Telangana High Court
Geometrix Laser Solutions Private Ltd. vs Registrar Of Companies And 2 Others on 16 June, 2022
Author: G. Radha Rani
Bench: G. Radha Rani
THE HON'BLE Dr. JUSTICE G. RADHA RANI
WRIT PETITION No.28197 OF 2019
ORDER:
This writ petition is filed by the petitioner seeking issuance of Writ of Mandamus to direct the 1st respondent and the functionaries acting under the R1 for approving the e-Form DIR-12 filed by the petitioner on 19-4- 2017 for the cessation of directorship of the 3rd respondent in accordance with Section 167(1)(b) of Companies Act, 2013.
2. Heard the learned counsel for the petitioner Sri Bavani Amir Ali and the learned Additional Solicitor General of India representing the respondent Nos.1 & 2. Notices were served on 3rd respondent on 21-12- 2019 and on 25-2-2020 as per the postal track reports filed by the counsel for petitioner along with Memo of proof of service on 4-2-2020 and 2-3- 2020. The 3rd respondent failed to appear before the court.
3. The learned counsel for the petitioner submitted that the petitioner duly submitted e-Form DIR-12 seeking cessation of directorship of the 3rd respondent in accordance with the provisions of Section 167(1)(b) of Companies Act, 2013, on account of her disqualification due to her absence from all the meetings of the Board of Directors held during a period of 12 2 Dr.GRR,J WP No.28197 of 2019 months, with or without seeking leave of absence of the Board of Directors. The same had not been processed by the Registrar of Companies and the current status of the e-form was pending approval since long time. Since the same was not processed, the petitioner was unable to file any other/further DIR-12 e-Forms for subsequent vacations, appointment or re- appointment of directors which led to delay on the part of the petitioners to adhere to statutory compliances, which was also resulting in incurring penalties. As the petitioner was unable to file Form INC-22A ACTIVE which was mandatory compliance required by the Ministry of Corporate Affairs, the petitioner company received ACTIVE Non Compliance status resulting in huge penalty on the petitioner in the form of late fees for late filing of pending DIR-12 Forms and Form INC-22A. The petitioner exhausted all possible remedies by lodging online complaints and letters to the Registrar of Companies, the Regional Director and the Ministry of Corporate Affairs. As there was no response or attempt towards redressal of petitioners grievance, filed the present writ petition.
4. The learned Additional Solicitor General of India submitted that inspection was ordered on the affairs of the company by the Ministry of Corporate Affairs due to various complaints lodged by Smt. BVS Lakshmi, 3 Dr.GRR,J WP No.28197 of 2019 who was the Ex-Director and Promoter Director of the company. Based on such inspections conducted several prosecutions were instructed to be filed by the Competent Authorities and the same were pending trial before the Economic Offences Court, Hyderabad. Smt. BVS Lakshmi also preferred an application under Section 7 of Insolvency and Bankruptcy Code on account of alleged default for repayments to be made to her by the petitioner company. She also filed an application under Section 130 of the Companies Act, 2013 for reopening of Books of Accounts of the petitioner company alleging falsification of the accounts of the company, which was pending before NCLT, Hyderabad. In view of the private dispute between both the parties and several matters being sub-judice before various courts of law, the respondents had taken a stand to await for the outcome of the litigations and as such the Form was pending since 2017, if this court would direct the office to dispose the grievance of the petitioner by approval of said e-Form, the official respondents would act upon the directions of the court and prayed to dismiss the petition.
5. Perused the record. As per the provisions of the Companies Act 2013 and the Companies (Appointment and Qualifications of Directors) Rules, 2014, every company, whether new or existing is required to file an 4 Dr.GRR,J WP No.28197 of 2019 e-Form DIR-12 with particulars of its directors and key managerial personnel of the company with the Registrar, within 30 days from the date of appointment/resignation and of any change taking place in their designations.
6. Section 167(1)(b) of Companies Act, 2013 deals with vacation of office of director. It reads as under:
167. Vacation of office of director:
(1) The office of a director shall become vacant in case--
b) He absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board.
