Kerala High Court Stays Judgment Removing Vellappally Natesan As General Secretary Of SNDP Yogam

The Kerala High Court on Monday (March 23) stayed the operation of the judgment ordering removal of Vellappally Natesan and others as directors of Aruvipuram Sree Narayana Dharma Paripalana Yogam (SNDP Yogam).

The Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. was considering a batch of appeals preferred against the judgment of the Single Judge by which certain directors of the SNDP Yogam, including former General Secretary Vellappally Natesan, were disqualified.

Further, the Single Judge had declared that no person shall be eligible to be appointed/re-appointed as Director of the SNDP Yogam unless they possess a Director Identification Number (DIN) which is issued by the State Government under the provisions of Kerala Non-Trading Companies Act, 1961 read with the Companies Act.

The appellants have also challenged the said observation, stating that valid DINs issued under the Companies Act were produced. It criticized the judgment as internally inconsistent, pointing out that the court acknowledged the absence of state rules governing DIN issuance but still relied on that ground to disqualify directors.

The Court noted that the appellants had Director Identification Number (DIN) and that the rules regarding DIN as applicable to the State has not yet formed. It therefore opined that the appellants cannot be held responsible:

"Moreover, prima facie it appears that the present appellants had DIN and it would appear from the order of Inspector General of Registration that rules with regard to the DIN as applicable to the State of Kerala has not yet been framed and as such, the present appellants cannot be held guilty of contravening any provisions of the Companies Act by which they can be asked to provide DIN although they possess a DIN under the Companies Act, 2013. Another aspect of the matter which seems to have escaped the attention of the learned Single Judge is that the directors could be disqualified if the company had failed to file the annual returns and it was by reason of failure of the company to file such returns that the directors also become disqualified. The object of the said section was that the directors be vigilant as they act as the organs of the company and through them that the company functions."

In the appeal, the appellants have also disputed the finding that the Yogam failed to file annual returns. They have asserted that returns were filed within extended timelines and that delays, if any, were condoned by the Government.

The Court noted that from 2009 till 2019, the original records of the company have been lying in the High Court since it was entangled in various litigations and opined that the view taken by the Inspector General of Registration in condoning the delay in filing returns by the company prima facie does not appear to have been unreasonable or unjustified.

"The other aspects with regard to the continuation of the present appellants as directors for various undesirable factors would be a subject matter of an independent proceeding which are not required to be gone into in this proceeding as the writ petition could only be maintainable against the order of the Registrar discharging a statutory function and the limitation for judicial review is to find out whether in the given present circumstances of the case, the Registrar was justified in extending the time in filing the returns in exercise of powers under section 460 of the Companies Act, which by reason of application of the Companies Act mutatis mutandis as clearly envisaged from the scheme of the Non-Trading Act would be made applicable. Under such circumstances, we stay the impugned order," the Court added.

The Single Judge had also passed a direction to the state government to nominate directors to hold office till directors are appointed by the organisation in the general meeting. The Division Bench had passed an interim order last week ordering status quo to be maintained with respect to nomination after it was informed that as of then, the State had not proceeded with the selection.

The appeals are now posted for hearing.

Case No: WA 693/ 2026 and connected cases

Case Title: V.K. Natesan and Ors. v. Dr. K. Reghu Anchayil and connected cases

Counsel for the appellants: K.Parameshwar (Sr.), Santhosh Mathew (Sr.), P.G. Chandapillai Abraham, Isaac Thomas, Paul P. Abraham, John Vithayathil

Counsel for the respondents: C.E. Unnikrishnan - Spl. Government Pleader, Elvin Peter (Sr.), Adarsh Babu, Shyam Kumar K.T., Harish R. Menon, K.N. Abha, A.G. Prasanth