Vignana Bharathi Educational ... vs The State Of Andhra Pradesh,
2021 Latest Caselaw 5465 AP

          *HONOURBLE SRI JUSTICE D.V.S.S. SOMAYAJULU
                        +   WP.Nos.24656 of 2020
                                    And
                        19591 and 19661 of 2021


% 24.12.2021
WP.No.24656 of 2020


# Kasturidevi Vidyalayam Committee,
Rep., by Secretary & Correspondent,
Dargamitta, Nellore
                                                         ... Petitioner


        Vs.


$ The State of Andhra Pradesh,
rep., by its Principal Secretary,
Velagapudi,
Amaravathi and 3 others.
                                                       ... Respondents




! Counsel for the petitioner : Sri Raja Reddy Koneti

! Counsel for the Respondents : Government Pleader for Stamps
                                and Registration


< Gist:


> Head Note:


? Cases referred:
1   (2004) 11 SCC 247
2   2019 (1) ALD 196
                                  2




HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU
                    W.P.Nos.24656 of 2020
                                And
                   19591 & 19661 of 2021
ORDER:

W.P.No.24656 of 2020 is filed by the petitioner

questioning the action of the 4th respondent in refusing to

receive the annual lists containing the names and addresses

of the members of the Managing Committee and Officers

entrusted with the affairs of the Society.

In WP.No.19591 of 2021 also the action of the 3rd

respondent in not receiving the annual lists (sent through me-

seva) of the names and addresses of the members of the

Managing Committee and the Officers and also the action of

rejecting them is questioned.

In WP.No.19661 of 2021 the action of the 3rd respondent

in issuing a notice proposing to enquire into the

mismanagement of funds etc., by the petitioner Society is

questioned.

Counter filed in WP.No.24656 of 2020 is treated as a

common counter in all the three matters. With the consent of

both the learned counsels, all the three writ petitions are

taken up for final hearing.

This Court has heard Sri Raja Reddy Koneti, learned

counsel for the petitioners in all the three matters and the

Government Pleader for Stamps and Registration.

The common thread that runs through all these three

matters is about the power vested in the District Registrar of

Assurances in the matters of Societies Registration Act.

The learned counsel for the petitioners Sri Raja Reddy

Koneti argues that the District Registrar under the provisions

of the Societies Registration Act does not have the power or

the authority to enter into the disputed areas of fact and can

at best receive the lists that are filed. Learned counsel

submits that the Registrar does not have the power either to

accept or to reject the list or to conduct any enquiry as

contemplated into the alleged acts of mismanagement, forgery

etc. This is the crux of the issue in these matters.

Sri Raja Reddy Koneti learned counsel took great pains

to take this Court through the provisions of the A.P. Societies

Registration Act, 2001 (Act, 35 of 2001) (for short „the Act‟).

The contention of the learned counsel for the petitioners is

that this is an Act which has been enacted by repealing the

Societies Registration Act, 1860 (Act 21 of 1860), insofar as it

applies to the State of Andhra Pradesh and it is meant to

consolidate the law relating to the Registration of Societies

situated in Andhra Pradesh promoting of art, fine arts,

charity, crafts, religion, sports, literature, culture, science,

philosophy, political education or any public purpose for

matters related thereto. It is his contention that this is a

special Act, which provides for the consolidation/amendment

of the law relating to the Registration of Societies only as can

be seen from its statement of objects and reasons. He also

argues that very limited powers are given to the Registrar and

in certain limited circumstances to take decisions. He

submits that the whole idea behind the Act is to allow

societies freedom of choice and that the Act merely mandates

filing of certain documents with the Registrar which can in

turn be inspected by third parties. Great autonomy and

freedom is given to the societies including freedom from

governmental control. It is his contention that this Act does

not contain any provision for framing of Rules also other than

section 29 of the Act. The Governments‟ power to issue any

Rules or circulars is also therefore questioned. Learned

counsel submits that judgment of the Hon‟ble Supreme Court

in AP Aboobaker Musaliar v. District Registrar (G),

Kozhikode and others1 case is a judgment in its own facts

and it does not consider the provisions of Act 35 of 2021.

