Case Law Details

Case Name : Vikas Goel & ANR Vs Union of India & ANR (Delhi High Court)
Appeal Number : W.P.(C) 5922/2018 and CM Nos.23115-16/2018
Date of Judgement/Order : 29/05/2018
Related Assessment Year :
Courts : All High Courts (4589) Delhi High Court (1355)

Vikas Goel & ANR Vs Union of India (Delhi High Court)

1. Issue notice to the respondents as to why rule nisi be not issued.

2. Vikram Jetly, learned CGSC accepts notice on behalf of respondents.

3. The petitioners were the Directors of Arvee Wires Pvt. Ltd. and had submitted his resignation to the Board of Directors on 8th April, 2011. However, the Board of Directors failed to take requisite steps for informing the Registrar of Companies. The respondents are not in a position to deny this position.

4. The writ petitioners inter alia seek quashing of the notices dated 6thSeptember, 2017 and 12th September, 2017 issued by the Ministry of Corporate Affairs at New Delhi by way of which they stood disqualified from performing as a Directors in any company.

5. In this background, as the petitioners had ceased to be the Directors of the Company, as stated by them, on 8thApril, 2011 and that they could not have been penalized for the failure of the company to effect statutory compliances.

6. In view of the above, it is directed as follows :

(i) The respondents shall forthwith take steps for removal of the petitioners’ name from the list of disqualified directors and to alienate their DIN.

(ii) The orders to this effect would be posted on the website and shall also be communicated to the petitioners within two weeks from today.

(iii) It is clarified that this would not preclude the Registrar of Companies from passing a fresh order disqualifying the petitioners, if any material is found or produced before the ROC to indicate that the petitioners’ statement that the petitioners had never consented to act as the Directors of the Company, is false, or any material is produced which establishes that the petitioners had acted as the Directors of the Company in any manner.

This writ petition is allowed in the above terms. Dasti under signatures of the Court Master.

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2 Comments

  1. vswami says:

    OFFHAND (to share sporadic thoughts):

    Director of a company , as a member of , and /constituting the ‘board of ‘directors’, as the body in governance, is, no doubt, in one’s well-founded conviction, responsible for the management of the affairs of the company, as a ‘trustee’ . In other words, to one’s clear understanding, a director , so also the board of directors, have a fiduciary status in relation to the company, both in form and substance.

    However, with a different stroke of, rather better, reasoning, the crucial point for a critical analysis and logical consideration is this:

    Whether in a given instance in which, a decision has been taken by the company, as a legal entity, and acted upon wholly on the strength of and entirely relying upon – with no other conceivable option being open – the advice of say, a secretary of the company, entrusted with duties of a ‘compliance officer’ , is there any rationale or justification for still holding, rightly so, a director, severally or jointly or jointly and responsible on the ground of any omission commission on his /its part.
    And, in any case, the dispute calls for a well founded judicial adjudication, to ultimately meet the ends of justice.

    The foregoing line of thinking deserves to be gone into at length, and to the core. And, to be begin with, an eminent opinion of top most law expert(s) in company law practice, preferably of the ICSC, the concerned regulatory, might help in bringing about a consensus in the matter; which prima facie entails issues of complicity, not -so- easy to satisfactorily resolve.
    courtesy
    EDIT open

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