Madhya Pradesh High Court
Anil Sanghvi vs Registrar Firms And Societies on 4 October, 2024
Author: Vivek Rusia
Bench: Sushrut Arvind Dharmadhikari, Vivek Rusia
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IN THE HIGH COURT OF MADHYA PRADESH
BENCH AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
AND
HON'BLE SHRI JUSTICE DUPPALA VENKATA RAMANA
WRIT PETITION No. 27769 OF 2023
Anil Sanghvi and another
Vs.
Registrar Firms and Societies and others
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Appearance :
Shri Amit Agrawal, learned Senior Advocate with Shri Mohammad Ibrahim,
learned counsel for the petitioner [P-1].
[P
Shri Ardhendu Mauli Kumar Prasad, learned Senior Advocate alongwith
Shri Hitesh Sharma and Ms. Apoorva Shukla, learned counsel for the Respondent
No.4.
Shri V.V.S.Murty, learned Senior Advocate with Shri Ritesh Inani, learned
counsel for the respondent.
Shri Siddharthh Radhe Lal Gupta with Shri Shri Piyush Parashar, learned
counsel for the respondent [INT].
Shri Kuldeep Pathak, learned counsel for the respondent.
Shri Sudeep Bhargava - Dy. A.G. for respondent/State.
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Reserved on :-20.09.2024
Pronounced on:
on:-04.10.2024
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Per : Justice Sushrut Arvind Dharmadhikari
Signature Not Verified
Signed by: BIJU BABY
Signing time:
10/4/2024 1:54:55 PM
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ORDER
The matter is heard finally with the consent of parties.
1. This is the second round of litigation arising out of limited remand by the
Hon'ble Supreme Court to decide the issue of list of voters based on which
election should be held in the Respondent No. 4 Society, namely, 'Shree Astha
Foundation for Education Society' (hereinafter referred to as 'Society'
'Society').
"In absence of pleadings,
pleadings the truth often hides,
for justice delayed is justice denied."
2. Before we advent into the merits of the case, at
at the very outset, we express
resentment towards both the parties for the way in which theyy pursued first round
of litigation with insufficient pleadings and without documents that had direct
nexus with the core dispute involved in the present matter. Without detailed
pleadings,the appreciation of critical facts andkey arguments remained
remain
unaddressedin the earlier roundand led to present round of litigation
litigation. The absence
of proper submissions underscores the timely pursuit of justice and the efficiency
of entire judicial system. Nevertheless, we are obligated to perform our judicial
duty and ensure dispensation of justice.
3. Adding
dding to our despair, we are further compelled to express our strong
disapproval regarding the conduct of Society for making travesty of the judicial
process, undermining the dignity of the Court and showing complete lack of
respect for the rule of law. Why we say so is because despite the operation of the
order dated 23.04.20241, order dated 08.07.20242and order dated 31.07.20243
Passed by this Court in Writ Petition No. 27769/2023 (in the first round of litigation).
Interim order passed by this Court during pendency of matter after limited remand
remand.
Interim order passed by this Court during pendency of matter after limited remand
remand.
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passed by this Court along with order dated 15.05.20244 passed by the Hon'ble
Supreme Court, the Society during the pendency of the matter converted itself
from a Society to a Company
ompany and got itself registered under Companies Act, 2013,
on 24.06.2024.. To put it otherwise, the Society
Society in blatant violation of the aforesaid
orders, converted itself from 'Shree Astha Foundation for Education Society' to
M/s Shri Astha Foundation for Education5'(hereinafter
'M/s (hereinafter referred to as
'Company').The said factum was brought on record vide I.A. No.
7051/20246filed by Respondent No. 4 Society on 08.08.2024. The contents of the
aforesaid I.A. are relevant and thus reproduced as under -
"APPLICATION
APPLICATION TO BRING ON RECORD BEFORE THIS
HON'BLE COURT, THE SUBSEQUENT DEVELOPMENTS IN
RESPECT OF RESPONDENT NO. 4; AND TO BRING ON
RECORD THAT SUCH SUBSEQUENT DEVELOPMENT DOES
NOT IN ANY MANNER, AFFECT THE PRESENT 'LIS
'LIS':
May it please the This Hon'ble Court,
1. That it is submitted that during the pendency of this petition,
petition
the Respondent No. 4 has undergone a technical change in its
nomenclature, the bona-fide
bona disclosure of which before this Hon'ble
Court, is undertaken by it as its bounden duty, even though such
disclosure does not affect the nature of lis pending before this Hon'ble
Court.
Order passed by the Hon'ble Supreme Court in Civil Appeal No(s). 6448/2024 remanding the
matter to this Court for limited purpose to decide the issue of voter list.
A Company registered under Companies Act, 2013, having its registered office at Safe Pa
Parisar,
Gram Kanadia, Kanadia Road, Indore - 452016, Madhya Pradesh (Earlier known as "Shri Astha
Foundation for Education Society" until 23.06.2024.
Allowed after judgment was reserved and subsequent developments were taken on record.
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2. That it is submitte
submittedd that on 20/08/2022, the Respondent No. 4
has passed a Resolution to carry out its conversion from being a
Society into a Company under the Companies Act, 2013 in the form of
a Company having charitable objects. Such resolution as duly passed
in accordancee with law, by the Respondent No. 4, has not caused any
contravention or violation to the provisions of the M.P. Societies
Registration Act, 1973. It is seen that such decision to cause
conversion of the Society into a company was much priorto the filing
off this writ petition, as can been seen from the true copy of the said
Resolution as passed by Respondent No. 4 (as it stood then) to the
effect of deciding to convert it from a 'Society' to a registered
'Company' (along
along with Certificate by the Chartered Accountant
Accountant),
which is annexed herewith as Annexure A-1.
3. That pursuant to the above, a Certificate of Incorporation
dated 24/06/2024 has been recently issued to it by the Office of
Registrar of Companies - Gwalior [Ministry of Corporate Affairs,
Govt. of India]
a] in favour of M/s Shri Astha Foundation for Education
by also allotting to it the Corporate Identification No.
U85301MP2024NPL071865
U85301MP2024NPL071865.. The Respondent No. 4, as it stands
currently, has also been issued PAN No. ABNCS7623Q by the
Department of Income Tax, G
Govt. of India. Thus, it was only with
effect from 24/06/2024 that Respondent No. 4 has been converted
into a registered Company under the Companies Act, 2013.. True copy
of such Incorporation Certificate dated 24/06/2024 issued by ROC
ROC-
Gwalior,, as discussed above, is annexed herewith and marked as
Annexure - A/2."
xx xx xx xx
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6. The above factum of conversion of the erstwhile society into a
company, has not affected the rights and liabilities of the Applicant -
Respondent No. 4 in any manner and thus, any order(s) passed by this
Hon'ble Court in this pending matter, continue to bind it, even in its
present form. Also, all the legal liabilities upon the Respondent No. 4
along with the legal rights available to it
it,, continue to remain as such.
The aforesaid mere 'conversion' of Respondent No. 4 into a
registered-company
company also does not affect the subject-matter
subject matter of this lis.
lis
It is similarly submitted that all affidavits, as submitted before this
Hon'ble Court on behalf of Respondent No. 4 till date, continue to
remain binding upon it
it.. Likewise, all the other affidavits filed by the
petitioners and all other Respondents and Intervenors also continue
to hold good.
xx xx xx xx
8. That in further support of the above, it is further clarified that
the same management
management-members
members of the erstwhile Society, have now
taken the affairs of the newly formed 'Company' in the form of its
Directors. No assets have been transferred from the Society to the
Company and thus, the nature of lis remains intact.
newly registered-Company
xx xx xx xx
Although, Mr. A.K. Prasad, learned Senior Counsel downright submitted
that the assets of the Society are intact and have not been transferred, however, on
bare perusal of the 'Certificate' issued by Chartered Accountant which is placed on
record as 'Annexure - A1' along with this I.A., in particular clauses
clause 4, 6 and 7, it
reveals otherwise. Interestingly,a
Interestingly,as per Clause 7,, on conversion of Society to
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Company, all 'Assets and Liabilities' will get transferred to Company. For ready
reference, the relevant recitals are reproduced below -
" xx xx xx xx
4. This is to inform you, that you need to open Bank Account
immediately and infuse share applicatio
application money. Also, we need to file
FORM INC 20A.
5. Kindly appoint Statutory Auditor on immediate basis.
6. Kindly close all the Societies Bank Account and intimate all the
concerned authorities and update your Academic and Bank
Accounting records.
7. And hence from conversion onwards all Assets and Liabilities
will get transferred to Company.
Company
We are pleased to inform you that, as a result of these corrective
actions, the conversion process has now been successfully completed.
The Society is now duly registered as "SHRI ASTHA FOUNDATION
FOR EDUCATION (CIN NO. - U85301MP2024NPL071865),
effective from 24thJune, 2024."
Additionally,, as per the Memorandum of Association of Company signed on
20.06.2024, a share capital of Rs. 10,00,000/
10,00,000/- (Rupees ten lacs only) of the
Company was divided into seven directors namely 'Anupam Chouksey,
Dharmendra Gupta, Jai Narayan Chouksey, Poonam Chouksey, Ashish Jaiswal,
Shweta Chouksey and Pooja Shree Chouksey'. As submitted
ted before us, out of
these seven directors, few are intervenors before this Court, however, we will be
dealing with them in the latter part of the judgment.
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4. For the sake of coherenceand for
for ready reference, the relevant extracts from
the aforesaid orders passed by this Court as well as the Hon'ble Supreme Court
are reproduced below to gauge the conduct of the Society -
"Order
Order dated 23.04.2024 passed in W.P. No. 27769/2023 -
xx xx xx xx
Para 14(2) - It has also been brought to the notice of this Court that
the documents and funds of the society are mismanaged and,
therefore, in the considered opinion of this Court, till the new elected
body is in place/assumes charge, both the parties are restrained from
operating bank accounts or from taking any financial or other
decisions related to the society in question
question."
"Order
Order dated 15.05.2024 passed in Civil Appeal No(s). 6448/2024 by
Hon'ble Supreme Court -
xx xx xx xx
iii. As regards clause (2) of paragraph 14 of the impugned judgment
and order, in the event it is necessary to release the amounts in the
bank accounts of Astha Foundation for Education Society for the
purposes of running the colleges/educational institutions,
institutions, the parties
are free to apply to the High Court by making appropriate
applications for limited modification of the said direction.
direction. The High
Court will consider the same on its own merits;
merits;"
"Order dated 08.07.2024 passed in W.P. No. 27769/2024 -
xx xx xx xx
12. Therefore we dispose of I.A. No.4321/2024 with the following
directions:
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(a) The Respondent No.4/Shree Astha Foundation for Education
Society is permitted to operate the bank accounts, and take necessary
financial decisions towards meeting out expenses relatable to routine
activities of various educational institutions and other
other infrastructure
appended to them like hospital, nursing home, etc. for a limited
period falling between the previously passed order dated 23.04.2024
and 31.07.2024.
(b) The currently existing management/governing body of Respondent
No. 4 society, stated to
to have been elected in the year 2021, is allowed
to take such necessary decisions for withdrawal and disbursal of
funds pertaining only to and restricted to the heads mentioned vide
Para 6 of the application and no other expenditure.
(c) The transaction wi
with
th the various bank accounts owned by
Respondent No. 4 society shall be done strictly through online/
RTGS/ NEFT/ IMPS mode and no cash transactions shall be
undertaken or subjected to whilst meeting out the afford expenses
specified in the Para 6 of the application.
application. In case of an emergency, for
reasons to be reduced in writing by the governing body of the society,
Lakhs/ as an urgent measure be
not more than an amount of Rs.5 Lakhs/-
allowed to be withdrawn or transacted in cash in a day, that too
against payment// utilisation of the said amount against voucher/
acknowledgment receipts of the payments/ utilisation/disbursal of the
same.
(d) A separate block audit report and statement of accounts &
expenditure shall be maintained of the expenses incurred and
payments
ts made under various heads by the Respondent No. 4 society
for the aforementioned period as mentioned under clause A) above.
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(e) The said statement of accounts & expenditure and audit report
must be filed on a monthly basis before 10th day of the succeeding
succeed
month before the Registrar /Assistant Registrar, Firms and Societies,
who shall verify the payments and expenses being made by the
Respondent No. 4 society towards various purposes as stipulated
under Para 6 of the interlocutory application moved on behalf
behalf of the
respondent society. In case, the Registrar /Assistant Registrar Firms
and Societies finds any suspicious unaccounted transaction alien to
the purposes specified under Para 6, then the said must be sought
explanation from the Respondent No. 4 society
society and accordingly
resolved. The Registrar, Firms and Societies shall be free and at
liberty to bring aforesaid suspicious transactions carried out in
contravention and directions of this Court to our knowledge, when
appropriate orders may be passed if necessary."
xx xx xx xx
5. By virtue of the orders quoted above, Respondent No. 4 Society was under
a clear mandate not totake
take any financial decision without leave of this Court and
limited liberty was granted to operate bank accounts in terms of order dated
08.07.2024. Yet to our dismay,
dismay the Society was converted to a Company during
the pendency of the current writ petition in flagrant disregard of the orders of this
Court. What further astonishes us is that, the Respondent No.4 apprised this Court
about such conversion after lapse of almost 45 days and meanwhile, supporting
affidavits were filed on behalf of the Society in different
different capacities. To cull one
such instance, it is imperative to referthe
refer supporting affidavit filed on behalf of
Society along with I.A. No. 6468/2024
6468/2024(Annexure - PL/17) vis-à--vis the date of
incorporation of Society as a Company.
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6. Admittedly, the Society was converted into a Company on 24.06.2024.
Subsequently,, on 25.07.2024, I.A. No. 6468/2024was
6468/2024 filed on behalf of Society
seeking further extension of time as granted by this Court vide order dated
08.07.2024 for operating the bank account. The
The aforesaid I.A. was sworn by one
Mr. Anupam Chouksey7 in the capacity of 'Secretary' of the Society
Society. It is
pertinent here to mention that he also signed subscription of shareholder as
director of the company on 20.06.2024.
20.06.2024. The contents of the said affidavit are
relevant and are hence reproduced below for ready reference -
xx xx xx xx
1. I swear on oath that ::-
My name : Anupam Chouksey
Father's name : Shri J.N. Chouksey
Age : 45 years
Occupation : Business
Address : Shyamla hills, Bharat Bhawan
Road, Bhopal (M.P.)
