Bombay High Court
Krantijyoti Savitribai Phule Nidhi ... vs The Union Of India, Thr. Secretary, ... on 11 June, 2025
Author: M.S. Jawalkar
Bench: M.S. Jawalkar
2025:BHC-NAG:5830-DB
Judgment 1 J-WP No.427.2024Corrected.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 427 OF 2024
Krantijyoti Savitribai Phule Nidhi
Limited., Having its registered office
at Shop No. G3, Meenakshi Plaza,
Opp. ST Stand, Buldhana,
Maharashtra - 443 001.
Through its Director,
Shri Yogesh Punjaji Gawali,
Aged about 28 years,
R/o. Nandrakoli, Buldhana,
Maharashtra - 443 001.
.... PETITIONER
// VERSUS //
1) The Union of India,
Through its Secretary,
Ministry of Corporate Affairs,
'A' Wing, 5th floor, Shastri Bhawan,
New Delhi - 110 001.
2) Joint Secretary,
Ministry of Corporate Affairs,
'A' Wing, 5th floor, Shastri Bhawan,
New Delhi - 110 001.
3) The Assistant Director,
Ministry of Corporate Affairs,
'A' Wing, 5th floor, Shastri Bhawan,
New Delhi - 110 001.
4) The Deputy Director,
Ministry of Corporate Affairs,
'Room no. 525, A' Wing, Shastri Bhawan,
New Delhi - 110 001.
Judgment 2 J-WP No.427.2024Corrected.odt
5) The Regional Director (Western Region),
Ministry of Corporate Affairs,
100, Everest, 5th floor,
Marine Drive, Mumbai-400 002.
6) The Registrar of Companies,
Mumbai 100, Everest, Marine
Drive, Mumbai - 400 002.
7) The Director, CRC Centre,
Ministry of Corporate Affairs,
Government of India,
Manesar, Gurugram. .... RESPONDENTS
______________________________________________________________
Mr. Kapil Hirani, Advocate for the Petitioner.
Mr. N. S. Deshpande, Deputy Solicitor General of India for
the Respondents.
______________________________________________________________
CORAM : SMT. M.S. JAWALKAR, AND
SHRI M.W. CHANDWANI, JJ.
DATE : 11th JUNE, 2025.
ORAL JUDGMENT : (Per : Smt. M.S. Jawalkar, J.)
1. Heard learned Counsel for the Petitioner and learned
Deputy Solicitor General of India for all Respondents.
2. RULE. Rule made returnable forthwith. Heard finally
with the consent of the learned Counsel appearing for the parties.
3. By this Petition, the Petitioner is challenging a
Communication dated 23.10.2023, rejecting the NDH-4 Form
issued by the Assistant Director, Ministry of Corporate
Affairs/Respondent No.3.
Judgment 3 J-WP No.427.2024Corrected.odt
4. The contention of the Petitioner is that the Petitioner is
a "Nidhi Company" incorporated under the provisions of Section
406 of the Companies Act, 2013. The said company is
incorporated vide Certificate of Incorporation on 15.07.2019
(Annexure-A, Page-43). After submitting statutory Form 20A, the
Petitioner was entitled under law to commence business and
accordingly the Petitioner commenced its business. At the relevant
time, the Nidhi Rules, 2014 (for short the "Nidhi Rules") were in
existence and applicable to the company. By way of Amendment
in the year 2019, the Nidhi Rules were amended and Sub-rule
3(A) is introduced. As per this provision, the Nidhi Company has
required to submit Form NDH-4, which is a declaration wherein
the Central Government after approval of Form NDH-4, declares/
notifies the company as "Nidhi Company" in the Official Gazette.
5. There was a second amendment in year 2022 in the
Nidhi Rules. Sub-rule 2 of Rule 5 of the Nidhi Rules reads as
under :
"5. Requirements for minimum number of
members, net owned fund etc.- (1) ..........
(2) Within ninety days from the close of
the first financial year after its incorporation and
where applicable, the second financial year,
Judgment 4 J-WP No.427.2024Corrected.odt
Nidhi shall file a return of statutory compliances
in Form NDH-1 along with such fee as provided
in Companies (Registration Offices and Fees)
Rules, 2014 with the Registrar duly certified by a
company secretary in practice or a chartered
accountant in practice or a cost accountant in
practice.
6. As such, it is mandatory to file return in Form NDH-1.
In second line of
Para 6, the word
Petition is corrected Our attention is drawn by the learned Counsel for the Petitioner
as "Petitioner" as
per the order
dated 23.06.2025. for Annexure-E (page-107), which is an acknowledgment of
submission of Form NDH-1, wherein type of fee is mentioned as
'Normal'. No late fee is imposed. Our attention is also drawn to
the Annexure-F (page-112), a Circular No.12/2020, by which
time is extended to submit documents till 30.09.2020 in view of
outbreak of Covid-19 Pandemic. The said period was further
extended upto 31.12.2020 vide Circular No.30/2020. The
Petitioner has submitted NDH-1 Form on 22.12.2020 (page-107),
even there also no late fee imposed as the same was filed within
extended period.
