The Madras High Court has stated that the Church of South India is a company and is liable to submit its accounts for inspection to the Registrar of Companies. The CSI had registered itself as a company under the Companies Act, in 1947- 1948. The order to this effect was passed recently by Justice S Rajeswaran, following a complaint lodged by John S Durai, a CSI member. The petitioner alleged that CSI was misusing the funds under foreign exchange account. The writ petition filed by Durai sought for a directive to scrutinize CSI accounts.
Justice Rajeswaran said that the CSI was indeed a registered company. He 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.”
Following the petition filed by Durai, Madras High Court directed the RoC to follow up on the matter, wherein a preliminary probe was carried out. The investigation confirmed the allegations made by the petitioner. The RoC was also granted permission from the Central Ministry for conducting a detailed probe into the financial matters of the CSI, under Section 209A of the Companies Act.
A showcause notice was also filed against the CSI Trust Association on 30 August, 2011, stating the commencement of an inspection on 12 September, 2011. The notice also stated that CSI authorities should keep their account books ready. However, the CSI authorities sought an extension of the audit exercise by a week’s time on 19 September, 2011.
However, the CSI moved to High Court against the showcause notice, seeking an extension from the RoC and subsequently questioning the registrar’s powers in inspecting their matters. But the matter was pursued by Durai who informed the HC 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”.