2. That, I am Secretary of Respondent No. 4 Society, hence
competent to file affidavit in support of the enclosed application
and the contents of the application for seeking permission for
extension of interim order to operate bank account from para 1
to end are true to best of my knowledge and belief and I am
conversant with the fact and nothing has been concealed by me.
xx xx xx xx
7. In addition, calling out the conduct of the Society, the petitioners
etitioners also filed
a detailed reply to the said I.A. and contended that Society has committed 'fraud'
One of the Directors in the Company as on date and also an intervenor.
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upon this Court by concealing the factum of conversion, which was already in
process as evident from the resolution dated 20.08.2022 passed by Society
annexed with the I.A. filed by it. It was further submitted that,, by withholding
such crucial information, this Court was misled to extend the interim order dated
08.07.2024 for a further period of six weeks by order dated 31.07.2024 in favour
of Society permitting the members of Society to operate its bank accounts
accounts.Such
non-disclosure
disclosure with an intent to have a favourable order initially in their favour
and then informing this Court about the conversion after much delay once the
fruits of interim order were reaped, is ex-facie fraudulent and amounts to material
concealment.This
This cannot be considered as nothing less than an act of highly
contemptuous nature.During
During the course of hearing, we have been informed that
petitioners have initiated contempt proceedings against Respondent No. 4 Society
Our attention was also drawn to Section 3688 of the Companies
and intervenors.Our
Act, 2013, which provides that 'all property, movable and immovable (including
actionable claims), belonging to or vested in a company at the date of its
registration in pursuance of this Part, shall, on such registration, pass to and vest
in the company as incorporated under this Act for
for all the estate and interest of the
company therein'.The
The learned Senior Counselfurther
Counsel placed reliance on decisions
of the Hon'ble Apex Court
Court, namely, 'S.P. Chengal Varaha Naidu Vs.
Jagannath9', 'Meera Chauhan Vs. Harsh Bishnoi10', 'All Bengal Excise
Licensees Association Vs. Raghbendra Singh11'etc.to
etc.to substantiate his contention
that a party to the litigation cannot be allowed to take unfair advantage by
committing breach of an interim order and escape the consequences.
Vesting of property on registration.
(1994) 1 SCC 1
(2007) 12 SCC 201
(2007) 11 SCC 374
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8. In addition, the learned Senior Counsel also submitted that on one hand, Mr.
Anupam Chouksey is filing affidavit on behalf of Society in the capacity of
Secretary and on the other hand, is also seeking impleadment in the present
petition vide I.A. No. 4622 of 2024 (Annexure - PL/11) filed on 29.05.2024.The
matter is being pursued by the Society in an absolutely haywire manner and
supporting affidavits are being filed as per whims and fancies. This conduct
reflects that the Society has been taking this Court on a ride and intends to keep
the management of Society by deceitful means. Lastly, it was submitted that
thatfraud
has been committed by Society in broad daylight in utter disregard of the orders
passed by this Court by suppressing material facts and no lenient view should be
taken.It
It was further urged that by filing false affidavit despite being well within
knowledge of conversion, Mr. Anupam Cho
Chouksey
uksey has committed perjury and
appropriate action shall be taken against him.
9. When
hen a query was put to the learned Senior Counsel,
Counsel, Mr. A.K. Prasad,
representing the Society to explain the cause of delay in disclosing the fact of
conversion and such conduct
conduc of the Society,, no satisfactory explanation was
given.. On being further inquired as to what was the reason to convert the Society
into a Company and what was the anxiety to do so during the pendency of the
petition without taking the leave of the Court and
and without informing the opposite
party, the learned Senior Counsel admitted that it was a mistake on Society's part.
Wee are not satisfied with the concession that it was merely a mistake.
mistake It was
Society itself which approached the Hon'ble Supreme Court in the first round, and
the matter was remanded on 15.05.2024 for a specific limited purpose for deciding
the issue of voters eligible to participate in the election to be conducted in the
'Society'.Despite matter being sub-judice before this Court,, the conv
conversion was
made and this Court was apprised about the same after 45 days. We are unable to
understand this approach and in our considered view, this does not appear to be a
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bona-fide mistake. Therefore, looking
looking at the conspectus of events, w
we have no
hesitation to hold that belated disclosure of fact of conversion into Company by
Society is a contemptuous act and itprima-facie seems to us that the current
management of the Society intends to retain the Society by stalling the
election.No justification whatsoever has been given and despite being in absolute
knowledge of the directives of Hon'ble Supreme Court, the conversion was done
for reasons best known to Society. The disclosure should have been made on
18.03.2024 itself, when Society filed its first reply when the matter was remanded
for fresh consideration to this Court
Court. Considering
onsidering the timing of disclosure made by
Respondent No. 4 Society
Society,, this Court cannot disregard the possibility of
mismanagement of assets and accounts of the Society. Needless too mention that,
since the conversion has been done when the liswas sub-judice
judice before this Court,
any such act shall be subject to outcome of the present petition.
THE PRESENT DISPUTE
10. The instant writ petition has been revived on the anvil of order dated
15.05.2024 passed by the Hon'ble Supreme Court in Civil Appeal No(s). 6448 of
2024 (lead matter) preferred by Respondent No. 4 Society assailing the order
dated 23.04.2024 passed by thi
this Court in the present petition,, whereby, while
affirming the impugned judgment in toto except the direction to hold election of
the Society on the basis of list of voters/members as on 30.01.2016, the Hon'ble
Supreme Court was pleased to remand the matter to this Court for limited purpose
of consideration of two issues, namely -
1. To decide the issue of list of voters on the basis of which the elections
should be held in the Respondent No. 4 Society and to pass appropriate orders
regarding preparation of fresh list of eligible members/voters to vote in the
election in consonance with the applicable laws/rules/bye
laws/rules/bye-laws for preparation
after hearing the parties;
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2. To consider the applications seeking release of amount in the bank accounts
of Respondent No. 4 Society
ociety for the purpose of running the colleges/educational
institutions, if made, on merits.
11. In compliance of directions of the Hon'ble Supreme Court, when the hearing
resumed in the second round limited to the scope of remand, the parties were in
strong disagreement with one another, albeit with more or less no documents to
substantiate their positions.
ons. On being put a query as to why all the documents
supporting their contentions as raised in the present round were not annexed in the
earlier round, the parties conceded to negligence on their part, and sought leave of the
Court to file additional documents.
documents. Keeping in mind the interest of justice and the
directivesof the Hon'ble Apex Court, the parties were granted liberty to file relevant
documents and henceforth,
enceforth, a joint convenience compilation (hereinafter referred to as
'Compilation') consisting of all the documents and pleadings filed by the parties and
intervenors was filed by parties along with additional/supplementary affidavit to
substantiate their stand.
12. Based on the compilation and additional documents placed on record,
submissions were made by the counsel for the parties.
parties. After hearing the counsels and
on perusing the compilation,looking
compilation,looking at the nature of controversy and subsequent
additional pleas raised, we are of the considered opinion thatbefore addressing the
contentions raised by parties,
partie it is essential to briefly outline the history of the
Society from 2006 to the date when the dispute arose and then
simultaneouslyexamine the disputes in the context of the timeline till 2024.
2006 - THE SHREE ASTHA FOUNDATION FOR EDUCATION
13. Respondent No. 4 Society was formed in year 2006 in the name of 'Shree
Astha Foundation for Education' primarily with an aim to promote, establish,
found, maintain, manage and conduct all types of Educational and Medical
Activities. As mandated under the Madhya
M Pradesh Societies Registration Act,
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1973 (hereinafter referred to as '1973 Act'),
), the Society was duly registered
bearing registration no. '03/27/03/09498/06'
'03/27/03/09498/06'(Annexure - C/1) and situated at
13/4, New Palasia, Indore (M.P.). The Society had its own bye--laws in 2006
(Annexure - C/2) and ass per Rule 6,
6, the members were categorized into four
categories namely
(i) Patron Member - 1;
(ii) Life Members - 14;
(iii) Ordinary Members (as many)
many);
(iv) Honorary Member (as many).
Further, as per Rule 1312, only Patron Member and Life Members had a
right to vote for constitution of Governing Body,
Body consisting of one 'President',
one 'Secretary', one 'Treasurer' and eleven 'Executive Members'
Members'. There was a
total strength of 'fifteen' members in the governing body as per 2006 bye-laws.In
bye
year 2007, the bye-laws
laws were amended by the then governing body and the
strength of the Governing Body was increased to 21, i.e., one President, one
Secretary and sixteen Executive Members. The strength of the Governing Body
from 2007 to 2015 remained ssame, i.e., 21 members.
14. Now, the then governing body of the Society in 2015, by 'General Body
Meeting' dated 02.12.2015(Annexure
(Annexure - C/6) proposed to induct Mr. Anil Sanghvi
and Mrs. Chandan Sanghvi (Petitioners herein) along with one Mr. Manish
Khatwani and one Mrs. Bharti Navlani as life members.. The proposal was
unanimously accepted and all four of them were inducted. Pursuant thereto, on
04.01.2016(Annexure - C/8)
C/8),, a 'Special Governing Body' was held to accept
resignations
ations of then members namely 'Abhay Surana', 'Vimal Chajlani', ''Vimal
Surana', 'Sanjeev Surana' and 'Dileep Surana (then Secretary)'. Furthermore,
Constitution of Governing Body.
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another resolution was also passed with the approval of the General Body to
appoint Mr. Ramesh Badlani as Acting
Ac President of the Society till the next date of
elections. Mr. Ramesh Badlani
Badlaniunder Rule 13 of the bye-laws, nominated Mr. Anil
Sanghvi as the acting
cting Secretary and Mr. Manish Khatwani as the Acting Treasurer
till the next date of election. In absence of a proper governing body, the next
elections were to be held as soon as possible, and accordingly notice dated
21.01.2016(Annexure - C/10) was issued by then acting Secretary Mr. Anil
Sanghvi calling for a 'Special General Body Meeting' on 30.01.2016 inter-alia
with
h an agenda to discuss about the resignation rendered by the erstwhile
members of the Society and also to discuss about appointment of new Acting
President, Secretary and Treasurer.
15. As gathered from the compilation, in furtherance of the notice dated
21.01.2016, there were two meetings held on 30.01.2016, i.e., first
firstbeing 'Special
General Body Meeting'(Annexure
(Annexure - C/11)which was attended by seven members
namely, 'Dr.
Dr. Ramesh Badlani', 'Smt. Shakuntala Badlani', 'Smt.
VijaylakshmiKhatwani', 'Shri Manish Khatwani', 'Shri Anil Sanghvi', 'Smt.
Chandan Sanghvi' and 'Smt. Bharti Navlani'. In the said meeting the decision to
accept resignation of erstwhile members was re
re-affirmed
affirmed and further, 'Dr. Ramesh
Badlani', 'Mr. Anil Sanghvi' and 'Mr. Manish Khatwani' were again
elected/nominated as 'acting President', 'acting Secretary' and 'acting Treasurer'
respectively. Further, 'President/Secretary' were authorized to submit the
proposals and other necessary information before the Assistant Registrar as per the
requirement of law. The minutes of this meeting is not disputed by either parties.
The second meeting was a 'General Body Meeting' (Annexure - C/12)having
more or less identical minutes of meeting as compared to the first meeting. The
only pivotal difference was with respect to decision to nominate 'all other persons'
persons
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(fourteen members) present in the meeting as 'Executive Members' in the Society
Society,
raising the total strength of 'Governing Body' to 21 members.
16. Pursuant to the said nomination, those 21 members constituted the new
'Governing Body' and admittedly, on 30.01.2016 election was held in the Society
in consonance with the applicable bye
bye-laws of year 2007.In
.In the said election, Dr.
Ramesh Badlani was elected as the new President,
President who further nominated Mr.
Anil Sanghvi as Secretary and Mr. Manish Khatwani as the Treasurer of the
Society. It is imperative here to mention that, this election dated 30.01.2016 was
never challenged/disputed by ei
either parties before any fora and has attained
finality. Moving forward, the newly elected Secretary Mr. Anil Sanghvi submitted
the 'annual list' of new 'Governing Body' under Section 2713 of the 1973 Act, to
the Assistant Registrar on 11.02.2016
11.02.2016. The said annual list (Annexure - C/13)
consisted of total of 21 members (inclusive of newly nominated 14 members) and
this list is disputed by Respondent No. 4 Society
Society.
THE CONTROVERSY
17. Now this is the point from which controversy begins and as noted in
previous interim orders passed by this Court, the parties are at vehement variance
with respect to events transpired thereafter. In a nutshell, the Respondent No. 4
Society is disputing the 'General Body Meeting' dated 30.01.2016 as well as the
'annual list' of newly constituted 'Governing Body' dated 11.02.2016 which was
submitted before the Assistant Registrar under Section 27 of 1973 Act by the
Secretary (petitioner no. 1 herein)
herein). The challenge was laid down by the then
President, Dr. Ramesh Badlani, on the premise that Mr. Anil Sanghvi (then
Secretary) and Smt. Chandan Sanghvi (Executive Member), petitioners herein,
forged and fabricated the signature of Mr. Badlani
Badlaniand
and other members of Badlani
Annual list of 'Governing Body' to be filed -
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group and prepared a concocted list adding
adding 14 new members from their family to
take over the management of the Society. At this juncture, we requested the
counsels to confine their arguments on the question as to who are eligible voters
as on today, however, looking to the intricacy of the issues
iss s linked together,
together the
counselsmade
made their submissions with respect to validity of the events that took
place from 2016 till date.To sum up submissions of the parties, they are delineated
as follows -
Submissions made by counsel for Petitioners
18. Learned Senior Counsel, Mr. Amit Agarwal, assisted by Mr. Mohammad
Ibrahim, Advocate,appearing
appearing on behalf of the Petitioners at the very outset
submitted that since parties are at loggerheads with each other, this Court will
have to consider and examine each and eevery
very resolution passed by the Society
along with the lists submitted to Assistant Registrar under Section 27 of 1973
Actafter 30.01.2016.. Drawing our attention to history of the Society, he submitted
that the Society was running into huge debts and was struggling
struggling to get permissions
for running educational institutions established by it. Somewhere in 2014
2014-2015
(prior to induction of petitioners herein), during the tenure of Mr. Badlani,
multiple fraudulent activities and scam were pulled by Mr. Badlani group
group. Due to
such scams, the reputation of the medical hospital and institutions managed by
Society were gravely tarnished. One of such incidents is when Dr. Badlanion the
basis of a false and fabricated permission gave admission to many students in a
non-existing
ting Medical College and allegedly provided them education for a period
of 1 year. On such controversy being unveiled, multiple criminal proceedings
were initiated against Mr. Badlani and group.
