Venkat Chintamaneni V. The Union of India

WP/11752/2020

AI Insights

The case involved two petitioners, Venkat Chintamaneni and Dhanamani Chintamaneni, who were directors of private companies. Their DINs were deactivated, and they were disqualified from being directors due to non-filing of financial statements and annual returns for three consecutive years, as per Section 164(2)(a) of the Companies Act, 2013. The petitioners challenged the disqualification and DIN deactivation, arguing that the actions were arbitrary, illegal, and violated the principles of natural justice. The respondents, including the Union of India and the Registrar of Companies, defended the actions based on statutory provisions. The court examined the retrospective application of the law and the lack of prior notice, ultimately ruling in favor of the petitioners.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 721771 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-08-2020
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax (Central)-I New Delhi v. Vattka Township Private Limited, Yashodhara Shroff v. Union of India, Gaurang Balvantlal Shah s/o Balvantlal Shah v. Union of India, Bhagavan Das Dhananjaya Das v. Union of India
• Laws Referred To: Companies Act, 2013, Companies Act, 1956, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NAMAVARAPU RAO
• Assessee Lawyers: D KIREET
• Keywords: Deactivation of DIN; Principles of natural justice; Writ of Mandamus; Disqualification as Directors
• Section: 248(5); 151 CPC; 252; 164(2)(a)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA (Special Original Jurisdiction) IVONDAY, THE TENTH DAY OF AUGUST TWO THOUSAND AND TWENTY PRESENT THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY WRIT PETITION NO: 11752 OF 2020 Between: 1. Venkat Chintamaneni, S/o, Late Ch.Koteswara Rao, Aged 69 Yrs., Occ. Business, R/o.Flat-2O1, A Block, Orchids Vasantha Valley, Kondapur, Hyd-84, Telangana. 2. Dhanamani Chintamaneni, D/o. Ch.Kasi Visweswara Rao, Aged 64 Yrs., Occ. Business, R/o.Flat-2O'1, A Block, Orchids Vasantha Valley, Kondapur, Hyd-84, Telangana. ..PETITIONERS AND The Union of lndia, Rep. by its secretary tMinistry of corporate Affairs, A wing, Shastri Bahvan, Rajendra Prasad Road, New Delhi 1'10001 Registrar of Companies, Telangana 2nd Floor, Corporate Bhavan, GSI post, Tattiannaram, Nagole, Bandlaguda, Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to lssue an order or direction more particularly one in the nature of VVRIT OF IVANDAfMUS declaring the action of the Respondents disqualifying the Petitioners as Dtrectors by terminating the ongoing Directorship of the Petitioners and deactivating their DIN Number as arbitrary, illegal and contrary to the Principles of Natural Justice and set aside the same. lA NO: 1 OF 2020 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 suspend the disqualification as Directors and further direct the respondent to restore / reactivate the DIN 02820251 and DIN 02036640 of the Petitioners, pending disposal of the main Writ Petition. Counsel for the Petitioner: SRI D. KIREET counsel for the Resporrdents: sRr NAMAVARAPu RAJESHWAR RAo, ASST. SOLICITOR GENERAL The Court made the following: ORDER 2 HON'BLE SRI JUSTICE A.RAJASHEKER RI'DDY Writ Petition No.1L752 oF 2020 ORDER: Learned counsel for the petitioners as n'e11 as Sri lrJamavararptt Rajeshu,ar Rao, iearned Assistant Solicitor General of India, appearirlg for the respondents submits that the lls in this Writ Petition is sclttttrelV cr;vered b1, the corrmon orders of this court in wP No.5122 r>1'20 18 &, lratch, dated 18.O7 ,2O19. ln vier,r, of the same and for the reasons alike in [he Commot\"t Order in WP No.5422 ol-2018 & batch, daled 18.07.2019, this Writ Petit.ion is also a1lorved. There sha1l be n(f order as to costs. As a seqr.tel tht:t-cto, rniscellaneous applications, i1'any, pendlng in this Wrrt F'etition, sh:i1l sternd disposed o[. SD/.B.SATYAVATHI ASSISTANT EGISTRAR //TRUE COPYII SECTION OFFICER To, SM 1. The Secretary, Union of lndia, IVinistry of corporate Affairs, A wing, shastri Bahvan, Rajendra Prasad Road, NewDelhi t'tOOOt 2. Registrar of companies, Telangana 2nd Floor, corporate Bhavan,GSl post, Tattiannaram, Nagole, Bandlaguda, Hyderabad. 3. One CC to Sri D Kireet Advocate tOpUCl 4. one cc to sri Namavarapu Rajeshwar Rao, Asst. Soricitor General, Advocate [OPUC] 5. Two CD Copies (Along with a copy of order d1.1810712019 in W P.No.5422 of 2A18 and Batch) , '+ HIGH COIURT DATE D: 1 0/08 12020 ORDER WP.No.11752 of 2020 ALLOWING THE WP WITHOUT COSTS ? rL.-. t * ( z $ l4 E H s 1 e 2 1 AU6 2M0 ,'tb % k \"t{.{) o THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY W.P.NOs.5422. 12184. 13520. 13783. 13855, 14166, 24o51. 3o993. ANp 40953 OF 2018. 5547. 5582, 5669. 5687. 5785, 6047, 6087, 6L40. 6484, 6753, 6858. 6958. 