Bombay High Court
Adv. Babasaheb Wasade And Others vs Manohar Gangadhar Muddeshwar And ... on 20 July, 2017
Bench: Dr. Shalini Phansalkar-Joshi
2007 FA 811/2016 1 Judgment
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH AT NAGPUR.
FIRST APPEAL NO. 811/2016
1] Adv. Babasaheb Wasade,
Aged about 75 years, Occu: Private,
R/o. Civil Lines, Chandrapur.
2] Adv. Anil Manohar Wairagade,
Aged about 61 years, Occu: Private,
R/o. Main Road, Mul, Tah. Mul,
Distt. Chandrapur.
3] Shri Dinkar Mahadeo Edlawar,
Aged about 77 years, Occu: Retired,
R/o. Main Road, Mul, Tah. Mul,
Distt. Chandrapur.
4] Shri Rammohan Bokare,
Aged about 70 years, Occu: Private,
R/o. Bazar Chowk, Mul, Tah. Mul,
Distt. Chandrapur. APPELLANT S
.....VERSUS.....
1] Manohar Gangadhar Muddeshwar,
Aged about 60 years, Occu: Private,
R/o. 53, New Snehnagar, Wardha
Road, Nagpur.
2] Shri Atmaram Raghobaji Burande,
Aged about 75 years, Occu: Private,
R/o. C/o. Prof. Burande Sir,
Karmavir Mahavidyalay, Tah. Mul,
Distt. Chandrapur.
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2007 FA 811/2016 2 Judgment
3] Shri Tejram Kawaduji Kapgate,
Aged about 70 years, Occu: Private,
R/o. Chintawar Layout, Chandrapur
Road, Mul, Tah. Mul, Distt. Chandrapur.
4] Shri Shashikant Dattatraya Dharmadhikari,
Aged about 69 years, Occu: Retired,
R/o. Near Bokare Wada, Tah. Mul,
Distt. Chandrapur.
5] Shri Prabhakar Yashwantrao Pullakwar,
Aged about 68 years, Occu: Private,
R/o. Ward No.5, Tah. Mul,
Distt. Chandrapur.
6] Shri Prakash Krushnaji Virgamwar,
Aged about 59 years, Occu: Private,
R/o. Navbharat Shikshak Colony,
Tah. Mul, Distt. Chandrapur.
7] Shri Bhaurao Mahadeorao Somalkar (dead)
8] Shri Gopinath Poshetti Kondekar (expired)
9] Shri Keshav Dharmaji Mahadole (expired)
10] Shri Dharmaji Patil Mungmode (expired)
11] The Joint Charity Commissioner, Nagpur,
Civil Lines, Nagpur. RESPONDE NTS
Shri S.V. Manohar, Sr. Counsel with Shri S.D. Abhyankar, Counsel for
appellants.
Shri P.A. Gode, Counsel for respondent no.1.
Shri M.R. Joharapurkar, Counsel for respondent nos.2 to 6.
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2007 FA 811/2016 3 Judgment
CORAM : DR. SMT. SHALINI PHANSALKAR-JOSHI, J.
JUDGMENT RESERVED ON
: JULY 05, 2017
.
JUDGMENT PRONOUNCED ON : JULY 20, 2017.
JUDGMENT :
This appeal is directed against the judgment and order
dated 29/07/2016 passed by District Judge-4, Chandrapur, in
M.C.A. No. 50/2016.
2] By the impugned order, District Judge-4, Chandrapur
has allowed the application/appeal filed under Section 72 of the
Maharashtra Public Trust Act, 1950 (hereinafter will be referred to
as "Act" for convenience), thereby setting aside the judgment and
order of Joint Charity Commissioner, Nagpur (for short, "JCC") in
Appeal No. 29/2010 dated 12/04/2016. By the said order, the JCC
has allowed the appeal filed under Section 17 of the Act,
challenging the order dated 16/06/2010 passed in Change Report
Inquiry No. 668/2002 by the Assistant Charity Commissioner,
Chandrapur (for short, "ACC") and accepted the said Change Report,
which was rejected by the ACC, vide his order dated 16/09/2010.
2007 FA 811/2016 4 Judgment
3] Brief facts of the appeal, can be stated as follows:-
Shikshan Prasarak Mandal, Mul is a registered Public
Trust, bearing PTR No. F-41(C). Initially, the said Trust was
registered as a society under the Societies Registration Act, 1860.