Primarily, he draws the attention of this Court to

various definitions in the Act. He thereafter argues and relies

upon Chapter-II of the Act and sections 3 to 9 of the Act. He

points out that under section 3 of the Act, seven or more

1 (2004) 11 SCC 247

persons can form into a society. Under section 4 of the Act,

he submits that the Registrar can entertain an application for

registration of the society by receiving a memorandum of

association and the bye-laws. Relying upon section 5 of the

Act, he argues that the bye-laws of the society, must contain

the details are mentioned in clauses 5 (i) to (v) of the Act.

Under section 6 of the Act, he points out that a society

cannot be registered with certain undesirable names which

are prohibited by the Emblems and Names (Act 1950). Under

section 6 2(a) and (b), certain names are prohibited according

to the learned counsel. Relying upon section 7, learned

counsel argues that if a society has complied with the

conditions in sections 3 to 6 of the Act and pays the fee

stipulated under section 29 of the Act, the Registrar shall

register the society and issue a certificate of registration. He

also points out that under Section 7(3) of the Act, a discretion

to refuse to register a society is given to the Registrar. This is

evident from the fact that if the Registrar refuses to register a

society, an appeal lies to the Registrar General. Learned

counsel also points out that under section 8 of the Act, a

provision is made for amending the memorandum of the

association by a resolution. Relying upon section 8 (3) of the

Act, learned counsel argues that an alteration of the

memorandum which has to be registered under the Act is

only valid after such an alteration is also registered. Learned

counsel points out that under section 8(4) and (5) of the Act,

limited discretionary powers are conferred on the Registrar to

reject the alteration, if it is contrary to the provisions of the

Act.

Learned counsel argues that other than these two

sections mentioned above namely, section 7 (3), (4) and (5)

and 8 of the Act, no discretion is vested in the Registrar.

Coming to Section 9 of the Act, learned counsel argues that

the society is bound to file annual list with the Registrar of

Societies which shall contain the names and addresses of the

members of the Managing Committee and the Officers.

Relying on a plain language interpretation, the learned

counsel argues that there is no discretion given to the

Registrar to refuse to receive the list or to enquire into the

correctness of the same. He submits that from a plain

language interpretation, a list that is filed with the requisite

details has to be received by the Registrar. He argues that

contrary to the provisions of section of 9 the Act, the Registrar

is refusing to receive lists that are filed and has even rejected

the same as in WP.No19591 of 2021. Learned counsel argues

that this is impermissible under law.

Entering into Chapter-III, learned counsel argues that it

deals with the management and administration of the society.

He points out that under Section 14 (3) of the Act, a duty is

cast upon the society to maintain a register showing the

names, addresses and occupations of the persons who are the

members of the committee. A copy of this register shall be

filed with the Registrar within 14 days of the election of the

first committee or within 14 days from the date of such

change. In addition, he submits that the bye-laws are to be

delivered to each member of the society. As per Sections 16

and 20 of the Act, the minutes of all the general body

meetings and the proceedings shall be recorded in a book

which shall be signed by the Chairman of the meeting. These

minutes have to be communicated to the members.

The register of mortgages and charges should also be

kept in the registered Office of the society which are open for

inspection (section 22). Section 23 of the Act, which falls in

chapter-IV deals with the disputes and the disputing

resolution mechanism. Chapter-IV deals with disputes,

dissolution and winding up of the society. Chapter-V of the

Act, as per the learned counsel, deals with miscellaneous

matters. Learned counsel draws the attention of this Court to

section 29 of the Act, which empowers the Government to fix

fees for registration under societies for filing or recording or

registering any document; for inspection of documents in the

custody of the Registrar, for granting copies and for other

matters necessary. Learned counsel submits that the power

under section 29 of the Act is only to fix the fees payable for

the various activities mentioned therein.

Learned counsel argues that the Registrar has very

limited powers under the two sections (7 and 8) mentioned

above and that he is duty bound to receive any document

that is filed relating to the names, addresses of the Office

bearers. He has a discretion to refuse to register a society, if

it has undesirable names. He has a discretion to refuse to

accept amendment to the memorandum, if it is contrary to

the provisions of the Act. According to the learned counsel,

he has no other powers. Contrary to the same, he points out

that Registrars are entering into detailed investigations like in

the present cases by asking questions about the signatures of

the members, the validity of the general body meetings and

attempting to conduct enquiries into alleged actions of the

finance mismanagement etc. He points out that even if the

annual lists are not filed or the list of office bearers is not filed

in time, the Registrar does not have any power to refuse to

receive the same. It is his argument that no penal provision

or punishment is also provided for the delayed filing of the

annual list of office bearers. In the absence of any penal

provision being stipulated for delayed filing, the Registrar is

bound to accept the returns filed as per the learned counsel.

