Prof. M. K. Sanoo Vs State of Kerala (Kerala High Court)
Kerala High Court held that condonation of delay in filing of the annual returns only averts penalty and prosecution and doesn’t remove disqualification of the directors of the Company. Accordingly, the writ is disposed of and order is quashed.
Facts- The petitioners in all these cases are members of the Aruvipuram Sree Narayana Dharma Paripalana Yogam (SNDP Yogam). The writ petitions are filed, mainly aggrieved by the Order No. IGR/4487/2020/L3 dated 17.02.2024 issued by the Inspector General of Registration, holding that the Directors were not disqualified for the financial years 2014-2015 and 2015-2016.
Conclusion- Held that even though the question of disqualification of other Directors have not been considered in this judgment, if the law which has been laid down is applied in their cases, necessarily, the fall out will be that they will also be disqualified. The functioning of the Yogam cannot come to a total standstill, since elections are yet to be conducted. The Statute provides an answer for such situation also in the form of Section 167(3) which says that the Government shall appoint the required number of Directors who shall hold office till Directors are appointed by the company in the general meeting. The word “Central Government” in Section 167(3) will have to be read as “State Government” in the case of the Yogam. It is hence for the Government to do the needful by appointing the required number of Directors to continue the functioning of the Yogam and to ensure that an election is conducted at the earliest and a proper Board of Directors is put in place. Section 167(2) says about punishment to persons who function as Directors even after knowing that the Office of Director held by him had become vacant. Those are aspects which the Inspector General of Registration will have to look into and pass necessary orders.
