Delhi High Court
Parmod Dhawan vs Mes Builders Association Of India ... on 13 August, 2012
Author: Manmohan Singh
* HIGH COURT OF DELHI: NEW DELHI
% Judgment Pronounced on: August 13, 2012
+ I.A. No.8708/2012 in CS(OS) No.1310/2012
PARMOD DHAWAN ..... Plaintiff
Through Mr.Akhil Sibal, Adv. with
Ms.Manmeet Kaur & Ms. Aditi
Sharma, Advs.
versus
MES BUILDERS ASSOCIATION OF INDIA (REGD) AND ORS
..... Defendants
Through Mr.V.P. Singh, Sr. Adv. with
Mr.Murari Tiwari, Mr. Amit
Chauhan & Mr.Naresh Sharma,
Advs. for D-1 & D-2.
Mr.V.K. Shukla, Adv. for D-3.
Mr.Dinesh Agnani, Sr. Adv. with
Mr.Murari Tiwari, Mr. Amit
Chauhan & Mr.Naresh Sharma,
Advs. for proposed defendants/
applicants.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
1. By this order, I propose to decide the pending application
being I.A. No.8708/2012 under Order XXXIX, Rules 1 & 2 read
with Section 151 Code of Civil Procedure, 1908.
2. The plaintiff filed the suit for declaration, mandatory and
permanent injunction seeking declaration that the decisions
taken at the Council meeting held on 18th March, 2012 to delay
the Branch and Council elections of defendant No.1-Association
and the letters dated 11th April, 2012 and 30th April, 2012 are
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.1 of 35
illegal, void and nonest, and defendant No.1 be restrained from
giving any effect to the decisions taken on 18 th March, 2012 and
also restrained the elected members/office bearers from holding
office beyond 1st July, 2012. Also directions be issued to the
defendants to conduct the elections of the Branches and Council
of defendant No.1 for 2012-13 in accordance with the provisions
of the Memorandum and Articles of Association of defendant
No.1.
3. Along with the suit, the plaintiff filed the above-mentioned
pending application seeking almost the same prayer.
4. The case of the plaintiff is that the plaintiff is a member of
the Executive Body of defendant No.1-Association which is
registered under the Societies Registration Act, 1860 comprising
of various builders undertaking contract work for Military
Engineering Services, a unit of the Ministry of Defence, Union of
India. The main object of defendant No.1-Association is, inter-
alia, to unite the builders working in MES for betterment of the
trade and profession and at the same time, to watch, support
and protect the rights and interests of its members, etc.
Defendant No.1-Association has its branches across India and
has a registered office in Delhi. Defendants No.2 & 3 are its
President and Hony. General Secretary respectively.
5. The plaintiff states that on 9th March, 2012, the Hony.
General Secretary of the Council sent a notice to all members of
the Council for convening a meeting of the Council to be held at
Ambala City on 18th March, 2012. After the said meeting, vide
letter dated 11th April, 2012, defendant No.3 communicated to
the Hony. Secretaries of all the Branches of defendant No.1-
Association the decisions taken during the course of the meeting
held on 18th March, 2012 and it was advised that the election
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process might not be initiated for the year 2012-13. The
minutes of the said meeting were communicated to the
members under cover of Circular No.17 dated 13th April, 2012.
6. The grievance of the plaintiff is that in the minutes of
meeting dated 18th March, 2012 and the letter dated 11th April,
2012, the main motive was to delay the elections of the
Headquarters and Branches by one year which is directly in
violation of the provisions of Memorandum and Articles of
Association which require the entire election process for the
Branches and the Council to be completed by 30 th June of every
year and the newly elected Council to assume office by 1 st July of
every year. The said decision to delay the elections is,
therefore, illegal and contrary to the Article 6 of the
Memorandum and Articles of Association which mandates all
members to abide by the Articles of Association.
7. It is also stated by the plaintiff that inspite of said direction
of the Council, Dinjan Branch of defendant No.1-Association
conducted elections on 12th April, 2012 and an e-mail was
addressed by the Chairman of the Dinjan Branch to defendant
No.1-Association on 19th April, 2012 wherein it was informed that
due to certain unavoidable circumstances beyond control of the
team members, it was felt necessary to conduct the elections of
the branch. The said election process was carried out
successfully. Similarly, it is stated, the Delhi Branch in a
meeting of Executive Members along with the office bearers held
on 20th April, 2012 pursuant to the notice dated 12th April, 2012
had also taken decision to conduct the elections despite of the
decision taken in the Council meeting held on 18th March, 2012.
8. It is further submitted that in the said meeting held on
18th March, 2012 the agenda of elections was not listed/
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.3 of 35
appended to the notice dated 9th March, 2012. The said conduct
of the defendants was unconstitutional in order to hold the
office. Not only that, defendant No.3 on behalf of defendant
No.1-Association addressed a letter dated 30th April, 2012 to the
Hony. Secretaries of all the branches wherein it was advised not
to initiate election process for the year 2012-13 and that the
present team would continue for the said year. It is alleged that
the said conduct cannot be permitted as the same is illegal and
arbitrary as the process of election is brought into place in order
to achieve transparency and fair play in running of any
organization.
9. No written statement has been filed by the defendants.
However, in the reply it is stated that due to shortage of time,
since the plaintiff is pressing for interim order, this short reply
may be read for the purpose of deciding the present application.
10. In the reply filed by the defendants, it is stated that
defendant No.1-Association has its own internal mechanism to
resolve any dispute of any nature among its members. There is
a special clause in Memorandum and Articles of Association of
defendant No.1 in Article 6 read with Article 9 and there is a
legal bar for filing the suit or legal proceedings in Court of law
with the motive to discourage unnecessary litigations. It is also
stated by the defendants that even earlier whenever the action
was taken by any member, the Courts have rejected the prayer
on the ground of non-compliance of Articles 6 and 9 of the
Memorandum and Articles of Association of defendant No.1. The
said Articles are relied upon by the defendants and the same
read as under:-
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"Article 6 (PARA 7)
If any member or group of members feel aggrieved
by conduct of election in a Branch or at Headquarter
or any other matter he/they may approach
"Dispute Redress and Reconciliation Committee" at
Headquarter immediately but not later than 3 days,
who will give decision within 30 days, which will be
final and binding.
