High Court dismisses appeal preferred by CSI Trust Association

A division chamber of the Madras High Court on Tuesday dismissed an appeal filed by the Church of South India Trust Association (CSI) against a single judge’s direction to the Registrar of Companies to conduct a new investigation into allegations of embezzlement, mismanagement and mischief in the appellant association, which owns properties worth several lakh crore rupees in the south of the country.

“Possibility to hear”

Judges Paresh Upadhyay and Sathi Kumar Sukumara Kurup upheld the orders made by Judge R. Mahadevan on February 1, directing the Registrar to conduct the investigation, in strict accordance with the law, giving the ITUC the opportunity to hear Trust Association.

The judiciary, however, said a temporary suspension of the single judge’s order will continue for an additional eight weeks, so any further appeal to the Supreme Court remains valid.

In his verdict, the single judge pointed out that the ITUC was a religious organization inaugurated on September 26, 1947, in accordance with an agreement reached between Protestant churches of different traditions such as Anglican, Methodist, Presbyterian and Congregationalist. There were 24 dioceses under the CSI. CSI Trust Association, in turn, was a registered company under the Companies Act and held the properties of CSI as a trustee.

The trust association was facing serious allegations such as the unwarranted use of rent-free bungalows, luxury cars and free world tours by bishops attached to certain dioceses using the money intended for charity. Numerous criminal cases have also been filed. Based on a report filed by the Registrar of Companies in January 2016, the Center ordered an investigation by the Serious Fraud Investigation Office (SFIO) in June 2016.

In November 2017, the Hyderabad High Court quashed the Registrar’s investigative order and returned the case to the Center for reconsideration. Subsequently, the Center reconsidered the matter in May 2018 and reiterated its earlier decision. Therefore, the CSITA and its office approached the Madras High Court in 2019 to challenge the Registrar’s report of December 2017 on the basis of which the Center made the May 2018 decision.

Agreeing that the principles of natural justice had not been scrupulously followed, the judge ordered that the registrar’s report be treated as a notice of cause for a new investigation. He had ordered the applicants to participate in the investigation and had ordered that a decision be taken within a specified time in the matter, after having followed the provisions of the law in letter and spirit. Within two weeks, a detailed report should be filed with the Union Affairs Ministry, he ordered.

Andrew B. Reiter