Allahabad High Court
C/M Kshetriya Shri Gandhi Ashram Garh ... vs The State Of U.P. And 3 Others on 14 May, 2024
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Neutral Citation No. - 2024:AHC:87128
Court No. - 10
Case :- WRIT - C No. - 13142 of 2024
Petitioner :- C/M Kshetriya Shri Gandhi Ashram Garh Road And Another
Respondent :- The State Of U.P. And 3 Others
Counsel for Petitioner :- Shiv Prakash Gupta,Shivendu Ojha,Sr. Advocate
Counsel for Respondent :- Abhishe Pandey,C.S.C.,Rajiv Sharma
Hon'ble Manjive Shukla,J.
1. Heard Sri R.K. Ojha, learned Senior Advocate assisted by Sri Shiv Prakash Gupta, learned counsel appearing for the petitioners, learned Standing Counsel appearing for Respondents No.1 and 4, Sri Rajiv Sharma, learned counsel appearing for Respondents No.2 and 3 and Sri Abhishek Pandey, learned counsel appearing for the caveator.
2. Petitioners through this writ petition have challenged the order dated 18.3.2024 passed by the Deputy Registrar, Firms, Societies and Chits, Meerut whereby direction has been issued to Kshetriya Shri Gandhi Ashram, Meerut to remove the office bearers of the Committee of Management of the Society.
3. Learned Senior Advocate appearing for the petitioners has invited attention of this Court that earlier the Deputy Registrar passed orders dated 9.9.2022 and 5.4.2023 whereby office bearers of the Committee of Management of the Society were ousted and decision was taken to hold elections of the Committee of Management in exercise of powers under Section 25(2) of the Societies Registration Act, 1860 (hereinafter referred to as the 'Act of 1860'). The said orders were challenged by the petitioners by filing Writ-C No.13576 of 2023. The aforesaid writ petition has been decided by the co-ordinate Bench of this Court vide judgment and order dated 16.8.2023 wherein categorical findings have been recorded that the orders passed by the Deputy Registrar dated 9.9.2022 and 5.4.2023 were without jurisdiction. This Court while dealing with the matter in Writ-C No.13576 of 2023 recorded a finding that the Deputy Registrar is empowered to take action against the petitioners only in accordance with the procedure prescribed under Section 23 and 24 of the Act of 1860.
4. Sri R.K. Ojha, learned Senior Advocate appearing for the petitioners has submitted that after passing of the aforesaid judgment on 16.8.2023 the Deputy Registrar issued notice to petitioners and directed for submitting reply in respect of alleged irregularities which have been pointed by the Khadi Gramudyog Commission, Meerut. Petitioners submitted their detailed reply on 10.2.2024 wherein petitioners tried to demonstrate that they are not responsible for the allegations which have been levelled by the Khadi Gramudyog Commission, Meerut.
5. Learned Senior Advocate has argued that a bare perusal of the procedure prescribed under Section 24 of the Act of 1860, it is crystal clear that once the Registrar while investigating the matter has issued a show cause notice to the petitioners and in response thereof reply has been submitted, the bare minimum which is required for the Deputy Registrar is that prior to passing any order taking decision in the matter, at least reply must be considered. Learned Senior Advocate has further argued that even otherwise the principles of natural justice categorically provide that once reply to the show cause notice has been submitted, then while taking decision that reply must be considered. Learned Senior Advocate has further argued that from a bare perusal of the impugned order dated 18.3.2024, it is patently manifest that the aforesaid reply submitted by the petitioners to the show cause notice has not been considered at all and straightaway the Deputy Registrar has taken decision and has directed the Society to remove the office bearers of the Committee of Management of the Society. It has also been argued that recommendations made by the Khadi Gramudyog Commission, Meerut were only a piece of information provided to Deputy Registrar therefore, while making investigation the Deputy Registrar is under obligation to scrutinize those recommendations on the basis of reply submitted by the petitioners and only thereafter he can arrive at a conclusion, whereas in the present matter the Deputy Registrar without considering the reply submitted by the petitioners has passed the impugned order dated 18.3.2024 therefore, the same cannot sustain in the eyes of law.
6. On the other hand, Sri Rajiv Sharma, learned counsel appearing for Respondents No.2 and 3 has vehemently argued that there are serious allegations against the petitioners as they are instrumental in transferring the land of the Society by way of lease agreement in favour of some private party. Sri Rajiv Sharma has further argued that since Khadi Gramudyog Commission, Meerut has extended financial support to the petitioners' Society therefore, it is duty bound to see that affairs of the Society are run in a manner which may fulfill the aims and objects of the Society and money of the general public may not be embezzled by the petitioners.
