Dilipraj Pukkella Vs Union of India (Karnataka High Court)
The Karnataka High Court first allowed IA No.1/25 and condoned the delay of four days in filing the review petition. The petitioners sought review of the order dated 25.07.2025 passed in Writ Petition No.3465 of 2021 (GM-RES) and requested appropriate consequential reliefs.
The petitioner contended that certain material aspects relating to Sections 164 and 167 of the Companies Act had not been brought to the Court’s notice during the earlier hearing. It was submitted that the statutory scheme distinguishes between a defaulting company and non-defaulting companies. According to the petitioner, in the defaulting company the concerned director continues to hold office despite disqualification, whereas in companies that are not in default, the disqualified director is required to vacate office. It was argued that this distinction is substantive and that paragraphs 11.13 to 11.18 of the earlier judgment required reconsideration.
The petitioner further submitted that the director must continue in the defaulting company to discharge statutory obligations and facilitate compliance with the Companies Act. In contrast, in non-defaulting companies, the director incurs disqualification and vacates office, enabling those companies to appoint replacement directors.
The Additional Solicitor General concurred with these submissions. He submitted that the distinction between a defaulting company and a non-defaulting company is inherent in the statutory framework. According to him, if a director were deemed to vacate office even in the defaulting company, the authorities would be deprived of the ability to proceed against the person responsible for statutory compliance, and the defaulting director would be unable to remedy the defaults. He therefore supported the position that the director should continue in office in the defaulting company while vacating office in all other companies where no default exists.