Article 9 (CLAUSE V)
To appoint any Committee or Sub-Committee of the
members of the Council, of the members of the
Association and such Committee or Sub-Committee
may be standing temporary or for special purposes as
the Council may determine.
There will be a Statutory Standing Committee named
"Dispute Redress and Reconciliation Committee"
consisting of members appointed by President and
approved by council to consider grievances of
members, if any, and give decision on the same."
11. It is contended by the defendants that the plaintiff is an
office bearer having knowledge of all the Articles as well as
judicial proceedings, despite that he directly filed the present
suit without making any representation to the Dispute Redressal
and Conciliation Committee of defendant No.1. Even in one of
the suits filed very recently by one of the members in Civil
Courts at Jammu & Kashmir, the interim order though earlier
passed but was vacated on the ground of non-compliance of the
above said Articles.
12. The second objection raised by the defendants is that
defendant No.1 is a society registered under the Societies
Registration Act, 1860 which is having its own by-laws and
regulations. It is a contract between the executive committee
and its members. The society is empowered to frame its own
by-laws and sub-committees to govern the internal
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management, business or administration of the society and all
the members are bound to obey the rules, regulations and by-
laws of defendant No.1. In the present case, as the Council of
defendant No.1 was of the opinion not to hold elections with
unanimity then the same cannot be a subject matter of judicial
scrutiny which is a basic fundamental term of a valid agreement.
Though some of the members raised issues regarding extension
of period for the election of defendant No.1, however, the
Council felt in the meeting held on 18th March, 2012 due to
peculiar circumstances, as the present Executive Body was
elected on 25th June, 2011 and immediately thereafter, some of
its members filed a civil suit in the State of Jammu and Kashmir
whereby the Court passed the interim orders by which the
functioning of the Executive Committee was stayed for the
period of nine months. After contest, finally on 8 th March, 2012
the interim order was vacated.
13. It is also stated by the defendants that the plaintiff ought
to have made all the office bearers as the defendants to the
present suit and the suit in the present form cannot continue
unless all the office bearers are heard in the proceedings.
14. Mr. Akhil Sibal, Learned counsel appearing on behalf of the
plaintiff has made his submissions which can be outlined to the
following effect:
a) Firstly, Mr. Sibal argued that the notice dated 9th March,
2012 and decision taken thereon on 18th March, 2012 by
way of resolution passed in the council meeting are in
violation of the provisions of Articles of Association of the
Defendant no. 1. Mr. Sibal assailed the said notice and
decision by arguing that Article 11 (c) of the Articles of the
society requires that all substantial matters requiring
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decision in the council meeting must be submitted to the
members on prior basis in the form of agenda.
Mr. Sibal submitted that a bare reading of notice
dated 9th March, 2012 would reveal that no such agenda
relating to deferring was communicated to the members. It
is stated that rather the agenda reads "to discuss the
present position of association" which nowhere gives any
hint towards the deferment of election. Consequently, the
defendant‟s decision in the meeting relating to deferring
the elections of the Head Quarters and branches is clearly
violating Article 11 (c). Thus, the said decision in the
council meeting in the form of resolution is vitiated by the
notice.
b) Mr. Sibal, learned counsel further assailed the said notice
and the resolution passed by the council meeting of the
defendant No. 1 by reading Article 10 of the Articles of
Association which provides that the members of the council
shall retire at each Annual General meeting. There is
complete procedure provided for the election of office
bearers/ council members and executive members which
as per Articles must be completed by 30th June of the year.
Mr. Sibal read the said Article 10 along with Article 15
which mandates that Annual General meeting is to be held
no later than 1st July to install the newly elected office
bearers. As per Mr. Sibal, the collective reading of Article
10 and 15 would reveal that the council members might
have been re-elected in the election if, the same would
have been conducted timely. But, there is no scope of
deferring the election for the year which as per the
mandate of the Articles must happen every year in the
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manner laid down the Articles. In that view of the matter
too, as per Mr. Sibal, the resolution passed in the council
meeting is unsustainable and this court should
immediately direct for the conducting of the elections.
c) Mr. Sibal argued that the Articles are binding upon the
Defendant No. 1 and its members as per Article 6. The
functioning of Defendant No. 1 cannot go beyond the
Articles. There is prescribed procedure for amendment of
Articles laid down under the Articles. The same as yet has
not been done. Thus, the resolution in the present state of
affairs under the Article is unsustainable in law.
Mr. Sibal relied upon the judgment passed by this
court in ILR (1989) II Del 585, Sarabjit Singh v. All India
Fine Arts and Crafts Society and also on the case decided
by Apex court in (1990) 2 SCC 117, Dorab Cawasji Warden
v. Coomi Sorab Warden in order to support the proposition
that the Articles are binding and must be insisted upon by
the court.
d) Mr. Sibal, also replied to the submission of the learned
counsel for the defendants by submitting that the Dispute
Redressal Clause in Article 6 is not mandatory and is
directory due to "may approach". Further, it is argued that
there is ouster expressly mentioned therein or can be
implicitly inferred by reading of the clause. In that event of
the matter, the plaintiff cannot be penalized for not
approaching the dispute redress and reconciliation
committee.
e) Mr. Sibal also replied to the submissions of the defendants
that there is no joinder of the necessary parties by urging
that once the defendant No. 1 is made party along with the
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president and general secretary, then the say of the other
members shall be implicitly covered in the say of the
society and no further joining of the parties is necessary.
This is due to the reason that all the members are an
integral part of defendant No.1 and thus cannot be heard
separately in isolation to the defendant No. 1. Therefore, as
per Mr. Sibal, this objection is hyper technical in nature
which does not affect the plaintiff‟s case and cannot
legitimize the acts of the defendants.
By making the aforesaid submissions, Mr. Sibal
prayed for the conduct of the immediate election by way of
directions from this court.
