The judgment emphasizes the need for the competent authority to consider applications generously while ensuring compliance with statutory requirements.

J U D G M E N T

The issue arising for consideration in this writ petition is already decided by this Court in Annamanada Gramakshemam Nidhi Ltd. v. Union of India and Others [2024 (3) KHC 429]

2. In such circumstances, I allow this writ petition in terms of the judgment referred to above in the following lines:

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

b) The petitioner will be at liberty to approach the competent Authority, for compounding the offences alleged against it; and if the same are made within a period of two months from the date of receipt of a copy of this judgment, the petitioner 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, the petitioner 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 de hors 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 application 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 the petitioner of the same and after giving a minimum of one month time 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 applicant and grant necessary further time as may be fixed, to rectify them, before taking a final decision.

3. I further order that the competent Authorities will permit the petitioner to raise its 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.

4. If the petitioner should require any clarifications in future, on the working of the afore directions, it will be at liberty to approach this Court through appropriate applications.

Needless to say, until such time as the afore exercise is completed and the resultant order communicated to the petitioner – in case where it complies with direction (a) above and makes 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/-