The Trust is having its own bye-laws for running its day-to-day
administration. As per the last entry in Schedule-I of the Trust, for
the year 1998, appellant no.1 is working President of the Trust. As
the election of the Executive Committee of the Trust was not held
since long time and the recorded Secretary, President and Vice
President of the Trust were also no more, the members of the
General Body of the Trust, by letter dated 20/08/2002, requested
the appellant no.1, in his capacity as working President to call
General Body Meeting for the election of the Executive Committee
of the Trust. Accordingly, appellant no.1, by the notice dated
03/09/2002, called the General Body Meeting of the Trust on
08/09/2002 at Panchayat Raj Prashikshan Kendra, Mul. The notice
of the said Meeting was sent to all its members by hand delivery
and by Under Certificate of Posting. In the said General Body
Meeting held on 08/09/2002, a new Executive Committee was
elected unanimously. The Change Report no. 668/2002 pertaining
2007 FA 811/2016 5 Judgment
to the said election came to be filed before the ACC.
4] The erstwhile members of the Trust, namely, Shri
Rishidev Choudhary, Narayan Choudhary, Muralidhar Patil, Dhanji
Shah, Vinayak Dhote, Dattatraya Nagose and one Shrawan
Pendholkar, however filed objections to the said Change Report. The
main grievance raised by the objectors was that they had not
received the notice of the Meeting dated 08/09/2002, though they
were the members of the Trust, and hence whatever resolution was
passed in the said Meeting, was not at all legal, proper and correct.
As against it, the contention of the appellants was that none of the
objectors had paid the subscription fees of their membership as per
clause (5) of the bye-laws of the Trust, hence they could not be
counted as the members of the Trust on the date of election,
therefore, there was no question of calling them to remain present
for the said Meeting.
5] Another contention raised by the objectors was that
appellant no.1 was not competent to convene the Meeting in his
capacity as working President; only the Secretary of the Trust could
convene such Meeting, and therefore, the Meeting itself was illegal.
2007 FA 811/2016 6 Judgment
6] The third contention was that there were irregularities
in the conduct of the Meeting, which were going to the root of the
matter and as a result of it, even the appointment of the members to
the Executive Committee was also not proper and the said executive
Meeting had no right to pass any resolution.
7] Before the learned ACC, Chandrapur, objector no.1
Rishidev Choudhary and objector no.2 Dhanji Shah examined
themselves in support of their objections. As against it, appellant
no.1 also led his own evidence and also led the evidence of Shri
Prakash Virgamgade.
8] On appreciation of this evidence, learned ACC was
pleased to hold that as the objectors, who were very much members
of the Executive Committee, were not issued notice of the Meeting,
the Meeting itself was not convened properly, and hence whatever
resolutions were passed in the said Meeting, cannot have any legal
value. It was also held by the ACC that appellant no.1 was not
competent to even convene the said Meeting. Accordingly, ACC
rejected the Change Report.
2007 FA 811/2016 7 Judgment
9] When the appellants took the matter before the JCC,
Nagpur, it was held that as admittedly the objectors had not paid the
membership fees, they had no right to remain present or to vote in
the Meeting convened by the appellants. It was held that when
objectors have themselves admitted the fact that they have not paid
the subscription fees, there was nothing much to be considered, and
hence the learned ACC has wrongly rejected the Change Report. The
learned JCC, therefore, allowed the appeal and accepted the Change
Report.
10] However, the respondents herein, who were brought on
record during pendency of the appeal before the JCC, in view of the
death of the original objectors, when challenged this order of the
JCC before the District Judge-4 in the appeal under Section 72 of
the Act, the learned District Judge-4 was pleased to uphold the
order passed by ACC and hold that objectors could not have been
expelled or removed from the membership without following the
due process of law, like issuance of notice to them and passing the
requisite resolution to that effect. Hence, till the time they were
members of the Trust, they were entitled for the notice of the
Meeting. As admittedly they were not issued such notice, Change
2007 FA 811/2016 8 Judgment
Report, which was on the basis of the resolution passed in the said
Meeting, could not have been accepted by the JCC. The learned
District Judge-4, therefore, set aside the order passed by JCC and
restored the order passed by the ACC of rejecting the Change
Report.
11] While challenging this order of the First Appellate
Court, submission of learned Senior Counsel Shri S.V. Manohar is to
the effect that when it is admitted by the objectors that they had not
paid the subscription fees, as per section 15 of the Societies
Registration Act, 1860, they were no more the members of the
Trust. Hence, they were also not entitled to vote in the Meeting.