He also argues that the Act does not empower the

Government to frame any Rules. Under section 29 of the Act,

power is given to fix the fee. Beyond this, it is stipulated that

there is no power vested in the State to frame any Rules,

issue circulars or even to interfere with the affairs of the

Registrar. Therefore, learned counsel prays that all the writ

petitions may be allowed.

In reply to this, learned Government Pleader argues that

there are many cases where the societies are not filing their

annual returns. It is his contention that within 15 days from

the date of general body meeting, the society is bound to file

the list of members. Many of the societies are not filing such

returns for decades and years to come. There are instances

where serious allegations are being made about office bearers.

Questions about their competence to hold office; questions

about election as office bearers and even serious questions of

financial irregularities, mismanagement etc., are coming to

the notice of the Government. Therefore, learned Government

Pleader submits that circulars have been issued like circular

dated 01.10.2010 which is filed with the counter in

WP.No.24656 of 2020 to meet such contingencies. Learned

Government Pleader argues that the Inspector General of

Registration and Stamps who has the supervisory power has

issued the instructions to verify whether the office bearers

whose names are furnished have been validly

nominated/elected. Therefore, he submits that the District

Registrar has the power to see if a notice is properly issued,

here was a proper quorum and then a proper resolution has

been passed. In cases of death or resignation of a member of

the committee etc., the learned Government Pleader submits

that a basic requirement is to check whether the member has

actually died or not and in case of resignation, the Registrar

has to take note if the resignation is valid; if signature is not

forged etc. He submits that there are basic requirements

which have to be complied before the lists are received.

Coming to the society in WP.No.25656 of 2020, the

learned Government Pleader submits that after a long lapse of

time, the society is filed its minutes for the year 2001. The

earlier minutes were filed in 1985-1986. From 2007-2018

also there is a gap. Learned Government Pleader points out

that after the said lists were filed in 2019, the District

Registrar, Nellore addressed a letter to the Commissioner and

Inspector General of Societies to clarify whether the lists can

be taken on record. Thereafter, they have also pointed out

the various defects that are noticed in the annual lists that

are filed. The signatures of some members were also found to

be defective. Therefore, learned Government Pleader argues

that the Registrar looked into the matter, considered the

documents raised relevant, cogent issues and thereafter only

came to a conclusion. It is his contention that in such cases,

the action of the Registrar which shows a clear application of

mind cannot be questioned. Therefore, learned Government

Pleader submits that there are no merits in the writ petitions

and the same should therefore be dismissed.

COURT: The facts are not in dispute in these cases.

Since the lead argument is advanced in WP.No.25656 of

2020, the same is taken up for hearing and for decision first.

Section 2 (c), 2(h), 2(k) and 2(n) of the Act are as follows:

(c) 'Committee' means the executive committee appointed under Section 14 or any person or body of persons to whom the management of the affairs of a society is entrusted by its bye-laws;

(h) 'Member' means a person, individual or body corporate, who/ which, having been admitted to membership in any society has not resigned or ceased to be a member, or been removed from membership, in accordance with the bye-

laws of that society;

(k) 'Officer' includes any director, manager, treasurer, trustee, secretary, member of the Committee, or any person appointed by a society to sue and be sued on its behalf and any other person empowered under the rules or the bye-

laws to give directions in regard to the business of a society;

(n) 'Society' means a society registered or deemed to be registered under this Act;

Chapter-II contains sections 3 to 9. It deals with the

registration of the societies. Section 4 deals with the

documents required to be filed for the registration of the

society. These are (a) memorandum of association containing

the name, aims and objects, names addresses and

occupations of the members of committee and (b) the bye-

laws.