15. Per Contra, Mr. V.P. Singh, learned Senior counsel for the
defendants has made his submissions which can be summarized
to the following effect:
a) Mr. Singh, learned Senior counsel argued on behalf of
defendants No.1 & 2 that admittedly, the present
Executive Body was elected on 25th June, 2011 for one
year and due to stay order, the said Executive Body
could not function for nine months. Therefore, they are
entitled to complete their work within the period for
which they have been elected. It is submitted that the
present council must be allowed to complete its full
tenure of functioning for one year which could not be
done due to circumstances beyond the control of
anybody much less the defendants. There is no intention
to delay the election as such and only to promote the
smooth functioning of the defendant No. 1 whose
executive body could not operate for 9 months. In such
exceptional circumstances, the resolution dated 18th
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March, 2012 was passed which is not illegal as no
stipulation under Articles prevents so either.
b) Mr. Singh, Learned Senior counsel argued that the
present suit cannot proceed as such due to non joinder
of the necessary parties as all the office bearers are
required to be made party in whose presence the
decision was taken in the council meeting. The plaintiff
has deliberately chosen not to array them in the present
suit. Thus, the present suit cannot proceed unless the
plaintiffs are directed to implead them as the necessary
parties to the suit. In support of the proposition, Mr.
Singh relied upon the judgment passed in AIR 2005 SC
592, Board of Cricket Control v. Netaji Cricket Club &
others, where Supreme Court observed that the office
bearers ought to be given the opportunity of being
heard which is imperative and not a matter of mere
procedure. It is stated that 4 other office bearers have
moved the application for impleadment and thus the
hearing on the present application for injunction can be
concluded only after hearing the stand of the other
members as proposed defendants. Therefore, this court
should await the disposal of the pending applications for
impleadment.
c) Mr. Singh, learned Senior counsel argued that the
Articles of the society like in the present case is in the
nature of the contract between the society and the
member. A person by becoming a member accepts the
terms and decision making of the society. Therefore, the
plaintiff being a member is aware as in what
circumstances, the resolution has been passed and also
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.10 of 35
the bye laws of the society. Therefore, the plaintiff is
estopped from challenging the said resolution before
this court.
d) Mr. Singh, learned Senior counsel for the defendants
argued that the plaintiff should approach the Dispute
Redressal Reconciliation Committee as per Article 6 of
the Articles of Association and the present suit is thus
not maintainable.
16. During the course of hearing the interim application, a
point was raised by the defendants that the plaintiff alone is
raising the objection without any valid reason as he was aware
about the circumstances, litigations and the stay order passed
by the Courts at Jammu and Kashmir which continued for nine
months. In the meantime, twenty five applications being I.A.
Nos.12095-12119/2012 for impleadment are filed by other
members of defendant No.1 in which notices have been issued
by the Joint Registrar for 27th September, 2012. No doubt, in all
the applications, the same statement was made that the
applicant is the member of defendant No.1 and supports the
case of the plaintiff and prays the Court for direction to the
defendants to conduct the elections of the Branches and the
Council for defendant No.1 for the year 2012-13 in accordance
with the provisions of Memorandum and Articles of Association
of defendant No.1 for proper functioning.
17. When the matter was taken up on 13th July, 2012, Mr.
Dinesh Agnani, learned Senior counsel appearing on behalf of
defendants No.1 & 2 informed the Court that four more proposed
applicants, namely, Sanjay Mittal, R.K.Bhamri, Maj.Panwar and
Mr.Parvesh Kumar Gupta are the office bearers of defendant
No.1 and they are entitled to be heard before passing any
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decision in the interim application because any decision passed
will, of-course, affect the rights of the office bearers. However, it
was noticed that the applications filed by those four office
bearers were not listed before the Court and further, the learned
counsel for the plaintiff is pressing for decision to be passed in
the interim application. The order in the application was
reserved.
18. I have gone through the application, replies and
documents filed by the parties and also considered the
submissions advanced by the learned counsel for the parties at
the bar. I shall now proceed to discuss the legal aspects arising
in the matter along side their due application to the facts of the
present case.
19. Firstly It is pertinent to discuss the relevant Articles of
Association of the Defendant No. 1 which are relied upon by both
the parties and their possible interpretation in order to discern
as the import of the Articles and find out as to whether the delay
in election can be said to be permissible or impermissible under
the Article:
"6. Rights & Privileges of Members :
Every member of the Association shall subject to
other Regulations in force, be entitled to the same rights
and privileges and subject to the same duties towards the
Association.
Any member shall be entitled to resign from the
membership of the Association.
Every member shall have one vote. Members who
have not paid their dues shall not be entitled to vote at any
meeting.
No person shall be eligible to be a member of the
Council/Executive Committee of a Branch unless he or his
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firm or company, is authorized to represent, has paid all
subscription and other dues of the Association.
Any applicant who has, at any previous time, been a
member of the Association shall not be eligible to take part
in election unless he pays all arrears standing against his
name at the time he ceased to be a member.
If any applicant has once been rejected by the council
he shall not be proposed for membership until atleast 6
months have elapsed since the date of rejection.
If any member or group of members feel aggrieved
by conduct of election in a Branch or at Headquarter or any
other matter he/they may approach "Dispute Redress &
Reconciliation Committee" at Headquarter immediately but
not later than 3 days, who will give decision within 30 days,
which will be final and binding.
All members shall abide by the Articles of Association,
Rules and Regulations and other bye laws of the
Association in force for the time being. Default on the part
of the member in this respect shall render him liable to
expulsion.
10. Election
The office bearers and all the members of the Council
shall retire at each Annual General Meeting but shall be
eligible for re-election.
The vacancies so arising shall be filled up by
members of the Association at the respective election
meeting held at Branch levels as per quota fixed according
to strength of members and as defined hereunder.
Branch membership No. of Council Members to be elected
Upto 25 Two (2)
From 26 to 50 Three (3)
From 51 to 100 Four (4)
From 101 to 150 Five (5)
From 151 to 200 Six (6)
From 201 to 250 Seven (7)
From 251 to 300 Eight (8)
From 301 to 350 Nine (9)
and so on.