Therefore, there was nothing wrong in non-issuance of notice to
them. It is submitted by him that appellants are not saying in any
way that the objectors were expelled or removed from the Trust.
The only contention raised by the appellants is that as objectors
were not entitled to vote, having not paid the subscription fees, the
notice of the Meeting to them was not essential, and hence
convening of the Meeting without issuing notice to them and
passing resolution therein, for which the objectors were not entitled
to vote, cannot constitute any illegality so as to reject the Change
2007 FA 811/2016 9 Judgment
Report.
12] In support of this submission, learned Senior Counsel
for the appellants has placed reliance on the decision of Shri
Sarbjit Singh and others -Vs- All India Fine Arts and Crafts
Society and others, ILR (1989) II Delhi 585. According to him,
learned ACC has not placed reliance on this decision, only on the
ground that the appellants are now the Public Trust and hence
provisions of Societies Registration Act, 1860, cannot be made
applicable. It is urged that, when admittedly the appellants were
initially registered as a society and is still continued to be society,
even though subsequently automatically it became a Public Trust,
the provisions of section 15 of the Societies Registration Act clearly
become applicable, and hence as per those provisions, if the
objectors have ceased to be the members on account of the non-
payment of subscription fees, they had no right to vote. It is urged
that both the ACC and First Appellate Court has committed an error
in assuming that appellants were proceeding on the footing that
these objectors were expelled from the membership. It is urged that
only in case of removal or expulsion of members from the society or
2007 FA 811/2016 10 Judgment
the Trust, the show cause notice and formal resolution to that effect
is essential, not otherwise.
13] By placing reliance on the various clauses of the
Constitution of the Appellant society, it is urged that, it empowers
working President in the absence of the President, Vice President
and Secretary of the Trust to convene the Meeting. Here in the case,
it was on the request of the members of the General Body of the
Trust, appellant no.1 has convened the General Meeting for election
of the Executive Committee of the Trust, and hence there was
nothing wrong in it.
14] Lastly, learned Senior Counsel for the appellants has
submitted that the objectors, who were the members of the
Executive Committee, are no more as all of them have expired. Now
this proceeding is being taken up and continued by some third party,
who has no locus standi to challenge the Change Report, on the
ground on which the objectors have challenged it.
15] To sum up, therefore, according to learned Senior
Counsel for the appellants, the impugned order passed by the First
2007 FA 811/2016 11 Judgment
Appellate Court being not legal, proper and correct, needs to be set
aside.
16] Per contra, learned counsel for respondents, has
supported the said order, by pointing out various irregularities
committed in convening the Meeting and also by submitting that
even under section 15 of the Societies Registration Act, 1860, a
member, who has not paid the subscription fees, cannot be
automatically removed or expelled from the Trust or the society
unless the proper procedure is followed, like issuance of show cause
notice and passing of resolution to that effect. No such procedure
was followed and despite that the notice of the Meeting was not
issued to the objectors, and therefore, the resolution passed in the
Meeting for election of the new members to the Executive
Committee was not legal and proper. The learned counsel for the
respondents has also submitted that appellant no.1 in his capacity
as working President was not competent to convene the Meeting;
even the constitution of the Trust does not confer on him any such
power, and therefore, Meeting itself was illegal.
17] On these rival submissions advanced by learned counsel
2007 FA 811/2016 12 Judgment
for both the parties, the only issue which arises for my
determination is, whether the objectors, who had admittedly
stopped paying subscription fees, were entitled to receive the notice
of the Meeting, in which the new members were elected to the
Executive Committee of the Trust?
18] In this case, it is admitted by the objectors Dhanji Shah
and Rishidev Choudhary that subscription fees of the Trust was
Rs.11/- per year and whenever the subscription fees was paid, the
receipt is to be issued. It is further admitted by them that after the
death of Shri Nagpure, Ex-President of the Trust, in the year 1998
no one has demanded subscription fees to them and they have also
not paid the subscription fees. According to them, after the death of
Nagpure, they and other objectors have not attended any Meetings
of the Trust, as they were not accepting the leadership of new
President Shri Wasade.
