Jitendra Kumar Sarangi vs Union Of India And Anr on 29 September, 2021

[Cites 4, Cited by 1]

Delhi High Court - Orders

Jitendra Kumar Sarangi vs Union Of India And Anr on 29 September, 2021

1. The present batch of writ petitions have been filed seeking quashing of lists of disqualified directors published by respondent no.1 between the years 2017-18, wherein the petitioners were disqualified as directors under Section 164(2)(a) of the Companies Act, 2013 (hereinafter 'Act') on account of non-filing of annual returns and financial statements for three consecutive years by the companies in which they were directors. Pursuant to their disqualification, the petitioners' Director Identification Numbers (hereinafter 'DIN') and Digital Signature Certificates (hereinafter 'DSC') were also deactivated and consequently, they are not in a position to file any returns, even in respect of other companies where they are directors.

2. The case of the petitioners is premised on the fact that the penal provisions introduced in the statute vide Section 164(2)(a) and Section 167(1)(a) of the Act, came into effect only from 07.05.2018 and therefore, could not be applied retrospectively. In support of their Signature Not Verified DigitallySigned By:GARIMA MADAN Signing Date:30.09.2021 14:53:09 plea, the petitioners have relied on the decision of a Division Bench of this Court in Radhika Byrn v. Union of India (W.P.(C) 5534/2020, decided on 28.12.2020) as also the decisions of Co-ordinate Benches in Mukut Pathak & Ors. v. Union of India & Ors. (W.P.(C) 9088/2018 decided on 04.11.2019), Sandeep Agarwal & Anr. V. Union of India & Anr (W.P.(C) 5490/2020, decided on 02.09.2020) and Anjali Bhargava & Anr. v. Union of India & Anr. (W.P.(C) 11264/2020, decided on 06.01.2021).

3. When the present batch of petitions was taken up for hearing on 28.09.2021, it transpired that some of the petitions were sought to be opposed on the ground of delay and latches by placing reliance on a judgment of the Division Bench in Anamika Devi v. Union of India & Anr., (W.P.(C) 4356/2020, decided on 20.07.2020), while the others were not opposed and the learned counsel for the respondents had fairly submitted that the issue was covered by the decision in Mukut Pathak (supra).

4. In the light of these contradictory stands being taken, Mr. Santosh Kumar, ROC, Delhi & Haryana, was directed to remain present in Court today. Pursuant to the said direction, Mr. Santosh Kumar has joined the proceedings through video conferencing and submits that since the decision in Mukut Pathak (supra) wherein this Court had allowed similar petitions, was not stayed, the respondents do not have any objection to the present petitions being allowed.

5. Despite this stand taken by the ROC, learned counsel for the respondents, in some of the petitions, while not denying that the issue is covered by the decision of the Co-ordinate Bench in Mukut Pathak Signature Not Verified DigitallySigned By:GARIMA MADAN Signing Date:30.09.2021 14:53:09 (supra) and Anjali Bhargava (supra), have contended that the petitions are liable to be dismissed on the ground of delay and latches, for which purpose, they have relied on the decision of the Division Bench in Anamika Devi (supra). I have, therefore, considered the said decision and find that the same does not lay any such broad proposition as sought to be contended by the respondents. In the said case, the Division Bench had dismissed the petition on the ground of delay and latches after finding that not only was the period of disqualification ending very soon, but there was absolutely no explanation or reason given for approaching the Court at a belated stage. However, in the present batch of petitions, it is the specific case of the petitioners that on account of their disqualification, they are not in a position to apply for the benefits sought to be extended by the respondents themselves under recent welfare schemes, including the Companies Fresh Start Scheme, as also the recent orders passed by the NCLT reviving the companies in which they were directors. I am, thus, of the view that in the light of these facts, the deactivation of DIN and DSC of the petitioners would constitute a continuing cause of action. It is also apposite to note that after the decision in Anamika Devi (supra) dismissing the petition on the ground of delay, another Division Bench of this Court has, in Radhika Byrn (supra), allowed similar petitions. I, therefore, have no hesitation in rejecting the respondents' plea that the present petitions are barred by delay and latches.

6. For the aforesaid reasons, the writ petitions are entitled to succeed and are, accordingly, allowed. The impugned list of disqualified directors, Signature Not Verified DigitallySigned By:GARIMA MADAN Signing Date:30.09.2021 14:53:09 insofar as it relates to the petitioners herein, are quashed. The respondents are directed to reactivate the Director Identification Number ("DIN") and the Digital Signature Certificate ("DSC") of the petitioners within a period of three weeks from today.

7. The petitions, along with the pending application(s), if any, are disposed of in the aforesaid terms.

REKHA PALLI, J SEPTEMBER 29, 2021 acm Signature Not Verified DigitallySigned By:GARIMA MADAN Signing Date:30.09.2021 14:53:09

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Delhi High Court - Orders