ERNAD NIDHI LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioner claims to be a Nidhi Company with an authorised capital of INR 49,96,940/-. It is aggrieved by Ext.P11 order of 2 nd respondent, rejecting its Ext.P7 application filed under Section 406(1) of the Companies Act 2013 read with Rule 3A of the Nidhi Rules.

(2.) Petitioner submits that there occurred a mistake while furnishing the figures of paid-up capital in its application, as INR 4,04,390/- whereas the actual paid-up capital was INR 40,46,880/- as on 31.12.2019 and thereafter it was INR 49,96,940/- as on 31.03.2020, as evident from Ext.P8 statutory form filed by it. Second respondent rejected the application dated 30.04.2020 of the petitioner, as per Ext.P11 order stating that petitioner does not meet the requirements to be declared as Nidhi company under Section 406 of the Act. The Registrar of Companies Kerala was directed to take appropriate action in accordance with the provisions of the Act and Nidhi Rules. Ext.P11 refers to a report of the Regional Director to the effect that the auditor's certificate attached to the balance sheet as on 31.03.2019 would show that the Company accepted deposits exceeding the prescribed limits during the financial year 2018-19 and it opened 4 branches in violation of Rule 10 of the Nidhi Rules, 2014. Furnishing the details of its authorized capital, allotment of share, etc., in the writ petition, petitioner states that such a finding is arrived at only because of a typographical errors occurred in its filings. It is stated that though petitioner had furnished the correct financial details disclosing the net on funds in NDH3 form Ext.P8 and had explained the mistake in Ext.P10 reply to Ext.P9 Email etc, which would show that it is within the limits prescribed under the rules, the said contentions are not considered before issuing Ext.P11 order. This writ petition was filed stating that the 2nd respondent did not consider the issue even after Ext.P13 representation was submitted before him pointing out the factual circumstances.

(3.) Shri Krishna Das P. Nair, the learned CGSC filed a statement according to which Ext.P11 order was passed in accordance with rules seeing that there is violation of rules. Learned CGSC also made available the order passed by the Deputy Director to the Ministry of Co-operate Affairs reiterating the rejection of the application dated 30.04.2020 disposing of Ext.P13 representation. Learned Counsel for the petitioner pointed out the illegality in disposing of the representation by the Deputy Director when the petitioner submitted the representation for reconsideration of the order passed by the 2nd respondent, that too during the pendency of the writ petition.