Sunil Dang vs The Indian Newspaper Society
2008 Latest Caselaw 1588 Del

       *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    CS(OS)1863/2008



%                                         Date of decision :      09.09.2008

Sunil Dang                                                    ....... Petitioners
                                  Through:        Mr. Sandeep Sethi, Sr. Advocate,
                                                  Mr. Ujjwal Jha, Advocate

                                           Versus

The Indian Newspaper Society                                ....... Respondents

Through : Mr. Neeraj K. Kaul, Sr. Advocate, Mr. Akhil Sibbal, Advocate

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. Whether reporters of Local papers may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether the judgment should be reported in the Digest?

RAJIV SAHAI ENDLAW, J. ( ORAL )

IA no.10757/2008 of the plaintiff u/o. 39 rule 1 & 2 CPC

1. Owing to the urgent nature of the relief claimed, short notice

was issued to the defendant.

2. The defendant is a company within the meaning of section 25 of

Companies Act. The plaintiff claims to hold two membership of the

defendant company. The plaintiff has instituted this suit for permanent and

mandatory injunction inter-alia on the ground that the defendant has

treated both the membership of the plaintiff to have ceased on the ground

of the plaintiff having not paid his subscription; that the elections of the

defendant have been announced to be held on 19.9.2008 and nomination of

the election has to be filed at least seven days prior to the election; that the

plaintiff in accordance with the Articles of association of the defendant had

tendered the subscription fee along with an additional Rs.500/- required to

be paid, but the defendant has not restored the membership of the plaintiff

and has on the contrary referred the matter to Sub-Committee, intentionally

with a view to debar the plaintiff, who has in the past been contesting the

elections to the committee of the defendant, from doing so. The plaintiff

has in the suit claimed the relief of restraining the defendant from ceasing

the plaintiff‟s membership besides claiming damages of Rs.21,00,000/-.

Alongwith plaint, the application for interim relief has been filed claiming

the relief of restoring the plaintiff‟s membership of the defendant society

and during the pendency of the suit.

3. Article 8 of the Articles of Association of defendant is as under :

"A member shall cease to be a member of the Society in any of the following events :-

(a) Upon the closing down of the newspaper which he represents in the Society.

(b) In case the member is a firm, upon the dissolution of such firm.

(c) Upon receipt by the Society of notice in writing to be sent under registered post of this intention to resign membership signed by a member.

(d) Upon a member failing in the first instance to pay his annual subscription for any year on due date, that is, by March 31, of the preceding year and to do so upon June 30, following in spite of three reminders having in the meantime been sent to him by the Society, the last of which should be under registered post, such cessation taking automatic effect from July 1 of the year for which the subscription has fallen due.

(e) Upon a member failing to pay within thirty days after written demand has been made, any contribution other than the admission fee and annual subscription, for the expenses of the Society leviable as decided by the committee.

(f) Upon a member failing to observe any rule, bye-law, regulation, ruling, resolution or decision of the Society which is passed as binding upon all members and a dissolution having been passed by a majority by a three- fourths of the members of the Society at a general meeting that such member shall cease to be a member. The Executive Committee, however, shall have the power to suspend a member pending final decision by the general body.

Provided that before a dissolution is passed as laid down either under clause 8(e) or (f) ante, an opportunity shall be given to the member concerned to appear and explained his position with regard to the point in issue at a general meeting/Executive Committee meeting, as the case may be, at which the resolution is to be moved, but that in the event of his not availing of this opportunity or general body not accepting his explanation, there shall be not question with regard to the validity and effectiveness of a resolution passed in the manner laid down."

4. The Senior counsel for the defendant has urged that the plaintiff

has indulged in falsehood and is thus not entitled to the discretionary relief.

Reliance in this regard is placed on S.P. Chengalvaraya Naidu Vs.

Jagannath & Ors, (1994)I Supreme Court Cases 1, and Satish Khosla Vs.

Eli Lilly Ranbaxy Ltd., 1998(44) DRJ 109 (DB). It is averred that the

plaintiff has in para 7 of the plaint falsely stated that he had sent the

subscription for the year 2008-2009 under cover of letter dated 4.6.2008.