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.13 of 35
The Delhi Branch shall elect 3 additional members to
the council for proper functioning of the Headquarters.
Only enlisted contractors with the MES shall be
eligible for election to/nomination on the Council.
The election of office bearers/council
members/members of executive committee in branches
shall be completed before 15th May every year and the
result along with names of active members and HQrs.
share of subscription will be sent to reach Headquarters by
31st May. Only those council members whose names have
been sent to Headquarters as elected as Council Members
for the year, as above shall be allowed to participate in the
election of office bearers at Headquarters.
The council will hold the first meeting by 30th June of
the year to conduct the following business-
(i) To elect office bearers only from amongst the elected
council members. No one member will hold two offices
concurrently either in the Branch and/or at the
Headquarters. A member of the Association can hold an
office at Headquarters for maximum of two consecutive
tenures of one year each only.
(ii) Election of three Vice Presidents will be as stated
below :
One from Northern, Western, Central Region-A and Central
Region-B on rotation basis & One from Eastern, Southern
(N), Southern (S) and South Western Regions on rotation
basis.
One from „E‟ Class Contractors from all Regions on rotation
basis.
Note : Each year a candidate from „E‟ Class Contractors will
be elected from one region. Once a person from a Region
has been elected, no one from that Region will be elected
again till all Regions have availed of chance, and thus
cycle has been completed.
(iii) To nominate 5 members on the council (after election
of office bearers)
(iv) To elect from amongst the elected members 8
Regional Chairmen. The region for the purpose of the
Association will be the area covered by the particular Army
Command except that Southern & Central Commands shall
be divided in two Regions each, comprising of
States/Branches as under :-
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.14 of 35
Southern Command
Southern Region (N) : Rajasthan, Gujarat, Maharashtra &
Goa.
Southern Region (S) : Andhra Pradesh, Tamil Nadu,
Karnataka, Kerala, and Andaman & Nicobar
Central Command
Central Region (A) : Branches at Agra, Babina, Bhopal,
Gwalior, Jabalpur, Jhansi, Mathura, Mhow & Saugor
Central Region (B) : Branches at Allababad, Bareilly, Dehra
Dun, Kanpur, Lucknow, Meerut, Ranchi & Roorkee
In case of a new Branch being set up in Central
Command area, the council will decide in which of the two
central regions, the same will fall. The council may also, if
it considers expedient, change any of the above Branches
from Central Region (A) to Central Region (B) or vice versa.
If any Branch in a region wants inclusion in a region
not corresponding to the area of the concerned Army
Command, it may send its request supported by 2/3rd
majority of its members for consideration of the council.
The responsibility of the Regional Chairman will be to
co-ordinate with the Branches in the Region for sake of
harmony and smooth working. The election of the Regional
Chairman will be held by the council members belonging to
that Region.
The Election Chairman (one only) will be from Past
Presidents. Another person (also a Past President) may be
deputed to assist Election Chairman, however, all powers
will vest in Election Chairman.
A Committee consisting of all Past Presidents,
President and Hony. Gen. Secretary amongst themselves
will decide name of chairman/person to assist him in
advance.
Any member of the above committee will not
participate in any meeting or deliberation of the committee
for nominating among themselves the election
chairman/person to assist him, if he himself happens to be
a candidate in the election.
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All elections shall be by a majority vote. In the event of a
tie, the Chairman will cast his deciding vote.
Election of office bearers of Headquarters will be by
filing of nomination. The nomination forms (which will be
available at office of Headquarters as well as of Branches)
duly filled by the contesting candidate, signed by him, a
proposer and a seconder (both council members) will be
submitted to the Returning Officer (Election Chairman) at
address of Headquarters Office, to reach by 10th June (in
case 10th June is Sunday the next working day). Scrutiny
and withdrawl of names will be completed by 17th June
and if there are more than one candidates, election will be
done by 30th June.
The new Council shall be inducted by the 1st July of
the year and the Annual General Meeting of the Association
be held on the same date to synchronise with the induction
of the new Council and the office bearers.
11. Proceedings of the Council
The Council shall meet at such times as it may deem
advisable but not less than once a month. It shall make
such regulations as will be considered proper as to the
summoning and holding of the meeting, and the record of
it shall be open to the inspection of members of the
Association subject to such regulation as the Council may
from time to time deem expedient.
(a) A special Council meeting shall be convened by the
President or on written notice of at least three days on a
requisition in writing signed by 8 members of the Council
stating the objects for which such meeting is convened.
The President, may also convene such a special council
meeting under special circumstances at any time by giving
written notice of 24 hours to its members.
(b) All meetings of the Council shall be presided over by
the President or the Senior Vice-President or the Vice-
President (in order of preference) or in the absence of all
by one of the members of the Council elected by those
present at the meeting.
(c) All substantial matters requiring decision of council
will be submitted to council through an item of Agenda
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circulated to all council members in advance. Normally,
final decision on a matter brought before the council under
"Any other Point" should not be taken in that meeting. This
shall apply to General Body Meeting as well.
(d) Atleast 3 Council meetings in a year will be held on
invitation in Branches outside the HQ of the Association.
(e) All resolutions recommending amendment to the
"Memorandum and Articles of Association" shall be
considered only in the council meeting held at
Headquarters of the Association.
15. General Meeting : Annual General Meeting of the
Association shall be held at least once in every financial
year at such date, time and place as the Council for the
time being may determine in conformity with the provision
of the law in force for the time being not later than "1st
July" for the purpose of-
(a) Receiving the annual report of the out going Council
and the yearly audited accounts of the Association for
adoption and confirmation.
(b) Considering and sanctioning with or without
modifications the budget estimates for the current year as
prepared by the Council.
(c) Considering amendments of the Articles of
Association if any as recommended by the Council.
(d) Installing newly elected office bearers and members
of the Council.
(e) Election/appointing auditors for the year.
(f) And transacting any other business which the Council
may include in the Agenda.