19. Due to such reputation, National Medical Commission had already rejected
to grant permission to Society to run a Medical College owing to infrastructural
deficiencies and alsodue
due to reputation of Dr. Ramesh Badlani. Such being the
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situation, Mr. Badlani approached the petitioners and inducted them as life
members in the Society on 02.12.2015 with a proposition to them to take over the
Society and infuse funds in exchange. The petitioners agreed and with 16
members (14 members + petitioners themselves), they took over the manageme
management
of the Society after due elections. Even the list of new "Governing Body" was
duly submitted before the Assistant Registrar on 11.02.2016. As agreed, funds
were infused in the Society and infrastructural deficiencies were rectified,
necessary permissionss were taken from National Medical Commission and finally
the Medical College started running.
20. Be that as it may, the petitioners unaware of the ulterior motive of Mr.
Badlani, who with the help of petitionersafter securing permission, getting funds
and deficiencies
ficiencies rectified, lodged a police complaint dated 10.05.2016 (Annexure
- C/21) against the petitioners along with another complaint dated
15.06.2016(Annexure - C/26) before the Registrar, inter-alia
alia raising allegations
that petitioners by forging and fabricating his signatures along with signatures of
Mr. Manish Khatwani, Shakuntala Badlani, Bharti Navlani and
VijaylakshmiKhatwani, submitted a concocted the list dated 11.02.2016 before
Assistant Registrar showing the governing body to be of 21 mem
members.
bers. Countering
the said allegation, the learned Senior Counsel vehemently argued that the
allegations are absolutely baseless and unfounded. The allegation that no meeting
took place on 30.01.2016 cannot be sustained because even in the records, there
aree two lists dated 30.01.2016 that are available and out of those two lists, only 1
list consisting of 21 members in the 'Governing Body' has been submitted before
the Assistant Registrar by Mr. Anil Sanghvi in the capacity of Secretary on
11.02.2016.Had there
ere been any other governing body, the annual list of same
ought to have been submitted to Assistant Registrar and should have been placed
on record. On the contrary,, prior to the said date, no list is available anywhere on
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record that was submitted to the Assistant Registrar under Section 27 for obvious
reason that no election was held due to resignation of the members in the erstwhile
governing body of the Society. As mentioned, had
ad there been any other members
elected other than those 21 members, definitely
definitely a list would have been submitted
before the Assistant Registrar to comply with the mandate of Section 27
27, which is
not the case herein. With regard to which bye-laws
laws were applicable in the year
2016, it was submitted that the bye
bye-laws of 2006 as amended on 28.06.200
28.06.2007
(Annexure - C/3) (hereinafter referred to as '2007 bye-laws') were applicable
applicable.
21. On a further query as to why the petitioners did not challenge any of the
subsequent electionsconducted
sconducted after 30.01.2016 which were held in the Society
till filing of this petition, it was submitted that the basic allegation against the
petitioners was that they forged and fabricated the signatures of Mr. Badlani and
submitted a concocted the list of 21 members before the Assistant Registrar.
Reg
Premised on the said foundation, Mr. Badlani with his minority group even passed
a resolution to expel the petitioners, however, the same was in complete violation
of the bye-laws.
laws. Nevertheless, a closure report dated 22.07.2017
22.07.2017(Annexure -
C/38)was filed by I.O. in the police complaint and the closure was affirmed up to
the Hon'ble Supreme Court by order dated 27.01.2023(Annexure - C/81) passed
in SLP (Criminal) No. 41085 of 2022
2022. It was further urged that Courts below after
considering report of handwriting expert gave categorical findings that signature
signatures
made on the list dated 30.01.2016 is of Mr. Badlani
Badlaniand
and 4 other members
themselves.. Our attention was drawn to particular findings in the orders passed in
those criminal proceedings, where the co
concerned Courts called for report of
handwriting expert,, who verified the signatures of Dr. Badlani along with
signatures of Shakuntala Badlani, Vijay Lakshmi Khatwani and Bharti Navlani
and confirmed the fact that the list dated 30.01.2016 was signed by no one else,
but them.This
.This being the case, learned Senior Counsel, Mr. Agarwal submitted that,
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once the foundation on which Mr. Badlanibuilt
Badlanibuilt his entire case to justify the
expulsion of petitioners does not sustain,
sustain coupled with distinctive findings that the
allegations are totally baseless in their entirety since the signatureson
signature list dated
30.01.2016 were made by Mr. Ramesh Badlaniand
Badlaniand group themselves
themselves, then all the
subsequent resolutions passed in the Society post the alleged
ged expulsion in itself
become a nullity.
22. In contrast, to
o substantiate th
that
at annual list dated 11.02.2016 as submitted by
petitioner no. 1 is a genuine and a valid list, it has been further contended that
much prior to lodging of aforesaid complaint, the minority
inority faction belonging to
Mr. Ramesh Badlani called for a 'Special General Body Meeting' on
05.03.2016(Annexure - C/15)vide
C/15) notice dated 26.02.2016(Annexure
(Annexure - C/14)
signed by Treasurer with an agenda to amend the bye-laws
bye laws of the Society and
induct 7 new members in the Society. Firstly, as per Rule 1714of the prevailing
2007 bye-laws,
laws, such notice could have only been signed by Secretary, which as
per records is evidently
ly not the case. Secondly, even if the resolution dated
05.03.2016 is accepted on the face of it as true, it had to necessarily bear the
signature of petitioners, which are not available. Furthermore
Furthermore, when such
application seeking approval of amendment and induction of new members was
submitted before the Assistant Registrar, it came to be rejected on merits vide
order dated 15.03.2016 (Annexure - C/16) categorically holding that as per the
registered bye-laws
laws of the Society, the quorum of Governing Body is 21 members,
however, the instant application has been signed by only 4 members lacking the
quorum required as per bye
bye-laws.
23. Moreover,, the information received from Assistant Registrar on
22.12.2016(Annexure - C/33) under Right to Information Act further affirms that
the valid list of governing body of the Society is the list dated 30.01.2016
Powers of Secretary.
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submitted on 11.02.2016 consisting of 21 members. Mr.Agarwal, learned Senior
Counsel then drew out attention to the second page of the said information, which
had the scribing of concerned authority stating that the said list has been given
under Section 2915 of the 1973 Act
Act, as per which, certified copy of any
information obtained under the said Section shall be prima-facie
prima facie evidence of
matters.
24. Qua the issue of expulsion of petitioners from the Society - As contested
by respondents in the pleadings
pleadings, petitioners were expelled from the Society vide
resolution dated 07.05.2016
07.05.2016(Annexure - C/18),, which was never assailed by
them and has attained final
finality. Further,, vide resolution dated
28.05.2016(Annexure - C/23)
C/23),, a new governing body was constituted and
therefore, the instant writ petition suffers from delay and laches. Countering the
same, learned Senior Counsel in single breath contended that, firstly, the alleged
notice dated 29.04.2016(Annexure
(Annexure - C/19) callingg for a 'Special Executive Body
Meeting' on 07.05.2016 was signed by Mr. Manish Khatwani in the capacity of
Secretary, which is ex-facie
facie illegal since as on the date, Mr. Anil Sanghvi held the
post of Secretary. Further, the alleged meeting held on 07.05.2016
016 expelling the
petitioners from the Society is not sustainable for reasons being, firstly
firstly, in terms
of Rule 15 (m) of 2007 bye
bye-laws,
laws, the expulsion of any office bearer can only be
done by majority of votes in the governing body; secondly,, if the notice as well as
resolution is seen, the same has been signed by less than 10 members and on top
of it, it has been signed by stranger memberss (Agrawal Group) who were never
inducted in the Society; thirdly
thirdly, these strange members are the same members
whose induction
tion in the Society was rejected by the Assistant Registrar vide order
dated 15.03.2016 rejected Mr. Badlani's application. Another crucial aspect which
is to be considered that, neither the alleged notice dated 29.04.2016 nor the
Inspection of documents.
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alleged meeting dated 07.05.2016 saw the daylight in any of the proceedings
between Petitioner's Group (the majority faction) and Mr. Ramesh Badlani's
Group (the minority faction)
faction).. Subsequent to resolution passed in alleged meeting
dated 07.05.2016, Mr. Ramesh Badlani submitted a police complaint on
10.05.2016 against petitioners and similarly on 15.0
15.06.2016,
.2016, he also submitted a
complaint to the Registrar on the same subject alleging induction of 14 new
members by submitting a concocted list prepared by forging and fabricating hi
his
signatures.However,
owever, surprisingly, neither the complaint before the police nor the
application before Registrar contains even a whisper or reference of alleged
meeting dated 07.05.2016 expelling the petitioners.
25. Lastly, the authenticity of the documents submitted by Respondent No. 4
qua notice/minutes of meeting dated 29.04.2016 and resolution dated 07.05.2016
itself is under clouds. It is submitted that the different sets of those documents
have been filed by Respondent No. 4 containing glaring contradictions,
tions, alterations
and variations which are in itself sufficient to demolish the whole case of
expulsion of petitioner from Society. First set has been filed along with the reply
filed by Respondent No. 4 Society to the Writ Petition supported by affidavit of
one Shri Rakesh Singh Dhakre (also one of the intervenors) and the second set is
also filedby
by Respondent No. 4 along with reply to I.A. No. 4321 of 2024
(Annexure - PL/7) filed by Petitioners. The alterations are of such nature that the
notice dated 07.04.2016 produced subsequently
subsequently, contains handwritten corrections
whereas, there is no such corrections in the first document. Further, the minutes of
meeting dated 07.05.2016 filed with main reply bears the signatures of
'Shakuntala Badlani' and is on th
thee letterhead of the Society. On the contrary,the
same document filed in response to I.A., bears no signature of 'Shakuntala
Badlani' and is not typed on the letterhead of the Society.
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26. There has been a constant pleading throughout that the petitioners slept over
their rights and the petition suffers from delay and laches, however, the Court is
being misled by making such pleadings. It has been submitted that petitioners
have been filing constant objections (Annexure - C/64 - Colly) to each
resolutions/acts done
one by the Society before the concerned authority requesting that
they be heard before taking anything on record, however, in vain, the authorities
turned a deaf ear and it is only when the petitioners knocked the doors of this
Court, the State machinery w
was set into motion.
27. As far as criminal remedies pursued by petitioners till today are concerned,
it has been submitted that the petitioners having being acquitted up to Hon'ble
Supreme Court from the baseless allegations made by Dr. Ramesh Badlani
regarding forgery in year 2021, they moved an application before the Assistant
Registrar seeking authorization under Section 3716 of 1973 Act to initiate criminal
proceedings against as many as 42 members who were illegally inducted and
retained a position in the management of Society. Assistant Registrar vide order
dated 15.09.2021 (Annexure - C/63) rejected petitioner's application, however in
appeal before Registrar, the order dated 15.09.2021 was set-aside
set aside by order dated
23.12.2021 (Annexure - C/72) and petitioners were granted authorization as
prayed. Pursuant thereto, petitioners lodged FIR No. 181 of 2022 (Annexure -
C/76) against 42 members for offences punishable u/s 420, 467, 468, 471 and
120-B
B of IPC. Considering the nature of large-scale scam involved,
lved, the matter has
been transferred to State CID which is currently investigating
investigati the entire matter,
since the alleged President of the Society Mr. Jay Narayan Choukseyis a prime
accused in VYAPAM scam.
28. Lastly, learned Senior Counsel closed the argument
argumentss by submitting that the
report was called from Registrar by this Court vide order dated 31.07.2024 at the
Cognizance of offences.
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behest of the Respondent No. 4 and intervenors
intervenors.Now when the Registrar filed a
detailed reportgiving
giving a conclusive opinion about validity of each resolution as
directed by this Court, andbearscategorical
and negative findings against the Society
and the intervenors, both the intervenors as well as the Society preferred a
challengeagainst the order of this Court before the Hon'ble Supreme Court vide
Diary No. 36732/202417 and SLP (C) No. 18948/202418. However, in vain, the
Hon'ble Supreme Court was pleased to dismissboth the SLPs vide order dated
30.08.2024 while affirming
ing the order passed by this Court.
Court Considering the
entirety of events, such
uch conduct of the Respondent No. 4raises
raises significant
concerns about overall litigation contested by them, and is indicative of the fact
that the members of Respondent No. 4 Society want to retain the management of
the Society by any means necessary, even to the extent of playing fraud on this
Court.
Submissions made on behalf of Respondent No. 4 Society
29. Learned Senior Counsel Mr. A.K. Prasad, assisted by Mr. Hitesh Sharma,
Advocate, began his arguments by strongly countering the submissions made on
behalf of petitioners. He submitted that, from the very inception, the elections
conducted on 30.01.2016 are in disputeand
and also the induction of the 14 members
(from petitioner's group) in the Society based on that election. He further
submitted in agreement with the submission made by counsel for petitioners that
to ascertain the list of members/voters
members/ as on today who are eligible to participate
in the election, this Court will have to see how the Society progressed from 2016,
how the bye-laws
laws were amended, how the members were inducted,what
inducted was the
tenure of the governing body, which were the applicable bye-laws
laws etc. So far as
which bye-laws
laws were applicable to the Society in 2016, both the learned Senior
Filed by intervenors.
Filed by Respondent No. 4 Society.
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Counsels, Mr. A.K. Prasad and Mr. Agarwal were in cons
consonance
onance and submitted
that the 2007 bye-laws were applicable.
30. Coming to the next limb of argument, learned Senior Counsel submitted
that Rule 619 of the 2007 bye
bye-laws
laws classified the types of members in the Society
into four categories, namely, 'Patron Membe
Member' (Rule 6A),, 'Life Member' (Rule
6B), 'Ordinary Member' (Rule 6C) and 'Honorary Member' (Rule 6D). It further
provided for the subscription fee to be paid to become a member in either of the
category except Honorary Member
Member. Only Patron and Life
ife members had voting
rights and were eligible to participate in the election. The Society could have a
maximum of 2 Patron
atron members and 19 Life members at one time and in case of
increase in their numbers, the same had to be approved by 3/4th majority of
existing Life members. Drawing our attention to Rule 1320, it was further
submitted that so far as 'President' of the 'Governing Body' of the Society was
concerned, he/she had to be elected by the members shown in Rule 6A (Patron
members) and Rule 6B (Life members). The President then would
nominate/appoint one 'Secretary', one 'Treasurer' and sixteen 'Executive
Members' as office bearers, bringing the total strength to 21 members
members, i.e., 19 life
members + 2 patron members as the office bearers.
