Kerala High Court Division Bench Stays Disqualification of SNDP Yogam Leaders
A division bench of the Kerala High Court has issued an interim order staying a previous single bench decision that disqualified prominent SNDP Yogam leaders, including General Secretary Vellappally Natesan, from holding their positions within the organization. The bench, comprising Chief Justice Soumen Sen and Justice V M Syam Kumar, granted this relief on appeals filed by Natesan and others challenging the disqualification, thereby allowing them to continue in their posts until a detailed hearing scheduled for June 2026.
Background of the Single Bench Order
The original single bench order had disqualified all board members of the SNDP Yogam who did not possess a director identification number (DIN), as required under Section 152(3) of the Companies Act, 2013. Additionally, the bench noted that the SNDP Yogam had failed to file annual accounts and returns from the financial year 2006-07 through 2016-17 until September 2020. This failure triggered disqualification under Section 164(2) of the Act, which applies when a company does not file financial statements or annual returns for three consecutive years. Consequently, the single bench held that the directors had been disqualified since 2009 and directed the state government to appoint the necessary number of directors to manage the organization until new directors could be elected in a general meeting.
Appeals and Legal Arguments
Aggrieved by this decision, Vellappally Natesan, along with his son Thushar (vice president of the Yogam), M N Soman (president), and Arayakkandil Santhosh (devaswom secretary), filed appeals. They contended that disputes regarding director disqualification and internal company management fall within the jurisdiction of the National Company Law Tribunal (NCLT), not the High Court. In their appeals, they argued that the matters should be handled by the specialized tribunal established for such corporate issues.
Division Bench Observations and Reasoning
In reviewing the appeals, the division bench made several key observations. It noted that from 2009 to 2019, the original records of the company had been before the High Court due to various ongoing litigations. The bench found that the registrar of companies' view in condoning the delay in filing returns appeared prima facie reasonable and justifiable. Furthermore, the bench observed that the appellants likely possessed deemed DINs and highlighted that, based on an order from the inspector general of registration, the rules relating to DIN in Kerala have not yet been formally framed. Therefore, the appellants could not be held guilty of contravening provisions requiring DIN submission, especially since they already had DINs under the Companies Act, 2013.
Interim Stay and Future Proceedings
Based on these findings, the division bench stayed the single bench order, allowing Natesan and the other appellants to continue in their positions within the SNDP Yogam. The appeals have been adjourned for a detailed hearing in June 2026, where further arguments and evidence will be considered. This interim decision provides temporary relief to the leaders while the legal process continues, emphasizing the complexities of corporate compliance and jurisdictional issues in such cases.