16. Special Meeting :
(i) Special Meetings of the Association may be convened
by the Council if so required by the majority of its
members. Such meeting may also be called on a
requisition in writing by at least one tenth of the
members of the Association for the time being and
such requisition must state the objects for which
meeting is to be convened. The venue of such meeting
shall be at HQ of the Association or any other place as
decided by at least 2/3rd members of the Council.
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(ii) If the Council does not within 21 days from the date of
the deposit of a valid requisition in regards to any
matters proceed duly to call a meeting for the
consideration of those matters on a day not later than
45 days from the date of deposit of the requisition the
meeting may be called by the requisitionists
themselves at the HQ and Secretary shall make all
arrangements for such meeting provided requisitionists
have given him clear 10 days notice from the date of
the meeting. Such a meeting should be held within 60
days of the requisition.
All General Meetings of the Association shall be held
at the place decided upon by the Council under
provisions of the law in force for the time being.
(a) At least 21 days notice of such General Meeting
of the Association (whether Annual General or Special)
specifying the place and date of the meeting and the
business to be transacted shall be given to all
members of the Association. Such notices may be sent
by post or otherwise to the registered address of each
member.
(b) The non-receipt by any member of the notice
convening the meeting or accidental omission to give
any such notice shall not invalidate the proceedings of
any General Meeting."
20. On a conjoint reading of the aforesaid Articles, the
following things can be immediately discerned:
a) That Article 11 (c) provides for the mechanism of
holding the meeting which is through the item agenda
circulated to all council members in advance.
b) It is also stated in Article 11 (c) that "normally" no final
decision should be taken on "any other point" brought
before council meeting. The use of the expression
"normally" indicates the intention of the framers of the
rules, which is that normally, no such decision should be
taken but the same does not connote the intent in the
form of command or mandate no such decision can
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.18 of 35
ever be taken at all. Thus, the said rule cannot be said
to be not without any exception. In some exceptional
cases, the said practice of not taking the decision "on
any other point" can be departed from. Thus, the
reading of the said Article does not suggest to be laying
down an absolute prohibition upon the governing body
or the council to take any decision which may be urgent
in nature and in the interest of the functioning of the
society during the time when the council meeting was
called.
c) It is also discerned from the collective reading of the
Article 10 and 15 that it is indeed provided that office
bearers and all the members of the council shall retire
at each Annual General Meeting. The reading of Article
10 alongside Article 15 would reveal that Annual
General Meeting of the Association shall be held at least
once in every financial year at such date, time and
place as the council for the time being may determine
in conformity with the provision of law for the time
being not later than "1st July". Thus, collective reading
of Articles 10 and 15 reveal that the elections are to be
held on annual basis.
d) Given the position that the collective reading of Articles
does indicate towards holding of election at every
annual general meeting, there does not seem to be any
express provision in the Articles stating the
consequences of such non holding of elections within a
year or deferring such election due to exigency. It is not
enacted as what will happen in the event such elections
are not held within the time span of one year due to any
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.19 of 35
reason or circumstances beyond the control of the
governing body or the current council for the time
being. whether the current council shall be deemed to
retire in the event of non holding of election or dissolve
automatically etc is also not mentioned or enacted in
the Articles in order to provide any such consequences.
21. In the absence of the any such consequences of the nature
discussed above in the Articles, it cannot be said that there
exists no possibility of arising of any event, where under the
elections of the society like defendant No. 1 could not be
deferred at all. I think rather the intent behind not providing the
consequences of not holding the election within a year by the
framers of the rule is only to leave a room in the functioning of
the society or association the cases which are exceptional
circumstances where under such decision could be taken by the
governing body or council with no consequences.
22. There is one thing which needs consideration when the
finding is arrived at that no consequences have been prescribed
under the Articles for such deferring of election. It can be argued
that Article 6 provides that any member who shall be found to
be at the default in abiding the provisions of the Article shall
render him liable for expulsion and in that sense, the
consequences are really provided under the Articles. I think the
said argument cannot be accepted as what shall make him liable
is the default or violation of the provisions of the Articles. I have
already discussed that there is no express stipulation in the
Articles that the elections are to be held every year though the
same can be inferred after reading Article 10 which talks about
the retirement at annual general meeting and Article 15 which
provides for yearly annual general meeting. There is also no
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.20 of 35
provision as to what shall happen if for some reason annual
general meeting is delayed or for that matter the society could
not function. In the absence of so many express wordings and
consequences, it cannot be said there would be violation of
express provisions of Articles leading to expulsion of the
member when Articles are themselves silent about the aspect.
Therefore, if under some special circumstances, the decision to
defer the election is taken considering the functioning of the
society when there is no express provision which mandates that
the election and consequences of not holding the same, it
cannot be said that the said decision is in violation of the
express provisions of the Articles. Therefore, it would not be
wise to insert the said decision under the general provision of
Article 6, when no specific consequences for deferring the
elections are not provided in the Article, as doing the same
would mean that every decision of the governing body shall
involve moulding of rules with time and functioning, the said
interpretation will not be in the aid of functioning of the society
or association.
23. Furthermore, clause 6 does not come to the rescue of the
plaintiff as it would be seen that the plaintiff himself has not
followed the agreed procedure under the Article by approaching
the redressal forum, howsoever good or weak decision making
there may be. Therefore, clause 6 cannot be pressed into
service.
24. It is also to be understood that after all the society or
association has to function in its day to day affairs. The Articles
are framed in order to govern and aid the functioning of the
society. The same are therefore to be interpreted in order to
promote the smooth functioning of the society and not to
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.21 of 35
obstruct the working of the society. This is the reason why there
is an accepted legal proposition that the Articles of the societies
are not to be given interpretation like rules of the statute. The
courts are therefore to accord such interpretation to the Articles
so as to promote the functioning of the society as well as
simultaneously being mindful of the fact that there exists
substantial compliance of the Articles of association which leads
to no illegalities in the functioning of the society. Consequently,
a rigid interpretation to the Articles as having a force of statute
cannot be given effect to. Therefore, there cannot be any a
priori assumption that in the working of the affairs of defendant
No. 1 society, there can arise no exceptional circumstance
leading to deferring of election for some period especially when
any such consequences for not holding the elections are absent
in the Articles.
