Madras High Court
Dr. R. Palaniappa vs S.H.N.E. School Committee on 23 December, 2021
S.A.(MD)No.116 of 2009
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 23.12.2021
CORAM:
THE HONOURABLE MRS. JUSTICE V.BHAVANI SUBBAROYAN
S.A.(MD)No.116 of 2009
1. Dr. R. Palaniappa
2. M. Ashok ... Appellants/ Respondents /Plaintiffs
Vs.
1. S.H.N.E. School Committee
through its President,
S.H.N. Edward Higher Secondary
School, Main Road, Sattur,
Virudhunagar District
2. S.H.N.E. School Committee
through its Secretary,
S.H.N. Edward Higher Secondary
School, Main Road, Sattur,
Virudhunagar District ... Respondents/Appellants/Plaintiffs
1/31
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PRAYER: Second Appeal is filed under Section 100 of Civil Procedure
Code, against the judgment and decree, dated 14.09.2007 made in A.S.No.
29 of 2006 on the file of the Subordinate Judge, Sivakasi, reversing the
Judgment and decree, dated 20.06.2006, made in O.S.No.64 of 2001, on the
file of the District Munsif, Sattur.
For Appellants : Mr. S. Subbiah, Senior Counsel for
Ms. Jeesi Jeeva Priya
For Respondents : Mr. J. Baradhan for
Mr. T. R. Jayapalan
JUDGMENT
The appeal is directed against the judgment and decree, dated
14.09.2007 made in A.S.No.29 of 2006, on the file of the learned
Subordinate Judge, Sivakasi, reversing the judgment and decree, dated
20.06.2006, made in O.S.No.64 of 2001, on the file of the learned District
Munsif, Sattur.
2. For the sake of convenience, the parties are referred to, as
described before the trial Court.
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3. The averments made in the plaint, in brief, are as follows:-
3(a). The first defendant 'Sattur Hindu Nadars Edward School
Committee' is registered under the Companies Act in the year 1919 with an
object of advancing education, literary, technical and physical activities and
to inculcate sound moral principles in the pupils in order to make them
efficient citizens. With this avowed object, the Articles of Association and
Memorandum of Association were registered on 15.3.1919 itself before the
Registrar of Companies at Madras.
3(b). To achieve the above object, the generous and philanthropic
minded people from Hindu Nadar community were contributing funds and
other resources to the first-defendant-committee. Thus, the first-defendant-
school grew from an elementary school to a Higher Secondary School level,
educating hundreds of pupils every year. Now, the Government of Tamil
Nadu is also extending aid to this defendant-school.
3(c). The first-defendant-school-committee consists of 24 members,
out of them 20 members shall be selected directly from ;the General Body of
Voters maintained by the first-defendant-committee. The remaining four
members to be elected indirectly by those 20 elected members from among
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the voters list maintained by the first-defendant. There will be six board of
directors, out of them three will be ex-officio board of directors, who will
act as President, Vice-President and Secretary and the remaining three will
be elected from among the committee members. As per clause V of the
Articles of Association, all the adult males, who are above the age of 18,
from the Hindu Nadar community of Sattur are eligible for membership of
the committee with voting right. It is significant to note that an application
from an adult male member of the Hindu Nadar Community of Sattur is a
condition precedent to enlist him as a member of the first-defendant
committee. This condition is prescribed by the founding fathers of the
committee in order to maintain a transparency in the membership and also
make large-scale of male members of Hindu Nadars of Sattur to have active
participation in the committee, thereby serving the avowed object for which
the school-committee was formulated.
3(d). The grievance of the plaintiffs is that for the past two decades,
people with vested interests have got control of the committee and have
given a go-by to the democratic methods to be followed in the election of
members, on the other hand engaged their own yes-men. Thus the present
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President and Secretary are the inheritors of such persons with vested
interests and the present committee members are thus selected through
back-door methods with foul means.
3(e). The further grievance of the plaintiffs is that resultant effect of
the mismanagement with rampant corruption is that the educational
institutions of the school-committee lost their stature and there is
disharmony among its teachers and employees leading to chaotic
atmosphere. The school campus which was known for conducting
tournaments, has now become a den of immorality and being led by people
with vested interests who have hijacked the school-committee and keeping
it as their captive and thereby the noble object of the committee to inculcate
sound moral principles among the pupils is lost.