698L, 700L, 7008, 7 0L4, 7046, 7069, 7-073, 7 L95, 7432, 7454. 7 572t 7595, 7732, 7765, 7768, 7824, 7978, 81r1. 8223. 8586. 8590. 9333, 9340. 9381. 94681 9563, 9584, 9623. a-r)A o'r?a l nnqR l nnoo r 1? fi 11))? 11??O 11)6? lraao tL99L, L20L8. L2036. L2040. L2069, LZLOB, L2L44, L2LB6, L2t94, 'l))o6 lrrno 1)r1tr 1r)17 1) 4? 1))An 1))R) lrraa 1)?a) 12350, L24L7, L2432t L2472, 1-2498, L25A6. L2574, L2598, L262t, 12702. 12735. 12740/ 12845. 12850. 12855. 12866,_13013, 13618, 13730. 13749. 13779, 13788. 13839. 13855. 13878, 13912, 13917. L3945, L4LOL, L4L74, L4207. L4350, t436t. L4390, L4392, L4397, 14409, 14582 AND 14597 0F 2019 COMMON ORDER Since, the issue involveC in all the writ petitions is one and the same, they are heard together and are being disposed of by this common order. 2. The petitioners are the directors of the private companies, registered under the Companies Act, 2013 (18 of 2013) (for short'the Act'), Some of the such companies are active, and some of them have been struck off from the register of companies under Section 248(t)( c ) of the Act, for not carrying on any business operation for the specified period mentioned in the said provision, and for not making any application within the specified period, for obtaining the status of a dormant company under Section 455 of the Act. 3, The petitioners, tvho were directors of the struck off companies, and who are presently directors of active companies, during the relevant period in question, failed to file financial statements or annual returns for a continuous period of three /c'a rs. Therefore, the 2nd respondent passed the impugned order under section 764(2) of the Act, disqualifying them as directors, and further making them ineligible to be re-appointed as directors of that company, or any other company, for a period of five years from the date on which the respective companies failed to do so. The Director Identification Numbers (DINs) of the petitioners were also deactivated, Aggrieved by the same/ the present writ petitions have been filed. 2 4. This court granted interim orders in the writ petitions directing the 2nd respondent to activate DINs of the petitioners, to enable them to function other than in strike off companies. 5. Heard the learned counsel appearing for the petitioner-s in all the writ petitions, Sri K, Lakshman, learned Assistant Solicitor General appearing for the respondents - Union of India, 6, Learned counsel for the petitioners, contend that before passing the impugned order, notices have not been issued, giving them opportunity, and this amounts to violation of principles of natural justice, and on this ground alone, the impugned ordt-.rs are liable to be set aside. 7. Learned counsel submits that Section 16a(2)(a) of the Act empowers the authority to disqualify a person to be a director, prov,ided he has not filed financial statement:; or annual returns of the company to which he is director, for any continuous period of three financial years. l-earned counsel further submits that this provision came into force with effect from 7'4,2014, and prior thereto i.e., under section 274(r)(g) or the companies Act, 1956 (1 of 1956), which is the analogous provision, there was no such requirement for the directors of the private companies. They contend that this provision under Act 1B of 2013, wiil have prospective operation and hence, if the directors of company fair to compry with the requirements mentioned in the said provision subsequent to the said date, the authority under the Act, is within its jurisdiction to disqualify them. But in the present cases, the 2nd respondent, taking the period prior to r.4.20!4, i.e., giving the provision retrospective effect, disqualified the petitioners as directors, which is illegal and arbitrary. B. with regard to deactivation of DINs, learned counsel for the petitioners submit that the DINs, as contemplated under Rure 2(cr) of the companies (Appointment and eualification of Directors), Rules, 2014 (for J short'the Rules), are granted for life time to the applicants under Rule 1O(6) of the said Rules, and cancellation of the DIN can be made onry for the grounds mentioned in clauses (a) to (f) under Rule 11 of the Rules, and the said grounds does not provide for deactivation for having become ineligible for appointment as Directors of the company under section 164 of the Act. Learned counsel further submits'that as against the deactivation, no appeal is provided under the Rules, and appeal to the Tribunal under Section 252 of the Act is provided only Section 248 of the Act. against the dissolution of the company under 9. Learned counsel further submits that 1st respondent - Government of India represented by the Ministry of Corporate Affairs, has floated a scheme dated 29.r2,2017 viz., condonation of Delay scheme - 20LB, wherein the directors, whose DINs have been