31. Building on the said premise, Mr. Prasad, learned Senior Counsel further
submitted that there were no significant amendments carried out in year 2007 in
the original bye-laws of 2006 except for increasing the number of 'Patron
member' from '1' to '2', 'Life members' ffrom
rom '14' to '19' and number of office
bearers from '14' to '21'. In this context
context, a parallel reference was also made Rule
Rule 13 in the original 2006
2006bye-laws, which reflected the total number of office
bearers as '15' instead of '14'
'14'. On such discrepancy being pointed out
out, it was
Membership.
Constitution of Governing Body.
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submitted that due to typographical error, the total number has been wrongly
mentioned as '15'. No submission was made to the effect that the total count of 15
is correct if 1 'Patron member' is included as 'Office bearer'.Nevertheless,
bearer'.Neverth
proceeding further, our attention was drawn back to Rule 13 of the 2007 bye
bye-laws,
and it was contended in absence of two Patron members in the Society, the list
dated 30.01.2016 as submitted by the petitioners is concocted on the face of it
since only 19 Life members could have been nominated/appointed as 'office
bearers' based on the classification as follows -
We must mention that while the argument may initially appear to be
promising, however, a comparison of the positions taken by the learned Senior
Counsel regarding the parimateria Rules in the 2006 and 2007 bye-
bye-laws reveals a
precarious position. On one hand, the learned Senior Counsel contends that there
was a typographical mistake as to maximum number of office bearers in the 2006
bye-laws
laws and at the same time, places significant emphasis on the same nature of
discrepancy in the 2007 bye-laws
bye to argue that the 2016 list consis
consisting of 21
members is clearly fabricated.
fabricated In our view, holding such conflicting stand is prima-
facie not sustainable. Moreover, on further reviewing the documents, we found
that despite stipulation of maximum of 19 Life Members in a Society, a list of
21members as office bearers has been maintained by both the partiesbetween 2007
to 2021, i.e., when allegedly last amendments in bye
bye-laws
laws were carried out. On an
explanation sought to this effect, both the parties conceded that the original
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number of office bearers are 21 only and there is a typographical error in the 2007
bye-laws regarding maximum number of Life Members.
32. Coming further, it has been further urged that, Rule 721 of the 2007 bye
bye-
laws deals with the grant of membership in Society.
Society. Any individual desirous of
becoming a part of Society shall submit a written application to the governing
body and it shall be accepted or rejected as decided by the governing body. If
those 14 members from petitioners group were made a member following due
process, the written application along with receipt of subscription should have
been placed on record. Conversely, not even a single document has been placed on
record by the petitioners to justify position of those 14 new members as to how
they becamee member in the Society. Further, Rule 922 deals with the termination
of membership and read with Rule 1523 sub clause (m), it provides that the
governing body has the right to nominate, appoint, accept the resignation, expel
Further, Rule 1024 provides for 'Membership
any office bearer and so on. Fu
Register' to be maintained by the Society, which admittedly in this case is not
available with either party. Referring the aforesaid rules, Mr. Prasad, learned
Senior Counsel submits that after the induction of peti
petitioners
tioners in the Society, a
'Special General Body Meeting' was called on 30.01.2016 vide notice dated
20.01.2016. Thereafter, on 30.01.2016, a resolution was passed in the aforesaid
meeting confirming Dr. Ramesh Badlani as working President, Mr. Anil Sanghvi
as working Secretary and Mr. Manish Khatwani as working Treasurer. This
resolution is not in dispute. What is in dispute is the second General Body meeting
alleged to have been conducted on the same date.
date. The petitioners have premised
their whole case on the said list and are contesting the induction as well as
Application for Membership.
Termination of Membership.
Duties & Right of Governing Body.
The Membership Register containing following information.
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nomination of fourteen new members from petitioner's group in the Society as
office bearers.
33. Mr. Badlani was totally unaware of the alleged meeting and as soon as he
came into knowledge of the said meeting in April, 2016, he obtained a copy of list
of 21 members from Assistant Registrar under Right to Information Act and
immediately filed complain
complaintt on 10.05.2016 before police. He also filed a
complaint before Registrar on 15.06.2016, inter-alia
alia alleging that the list dated
30.01.2016 was a fabricat
fabricated document prepared by petitioners by forging his
signature.. He further requested the Registrar to re
remove
move the alleged 14 members
who were inducted in the Society on the anvil of the meeting in dispute.
Subsequently, FIR also came to be lodged by the police against petitioners.
Looking at such misconduct of the petitioners, they were also expelled from the
Society vide resolution dated 07.05.2016 passed by governing body in a Special
Meeting. The petitioners never challenged their expulsion before any forum and it
attained finality. At this stage, when we asked the learned Senior Counsel that if
any steps were
ere taken by Society to remove these 14 members for want of
application, the answer was in negative.
34. Subsequent to termination, 7 new members were inducted in the Society as
reflected from list dated 28.05.2016 submitted to Registrar under Section 27 of tthe
1973 Act. Much emphasis was laid down by Mr. Prasad, learned Senior Counsel
on the fact that this list was challenged in appeal by the petitioners under Section
4025 of 1973 Act before Registrar on 0
07/08.12.2016,, which came to be dismissed
by Registrar vide order dated 01.09.2017. No challenge whatsoever was preferred
by petitioners against the order of Registrar and hence it attained finality. The
induction of new members was accepted by the petitioners way back in 2017 itself
and hence, at this stage, they cannot assert any claim in the Society, given their
Appeal.
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failure to pursue the legal remedies available to them.
them It is also submitted by
learned Senior Counsel that election in the Society is being conducted from time
to time as per bye-laws
laws and hence, the argument of the petitioners that elections
are not being conducted as per bye
bye-laws
laws is baseless and absurd. The petitioners
have not been able to demonstrate that no elections were conducted after
30.01.2016. However, when a specific query was put to the llearned Senior
Counsel as to how those 7 members whose induction was rejected by the Assistant
Registrar on 15.03.2016, were inducted again on 28.05.2016 by the minority
faction, he wasn't able to satisfy the Court.
35. As far as report of Registrar submitted in
in due compliance of interim order
dated 31.07.2024 passed by this Court is concerned, it has been vigorously
opposed by learned Senior Counsel.With
Counsel ith all vehemence at his command,he
command
submitted that even though a request was made by him to call for a report fr
from
Registrar as to affairs of the Society, this Court should not have considered
30.01.2016 as a benchmark or foundational date for calling the said report,
especially given that thee list dated 30.01.2016 is disputed by Society as well as the
intervenors. He further submitted that
that, even though Special Leave Petition (Civil)
No. 18948 of 2024 preferred by Society against the interim order dated
31.07.2024 was dismissed by the Hon'ble Apex Court, though in the order of
dismissal all the issues and contentions of the parties with respect to preparation
of voter list were left open. Since list dated 30.01.2016 is particularly in dispute,
therefore, this Court cannot accept the report of Registrar wh
which
ich has been called
for events subsequent to 30.01.2016. To determine the validity of list dated
30.01.2016, report ought to have been called from 30.01.2016. Lastly, the learned
Senior Counsel closed his arguments by saying that the Society has been
conducting
cting elections regularly since 2016 and by virtue of petitioners being
expelled, that datum having attained finality, they have no locus to participate in
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upcoming election to be held in the Society. Besides, the last election in Society
was held on 31.10.2021
.2021 in consonance with the bye
bye-laws
laws of the Society, duly
electing 21 members. Therefore, under all circumstances only present 21 members
duly elected in the Society are the eligible to participate in the election.
Submissions made by the State
36. Considering
ing the complexity of the issues involved, we directed that a
competent officer on behalf of State shall be present to assist us during the final
hearing of the matter. Accordingly, Mr. Sudeep Bhargava, learned Deputy
Advocate General was present and he submitted
bmitted that in compliance of the order
dated 31.07.2024 passed by this Court, the Registrar has submitted its report
testing all the resolutions as per applicable rules/bye-lawspassed
passed in the Society
subsequent to 30.01.2016. As already held by this Court in order dated 23.04.2024
and affirmed by the Hon'ble Supreme Court vide order dated 15.05.2024 (order of
remand), the last undisputed election in the Society was held on 30.01.2016.
Further, undisputedly, Dr. Ramesh Badlani was elected as the working President
Pres
of the Society on the basis of the said disputed list itself and the members
mentioned therein. Apart
part from the said list, there are no documents available on
record either with Registrar or the Society to demonstrate how Dr. Badlanicame
Badlani to
be elected and confirmed as working President on 30.01.2016. Furthermore, the
whole dispute started after the rejection of application preferred by Dr. Badlani
seeking to induct 7 new members in the Society and approval of certain
amendments in the 2007bye
bye-laws.
laws. The said application was rejected by Assistant
Registrar vide order dated 15.03.2016, stating that the registered quorum with the
office is that of 21 members
members,, however, the application is signed by only 4
members, showing lack of quorum
quorum. Hence,
ce, considering the facts in totality, it
cannot be said that Respondent No. 4 Society was not aware about the list dated
30.01.2016 and the governing body therein.
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37. When State was put to query as to which bye-laws
laws were applicable in the
Society back in 2016
16 and which bye
bye-laws
laws are applicable as on today, it was
submitted that so far stand of Respondents about the amendment carried out in the
bye-laws
laws of Society in 2021 is concerned,, the same cannot be accepted as gospel
truth on the face of it. The primary justification given by them is that the
amendment of 2021 was approved by Assistant Registrar under
under Section 10 of
1973 Act, but it has to be noted that the Registrar has no authority or power to
inquire into the validity of the list of members in the governing
governing body (as submitted
under Section 27 of 1973 Act) of the respective Society which carried out the
amendment. Now when an order was passed by this Court directing the Registrar
to look into each resolutions passed after 30.01.2016 and submit a report ab
about
their legality and validity, the exercise was undertaken and on scrutiny of the
resolutions vis-à-vis
vis the mandate of the 1973 Act, several irregularities were found
out. As provided in detail in the report, the Registrar has opined that the members
weree inducted and removed illegally in the Society in complete violation of the
applicable bye-laws.
laws. Even the amendments that were carried out in the bye
bye-laws
are a nullity for reasons recorded in the report. Lastly, it was submitted that the
report can be relied
lied upon by this Court in order to decide the issue of voters list.
Submissions made by the Intervenors
38. Learned Senior Counsel Mr. V.V.S Murty assisted by Mr. RiteshInani
appearing for intervenor Rakesh Singh Dhakre (I.A. No. 4598/2024), Mr.
Siddharth Radhe Lal Gupta appearing for intervenors Anupam Chouksey and
Dharmendra Gupta (joint I.A. No. 4622/2024)
4622/2024), Mr. Kuldeep Pathak for intervenor
Shweta Chouksey (I.A. No. 4599/2024) and Mr. RiteshInani for intervenor Mr.
Ramesh Badlani(I.A.
(I.A. No. 8196/2024), in unison have mainly supported the
submissions made by learned Senior Counsel Mr. A.K. Prasad for the Society. In
addition, it has been submitted that the intervenors (except Mr. Ramesh Badlani)
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obtained membership in the Society on 14.01.2021 after following
g due procedure
and paying the requisite subscription. The subscription document of intervenors
Mr. Anupam Chouksey and Mr. Dharmendra Gupta is placed on record along with
their intervention application. They have further submitted that prior to 2021, the
Society was practically defunct and only after their induction in the Society, it was
resurrected whenloans
oans were taken by the Society supported by personal guarantee
to the tune of Rs. 200 crores born by the intervenors.Hence,, if their intervention
application is not allowed, it would result into an irreparable loss for no fault of
theirs and prayed that their application seeking intervention be decided on merits
and be allowed. It is further argued by all the intervenors that they are eligible to
participate in the elections as their name is present in the list dated 31.10.2021.
39. Mr. Gupta further submitted
ubmitted that amendments carried out in the bye
bye-laws in
year 2021 have been affirmed by the competent authority under Section 1026 of
the 1973 Act. Adding up, he further argued on the maintainability of the writ
petition premised on the foundation that the writ petition suffers from delay and
laches of more than 8 years. Petitioners by not disclosing about the order of
dismissal of their
eir appeal challenging the resolution dated 07.05.2016 expelling
them from Society have suppressed material facts and hence warrant nothing, but
dismissal from this Court. In support of his arguments, he has further referred to
interim order dated 08.07.20
08.07.2016
16 passed by this Court wherein certain grounds were
highlighted by this Court including fallout of delay and latches on part of the
petitioners in preferring the SLP.
40. Mr. RiteshInani, for intervenor Dr. Ramesh Badlani has submitted that he
has not been intentionally impleaded as respondent by the petitioners despite the
fact that the expulsion of petitioners took place by the governing body of which he
was the President and the proceedings have a direct bearing on him. He is a
Amendment of Memorandum or regulation or byelaws of registered society.
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affected party by this litigation and the present Writ Petition is bad for his non-
non
joinder as a necessary party. Therefore, he urged that his intervention application
shall also be allowed. He also argued that he and his group members have
resigned from the Society and despite having no business with the Society, he and
his group members will be forced to participate in the election.
DISCUSSION AND REASONING
41. We have heard
eard the learned counsels for the parties extensively at length and
perused the entire material placed on record. The core lis in the present case is
with respect to who shall be the eligible voters of the Respondent No. 4 Society in
year 2024. The entire litigation revolves around the fact that free and fair election
must be held in the Society at the earliest as directed by the Hon'ble Supreme
Court in the order dated 15.05.2024 passed in Civil Appeal No(s). 6448/2024
remanding the matter to this Court for limited purpose to decide the issue of list of
voterss on the basis of which elections are to be held in the Society
Societywhile
considering
sidering the applicable rules/bye
rules/bye-laws. Bearing in mind that it is a case of
limited remand and that common issues are involved in the present petition,
therefore, all the issues are taken up together and decided accordingly.
