A Division Bench of the Madras High Court on Tuesday dismissed a writ appeal preferred by the Church of South India (CSI) Trust Association against a single judge’s direction to the Registrar of Companies to conduct a fresh inquiry into allegations of misappropriation, mismanagement and misfeasance in the appellant association, which owns properties worth several lakh crores of rupees, across the southern parts of the country.
‘Opportunity of hearing’
Justices Paresh Upadhyay and Sathi Kumar Sukumara Kurup confirmed the orders passed by Justice R. Mahadevan on February 1, directing the Registrar to conduct the inquiry, strictly in accordance with law, by giving an opportunity of hearing to the CSI Trust Association.
The Bench, however, said an interim stay on the single judge’s order would continue for eight more weeks, so that any further appeal to the Supreme Court remains meaningful.
In his verdict, the single judge had pointed out that CSI was a religious organisation inaugurated on September 26, 1947, pursuant to an agreement reached between Protestant churches of different traditions such as Anglican, Methodist, Presbyterian and Congregational. There were 24 dioceses under the CSI. CSI Trust Association, in turn, was a registered company under the Companies Act and it held the properties of CSI as a trustee.
The trust association was facing serious allegations such as unwarranted use of rent-free bungalows, luxury cars and free world tours by Bishops attached to some of the diocese by utilising the money meant for charity. Many criminal cases had also been filed. On the basis of a report filed by the Registrar of Companies in January 2016, the Centre ordered a probe by the Serious Fraud Investigation Office (SFIO), in June 2016.
In November 2017, the High Court in Hyderabad had set aside the order for a probe by the Registrar and remitted the matter to the Centre for fresh consideration. Subsequently, the Centre reconsidered the issue in May 2018 and reiterated its earlier decision. Hence, CSITA and its office-bearer approached the Madras High Court in 2019 challenging the Registrar’s December 2017 report based on which the Centre took the May 2018 decision.
Agreeing that principles of natural justice had not been followed scrupulously, the judge ordered that the Registrar’s report must be treated as a show cause notice for a fresh inquiry. He had directed the petitioners to participate in the inquiry, and ordered that a time-bound decision must be taken in the matter, after following provisions of the law in letter and spirit. Within two weeks thereafter, a detailed report should be filed with the Union Ministry of Corporate Affairs, he had ordered.