19] On this factual aspect, thus there is no dispute that the
objectors had stopped paying the subscription fees of Rs.11/- per
year since long and they had also stopped to attend the Meetings of
the Trust, convened by the new President Wasade, after the death of
2007 FA 811/2016 13 Judgment
Ex-President Nagpure. Clause (5) of the Constitution of the Trust
clearly provides that all members who are enrolled in the respective
category of members, shall have to pay annual subscription of
Rs.11/- every year. The Constitution of the Trust, however does not
provide for the consequences in case of failure of the members to
pay such subscription fees. Those consequences are provided under
Section 15 of the Societies Registration Act, 1860. Here in the case,
admittedly the Trust was initially registered as a society under the
Societies Registration Act and by virtue of the provisions under the
Act, it became a Trust with effect from 1950. Hence, though learned
ACC has held that as the Change Report is filed under section 22 of
the Act, the Societies Registration Act, 1860, has no application, in
my considered opinion, as the Trust was also the society registered
under the Societies Registration Act, all its activities, its
memorandum and Constitution have to confirm to the provisions of
Societies Registration Act. All actions of society have to be in
accordnce with the provisions of the Societies Registration Act, 1860
and it is not open to the society or its member to do any act or
formulate any Article of Association which is at variance with, or
contrary to the provisions of the Societies Registration Act, 1860.
2007 FA 811/2016 14 Judgment
Hence, for the purposes of the present appeal, it is necessary to refer
to the provisions of Section 15 of the said Act, which reads as
under:-
"15. Member defined. Disqualified member. - For the
purposes of this Act a member of a society shall be a person
who, having been admitted therein according to the rules
and regulations, thereof, shall have paid a subscription, or
shall have signed the roll or list of members thereof, and
shall not have resigned in accordance with such rules and
regulations; but in all proceedings under this Act no person
shall be entitled to vote or be counted as a member whose
subscription at the time shall have been in arrears for a
period exceeding three months."
20] From the perusal of Section 15 of the Societies
Registration Act, 1860, thus it is apparent that section 15 does not
postulate removal or expulsion of any member from the membership
of the society. All that it postulates, is that a member once admitted
to membership, shall continue to be a member of the society. It also
postulates that a person whose subscription is in arrears for a period
exceeding three months, shall not be entitled to vote or to be
counted as a member.
21] This provision came for interpretation in the case of
Shri Sarbjit Singh and others -Vs- All India Fine Arts and Crafts
2007 FA 811/2016 15 Judgment
Society and others (supra) and it was held that, "the provisions of
section 15 of the Societies Registration Act does not postulate expulsion
of any member from the membership of the society. All that it
postulates, is that a person may resign from the membership of the
society. In case a member is in arrears of subscription for a period of
over three months, he is not entitled to vote. Thus the emphasis in
section 15 appears to be on voting alone as it is reiterated in that
section that a person whose subscription is in arrears for a period more
than three months, shall not be counted as a member. Prima facie, a
person is likely to be counted as a member only at the Meetings of the
society, and when any particular matter is sought to be voted upon,
and not otherwise".
22] It was further held in this judgment that, "there is no
provision in the Societies Registration Act, 1860, which permits any
society registered under that, to expel its members". Even in case of
the default committed by a member in payment of subscription, it
was held that, "if the society wants to expel or remove any member,
even on the count of non-payment of subscription fees, then the
necessary procedure, as contemplated under the principles of natural
2007 FA 811/2016 16 Judgment
justice is required to be followed. The rules of natural justice would
require that before any member of the society can be expelled from the
society, he may be served with notice calling upon him to pay the
arrears, failing which he shall ceased to be counted as a member of the
society. There should also be necessary resolution of expelling or
removing him from the membership. Mere entry in the ledger folio
indicating that such member was in arrears of subscription fees since
long time ago and hence he ceased to be a member is also not
sufficient". In para no.30 of this judgment it was further held that,
"Section 13 of the Act postulates reference of disputes between the
members and the society, and therefore if there is any cause for
expulsion of member, then such dispute should be referred to the court
under section 13 of the Act".
23] Thus, the law on this aspect is not only spelt out in
section 15 of the Societies Registration Act, 1860, but also it is
crystallized to the effect that no member of the society can be
expelled or removed for non-payment of subscription fees. The only
consequence contemplated under section 15 of the Societies
Registration Act is that he may not be entitled to vote and may not
2007 FA 811/2016 17 Judgment
be counted as a member for the purpose of voting on any particular
matter.