3(f). The plaintiffs state that the first plaintiff is a doctor by profession
and the second plaintiff is a business man with equally good qualification.
Both of them are with reputation and respect in Sattur. They along with
other reputed Hindu nadars of Sattur approached the committee several
times requiring them to conduct election and maintain transparency in the
membership, as per the terms of the Articles and Memorandum of
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Association, but those requests gone to the deaf years. Therefore, the first
plaintiff, supported by 105 eligible Hindu Nadars of Sattur, together with
the second plaintiff, had issued legal notices dated 23.9.2000 to all the six
Directors of the Committee requiring them to refrain from improperly
conducting the affairs of the Committee, but it was not heeded to.
Thereafter, the first plaintiff had sent complaints dated 6.5.2001 to the
District Collector, Virudhunagar and Tahsildar of Sattur in public interest,
seeking their intervention for retrieving the School-Committee from the
illegal clutches of the defendants and their minions. In view of this, a
Conciliarly meeting was held on 18.6.2021 with the participation of DSP
and Tahsildar of Sattur, the first plaintiff and the defendants herein, the
minutes of which was reduced in writing, signed by all participated,
wherein, the defendants herein had promised that they would conduct
elections to the members of the Committee before 17.7.2001, as per the
terms of the Articles and Memorandum of Association, but despite their
written promise, the defendants continued their illegal course of action.
Therefore, finally the plaintiffs individually had sent applications on
31.8.2001 through registered post to the first-defendant seeking to register
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their names as voters in the electoral rolls of the Committee and to permit
them to participate in the ensuing election. It is learnt that some other
eligible Hindu Nadars of Sattur also had applied to the first defendant for
being registered as voters. Despite receiving all the applications, the first-
defendant did not care to comply with the demand or even to give a reply to
the applicants.
3(g). The grievance of the plaintiffs is that due to the illegal attitude
and conduct of defendants, hundreds of eligible members of the Sattur
Hindu Nadar community, including the plaintiffs, are deprived of their
inalienable right of becoming electors and get elected to the Committee,
which is ensured to them by the Memorandum and Articles of Association
and the Rules laid thereunder. Hence the suit for declaration that the
plaintiffs and the others, whom they represent, are qualified voters to get
entry in the Register of Voters and for a mandatory injunction directing the
defendants to include the names of the plaintiffs and the others whom they
represent in the Register of Voters as per the election Rules of Articles of
Association.
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4. The averments made in the written statement, in brief, are as
follows:- Sattur Hindu Nadars Edward School Community is a company
registered under the Companies Act, 1913. The Articles of Association of
the company was amended on 16.05.2001. If any adult Hindu Nadar of
Sattur is willing to become a member of the institution, he has to make an
application to the Secretary of the school. The executive committee of the
institution will decide about the eligibility of the applicant to become a
member of the institution. The plaintiffs have not made any application to
the company for their membership. The suit has been filed on the basis of
old Memorandum and Articles of Association and hence not maintainable.
4 (a). It is incorrect to state that all the adult male members of
Hindu Nadars who are above 18 years will automatically become members,
for the reason that the adult hindu Nadars of Sattur who are residents of
Sattur, residing at Sattur for the last three years and above and who are
willing to become the members of the committee have to make applications
for membership and their eligibility to become members will be decided
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only by the executive committee. As per articles VI (b) and ©, the
executive committee will form the election committee to conduct the
election. All the members of the company, whose names are entered in the
register of members, shall automatically become eligible to attend and vote
at the general body meeting. There is no register of voters, on the other
hand there is only a register of membership. Any suit against a company
can be filed in the High Court or a District Court, which is empowered by
High Court and therefore the Trial Court before which the suit was filed has
no jurisdiction.
