Kerala High Court

Nedstar Prime India Nidhi Limited vs Union Of India on 20 June, 2024

Author: T.R.Ravi

Bench: T.R.Ravi

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                               PRESENT
                 THE HONOURABLE MR. JUSTICE T.R.RAVI
     THURSDAY, THE 20TH DAY OF JUNE 2024 / 30TH JYAISHTA, 1946
                       WP(C) NO. 19807 OF 2024


PETITIONER:

          NEDSTAR PRIME INDIA NIDHI LIMITED
          MP 16/300, NEDUMPARAMBIL HOUSE,
          INTUC JUNCTION, NETTOOR P.O,
          NETTOOR, ERNAKULAM
          REP. BY ITS DIRECTOR,
          JOHAN GEORGIE JAMES
          S/O N M JAMES, NEDUMPARAMBIL HOUSE,
          PIN - 682040

          BY ADVS.
          S.RENJITH
          EDISON THOMAS T.
          P.K.SREEVALSAKRISHNAN
          S.UNNIKRISHNAN (NELLAD)
          K.R.PRATHISH
          KRISHNA DAS


RESPONDENTS:

    1     UNION OF INDIA
          REPRESENTED BY THE SECRETARY,
          MINISTRY OF CORPORATE AFFAIRS,
          "A" WING, SHASTRI BHAVAN,
          RAJENDRA PRASAD ROAD,
          NEW DELHI, PIN - 110001

    2     JOINT SECRETARY
          MINISTRY OF CORPORATE AFFAIRS,
          "A" WING, SHASTRI BHAVAN,
          RAJENDRA PRASAD ROAD,
          NEW DELHI, PIN - 110001

    3     THE REGIONAL DIRECTOR
          SOUTHERN REGION, MINISTRY OF CORPORATE AFFAIRS,
          SHASTRI BHAVAN, BLOCK 1,
          VTH FLOOR, 26, HADDOWS ROAD,
          CHENNAI, PIN - 600006
 WP(C) NO. 19807 OF 2024
                               2



    4     REGISTRAR OF COMPANIES,
          ERNAKULAM
          COMPANY LAW BUILDING, KAKKANAD,
          KOCHI, PIN - 682021

          SRI. V. GIREESH KUMAR. CGC.




     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
20.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 19807 OF 2024
                                           3



                               T.R. RAVI, J.
                --------------------------------------------
                        W.P.(C). No.19807 of 2024
                 --------------------------------------------
                  Dated this the 20th day of June, 2024

                                      JUDGMENT

When the case is taken up, the counsel for the petitioner

submitted that the issue is covered by the judgment dated

19.03.2024 in WP(C) No.38860/2023 & connected cases and the same

directions may be issued in this case also. Paragraph 18 of the said

judgment and the order even dated, as 'spoken to' are extracted

below;

"18. Since there is hardly in dispute at the bar, that reasonable restrictions are permissible, if not necessary, I deem it appropriate that these writ petitions be ordered with the following directions;

(a) The challenge to the amendments to Section 406 of the Companies Act, 2013, as also to the "Nidhi Rules, 2014" - as impelled in these writ petitions -

are left undecided and kept open for future consideration, if it becomes so warranted.

(b) Each of the petitioners in these cases will be at liberty to approach the competent Authority, for compounding the offences alleged against them; and if such are made within a period of two months from the date of receipt of a copy of this judgment, they shall be considered by the said Authority with WP(C) NO. 19807 OF 2024

the maximum empathy requisite; thus leading to the imposition of the least sum of penalty, as permissible in law - however, subject to the evaluation and determination of such, on a case-to- case basis by the competent Authority. But, these protections will not apply in a case where criminality is suspected, or found, or in which action under the criminal law is initiated or proposed; in which event, the respective petitioners will be informed to the same appositely.

(c) On the offences committed by the petitioner - Nidhi Companies, if any, being compounded in terms of the afore directions, they will be at liberty to apply afresh, in the format prescribed as per the "NDH Form"; and if this is done, it will be considered dispassionately and without being trammeled or influenced by the earlier rejections, and dehors the orders qua the same; and appropriate new orders and necessary action issued and completed thereon, without any avoidable delay, but not later than three months from the date of the receipt of the application.

(d) If, on the contrary, the competent Authority is to find any objection with the applications of the petitioner - "Nidhi Companies" under the "NDH" Format, they shall not reject it peremptorily, but will notify each of them appropriately through apposite proceedings, intimating them of such and giving them a minimum of one month to rectify the same, to be then resubmitted as per law. Should there be WP(C) NO. 19807 OF 2024

any further defects still found to be subsisting, the Authority will then hear the respective applicants and give them such necessary further time as may be fixed, to rectify them, before taking a final decision. Needless to say, until such time as the afore exercise is completed and the resultant order communicated to the petitioners - in case where they comply with direction (a) above and make fresh application in "NDH 4" format, within the time frame fixed in direction (b) above - the interim order granted by this Court in these matters, will continue to hold field.

After I dictated this part of the judgment, some learned counsel appearing for other petitioners submitted that there are cases in these batches where their clients have not filed "NDH 4" forms yet, as also Form No.SH

7. They prayed that the benefit of the afore declaration be made available to them also. The learned Deputy Solicitor General of India did not oppose this and consequently, I order that it is not in the case of those companies where their Forms have been rejected who would get the afore benefit, but also those who want to make application, in terms of law.

To be spoken to on 19.03.2024 These matters have been listed today for being spoken to at the request of some of the learned counsel for the petitioners, submitted that, on account of the rigour of the impugned Statutory amendments, the Share of Capital of their clients cannot be raised; and that this puts them in a rather incongruous situation WP(C) NO. 19807 OF 2024

because, without such an enhancement, they cannot achieve the qualifications of 'Nidhi Company' under law; while, when they try to do that, they are interdicted by the requirement of filing Statutory Forms. I am sure that this is a piquant situation for the petitioners because, unless they are able to raise their capital to the level as is statutorily mandated, they would not be able to operate as a 'Nidhi Company', much less obtain any benefit under this judgment. Sri.Ajith Kumar - learned Central Government Counsel, in response, submitted that, if the raising of capital is solely so as to bring the 'Nidhi' Companies within the threshold limit of the Statutory prescription, his client will not stand in the way of appropriate orders being issued. In the afore circumstances, in addition to the afore directions, I order that the competent Authorities will permit the petitioners to raise their capital within the threshold limit as per the Statutory requirement; for which purpose, all applications and requirements for such will be acceded to, subject to other mandatory requirements being satisfied. Needless to say, if the petitioners require any clarifications in future, on the working of the afore directions, they will be at liberty to approach this Court through appropriate applications."

Having gone through the judgment, I find that there is no reason

to vary from the directions contained. In the above circumstances,

this writ petition is disposed of and it is ordered that the directions WP(C) NO. 19807 OF 2024

issued in WP(C) No.38860/2023 & connected cases and the order

dated 19.03.2024 extracted above will be applicable in this case also.

Sd/-

T.R. RAVI JUDGE

Pn WP(C) NO. 19807 OF 2024

PETITIONER'S EXHIBITS

Exhibit P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION OF THE PETITIONER COMPANY DATED 25.01.2022

Exhibit P2 TRUE COPY OF THE NIDHI RULES 2014 DATED 31.03.2014

Exhibit P3 TRUE COPY OF THE NIDHI AMENDMENT RULES 2019 DATED 01.07.2019