25. It is well settled that the Articles of Association of the
Society are in the nature of Bye-laws which are made for internal
functioning and management of the society and the Court‟s
interference in such matters where the decisions of the Society
are challenged on the basis of violation of Bye-laws or the
Articles is extremely limited as it is generally understood that
the court will not lightly interfere with the internal management
of the society unless there is a manifest illegality which goes into
the root of the matter.
26. Thus, the court‟s interference in such matters is an
exception to the general rule that the internal management of
the Society must be preserved, the societies are not allowed to
be run by the courts direction and the decision taken by the
society should be respected. This view is prevalent in the field
and it is also said that the normal rule of suits between private
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.22 of 35
individuals must be distinguished from the suits between the
social club, societies and its members. In the case of clubs and
societies, the general principle governing the right of the
individual shareholder or member of the company would apply.
Hence, it is clear that not every violation of Articles or rules or
Bye-laws of the society may give cause of action to the
individual member to insist the compliance of the rules and
quashment of decision making of the society. This has been
held in AIR 1969 Mad 42, S. Krishnaswamy And Ors. vs South
India Film Chamber of ... on 3rd July, 1967, wherein the learned
Single Judge has observed thus:-
"14. On the question of the balance of convenience and
the threatened mischief or injury irreparable or
otherwise, regard must be had to the nature of the suit
and the particular right asserted like suits against
Government, Public Corporations, Municipal Corporations,
Statutory bodies. Social clubs and its members.
Societies registered under the Societies
Registration Act and its members distinguished
from litigation between private individuals. In the
case of clubs and Societies registered under the
Societies Registration Act, the general principles
governing the right of suit of an individual share
holder or a member of the Company would apply
and ordinarily the Court will not interfere with the
internal management of the Society at the
instance of one or some only of the members of
the Society subject to well recognized exceptions
(1) where the impugned act is ultra vires of the
Society, (2) the act complained of constitutes
fraud or (3) whether the impugned action is illegal.
The Rules are made by the Society itself for the
convenience of its members for regulating their
own conduct as members and for regulating the
affairs of the Society as an entity. A breach of any
Rule made by the Society would not give rise to a
cause of action for any member to rush to Court, it
must be a case of manifest illegality or where the
act of omission or commission is something which
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.23 of 35
goes to the root of the matter. All the members
would be bound by the decision taken by the
general body though there may be some violation
of some Rules provided it is something which could
well be condoned and ignored by the general body
(Vide Shridhar 'Misra v. Jaichandra. ); Satyavart
Sidhantalankar v. Arya Samaj, Bombay. AIR 1946
Bom 516 and Nagappa V. Madras Race Club."
(Emphasis Supplied)
27. The said observations are holding the field till date and has
been recently reiterated in the case of Dr.A.C.Muthiah vs The
Board Of Control for Cricket decided on 13 July, 2009:-
"39.This Court in its decision in S.Krishnaswamy and
others vs. South India Film Chamber of Commerce and
others reported in AIR 1969 MADRAS 42 dealt with the
scope of the power vested on a civil Court for the grant of
injunction under Order 39 Rule 1 and had set out
parameters. It also analysed as to what constitutes a
prima facie case and as to when a balance of
convenience can set to arise. Useful reference may be
made to paragraphs 13 and 14 of the said judgment:-
"........... 14.On the question of the balance of
convenience and the threatened mischief or injury
irreparable or otherwise, regard must be had to the
nature of the suit and the particular right asserted like
suits against Government, Public Corporations, Municipal
Corporation, Statutory bodies, Social clubs and its
members, Societies registered under the Societies
Registration Act and its members distinguished from
litigation between private individuals. In the case of clubs
and Societies registered under the Societies Registration
Act, the general principles governing the right of suit of
an individual share holder or a member of the Company
would apply and ordinarily the Court will not interfere
with the internal management of the Society at the
instance of one or some only of the members of the
Society subject to well recognized exceptions (1)where
the impugned act is ultra vires of the Society, (2)the act
complained of constitutes fraud or (3) whether the
impugned action is illegal. The Rules are made by the
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.24 of 35
Society itself for the convenience of its members for
regulating their own conduct as members and for
regulating the affairs of the Society as an entity. A
breach of any Rule made by the Society would not give
rise to a cause of action for any member to rush to Court,
it must be a case of manifest illegality or where the act of
omission or commission is something which goes to the
root of the matter. All the members would be bound by
the decision taken by the general body though there may
be some violation of some Rules provided it is something
which could well be condoned and ignored by the general
body (Vide Shridhar Misra v. Jaihandra, AIR 1959 All 598;
Satyavart Sidhantalankar v. Arya Samaj, Bombay, AIR
1946 Bom 516 and Nagappa v. Madras Race Club, ILR
(1949) Mad 808 at pp. 821 to 823 = (AIR 1951 Mad 831
(2) at pp. 835-836)."
28. I also had an occasion to apply the said principle of law
while adjudicating another claim relating to expulsion of the
member from Delhi Public school society in 166 (2010) DLT 153,
Salman Khurshid vs Delhi Public School Society & Anr while
deciding I.A No. 10680/2008 in CS (OS) No. 1844/2008, I have
approved the decision of Dr. A.C. Muthiah (supra) decided by the
Madras High Court and proceeded to base the judgment on the
applicability of the same very principle.