The original letter dated 4.6.2008 of the plaintiff to the defendant has been

produced alongwith envelope to demonstrate that the same bore the postal

stamps of 16.7.2008 only and has been received by the defendant on

16.7.2008 itself i.e. after the date when the plaintiff in accordance with the

Articles of association ceased to be a member.

5. It is next contended on behalf of the defendant that as per the

documents filed by the plaintiff himself, the Executive Committee of the

defendant had as far back as in October, 2007 taken a decision to constitute

a Sub-Committee to consider all cases of applications for restoration of

ceased membership. It was pointed out that such a Sub-Committee has in

fact been constituted in December, 2007, since it was found that a large

number of members were not paying their subscriptions on time and were

coming at the last minute before the election for payment of their

subscription. The defendant has also handed over a list of documents

alongwith photocopy of documents showing compliance of the procedure

prescribed in Article 8 i.e. of issuance of three reminders and reminder by

Registered Post AD to the plaintiff. The said list of documents also contains

at page 10 a decision of the Executive Committee on 10.7.2008 to refer the

cases of applications for restoration of ceased membership to the Sub-

Committee constituted earlier, as aforesaid.

6. It is contended that as per the Articles, the membership

terminated automatically on 1st July of the year for which the subscription

had not been paid.

7. Lastly, it is contended that the plaintiff has in the plaint sought

the relief of restraining the defendant from ceasing the plaintiff‟s

membership; the said relief has become infructuous in as much as the

membership had ceased on 18th July, 2008, prior to the institution of the

suit. It is also contended that the interim relief claimed is beyond or

inconsistent with the relief which has been claimed in the plaint and the

plaintiff is not entitled to any interim relief on this ground as well.

8. Reliance has also been placed on Naresh Chandra Sanyal Vs.

Calcutta Stock Exchange Association Ltd., 1971(1) SCC 50, to contend

that the Articles of association of a company constitute a contract between

the members and the relief in contravention of the same cannot be granted.

9. The Senior counsel for the plaintiff has not disputed the letter

dated 4.6.2008 produced by the defendant. He has further contended that

Article 10 vests the discretion in the member, whose membership has

ceased, to apply for restoration and does not vest any such discretion in the

defendant to refuse such restoration of membership. In response to the

argument of the Senior counsel for the plaintiff of the suit being

infructuous, reliance is placed on Nabha Investment Pvt. Ltd., Vs.

Harmishan Dass Lukhmi Dass, 58(1995) Delhi Law Times 285 to contend

that u/o.7 Rule 7 CPC, relief not specifically asked for can be granted.

10. As far as the argument of Senior counsel for the defendant with

respect to the plaintiff having practiced falsehood is concerned, a perusal of

the letter dated 4.6.2008 alongwith its envelope handed over in the court

and which is now taken on record shows the envelope to be in fact bearing a

postal stamp of 4.6.2008 also, though, it undoubtedly also bears a postal

stamp of 16.7.2008. A postal article ordinarily bears the stamp of both,

dispatching and the receiving post office. Normally, an Article sent by post

under certificate of posting within the city would not take such a long time

but the fact remains is that the envelope does bear the stamp of 4.6.2008,

on which the plaintiff claims to have dispatched the said envelope. I would

have been reluctant to believe the UPC produced by the plaintiff in proof of

having dispatched the subscription on 4.6.2008 and would have believed the

letter to have been dispatched one or two days before 16.7.2008 only.

However, the envelope produced by the defendant also bears the stamp of

4.6.2008. Thus at this stage, nothing definite can be said as to whether any

sharp practices have been indulged by the plaintiff or not. There is also

some dispute as to the address of the plaintiff and thus it cannot be said at

this stage whether the plaintiff has lied about not receiving the reminders.

11. I am more persuaded to take this view because the plaintiff has

made out a two fold case in the plaint. The plaintiff has firstly contended

that he had paid the subscription within time and, therefore, there was no

occasion for the defendant to treat the membership of the plaintiff to have

come to an end automatically and secondly, it is contended that even if it is

so, the plaintiff has in accordance with the Articles shown his willingness to

pay subscription alongwith Rs.500/- and cannot be denied the relief of

restoration of membership. As far as the second basis of the suit is

concerned, in my opinion, it was not essential for the plaintiff to have

created a case of having sent the subscription before 30.6.2008, i.e. on

4.6.2008. Thus the falsehood imputed to the plaintiff is found to be not

essential for the plaintiff to succeed.

