Court overturns director disqualifications, reactivates IDs. Registrar lacked authority to deactivate DIN.

The court allowed the appeals, set aside the disqualification orders, quashed the publication of the list of disqualified directors, and ordered the reactivation of Director Identification Numbers (DIN) within 30 days. The judgment clarified that the Registrar of Companies (RoC) lacked authority to deactivate DIN upon director disqualification under Section 164(2) of the Companies Act, 2013. The RoC could only initiate disqualification after an inquiry determining specific default attribution to directors. The decision aligned with previous rulings, allowing the writ petitions and closing connected miscellaneous petitions without costs.

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Issues:
Challenge to orders disqualifying directors under Section 164(2)(a) of the Companies Act, 2013 and seeking reappointment without hindrance.

Analysis:
The writ petitions challenged the orders disqualifying directors under Section 164(2)(a) of the Companies Act, 2013. The issue revolved around the disqualification of directors by the Registrar of Companies (RoC) through various notifications. The RoC had disqualified directors under different notifications, leading to legal challenges. A previous judgment in Bhagavan Das Dhananjaya Das V. Union of India allowed a batch of writ petitions and set aside the disqualification notifications/orders issued by the RoC. However, a subsequent notification dated 17.12.2018 faced challenges but were dismissed by the court. The powers of the RoC under Sections 164 and 167(1) of the Companies Act, 2013, and Rule 14 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 were extensively discussed in a judgment by the Hon'ble Division Bench in W.A.No.569 of 2020. The court analyzed the rules regarding Director Identification Number (DIN) and concluded that the RoC did not have the authority to deactivate the DIN upon disqualification under Section 164(2) of the Companies Act, 2013.

The judgment emphasized that Rule 11 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 did not provide for the deactivation of DIN upon disqualification. It further highlighted the importance of DIN for filing financial statements and annual returns, especially in cases where a director was disqualified from one company but continued to be a director in another. The court concluded that the deactivation of DIN by the RoC was contrary to the relevant sections of the Companies Act, 2013. As a result, the court allowed the appeals, set aside the impugned orders, quashed the publication of the list of disqualified directors, and ordered the reactivation of DIN within 30 days. The judgment clarified that the RoC could initiate action for disqualification after an inquiry to determine specific default attribution to directors. The court's decision aligned with a previous ruling in Meethelaveetil Kaitheri Muralidharan V. Union of India, following which the writ petitions were allowed, and connected miscellaneous petitions were closed without costs.

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