42. Now, considering
onsidering that a chequ
chequered
ered history of disputes between the parties
has now surfaced in this round of litigation, we deem it appropriate to start with
the inception of the first round of litigation before us.
us Prior in time
time, on
26.10.2023, the petitioners herein filed the instant Writ Petition
Petition(Annexure -
PL/1) inter-alia
alia seeking the following reliefs -
A. Be pleased to direct Respondent No. 1 (Registrar,
Firms and Society) to perform his statutory duty and act upon
the representation
esentation made by the Petitioners and conduct free
and fair elections of the society as per the list of members and
governing body dated 30/01/2016 within a period of 7 days
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from the date of order. The list of members/governing body
dated 30/01/2016 is enumerated
en below -
I. Dr. Ramesh Badlani, S/o Mr.
PrabhudayalBadlani (President);
II. Mr. Anil Sanghi, S/o Mr. Shantilal Sanghvi
(Secretary);
III. Mr. Manish Khatwani, S/o Mr. Mohan
Khatwani (Treasurer);
IV. Mrs. Shakuntala Badlani, W/o Dr. Ramesh
Badlan
Badlani;
V. Mrs. Vijay Laxmi Khatwani, W/o Mr. Manish
Khatwani;
VI. Mrs. Chandan Sanghvi, W/o Mr. Anil Sanghvi;
VII. Mrs. Bharti Navlani, W/o Mr. Rajesh Navlani;
VIII. Mr. Rajat Sanghvi, S/o Mr. Anil Sanghvi;
IX. Mr. Rahil Sanghvi, S/o Mr. Anil Sanghvi;
X. Mr. Anup Sanghvi, S/o Mr. Shantilal Sanghvi;
XI. Mrs. Sandhya Sanghvi,
Sanghvi W/o Mr. Anup Sanghvi
Sanghvi;
XII. Mr. Aditya Sanghvi,
Sanghvi S/o Mr. Anup Sanghvi;;
XIII. Mrs. Aashi Sanghvi,
Sanghvi W/o Mr. Aditya Sanghvi
Sanghvi;
XIV. Amber Sanghvi,
Sanghvi S/o Aditya Sanghvi;
XV. Rajesh Jain
Jain, S/o Kantilal Jain;
XVI. Ashok Soni
Soni, S/o RadheyshyamSoni;
XVII. Dr.Tripti Murat
Murat, S/o Mr. Ashok Murat;
XVIII. Mrs. HemlataMaloo
HemlataMaloo, W/o Dr. B.K. Maloo;;
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XIX. Mrs. PhushpaChelawat,
PhushpaChelawat W/o Mr. Pradip
Chelawat
Chelawat;
XX. Dr. V.K. Maloo
Maloo, S/o Dr. R.C. Maloo.
XXI. Dr. Rahul Maloo S/o V.K. Maloo;
B. Be pleased
leased to direct Respondent
espondent No. 1 (Registrar,
Firms and Society) toensure that the newly elected body is in
charge of the society and the newly elected post holders are
appointed as authorized signatories of the society for carrying
out day to day functioning of the society
society;
C. Be pleased to direct the Respondent No.1
o.1 (Registrar)
to set aside the illegal induction of persons as members of the
governing body of the society subsequent to list dated
30.01.2016;
D. Be pleas
pleased
ed to set aside any list filed under Section 27
of the said Act filed subsequent to 30.01.2016 having illegally
inducted members of the society and further any amendment
carried out by the said illegally inducted members in the bye
bye-
laws of the society be sset aside;
E. Be pleased to direct respondents to handover
physical possession and charge of society to elected governing
body and members of the society as per the above list
immediately after elections
elections;
F. Be pleased to direct Respondent No. 2(Police
Commissioner, Indore) to provide necessary support to
Registrar, Firms and Society to conduct elections of Society
and handing over physical possession and charge of society to
newly elected;
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G. Be pleased to restrain the illegally inducted members
from abusing
busing the process of law by frivolous petitions before
any court/authority
court/authority;
H. Be pleased to direct that the huge amount of loan
taken by the illegally inducted members in the name of society
shall be repaid by the said persons
persons;
I. Be pleased to direct the Respondent No.4
o.4 (NMC) to
conduct an independent inquiry pertaining to the affiliation of
LNCT Medical College, Indore obtained by illegally inducted
members of the society
society."
43. As per records, notice was issued on 31.10.2023 to the respondents
(including Registrar, Firms and Societies) and by 27.02.2024, Respondent No. 4
Society entered appearance. On 18.03.2024, the Society filed its counter-
counter
affidavit(Annexure - PL/3) inter-alia contested the petition on maintainability
stating that the main prayer in the Writ Petition is with respect to conduct
conducting
election as per 'General
General Body Meeting'
Meeting dated 30.01.2016, however, the petitioners
were removed from the Society vide resolution dated 07.05.2016 for committing
forgery. That the
he petitioners have already challenged the resolution dated
07.05.2016 before the Registrar in appeal under Section 40 of the 1973 Act and
the appeal was dismissed on 01.09.2017. The said order was never challenged and
hence by virtue of order having attained
attained finality, the petitioners are not the
members of the Society.Therefore,
herefore, being a stranger to the Society, neither the writ
petition is maintainable, nor the relief as prayed can be given. In the additional
reply(Annexure - PL/5) filed by the Society, it was further contended that the
petitioner is trying to get validation from this Court of a forged list dated
30.01.2016.. As pleaded in the petition, the said list was submitted by Mr. Anil
Sanghvi before the Assistant Registrar on 11.02.2016 under Section 27 of the
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1973 Act, however, no challan has been filed along with it. The list only has
receiving of the Registrar's office, but as per the mandate of Section 27, the
challan as well as the receipt should have been issued. None of the said documents
have been filed.
44. On behalf of Assistant Registrar,
Registrar, only preliminary reply dated 06.03.2024
(Annexure - PL/2) was filed,
filed therein, stating that the petitioners in their petition
have wrongly mentioned that they do not have an efficacious alternate remedy
except to file the instant writ petition. It was
was further stated as that the alternate
remedy available to them was under Section 3227 of the 1973 Act which
specifically prescribes for an enquiry into the disputes of the Society. The
petitioners have not availed the said remedy and hence, the petition oought to be
dismissed only on the ground of availability of alternative remedy. Further, at the
instance of petitioners, investigation is being carried out by State CID in relation
to FIR filed by them. Hence, the instant petition also involves disputed que
question of
facts which can be adjudicated before proper forum.
45. This Court on consideration of entire pleadings made in the first round of
litigation, came to a conclusion that Society has only disputed the list dated
30.01.2016 and only on one ground, i.e., non-issuance
non of receipt of amount and
challan by Assistant Registrar on submission of annual list of governing body by
the petitioners under Section 27 of 1973 Act.
Act However, at the same time it was
also accepted that the said list has receiving from the office of Registrar.
Nonetheless, neither of the parties eitherin written or verbal pleadings, disputed
that no 'election' was held on 30.01.2016
30.01.2016,, and when election was held, any
challenge was made to that election.The
election matter was accordingly
ngly reserved on
19.03.2024 and judgment was pronounced on 23.04.2024.Based
23.04.2024.Based on appreciation
of pleadings on record, this Court came to a conclusion that there appears to be
Enquiry and settlement of disputes.
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certain dispute with respect to conducting elections in total violation of the bye
bye-
laws of the Society.Further,
Further, admittedly, the last election held on 30.01.2016 is
neither disputed nor challenged by either petitioners or the Society. The relevant
extracts from the said order are reproduced below for ready reference -
xxxx
x xxxx xxxx
"9. Heard, learned counsel for the parties and perused the
record.
10. From a perusal of the writ petition as well as the reply,
it appears that certain dispute with regard to conducting elections
in total violation of bye
bye-laws of the society and that the Courts are
certainly empowered to set right the illegalities and took the
election process in motion to be performed in accordance with the
bye-laws
laws have been raised. However, looking to the fact that the
last election was held on 30.01.2016 and as per bye-laws,
laws, the term
of elected body is three years, this issue requires no consideration
at all since fresh elections are to be held.
11. Admittedly, the last election is not under challenge in
petition. Both the parties have even not stated that
the present writ petition.
the earlier elections dated 30.01.2016 as well as the membership of
the society has been terminated. At the same time, there is no order
as to how the respondent no.4 became the member of the society.
12. It is also not in dispute that the petitioners had already
approached the Registrar, Firms and Societies u/s
u/ 32 of the Act of
1973 and no decision whatsoever has been taken till date.
13. In view of the above, in order to resolve the controversy
oncefor all, this Court is of the opinion that
t fresh elections are
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required to be conducted in respect of the society under the
supervision of Registrar, Firms and Societies in terms of the Act of
1973.
14. Resultantly, this petition stands finally
disposed off with the following directions:
1. The Registrar, Firms and Societies is directed to
perform the statutory duty and act upon the representation
made by the petitioners and conduct free and fair election of
the society as per the list of members and governing body of
the last election dated 30.01.2016 in accordance with law,
forthwith.
2. It has also been brought to the notice of this Court
that the documents and funds of the society are mismanaged
and, therefore, in the considered opinion of this Court, till the
new elected body is in plac
place/assumes
e/assumes charge, both the parties
are restrained from operating bank accounts or from taking
any financial or other decisions related to the society in
question.
3. The Registrar, Firms and Societies after the election
is conducted shall handover the ch
charge,
arge, papers as well as
properties/institutions to the newly elected governing body in
accordance with law forthwith.
4. The Registry is directed to communicate this order to
the Registrar, Firms and Societies, Indore immediately."
immediately.
46. Aggrieved, the Society and other intervenors (alleged members of present
governing body of the Society) approached the Hon'ble Supreme Court in Civil
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Appeal No(s). 6448 of 2024 (lead matter) challenging the aforesaid order dated
23.04.2024 passed by this Court. It is pertinent here to note that the Society in its
memo of appeal, in particular paragraph (B) on page (G) submitted as follows -
"The Hon'ble High Court has failed to consider the following
factual aspects categorically raised by the present petitioner
before it:-
xx xxxxxx
(B) The High Court failed to consider that Respondent
No. 2 and 3, had placed before it a forged list of executive
members who participated in the 30.01.2016 elections
elections. It
would be material to point out that the said list was not in
conformity with
ith the list of executive members dated
28.05.2016 sent to the Registrar for compliance under Section
27 of the Act after the election/general meeting was conducted
on 30.01.2016."
xx xxxxxx
Considering the aforementioned submission and other material placed on
record,, the Hon'ble Supreme Court was pleased to concur with the observation
made by this Court thatadmittedly, the last election in the Society in consonance
with bye-laws
laws was held on 30.01.2016, and there is a pressing need for conduct
conducting
free and fair election in the Society
Society. However, given that 8 years had lapsed since
2016, the fresh election cannot be held on the basis oflist
of of voters/members
existing as per list dated 30.01.2016. In the said context, the Hon'ble Apex Court
while affirming the impugned judgment in toto except the direction given in
paragraph 14(1), was pleased to dispose
dispose-of all the appealss vide common order
directing as thus -
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Accordingly, we dispose-of
"Accordingly, dispose of the Appeals by passing the
following order:
i. The directions issued in terms of paragraph 14 of the
impugned judgment and order are hereby confirmed subject to
modification that elections shall not be held on the basis of the
list of members/voters as on 30thJanuary, 2016.. The direction
to hold election on the basis of the list of members/voters as
on 30thJanuary, 2016 is set
set-aside. The Writ Petition is
remanded to the High Court only for limited purpose of
deciding the issue of list of voters on the basis of which
election should be held;
held
ii. Considering the fact that the elections as directed
must be held at the earliest, we request the High Court to hear
the parties and pass appropriate order regarding preparation
of a fresh list of members/voters eligible to vote in the
elections to be condu
conducted
cted in terms of clause (1) of paragraph
14 of the impugned judgment and order. Needless to add that
the High Court will consider the applicable laws/rules/bye
laws/rules/bye-
laws while determining the issue;
issue
iii. As regards clause (2) of paragraph 14 of the
impugned judgment
dgment and order, in the event it is necessary to
release the amounts in the bank accounts of Astha Foundation
for
or Education Society for the purposes of running the
colleges/educational institutions, the parties are free to apply
to the High Court by making
making the appropriate applications for
limited modification of the said direction.
direction. The High Court will
consider the same on its own merits;
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iv. Subject to modification made above and limited
order of remand, the impugned judgment and order is
confirmed.
v. The Appeals are partly allowed on the above terms.
We make it clear that though some of the appellants are not
parties before the High Court, this order shall not be
construed to mean that they are entitled to participate in the
proceedings before the High Court. It is for them to make
appropriate applicat
applications in that behalf before High Court."
Court.
Against the aforesaid order, no review was preferred by either parties and hence,
the order dated 23.04.2024 passed by this Court stood merged with the aforesaid
order. On merger, the settled position as on 15.05.2024 emerged as thus
thus-
a. Based on the pleadings raised by parties and their admitted position,
election was held in the Society on 30.01.2016
30.01.2016.
b. There is a need to conduct a 'free & fair' election in the Society.
c. Since much time has lapsed from 2016
2016,, the election which is to held now
in 2024 cannot be held on the basis of list of voters/members as per list
dated 30.01.2016. The 'direction' to hold the election as per list dated
30.01.2016 is set--aside
aside and not the list dated 30.01.2016.
d. As per the directives
rectives of the Hon'ble Supreme Court, this Court has to
decide who are the eligible voters/members to participate in the election
and to decide such issue, applicable bye
bye-laws/rules
laws/rules in the Society are to
be considered.
e. While considering which are the applicable
appl bye-laws,
laws, this Court has to
look into the validity of the same.
same. Since the clock cannot be reversed
indefinite in time, a common cut
cut-off date is to be taken which is
undisputed by all the concerned parties.
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f. After the cut-off
off date is ascertained, this Court has to simply look first
into the following two things as on said date -
(i) the applicable bye
bye-laws;
(ii) the governing body (the office bearers/members) vis-à-vis
vis the
applicable bye-laws;
bye
g. Once the applicable bye
bye-laws and
nd list of governing body existing as on
the cut-off
off date is determined, this Court has to look into subsequent
events in the Society after the cut
cut-off
off date and to ascertain the legality of
the said events in consonance with the bye-laws.
bye
h. For further clar
clarification,
ification, the 'events' include
'induction/expulsion
'induction/expulsion/termination/resignation of members', 'amendments
carried out in the bye
bye-laws',
laws', 'tenure of the Society', 'dissolution (if any)
of Society' etc.