deactivated by the 2nd respondent, allows the DINs of the Directors to be activated. However, such scheme is not applicable to the companies which are struck off under Section 248(5) of the Act. In case of active companies, they can make application to National Company Law Tribunal under Section 252 of the Act, seeking for restoration, and tire Tribunal can order for reactivation of DiN of such directors, whose DIN are deactivated. However, under Section 252 only the companies, which are carrying on the business, can approach the Tribunal and the companies, which have no business, cannot approach the Tribunal for restoration. They submit that since the penal provision is given retrospective operation, de hors lhe above scheme, they are entitled to invoke the jurisdiction of this court under Article 226 of the Constitution of India, 10, With the above contentions, learned counsel sought to set aside the impugned orders and to allow the writ petitions. 11. On the other hancl learned Assistant Solicitor General submits that failure to file financial statements or annual returns for any continuous period 1 of three financial years, automatically entail their clisqualification under Section 164(2)(a) of the Act and the statute does not provicJe for issuance of any notice, Hence, the petitioners, who have failed to comply with the statutory requirement under section 164 of the Act, cannot complain of violation of principles of natural justice, as it is a deeming provision. Learned counsel further submits that the petitioners have alternative remedy of appeal under section 252 0f tlre Act, and hence writ petitions nray not be enterta ined, 12' To consider the contention of the learned Assistant Soticitor General with regard to alternative remedy of appeal under Section 252 of the Act, the said provision is required to be considered, and the same is extracted as under for befter appreciation: 252. Appeal to Tribunal: (1) Any pelson aggrieved by an order of the Registrar, notifying a company as dtssolved under Section 248, may file an appeal to th6 Tribunal within a periocl of three years from the date of the order of the negist.ai an,r ii,r..]\" Tribunal is of the opinion that the removar of the name or.the comp-uny iro, ir-,e register of companies is not justified in view of the absence of any of the grounds on whlch the orcler was passed by the Registrar, it may order restoration of [hu nur. of the company in the register of companies; Provided that beFore passing an order under tlris section, the TribLrnal shall give a reasonable opportunity or mlting representations ancl of being hearcl to the Registrar, the company ano all the perio'ns concerned: provided further. that - if the Registrar is satisfiecr, that the name of the conlpany has been struck off from the rJgister of .o;;;;;. .it,\",. inadverrengy or on basis or incorrect information furnisrre-d uv tne-corip;;;;; its directors, which requires restoration in the register of companies, he may within a perrod of three years from the date of passing of the order dissoruinq th\" aorpuny under Section 248' file an application befor6 the TriLunal seeking restoration of name of such com pa ny. (2) A copy of the order passed by the Tribunal slrall be filed by the cornpany with the Registrar within thirty days from'the date \"r lh\" orali ano on receipt of the order, the Registrar shall cause ir,u nun.u of the company to be restored in the register of companies and sha, issue a fresh cerrifii.i; ;ii;J.;rarion. (3) If a compa ny I or any member or creditor or worker thereof feers aggrievecl by the company having its name struck off from 1.re register of companies, the Tribunal or an application made by r:he.on-,,puny, Tnember, credrtor or workman before the expiry of twenty years from the publication jn tlre ol.ficial Gazette of the notice under sub-section is; or section iia,\",r satisfiecr thar the company was, at the time of its name being struck off, carrying on business or rn operation or otherwise it is just that the name of the company be restorecr to the register of companies, order the name of the company to be restorecj ro the regrster of cornpanies, and the Tribunar nray, by the order, give such other directions and nrake such provisions as deemerl juit ror placing tnf con-rpanv aict a1 orher 1;ers.ns in the sarne position,as nearry ar may be as ir the name oi tt',\" co,-lpany has not been struck off from the register of companies. ) A readlng of above provision Eoes to show that if the company is dissolved under Section 248 of the Act, any person aggrieved by the same, can file an appeal, Thus the said provision provides the forum for redressal against the dissolution and striking off the company from the register of companies. It does not deal with the disqualification of the directors, and deactivation of their DiNs. In