7. As per the petitioner, he filed e-Form DIR-12 on 19-4-2017 and resubmitted the same on 9-5-2017 with required details/clarifications in accordance with Section 167(1)(b) of Companies Act, 2013, for cessation of directorship of the 3rd respondent as the 3rd respondent did not attend a single board meeting for over a period of 10 years. On receiving no response from the 1st respondent for over 5 months, the petitioner issued a letter dated 9-10-2017 to 1st respondent requesting him to process the form DIR-12. In a meeting dated 8-8-2018, the board of directors of the petitioner company appointed Additional Directors namely, Mrs. 5 Dr.GRR,J WP No.28197 of 2019 Naseemunnisa Mohammad and Mrs. Hussain Shabnam and the said persons were regularized as Directors at the Annual General Meeting (AGM) of the petitioner company held on 29-9-2018. Further, one Mr. Nisar Ahmed and Mr. Mohammad Mazaruddin were disqualified and deemed to have vacated their office as Directors in accordance with Section 167(1) read with Section 164(2)(a) of the Companies Act, 2013 read with the MCA Notification dated 7-5-2018. Due to the pending status of the petitioner's DIR-12 e-form dated 19-4-2017 and 9-5-2017, the petitioner was unable to file the aforesaid information with regard to the appointment of Additional Directors, their regularization as Directors and removal of two of its Directors. The petitioner also raised a Ticket with MCA regarding its inability to furnish the aforesaid information and was forced to issue letters to R1 and Regional Director (SER) dated 25-2-2019 apprising them of the difficulty being faced by the petitioner but there was no response from them. The petitioner was unable to file Form INC-22A ACTIVE which was mandatory compliance required by the Ministry of Corporate Affairs, due to which the petitioner company received ACTIVE Non Compliance status resulting in huge penalty in the form of late fees for late filing of pending DIR-12 Forms and Form INC-22A. The petitioner over a period exceeding 2 years tried every possible method to apprise the 6 Dr.GRR,J WP No.28197 of 2019 1st respondent of the difficulties faced by the petitioner company. Due to the inaction on the part of 1st respondent, the petitioner faced grave difficulties in running the operations of its business causing damage to the reputation of the petitioner company.
8. The learned counsel for the petitioner further submitted that Ms. BVS Lakshmi preferred an application under Section 7 of Insolvency Bankruptcy Code, 2016 before the NCLT, Hyderabad Bench seeking initiation of CIRP against the petitioner company on account of an alleged default in repayment of an amount of Rs. 91,47,864. The said petition was dismissed by the NCLT vide order dated 13-3-2017. On an appeal preferred before the NCLAT, the NCLAT upheld the order passed by the NCLT, on 22-12-2017. Ms. BVS Lakshmi also preferred a petition before NCLT under Section 130 of Companies Act, 2013 seeking reopening of Books of Accounts of the petitioner company. The said matter was pending before the NCLT. The petitioner company along with its directors were contesting the matters before the respective courts.
9. Considering the submission of the learned counsel for the petitioner and the learned Additional Solicitor General of India, this court is of the opinion that mere pendency of such complaints shall not be a ground 7 Dr.GRR,J WP No.28197 of 2019 to hold the processing/acceptance of Form DIR-12 filed by the petitioner for cessation of directorship of 3rd respondent and the inaction on the part of the R1/Registrar of Companies by withholding processing/accepting the DIR-12 was arbitrary and unreasonable. Due to the inaction on the part of the 1st respondent, the petitioner company was given ACTIVE Non Compliance status for no fault of them leading to imposition of huge penalties and crippling difficulties.
10. The non registration of cessation of directorship of 3rd respondent by way of Form DIR-12 by the Registrar of the Companies was in contravention of the provisions of Section 398 of the Companies Act, 2013. Section 398(f) of the Companies Act, 2013 lays down the provisions relating to filing of the documents in electronic form with the Registrar of the Companies. It reads as under:
"398. Provisions relating to filing of applications, documents, inspection, etc., in electronic form.-- (1) Notwithstanding anything to the contrary contained in this Act, and without prejudice to the provisions contained in section 6 of the Information Technology Act, 2000 (21 of 2000), the Central Government may make rules so as to require from such date as may be prescribed in the rules that--
(f) the Registrar shall register change of registered office, alteration of memorandum or articles, prospectus, issue certificate of incorporation, register such document, issue such certificate, record the notice, receive such communication as may be required to be registered or issued or recorded or received, as the case may be, under this Act or the rules made 8 Dr.GRR,J WP No.28197 of 2019 thereunder or perform duties or discharge functions or exercise powers under this Act or the rules made thereunder or do any act which is by this Act directed to be performed or discharged or exercised or done by the Registrar in the electronic form in such manner as may be prescribed."
11. A perusal of the above provision would clarify that the Registrar of the Companies is under obligation to register the entries envisaged in the aforesaid sub-Section. The word 'shall' used in Section 398 (1)(f) of the Companies Act, 2013 denotes that, it is mandatory for the Registrar of Companies to register, process and accept such forms. Filing of Form DIR- 12 was procedural in nature and the same was done pursuant to appointment or cessation or change in designation of a director. The petitioner company, through its Board of Directors and Shareholders was well within its rights to appoint new directors or to confirm the Additional Director as Directors as per the applicable provisions of Companies Act, 2013. The pendency of DIR-12 for cessation of directorship of R3 in not permitting the petitioner company to file any other DIR-12 was taking away their lawful rights under the provisions of Companies Act, 2013. As the same was impermissible and the Registrar of Companies cannot withhold the form DIR-12 on account of the disputes between two individuals and the said complaints and petitions were being contested before the appropriate forums having jurisdiction over the subject matter, 9 Dr.GRR,J WP No.28197 of 2019 it is considered fit to dispose of the writ petition directing the 1st respondent i.e., Registrar of Companies to consider the Form DIR-12 submitted by the petitioner company, if it is in accordance with law.
12. In the result, the writ petition is disposed of with the above direction. No order as to costs. Miscellaneous Petitions pending, if any, shall stand closed.
_____________________ Dr. G. RADHA RANI, J June 16, 2022 KTL