Srinagar: The National Company Law Tribunal (NCLT), Chandigarh Bench, has appointed a Provisional Liquidator to take charge of the affairs, assets, bank accounts and records of Shopian-based Siraj-Ul-Uloom Welfare Foundation, a Section 8 company, after holding that material placed before it prima facie disclosed a case for winding up under the Companies Act, 2013.
Acting on a petition filed by the Registrar of Companies (RoC), Jammu & Kashmir and Ladakh, a Bench of the NCLT comprising Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal passed interim directions, including the appointment of a provisional liquidator and a freeze on the company’s assets pending adjudication of the winding-up petition. The petition was filed under Sections 271(b) and 272 of the Companies Act, 2013.
The Siraj-Ul-Uloom Welfare Foundation was incorporated as a Company on April 18, 2025, with its registered office at Hillow Imam Sahib in Shopian and was established for charitable and non-profit objectives, including educational and social welfare activities.
According to the tribunal’s order, the proceedings originated from a report submitted by the Criminal Investigation Department (CID), Jammu and Kashmir, on March 6, 2026.
The Bench said that the CID report had flagged the activities of the company as “fraudulent,” “violative of its stated objects,” and “prejudicial to the sovereignty and integrity of India.” Following the report, the Ministry of Corporate Affairs (MCA), through the Director General of Company Affairs, directed initiation of proceedings under the Companies Act and also called for steps towards freezing and attachment of assets of directors and key managerial personnel under applicable provisions of law.
The tribunal further noted that the Regional Director, Chandigarh, subsequently issued a show-cause notice to the company and its directors alleging “anti-national activities,” “secessionist activities,” and activities “threatening national security.”
As these allegations remain contested, the tribunal’s findings at this stage are only prima facie and the winding-up petition itself is yet to be finally adjudicated.
The Bench observed that an initial reply to the show-cause notice was filed not in the name of the respondent company but in the name of another entity, “Jamia Siraj-Ul-Aloom Welfare Foundation.” It further noted that a subsequent communication from the company’s Managing Director allegedly acknowledged that while the institution was being run through the Section 8 company, records and activities were being maintained in the name of an older trust.
According to the tribunal, this amounted to an admission of “deliberate commingling and obfuscation of the identities of the multiple entities operated by the same persons to evade regulatory scrutiny.”
The Regional Director later rejected the representations as unsatisfactory and granted sanction for filing of the winding-up petition.
The NCLT order also refers to action taken earlier by the Divisional Commissioner, Kashmir.
The tribunal recorded that the Divisional Commissioner, after hearing objections from the institution, dismissed its response as “misconceived, factually untenable, and devoid of legal merit” and notified the premises of Darul Uloom Jamia Siraj-ul-Uloom, Imam Sahib, Shopian, as an “Unlawful Entity/Place” under the Unlawful Activities (Prevention) Act (UAPA), 1967.
That notification had already attracted public attention in Kashmir and was followed by protests by students and parents demanding reopening of the institution. Reports at the time indicated that the administration cited alleged links with the banned Jamaat-e-Islami and concerns raised in official dossiers, while the action also drew criticism from some political and religious leaders.
After examining the petition, sealed material placed before it, the UAPA notification and other documents, the Bench said it was “prima facie satisfied” that the respondent company had been used as a vehicle for activities “prejudicial to the sovereignty, security, and integrity of India.”
The tribunal further observed that material before it prima facie indicated that the company had been incorporated shortly after denial of security clearance to the institution in its earlier forms and that actual management allegedly continued to remain with certain individuals despite formal changes in leadership.
On that basis, the Bench concluded that a prima facie case under Section 271(b) of the Companies Act had been made out.
The tribunal also expressed concern that, without immediate intervention, there was a “grave and real risk” of dissipation of assets, destruction of records and continued use of the company’s infrastructure for activities considered prejudicial to national security. It held that the “balance of convenience lies with the State.”
Invoking its powers under the Companies Act, the NCLT appointed the Official Liquidator attached to the High Court of Jammu & Kashmir and Ladakh as the Provisional Liquidator of the company with immediate effect.
The Provisional Liquidator has been directed to take charge of all affairs of the company, including movable and immovable assets, bank accounts, books of accounts, financial records and documents. The order also extends to records allegedly maintained in the names of associated trust and society entities in view of what the tribunal described as admitted “commingling.”
The liquidator has been directed to prepare and place before the tribunal a preliminary inventory of assets and liabilities within 60 days.
Pending final adjudication of the winding-up petition, the tribunal has restrained the company, its directors, officers and persons acting on its behalf from selling, transferring, alienating, encumbering or otherwise disposing of any assets, properties or funds without prior permission of the Bench.
The company and its officers have also been directed to submit a complete statement of affairs, including assets, liabilities, debts and financial affairs, verified on affidavit, within 30 days.
While granting interim relief, the tribunal has directed issuance of notice to the respondent company and fixed July 13, 2026, for further hearing of the matter. The company has been granted an opportunity to file its reply to the winding-up petition.
The final question of whether the company should ultimately be wound up under the Companies Act remains pending adjudication before the NCLT.
Darul Uloom Jamia Siraj-ul-Uloom, Imam Sahib, Shopian, has remained at the centre of controversy in recent months after the J&K administration declared it an “unlawful entity” under the UAPA, citing alleged links with the banned Jamaat-e-Islami. The move led to protests by students and parents, while political and religious figures questioned the action. Separately, the National Investigation Agency (NIA) carried out searches at the institution in May this year.
This NCLT order marks a parallel corporate-law action, where the tribunal has, at the interim stage, accepted the government’s contention that sufficient prima facie material exists to justify appointment of a Provisional Liquidator and preservation of the company’s assets pending a final decision on the winding-up petition. (KDC)