47. Thereafter, on remand when the matter was being heard
heard, since the parties
were at strict variance with each other on what transpired in the Society and were
vehemently contesting the same, therefore in order to reach a conclusion, a 'cut-
off date/event' had to be fixed, i.e., any last date/event which is undisp
undisputed by the
parties and which can be made the foundational basis for this Court to move
thereon. As discussed earlier in paragraph 46, i.e., admittedlythe
lythe last election in
the Society was held on 30.01.2016 which is not disputed by both the parties and
hence,in our view, setting 30.01.2016 as the cut-off
cut dateappropriately
appropriately satisfies the
concerns of all parties. Now, kkeeping the said cut-off date in mind,, directions were
issued vide interim order dated 331.07.2024
.2024 calling upon the Registrar, Firms and
Societies, to examine the all pleadings and documents filed by parties in the joint
compilation in accordance with the bye-laws
bye laws and furnish a report on the legality of
the induction, expulsion and resignation of members having voting rights, if any,
made in
n the Society; the elections, if any, conducted in the Society;
Society the
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amendments, if any, made in the bye-laws
bye of the Society. Even though
ough arguments
were raised by Society disputing the said cut
cut-off
off date, however, for reasons given
herein above, it requires no interference. Arguments raised by Society and the
intervenors to that effect are answered accordingly. More so, the Registrar is the
competent authority to hold an inquiry into the 'constitution', 'working' and
'financial condition' of a society. The legislature has conferred jurisdiction upon
the Registrar to hold such inquiry. Therefore, we will substantiate our findings by
referring the report submitted by Registrar whenever needed.
48. Coming further, now that election in the Society was held on 30.01.2016,
certainly members must have been elected.
elected.Therefore,
Therefore, the next questions that arise
for consideration are as follows -
1. Which were the prevailing applicable bye-laws
laws in the Society on
30.01.2016?
2. Who were the elected members as per election dated 30.01.2016 and
constituted the governing body of the Society?
Admittedly, there is no register of members maintained either by Registrar
or by the Society, and looking to the fact that intervenors namely Mr. Anupam
Chouksey and Mr. Dharmendra Gupta have filed subscription receipts of
membership issued by Society's President/Secretary, however, the said receipts
filed by them are prima-facie
facie against bye-laws
laws and issued by a person who as per
their record has already resigned from the membership of Society. T
Therefore we
will confine our observations based on the appreciation of evidence available on
record and take assistance of the report submitted
submitted by Registrar as and when
required.
Now, so
o far as question no. 1 is concerned, there is no dispute between the
parties that 2007 bye-laws
laws were applicable as on 30.01.2016 and hence, it is
answered accordingly.
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This brings us to the second question.The petitioners submit thatthe list of
21 members [reproduced in clause (A) of prayer in writ petition] elected on
30.01.2016and
and nominated as office bearers of the Society is the valid list.
list The said
list was also submitted to the Assistant Registrar under Section 27 of 1973 Act for
compliance on 11.02.2016. Conversely, the Societyhas disputed the said list of
members stating that it is a concocted list which was prepared by the petitioners by
forging and fabricating the signatures of the then President of Society
Society, Dr. Ramesh
Badlani. Since the said list is the foundational basis of the present lis,
lis we shall now
analyze the rival contentions of the parties and concurrently examine the material
placed on record.
49. As is borne from the records, subsequent to being elected as President of
Society based on election dated 30.01.2016, Dr. Ramesh Badlani disputed the list
dated 30.01.2016 alleging that it is a concocted list prepared by petitioners by
forging and fabricating his signatures. A police complaint dated 10.05.2016 was
also filed against the petitioners for offences punishable under Section 406, 420,
467, 468, 471 and 120-B
B of Indian Penal Code, alleging therein that the 14 new
members never became the members of the Society and the forgery was done with
a motive to illegally induct those 14 members belonging to petitioner's family in
the Society to get in majority and usurp its management. He even submitted
another complaint dated 15.06.20
15.06.2016 before the Assistant Registrar, Indore praying
for removal of those 14 members. On the basis of complaint made by Mr. Badlani,
FIR No. 224/2016 (Annexure - C/31)was
was lodged against the petitioners
petitioners.
However, it is imperative to note that, no authorization under Section 37 of 1973
Act was taken by
y the erstwhile President Dr. Ramesh Badlani for lodging the FIR
against the petitioners. Be that as it may, after due investigation, the Investigation
Officer filed a closure report (Annexure - C/38) in the said FIRon 22.07.2017
before the concerned Magis
Magistrate,
trate, which was accepted on 30.08.2018 (Annexure -
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C/46).. Aggrieved, Mr. Badlani then preferred Criminal Revision No. 453/2018
before Sessions Judge, which came to be dismissed on 27.02.2021 (Annexure -
C/62) endorsing the acceptance of closure. Our attention was drawn to paragraph
7 of the order passed by learned Sessions Judge noting that the allegations of
forgery of signatures have not been found proved based on reports of handwriting
expert. The observations
ns made in paragraph 7 are relevant and hence reproduced
below as thus -
"7. Complainant Dr. Ramesh has also stated in his
statements that the Anil and Smt. Chandan had also invested
money in the foundation and on this basis they were made
members. It is clear that the accused Anil and Smt. Chandan
had also invested in the society. On this basis only, the
meeting of Aastha Foundation Society was held on
30.01.2016, in which Anil was appointed as the Secretary, Dr.
Ramesh was appointed as the Executive President
President and Manish
Khatwani was appointed as the Treasurer. On the basis of this
meeting, the letter for proceeding was produced before the
Registrar Firms & Society, Indore. The complainant has
stated that a parallel meeting was held by Anil and a bogus
listt was made and produced in the office of Registrar Firms &
Society. It is clear that the complainant has doubt that
contrary to the Rules of the Society, the Executive Committee
has been formed on 30.01.2016 but in this regard there is a
letter on the reco
record
rd bearing No.1368/2016 dated 22.12.2016
of the Assistant Registrar Firm & Society, Indore in which it
has been certified that the Society has accepted the Executive
Committee formed on 30.01.2016 as legal. In this manner, the
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Assistant Registrar Firm & So
Society,
ciety, Indore himself has himself
declared the objection of the complainant that the aforesaid
list was incorrect, as irrelevant. The request for stay of
meeting dated 30.01.2016 has been filed under the signature
of the President Ramesh himself.
8. According
ding to the letter number 284 / 2016 dated 25
04 2017 from the Office of City Superintendent of Police, Juni,
Indore, the CSP has written a letter to the Additional Director
General of Police, Indore Zone, recommending the elimination
of the case. In page number 1 of the said letter, it is written
that the 21 members under whose signatures the settlement
proposal dated 30.01.2016 has been submitted to the Assistant
Registrar, in this regard, the report of signature expert
Rajendra Gaur, Forensic Consultant has been submitted with
his authorized signature. Another signature was done before
expert Yogita Singh on 09.05.2016 as per the same and as per
the signatures made on 15.05.2016 and 28.05.2016 the
signatures have been certified to have been done in the
meeting
eting of 30.01.2016. The report of the signature expert in
this regard is enclosed. It has been closed on this basis and in
it is also written in the same that on the basis of forged
signature, the fake meeting was held on 30.01.2016. There is
also an article
cle in the said letter that it has been clarified and
certified by the Assistant Registrar of Firms and Institutions
himself vide letter no. 1368 / 2016 dated 22.12.2016 that the
executive body selected in the meeting dated 30.01.2016 only
is the statutory executive body of the organization. This letter
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has also been annexed with the charge sheet. It is also written
in the said letter that by conspiring with new persons, through
fake and forged documents, the complainant Ramesh, to
embezzle and usurp the pr
properties
operties of the organization,
submitted the same before the Assistant Registrar Firms &
Societies and has committed offences punishable under
Section 38 (2) Madhya Pradesh Societies Registration Act,
1973 and also under Sections 406, 420, 467, 468, 471 and
120-B
B IPC. An appeal has been filed before the Registrar in
this regard and a write has been filed in the Hon'ble High
Court. The Registrar has also given the Order thatthe
Executive Committee selected on 28.06.2016 has not got any
statutory right and the executive committee of Ramesh has not
been treated as statutorily appointed. It is clear that the
dispute is pending before the Assistant Registrar Firms &
Societies between the aforesaid parties, the actual settlement
of which can be done by the Court of Registrar Firms &
Societies only.
50. Being dissatisfied, Mr. Badlani then preferred M.Cr.C. No. 2866/2022
before this Court, which also came to be dismissed by learned Single Judge by
order dated 15.09.2022 (Annexure - C/78) noting in paragraph 5 that the fo
forensic
consultant has verified the signature and closure report has been recommended by
CSP after examining all the investigations. Thereafter, Mr. Badlani assailed the
order of this Court before the Hon'ble Supreme Court in Special Leave Petition
(Criminal)
l) No. 51085/2022, however, it was also dismissed on 27.01.2023
(Annexure - C/81).. Neither any review was preferred by Mr. Badlani nor any
separate criminal proceedings was pursued thereafter. Therefore, when the
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Hon'ble Apex Court dismissed the SLP discarding the allegations in toto and
confirming the findings that the signature made on the list dated 30.01.2016 was
of Mr. Badlani himself, it leads to the inescapable conclusion that the list dated
30.01.2016 was a valid list. We say so because, the llist
ist was disputed by Mr.
Badlani only on the ground of forgery and fabrication of his signatures by the
petitioners and when the closure report in criminal proceedings was given seal of
affirmation by the Hon'ble Apex Court leading to acquittal of petitioners,
petitione the
whole foundation of dispute does not sustain.
sustain Admittedly, the list dated
30.01.2016 was not disputed on any other grounds except as mentioned above
above.
So far as civil remedy taken by Mr. Badlani is concerned, i.e., the complaint
dated 15.06.2016 lodged
ed before Registrar, nothing has been brought on record to
show its fate and neither any arguments have been made in that context. Further,
we can also not lose sight of the fact that, when the petitioners were granted
authorization under Section 37 by Reg
Registrar
istrar to initiate criminal proceedings based
on list dated 14.01.2021 against 42 members including intervenors and current
members of Society by order dated 23.12.021, he had endorsed the list dated
30.01.2016 as the valid list. Therefore, considering the entirety of events, we have
no hesitation to hold that list dated 31.01.2016 submitted by petitioners is the
valid list.
51. It is already admitted that 2007 bye-laws were applicable as on 30.01.2016
and once it has been found that list dated 30.01.2016 is valid,, all the 21 members
including petitioners and those 14 members reflected therein form/constitute the
governing body of the Society. Having said so, the next question which calls for
deliberation is with respect to validity of the expulsion of petitioners
petitio vide
resolution dated 07.05.2016
7.05.2016. The legitimacy of the said resolution has to be tested
on the anvil of relevant Rules in 2007 bye
bye-laws. Forr ready reference, the relevant
Rules are reproduced below as thus -
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"Rule 6 - Membership
a. Patron Member - Any life member ....... majority of life
members can decide the issue.
b. Life Member - Any member contributing a sum of Rs.
Rs
1100/- as subscription for membership will be entitled to
become a Life Member. There will be only 14 life members.
The approval of filing
filing the casual vacancies of the life
members owing to the death, resignation or otherwise, will
be done by majority of the existing life members. In case of
increase in the number of life members, existing life
members by 3/4th majority should approve the same.
c. Ordinary Member - Anyy person contributing ........ in any
meetings of the Society.
d. Honorary Member - The governing board ...... any
meeting of the Society.
Rule 9 - Termination of Membership
The following are the ground for the termination of
membership -
a. Death of members or;
b. If the member became mentally insane or;
c. If the member resigns and if the resignation is accepted by
the Governing Body, or;
d. If membership subscription of Society has not been
deposited or;
e. If he is expelled from the Society as per the Rules of the
Society.
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Rule 13 - Constitution of Governing Body
The members shown in Rule 6 (A & B) whose name may be
entered in the membership register, on the basis of majority
will elect the President of the Governing Body. The President
so elected will then nominate/appoint the following office
bearers -
To become President or office bearerss of the Society, the
person should be a Patron or Life Member.
Member
Rule 15 - The Duties and Rights of Governing Body
xxx xxx
(g) After inviting special meeting, considering the proposal of
amendment in the constitution of Society in the special
meeting of General Body for its approval will be put up. The
amendment being passed by 2/3rd majority votes of the total
members of the general body passing the aforesaid proposal
will be sent for approval of the Registrar.
xxx xxx
(m) To nominate, appoint, accept the resignation, to expel the
office bearers, and to fill up the casual vacancy of the
Governing Body by majority votes of the Governing Body.
Body.
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On plain reading of bye-laws,
bye in particular Rule 15 (g) and (m), it is clear
bye-laws, 2/3rd majority votes of total
that for passing any amendment in the bye
members of general body is necessary. Similarly, for the purpose of nomination,
acceptance of resignation, expulsion of office bearers and filling up of casu
casual
vacancy of governing body, majority votes of governing body is mandatory. It is
not in dispute that the petitioners herein were inducted as life members in 2015
and the same is also substantiated by the nomination of petitioner no. 1 by
President as 'Secretary'
cretary' of the Society as per list dated 30.01.2016. The power of
such nomination vests exclusively with the President and any person who is not a
life member could not have been appointed as office bearer of the Society as per
mandate of Rule 13. Therefo
Therefore, petitioners by virtue of being a life member and
also office bearers,, automatically stood to be a part of governing body.
52. Now so far expulsion of petitioners is concerned, it is to be seen that
whether the resolution dated 17.05.2016 was passed by the majority of the 21
members who constituted governing body as per list dated 30.01.2016.
Interestingly,, what surfaces from the material placed on record is that, prior to
lodging of FIR against petitioners, when there was an attempt by erstwhile
President Dr.
r. Ramesh Badlani to induct 7 new members in the Society and carry
certain amendments in bye--laws
laws vide application dated 09.03.2016, it was rejected
by the Registrar by order dated 15.03.2016 categorically observing that - (i) as per
registered list, Governing
ning Body is of 21 members and resolution dated 14.02.2016
is signed by only 4 members, which is not acceptable; (ii) similarly in General
body meeting and Special Body meeting, amendments are carried out by 4
members, which is not acceptable; (iii) compar
comparative
ative chart is not provided; (iv)
resolutions are incomplete, signatures column of proposer (Secretary) is blank.
Thereafter, the complaint was lodged before police as well as the Registrar and on
the anvil of the same, as contended by Society, a Special G
General
eneral Meeting was
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called on 07.05.2016 vide notice dated 29.04.2016. When the meeting was
convened on 07.05.2016, the resolution dated 07.05.2016 was passed expelling
the petitioners from Society
Society.
53. On having gone through both the aforesaid notice as well as the resolution,
we noticed two things. Firstly, the notice has been served and signed by those 7
members with respect of whom Mr. Badlani moved an application before
Assistant Registrar seeking approval
approval of their induction, however the same was
rejected vide order dated 15.03.2016. Neither any explanation has been given by
the Society as to how these strangers became members in the Society and that too
in the capacity of office bearers, nor anything is placed on record to substantiate
the same. The situation with the resolution dated 07.05.2016 is also identical. It
has also been signed by stranger members in the Society. In addition, even for the
sake of argument if it is accepted that the induction is valid, then also the said
resolution has been signed only by 9 members. No explanation is given as to how
9 members can form the voting majority to comply with the mandate of
Regulation 15 (m) for the purpose of expulsion. Secondly, there are 2 notices of
the same day that are placed on record by the Society. It is again astonishing to see
that there are handwritten over-writings
over writings in the second notice, giving a prima
prima-facie
indication of manipulation of records. Be that as it may, in the instant case, as is
gathered from the records and discussed above, there has been clear violation of
Rule 15 (m) of the 2007 bye
bye-laws in issuing the resolution expelling the
petitioners from the Society.