4(b). As per the Articles of Association only the members of the
company can pass resolution and it does not permit intervention of any
outsiders in the affairs of the company. Therefore, the plaintiffs being
outsiders, will not and cannot be permitted to enter into the affairs of the
company at any level. Further, the Articles of Association clearly mentions
about the procedure for voting and conducting election. Hence, neither the
President nor the Secretary of the School committee can act against these
norms for the convenience of the plaintiffs or for the convenience of the
defendants either. It is only the Board of Directors of the company who can
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question about the affairs of the company. If the members think that the
affairs of the company are prejudicial to the public, they can convene
General Body Meeting and remove the Board of Directors and restrict the
powers of the Board. Therefore, the general public, the District Collector or
the Tahsildar cannot interfere in the affairs of the company, because they are
not the appropriate persons to interfere in the matter. The Companies Act
regulate the conduct of the company and if any Member is aggrieved by any
act of the company, appropriate forum for redressal is provided in the
Companies Act. The plaintiffs, who are more than 20 in number, when seek
relief with respect to an educational institution, ought to have registered
under the Societies Registration Act, 1975, because an unregistered body
cannot maintain a suit representing the members and as such the suit is not
maintainable in law.
5. The plaintiffs, in support of their case, before the trial Court,
have examined themselves as P.W.1 and PW3 respectively and one
Sankaralingam as P.W.2, and marked Exs.A1 to A18. On the side of the
defendants, D.Ws. 1 to 3 were examined and Exs. B1 to B11 were marked.
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6. On the basis of the above pleadings, the trial Court framed
necessary issues viz.,
'1. Whether the plaintiffs have become
members on submitting applications as per rules?
2. Whether there is right for the plaintiffs
and others, who are eligible like plaintiffs, to be
included in the list of voters maintained by the
defendants?
Whether the plaintiffs are entitled to the relief of
declaration as prayed for in the suit?
3. Whether the plaintiffs are entitled for the
relief of mandatory injunction as prayed for in the
suit?
4. To what other relief?'
7. The Trial Court, after considering the various aspects of the
evidence, both oral and documentary, held that on the basis of Exs. A2, A3
and A14 the plaintiffs have properly submitted their applications to the
defendants to become members of the School Committee and the plaintiffs
have the right to be included in the list of voters. The Trial court further
granted the relief of declaration as prayed for by the plaintiffs relying upon
the documents filed by the plaintiffs and disbelieving the documents Exs.
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B1 to B11 filed by the defendants and also granted the relief of mandatory
injunction as prayed for and finally decreed the suit as prayed for.
8. Aggrieved by the judgment and decree of the trial Court, the
defendants preferred an appeal in A.S.No.29 of 2006, before the learned
Subordinate Judge, Sivakasi. The lower Appellate Court, on entertaining a
very strong doubt with regard to the jurisdiction of the Civil Court in
Company Law matters, framed the following issues:
'1. Whether the plaintiffs are entitled to get
the reliefs as prayed for?
2. To what other relief?'
9. Considering the facts of the case, the lower Appellate Court
ultimately held that the Civil Court has no jurisdiction to eschew the
Articles of Association, which was already approved by the Company Law
Board. Thus, the lower Appellate Court disagreed with the decision of the
trial Court and consequently set aside the decree of the trial Court and
allowed the appeal.
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10. Against the conflicting findings of the courts below, the
unsuccessful plaintiffs before the lower appellate court, have filed the
present appeal before this Court.
11. At the time of admission of the Second Appeal on 15.10.2009
the following substantial questions of law arose for consideration:
'1. whether the provisions of Section 10 of
the Companies Act specifically oust the
jurisdiction of the civil court o try and determine a
civil nature regarding the declaratory and
mandatory injunction relief?
2. When the declaration regarding the right
of the membership does not fall within the
jurisdiction of either this court sitting in the
company jurisdiction or district court or company
law board, is not the jurisdiction of the civil court
to declare such a right is barred under Section 10
of the companies Act ?
3. When Section 10 of the Companies Act
does not specifically or impliedly bar the
jurisdiction of the civil court regarding the nature
of the relief prayed for in the suit. is not the
judgment of the lower appellate court holding that
the civil court has no jurisdiction to try the suit
under Section 10 of the Companies Act is correct?
4. Simply because the members to be
enrolled would be numerous, is it open to the court
to deny a right to a member of the community who
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is otherwise eligible and entitled to be enrolled as
members , on the ground of plurality of the
members for such enrolment ?'