Section 5 of the Act deals with the contents of the bye-

laws which should include the names and addresses of the

particulars of the society, the activities, membership of the

society, method and manner of holding the general body

meeting, appointment, election, removal of office bearers,

finances, appointment of auditors and other matters relating

to the settlement of disputes. Section 6 of the Act prohibits

the use of certain names as the name of the society.

After this, comes section 7.

7(1) and 7(3) are as follows:

7. Registration of Societies:- (1) Where a society has complied with the provisions of the Act as to registration and on payment of such fees as may be notified under Section 29, the Registrar shall issue to that society a certificate of registration and such certificate shall be conclusive evidence that the society therein mentioned is duly registered.

(3) If the Registrar refuses to register a society, an appeal shall lie to the Registrar General within sixty days from the date of communication of the order of the Registrar refusing to register the society. Every such appeal shall be accompanied by a fee as may be notified by the Government from time to time.

This shows that a discretion is vested with the registrar

to refuse to register a society and it also provides for an

appeal for redressal.

Section 8 of the Act states that by a special resolution,

the memorandum of the society can be altered. Section 8(3)

and 8(4) are reproduced hereunder:

8(3) Any alteration of the memorandum of the society shall not be valid unless such alteration is registered under this Act.

(4) If any alteration of the memorandum is filed with the Registrar and if they are not contrary to the provisions of this Act, he shall register the same and shall certify the registration of such alteration under his hand and seal within thirty days from the date of receipt of the resolution. The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the certification thereof have been complied with and henceforth the memorandum as so altered shall be the memorandum of the society. (emphasis supplied)

It is clear therefore that alteration is only valid after it is

registered and any alteration can be rejected if it is not

contrary to the provisions of the Act.

Section 8(4) of the Act states that certificates so issued

under this section are conclusive proof that the requirements

of the Act have been complied with for the alteration.

Section 8(5) of the Act is as under:

8 (5): Every alteration in the bye-laws of the society should be sent to the Registrar and he shall take it on record if it is not contrary to the provisions of this Act.

As per the above sub-section, the Registrar can refuse

to take the alteration in the bye-laws on the record if it is

contrary to the provisions of the Act only.

This Court has to therefore agree with the submissions

of the learned counsel for the petitioners that the Act provides

for the minimal role/minimal supervision and or interference

by the Registrar. Discretion is conferred at the stage of

registration and at the time alteration of the memorandum

etc., by the above mentioned two sections only and under

those limited circumstances only.

Section 9 which is the bone of contention is reproduced

hereunder:

9.Filing of annual list:- Every year the society shall, within fifteen days from the date on which the General Body meeting was held, furnish a list to the Registrar of Societies which shall contain the names and addresses of the members of the Managing Committee and Officers entrusted with the management of the affairs of the Society.

A plain language interpretation of this section (which is

the primary method of statutory interpretation) shows that a

duty is cast upon the society to file a list of the names and

addresses of the Managing Committee and Officers entrusted

with the Management within 15 days of the general body

meeting. The duty is only cast upon the Society. There is no

"default" clause giving upon the power to the Registrar to

refuse to receive or to reject the list if it is filed after the 15th

day. There is no provision for initiating action against the

Committee members either for delay or for the failure to file

the list. What are required to be filed are the list with the

clear details of the members of the Managing Committee and

the Officers.

Chapter-III deals with management and administration.

One of the grounds raised by the learned Government Pleader

is that some of the societies are not filing their returns for

years together. In some societies, there are also serious

allegations about mismanagement, wrongful inclusion of

members, variations in signatures etc., which led the State to

take action by issuing circulars etc. Chapter-III dealing with

management and administration of the society contains 12

sections from sections 10 to 22. None of these sections

support the version advanced by the learned Government

Pleader of the need to look into these issues. It is only

necessary for the society to keep a register of members

showing the details mentioned in section 11 of the Act.