54. Att this juncture, it is also pertinent to refer the report submitted by Registrar
in this context. In the report it has been stated that, firstly, notice dated 29.04.2016
calling for meeting on 07.05.2016 has not been signed by the Secretary and the
timeline as mandated under 2007 bye
bye-laws
laws has not been adhered to. Further, the
meeting dated 07.05.2016 has not been conducted on the registered address of the
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Society and the resolution has been signed by 9 members, out of which, 5
members namely Puneet Agarwal, Rajni Agarwal, Neelam Agarwal, Neha Goyal
and Ashok Kumar Agarwal are not the members of the Society/governing
governing body.
The resolution lacks quorum and the meeting had members stranger to the
Society.
55. On examination of the material placed on record and the submissions
made, in our view, the resolution dated 07.05.2016 passed by the then governing
body expelling the petitioners cannot be termed to be a valid resolution since it
was passed in violation of the applicable 2007 bye-laws
laws and consequently, the
expulsion of petitioners from Society is also held to be invalid.
"SublaFundamentocadit opus - Once foundation being
beingremoved, the
superstructure falls". At this stage, we can profitably refer the judgment rendered
by the Hon'ble Apex Court in 'State of Punjab Vs. Davinder Pal Singh Bhullar
and others28' wherein, while dealing with the issue that if show-cause
show cause notice itself
is defective, then whether consequential proceedings can stand, it was pleased to
observe as thus -
"107. It is a settled legal proposition that if initial action is
not in consonance with law, all subsequent and consequential
proceedings would fall through for the reason that illegality
strikes at the root of the order
order. In such a fact-situation,
situation, the
legal maxim "sublatofundamentocadit opus" meaning thereby
that foundation being removed, structure/work falls,, comes
into play and applies on all scores in the present case.
108. In Badrinath Vs. State of Tamil Nadu &Ors., AIR 2000
SC 3243; and State of Kerala v. Puthenkavu N.S.S.
2011 (14) SCC 770
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Karayogam&Anr., (2001) 10 SCC 191, this Court observe
observed
that once the basis of a proceeding is gone, all consequential
acts, actions, orders would fall to the ground automatically
and this principle is applicable to judicial, quasi
quasi-judicial
judicial and
administrative proceedings equally
equally."
In the aforesaid context, on considering the factual positionwhich
position has
emerged from the foregoing discussion,
discussion,we
we are of the firm opinion that the list
dated 30.01.2016 sustains ground and the expulsion of the petitioners vide
resolution dated 07.05.2016 from the Society is non-est for being passed in
violations of 2007 bye-laws.
laws.Once
Once the expulsion of petitioners itself is found to be
non-est,
est, the subsequent inductions automatically stand to be non-est
non est in the eyes of
law. It is also a cardinal principal of law that fraud vitiates every
every solemn act and it
is well established from the record that the expulsion of petitioners vide resolution
dated 07.05.2016
2016 and subsequent induction of the 7 members on 28
28.05.2016
despite having full knowledge of the order dated 15.03.2016
15 2016 is an act of fraud
fra by
Dr. Badlani and his group members. Further, we are also unable to accept the
argument of Society that they got knowledge of list dated 30
30.01..2016 in April,
2024 as the order of registrar was passed on 15
15.03.2016.Therefore,
herefore, it also raises
serious suspicion
icion in our mind that the manner in which the complaint was filed
against the petitioners and the subsequent actions taken by Dr. Badlani and his
group members appears to be a well hatched conspiracy in order to defraud
petitioners and his group members.
56. The
he next argument of Society and intervenors is that the petitioners
challenged resolution dated 07.05.2016 in appeal under Section 40 of the 1973
Act, which was dismissed and in absence of further challenge, the expulsion
attained finality.. The argument seems to be compelling in the first blush, however,
on examination of records, we found that the petitioners did not challenge the
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resolution dated 07.05.2016 in appeal, rather they challenged the resolution dated
28.05.2016 inducting new members
members in the Society and forming a new governing
body. Be that as it may, on perusal of order of dismissal, it is revealed that the
appeal was not dismissed on merits, but on the question of maintainability on a
hyper technical ground that the list which is
is being challenged is a list obtained by
the appellant (petitioner no. 1 herein) through Right to Information Act and such
information does not fall within the definition of order. Once it fails to fall within
the ambit of order, therefore, appeal is not maintainable.
maintainable. Considering the records,
in our opinion, the arguments of the Society and intervenors in the said regard are
misconstrued. The society through its President Dr. Ramesh Badlani had filed a
detailed reply wherein neither did he inform the Registrar
rar about the expulsion of
the petitioners, nor he challenged the locus of Petitioners.
Petitioners The resolution dated
07.05.2016 expelling the petitioners was never under challenge. More so, the
petitioners till date did not get a notice of expulsion by the Society
ociety. According to
petitioners and from the record it appears that the petitioners got knowledge of the
said expulsion when the petitioner got authorization to register complaint against
erring 42 persons.Further, looking at the material available on record, w
we have no
07.05.2016 prima-facie appears to be a
hesitation to hold that the resolution dated 07
back dated expulsion prepared to defeat the purpose of litigation and is clearly an
abuse of process of law.
57. "Ex
Ex injuria jus non oritur",
oritur meaning thereby that "a legal right or
entitlement cannot arise from an unlawful act or omission. When a fact arises
from an illegal or unlawful acts or omissions, it cannot form the basis of law or
legal rights, even if it is public or prominent."
prominent. In other words, if the initial action
is not in accordance with the law, the subsequent conduct of a party cannot
legitimize it. In view of the above, b
before
efore we proceed to delve into further
arguments, we deem it necessary to sum up the findings thus far since these
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findings are vital for consideration of events as transpired. The findings are as
follows -
a. 2007 bye-laws
laws are applicable as undisputed by the parties.
b. Based on the pleadings and documents on record, the list dated
30.01.2016 submitted by the petitioners and consisting of 21 members is
the only list that is found to be valid and in consonance with the 2007
bye-laws.
c. The expulsion of petitioners vide resolution dated 07.05.2016 is found to
be illegal since it has been passed in non-compliance
non compliance of the provisions
of 2007 bye-laws.
laws.
d. The petitioners never challenged the alleged resolution dated
07.05.2016 by which they were allegedly expelled from the Society.
Rather they challenged the subsequent resolution dated 28.05.2016.
e. Since the list dated 30.01.2016 has been found to be valid; expulsion of
petitioners to be invalid, then all the resolutions passed subsequent to
30.01.2016
2016 till date have to be tested on the anvil of applicable
rules/bye-laws
laws of the Society.
ociety. Upon careful examination of resolutions
available on record vis-à-vis the detailed findings given
en in the report
furnished by Registrar
Registrar,, it is clearly established that the resolutions
pertaining to induction/expulsion of members and amendment carried
out in theSociety
ociety subsequent to 30.01.2016
30 2016 cannot sustain as they were
not in consonance with the by
bye-laws/rules of the Society.Therefore
.Therefore, they
automatically stand null and void.
f. In view of specific findings above, the petitioners and other 14 members
are found to be life members of the Society in the capacity of 'office
bearers/Executive Members'.
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58. Coming further, what falls next for our consideration is notice dated
13.05.2016(Annexure - C/22) calling for a general body meeting on
28.05.2016(Annexure - C/23) with an agenda to increase the tenure of Society's
governing body from 30.05.2016 to 30.11.2016
30.11.2016.. As per the records available with
us, it is yet surprising to see that, firstly, the said notice was not signed by anyone
and again served to stranger members whose
whose induction was already rejected by
Assistant Registrar vide
ide order dated 15.03.2016 and they never became part of the
Society following the due compliance of 2007 bye-laws.
bye . Secondly, so far as
meeting dated 28.05.2016 is concerned, the Registrar has opined that it has not
been held on the registered address and based on this meeting, annual list of
members in the governing body under Section 27 for extended tenure
tenure(Annexure -
C/24) has been submitted for the extended tenure which has been signed by Mr.
Manish Khatwani in the capacity of Secretary.
Secretary Lastly, despite the quorum being of
21 members, the meeting was attended by only 9 members including the members
who were never validly included in the Society. Accordingly, we find both the
notice and resolution to be invalid for them being passed in violation of bye
bye-laws.
59. For the sake of brevity and to avoid overburdening our judgment, we shall
refrain from examining each notice, resolution, meeting and list29submitted up to
29.01.2019.
2019. Once it is established that the list dated 30.01.2016 is valid
valid, indicating
the tenure of the elected body to be till 29.01.2016 and also considering that the
expulsion of the petitioners was also invalid as per 2007 bye-laws
laws, the only
governing body that could have remained in the Society would be as per
30.01.2016 list.
t. Consequently,in light of the aforementioned observations, any
event that took place in the Society against the bye-lawsfrom
from 07.05.2016 to
Notices dated - 30.09.2016, 02.11.2016, 01.04.2017, 11.04.2017, 17.10.2017, 18.11.2018.
Meetings dated - 15.10.2016, 09.11.2016, 14.12.2016,
14.12.2016, 10.04.2017, 24.07.2017, 04.11.2017,
30.11.2018.
Lists dated - 14.12.2016, 27.11.2017, 30.11.2018.
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29.01.2019 lacked legitimacy and hence, rendered null and void.This
This fact is also
supported by the report furnished by Registrar giving detailed findings on each
resolution. Therefore, the next questionfalling for this Court's consideration is
regarding events that unfolded in the Society after 29.01.2019,, i.e., the date on
which the tenure of the legitimately elected b
body came to an end.
60. As per the Rule 1430 of the 2007 bye-laws,
laws, the tenure of the governing body
will be of 3 years and extendable for another 6 months with the approval of
general body till fresh elections are held. It is to be noted that, on the end of tenure
of the governing body after 3 years
years, all the 21 members as per 2016 list continued
to be the life members and election ought to have been conducted within the
Society. However, as gathered from record, there was already a governing body in
place in the Society deriving its authority from illegal elections conducted in the
Society between 2016 to 2019 (which we have already declared to be null and
void), and that governing body, ssubsequent to 29.01.2019, vide notice dated
03.01.2019 (Annexure - C/50) gathered for meeting of governing body on
12.10.2019(Annexure - C/51) with primary agenda to amendthe 2007 bye-laws.
bye
Keeping the petitioners and other 14 members at bay, another general body
meeting dated 17.11.2019 (Annexure - C/53) was convened vide notice dated
04.11.2019 (Annexure - C/52) seeking to further discuss amendments as
proposed in the last meeting. In the said meeting, few of the amendments as
proposed were sanctioned/approved by the governing body. Again on 21.11.2019,
a notice (Annexure - C/54) calling for general body meeting on 07.12.2019
(Annexure - C/55) was issued for forwarding the list under Section 27 of the
1973 Act. In compliance of the resolution, the list was submitted to the Registrar
on 13.02.2019 (Annexure - C/56).
Tenure of the governing body.
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61. Coming to 2020, thereafter on 17.12.2020, another meeting of general body
was held in which Mr. Badlani participated. In the said meeting, 16 members
(Agrawal Group) resigned and 16 new members (Chouksey group) were inducted.
Basically, the Society
ety was handed over by Agrawal group to Chouksey group and
intervenors herein were inducted. Be that as it may, Mr. Badlani was never shown
as a member in the list submitted on 13.02.2019 and he re-appeared
re appeared out of the
blue in the governing body meeting dat
dated
ed 17.12.2020 without any document on
record explaining his re-induction.
induction. Further, one lady namely 'Jaya Devi' who was
shown at Serial No. 4 in the list dated 13.02.2019, disappeared in the governing
body meeting dated 17.12.2020. These acts in itself speak
speak for the conduct of the
management of Society, which is nothing less than dubious. We would have given
independent findings on each of these events, however, as already established
above that after the alleged expulsion of petitioners in the Society vide resolution
dated 07.05.2016 (which has been declared to be invalid by us),
us), all the further
activities are being carried out by those set of members who magically appear and
disappear in the Society without there being any document on record
substantiating their induction and expulsion. We have gone through the Registrar's
report in detail about the particular dates and events as mentioned above and
looking at the conduct of the management of the Society, we are not surprised to
find negative findings by Reg
Registrar
istrar on each event. Considering everything in
totality, we are constrained to say that we cannot escape the possibility of a huge
scam being run in the society putting lives of thousands of students and employees
at stake.
62. Now what transpires hereafter is more appalling. On 14.01.2021
14.01.2021, another
list was forwarded under the signatures of one'Puneet Agrawal'vide
vide Annexure
C/58showing members for the period 14.01.2021 to 13.01.2024. In this list
reference is made to meeting of general body dated 14.01.2021
14.01.2021,, which is not on
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record and has not been produced by Respondent No. 4 and intervenors. In this
list, surprisingly, one Jay Narayan Choukseyis shown as President
President, Anupam
Choukseyas Secretary and Shweta Chouksey
Choukseyas Treasurer.. However, close on heels
of this list dated 14.01.2021, another list dated 14.01.2021 (Annexure - C/59)
was simultaneously forwarded showing Shweta ChoukseyasPresident,
Chouksey
Dharmendra Guptaas Vice-
-President, PujashreeChoukseyas Secretary and Ashish
Jaiswal as Treasurer. This list is forwarded under signatures of Shweta Chouksey.
63. When a reference was made to Registrar's report in this regard, we found
mention of 2 lists inparagraph 17 of the report, each dated 14.01.2021, forwarded
and having 12 common members and 8 different members
members.. Having hi
highlighted the
conduct of the management of Society yet again and again, submission of 2 lists
of the same date with different members and different designation reeks of a
deeper controversy within the management
management. Not to forget, it is also mentioned by
the Registrar that Dharmendra Gupta and Anupam Chouksey were made members
on 14.01.2021 itself,, however, by letters of the Society vide Annexure C/60 and
C/61 but neither the minutes of meeting dated 14.01.2021 are available nor a
notice for holding the meetin
meeting is available on record.
64. Additionally,, despite non availability of these 2 lists, i.e., Annexure C/58
and C/59 referring to general body meeting dated 14.01.2021 on record
record,
interestingly contradictory pleadings are raised with respect to it by the Society.
