The judgment clarifies procedural directions and constitutional interpretations regarding Nidhi Companies under specified rules.

JUDGMENT

The petitioner has approached this Court seeking the following reliefs:

(i) To declare that Rule 3A and 23A of Ext.P3 Rules is unconstitutional as it violates Articles 14, 19 and 21 of the Constitution of India.

(ii) To declare that Ext.P3 Rules is applicable only to the Companies which have been registered after the date of commencement of Ext.P3 Rules.

(iii) To issue a writ of certiorari or any other appropriate writ, order or direction quashing Ext.P7.

(iv) To issue a writ of mandamus or any other appropriate writ or direction directing the 1^st respondent to notify the petitioner company as a Nidhi Company under Ext.P2 Rules.”

2. The learned Counsel on both sides submit that the issue is covered by a judgment of this Court in Annamanada Gramakshemam Nidhi Limited v. Union of India [2024 (3) KHC 429), paragraph 18 of the said judgment, which is the operative portion, reads as follows:

“18. Since there is hardly in dispute at the bar, that reasonable restrictions are permissible, if not necessary, I deem it appropriate that these writ petitions be ordered 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 these writ petitions - are left undecided and kept open for future consideration, if it becomes so warranted.

b) Each of the petitioners in these cases 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 cas-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 respective petitioners 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 applicants and give them such necessary further time as may be fixed, to rectify them, before taking a final decision.

Needless to say, until such time as the afore exercise is completed and the resultant order communicated to the petitioners – 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 – the interim order granted by this Court in these matters, will continue to hold field.”

In terms of the judgment in Annamanada Gramakshemam Nidhi Limited [supra], this writ petition is disposed of and the directions in the aforesaid judgment will gove