the present case, the petitioners are only aggrieved by their disqualification as directors and deactivation of DINs, but not about striking off companies as such, l-lerrce, Section 252 of the Act, cannot be an alternative remedy for seeking that relief, and the contention of the learned Assistant Solicitor General, in this regard, merits for rejection, 13. Under Section 16zl(2)(a) of the Act, if the Director of a company fails to file financial statements or annual returns for any continuous period of three financial years, he shall not be eligible to be re-appointed as a director of that company or appointed intother company for a period of five ycars from the date on which tl-re said company fails to do so. The said provision under the Act 1B of 2013,:,came into force with effect from 01,04.2074, and the petitioners are disqualified as directors under the said provision, At this stage, the lssue that,arises for consideration is - whether the disqualification envisaged under Section rcaQ)G) of the Act, which provision came into force with effect from 01.04.2074, can be made .: applicable with prospective effect, or has to,be given retrospective operation? In other words, the issue would be, from which financial year, the default envisaged under Section 164(2)(a) of the Act, has to be calculated, to hold the director of the company liable? In this regard, the learned counsel brouglrt to the notice of this Court, the General Circular No.0B/14 dated 4,4.2014 issued by the Ministry of Corporation affairs, which clarifies the applicability of the relevant firrancial years, The relevant portion of the said circular is as under: \"A number of provisions of the Companies Act, 2013 including those relating to maintenance of books of account, preparation, adoption and filing of financial staternents (and docurnents required to be attached thereto), Auditors reports and the Board of Directors report (Board's report): have been brouqht into force with () effect from 1st April, 2014. Provisions of Schedule I1 (tiseful lives to conrpute depreciation) and Schedule III (format of financial statements) have also been brought into force from that date. l-he relevant Rules pertaining to tlrese provisions have also been notified, placed on the website of the Ministry and have com<: into force from the same date. The Ministry has received requests for clariflcatlon with regard to the relevant financial years with effect from which such provisions of the new Act relating to maintenance of books of account, preparation, adoption and filing of financial statements (and attachments thereto), auditors report and Board's report will be applicable. Although the position in this behalf is quite clear, to make things absolutely clear it is hereby notified that the financial statements (and clocuments required 1o be attached thereto), auditors report and tioard's report in respect of financial rtears that commenced earlier than 1't April shall be governecl by the relevant provisions/schedules/rules of the Compranies Act, 1956 and that in r€spett of financial years commencing on or after lstApril, 2014, the provisions of the new.Act shall apply.\" A reading of the above circular makes it clear the financial statements and the documents required to be attached thereto, auditors report and Board's report in respect of financial years that commenced earlier than Ol.O4.2Ol4, shall be governed by the provisions under the companies Act, 1956 and in respect of financial years commencing on or after 01,04,2014, the prr:visions of the new Act shall apply. 14. At this stage it is required to be noticed that the analogous provision to section L64(2)(a) of the Act 18 of 2013, is section 274(:L)(g) or Act 1 of 1956. The said provision under Act 1 of 1956 is extracted as under for ready reference: Section 274(1) A person shall not be capable of being appointed director of a company, if - (g) such person is already a director of a public company which, - (A) has not filed the annual accounts and annual retLrrns for any continuous three Financial years commencing on ancl aFter the first day of April, 1999; or (B) Provided that such person shall not be eligible to be appointed as a cjjrector of arry other public company for a period of flve years from the clate on which such public company/ in which he is a director, failed to file annual accounts and annual retLlrns under sub-clause (A) or has failed to repay its deposits or interest or recleem its debentures on due date or pay dividend rel=erred to in clause (B). A reading of the above provision under Act 1 of 1956, makes it clear tlrat if a person capable of being appointed director of a company and sLrch person is already a director of a public company, which has not filed annual accounts and annual returns for any continuous three financial years commencing on 1 and after the first day of April 1999, shall not be eligible to be appointed as a director of any other public company for a period of five years from the date on which such public cornpany, in which he is a director, failed to file annual accounts and annual returns. So the statutory requirement of filing annual accounts and annual returns, is placed on the directors of a'public company', There is no provision under the Act 1 of 1956, which places similar obligations on the directors of a 'private company,. Therefore, non- filing of annual accounts and annual returns by the directors of the private company, will not disqualify them as directors under the provisions of Act 1 of 1956. 