Telangana High Court

Vasavi Clubs International vs Gella Krishna Veni on 25 March, 2021

Bench: Challa Kodanda Ram

      IN THE HIGH COURT FOR THE STATE OF TELANGANA


                                ***


        CIVIL MISCELLANEOUS APPEAL No.159 of 2021



BETWEEN:

1.    Vasavi Clubs International Rep by its
      International Secretary, A Registered Society under
      A.P. Societies Act, having its registered office at
      H.No.1-1-385/32, P&T Colony, Gandhi Nagar,
      Hyderabad - 500 080; and 2 others

                                                            ... Appellants

AND


Gella Krishna Veni, w/o Damodar Rao
Aged about 48 yrs, Occ: Housewife
R/o 2-3-247, Flat No.404
AbhiramaKoppu's Towers,
Sundar Talkies Road, Khammam (Urban)
Gandhi Chowk, Khammam - 507 003

                                                        ... Respondent



Date of Judgment pronounced on :             25.03.2021



       THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM


1. Whether Reporters of Local newspapers                    : Yes / No
   May be allowed to see the judgments?


2. Whether the copies of judgment may be marked             : Yes / No
   to Law Reporters/Journals:


3. Whether The Lordship wishes to see the fair copy         : Yes / No
   Of the Judgment?



                                           ____________________
                                           CHALLA KODANDA RAM, J
                                   2                            cma_159_2021
                                                                      CKR, J




         THE HON'BLE SRI JUSTICE CHALLA KODANDA RAM


          CIVIL MISCELLANEOUS APPEAL No.159 of 2021



% 25.03.2021

#     Vasavi Clubs International Rep by its
      International Secretary, A Registered Society under
      A.P. Societies Act, having its registered office at
      H.No.1-1-385/32, P&T Colony, Gandhi Nagar,
      Hyderabad - 500 080; and 2 others

                                                            ... Appellants

Versus


Gella Krishna Veni, w/o Damodar Rao
Aged about 48 yrs, Occ: Housewife
R/o 2-3-247, Flat No.404
AbhiramaKoppu's Towers,
Sundar Talkies Road, Khammam (Urban)
Gandhi Chowk, Khammam - 507 003

                                                       ... Respondent



< GIST:



> HEAD NOTE:



! Counsel for the Appellants                :     Sri K.S. Murthy


^ Counsel for the Respondent                :     Sri A. Venkatesh



? Cases referred:

      1. 2009 (6) ALD 711
      2. (2009) 2 SCC 55
      3. 1995 (32) DRJ
                                         3                              cma_159_2021
                                                                              CKR, J




       THE HON' BLE SRI JUSTICE CHALLA KODANDA RAM

         CIVIL MISCELLANEOUS APPEAL No.159 of 2021

ORDER:

This appeal is filed against the order dated 24.02.2021 passed

by the XXVI Additional Chief Judge, City Civil Court, at Hyderabad, in

I.A.No.45 of 2021 in S.O.P.No.26 of 2020.

Heard the learned counsel for the appellants, and the learned

counsel for the respondent.

The entire controversy in the present case revolves around the

issue of whether an application filed under Section 8 of the Arbitration

and Conciliation Act, 1996 is maintainable when there is admittedly no

arbitration clause incorporated in the bye-laws.

It may be noted that the OP was filed before the Court below

seeking the following reliefs:

(a) To declare the actions of the respondents in extending the incumbent International Executive Council of the Association of the respondent No.1 society beyond the term of one fiscal year i.e., for the year 2021 purported to be resolved through an "Special Extraordinary International Executive Council Meeting" dated 29.11.2020, as illegal and arbitrary and null and void.

(b) To appoint an Advocate Commissioner to conduct the affairs of the respondent No.1 society until a new International Executive Council of the Association of the respondent No.1 is elected for the Fiscal year 2021 according to the Constitution and bye-laws of the respondent No.1.

(c) To direct the respondents to furnish the books of accounts as well as the balance sheets of the respondent No.1 society for the year 2020.