Under section 12 of the Act, the society is bound to keep at its

Office the accounts, records and documents mentioned

therein. This register of members should be kept open for

inspection. Section 14 of the Act deals with the committee of

society. The names of members of the committee should be

entered in a register which should be filed with the Registrar

(Section 14(3)). This register should contain the names and

addresses and occupations of the members. Sections 16 and

17 of the Act talk of delivery of the bye-laws and accounts of

the members of the society. The minutes book which are

required to be maintained under section 20 of the Act should

also be communicated to the members. The register of

mortgages and charges is also required to be kept at the

Office of the society. Thus, it can be seen from a reading of

all the sections in Chapter-III, namely from sections 20 to 22

of the Act that there is no power given to the Registrar to

enquire into the manner and method in which the meetings

were conducted, the manner/method in which members were

elected etc., or to demand information of the activities of the

society. Even after section 14 (3) of the Act which deals with

the necessity of filing the register of members, no penal

provision or disqualification clause is provided. It merely

states that the society shall file with the Registrar the copy of

the register.

Apart from that section 23 of the Act deals with the

dispute resolution. It is reproduced hereunder:

23.Dispute regarding management:- In the event of any dispute arising among the Committee or the members of the society, in respect of any matter relating to the affairs of the society, any member of the society may proceed with the dispute under the provisions of the Arbitration and Conciliation Act, 1996, (Central Act 26 of 1996) or may file an application in the District Court

concerned and the said Court shall after necessary inquiry pass such order as it may deem fit.

A reading of this section makes it clear that any dispute

arising among the committee or the members of the society in

respect of any matter relating to the affairs of the society can

be resolved either by arbitration under the 1996 Arbitration

Act or by an appropriate application in the District Court

concerned.

The clause "in respect of any matter relating to the

affairs of the society" is a clause of very vide amplitude which

will cover within its scope every conceivable dispute.

Therefore, this Court has to hold that it is for the affected

members of the committee or the members of the society to

raise a dispute in case of delayed filing of minutes, in cases of

apprehension of mismanagement of funds, in cases of forged

signatures etc. All of these are issues which can be raised by

the affected party if he can sustain the cause of action before

the arbitrator or the Court concerned. A third party always

has access to the Courts under the general law of the land

including the criminal law. The Registrar either by himself or

through the circulars issued does not have the jurisdiction to

enter into these disputed areas. He cannot issue a notice to

the members of the society to appear before him for

conducting an enquiry or to decide a question. The only

clause/section dealing with the resolution of any dispute is

found under section 23 of the Act. The other provisions

which provide a modicum of discretion are in section 7(3) and

8(4) (5). Section 7(3) of the Act provides for an "appeal" to the

Registrar General against the Registrars‟ "refusal" to register a

society. If the alteration of the bye-laws is refused by the

Registrar under sections 8 (4) or 8(5) of the Act, it is for the

society or the member concerned to pursue his/their

remedies as per the general law of the land.

This Court also has to agree with the submission made

by the learned counsel for the petitioners that the Act 35 of

2001 has been enacted in view of the difficulties found in the

working of the Central Act, 21 of 1860. In order to have a

comprehensive law, the 2001 Act was brought into existence.

The 1860 Act was initially amended in 1984. Thereafter, the

current Act was brought into existence. Even then, when the

Act was brought into existence, the legislature in its wisdom

did not enact any provision for framing of the Rules. The only

power given to the Government to frame Rules is under

Section 29 of the Act which is under Chapter-V. Section

29(1) of the Act clearly states that the Government shall from

time to time prepare a schedule of fees payable for the

activities described in section 29(a) to (d) of the Act. Section

29 (e) of the Act also gives the power to the Government in the

opinion of this Court, to fix fees for other matters necessary to

give effect for the purpose of the Act. Section 29(2) of the Act

also makes the purpose of the section clear and it deals only

with the table of fees to be notified/published in the Gazette.

No other section of this Act deals with the rule making power.

The definition of "Rule" as per the general clauses Act (section

3 (51) is as follows:

3 (51) "rule" shall mean a rule made in exercise of a power conferred by any enactment, and shall include a Regulation made as a rule under any enactment;

It is thus clear that a rule can only be made in exercise

of a power conferred by an enactment. In the absence of a

power; no rule can be framed.

Section 31 of the Act gives the power to the

Government for a period of five years from 2001 to give orders

to make provisions which are necessary for removing of

defects. Even this is a transitory provision for a period of five

years only and it is for removal of difficulties in giving effect to

the Act only. No rules/directions were issued in the five year

window provided.

