The court emphasized the necessity of providing a specific notice to a Nidhi Company before rejecting its NDH-4 Form, highlighting procedural fairness and proper adherence to statutory requirements.

JUDGMENT :

(Per : Smt. M.S. Jawalkar, J.)

1. Heard learned Counsel for the Petitioner and learned Deputy Solicitor General of India for all Respondents.

2. RULE. Rule made returnable forthwith. Heard finally with the consent of the learned Counsel appearing for the parties.

3. By this Petition, the Petitioner is challenging a Communication dated 23.10.2023, rejecting the NDH-4 Form issued by the Assistant Director, Ministry of Corporate Affairs/Respondent No.3.

4. The contention of the Petitioner is that the Petitioner is a “Nidhi Company” incorporated under the provisions of Section 406 of the Companies Act, 2013. The said company is incorporated vide Certificate of Incorporation on 15.07.2019 (Annexure-A, Page-43). After submitting statutory Form 20A, the Petitioner was entitled under law to commence business and accordingly the Petitioner commenced its business. At the relevant time, the Nidhi Rules, 2014 (for short the “Nidhi Rules”) were in existence and applicable to the company. By way of Amendment in the year 2019, the Nidhi Rules were amended and Sub-rule 3(A) is introduced. As per this provision, the Nidhi Company has required to submit Form NDH-4, which is a declaration wherein the Central Government after approval of Form NDH-4, declares/notifies the company as “Nidhi Company” in the Official Gazette.

5. There was a second amendment in year 2022 in the Nidhi Rules. Sub-rule 2 of Rule 5 of the Nidhi Rules reads as under :

“5. Requirements for minimum number of members, net owned fund etc.- (1) ……….

(2) Within ninety days from the close of the first financial year after its incorporation and where applicable, the second financial year, Nidhi shall file a return of statutory compliances in Form NDH-1 along with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 with the Registrar duly certified by a company secretary in practice or a chartered accountant in practice or a cost accountant in practice.

6. As such, it is mandatory to file return in Form NDH-1. Our attention is drawn by the learned Counsel for the Petition for Annexure-E (page-107), which is an acknowledgment of submission of Form NDH-1, wherein type of fee is mentioned as ‘Normal’. No late fee is imposed. Our attention is also drawn to the Annexure-F (page-112), a Circular No.12/2020, by which time is extended to submit documents till 30.09.2020 in view of outbreak of Covid-19 Pandemic. The said period was further extended upto 31.12.2020 vide Circular No.30/2020. The Petitioner has submitted NDH-1 Form on 22.12.2020 (page-107), even there also no late fee imposed as the same was filed within extended period.

7. In fact, there is no specific notice to show cause is issued to the Petitioner pointing out any compliance remained to be complied. There was only one communication by way of e-mail dated 16.04.2021, which appears to be a common notice issued to all concerned. There is no specific notice to the Petitioner company for any specific compliance. There is no other communication placed on record to show that there is any individual or separate notice issued to the Petitioner company. However, suddenly by the Communication dated 23.10.2023 (Annexure-J), it was intimated that the Form NDH-4 is rejected for the deficiencies as mentioned in the said communication.

8. First ground for rejection appears to be that company was incorporated on 15.07.2019 and the company has filed a return of statutory compliance in Form NDH-1 after its due date, thus violating Rule 5(2) of