NCLT Mumbai Dismisses Church Trust Dispute For Want Of Locus, Holds Only CNI Members Can Invoke Oppression Jurisdiction

The Mumbai Bench of the National Company Law Tribunal (NCLT) has dismissed a company petition filed under Sections 58, 59, 241, 242 and 244 of the Companies Act, 2013, holding that the petitioners lacked locus standi as they were not members of the company concerned within the meaning of the Act.

Background

The petition was filed by certain individuals claiming to be members and directors of United Church of Northern India Trust Association (UCNITA), a company incorporated in 1939 and also registered as a public trust under the Maharashtra Public Trusts Act, 1950. The dispute arose from the historic merger of the United Church of Northern India (UCNI) with five other churches to form the Church of North India (CNI) in 1970. Consequent amendments to UCNITA’s Memorandum and Articles of Association restricted membership of the company to members of the Synod of CNI. The petitioners contended that the merger was void ab initio, relying on the Supreme Court’s decision in Vinodkumar M. Malaviya v. Maganlal Mangaldas Gameti (2013), and claimed that the General Assembly of UCNI continued to have authority to appoint members and directors of UCNITA. On this basis, they sought rectification of the register of members and invoked oppression and mismanagement jurisdiction against the existing management.

Findings Of The Tribunal

The NCLT held that the right to invoke Sections 241 and 242 of the Companies Act is statutorily confined to “members” as defined under Section 2(55) of the Act. Upon examining the statutory records, the Tribunal found that the petitioners were neither subscribers to the memorandum nor persons whose names were entered in the register of members of UCNITA. The Tribunal clarified that the Supreme Court in Vinodkumar M. Malaviya had only invalidated the merger of the First District Church of Brethren with CNI and had not declared the formation of CNI or the merger of other churches illegal. This position, the Bench noted, stood conclusively affirmed by the Allahabad High Court and upheld by the Supreme Court through dismissal of special leave petitions. Rejecting the petitioners’ attempt to revive UCNI and its General Assembly, the Tribunal held that both entities ceased to exist upon merger in 1970 and that subsequent registrations could not confer membership rights in UCNITA.

The Bench also took note of irregular filings before the Registrar of Companies and the subsequent criminal proceedings, observing that the conduct of the petitioners indicated mala fides.