15. Under section 164(2) of the new legislation i,e., Act 18 of 2013, no such distinction between a'private company'or a'public company'is made and as per the said provision goes to show that no person who is or has been a director of a'company', fails to file financial statements or annual returns for any continuous period of three financial years, will not be eligible for appointment as a director of a company, As already noted above, the said provision, came into force with effect from 01,04,2014. 16, Coming to the facts on hand, the 2nd respondent has disqualified the petitioners under Section 164(2)(a) of the Act 18 of 2013, for not filing financial statements or annual returns, for period prior to 01,04.20t4. The action of the 2nd respondent runs contrary to the circular issued by the Ministry of the Corporate Affairs, and he has given the provisions of Act 1B of 2013, retrospective effect, which is impermissible, 77, The Apex Court in COMMISSIONER OF INCOME TAX (CENTRAL)-L NEW DELHI V, VATTKA TOWNSHIP PRIVATE LIMTTEDL has dealt with the general principles concerning retrospectivity. The relevant portion of the judgment is thus: 27. A legislation, be it a statutory Act or a statutory Rule or a statutory Notrfrcation, may physically consists of words prlnted on papers, However, ' 1to I.;; I sc(. l 8 conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a.series of statements, such as one finds in a work of fiction/non fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation, Former technique is ln under Section 164(2)(a) of the Act, DIN cannot be cancelled. 27. Rule 10 of the Rules provide for allotment of DIN and under sub rule (6) of Rule 10, it is allotted for life time, Rule 11 provicles for cancellation or deactivation, Rule 77, which is relevant for the present purpose, is extracted as under for ready reference: (a) 11. cancellation or surrender or deactivation of DrN : The central Government or Regional Director (Northern Region), Noida or any officer authorized by the Regional Director may, upon being satisFied on verification of particLrlars or documentary proof attached with the application received from any person, canr:el or deactivate the DIN in case - the DIN is found to br: duplicated in respect of the sanre person prorrided the data related to both the DIN shall be merged wiil-r the valiclly retaine6 nu mber; the DIN was obtarned in a wrongfur manner or by fraudurent means; of the death of the concerned individual; the concerned individual has been declared as a person of Lrnsor.rnd mrnd by a competent Court; if the concernecl individuar has been adjr_rdicated an insorverrt; Provided that before cancellation or cjeactivation of DIN pLrrsuant to clause (b), an opportunity of being heard shail be given to the concerned indiviclrar; on an appiication made in Form DIR-5 by the DIN holcler to surrenrler l-ris or her DIN along with declaration that he has neue. ou\"n apiointeo as director in any company and the said DIN has never been used for filing of any clocrment with any authority, the Central Government may deactivate ,u.n drr,.l; Provided that before deactivation of any DIN in such case, the Cer.rtrar Government shall verify e-records. Explanation: for the purposes of clause (b) _ The terms \"wrongiur manner,, means if the DIN is obtained on the strength of documents which are not legally valid or in.orpiut\" documents are furnished or on suppression of material information or on'il.,u basis of wrorg certification or by making misleading or false inFormation or b! mrsrepresentatiorr ; (ri) the term \"fraudurent means\" means if the DIN is obtained with an intent to deceive any other person or any authority including the Central Government. (b) (c) (cl) (e) (f) (i) 28. clauses (a) to (r) of Rure 11, extracted above, provides for the circumstances under which the DIN can be cancellecl or deactivated. The said grounds, are differe.t from the ground envisaged under l5 Section 16aQ)@) of the Act. Therefore, for the alleged violation under Section 164 of the Act, DINs cannot be cancelled or deactivaled, except in accordance with Rule 11 of the Rules. 