29. Applying the said principle of law to the facts of the case, I
find that prima facie the resolution dated 18th March, 2012 is not
ultra vires the Article 11 of the Articles of association. This is due
to the following reasons:
a) The interpretation to the Articles provided above where
under in an exceptional circumstances, the council can
take the decision on "any other point" in the meeting
without circulating the agenda even if the complaint of the
plaintiff is that the agenda to the meeting has not been
informed. This is clear from the usage of the expression
"normally" in the Article and the discussion done above
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.25 of 35
makes it clear that the rule does not indicate any such
mandatoriness and the same is flexible in nature. Thus, in
the present case, where the society was not functioning for
9 months due to operation of the stay orders as per the
explanation given by the defendants which has not been
disputed by the plaintiff, it cannot be said at prima facie
stage that the said resolution passed by the defendants
was under normal circumstances. Rather, it can be said
that the said resolution was aimed at to initiate the prompt
working of the defendant‟s association.
b) In the alternative, it has been informed by the parties that
the agenda of the meeting was "to discuss the present
position of the association", the said agenda was given
after the passage of time of 3 months when the association
had a last meeting on 19th December, 2011. The said
agenda was considerably discussed as evident from the
minutes of the meeting produced on record and every
member has placed his or her comments to the said
agenda. Under these circumstances, the plaintiff cannot be
said to be unmindful of the fact as to what present position
of the association is aimed to be discussed in the said
meeting. The agenda of the meeting is wide enough to
subsume the aspect of the holding or deferring of election
in the light of the events as they stood on the date of
holding of the meeting. thus, at prima facie stage, it cannot
be said that the said agenda was not well informed to the
members like plaintiff, therefore if it is not the "any other
matter", even then the said agenda appears to cover
within its ambit some emergent decisions which were
required to be taken including the aspect of the holding or
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.26 of 35
deferring of elections in the light of the events which had
happened so far.
30. Therefore, no illegality can be ascribed on the counts of
violation of Article 11 of Articles of Association so far as the
resolution is concerned at this prima facie stage.
It is noteworthy to mention that Articles do provide the
provisions for holding special meeting under Article 16 of the
Articles of association. But, the presence of the said provision for
holding such special meeting does not obliterate the discretion
which vests with the council under Article 11 (c) to take decision
on "any other point" as seen above. Both Article 11 (c) as well as
Article 16 has to be conjointly in order to give meaning to both
the Articles and make them operative. Thus, it cannot be argued
to say that for special circumstances, there is a provision for
special meeting and therefore the resolution is bad and illegal. I
think position will still not change whether there exists Article 16
or not. This is due to the language of Article 11 (c) of the Articles
and the in the manner it is worded.
31. Likewise, it is also seen above from the interpretation of
the Articles done above, that the Articles nowhere provide for
the consequences for non holding of election within a year. It is
though correct that the collective reading of Articles 10 and 15
lead to conclusion that the elections shall be held within a time
gap of year. But the consequences for non holding the same
timely has also not been provided in the form dissolution of
current council or governing body or deemed retirement or
anything. On the other hand, it is stated It is noteworthy to
mention that the Articles of Association provide that a member
or office bearer of the society can hold the tenure not more than
two years.
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.27 of 35
32. As stated above, that the Articles are framed for an
internal management and functioning of the society, The court
has to interpret the Articles of Association in order to promote
and to sub-serve the functioning of the society rather than to
stall or to obstruct the functioning of the society. There can
exist some unavoidable circumstances in the functioning of the
organization like society or company which may give rise to a
situation where some important decisions like elections which
may involve substantial expenditure etc may be postponed
which might not have been contemplated at the time when
Articles of association were framed.
33. Thus, in the present case, once the functioning of the
society was non operational due to the stay orders of the court
which has been communicated to all the members by calling a
meeting of the council in the month of March 2012 and
thereafter the matter was brought before all the members in the
form of council meeting and it was decided after the approval of
the members that elections must be delayed by one year, then it
cannot be said that there is an illegality or no substantial
compliance of the Articles of the society. Therefore, on that
count too, prima facie no illegality can be said to have occurred
as the Rules or Articles in the present form are flexibly framed
so as to leave a room for discretion for some urgent decisions in
exceptional cases as seen above.
34. I have already found prima facie that there is no violation
of the Articles of association while passing of the resolution
dated 18th March, 2012 and the notice issued prior to the same.
However, the law goes to the extent of saying that even if there
is a violation, still not every violation will give rise to cause of
action for the member to approach the court and insist for the
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.28 of 35
compliance of the rules and the principles analogous to a civil
dispute between the shareholder and company shall be
applicable in such cases. Therefore, even if some violation is
found out, the explanation given by the defendants that it was
under some exceptional circumstances where the executive
body of the society was not functioning for 9 months due to
operation of stay orders by the civil court as stated in para 6 of
the reply, the said resolution dated 18th March, 2012 was
passed, which has not been disputed by the plaintiff‟s counsel
cannot be ignored and seems justifiable. Thus, it is not amongst
any gross illegality or mismanagement carried out by the
defendants nor any such malice can be inferred which warrants
interference by this court in the present case.
35. It is now well settled law that the Articles are in the nature
of covenant between the members of the society inter se and
with the society as organization. There is an another aspect
which requires consideration in the light of the said emerging
principle of law which is the applicability of the governing rule of
equity that a person who seeks equity must do equity and the
corresponding principle that a person who is under breach of the
covenant cannot insist the breach of the said covenant.
36. In the present case, there is an Article 6 which provides for
the resolution of disputes before the committee which is to be
formed by the executive committee of the society namely
Dispute Redressal and Reconciliation committee. No doubt that
the said Article seems to be giving an option to the aggrieved
member to approach the Redressal Forum prior to the
approaching of the court and the court‟s jurisdiction to entertain
the suit is not divested but one must not forget that the Articles
of the society is in the nature of contract between the society
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.29 of 35
and its members and a person who insists for remedifying the
breach of the contract by the other members of the society must
not himself be in breach of the same. In the present case by not
approaching the Redressal Forum, the plaintiff challenging the
decision making of the society is himself in breach of the Articles
of association prior to approaching this court and therefore, the
plaintiff on that count too is not entitled to equitable relief of
injunction as the court‟s discretion to interfere does not tilt in
favour of the person who is himself at breach.
