Sri Sandeep Kalvakuntla V. Union of India

WP/22714/2020

AI Insights

The case involves Sri Sandeep Kalvakuntla and Smt Manohari Kalvakuntla, who challenged their disqualification as directors and the deactivation of their DINs by the Registrar of Companies, Telangana. The disqualification was based on alleged defaults in filing financial statements and annual returns for three consecutive years, as per Section 164(2)(a) of the Companies Act, 2013. The petitioners argued that the action was arbitrary, illegal, and violated principles of natural justice, as it was applied retrospectively despite the provision being prospective in nature. The court examined the applicability of Section 164(2)(a) and related rules, ultimately finding that the disqualification was improperly applied to periods before the enactment of the relevant provision and that the DINs should not have been deactivated based on the grounds cited.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 721698 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 11-12-2020
• Assessment Year: misc
• Other Referred Cases: COMMISSIONER OF INCOME TAX (CENTRAL)-L NEW DELHI v. VATIKA TOWNSHIP PRIVATE LIMITED, YASHODHARA SHROFF vs. UNION OF INDIA, GAURANG BALVANTLAL SHAH S/O BALVANTLAL SHAH VS, UNION OF INDIA, BHAGAVAN DAS DHANANJAIA DAS vs. UNION OF INDIA
• Laws Referred To: Companies Act, 2013, Companies (Appointment of Directors) Rules, 2014, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: N RAJESHWAR RAO
• Assessee Lawyers: ANGOTHU NEHRU
• Keywords: Companies Act; Director Identification Number (DIN); Disqualification of Directors; Natural Justice; Writ of Mandamus
• Section: 226; 248; 252; 164(2)(a)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYOERABAD (Special Original Jurisdiction) FRIDAY ,THE ELEVENTH DAY OF DECEMBER TWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION NO: 22714 OF 2020 Between: 1. Sri Sandeep Kalvakuntla, S/o Srinivas Kalvakuntla Aged about- 33 years No 4-7-324, Esamia Bazar, VPG Ground Esamia Bazar. Himavath Nagar, Hyderabad. Telangana-500027.. 2. Smt Manohari Kalvakuntla, W/o Srinivas Kalvakuntla. Aged aboul 52 years No 4-7-324, Esamia Bazar, VPG Ground Esamia Bazar, Himayath Nagar, Hyderabad, Telangana-500027 ...PETITIONERS AND 1. Union of lndia, Represented by its Ministry of Corporate Affairs, Shastri Bhawan, Dr. Rajender Prasad Road, New Delhi - 110001 2. The Registrar of Companies, Telangana 2nd Floor. Corporate Bhawan, Thattiannaram, G.S.l. Post, Bandlaguda, Nagole, Hyderabad - 500068 ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to paBs an order or direction or any other proceedings one in the nature of Writ of Mandamus declaring the action of respondents in disqualifying the petitioner as a directors and deactivating the '1st petitioner Director ldentification Number (DlN) 06648417, 2nd petitioner Director ldentification Number (DlN) 07444122., and restricting the petitioners from filing statutory returns, i.e., the annual returns and financial statements of the Companies in which they are Directors as arbitrary, illegal, without jurisdiction, contrary of the provisions of the Companies Act, 2013 and Rule 11 of the Companies (Appointment of Directors) Rules, 2014, violative of the principles of natural justice besides violating the petitioner rights guaranteed under Article 14 and Article 19 (l) (g) of the Constitution of lndia. Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the '1 st Respondent to restore the petitioner Director ldentification Number (DlN) 08137504, 2nd petitioner Director ldentification Number (DlN) 06648417, 2nd petitioner Director ldentification Number (DlN) 07444122. so as to enable petitioners to submit pending annual returns and financial statements for the Companies in which they are appointed as directors. Counsel for the Petitioners:SRl. ANGOTHU NEHRU Counsel for the Respondents: SRl. N. RAJESHWAR RAO, ASST. SOLICITOR GENERAL The Court made the following: lA NO: 1 OF 2020 THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 22714 of 2O2O ORDER: The petitioners challenge their disqualification from Directorship under Section l6aQ) ol the Companies Act, 20 1 3, for the alleged default in filing financial statement/Annual Returns, and consequently seek restoration of their Director ldentification Numbers (DlN) viz., 06648417 and 07444122 respectively. Learned counsel for the petitioners submits that the issue raised in the present Writ Petition common order dated 18.07.2O19 in batch. is squarely covered by the W.P.No.5422 of 2018 and Sri Namavarapu Rajeshwar Rao, learned Assistant Solicitor Geheral of India, appearing for the 2\"d respondent - Registrar of Companies does not dispute the aloresaid submission. Operative portion of the aforesaid order reads as under: t'For the foregoing reasons, the impugned orders in the writ petitions to the extent of disqualifying the petitioners under Section l6al2lla) of the Act and deactivation of their DINs, are set aside, and the 2\"d respondent is directed to activate the DINS of the petitioners, enabling them to function as Directots other than in strike off companies. It is made clear that this order will not preclude the 2\"d respondent from taking appropriate action in accordance with law for violations as envisaged under Section L64l2l of the Act, giving the said provision prospective effect from OL.O4.2O|4 and for necessaty action against DIN in case of violations of Rule 11 of the Rules. It is also madc clear that if the petitioners are aggrieved by the action of the respondents in striking off their cotnpanies under Section 248 of the Act, they are at l liberty to avail alternative remedy under Section 252 of the Act. AII the writ petitions are accordingly allowed to the extent indicated above.\" ln view of the said Order dated 18.07.2019 and for the reasons recorded therein, this Writ Petition is also allowed in terms thereof. No costs. Miscellaneous Petitions, if any stand closed. SD/.I.NAGALAKSHMI ASSISTANT REGI //TRUE COPY// SE OFFICER To, 1. The tMinistry of Corporate Affairs, Union of lndia, Shastri Bhawan, Dr. Rajender Prasad Road, New Delhi - 110001 2. The Registrar of Companies, Telangana 2nd Floor. Corporate Bhawan, Thattiannaram, G.S.l. Post, Bandlaguda, Nagole, Hyderabad - 500068 3. One CC to Sri. Angothu Nehru, Advocate [OPUC] 4. One CC to Sri. N. Rajeshwar Rao, Advocate [OPUC] 5. Two CD Copies. (Along with copy of order daled 1810712019 in WP.No. 5422 oI 2018.) PM ... ;}'F-- HIGH COURT DATED:1111212020 ORDER WP.No.22714 of 2020 ,A--. Allowing the WP Without costs. ..Q 15 DEC@, * * ':i 14 E H 1 a c L: }l (9 THE HO N'BLE SRI JUSTI E A.RAJASHEKE REDDY W,.P.NOs.5422. 12184, 13520. 13783. 13855. 14166. 24q51, 30993. F 6 AND 40953 0 2014- 5547_ 554 5559.5 47. 5745- 6rJ47 _ 6.rrq'7. AI 4i aLaL 47E2 Aa(a t'Oqa