Director disqualification cannot rest on defaults of a company already struck off and dissolved

A director's disqualification under the Companies Act, 2013 and the consequent DIN deactivation were held unsustainable where the defaulting company had already been struck off and dissolved under the Companies Act, 1956. The court noted that the disqualification was based on non-filing of returns by a company that had ceased to exist in law, and that the continued online display of the company as under striking-off was only an administrative anomaly. As the defaults were attributed to a dissolved company, the impugned disqualification and DIN deactivation were quashed and restoration of the DIN was directed.

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Issues: Whether the petitioner's disqualification under Section 164(2) of the Companies Act, 2013 and consequent deactivation of his DIN could be sustained when the defaulting company had already been struck off and dissolved under Section 560 of the Companies Act, 1956.

Analysis: The application for striking off had been processed under the Fast Track Exit guidelines, notice had been issued, and the company's name was struck off and the company stood dissolved. The respondents' own record showed that the disqualification and DIN deactivation were founded on non-filing of returns of that very company for a period of three years. Once the company had ceased to exist in law, it was unsustainable to treat the petitioner as disqualified for defaults attributed to a dissolved company. The continued online status of the company as under process of striking off was an administrative anomaly, and the petitioner could not be penalised for that mistake.

Conclusion: The disqualification and DIN deactivation were unsustainable and were quashed; the petitioner was entitled to restoration of his DIN.

Final Conclusion: The writ petition succeeded and the petitioner obtained consequential relief against the impugned disqualification and DIN deactivation.

Ratio Decidendi: A director cannot be disqualified under Section 164(2) of the Companies Act, 2013 on the basis of default in filing returns of a company that had already been validly struck off and dissolved in accordance with law.

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