12. The learned counsel appearing for the appellants/plaintiffs
would submit that the Civil Court has got jurisdiction to try the claim made
by the appellants on the ground that as per section 10 of the Companies Act
(a) the High Court has jurisdiction in relation to the place at which the
registered office of the company concerned is situate, except to the extent
to which jurisdiction has been conferred on any District Court or District
Courts subordinate to that High Court in pursuance of sub-section (2) and as
per sub-section (2), the Central Government may empower any District
Court to exercise all or any of the jurisdiction conferred by the Act upon the
Court, not being the jurisdiction conferred in respect of companies generally
by sections 237, 391, 394, 395 and 397 to 407. The learned counsel further
submitted that for the purpose of jurisdiction to wind up companies,
registered office means the place which has longest been the registered
office of the company during the six months immediately preceding the
presentation of the petition for winding up. The learned counsel also
submits that as per the 1956 Act, only three forums are vested with the
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power to decide the disputes, namely High Court, District Court and
Company Law Board and further submits that there is no other provision in
the Act, which confers powers upon any other forum, in relation to the
matters other than to which, the High Court, the District Court and the
Company Law Board were vested with the powers to deal with the same.
The High Court is empowered to decide upon the issues covered by sections
391, 394 and 395, whereas the powers under sections 237 and 397-407 have
been conferred upon the Company Law Board, while limited powers were
made available to the District Court, in relation to certain matters as
provided under GSR No.663 dated 29.5.1959 and they can deal with only
such matters falling under sections 89, 113, 118, 144,163,196, 219,234,304,
307 and 614. The learned counsel further argued that the Company Law
Board is also vested with powers to deal with matters arising under specific
provisions. The learned counsel further submits that when there are specific
provisions empowering the three forums, namely, the High Court, District
Court and the Company Law Board with certain matters, and when there is
no exclusion of the powers of the Civil Court in relation to matters, which
are not covered by these three forums, certainly, in the absence of specific
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exclusion, the civil court alone will have definite jurisdiction to entertain
those matters, which do not fall within the ambit of the above three forums.
The learned counsel argued that with regard to the enforcement of the right
of the plaintiffs as per the Articles of Association, as it stood prior to the
amendment under Ex.B1, none of the three forums, namely, High Court,
District Court and the Company Law Board were vested with any such
power to deal with directing the company for the enrolment of the members
to the committee and the election to such committee as per the Articles of
Association.
12(a). The learned counsel for the appellants submits that under
section 9 of the Code of Civil Procedure, the Courts shall have jurisdiction
to try all suits of a civil nature, excepting suits of which their cognizance is
either expressly or impliedly barred. Thus, the learned counsel further
argues that as provided under section 9 of the Code, the jurisdiction of the
civil court to decide the issue involved in the suit has not been ousted either
explicitly or impliedly, as there is no other provision conferring such powers
on any other forum.
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12(b).The learned counsel further submits that there is no limit to the
powers given to the civil Court, though under the Tamil Nadu Civil Court
Act, the jurisdiction of the various Courts have been given relating to the
pecuniary and territorial jurisdictions and the same can be found in sections
10 to 12 of the Tamil Nadu Civil Courts Act. Section 15 of the Code of
Civil Procedure provides that every suit shall be instituted in the Court of
lowest grade competent to try it, while sections 16 to 20 deal with the place
of jurisdiction and cause of action. He further submitted that what is to be
decided by a civil court is to be considered in the light of the provisions
contained in the Specific Relief Act. Section 4 of the Specific Relief Act
provides that relief can be granted only for the purpose of enforcing
individual civil right and not for the mere purpose of enforcing any penal
law and the civil rights have got to be granted power to try matters as
provided under the Specific Relief Act. The learned counsel further argues
that section 34 of the Specific Relief Act provides for the declaration of
status or right, in the following specific terms:
“Discretion of Court as to declaration of
status or right:--Any person entitled to any legal
character, or to any right as to any property, may
institute a suit against any person denying, or
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interested to deny, his title to such character or
right, and the court may in its discretion make
therein a declaration that he is so entitled, and the
plaintiff need not in such suit ask for any further
relief.
Provided that no court shall make any such
declaration where the plaintiff, being able to seek
further relief than a mere declaration of title,.
omits to do so.”
