Church of South India is a company - says Madras High Court

A Subramani, TNN Mar 26, 2012, 01.09AM IST CHENNAI: The Church of South India (CSI) is a company registered under the Companies Act and hence it has to submit its account books to the Registrar of Companies (RoC) for inspection, the Madras high court has ruled. The CSI had been registered as a company in 1947-48. Justice S Rajeswaran, passing an order to this effect recently, said it was not fair on the CSI's part to have gone before RoC seeking an extension and then question the registrar's powers to inspect CSI affairs in the high court. The case started with a complaint lodged with the RoC by a CSI member, John S Durai of Mylapore. He had claimed that the CSI was misusing the foreign exchange account, which witnessed a huge inflow of money. Durai also filed a writ petition for a direction to the registrar to inspect the CSI accounts. On February 2, 2011, the HC had directed the registrar to look into the complaints. Based on the court directive, the registrar conducted a preliminary inquiry. On realising that there was substance in the allegations, he wrote to the Centre and obtained permission to hold a detailed probe into the CSI affairs as per Section 209A of the Companies Act. Accordingly, the registrar issued a showcause notice to the CSI Trust Association on August 30, 2011, stating that the inspection would begin on September 12, 2011, and that the authorities should keep the accounts books ready for the exercise. In response, the CSI authorities appeared before the registrar with a request that the audit start a week later on September 19, 2011. Simultaneously, the CSI moved the HC against the showcause notice and it was stayed on September 16, 2011. While the RoC was arrayed as a respondent, Durai himself got himself impleaded as part of the proceedings. In his counter-affidavit, Durai informed the court that CSI was a "habitual defaulter in filing the statutory returns in time, and also not in the habit of replying to the genuine queries raised by the registrar regarding complaints received against the CSI". He also said the court order was the basis for the present inspection. Concurring with his submissions, Justice Rajeswaran vacated the stay on inspection and said the CSI was indeed a company registered under the Companies Act. Pointing out that besides the court direction, the registrar had conducted a preliminary inquiry and obtained a nod from the Centre before issuing the showcause notice, the judge said: "Only after getting clearance from the Ministry of Corporate Affairs the impugned action has been taken under the provision of law...The contention of the CSI counsel is of no merits and the proceedings cannot be questioned at all by the CSI Trust Association."