Judicial review is permissible where administrative agencies fail to follow procedural fairness; petitioners have rights for due process in application handling.

JUDGMENT

Dated this the 17^th day of February, 2026 Above writ petition is filed challenging Ext.P2.

2. Petitioner is a Nidhi Company registered as per the provisions of Section 406 of the Companies Act . The application submitted by the petitioner in Form No.NDH-4 has been rejected pointing out several errors and without hearing the petitioner. The learned Counsel for the Petitioner submits that the issue is covered in their favour by the judgment of this Court in Annamanada Gramakshemam Nidhi Ltd. v. Union of India & Others, WP(C)

No.38860 of 2023 and connected matters Therefore, the above writ petition is also disposed of in terms of the direction issued by this Court in Annamanada’s case. It is made clear that the direction in the said judgment will govern this case also, and therefore the writ petition is disposed of with the following directions:-

(a) The challenge to the amendments to Section 406 of the Companies Act , 2013, as also to the Nidhi Rules, 2014 - as impelled in the writ petition - are left undecided and kept open for future consideration, if it becomes so warranted.

(b) The petitioner in this case will be at liberty to approach the competent Authority, for compounding the offences alleged against them; and if such are made within a period of two months from the date of receipt of a copy of this judgment, they shall be considered by the said Authority with the maximum empathy requisite; thus leading to the imposition of the least sum of penalty, as permissible in law – however, subject to the evaluation and determination of such, on a case- to-case basis by the competent Authority. But, these protections will not apply in a case where criminality is suspected, or found, or in which action under the criminal law is initiated or proposed; in which event, the petitioner will be informed to the same appositely.

(c) On the offences committed by the petitioner - Nidhi Companies, if any, being compounded in terms of the afore directions, they will be at liberty to apply afresh, in the format prescribed as per the “NDH Form”; and if this is done, it will be considered dispassionately and without being trammeled or influenced by the earlier rejections, and dehors the orders qua the same; and appropriate new orders and necessary action issued and completed thereon, without any avoidable delay, but not later than three months from the date of the receipt of the application.

(d) If, on the contrary, the competent Authority is to find any objection with the applications of the petitioner - “Nidhi Companies” under the “NDH” Format, they shall not reject it peremptorily, but will notify each of them appropriately through apposite proceedings, intimating them of such and giving them a minimum of one month to rectify the same, to be then resubmitted as per law. Should there be any further defects still found to be subsisting, the Authority will then hear the respective applicant and give them such necessary further time as may be fixed, to rectify them, before taking a final decision.

I further order that the competent Authorities will permit the petitioner to raise their capital, if so necessary, within the threshold limit as per the Statutory requirement; for which purpose, all applications and requirements for such will be acceded to, subject to other mandatory requirements being satisfied. If the petitioner should require any clarifications in future, on the working of the afore directions, they will be at liberty to approach this Court through appropriate application. Needless to say, until such time as the afore exercise is completed and the resultant order communicated to the petitioner – in case where they comply with direction (a) above and make fresh application in NDH 4 format, within the time frame fixed in direction (b) above – all coercive action against the petitioner shall stand deferred.

Sd/-