7. Sri Rajiv Sharma, learned counsel appearing for Respondents No.2 and 3 has also drawn attention of this Court that a proper inquiry in the matter has already been done at the end of the officers of the Commission and only thereafter the Commission has recommended the Deputy Registrar for passing order to oust the office bearers of the Committee of Management of the Society in question therefore, now there was no occasion for the Deputy Registrar to consider the petitioners' reply as such, the Deputy Registrar while passing the impugned order dated 18.3.2024 thereby directing the Society to remove the office bearers of the Committee of management of the Society, has acted in accordance with law.
8. I have considered the arguments advanced by the learned counsels appearing for the parties and I find that the Deputy Registrar, Firms, Societies and Chits, Meerut has passed impugned order on 18.3.2024 whereby he has accepted the recommendations made by the Khadi Gramudyog Commission, Meerut for removal of the office bearers of the Committee of Management of the Society and thereby has issued direction to the Society for acting upon his decision. This Court finds that earlier the Deputy Registrar passed order on 9.9.2022 whereby the Committee of Management of the Society in question was declared to be time barred and direction was given for holding elections of the Committee of Management of the Society under Section 25(2) of the Societies Registration Act, 1860. The order dated 9.9.2022 was challenged by the petitioners by filing Writ-C No.13576 of 2023 and the co-ordinate Bench of this Court, while recording findings that the Deputy Registrar pursuant to recommendations made by the Khadi Gramudyog Commission, Meerut, could not have declared the Committee of Management of the Society as time barred and could not have proceeded to hold elections under Section 25(2) of the Societies Registration Act, 1860, has allowed the writ petition vide judgment and order dated 16.8.2023 whereby order passed by the Deputy Registrar dated 9.9.2022 has been set aside. This Court vide order dated 16.8.2023 has also quashed the consequential order dated 5.4.2023 passed by the Commission.
9. This Court finds that in earlier round of litigation the co-ordinate Bench of this Court in its judgment and order dated 16.8.2023 has recorded finding that the Deputy Registrar can take any decision in the matter only after following procedure prescribed under Section 23 and 24 of the Act of 1860 and without following the procedure, if any action is taken by the Deputy Registrar, that cannot sustain in the eyes of law. After passing of the judgment and order dated 16.8.2023, the Khadi Gramudyog Commission, Meerut vide his letter dated 12/15.1.2024 has made recommendations for removal of the office bearers of the Committee of Management of the Society and acting straightaway on the said recommendations, the Deputy Registrar has passed order on 18.3.2024 whereby he has taken decision that office bearers of the Committee of Management of the Society are liable to be removed and accordingly direction has been issued to the Society to act upon his order dated 18.3.2024.
10. For arriving at a correct conclusion, it is necessary to have a brief look of the provisions of Section 23 and 24 of the Societies Registration Act, 1860. Accordingly, Section 23 and 24 of the Societies Registration Act, 1860 are extracted as under:
"23. Audit.- (1) Without prejudice to the provisions of sub-section (2) of Section 4 or of Section 22, where the Registrar is of opinion that it is necessary or expedient so to do, may, by written order, require any society to furnish its accounts or a copy of a statement of receipts and expenditure for any particular year duly audited by a Chartered Accountant:
Provided that the Registrar may, at the request of society permit it to have such accounts and statement audited by any other person approved by him.
(2) If the society fails to furnish the documents referred to in sub-section (1) within the period specified in the order or with such extended period as the Registrar may from time to time allow, the Registrar may cause the accounts of such society audited for the said year and may recover the cost of such audit from that society.
(3) If the society neglects or refuses to make its accounts or other documents available for audit under sub-section (2) or, in the opinion of the Registrar, otherwise fails to provide requisite facilities to have the audit made with due expedition the Registrar may proceed to take action under Section 24.
24. Investigation of affairs of a society.- (1) Where on information received under Section 22 or otherwise, or in circumstances referred to in sub-section (3) of Section 23, the Registrar is of opinion that there is apprehension that the affairs of a society registered under this Act are being so conducted as to defeat the objects of the society or that the society or its governing body by whatever name called, or any officer thereof in actual effective control of the society is guilty of mismanaging its affairs or of any breach of fiduciary or other like obligation, the Registrar may either himself or by any person appointed by him in that behalf, inspect or investigate into the affairs of the society or inspect any institution managed by society.