12 (c). The learned counsel for the appellants/plaintiffs further
argued that a civil right falling under section 34 of the Specific Relief Act
has got to be made as provided under section 15 of the Code and the
competence of the lowest grade civil court, which is the District Munsif's
Court at Sattur, depends upon its pecuniary and territorial jurisdiction. As
both the defendants are in Sattur town; the registered office of the
defendants is only at Sattur and the relief claimed by the plaintiffs is only
against the defendant-company, within the territorial jurisdiction of District
Munsif's Court, Sattur, the suit filed by the plaintiffs comes within the
territorial jurisdiction of District Munsif's Court at Sattur. The learned
counsel further argues that the District Munsif's Court at Sattur also
exercises pecuniary jurisdiction for the reason that the relief sought for by
the plaintiffs does not have any market value as it does not pertain to any
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immovable property and accordingly the value of the relief was adopted at
Rs.400/- and court-fee had been paid under section 25(d) of the Tamil Nadu
Court Fees and Suits Valuation Act, 1955. Thus, according to the learned
counsel for the appellants, the finding of the lower appellate court that the
District Munsif's Court at Sattur has no jurisdiction is erroneous and further
submits that in respect of matters not specifically empowered upon the High
Court, District Court or Company Law Board, the powers of the Hon'ble
Supreme Court are not excluded.
13. Per contra, learned counsel for the respondents/defendants
submitted that Sattur Hindu Nadars Edward Committee is a company
registered under the Companies Act 1913 with registration number 2684.
The Articles of Association was amended on 16.5.2001, along with the
Memorandum of Association. As per the amended Memorandum and
Articles of Association, if any adult Hindu Nadar of Sattur is willing to
become a member of the institution, he has to make an application to the
Secretary of the institution. The executive committee of the institution will
decide about the eligibility of the applicant to become member of the
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institution. The plaintiffs in the suit have not individually made any
application to the company for their membership, on the other hand they
have filed the suit without any basis. As the suit has been filed on the basis
of old Memorandum and Articles of Association, the same is not
maintainable and liable to be dismissed.
13(a). The learned counsel for the respondents/defendants further
argued that the approach of the appellants/plaintiffs that all the adult male
members of Hindu Nadars of Sattur, who are above the age of 18 are
eligible for membership of the school committee and every such person has
right to vote in the election of the committee and shall also be eligible to be
a member of the committee is altogether incorrect. On the other hand, apart
from being adult Hindu Nadars of Sattur, they ought to be residents for the
last three years and above at Sattur. Further, if they are willing to become
the members of the committee, they have necessarily to make applications
for membership and their eligibility to become members will be decided
only by the executive committee. As such it is not automatic that all the
adult male Hindu Nadars who are above 18 years will become the members
of the company as per the Articles of Association.
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13(b). The learned counsel for the respondents/defendants further
argued that as per the Articles of Association, the executive committee will
form the election committee to conduct the election and all the members of
the company whose names are entered in the register of members shall
automatically be eligible to attend and vote at the General Body Meeting.
There are no register of voters, as the company has only register of
membership.
13(c). The learned counsel further submitted that the District Munsif's
court at Sattur has no jurisdiction to try the present suit against a company,
when it can be filed only before the High Court or a District Court
empowered by the High Court. The learned counsel further argued that as
per the Articles of Association only the members of the company can pass
resolution and it does not permit intervention of any outsiders in the affairs
of the company and accordingly the plaintiffs who are outsiders could not
be permitted to enter into the affairs of the company. The learned counsel
also argues that the Articles of Association bears the procedure for voting
and conduct of election and therefore neither the President nor the Secretary
of the school committee can act against this ruling for the convenience of
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either the plaintiffs or the defendants themselves.
13(d). The learned counsel further argued that it is only the Board of
Directors of the company who can question about the affairs of the
company. If the members think that the affairs of the company are
prejudicial to the public interest they can convene General Body Meeting
and remove the Board of Directors and restrict the powers of the Board.
Therefore, the general public, the District Collector and the Tahsildar
cannot interfere in the affairs of the company, as they are not the appropriate
persons to interfere in the affairs of the company. The Companies Act
regulate the conduct of the company and if any person, who is a member,
aggrieved by any act of the company, the Companies Act provide
appropriate forum for redressal.
