AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 317
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.... functioning as Directors of respondent No.3 Yogam. (iii) Appoint an Administrator to manage the day to day activities of respondent No.3 Yogam and to conduct election to its Board of Directors/office bearers in accordance with law and under the supervision of this Hon'ble Court; (iv) Issue a writ of Mandamus or any other appropriate writ or direction commanding respondent No.1 to consider and pass orders on Ext.P4 after hearing the petitioner within a time frame as may be fixed by this Hon'ble Court." 2. The petitioner states that the 3 rd respondent- Aruvippuram Sree Narayana Dharma Paripalana Yogam (hereinafter referred to as the 'Yogam') was registered under the Travancore Regulation No.1 of 1063 as an Association. The Kerala Non-trading Companies Act, 1961 came into effect from 01.03.1962 and the Yogam being an existing company came under the ambit of the Act, 1961. The Yogam is also deemed to be a company registered under the Companies Act, 1956 in view of Sections 3 to 5 of the Act, 1961. Consequent to the repeal of the Companies Act, 1956 and enactment of the Companies Act, 2013, the Act, 2013 would apply to the Yogam, as held by this Co....
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.... financial statement and annual returns for a continuous period of 3 financial years. 7. Respondents 3 to 7 contended that Section 164 does not contemplate any application being made to the Company Court either to declare that the office has been vacated or to declare that the office has not been vacated. No application can be entertained by the Company Court or High Court. The remedy, if any, of the petitioner is through civil court or by arbitration. 8. Respondents 3 to 7 refuted the allegation that the 3rd respondent has not filed annual returns in all these years. Financial statements for the years 2006-'07 to 2017-'18 were submitted in time. The 2nd respondent informed that they could not record the returns in registry due to want of original records which were in the office of Registrar of Companies. The annual returns submitted by the 3 rd respondent were not processed due to certain litigations. The delay caused has been condoned by the Government of Kerala and the 2 nd respondent has permitted the 3rd respondent to file Annual Returns remitting requisite fee. 9. Respondents 3 to 7 further stated that the 3 rd respondent filed a request for availing the ben....
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....of annual statements and balance sheets was not done in time, is admitted by the Government, as is evident from Ext.P2, Ext.P3 and Ext.R3(h). The documents were filed before the competent authority only on 15.06.2020. 13. The learned counsel for the petitioner urged that Section 164(2)(a) disqualifies a person as Director if financial statements or annual returns are not filed for a continuous period of three years. Such Directors cannot be reappointed for a period of five years. Section 167 of the Companies Act, 2013 mandates that the office of a Director shall become vacant in case he incurs any of the disqualifications specified in Section 164. In view of the continued default in filing the mandatory returns, respondents 3 to 7 should be deemed to have vacated office of the Directors by operation of Section 164(2) of the Companies Act read with Section 167 and they are disqualified from seeking re-election. Learned counsel for the petitioner relied on the judgment of the Hon'ble Delhi High Court in W.P.(C) No.9088/2018 and the judgment of the Hon'ble Madras High Court in W.P.(C) No.13616/2018, in support of his contentions. 14. Learned counsel appearing for respond....
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.... (a) he is of unsound mind and stands so declared by a competent court; (b) he is an undischarged insolvent; (c) he has applied to be adjudicated as an insolvent and his application is pending; (d) he has been convicted by a court or any offence, whether involving moral, turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence: Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company; (e) an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force; (f) he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call; (g) he has been convicted for the offence dealing with related party transactions under section 188 at any time during the last ....
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....ntenced in respect thereof to imprisonment for not less than six months: Provided that the office shall be vacated by the director even if he has filed an appeal against the order of such court; (g) he is removed in pursuance of the provisions of this Act; (h) he, having been appointed a director by virtue of his holding any office or other employment in the holding, subsidiary or associate company, ceases to hold such office or other employment in that company. (2) If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in sub-section (1), he shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both. (3) Where all the directors of a company vacate their offices under any of the disqualifications specified in sub-section (1), the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in....
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....er company, for a period of five years from the date on which the said company fails to do so. Section 167(1)(a) mandates that the office of a Director shall become vacant in case he incurs any of the disqualifications specified in Section 164. It is evident from the said provisions that disqualification of such Directors occurs by operation of law and is automatic and an administrative decision is not required in that regard. 22. Then the question will be whether any of the Directors of the 3rd respondent-Yogam have incurred the disqualification due to non-filing of annual returns/financial statements for a continuous period of three years. It is evident from the pleadings that the annual returns of the Yogam from the year 2006-'07 to 2016-'17 were filed paying the penalty imposed by the Non-trading Company Registrar, Kerala only after 24.09.2020. The amended provisions of the Companies Act came into force with effect from 12.09.2013. Therefore, if financial statements/annual returns for the years 2013-'14, 2014-'15 and 2015-'16 were not filed, such of the Directors who were in office during the period will be disqualified for reappointment as Directors in t....
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.... the period would be disqualified for reappointment for the next five years. 27. Now, the issue to be considered is whether respondents 4 to 7 in the writ petition are liable to be declared as having incurred the disqualification under Section 164(2) of the Companies Act, 2013, by this Court. Going through the pleadings in the writ petition, I find that there is no positive assertion anywhere in the writ petition that respondents 4 to 7 were Directors of the Company during the three consecutive years since 2013-'14, except in the case of the 4th respondent. A reference with regard to the tenure of the 4th respondent can be found only in Ext.P4 complaint preferred by the petitioner before the Inspector General of Registration, which is as follows:- "The present General Secretary of the SNDP Yogam took charge in 1997. From that year onwards, he is not functioning in accordance with the provisions of the law, rules and other circulars governing in the Companies Act." The pleadings in the writ petition leaves this Court to presume that the 4th respondent has been the General Secretary of the Yogam during the years 2013-'14 to 2015-'16. As regards respondents ....