Culling out the same, on
n 29.05.2024,
29.05.2024 the Society in its reply to an application filed
by the petitioner bearing I..A. No. 4371/2024, in Para 'B(4)' categorically stated
that the list dated 14.01.2021 (Annexure C/58) is referrable to election held on
17.12.2020 as per minutes of governing body meeting 17.12.2020 (Annexure -
C/57). On perusal of the minutes of meeting dated 17.12.2020,, it was found that
though the said meeting was presided over by Mr.Puneet
Puneet Agrawal as President
where 16 members (Agrawal
Agrawal Group
Group)) resigned and 16 new members ((Chouksey
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group) were inducted, it does not show that elections took place whereby Jay
Narayan Chouksey was elected as President as mentioned in the pleadings of reply
to I.A. No. 4371/2024 by Society. Based on these discrepancies, the petitioners
were granted authorization under Section 37 to proceed against the management
of Society as discussed earlier.
65. In these circumstances
circumstances, only one conclusion can be drawn that the Society
and its affairs were conducted by the so called unauthorised members of Agrawal
Group and then by Chouksey Group hand in hand throwing all the bye
bye-laws and
its mandate to the winds. We are constrained to o
observe
bserve that the both the lists
beingAnnexure
Annexure C/58 and Annexure C/59 dated 14.01.2021 are totally
unauthorised and shows unethical and unprofessional approach of members in
conducting the affairs of the Society.
66. Subsequently, by notice dated 16.10.2021
16.10.2021(Annexure - C/69),another
general body meeting was called on 31.10.2021(Annexure - C/70).
C/70) On the said
date, purportedly an election is said to have taken placeinducting 7 new members
in the Society. Pursuant thereto, on 10.11.2021(Annexure - C/71)),annual list of
members inducted vide resolution dated 31.10.2021 was forwarded to the
Registrar under Section 27 of 1973 Act
Act. However, on examination of record and
the report of Registrar, the situation is same, i.e., based on the invalidity of the
governing body constituted in earlier rounds, the consequent elections are also
reported to be unauthorised and invalid.
67. Last but not
ot the least, on 15.03.2024(Annexure
15.03.2024 yet again another
- C/87),yet
meeting of governing body was held by alleged 7 office bearers (Chouksey
Group) wherein 10 new members were inducted. Since induction of 16 members
(Chouksey Group) by governing body meeting dated
dated 17.12.2020 was held to be
invalid, wee can safely hold and conclude that the fresh induction on 15.03.2024 by
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governing body meeting held by majority of members of Chouksey Group
automatically falls to the ground.
The amendment carried out in 2007 bye
bye-laws of the Society, its approval by
Assistant Registrar under Section 10 of the 1973 Act and its effect on the
present litigation.
68. Mr. V.V.S. Murty, learned Senior Counsel assisted by Mr. RiteshInani,
Advocate, Mr. Siddharth Radhe Lal Gupta andMr. Kuldeep Pathak, all learned
counsels appearing for the intervenors, collectively argued that in furtherance of
meeting convened on 17.11.2019 vide notice dated 04.11.2019, the amendments
proposed in the 2007 bye-laws,
laws, in particular to Rule 2, 8, 11(a),
11(a), 11(b) and 13 were
sanctioned and approved by the governing body of the Society. Much emphasis
was laid on the fact that after the approval of amendments by the governing body,
application dated 12.02.2021 was duly sent to Assistant Registrar seeking for
f
registration of the amendments. By order dated 08.10.2021 (Annexure - C/65),
the amendments were registered under Section 10 by the Assistant Registrar and
were taken on record. Had there been no duly constituted governing body in place,
the amendments wouldn't have been registered by the concerned authority. Now,
once the amendments were acknowledged by the competent authority back in year
2021 itself, the petitioners cannot challenge the validity of the same at a belated
stage after a lapse of two year
years. Reading sub-clause
clause (3) of Section 10 of 1973 Act,
it was further contended that once an amendment is registered by the Registrar on
payment of fee as specified, a copy of amendment certified by him is issued in
favour of the Society which is a conclusive
conclusive evidence that the amendment is duly
registered. Hence, it was urged that no relief can be granted to the petitioners after
such delay, particularly in absence of any challenge to such registration.
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69. Per contra, Mr. Sudeep Bhargava, learned Deputy Advocat
Advocatee General for the
State argued that the Registrar does not have power under Section 10 to check the
legitimacy of the governing body who has filed the application seeking
registration. He has to merely see whether due fee has been paid and whether the
amendment
dment is not contrary to the Act or Rules made thereunder. However, in the
present case, when the Registrar was specifically directed by this Court to look
into the legitimacy of the said amendment by looking into entire pleadings and
documents as submitted in the convenience compilation, it was found that the
amendment is not valid. Out of the original 21 lawful members present in the
governing body, no one was present in the governing body which submitted the
application. Therefore, from the stage of meeting
meeting proposing the amendment to
registration of the same, everything was carried out unauthorized governing body.
70. In order to appreciate the controversy, we shall first refer Section 10 of
1973 Act, which is reproduced below for ready reference -
"10. Amendment
ndment of Memorandum or regulation or
byelaws of registered society -
(1) No amendment of memorandum of association or
regulations of a registered society shall be valid until the
amendment has been registered under this Act.
(2) Every proposal for such amendment shall be
forwarded to the Registrar in such form together with such fee
as may be prescribed and if the Registrar is satisfied that the
amendment is not contrary to this Act or the rules made
thereunder, he may, if he thinks
thinks fit, register the amendment.
(3) Where an amendment is registered under sub -section
section
(2), the Registrar shall issue to the society on payment of a fee
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specified in Section 29 a copy of the amendment certified by
him, which shall be conclusive evidence that the same is duly
registered.
On bare reading of Section 10, we find substance in the argument made by
State. Section 10 merely deals with the validity of memorandum of association or
regulations of Society, in case they have been amended and not regis
registered. It casts
a duty upon the Society to get the amendment registered by paying specified fee
and procure an amendment certificate from the Registrar. It nowhere empowers the
Registrar or directs him to issue amendment certificate only after ascertaining the
validity of the governing body. Registrar cannot make a roving enquiry when an
application is presented before him. He has to merely ascertain if the amendments
are in consonance with the Acts and Rules specified therein.
So far as report of Registrar is concerned, he has given definitive findings
that notice of 14 days before calling for meeting was not given. More so, tracing
the legitimacy of the governing body from 2016, it has been further opined that the
in the meeting approving the amendment, no original members out of the 21
lawful members as per list dated 30.01.2016 was present. We are in agreement
with the findings. On examining the records, we are unable to concur with the
submissions made by learned counsels for the intervenors that once re
registration
certificate has been given, the same acts as a conclusive evidence of the governing
body of the Society. We are looking at a classic case where there has been an
ongoing violation of bye-laws
laws in conducting the affairs of the Society. As per the
directives of Hon'ble Supreme Court, it is essential for us to look at each instance
ensuring that applicable bye
bye-laws were adhered to. In the former part of our
judgment, we have thoroughly examined the sequence of events and hence, in our
considered opinion,
ion, merely having a certificate of amendment issued by competent
authority will not give legitimacy to the amendment in the facts of the case.
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Maintainability of the writ petition qua delay and laches and alleged suppression
of material facts by the inte
intervenors -
71. As already noted by us above, Mr. Siddharth Radhe Lal Gupta for the
intervenors turned no stones left in persuading us that considering the huge delay
of almost 7 years from date of expulsion and filing of the present writ petition, it
ought to be dismissed on this ground alone. Not just the delay, there's even
suppression of material facts made by the petitioners leading to the core dispute
and hence, the writ petition should be dismissed at threshold.
On a query put to himas to how this question can be raised at th
this stage
when the matter is being heard on limited remand,, our attention was drawn
towards the order dated 30.08.2024 passed by Hon'ble Supreme Court in Diary
No. 36732/2024, wherein, the Hon'ble Apex Court was pleased to observe that all
contention of parties are left open which shall be considered by High Court.
Cour We
heard the learned counsel to his satisfaction
satisfaction.. After hearing, when a query was put
to him to explain that if his submissions are accepted and Writ Petition is
dismissed, how will there be compliance of order of limited remand passed by the
Hon'ble Supreme
preme Court? No satisfactory response was offered. Thereafter, when
the learned counsel was asked as to how the question of maintainability will arise
at this stage, when the original order dated 23.04.2024 has been affirmed by the
Hon'ble Apex Court and the
he issue of maintainability has crystallised, again there
was no satisfactory response. In view of the above, we are not inclined to accept
the arguments raised and hence, they are rejected at threshold.
Interlocutory Applications -
72. I.A. No. 4598/2024 has been filed by intervener namely Rakesh Singh
Dhakre claiming to be a member of the society (also in capacity of member of the
Company) opposing the petition.
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I.A. No. 4622/2024 has been jointly filed on behalf of intervenoors - Anupam
Chouksey and Dharmendra
dra Gupta opposing the petition.
I.A. No.4599/2024 has been filed by interven
intervenor - Shweta Chouksey (opposing the
petition).
I.A. No. 8196/2024 has been filed by intervenor - Dr. Ramesh Badlani.
(i) I.A. No. 7048/2024 is an application seeking preponement of hearing. Since
the case has been decided on merits, the said I.A. is also dismissed as infructuous.
(ii) After this Court passed an order on 31.07.2024, Respondent No. 4 Society
filed I.A. No. 7043/2024 seeking recall of the said order along with I.A. No.
7107/2024 for stay of the said order. Similarly I.A. No. 7046/2024 for recall of
order dated 31.07.2024 was filed by intervener Anupam Chouksey and
Dharmendra Gupta along with I.A. No. 7047/2024 for stayy of order dated
31.07.2024.
(iii) disposed-of, the I.A.
Since the matter has now being heard on merits and disposed
Nos. 7043/2024, 7046/2024
7046/2024, 7047/2024 and 7107/2024 are disposed
disposed-of as
infructuous.
(iv) I.A. No. 8195/2024 is an application on behalf of the So
Society seeking
extension of interim order permitting them to operate the bank account. The
application is dismissed at threshold for fraud being played by the management of
the Society on this Court.
73. Having heard the matter of merits along with aforesaid I.A.s,
I.A.s, we allow all
the intervention applicatons pending. However, it is ssuffice
uffice to say on hearing the
matter on merits and reasoning given regarding legitimacy of intervenors being
not a lawful member in the original list dated 30.01.2016, they are not all
allowed to
participate in the elections. So far as Dr. Ramesh Badlani is concerned, since he
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was the then elected President and election has to be held on the basis on the said
list, his application is also allowed. However, considering that Mr. Badlani does
not want to contest the election as informed to us, it will be open for him to submit
representation before Registrar in such case.
Conclusion -
74. Before we arrive at our final decision, we must highlight that we are
mindful of the specific direction given by the Hon'ble Apex Court that election
shall not be held on the basis of list of members/voters as on 30.01.2016.
However, considering
onsidering the manner in which the parties pursued litigation in the
first round, it is to be noted that such direction was given based on incomplete
material placed on record before the Hon'ble Apex Court. While we acknowledge
this instruction with all respect and humility at our command,
command though at the same
time, wee also wish to inform the Hon'ble Apex Court thatu
thatupon re-examination
examination of
the matter, we encountered a substantial array of new pleadings leading this Court
in a position of divergence from that specific directionfor reasons mentioned
above. On appreciation of pleadings brought on record on remand and examining
the material placed on record from 2016 till date, i.e., 2024,
2024 the actions undertaken
by the parties appear to fall short of the expectations outlined in the order of
remand. After carefully reviewing the records, along with the Registrar's report,
we are of the firm opinion that the annual list dated January 30, 2016 is the only
valid and legally constituted list of the Society's governing body in accordance
with the 2007 bye-laws till date.
date All the subsequent annual lists as brought on
record lack conformity with the 2007 bye
bye-laws
laws and do not provide sufficient
evidence to establish their legitimacy.
We have no hesitation in holding that this is a classic case where
apparently criminal prosecution has been used as a tool against the petitioners to
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take-over
over the management of Society. The management of the Society has left
no stones unturned to ensure that they retain the Society. The legal maxim 'res
ipsa loquitur' aptly fits for this case where thing
thingss are speaking for themselves on
the face of it. The Society has been converted into a company despite an
operational stay order and without obtaining leave of this Court. This is an act
purely intended to avoid the clutches of this Court and we highly dep
depreciate such
conduct.Needless
eedless to mention that, once it is established that element of fraud is
involved, it vitiates all the solemn act.
In assessing the eligibility of voters,
voters it is crucial to strictly adhere to the
provisions set forth in the bye
bye-laws. The
he principle of inclusivity should guide our
determination, ensuring that all the members who meet the specified criteria are
afforded the right to vote. We acknowledge the importance of a transparent
electoral process especially when the lives of thousand students are at stake.
Therefore, we dispose-of
of this petition with the following directions -
(1) The Registrar, Firms and Societies, Bhopal, Madhya
M Pradesh
radesh is directed
to conduct free and fair elections of the Respondent No. 4 Society as per
the list of member
members/votersdated 30.01.2016.
(2) The election as directed shall be conducted by Registrar
Registrar, Firms and
Societiesas
as expeditiously as possible with an outer limit of two weeks
from the date of receipt of this order and the result shall be published
accordingly and a report shall be submitted thereafter before the
Principal Registrar of this Court. The Principal Registrar shall place
the report on record.
(3) The Registrar,, Firms and Societiesafter election shall hand over the
management of the Society to the newly elected
elected governing body. If
required, he is also permitted and authorised to take assistance of any
local administration situated in Madhya Pradesh or any other place
place.
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(4) Till the time newly elected governing body takes over the charge of
Society, all the concerned stakeholders including petitioners, members
of Respondent No. 4 Society and intervenors are restrained
rained from taking
any financial decision or any other decisions pertaining to management
of Society in question and are also forthwith restrained
ined from operating
the bank accounts (either in the name of society or in the name of
company).
(5) The newly elected governing body along with Registrar, Firms and
Society
ociety shall take steps in accordance with law to restore the Society to
its original status. The Registrar of Company -Gwalior shall provide all
necessary help as and when needed.
(6) Let a copy of this order be transmitted through e-mail
e mail to the Registrar,
Firms and Societies and also Registrar of Company - Gwalior for
timely action.
(SUSHRUT ARVIND DHARMADHIKARI) (DUPPALA VENKATA RAMANA)
RAMANA
JUDGE JUDGE
b
