Case Note & Summary
The Petitioner, Rajiv Sharma, filed a Writ Petition under Article 226 of the Constitution of India before the Bombay High Court seeking a direction to the Registrar of Companies, Mumbai (Respondent No.1) to remove his name as a Director of Respondent No.4 Company, Local Search Solutions Private Limited, with effect from 1 September 2021, the date of his resignation. The Petitioner also sought a direction to initiate action against Respondent No.4 for default in complying with the provisions of the Companies Act, 2013 regarding resignation of a director. The Petitioner was appointed as a director on 14 August 2020 during the Covid-19 pandemic, but the business of the company never commenced. He tendered his resignation on 24 August 2021, effective from 1 September 2021, and the Board of Directors passed a resolution on 1 September 2021 accepting the resignation and resolving to file Form DIR-12 with the Registrar. However, the company failed to file the form, and the Registrar refused to record the resignation. The Petitioner argued that the resignation took effect from the date specified in the resignation letter and that the company's failure to file DIR-12 should not prejudice him. The Respondents (Registrar of Companies, Regional Director, and Ministry of Corporate Affairs) opposed the petition, contending that the Registrar could not act without the company filing the form. The Court held that under Section 168 of the Companies Act, 2013, a director's resignation takes effect from the date specified in the resignation letter, and the company's obligation to file Form DIR-12 is a procedural requirement that cannot defeat the substantive right of the director to resign. The Court further held that the Registrar of Companies is a public authority amenable to writ jurisdiction under Article 226, and failure to perform its statutory duty to record the resignation upon proof of resignation and board resolution warrants issuance of a writ of mandamus. The Court allowed the petition, directing the Registrar to remove the Petitioner's name as a director with effect from 1 September 2021 and to initiate appropriate action against Respondent No.4 for non-compliance.
Headnote
A) Company Law - Director Resignation - Section 168 of Companies Act, 2013 - Resignation takes effect from date specified in resignation letter, not from filing of Form DIR-12 - Company's failure to file DIR-12 cannot prejudice the resigning director - Registrar of Companies is bound to record resignation upon proof of resignation and board resolution - Writ of Mandamus issued directing removal of name with effect from date of resignation (Paras 1-9). B) Constitutional Law - Writ of Mandamus - Article 226 of Constitution of India - Registrar of Companies is a public authority amenable to writ jurisdiction - Failure to perform statutory duty under Companies Act, 2013 to record resignation of director - Writ of Mandamus lies to compel performance (Paras 2-9).
Issue of Consideration
Whether the Registrar of Companies can refuse to record the resignation of a director on the ground that the company has not filed Form DIR-12, and whether a writ of mandamus lies to compel the Registrar to remove the director's name from the register.
Final Decision
The Court allowed the petition, directing Respondent No.1 to remove the Petitioner's name as a director of Respondent No.4 with effect from 1 September 2021, and to initiate appropriate action against Respondent No.4 for default in complying with the provisions of the Companies Act, 2013 regarding resignation of the director.
Law Points
- Director resignation takes effect from date of resignation
- not from filing of Form DIR-12
- Company's failure to file DIR-12 cannot prejudice resigning director
- Writ of Mandamus lies against Registrar of Companies for non-compliance with statutory duty
