Supreme Court Asks Centre To Clarify If SNDP Yogam Governed By Companies Act Or Kerala Law

The Supreme Court recently has asked the Union Government to clarify whether Sree Narayana Dharma Paripalana Yogam would be governed by the Companies Act, 2013 or the Kerala Non-Trading Companies Act, 1961.To briefly state, the special leave petition is filed against the Kerala High Court's judgment, which directed the Central Government to comply with a 2009 decision of the Delhi High Court and decide what law legislates the functioning of Yogam.The division bench of the Kerala High Court set aside the order of the Single Judge Bench, which in turn had set aside a 1974 government order that granted an exemption to Yogam from Sections 172(2), 219 and Article 14 of Table C of Schedule I of the Companies Act, 1956. This meant every member of the Yogam would not have the right to cast their votes in its General Body meeting, and only their representatives would.As a result of the order, the Yogam amended its articles of association and brought in Article 44 to deprive its members of casting their votes. The order and the Article were challenged by certain members of the Yogam before the Single Judge, who allowed the pleas, but it was challenged in appeal before the division bench.Senior Advocate Rajiv Shakdher(appearing for one of the shareholders) told the bench that the organisation Yogam is dedicated to Narayana Guru and that the objects of Yogam are confined to the State of Kerala, and since it is a non-trading company, it is governed by the 1961 Act. "It raises a very interesting issue...What has happened is that the members of the company seek to exclude the shareholders and confine it to certain representatives...[Mr client] he is one of the Yogam is not being allowed to vote as a member of the Company. Any member as shareholder will cast his vote if there is an ordinary general meeting or special general meeting or if account is put before the shareholders."Senior Advocate K Parmeshwar(for the Company Yogam) interjected and told the bench that the hearings by the Central Government had already started, but the petitioner didn't participate. He added that while the 1965 Act may have allowed the exemption, the Companies Act 2013 doesn't.Whereas, Solicitor General Tushar Mehta submitted that there is consensus between the parties that the Central Government should take a call on this. He said: "One of the arguments of Mr Parmeshwar's client is that their activities are across the country and it was registered under the Companies Act. His[Shakdher's] client says it is under the [Kerala] Non-Trading Corporation Act. We have started deciding."Shakdher responded that the Central Government has already decided the issue in favour of the petitioner. He added that, as per the 2005 order of the Union Government, it has conceded that the Yogam is covered by the provisions of the 1961 Act. "The Central Government cites various instances where there is an admission by Yogam that the Kerala Non-Trading Act applies. The division bench notes this order and still remits it to the central government. How many times the central government is going to do the flip-flock?"The 2005 Government order was passed when certain members tried to proceed against the Yogam under the 1956 Act on the grounds of oppression and mismanagement. However, the government didn't allow and had said that Yogam is not covered under the Companies Act. Reportedly, the 2005 order was set aside in 2009 by the Delhi High Court, which had then directed the government to decide the matter afresh.After arguments were made, Justice Pardiwala directed SG Mehta to clarify the position whether the Companies Act apply or the State legislation. The Court added that the current proceedings can go on.It ordered: "We want the Union to clarify the position by filing a short note or a counter affidavit...We clarify that the hearing which is going on before the authority concerned of the Union shall proceed further in accordance with law."In March, a single judge of the Kerala High Court had directed the removal of Vellapally Natesan as the SNDP General Secretary for failure to file returns as per the Companies Act 2013. This order was later stayed by the division bench.Case Details: V VIJAYAKUMAR vs. ARUVIPURAM SNDP YOGAM|Diary No. - 8846/2026Click Here To Read Order

Supreme Court Asks Centre To Clarify If SNDP Yogam Governed By Companies Act Or Kerala Law

Gursimran Kaur Bakshi

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Supreme Court Asks Centre To Clarify If SNDP Yogam Governed By Companies Act Or Kerala Law

Gursimran Kaur Bakshi

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INR 1099+GST

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