M. K. Sanoo, S/o. Mangalath M. C. Kesavan v. State of Kerala, Represented by the Secretary, Taxes(J) Department
2023-11-30
DEVAN RAMACHANDRAN
body2023
DigiLaw.ai
JUDGMENT : Among the afore three writ petitions, W.P.(C) No.6322/2022 and W.P.(C) No.20931/2022 have been filed by members of the Company by name “Aruvipuram Sree Narayana Dharma Paripalana Yogam”. 2. I propose to be very brief in this judgment because, finally, this Court can only direct the competent Authority to reconsider the matter, for the reasons that I will presently state, but very compendiously. 3. The controversy in question arose sometime earlier, which reached this Court, culminating in the judgment of a learned Division Bench in Writ Appeal Nos.602/2021 and 688/2021 (which will hereinafter be referred to as the 'Division Bench judgment'). Suffice to say, the learned Division Bench directed, with the consent of all sides, the Inspector General of Registration to assess whether party respondents are disqualified under the provisions of Section 164 (2) of the Companies Act, 2013, after the fiscal year 2014-15. However, the Inspector General issued the impugned order, produced as Ext.P10 in W.P.(C) No.6322/2022, narrating the facts involved as also the documents produced, but then virtually abdicating his Authority, saying that since substantial questions of law arise, the parties must approach the Civil Court for appropriate remedy. 4. It is needless to say and without requirement for any expantiation, that this stand of the Inspector General is contrary to the directions of the learned Division Bench; since, should he have encountered any issue, it was for him to have sought a review, which he has not done even as of date. 5. Interestingly, the order of the Inspector General is also challenged by the Company in W.P.(C) No.20641/2022, but with respect to certain observations that the officer is stated to have made in the said order. I am afraid that such a challenge was unnecessary because, eventually, the Inspector General, as I have already said above, simply refused to exercise jurisdiction and stated that the parties must go to the Civil Court. 6. When these matters were called today, Sri. Uday Holla, learned Senior Counsel, instructed by Sri. A.N. Rajan Babu appearing for the Company, and Sri. P.B. Krishnan – learned counsel appearing for the petitioner in W.P.(C) No.6322/2022, as also Sri.
6. When these matters were called today, Sri. Uday Holla, learned Senior Counsel, instructed by Sri. A.N. Rajan Babu appearing for the Company, and Sri. P.B. Krishnan – learned counsel appearing for the petitioner in W.P.(C) No.6322/2022, as also Sri. D. Anilkumar – learned counsel appearing for the petitioner in W.P.(C) No.20931/2022, conceded that, even though all the contentions of their clients have been recorded in the impugned order by the Inspector General of Registration, he has not answered them at all, but has gone on to relegate the parties to the Civil Court. They were in unison that the actions of the Inspector General are improper and hence liable to be interdicted by this Court. 7. However, Sri. P.B. Krishnan and Sri. D. Anilkumar insisted that this Court hear these matters on its merits and answer the issues because, according to them, any further relegation to the Inspector General would only cost time and nothing else. In fact, Sri. P.B. Krishnan went to the extent of saying that, on account of the delicate issues involved in these cases, the Inspector General of Registration may not be even able to answer them. 8. Sri. Uday Holla – learned Senior Counsel, on the other hand, submitted that, if this Court is inclined to relegate these matters to the Inspector General of Registration, his client would not stand in the way, but pleaded that all their contentions, which are impelled in W.P.(C).No.20641/2022, be left open, so as to enable them to approach this Court again in future, if it becomes so warranted. 9. I must record at this time that, apart from the disqualification mentioned in the Division Bench judgment, learned counsel for the petitioners, Sri. P.B. Krishnan and Sri. D. Anilkumar, spoke on the requirements of the Inspector General in looking at the disqualification of the party respondents under Section 167(2) of the Companies Act also, particularly under the ambit of the proviso that has now been added. They submitted that delay in the resolution of the issues is causing deleterious consequences on the Company itself because, its Annual General Body has not been convened for the last several years; the party respondents thus being allowed to hang on with their directorships, even though, according to their clients, they stand wholly disqualified. 10. In addition to the afore, Sri.
10. In addition to the afore, Sri. D. Anil Kumar also impelled a case, that since the Director Identification Numbers (“DIN”) of the party respondents have already been cancelled, or not issued, their disqualification is on that ground also; and hence that, allowing them to continue in the post of directors of the Company any further, would be improper and untenable. 11. As I have already indicated in the prefatory paragraphs of this judgment, this Court does not intend to go into the merits of any of the rival contentions of the parties for the singular reason that, even after the Division Bench Judgment directed the Inspector General to act in a particular manner, he has refused to do so, which cannot be condoned or countenanced, because it would then hit at the integrity and majesty of the judicial mechanism. 12. I have no doubt in my mind that the Inspector General must do as he has been commanded; of course, the adscititious question would be whether he should also be asked to consider the question regarding disqualification of the directors of the Company under Section 167(2), as also the absence or presence of “DIN” – as the case may be, depending upon the version of the parties. 13. I, therefore, put it at the Bar to the learned Senior Counsel and the counsel for the parties, whether these issues can also be left to be considered by the Inspector General of Registration; and I must record that none of them had any objection because, as they rightly put it, this is only an extension of the earlier order of the learned Division Bench, whereby, the disqualification under Section 164(2) of the Companies Act had, in any event, been asked to be assessed and considered. In the afore circumstances, I allow these writ petitions and set aside the impugned order of the Inspector General of Registration; and direct him to reconsider the matter, adverting specifically to the directions of the learned Division Bench in Writ Appeal Nos.602/2021 and 688/2021, but bringing within the ambit of the exercise of his evaluation, the further question whether the disqualification under Section 167(2) of the Companies Act would apply against the Directors of the Company, as also whether they are in possession of valid “DIN”, and if not whether they would face disqualification on that ground also.
For an expeditious compliance of the afore directions, I direct the parties to mark appearance before the Inspector General at 11 a.m., on 04.01.2024. The Inspector General of Registration will complete the hearing within a period of one month from the afore date and issue the resultant order within a period of two weeks thereafter.