12. That takes me to the interpretation of the Articles of association

of the defendant. The Senior counsel for the defendant has fairly admitted

that unlike Articles/rules of the several bodies which provide for the

subscription/membership charges to be paid/deposited by a cut-off date to

enable participation in the elections, there is no such rule/article of the

defendant. Article 8 provides for the subscription of the ensuing year to be

paid by 31st March and upon failure to do so upto 30th June in spite of three

reminders, last of which should be by registered post, the membership is to

cease automatically w.e.f. 1st July. Article 8(e) provides for the payment of

the expenses of the society leviable as decided by the committee, besides

the payment of subscription and admission fee.

Article 10 is as under :

"A member losing his membership for the non-payment of his due subscription to the Society as contemplated in Article 8(d) hereof may have his membership restored on payment of such subscription with an additional readmission fee of Rs.500/- but a member losing such membership for the non- payment of any other contribution as contemplated in Article 8(e) hereof may have his membership restored on the payment of such contribution only."

13. In my view, the contention of the Senior counsel for the plaintiff

is correct that the use of the expression „may‟ in the aforesaid Article does

not intend to vest any discretion to the defendant to readmit or not to

readmit a member whose membership has ceased under Article 8(d) or 8(e).

The only requirement is of payment of the subscription and of readmission

fee and if Article 8(e) is applicable, also such other expenses which the

Executive Committee may levy. There is no power vested in the defendant

under its Articles to refuse or deny readmission upon the member tendering

the subscription, readmission fee and other incidental expenses, if any.

Under Article 10 it is a right of member to "have his membership restored"

on complying with the conditions thereof.

14. As aforesaid, it is admitted position that in the past, such issues

of readmission were not referred to any Sub-Committee. Even if, the same

are to be referred to any Sub-Committee, I do not find any justification for

the said Sub-Committee to not take a decision on the readmission

immediately and/or well before last date to file nomination for the election

to the committee of the defendant. Such contact on the part of the

defendant which ought to, in these matters, take a fair and unpartisan

stand, without favouring any member or group, definitely deprives the

plaintiff from participating in the ensuing election to the committee of the

defendant.

15. The plaint and the application are definitely not drafted in the

best possible manner in which they ought to have been. However, the

plaintiff ought not to be deprived of any relief to which he would otherwise

be entitled to but for the error, if any of the agent employed by him. Suits

for injunction are always drafted in a hurry in a race against time,

whereafter the suit would be infructuous. Lawyers also cannot be totally

blamed for not drafting astutely. I also do not find the plaint to be

infrucutous. The relief claimed is of restraining the defendant from ceasing

the plaintiff‟s membership. The case of the plaintiff is that upon offering

the subscription and readmission fee and other charges, he is in any case,

entitled to be treated as a member and/or be readmitted as a member and

the defendant should not be permitted to prevent him from exercising his

rights as a member of the defendant.

16. I, thus find that the plaintiff has a prima facie case of

participating in the ensuing elections of the committee of defendant.

Election is an an important event or facet of membership and the plaintiff

would suffer irreparable injury, if in spite of having a prima facie case is not

permitted to participate in the elections. In these circumstances, I also find

the balance of convenience in favour of the plaintiff. The application is,

therefore, allowed. The plaintiff has already tendered the subscription and

application readmission fee for both membership. The defendant is free to

encash the cheques deposited by the plaintiff for the said purpose. The

plaintiff shall before participating in election also pay Rs.500/- in addition

towards restoration expenses (postal charges etc), if any, of both

membership. Needless to add that since the plaintiff upon tendering the

amount is found to be a member, the plaintiff shall be entitled to participate

in the ensuing elections of the defendant subject to the rules thereof.

17. Order be given dasti to the counsels for the parties.

CS(OS)1863/2008

Let the written statement be filed within four weeks, replication, if

any within four weeks thereafter. Parties to also file their documents along

with pleadings.

List before the Joint Registrar on 27th November, 2008 for

admission/denial of documents.

RAJIV SAHAI ENDLAW (JUDGE) September 9, 2008 k