7. In fact, there is no specific notice to show cause is
issued to the Petitioner pointing out any compliance remained to
be complied. There was only one communication by way of e-mail
dated 16.04.2021, which appears to be a common notice issued to
Judgment 5 J-WP No.427.2024Corrected.odt
all concerned. There is no specific notice to the Petitioner
company for any specific compliance. There is no other
communication placed on record to show that there is any
individual or separate notice issued to the Petitioner company.
However, suddenly by the Communication dated 23.10.2023
(Annexure-J), it was intimated that the Form NDH-4 is rejected
for the deficiencies as mentioned in the said communication.
8. First ground for rejection appears to be that company
was incorporated on 15.07.2019 and the company has filed a
return of statutory compliance in Form NDH-1 after its due date,
thus violating Rule 5(2) of the Nidhi Rules. However, it appears
that there is no consideration for extension of period in view of
outbreak of Covid-19 Pandemic. The time was extended till
31.12.2020 and the Form is submitted on 22.12.2020. Thus,
ground No.1 for rejection does not survive.
9. The second ground is that the company has failed to
file half yearly return - Form NDH-3 for the half year ending on
30.09.2022 and 31.03.2023, thus violating Rule 21 of the Nidhi
Rules. It is to be noted here that alleged notice was issued on
16.04.2021 by way of e-mail. As such, this subsequent events of
Judgment 6 J-WP No.427.2024Corrected.odt
non filing of half yearly return for the year ending on 30.09.2022
and 31.03.2023 cannot be the reason for rejecting the Form NDH-
4. However, it appears that no consideration is given by the
Authority to this aspect and passed the erroneous order. The
purpose of notice is to call explanation from the concerned on
contentions of the authority or person. If there is no specific
notice issued, the ground of rejection would survive.
10. So far as the third ground for rejecting the Form
NDH-4 is concerned, it is alleged that the company has not
furnished the Auditor Certificate with Form AOC-4 for financial
year 2021-22, thereby violated Rule 22 of the Nidhi Rules.
Learned Counsel for the Petitioner submitted that in fact, the
Auditor Certificate was obtained but it is inadvertently not
annexed along with the Form AOC-4. In absence of any specific
notice for compliance, the order of rejection of Form NDH-4 is in
violation of principle of natural justice as well as contrary to the
provisions of Nidhi Rules. In fact, there is no provision or
guidelines in the Nidhi Rules under what circumstances the NDH-
4 Form can be rejected.
Judgment 7 J-WP No.427.2024Corrected.odt
11. If the Nidhi Rules are perused specifically Proviso of
Rule 3(A), rejection of Form NDH-4 has wide and wild
repercussion on the company. The Proviso of Rule 3(A) reads as
under :
"Provided also that no company, which has not
complied with the requirements of this rule, or
fails to comply with such requirement on or after
the commencement of the Nidhi (Amendment)
Rules, 2022, or in case the application submitted
by the company in Form NDH-4 is or has been
rejected by the Central Government, shall raise
any deposit from its members or provide any
loan to its members under the provisions of these
rules from the date of such non-compliance, or
from the date of the commencement of the above
said rules, or the date of rejection of the
application in Form NDH-4, whichever is later:"
12. If Rule 3(A) of the Nidhi Rules is perused, in view of
the proviso, there is no remedy appears to be available to the
company like the petitioner after rejection of NDH-4 Form.
Moreover, the company cannot function after rejection. It is also
submitted that on rejection, the company could not submit any
form/report online.
13. Even on perusal of Rule 23, which contemplates the
opportunity of being heard shall be given to the concerned Nidhi
Company by the Central Government before appointing Special
Judgment 8 J-WP No.427.2024Corrected.odt
Officer in pursuance to the enforcement of compliance of the
Rules. At any rate, the opportunity of explanation is required to be
given to the Petitioner. On the face of order, it appears that there
is no consideration to the extended period due to outbreak of
Covid-19 Pandemic. Though, learned Counsel for the Respondents
Deputy Solicitor General of India argued that the Authority is
empowered to reject the Form NDH-4, there is no illegality in the
order and even subsequent events can be taken into account for
rejection of such NDH-4 Form. In our considered opinion, before
taking such drastic steps of rejection, an opportunity of
explanation as well as if there is any deficiency, opportunity for
compliance is required to be given to the Petitioner. There is
provision of imposing penalty for non-compliance, however,
recourse of rejection of NDH-4 Form is unwarranted specifically
when there is no show cause notice as per the provisions of law.
Accordingly, the impugned communication is liable to be set
aside. Hence, we pass the following order :
(i) The Writ Petition is allowed.
(ii) The impugned Communication dated 23.10.2023
(Annexure J) issued by Respondent No.3 - Assistant
Judgment 9 J-WP No.427.2024Corrected.odt
Director, Ministry of Corporate Affairs is hereby
quashed and set aside.
(iii) So far as ground Nos.1 and 2 in the impugned
communication does not survive and rejection on the
said grounds of the NDH-4 Form is set aside.
(iv) So far as ground No.3 is concerned, the Authority may
reconsider the same in view of subsequent submission
of Auditor Report along with return AOC-4 Form
within a period of four weeks.
The Writ Petition stands disposed of in the above
terms. No order as to costs.
(M.W. CHANDWANI, J.) (M.S. JAWALKAR, J.)
Kirtak
Signed by: Mr. B.J. Kirtak
Designation: PA To Honourable Judge
Date: 24/06/2025 14:50:16