29, Learned Single Judge of the Gujarat High Court in the decision cited 2 supra, held as under: \"29. This takes the Court to the next question as to whether the respondents could have deactivated the DINs oF the petitioner as a consequence of the impugned list? In this regard, it would be appropriate to refer to the relevant proviiions contained in the Act and the said Rules. Section 153(3) provides Lhat no person shall be appointed as a Director of a company, unless he has been allotted the Director Identification Number under Section 154. Section 153 reqLrires every individual intending to be appointed as Director of a company to make an application for allotment of DIN to the Central Government in sr-rch fornr and manner as nlay be prescribed, Section 154 states that the Central Government shall within orre month from the receipt of the application under Section 153 allot a DIN to an applicant in such manner as may be prescribed. Section 155 prohibits any nclividual, who has already been allotted a DIN under Sectjon 154 from applying for or obtalning or possessing another DIN, Rules 9 and 10 of the said Rules of 2014 prescribe the procedure for making application for allotment and for the allotment of DIN, and further provide that the DIN allotted by the Central Government under the said Rules would be valid for the liFe time oF the applicant and shall not be allotted to any other person, 30, Rule 11 provides for cancellation or surrender or deactivation of DIN. Accordingly, the Central Government or Regional Director or any authorized officer of Regional Director may, on being satisfied on verification of particulars of documentary proof attached with an application from any person, cancel or deactivate the DIN on any oF the grounds mentioned in Clause (a) to (r) thereof. The said Rule 11 does not contenrplate any suo motu powers either with the Central Government or with the authorized officer or Regional Director to cancel or deactivate the DIN allotted to the Director, nor any of the clauses mentioned in the said Rules contemplates cancellation or deactivation of DIN of the Director of the \"struck off company\" or of the Director having become ineligible under Section 164 of the said Act. The reason appears to be that once an individual, who is intending to be the Director of a particular company is allotted DIN by the Central Government, such DIN would be valid for the liFe time of the applicant and on the basis of such DIN he could become Director in other companies also. Hence, if one of the companies in which he was Director, is \"struck off\", his DIN could not be cancelled or deactivated as that would run counter to the provisions contained in the Rule 11, which specifically provides for the crrcumstances under which the DIN could be cancelled or deactivated. 31. In that view of the matter, the Court is of the opinion that the action of the respondents in deactivating the DINs of the petitioners - Directors along with the publication of the impugned list of Directors of \"struck off\" companies under Section 248, also was not legally tenable. Of course, as per Rule 12 of the said RLrles, the individual who has been allotted the DiN, in the event of any change rn his particulars stated in Form DIR -3 has to intimate such change to the Central Government within the prescribed time in Form DIR-6, however, iF that is not done, the DIN could not be cancelled or deactivated. The cancellation or deactivation of lhe DIN could be resorted to by the concerned respondents only as per the provisions contained in the said Rules.\" 30. in view of the above facts and circumstances and the;udgment referred to supra, the deactivation of the DiNs of the petitioners for alleged violations under Section 764 of the Act, cannot be sustained, l6 31. For the foregoing reasons, the impugned orders in the writ petitions to the extent of disq ualifying the petitioners under Section 164(2)(a) of the Act and deactivation of their DINs, are set aside, and the 2nd respondent is directed to activate the DINs of the petitioners, enabling them to function as Directors other than in strike off companies. 32. It is made clear that this order will not preclude the 2nd respondent from taking appropriate action . in accordance with law for vicrlations as envisaged under sectiorr t64(2) of the Act, giving the said prr:vision prospective effect from ol,o4.2ol4 and for necessary action against DIN in case of violations of Rule 11 of the Rules. 33. It is also made clear that if the petitioners are aggrieved by the action of the respondents in striking off their companies under Section 248 of the Act, they are at liberty to avail alternative remedy under Section 252 of the Act. All the writ petitions are accordingly ailowed to the extent indicated above 35. Interlocutory applications pending, if any, shalr stand close