37. Let me now deal with the submissions of the learned
counsel for the parties.
a) I have already come to prima facie conclusion that the no
illegality can be ascribed to the notice as well as the
resolution passed on 18th March, 2012. Therefore, the
submissions of the learned counsel Mr. Sibal stands
addressed in view of the interpretation to the Articles
accorded above.
b) Mr. Sibal argued that Article 6 to approach the redressal
forum is a "may approach" and does not preclude the
plaintiff to approach the civil court. No doubt that the said
contention is correct but once the plaintiff approaches this
court while not following the agreed procedure, the court is
equally not precluded in drawing an inference as to
whether such plaintiff who is himself at breach should be
entitled to insist the strict compliance of the same very
Articles by the society. Thus, it is not the question of
maintainability but the court can any time draw the
inference seeing the conduct of the plaintiff before the
court.
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.30 of 35
c) Mr. Sibal placed reliance of the judgment passed in the
Sarabjit Singh (supra) by the learned single judge of this
court. I think there is no quarrel that if the court will find
the illegality in the decision making of the society, the
court will interfere in such cases and Sarabjit Singh (supra)
is one of such cases where the court interfered after the
positive finding of illegality or ultravires. In the present
case, I have prima facie after reading the Articles come to
the finding that there is no illegality or ultra vires as the
Articles are flexibly framed. Thus, the judgment rendered
in Sarabjit Singh (supra) does not aid the case of the
plaintiff and is clearly distinguishable on facts.
d) Mr. Sibal argued that Article 6 relates to election of
members may not be applicable to the council election. I
think the same is also not correct as the said Article 6
reads that if any member or group of members feel
aggrieved by conduct of election in a branch or at
headquarter or any other matter, he may approach Dispute
Redress and Reconciliation Committee. The said clause
talks about conduct of election or any other matter which I
find may subsume the matter relating to deferring of
election. I find that all the office bearers are also members
of the association as defined by the Articles. The persons
challenging the election are also members of the
association. Furthermore, the words used in Article 6 are
"conduct of election" which does not in any way inform
which kind of election. Therefore, the said Article 6 cannot
be given a limited interpretation as urged by Mr. Sibal.
The said Article 6 also finds mention on the letter
dated 11th April, 2012 informing the members of about the
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.31 of 35
minutes of the meeting and resolution passed thereunder.
Thus, the intent of members to press into service such v 6
can also be gauged from the said letter.
No other submission of Mr.Sibal remains
unaddressed. Likewise, Mr. Singh, learned Senior counsel
for the defendants has made several submissions at the
bar raising number of objections. I think in view of the
aforesaid analysis, the said objections as to non joinder of
the necessary parties and their entitlement to be heard,
are left open to be heard at the advance stage of the
proceeding after trial.
38. Accordingly, the plaintiff has not made out any prima facie
case for the grant of interference from this court calling upon the
defendants to hold the elections with immediate effect. The
balance of the convenience also does not lie in favour of the
plaintiff as the defendants are proposing an alternative schedule
for holding the elections, the process of which shall commence
by the next month. The irreparable loss also will not be caused
to the plaintiff if, the elections are allowed to be conducted as
per the schedule proposed by the defendants. Therefore, the
plaintiff is not entitled to any such interim relief prayed in the
application.
39. However, in the written submissions, the defendants have
fairly proposed the schedule of elections and submitted that the
defendants are not against holding the elections and it is only in
certain circumstances, the elections were deferred by the
defendants. The said schedule reads as under:-
"August & September, 2012:
(i) Letter by HQ to all branches, letter to all
members for clearance of dues.
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.32 of 35
(ii) Members to submit the personal details for
issue of ID Cards.
(iii) Preparation of eligible voter list after receiving
of the dues.
(iv) Submission of list of eligible members to HQ.
(v) 664 new members enrolled during current year.
October, 2012:
(i) Appointment of election chairman by branches.
(ii) Election chairman to:-
(a) Issue election notice.
(b) Get the list of eligible voters.
(c) Circulation of information regarding
election/AGM to all members.
(d) To receive any complaints/suggestions
from members, evaluate and disseminate to all
members for any suggestion.
(e) Fix venue for AGM/election and make
arrangements accordingly.
November, 2012:
(i) Conduct of election by branches.
(ii) Submit share of HQ dues to the HQ.
(iii) Submit result of election to HQ.
December, 2012:
(i) Appoint Election Chairman at HQ.
(ii) Get the list of eligible voters.
(iii) Issue election notice.
(iv) Receive any complaints/suggestions from
members/branches.
(v) Put up these to DRCC for advice & intimate
outcome to all members & wait for response at least
15 days time to be given. Then reevaluate
suggestion from branches & take final decision &
communicate to branches at least 15 days required.
January, 2013:
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.33 of 35
(i) Final list of voters with parameter for election
be circulated to all branches.
(ii) Venue to be booked for AGM/Annual days/
Election.
February, 2013:
(i) AGM/Annual day and election to be held. New
teams to be inducted, old team then prepare and
hand over the a/c to the new team including at Leh,
Goa, Kochi and Dinjan."
40. This court accepts the schedule proposed by the
defendants except slight modification for holding the elections in
the manner as suggested by the defendants in order to
complete the entire process of election till February, 2013. The
said schedule shall be considered as final schedule for holding
the elections. The interim application is accordingly disposed of
with a direction to the defendants that they shall abide by the
schedule of elections proposed by them. The leave is granted to
the plaintiff to revive the interim application, in the event the
elections are delayed and not conducted as per the proposed
schedule.
41. It is made clear that after holding the elections as per the
proposed schedule, the defendants shall ensure that the newly
appointed members and office bearers shall complete their full
term of one year as prescribed under the Articles and that the
future elections be conducted by the defendant society on
yearly basis as per the procedure and the manner laid down
under Article 10 of the Articles of Association.
42. The application being I.A. No.8708/2012 is disposed of with
the above directions. No costs.
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.34 of 35
CS(OS) No.1310/2012
43. List the matter before Joint Registrar on 27th September,
2012, the date already fixed.
MANMOHAN SINGH, J.
AUGUST 13, 2012
I.A. No.8708/2012 in CS(OS) No.1310/2012 Page No.35 of 35