(2) It shall be the duty of every officer of the society when so required by Registrar or other person appointed under sub-section (1) to produce any books of account and other records of or relating to the society which are in his custody and to give him all assistance in connection with such inspection or investigation.
(3) The Registrar or other person appointed under sub-section (1) may call upon and examine on oath any officer, member or employee of the society in relation to the affairs of the society and it shall be the duty of every officer, member or employees, when called upon, to appear before him for such examination.
[(3-A) The Registrar or other person appointed under sub-section (1), may, if in this opinion it is necessary for the purpose of inspection or investigation, seize any or all the records including account books of the society:
Provided that any person from whose custody such records are seized shall be entitled to make copies thereof in the presence of the person having the custody of such records.]
(4) On the conclusion of the inspection or investigation, as the case may be, the person if any appointed by the Registrar to inspect or investigate shall make a report to the Registrar on the result of his inspection or investigation.
(5) The Registrar may, after such inspection or investigation, give such directions to the society or to its governing body or any officer thereof, as he may think fit, for the removal of any defects or irregularities, within which as may be specified and in the event of default in taking action according to such directions, the Registrar may proceed to take action under section 12D or section 13B, as the case may be."
11. Under Section 24(1) of the Societies Registration Act, 1860, it is provided that if the Registrar receives some information or on its own comes to the conclusion that affairs of the Society are not being managed in a proper manner, then he can start the investigation. After investigating the matter if the Registrar forms his opinion that there are serious irregularities in the affairs of the Society, then under Section 24(5) of the Societies Registration Act, 1860 he shall communicate to the Society and thereby direct for correcting the affairs of the Society and removal of deficiencies and if in spite of direction given by the Registrar action is not taken on the part of the Society, he can proceed to pass any order under Section 12D or Section 13B of the Societies Registration Act, 1860, as the case may be.
12. I find that the Deputy Registrar prior to passing of the order dated 18.3.2024 issued a show cause notice to the petitioners on 18.1.2024 whereby he required the petitioners to submit their reply viz-a-viz allegations levelled in the recommendations made by the Khadi Gramudyog Commission, Meerut. Petitioners submitted their detailed reply on 10.2.2024 which has been received in the office of the Deputy Registrar on 12.2.2024.
13. I have perused the reply submitted by the petitioners and I find that it is a detailed reply and reasons have been given to deny the allegations levelled in the show cause notice. This Court is of the view that once petitioners submitted reply to the show cause notice and gave detailed reasons to deny the allegations levelled against them, then the Deputy Registrar prior to forming any definite opinion in the matter, ought to have considered the said reply as it is well settled proposition of law that once show cause notice is issued and reply is filed, decision cannot be taken without considering the reply, whereas in the present case the Deputy Registrar has not considered even a word out of aforesaid reply submitted by the petitioners and straightaway has passed order on 18.3.2024 whereby he has accepted the recommendations made by the Khadi Gramudyog Commission for removal of the office bearers of the Committee of Management of the Society and has directed the Society to act upon his decision. From a bare reading of the impugned order dated 18.3.2024, it is quite apparent that it has civil consequences to the petitioners and it is also apparent that the said decision has been taken without considering the detailed reply submitted by the petitioners therefore, the said order cannot sustain in the eyes of law.
14. At this stage, Sri Rajiv Sharma, learned counsel appearing for Respondents No.2 and 3 submits that let order dated 18.3.2024 be set aside by this court and matter may be remitted to the Deputy Registrar, Firms, Societies and Chits, Meerut to consider the reply submitted by the petitioners on 10.2.2024 and thereafter to take decision in accordance with the provisions made in Section 24 of the Societies Registration Act, 1860, within a fixed time frame.
15. In view of the aforesaid reasons, without making any comment on the merits of the allegations levelled against the petitioners, this writ petition is allowed. The impugned order dated 18.3.2024 is quashed with a direction to the Deputy Registrar, Firms, Societies and Chits, Meerut to consider the reply submitted by the petitioners on 10.2.2024 and thereafter to pass fresh order strictly in accordance with the provisions of Section 24 of the Societies Registration Act, 1860. The aforesaid exercise shall be completed by the Deputy Registrar, Firms, Societies and Chits, Meerut within two months from the date of presentation of certified copy of this order.
Order Date :- 14.5.2024
Salim