13(e). The learned counsel also argues that when the plaintiffs seek
relief against an educational institution being more than 20 in number, they
ought to have registered themselves under the Societies Registration Act,
1975, because an unregistered body cannot maintain a suit representing the
members and as such the suit is not maintainable in law. The learned
counsel further argued that the plaintiffs not being members of the company
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are not eligible to become voters and accordingly the claim in the suit for
such a prayer cannot be granted in favour of the plaintiffs.
14. I have carefully considered the submissions made by the learned
counsel for the Appellants/Plaintiffs as well as the learned counsel for the
respondents/defendants and perused the materials available on record.
15. As per section 10(1)(a) of the Companies Act, 1956, the jurisdiction
is conferred on the High Court in relation to the place at which the
registered office of the company concerned is situate, except to the extent to
which jurisdiction has been conferred on any District Court or District
Courts subordinate to that High Court in pursuance of sub-section (2) and as
per which, the Central Government may empower any District Court to
exercise all or any of the jurisdiction conferred by the Act upon the Court,
not being the jurisdiction conferred in respect of companies generally by
sections 237, 391, 394, 395 and 397 to 407. As per section 10(3), for the
purpose of jurisdiction to wind up companies, registered office means the
place which has longest been the registered office of the company during
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the six months immediately preceding the presentation of the petition for
winding up. In the Companies Act,1956, only three forums are vested with
the power to decide the disputes, namely High Court, District Court and
Company Law Board and there is no other provision in the Act, which
confers powers upon any other forum, in relation to the matters other than to
which, the High Court, the District Court and the Company Law Board were
vested with the powers to deal with matters relating to a company.
15(a). In the case of Aruvipuram Dharma Paripalan Yogam and
others Vs. K. Karunakaran reported in (2012) 2 MLJ 657, learned single
Judge of this Court K. Venkataraman,J. has elaborately discussed about the
bar on Civil Court's jurisdiction to entertain suits pertaining to matters of
mal-administration and mis-administration of a company and the binding
nature of memorandum and articles of associations in paragraphs 20 and 21
of the judgment, which is extracted below:
“20. Before adverting to the said issue, it
would be useful to re-produce section 10-GB of
the CompaniesAct and the same is extracted
hereunder:
“10-GB. Civil Court not to have
jurisdiction: (1) No civil Court shall
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have jurisdiction to entertain any suit
or proceeding in respect of any
matter which the Tribunal or the
Appellate Tribunal is empowered to
determine by or under this Act or any
other law for the time being in force
and no injunction shall be granted by
any Court or other authority in
respect of any action taken or to be
taken in pursuance of any power
conferred by or under this Act or any
other law for the time being in force.
The respondent, being a member of the Chennai
SNDP Union, if aggrieved over the mal-
administration or mis-administration respectively
of the first-petitioner Yogam and Chennai SNDP
Union, should have approached the Company
Law Board under sections 397 and 398 of the
Companies Act.........”
After extracting sections 397 and 398 of the Companies Act, the learned
Judge has further observed as follows at paragraph 21 of the said judgment:
“21. Section 36 of the Companies Act
envisages that the memorandum and articles
would bind the company and the members
thereof. In the case on hand, the respondent
claims to be a member of Chennai SNDP Union
and hence, he is also bound by the memorandum
and articles of the first-petitioner. If so, the
respondent should have instituted the suit before
the Court of Kollam as per Rule 71(a) of the said
Rules or should have sought for arbitral
proceedings as required under Rule 71(a) of the
Rules. In fact, each one of the members including
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the respondent has signed the application for
membership of Chennai SDP Union, wherein they
have simultaneously taken oath to abide by SNDP
Yogam Rules. Having undertaken to abide by the
rules, the respondent cannot be heard to say that
he will bye-pass the rules and file the suit before
the civil Court at Chennai......”
15 (b). From a reading of the above, it is clear that no civil Court
shall have jurisdiction to entertain any suit or proceeding in respect of any
matter pertaining to the affairs of a company, when exclusively the High
Court, District Court and Company Law Board are vested with powers to
deal with those issues and further if members of a company are aggrieved
over the mal-administration or mis-administration of the company, they
should approach the Company Law Board under sections 397 and 398 of
the Companies Act.
