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By Dr. D.J. Muthuraj
Special to Virtueonline
April 12, 2021

If the facts are against you, pound the law. If the law is against you, pound the facts. And if both are against you, pound the table!

The recalcitrant Church of South India Trust Association (CISTA) prefers paying heavy fees to lawyers and spends on average one crore ($150,000) or more rupees every month on legal professional charges. This amount is sufficient to renovate ten elementary school buildings in rural areas, and also capable of doing all types of poundings in order to protect the CSI leaders from obeying law.

The four million members of the Church of South India are shocked to learn that the CSITA has obtained yet another 'stay' over the judgement declared on 01.02.2021 by the honourable Justice R. Mahadevan. According to my count, it is 'stay no. 4' for keeping the Serious Fraud Investigation Office (SFIO) away from the church management which is packed with fraud and misfeasance.

The new Writ Appeal of 24 March 2021 from the CSITA is simply to prevent the statutory authorities of the Indian Government from probing into the misdeeds (illegal sale/lease of church assets, irregularities in financial management and astounding corporate misbehaviours and non-compliances to provisions of the Companies Act 2013) of the incorporated body called the CSITA (Est.1947).

The honourable Justice Mahadevan had laid down key procedural steps to carry out the formalities of Inquiry and Inspection by the Register of companies (RoC) so that the Central Government might be able to convince itself of the urgent need for ordering investigating into the affairs of the CSITA. All these vital steps were to be completed by the end of March 2021, as per the Court's order. The time frames to accomplish this was expected to be adhered to as the court felt that the matter was unnecessarily being dragged both by the RoC authorities and the CSITA since 2011.

Since the first day of February 2021, the CSI public are not aware of anything happening from the side of the CSITA towards the order being implemented. After seven weeks, the CSITA has now filed a Writ Appeal seeking modification of the judgement of R. Mahadevan expressing some of its grievances (?).

The reasons for making the Appeal look quite strange to the public eye since the CSITA seems to be misinterpreting (pounding) the order of 01.02.2021. It claims that "the order and the action taken by the Registrar and the Central Government were quashed by the judgment and order impugned dated February 2, 2021 on the grounds of breach of the principles of natural justice". So the Report of 13.12.2017 cannot be treated as a show-cause notice, the CSITA argues. These claims rest comfortably on the complete distortion of the court's order of 01.02.2021.

The Company has no say on the decision to conduct inquiry, inspection and investigation made by the statutory bodies over the performance of the company. Sure, an adequate opportunity or reasonable time is normally given to respond to the notice by the company. But the notices and reports from the RoC cannot be set aside by the company through its willful negligence by choosing not to respond hiding behind grievances.

According to CA 2013, sec. 206 (2), when the RoC calls for information or explanation, "it shall be the duty of the company and of its officers concerned to furnish such information or explanation to the best of their knowledge and power...." It is not the business of the company to reject such an order from the RoC stating that it was done with a 'closed mind'. Notices from the RoC or the Central Government seeking for documents or explanations cannot be sent after consulting with the members of the appellant company whether they would be prepared to or would be willing to receive a written notice from the RoC.

The CSITA is looking for ways to dump the Report of the RoC dated 13.12.2017

The motive of the CSITA is very clear to the members of the church that the CSITA officers are trying to find excuses not to face the Report from the RoC dated 13.12.2017 which, the public is given to understand that, it is a voluminous document of some thousand pages. The report must have documented all the mis-mismanagement of finance and fraudulent dealings with regard to lands/properties committed by the committee of management of the CSITA.

The church leaders want to cover their faces from reading the facts about their unlawful activities and therefore, they appeal to the court (pounding law) that they require a fresh show-cause notice to be issued, whether under Section 206 (1) or under Section 206 (4) of the Act of 2013....

Can a company demand issuing show-cause notices with contents the managers would like?

FIRST OF ALL, THE CSITA SHOULD SEND A REPLY TO THE MATTER IN THE ALLEGED REPORT OF THOUSANDS OF PAGES. They cannot demand "a different one" thus skipping the report already compiled and sent on 13.12.2017. The Company cannot push RoC back to 'square one' to make it restart the ten years of its inquiry/inspection work all over afresh again! The principles of the statues of Companies Act and not the natural justice do apply here.

The court's decision on 01.02.2021 is in effect to help the CSITA by taking into consideration complaints against it, thus it appears so to the public mind. Because, the court itself has the power to order on its own for the Investigation by the SFIO [see sec. 210(2)], but it preferred the Government to take that decision and the court was content to streamline the procedures leading to investigation.

On 01.02.2021, the court asked the CSITA to pick-up the proceedings from sec. 206(4) marked by the Report from the RoC by treating it as "a show-cause notice" to be responded to. From thereon, other requirements of the Company Law will follow within the time frames set by the court for a speedy conclusion of the investigation matter (possibly by 31 March 2021).

The RoC and the Court cannot negotiate with the CSITA to ascertain its own preferences, conveniences and desires for conducting an inquiry and investigation. It is further unofficially learnt by the people that the CSITA has never responded so far in any fullest manner to the complaints forwarded to it by the RoC/RD.

The Christian public hopes to see a stern judgement from the court this time against the irresponsible and unrepentant CSITA so that a full-scale investigation into its affairs can soon happen.

It is also desirable from the public point of view that a proper emphasis is given to "public interest" as one of the causes for ordering an investigation [sec. 210(1)]. The interest among the Christian public (who donate more than 500 crores of rupees to the well-being of the church annually) demanding an investigation into the affairs of the CSITA is gaining strength and momentum. The CSITA is definitely acting in a manner detrimental to public good, transparency and honesty in all respects.

It is also highly desirable that the whole Committee of management of the CSITA should recede to create a regulatory environment not only for the church administration but for conducting the investigation by the SFIO consisting of experts/highly qualified persons. It is impossible to carry out any investigation with the present Board and the General Body, whose election to their positions are still under cloud any way, remaining in control.

Hence, the CSITA urgently needs a retired High Court or Supreme Court Judge assisted by a managing committee appointed by the court to take complete charge of the affairs in order to revamp and restructure the CSITA Company.

To escape from facing Law and Facts the church leaders are now pounding the table...to make it sound as though they are running the CSITA on-track with clean hands!


The Rev. Dr. JG Muthuraj is a Master of Corporate Law and a frequent contributor to VOL

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