                                              4                                cma_159_2021
                                                                                     CKR, J

(d) To direct respondents to furnish the details of the member and their Zoom IDs who have attended the EGM dated 06.12.2020.

(e) To direct the respondents to furnish the minutes of the meetings in respect of the EGM dated 06.12.2020.

(f) To appoint an Advocate Commissioner for conducting the elections for the post of International President of the respondent No.1 Society for the fiscal year 2021 in a democratic and fair manner.

(g) To consequentially grant a relief of Perpetual Injunction in favour of the petitioner and against respondent No.2 from continuing as an International President of the Respondent No.1 society for the second time i.e., for the fiscal / annual year 2021.

(h) To grant such other relief or reliefs as this Hon' ble Court may deem fit and proper in the circumstances of the case and such other order in the interest of justice.

The respondent who is the Member of one of the Associated

Clubs sought certain clarifications and also addressed a letter dated

17.11.2020 to the Chairman, Legal, Disciplinary, Arbitration

Committees, not being satisfied with the response received for her

earlier letters. In the said letter, she had asserted that on earlier

occasion, she had asked for arbitration and that she was not

responded to. Thereafter, she had instituted the OP invoking Section

23 of the Societies Registration Act, 2001.

The respondents having received notices in the OP, and before

filing their counter affidavit, have filed the I.A.No.45 of 2021 invoking

Section 8 of the Arbitration and Conciliation Act, seeking a direction to

the parties to invoke arbitration proceedings for resolution of the 5 cma_159_2021 CKR, J

alleged disputes between the petitioner and the respondents, and the

said I.A. came to be dismissed by the impugned order.

Learned counsel Sri K.S.Murthy appearing for the appellants, by

making reference to Clause 6 of the bye-laws, would contend that the

finding of the trial Court that there is no Arbitration Clause in the bye-

laws is erroneous inasmuch as the Clause 6 refers to Arbitration as it

impliedly sets out the consequences of not following the procedure

agreed to under Clause 6. It is the further contention of the learned

counsel that inasmuch as the respondent initially having invoked the

arbitration clause is aware of the procedure and conscious of the

Societies Registration Act that it is convenient to refer the dispute for

arbitration and only such disputes which are unresolved would be

litigated before the Court. Learned counsel would further contend that

under Section 23 of the Societies Registration Act, a Member of the

Society may proceed with the dispute under the provisions of the

Arbitration and Conciliation Act or may approach the District Court

concerned. It is also contended that while there is a choice for

Members of the Society to seek resolution of disputes either through

arbitration or by approaching the Court, in the present case on hand,

the respondents having invoked the arbitration clause seeking to

appoint an arbitrator by approaching the arbitration committee would

be barred from approaching the Civil Court invoking Section 23 of the

Societies Registration Act. Learned counsel would further contend that

the arbitration clause has to be read into the terms of Section 23 of

the Societies Registration Act for which he would place reliance on the

judgment of the learned single Judge of this Court in Dr. Ganta Noble

v. V. Paul Himamsu1. Yet another contention of the learned counsel

2009 (6) ALD 711 6 cma_159_2021 CKR, J

for the appellants is that the finding of the learned District Judge that

election disputes are not arbitrable is not correct.

On the other hand, learned counsel A. Venkatesh, would resist

the appeal and would contend that the jurisdiction in relation to

arbitrations would arise only if there is an arbitration agreement

between the parties. He would further contend that neither the bye-

laws nor by way of any correspondence, there is an agreement at any

point of time with respect to the arbitration. Addressing a letter in

ignorance seeking to refer the matter for arbitration before a non-

existent arbitration committee, does not debar the respondent from

seeking justice from appropriate Court of law. He would further

contend that Section 8 of the Arbitration and Conciliation Act has no

application to the facts of the present case, and the reliefs claimed in

the OP are in fact the reliefs which cannot be granted in the arbitration

proceedings, and therefore the learned counsel for the respondent

prays for dismissal of the appeal.

Having regard to the respective submissions, from the facts of

the present case, one aspect is clear that there is no dispute that the

bye-laws by themselves do not contain or contemplate any arbitration

clause. The word 'arbitration' was only referred in Clause 6.

