Former SNDP Yogam general secretary Vellappally Natesan and his son Thushar Vellappally have moved appeals against a Kerala High Court single bench ruling that disqualified the organisation’s entire Board of Directors over alleged violations of statutory requirements under the Companies Act.
The appeals were filed on Monday, challenging the March 12 judgment delivered by Justice T R Ravi, who had acted on a batch of petitions alleging irregularities in the functioning of Sree Narayana Dharma Paripalana (SNDP) Yogam, a prominent socio-cultural body representing the Ezhava community in Kerala. One of the petitions had been filed by late professor M K Sanoo.
In the impugned order, the single bench disqualified all office-bearers and directors of the Yogam. Apart from Vellappally Natesan and Thushar Vellappally, the court had also disqualified M N Soman and Santhosh, also known as Arayakkandil Santhosh, from the Board.
The court held that the directors had incurred disqualification under the Companies Act and consequently vacated their offices under Section 167(1)(a). It further directed the government to appoint new directors under Section 167(3) to manage the affairs of the organisation.
Challenging the ruling, the appellants have argued that the judgment suffers from “serious jurisdictional error” and misinterpretation of statutory provisions.
“The impugned judgment suffers from serious jurisdictional error, failure to follow binding precedent, incorrect appreciation of facts relating to filing of returns and erroneous interpretation of the statutory provisions relating to Director Identification Number (DIN) and disqualification of directors,” the appeal states.
The petitioners contend that the judgment is “wholly without jurisdiction” and liable to be set aside.
A central issue raised in the appeal concerns the alleged failure to file annual returns, which formed the basis for invoking disqualification under Section 164(2) of the Companies Act.
According to the appellants, the single judge proceeded on an incorrect premise that the Yogam had not filed its annual returns for three consecutive financial years. They maintain that, given the organisation’s wider objectives beyond Kerala, returns had initially been filed with the Registrar of Companies.
Following a Central government order dated August 23, 2005, which brought the organisation under the Kerala Non-Trading Companies Act, returns were thereafter submitted to the Registrar General.
The appeal states that from the financial year 2006–07 onwards, the Yogam had been regularly filing annual returns and financial statements with both the Registrar General and the Registrar of Companies.
However, the appellants have pointed out that these records could not be processed earlier as the organisation’s registers were kept in sealed custody with the Registrar (Judicial) of the High Court in connection with earlier litigation, and were released only in 2019.
On this basis, they argue that the finding of non-filing of returns for three consecutive years is unsustainable.
The appellants have also disputed the court’s findings regarding Director Identification Numbers (DIN). They claim that valid DINs issued by the Central government under the Companies Act had been produced before the court.
Notably, the appeal highlights that the single judge had recorded that the state government had not framed rules for issuing DINs, yet still proceeded to disqualify the directors on that ground.
The petitioners have further argued that the single bench exceeded its jurisdiction by issuing directions that effectively altered the governance structure of the organisation.
They contend that issues relating to disqualification of directors fall within the jurisdiction of the National Company Law Tribunal (NCLT), and not within the writ jurisdiction of the High Court.
According to the appeal, the directions to appoint new directors under Section 167(3) had far-reaching consequences for the administration of the Yogam and could not have been issued in such proceedings.
The matter is now expected to be considered by a division bench of the Kerala High Court.
