Calcutta High Court (Appellete Side)
Sourajit Ghosh vs Union Of India & Ors on 30 July, 2020
1
01, Ct.08.
30.07.2020
DC/AJ.
W.P. 5774(W) of 2020
with
CAN 3757 of 2020
Sourajit Ghosh
-Vs-
Union of India & Ors.
Mr. Sourojit Dasgupta,
Mr. Aditya Tiwari.
... for the petitioner.
Mr. Avinash Kankani.
.....for the respondent.
The writ petition is directed against a communication received from the State Bank of India to the Directors of M/s. S & H Manufacturing and Trading Private Limited dated 15th February, 2020 in which the newly appointed Director Mrs. Medhawi Verma wife of Mr. Sourajit Ghosh of the said company was not allowed to operate the bank account since she was declared disqualified along with other Directors, namely, Mr. Sourajit Ghosh and Mrs. Sila Singh Ghosh due to non-filing of audited financials of the company with the Register of Companies.
The learned counsel appearing on behalf of the petitioner submits that under Section 164(2) of the Companies Act (hereinafter referred to as the said Act), the said person may not be eligible for reappointment as a director of that company or appointed in other company for a period of 5 years from the date on which the said company fails to do so. But, under Section 167 of the said Act, the said director continues to remain as director of the companies which have not defaulted in filing 2 the financial statements. In this regard, the learned counsel has relied upon a decision of the Division Bench of this Court in Arun Seth -Vs- Union of India Ors. (MAT 1874 of 2017) dated 15th November, 2017 in which on an interpretation of Section 167(1)(a) read with Section 164(2)(a) of the said Act, it was held that disqualification under Section 164(2) of the said Act would not prevent the petitioner to continue to act as director of other companies which are not in default. The view expressed by the Division Bench was prima facie and issue not conclusively decided.
It is significant to mention here that the Hon'ble Division Bench at the relevant time was considering Section 167(1)(a) of the said Act which did not have a proviso that was added to it by an amendment on 7th May, 2018. Now, Section 167(1)(a) of the said Act reads as follows :-
"167. Vacation of office of director. - (1) The office of a director shall become vacant in case -
a) he incurs any of the disqualifications specified in Section 164:
Provided that where he incurs disqualification under sub-section (2) of Section 164, the office of the director shall become vacant in all the companies other than the company which is in default under that sub- section."
This Section makes it clear that if a director of a company who has failed to file financial statements incurs disqualification for appointment of a director in another company or re-appointment as a director as the case may be would immediately forfeit his right to continue as director in all the companies which may have filed the financial statements of annual returns as required under the 3 Companies Act. The inclusion of the said proviso has an object as it is found that directors in several companies act in a perfunctory manner and with a view to evade the provisions of the Companies Act remain as director of different companies and continue to remain in the Board of such companies by virtue of the fact that no default had occurred in the other company. It is significant to mention here that director of Regatta Techno-Com System Private Limited and S & H Manufacturing and Trading Private Limited are common and keeping in view the object of the said amendment which fastens the liability on the directors and in clear terms specify the disqualification that a director would earn irrespective of the fact that he may not be the director of the company which has not committed any default, I find no reason in the communication made by the State Bank of India. In fact, the writ petitioner should have availed the remedies available under the Companies Act and should have complied with the provisions of the said Act instead of subterfuging the same. Under such circumstances, the writ petition fails.
The writ petition stands dismissed.
The application being CAN 3757 of 2020 is disposed of.
There shall be no order as to costs.
Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
( Soumen Sen, J. ) 4