At the outset, so far as Section 23 of Societies Registration Act

is concerned, as contended by the learned counsel for the appellant,

provides for a choice to resolve their disputes either through

arbitration or by approaching the Court. However, for invoking of

arbitration proceedings, what is essential is existence of an arbitration

agreement i.e., mandate under Section 7 of the Arbitration and

Conciliation Act, 1996. In a given case, an arbitration clause may be

provided by way of statute. The dispute resolution mechanism as 7 cma_159_2021 CKR, J

provided under Section 23 of the Societies Registration Act which

provides a choice for dispute resolution cannot be read into the bye-

laws of the Society or as forming part of bye-laws, as it only provides

a choice of forum for dispute resolution i.e., either by arbitration or by

approaching the Court concerned. Section 23 of the Societies

Registration Act cannot be read as an Article or Clause of Society's

bye-laws. Section 23 would have to be read, in a given case, where

there is a provision made in the bye-laws of Society for reference to

arbitration, the same are required to be referred to arbitration; and in

all other cases, recourse is required to be had to the provisions of Civil

Court.

So far as the judgment of the learned single judge of this Court

in Dr. Ganta Noble (1 supra) is concerned, in the said judgment,

proceedings were initiated in the District Court where applications

were made for appointment of arbitrator and, as a matter of fact,

arbitrator was appointed and in such a factual situation an argument

was advanced stating that there was no arbitration agreement in the

said case.

A careful reading of paragraph 8 of the judgment in Dr. Ganta

Noble (1 supra) would disclose that the learned single Judge had

held that "existence of an arbitration agreement either independently

or otherwise is an essential requirement for the purposes of

entertaining the application under the Arbitration and Conciliation Act

without an arbitration agreement the parties cannot seek intervention

of the Chief Justice or his designate for constituting the Arbitral

Tribunal for securing resolution of their disputes". Therefore, it is

clear that when there is no clause for referring the disputes to

arbitration, the question of invoking Section 8 of Arbitration and

Conciliation Act does not arise.

                                             8                               cma_159_2021
                                                                                   CKR, J

The judgment of the Supreme Court in Visa International

Limited v. Continental Resources (USA) Limited2, is

distinguishable on facts and therefore not applicable to the present

case on hand. A careful reading of the above judgment discloses that

as a matter of fact there was a clause providing for arbitration in the

event of failure to settle the disputes amicably. The same is evident

from a reading of paragraph 12 of Visa International (2 supra).

Though it is the contention of the learned counsel for the

appellants that arbitration clause is presumed to have existed in the

light of Clause 6 of the bye-laws of the Society, such a contention is

liable to be rejected in view of there being no other foundation wherein

the parties have resolved to refer their disputes to arbitration.

Further, a careful reading of Clause 6 discloses that what all it provides

for is that in the event of any member of any affiliated club or any

affiliated club goes to the court of Law without arbitrations with the

Association, their Membership/Affiliation will be ceased by the

Association.

In the present case, the grievance of the respondents is not that

the respondents are being removed from affiliated club or affiliated

club removing them from the membership of apex club i.e., the 1st

appellant herein. Prima facie, the reliefs of the nature which the

respondents claim in the OP are not the reliefs which would be granted

through any other mechanism except providing for declaratory reliefs

even assuming that such reliefs could be granted in the arbitration

proceedings.





    (2009) 2 SCC 55
                                       9                          cma_159_2021
                                                                        CKR, J

So far as the reference to the judgment of the Delhi High Court

in G.S.Mander v. Indian Olympic Association3, at the outset, it

may be noted that in the said judgment, as a matter of fact, there was

an arbitration clause and further the said judgment was arising under

the proceedings of Arbitration Act, 1940. The judgment itself is of the

year 1995. In those circumstances, the reliance on the said judgment

is misconceived.

In the circumstances of the present case, this Court does not

find any merit in the appeal and, accordingly, the appeal is dismissed.

No costs. In view of the request made by both the parties, there shall

be a direction to the learned trial Judge to dispose the S.O.P. in

accordance with law, as expeditiously as possible. Miscellaneous