JAYALAKSHMI Vs. NAIR SERVICE SOCIETY

JUDGEMENT

(1.) The appeal is lodged against the judgment of the learned Company Judge in C.P. No. 10/2007. The company petition was filed by some of the members of the second Respondent. It is their case that they are creditors of the second Respondent. They had made deposits, according to them, with the second Respondent. There was failure on the part of the second Respondent to return the money. Accordingly, they filed a company petition under Section 433(e) of the Companies Act, 1956 after serving requisite lawyer notice under Section 434 of the Companies Act. The first Respondent is the Nair Service Society. The second Respondent is a Karayogam. According to the Appellants, the first Respondent is a three tier organisation with Karayogam at the base level, Taluk Unions at the intermediate level and the Head Quarters at the apex level. The second Respondent is one of the base level organisations of the first Respondent having registered as per the memorandum and bye-laws approved by the Board of Directors of the company and as certified by the Karayogam Registrar. Annexure A produced is the Registration Certificate and Annexure B purports to be the bye-law of the second Respondent.

(2.) Respondents 1 and 2 have filed separate counter-affidavits before the learned Company Judge in C.P. No. 10/2007. The first Respondent contended that the company petition is not maintainable. It took the stand that it is a company registered under Section 26 of the Travancore Companies Regulations 1 of 1092 M.E. as a Company limited by guarantee, but without the addition of the word, 'limited' to its name as per licence dated 18th March, 1925 certified by the Government in its favour. The Society became a deemed company within the meaning of Section 3 of the Companies Act, 1956 on the commencement of that Act. As the objects of the Society were confined to one State, namely, the State of Kerala, it was contended that it was no longer governed by the Companies Act, 1956. It was further contended that it was governed by the provisions of the Kerala Non-trading Companies Act, 1961 (Act 42 of 1961). They relied upon Ext.R-1(c). It is an order published in the Kerala Gazette, Extraordinary, to the effect that the first Respondent is exempted from the provisions of Sections 171 - 186 (both inclusive) and Sections 433 - 483 (both inclusive) of the Companies Act, 1956. It was on this score it was contended that the company petition was not maintainable.

(3.) The second Respondent contended that it is a voluntary association, i.e. neither a company nor any registered association of persons. It is not a legal person or a registered body. It was contended that the association, as per its bye-laws, is an association which came into existence mainly for the upliftment of the persons of the Nair Community. It is also contended that it is not a branch of the first Respondent nor is it a unit of the first Respondent. It has its own bye-laws and rules of administration.