Thus, a reading of the entire Act makes it clear that it is

meant to essentially allow societies to have a free hand in

their administration and affairs with minimal interference by

the Government. The areas in which the Registrar can

interfere/has a discretion to interfere or decide are clearly

mentioned in the Act only. There is no other provision in the

entire Act in the State to issue circulars or executive

instructions. In its own wisdom the legislature decided to

frame the Act in its current form to give the societies their

own liberty/freedom to operate. The issues that are felt

necessary or felt needed for Government regulation/control

are spelt out in the Act. If the Act intended for the Registrar

or the State to interfere only in very limited aspects, circulars

or instructions which are now issued by the State cannot be

supported since they are inconsistent with the Act. Through

these circulars/instructions greater power cannot also be

conferred on the Registrar than what is envisaged under the

Act itself.

Even as per the settled law, if the Rules are already

framed and they are silent on any aspect, the Government

can supplement the Rules or issue instructions which are not

inconsistent with the statutory provisions. But in the case on

hand, this Court finds that there is no provision under the

Act as it exists for framing of Rules. The power to supplement

and not supplant a Rule, if it is not inconsistent with the Act

is accepted by the Courts. In the case on hand, the circulars

are conferring powers which are not given by the parent Act

itself. Therefore, the instructions that are issued either in the

form of circulars or guidelines cannot be said to be binding on

the societies or its members. The law is also settled and

circulars that are so issued are not binding on the Court and

cannot be treated as "law".

The statement of objects and reasons of the 2001 Act

clearly states that it is enacted as a single and comprehensive

Act and is being enacted as the earlier Acts were not

exhaustive in certain material aspects. This is a useful guide

to understand the Act. Despite the noticed shortcomings etc.,

the legislature did not expand the powers of the Registrar or

give him an adjudicatory role. For this reason also, this

Court holds that by issuing circulars/instructors etc., the

powers/role of the Registrar cannot be increased/expanded.

These instructions/circulars are clearly contrary to the

statutory provisions.

As far as Aboobaker Musaliar's case (1 supra) is

concerned, this Court is of the opinion that it is a decision on

its own peculiar facts. The scheme of the 2001 Act which is

discussed above is also a distinguishing feature. Aboobaker

Musaliar‟s (1 supra) case was considering provisions of the

1860 Act which has been both consolidated and amended by

the 2001 Act.

Therefore, for all these reasons and as per the existing

law (2001 Act), this Court holds that the Registrar is bound to

receive and file the annual list of members that are filed by

the society. He has to keep them on his record. He cannot

either accept or reject the same. Such a power of

adjudication is not conferred on the Registrar. As per the

Division Bench judgment reported in Mokkapati Chandra

Sekhara Rao v. Pragathi Educational Society, Guntur

District and others2 by the combined high Court of State of

A.P., the Registrar can only receive and keep the lists on his

file. Any member or person dissatisfied with the same has to

seek legal recourse only. But the Registrar cannot for any

reason enter into enquiries or decide on the validity etc., of

the list. He cannot look into issues like quorum of the

meeting etc. Even on issues like forgery of signatures etc., or

mismatch of signatures etc., the Courts themselves are very

circumspect in taking a decision on these issues and often

look for expert evidence on such matters. The Registrar in

the opinion of this Court cannot also enter into these areas of

enquiry as he does not have either the legal competence or

the expertise to decide on matters of differences in signatures

etc.

W.P.No.24656 of 2020 is therefore allowed. A

Mandamus is issued declaring the action of the 4th

respondent is incorrect. He is directed to receive, file and

upload the annual lists of the managing committee filed by

the petitioner.

WP.No.19591 of 2021 is also allowed. The action of the

3rd respondent in rejecting the lists that are filed by his

proceedings dated 06.08.2021 and 11.06.2021 are set aside.

He does not have the power to reject the applications. He is

2 2019 (1) ALD 196

therefore directed to receive the applications and keep them

on their file.

In WP.No.19661 of 2021 the notice dated 26.08.2021 is

set aside and it is held that the District Registrar-respondent

No.4 does not have the power or competence to enter into to

hold enquiry into these disputed areas. The writ petition is

therefore allowed. No order as to costs.

As a sequel, the miscellaneous applications, if any

pending, shall stand closed.

________________________ D.V.S.S.SOMAYAJULU,J

Date : 24.12.2021 Note: L.R. copy be marked.

KLP