification subject to an enquiry to decide the question of attribution of default to specific directors.

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