Kerala High Court Adjourns SNDP Yogam Directors' Disqualification Appeals to Thursday
The Kerala High Court has postponed until Thursday the hearing of appeals filed by SNDP Yogam general secretary Vellappally Natesan and other leaders against a single bench order that disqualified them from holding their positions within the organization. A division bench comprising Chief Justice Soumen Sen and Justice V M Syam Kumar made the decision after hearing preliminary arguments from both sides.
Grounds for Disqualification Under Companies Act
The original judgment from the single bench declared the offices of the SNDP Yogam directors vacant due to multiple violations of the Companies Act, 2013. The court found that all board members who did not possess a mandatory Director Identification Number (DIN) as required under Section 152(3) of the Act stood automatically disqualified.
Furthermore, the court noted serious compliance failures: SNDP Yogam had failed to file annual accounts and returns continuously from the financial year 2006-07 through 2016-17, with filings only resuming in September 2020. This prolonged non-compliance triggered disqualification under Section 164(2) of the Companies Act, which applies when a company fails to submit financial statements or annual returns for three consecutive years.
Consequently, the High Court determined that the directors had incurred disqualification starting from 2009 onward, making their continued tenure in office legally untenable.
Appellants' Legal Arguments and Jurisdictional Challenge
Challenging this comprehensive judgment, Vellappally Natesan filed appeals alongside his son Thushar (who serves as vice-president of the Yogam), M N Soman (the organization's president), and Arayakkandil Santhosh (devaswom secretary). Their legal team presented several key arguments before the division bench.
During the hearing, senior counsel representing Natesan emphasized that the single bench's ruling effectively disqualified the entire board of directors. More significantly, the appellants contended that matters concerning director disqualification and internal company management properly fall within the exclusive jurisdiction of the National Company Law Tribunal (NCLT).
They specifically cited Section 430 of the Companies Act, which expressly bars civil courts and other judicial forums from adjudicating matters that the NCLT is empowered to determine. This jurisdictional challenge forms the cornerstone of their appeal, suggesting the High Court may lack proper authority to rule on these specific corporate governance issues.
Court's Response and Next Steps
In response to these arguments, the High Court bench acknowledged the complexity of the legal questions presented and decided the matter required more detailed examination. The bench stated explicitly that the case would be heard thoroughly on Thursday, leading to the adjournment.
The outcome of Thursday's hearing could have significant implications for SNDP Yogam's leadership structure and establish important precedents regarding the jurisdictional boundaries between High Courts and specialized tribunals like the NCLT in matters of corporate law compliance.