15(c). In the 1956 Act, only three forums are vested with the power
to decide the disputes, namely High Court, District Court and Company
Law Board and there is no other provision in the Act, which confers powers
upon any other forum, and it is incorrect to state that in the absence of
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S.A.(MD)No.116 of 2009
specific exclusion, the civil court will have jurisdiction to entertain matters
relating to the affairs of a company.
15(d). It is seen that Sattur Hindu Nadars Edward committee is a
company registered under the Companies Act 1913 with registration number
2684. The Articles of Association was amended on 16.5.2001, along with
the Memorandum of Sattur Hindu Nadars School Committee. If any adult
Hindu Nadar of Sattur is willing to become a member of the institution, he
has to make an application to the Secretary of the institution. The executive
committee of the institution will decide about the eligibility of the applicant
to become member of the institution. The plaintiffs in the suit have not
made any individual application to the company for their membership. It is
argued on behalf of the respondents/defendants that as the suit has been
filed on the basis of old Memorandum and Articles of Association, the same
is not maintainable and liable to be dismissed.
15(e). It is not in dispute that the first-defendant is a company
registered under the provisions of the Companies Act, 1956. It is also not in
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S.A.(MD)No.116 of 2009
dispute that Ex.B1 is the Memorandum and Articles of Association,
governing the activities of the first-defendant-company and it is also not in
dispute that the new Memorandum and Articles of Association is in force,
with all its amended clauses with regard to enrolment of membership. As
per the new Memorandum and Articles of Association, if a male Hindu
Nadar of Sattur, who has completed the age of 18 years and more, wants to
become a member of the defendant-school-committee, specifically he ought
to have resided at Sattur for a period three years and more and ought to have
made an application for the said purpose. Thus, a male Hindu Nadar
residing in Sattur will not automatically become a member of the defendant-
school committee, for the reason, as admitted by the plaintiffs themselves in
the witness box, that it is not exactly known as to the exact number of male
hindu nadars in Sattur. It is to be seen that when the plaintiffs, being more
than 20, sought relief against an educational institution, they ought to have
registered themselves under the Societies Registration Act, 1975, because an
unregistered body cannot maintain a suit representing a group of members.
15(f). It is admitted fact that at the time of filing the suit, the plaintiffs
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S.A.(MD)No.116 of 2009
were not the members of the company. As per the Articles of Association,
the members are not eligible to vote automatically. Accordingly, the
plaintiffs without getting themselves enrolled as members of the defendant
company, cannot expect to have a right to vote in the General Body. Thus,
the plaintiffs, without adopting the due procedure as contemplated in the
Memorandum and Articles of Association to enroll themselves as members,
are not automatically become eligible as voters and accordingly the claim in
the suit for such a prayer cannot be granted in favour of the plaintiffs. As
per the Articles of Association only the members of the company can pass
resolution and it does not permit intervention of any outsiders in the affairs
of the company. Thus,the plaintiffs who are outsiders do not become
eligible to enter into the affairs of the company. Further, when the Articles
of Association bears the procedure for voting and conduct of election, every
one including the parties to the suit have to adopt only such procedure.
16. In view of the foregoing discussions, all the questions of law are
answered against the appellants/plaintiffs and in favour of the
respondents/defendants. In the result, the Second Appeal is dismissed,
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S.A.(MD)No.116 of 2009
confirming the judgment and decree, dated 14.09.2007 made in A.S.No.29
of 2006, on the file of the learned Subordinate Judge, Sivakasi and setting
aside the Judgment and decree, dated 20.06.2006, made in O.S.No.64 of
2001, on the file of the learned District Munsif, Sattur. However, there
shall be no order as to costs.
23.12.2021
Index : Yes/No
Internet : Yes/No
mnr
To
1.The Subordinate Judge,
Sivakasi.
2.The District Munsif,
Sattur.
3.The Record Keeper,
Vernacular Section,
Madurai Bench of Madras High Court,
Madurai.
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S.A.(MD)No.116 of 2009
V.BHAVANI SUBBAROYAN,J.
mnr
JUDGMENT MADE IN
S.A.(MD)No.116 of 2009
23.12.2021
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