Karnataka HC Orders Reactivation Of Two Directors’ DINs, Says Rule 11 Grounds Did Not Cover Allegations Against Them

The petitioners challenged the deactivation of their Director Identification Numbers (DINs) and sought reactivation.

In W.P. No. 17419/2026, the petitioner said he had participated in an enquiry and filed a reply but received no further information before his DIN was deactivated.

In W.P. No. 10482/2026, the petitioner said he had received no notice before deactivation.

The respondents stated that complaints had been received and an enquiry conducted; they also contended that the petitioners had failed to file DIR-3 KYC forms periodically.

The petitioners argued, among other things, that deactivation was not authorised by Rule 11 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Rule 11 of the Companies (Appointment and Qualification of Directors) Rules, 2014 permits cancellation or deactivation of a DIN only in the circumstances specified there, including where the DIN was obtained wrongfully or by fraudulent means; before action under clause (b), the concerned individual must be given an opportunity of being heard.

Section 206 of the Companies Act, 2013 sets out the Registrar’s powers to seek information and conduct an inquiry, including under sub-section (4) after giving the company a reasonable opportunity of being heard; sub-section (7) provides for penalties for failure to furnish required information or documents.

The Court also noted that Rule 11 could be invoked only in the circumstances specified in that Rule.

The Court observed that the allegations against the petitioners did not fall within any of the circumstances enumerated in Rule 11.

The respondents’ reliance on the petitioners’ failure to file DIR-3 KYC forms did not justify deactivation on the stated basis, particularly since the petitioners contended that an active DIN was needed to file those forms. The Court therefore found the deactivation ex facie untenable and liable to be set aside.

The respondents were also directed to permit the petitioners to file pending DIR-3 KYC forms after reactivation. The order did not preclude the respondents from taking further action in accordance with law.