Telangana HC grants interim relief to restore DIN numbers for active company directors

The Telangana High Court granted interim orders in favor of the petitioners in a writ petition, allowing them to restore their DIN numbers to submit annual returns and financial statements of active companies where they held directorship. The court found a prima facie case in favor of the petitioners, aligning their case more closely with a judgment from the Madras High Court rather than the Bombay High Court. This decision was based on a comparison of legal issues raised in different High Court judgments and previous orders, leading to the grant of interim relief.

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Issues involved:
Interpretation of legal issues raised in writ petitions, comparison of judgments from different High Courts, consideration of appeal filed before Division Bench, grant of interim orders based on prima facie case made out by petitioners.

Analysis:
The judgment delivered by the Telangana High Court involved a detailed analysis of the legal issues raised in the writ petitions before the court. The counsel for the petitioners and the Assistant Solicitor General representing the respondents presented their arguments regarding the appeal filed by the 2nd respondent-ROC against the judgment in WP Nos. 148 of 2018. It was highlighted that a stay had been granted by the Hon'ble Supreme Court on 06.08.2018 in this regard.

A crucial aspect of the judgment was the comparison made with the judgments of other High Courts. The counsel for the petitioners emphasized that the issue raised in the present writ petition was different from the one raised in the Bombay High Court judgment related to the COD scheme. Reference was made to the judgment of the Madras High Court in support of this argument. The Assistant Solicitor General mentioned that an appeal had been filed against the Madras High Court judgment before the Division Bench, which was scheduled for the next day.

The Telangana High Court carefully examined the orders passed by the Bombay High Court and the Madras High Court to determine the similarity of issues raised. It was observed that the issue raised in the present writ petition aligned more closely with the Madras High Court judgment. Considering this, the court opined that the petitioners had established a prima facie case warranting the grant of interim orders.

Drawing parallels with a previous order dated 19.04.2018, the court decided to grant interim stay of proceedings, thereby disabling the DIN of the petitioners. Additionally, a direction was issued to the 1st respondent to restore the DIN number of the petitioners to enable them to submit annual returns and financial statements of the active companies in which they held directorship, pending the disposal of the writ petition. This decision was based on the rationale provided in the earlier order and the similar circumstances presented in the current case.

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