Bom HC | Disqualification of Directors: Batch of petitions to be heard in reference to S. 164 (2)(a) of Companies Act, 2013

Bombay High Court: The Division Bench comprising of S.C. Dharmadhikari and G.S. Patel, JJ. has tagged a batch of petitions to be heard in regard to disqualification of directors due to failure in filing of returns.

Anil Singh, learned Additional Solicitor General has agreed to address the Court in these matters and prays for two weeks time.

No interim orders have been passed by the Court, though the Court has granted liberty to the parties to revive their applications for interim relief.

Matter has been listed for 10-07-2019. [Vinodkumar Dulchand Daga v. Registrar of Companies, Mumbai, 2019 SCC OnLine Bom 1127, decided on 19-06-2019]


For reference and understanding of the issue: 

[Recently Karnataka High Court dealt with similar issue in the following case]

Karnataka High Court: Directors of either public companies or private companies or both were all aggrieved by their disqualification as directors as per the list issued by the Ministry of Corporate Affairs under Section 164(2) (a) and Section 167(1)(a).

They were faced with the consequences as stipulated under Section 164(2) and Section 167(1)(a) of the Companies Act, particularly, its proviso as inserted by the Amendment Act, 2017.

The High Court held that: “the directors of the struck off companies under Section 248 of the Act do not per se get disqualified. But, if the said company has also not complied with Section 164(2)(a) of the Act, then the said company being a defaulting company, the directors of such a company get disqualified.”

Further, the Court ordered that:

  • Where the disqualification of the petitioners is based by taking into consideration any financial year “prior to 01-04-2014 as well as subsequent thereto” while reckoning continuous period of three financial years under Section 164(2)(a) of the Act, irrespective of whether the petitioners are directors of public companies or private companies, such a disqualification being bad in law, the Writ Petitions are allowed
  • If disqualification has occurred under the provisions of the 1956 Act in respect of the public companies, the writ petitions are dismissed
  • Restoration of the DIN of those directors whose disqualification has been quashed by this Court;
  • If the disqualification of the directors is based by taking into consideration three continuous financial years subsequent to 01-04-2014, they stand disqualified under the Act
  • Where the disqualification of the petitioners is based by taking into consideration any financial year prior to 01-04-2014 in respect of private companies, such disqualification being bad in law, the writ petitions are allowed
  • Writ Petitions, wherein the challenge is also made to the vires of Section 164(2)(a), and/or 167(1)(a) and/or proviso to Section 167(1)(a) of the Act, are dismissed. [Yashodhara Shroff v. Union of India, WP No. 52911 of 2017, decided on 12-06-2019]

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