Prospective director disqualification under the Companies Act cannot be extended to past defaults or used to deactivate DINs unlawfully.

Section 164(2) of the Companies Act, 2013 was treated as prospective, so defaults for financial year 2013-14 could not be used to impose director disqualification. The publication of the disqualification list and deactivation of DINs were found unsustainable because the statutory timeline and permitted grounds for DIN action were not satisfied. Alleged resignation did not alter the position without compliance with section 168 and the prescribed rules, and striking off a company did not extinguish continuing statutory obligations. The impugned list was set aside and DIN restoration directed, while leaving scope for action on any actual default in accordance with law.

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Issues: (i) Whether section 164(2) of the Companies Act, 2013 applied retrospectively so as to cover defaults relating to the financial year 2013-14 and justify disqualification of directors in the impugned list. (ii) Whether the publication of the list showing the petitioners as disqualified directors and the deactivation of their DINs were legally sustainable. (iii) Whether the petitioners' alleged resignation and the striking off of the companies altered the statutory consequences.

Issue (i): Whether section 164(2) of the Companies Act, 2013 applied retrospectively so as to cover defaults relating to the financial year 2013-14 and justify disqualification of directors in the impugned list.

Analysis: Section 164(2) introduces a disqualification for a director where the company has not filed financial statements or annual returns for any continuous period of three financial years. The provision came into force from 1 April 2014 and, absent express words or necessary implication, could not be given retrospective effect. The relevant three financial years therefore had to be counted prospectively from 2014-15 onwards. Applying the provision to defaults beginning with 2013-14 would unlawfully attach a new disability to past conduct and offend the settled rule against retrospectivity.

Conclusion: The provision was held to operate prospectively only, and the petitioners could not be treated as disqualified on the basis of 2013-14 defaults.

Issue (ii): Whether the publication of the list showing the petitioners as disqualified directors and the deactivation of their DINs were legally sustainable.

Analysis: The impugned list treated the petitioners as disqualified for a five-year period commencing from 1.11.2016, which was inconsistent with the statutory timeline under section 164(2) read with sections 92, 96, 137 and 403. The statutory filing obligations for the third relevant financial year had not matured on the dates reflected in the list, making the declaration of disqualification premature and untenable. Further, the DIN framework under sections 152 to 155 and Rule 11 of the Companies (Appointment of Directors) Rules, 2014 permits cancellation or deactivation only on the specified grounds and does not authorise suo motu deactivation merely because a company is struck off or a director is said to be disqualified.

Conclusion: The publication of the disqualification list and the deactivation of the DINs were illegal and unsustainable.

Issue (iii): Whether the petitioners' alleged resignation and the striking off of the companies altered the statutory consequences.

Analysis: A director's resignation takes effect only in accordance with section 168 and Rules 15 and 16, including intimation to the company and Registrar in the prescribed manner. In the absence of material showing compliance with those requirements, resignation could not absolve the petitioners of statutory liabilities. Likewise, striking off of a company under section 248 does not erase statutory obligations, because section 250 preserves liabilities and obligations notwithstanding dissolution.

Conclusion: The alleged resignation did not displace the statutory consequences, and striking off did not extinguish the company's or directors' obligations.

Final Conclusion: The statutory disqualification was applied prematurely and on an incorrect temporal basis, and the consequential DIN deactivation could not stand. The impugned list was therefore set aside and the petitioners were entitled to restoration of their DINs, leaving the respondents free to proceed in accordance with law for any actual statutory default.

Ratio Decidendi: A disqualification provision creating a new disability must be construed prospectively unless the legislature clearly indicates otherwise, and administrative action under the Companies Act cannot extend disqualification or disable DINs beyond the statutory grounds and timing prescribed by the Act and the Rules.

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