Court Overturns Director Disqualification and Reinstates DINs Under Companies Act 2013, Allows Alternative Remedies.

The HC allowed the writ petition challenging disqualification under Section 164(2)(a) of the Companies Act, 2013, and DIN deactivation, referencing a prior order. The Court set aside the disqualification, reinstated the petitioners' DINs, and permitted them to act as Directors in active companies. The Registrar retained authority to address post-01.04.2014 violations and Rule 11 breaches. Petitioners may pursue alternative remedies if aggrieved by company striking off under Section 248. All writ petitions were allowed, and miscellaneous petitions were closed without costs.

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Issues:
Challenge of disqualification as Director under Section 164(2)(a) of the Companies Act, 2013 and deactivation of Director Identification Number (DIN).

Analysis:
The present writ petition challenges the action of the 2nd respondent, The Registrar of Companies, in disqualifying the petitioners as Directors of the Company under Section 164(2)(a) of the Companies Act, 2013, and deactivating their Director Identification Number (DIN). The learned Counsel for the petitioners argued that the matter is covered by a common order dated 18.07.2019, in a previous case, and requested the writ petition to be allowed based on that order. The Assistant Solicitor General representing the respondents agreed that the previous order covers the issue at hand. The Court referred to the previous order and held that the impugned orders disqualifying the petitioners as Directors and deactivating their DINs were passed based on events before 01.04.2014, making them unsustainable. Consequently, the Court set aside the disqualification and directed the activation of the petitioners' DINs to enable them to function as Directors in companies other than those struck off. The Court clarified that the Registrar could still take appropriate action for violations under Section 164(2) of the Act post-01.04.2014 and for violations of Rule 11 of the Rules. The petitioners were also given the option to seek alternative remedies if aggrieved by the striking off of their companies under Section 248 of the Act. All writ petitions were allowed in line with the previous order.

In conclusion, the present writ petition challenging the disqualification as Director under Section 164(2)(a) of the Companies Act, 2013, and deactivation of DIN was allowed based on a previous common order. The Court set aside the disqualification and directed the activation of the petitioners' DINs, allowing them to function as Directors in active companies. The Registrar was granted the authority to take appropriate actions for violations post-01.04.2014 and for Rule 11 violations. The petitioners were also given the option to seek alternative remedies if dissatisfied with the striking off of their companies. The miscellaneous petitions, if any, were closed without costs.

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