24] The submission of learned Senior Counsel for the
appellants in this case is that it is not the case of appellants that
these objectors, who had committed default in payment of
subscription fees were expelled or removed from the membership of
the society. It is submitted that as they were not entitled to vote and
were also not counted to be member of the society on account of the
failure on their part to pay the subscription fees, there was
justification not to issue notice to them of the Meeting convened by
the working President. Ultimately even if the notice was issued to
them to remain present in the Meeting, they could not have voted
for the resolution passed in the Meeting and hence it was merely an
empty formality which was not going to serve any fruitful purpose.
25] However, this submission advanced by the learned
Senior Counsel for appellants, cannot be accepted for two reasons;
the first reason is that if they were not expelled or removed from
the membership, then they were definitely entitled to get notice of
the Meeting and to remain present in the said Meeting. Merely
2007 FA 811/2016 18 Judgment
because they could not have voted or would not have been counted
as a member, is not sufficient to not issue notice to them at all, of
the Meeting which was convened. Their right as a member of the
society, unless and until, they were expelled from the society
comprises of right to know all the affairs of the society and one of
the affair about the management of the society includes the election
of the members to the Executive Committee. At the most after
attending the Meeting, they would not have been able to cast their
vote, but that doesn't mean that appellants should not issue notice
of the Meeting to them at all. As admittedly such notice was not
issued to objectors, on this very ground itself, the holding of such
Meeting was illegal and the resolutions passed therein, which
resulted into filing of Change Report, also cannot be called as legal.
26] It is pertinent to note that in the minutes of that
Meeting also nowhere it was stated that as the objectors had not
paid the subscription fees, their membership has come to an end,
and therefore, the notices were not issued to them. As a matter of
fact, in this case in evidence before the court, appellant no.1 has
categorically stated that due to non-payment of subscription fees by
these objectors, their membership came to an end, and therefore,
2007 FA 811/2016 19 Judgment
notice was not issued to them. If it was so, then indirectly appellants
are admitting that these objectors were removed or considered to be
removed and expelled from the society, therefore notice was not
issued to them. However, in view of the principles of natural justice
which are discussed above, these objectors were entitled for show
cause notice and only after giving them an opportunity to clear the
arrears of subscription fees, they could have been expelled for non-
payment of subscription fees, by passing necessary resolution to that
effect. Their membership could not have been terminated otherwise.
There is no such provision in the Societies Registration Act for
automatic expulsion, removal or termination of membership for
non-payment of subscription fees. Even the Constitution of the
appellant Trust does not provide for expulsion of its members for
non-payment of subscription fees.
27] In such situation, the learned ACC and the First
Appellate Court had rightly held that as the notice of the Meeting
was not issued to the objectors, though they were the members of
the Trust and that too of the Executive Committee, the General Body
Meeting was not convened legally and validly. Accordingly, the
resolution passed in such Meeting electing the new members to the
2007 FA 811/2016 20 Judgment
Executive Committee also cannot be said to be legal and valid. As
these objectors were deprived from participation in the said Meeting
in which election of the members of the Executive Committee has
been held, the election of new members of Executive Committee is
illegal and for this purpose, the Change Report filed by the
appellants could not be accepted and is rightly rejected by the ACC
and the First Appellate Court.
28] As to the objection raised by the learned Senior Counsel
for the appellants about maintainability of this proceeding on the
count that original objectors, who had grievance of not being served
with notice of the Meeting, have already expired and hence some
third party like respondent no.1 cannot raise grievance on that
issue. It is needless to state that as the very nature of the appellants
Trust is charitable and social, any beneficiary can challenge its
activities on the ground that they are illegal. Moreover, it is the duty
of the ACC to ensure whether the Trust either as a collective body of
members or majority had adhered to the Constitution, rules,
regulations or bye-laws adopted by it and according to the legal
provisions.
2007 FA 811/2016 21 Judgment
29] There is also some substance in the contentions raised
by the respondents and accepted by the First Appellate Court that
there is no provision in the constitution of the Trust empowering the
working President to call the Meeting and that too, without notice to
those, who were the members of the Executive Committee. On this
count also, the resolution passed in the said Meeting cannot be
called as legal and valid.
30] The impugned order, therefore, passed by the First
Appellate Court restoring the order of the ACC, rejecting the Change
Report, being just, legal and correct, needs to be upheld.
31] Appeal, therefore, holds no merits, hence stands
dismissed.
32] At this stage, learned counsel for appellants submit that
the interim order passed by this Court may be extended for a period
of four weeks. Learned counsel for respondents raised objection to
2007 FA 811/2016 22 Judgment
the same. However, in the interest of justice, the interim order is
extended for a period of four weeks as requested.
JUDGE
Yenurkar
