Telangana High Court
Sri Prem Raj vs The State Of Telangana on 29 October, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
1
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THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No.12291 of 2024
ORDER:
The 1st petitioner is the Vice-President of the 2nd respondent-State
Olympic Association, registered under the Societies Registration Act, 2001.
The 2nd respondent-Association receives funds from the Indian Olympic
Association and also from the State Government for furtherance of Sports
Activities and to inculcate sportsmanship, aesthetic, ethical and spiritual
values and development of character and good citizenship. Petitioner Nos.2
and 3 are the Joint Secretary and Treasurer of the Association, respectively.
The grievance in the writ petition is that the term of Office of the Association
expired on 08.02.2024, however, the erstwhile Office Bearers are continuing
as Office Bearers and mismanaging the affairs of the Association and acting
detrimental to the aims and objects of the Association. It is alleged that
respondent No.3 in collusion with respondent No.4 committed serious
irregularities in conducting the affairs of the Association, mismanaged the
funds without maintaining proper account books, collected money for
booking conference halls and room bookings without proper record, took
their own decisions without consulting the other Office Bearers and not
putting them before the Managing Committee or General Body for approval,
conduct meetings on their own wishes, and they used to remove the Office
Bearers of the affiliated associations and appoint their favourable persons as
Office Bearers. It is also alleged that the Association has three Bank Accounts
and respondent No.3 receives salary as an Advisor to Central Government
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and declared himself as Officiating President though By-Laws doesn't
recognize the same and no Annual General Body meeting is conducted till
date. It is stated that an Annual General Body Meeting was conducted by the
Office Bearers on 26.06.2022 and some office bearers and affiliated
associations submitted representations objecting to the same due to various
irregularities and requested them to rectify the irregularities and postpone
the Annual General Meeting to a later date in consultation with Executive
Committee members, however, the same was disregarded and respondents 2
to 4 have conducted the meeting and passed illegal resolutions. It is alleged
that the 3rd petitioner informed the 3rd respondent on 10.11.2023 that from
the date of election, he has not been given the charge of cash books, cheque
books, ledgers, and other expenditure details of management of office and
Olympic Bhavan, and respondents 3 and 4 did not disclose the number of
accounts, fixed deposits etc. It is alleged that after the 3rd petitioner
communicated the irregularities being committed by the 3rd respondent, the
3rd respondent terminated the 3rd petitioner from the post of Treasurer of the
Association, without following Clause No.2 of the By-Law No.11 that
stipulates no-confidence motion supported by 3/4th strength of the
Association for such removal from office, and the 3rd petitioner got issued a
Legal Notice to recall the termination order. However, as the termination was
not recalled the 3rd petitioner filed OP No.1/2024 on the file of XXV
Additional Chief Judge, City Civil Court, Hyderabad, along with a Stay
Application but the Stay application was dismissed without appreciating the
facts. On 17.12.2023, petitioners 1 and 3 and some State affiliated
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Associations submitted a representation to take necessary action on the
illegalities of respondents 3 and 4. It is stated that when the 2nd respondent
issued Notice to conduct Executive Meeting and Special General Body
Meeting on 29.02.2024 and 13.04.2024, respectively, proposing to amend By-
Laws, the petitioners and other Associations objected to the same. On
15.04.2024, the petitioners submitted representations to the Registration
Office informing them about the expiry of the present term of office on
08.02.2024. It is also stated that clause No.10 of the By-Laws prescribes
holding of Annual General Meeting in the last quarter of every year, and
Clause No.11 prescribes the manner of conducting the Special General
Meeting, and respondents 3 and 4 have not complied with the By-Laws. It is
alleged that clause No.12 of By-Laws prescribes issuance of 21 days' Notice
for conducting Annual General meeting with quantum of 1/3rd members
entitled to vote but respondents 2 to 4 did not issue such Notice and the
Meeting did not have the quorum of 1/3rd members entitled to vote. It is
alleged that By-Law No.29(i) deals with the manner in which amendments
can be made to the Clauses of Memorandum of Association, but respondents
2 to 4 have not followed the By-Laws, and on 03.03.2024, the 3rd petitioner
lodged complaint against respondents 3 and 4 in Saifabad Police Station and
an FIR No.88/2024 for the offences punishable under Sections 406 and 420
IPC was registered. It is stated that sub-sections 2 and 3 of Section 8 of the
Societies Registration Act, 2001 Act deal with the manner in which
amendments can be made to the Memorandum of Association. It is stated
that sub-sections 4 and 5 of Section 8 deal with alteration of the
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Memorandum, and certifying thereof by the Registrar and that every
alteration in the By-Laws of the Society should be sent to the Registrar and he
shall take it on record if it is not contrary to the record. It is alleged that
respondent Nos.3 and 4 did not follow the procedure prescribed in the above
provision and the By-Laws of the Association while issuing Notice and
convening the alleged Special General Body Meeting and making the
proposed amendments on 13.04.2024. Questioning the same, the present
writ petition is filed.
2. Learned counsel for the petitioners made submissions on the lines of
writ affidavit, and would mainly contend that the term of office of the
Association expired on 08.02.2024 and therefore the present incumbent
Executive Committee neither can convene any meeting nor have any powers
to remove any member. It is also contended that respondents 3 and 4 have
not followed the By-Laws No.10, 11 and 12 of the By-Laws and Section 89 of
the Telangana Societies Registration Act, 2001 for convening the Special
General Body meeting. It is also contended that respondents 3 and 4 did not
consider the objections submitted by the petitioners or some of the affiliated
Associations after issuing Notice proposing to amend the By-Laws. It is also
contended that respondents 3 and 4 have conducted the meeting and made
proposed amendments in the Special General Body meeting resolving the
proposed amendments to the By-laws. It is further contended that a case was
registered in Crime No.88 of 2024 against respondents 3 and 4 and one Sri A.
Someshwar Rao for the offences under Sections 406 and 420 IPC in
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connection with mismanagement and embezzlement of funds of the 2nd
respondent-Association.
3. Per contra, learned Senior Counsel Mr. M.S. Prasad for respondent
No.2-Association would contend that the writ petition is not maintainable
and so far as other prayers relating to appointment of a Retired Hon' ble
Judge of the High Court to conduct elections to 2nd respondent-Association is
concerned, the same has become infructuous as Hon' ble Sri Justice C.
Praveen Kumar (retired) has been appointed as Returning Officer to conduct
elections by the Executive Committee and the election process already
commenced. It is also contended that the writ petition is not maintainable on
the ground that the petitioners are not Members of the 2nd respondent-
Association, as Membership to the Association is only for the affiliated
District Associations but not to any persons in individual capacity. It is also
contended the 1st petitioner participated in elections conducted in the year
2020 for the term 2020-24 as voter representing the Telangana Ice-Skating
Association and it has come to the knowledge of 2nd respondent-Association
that during such period petitioner No.1 was also the Principal Office Bearer
i.e, General Secretary of the Sepaktakraw Association of Telanganadn also the
President of SepakTakraw Federation of India and also Office Bearer of
SepakTakraw Federation of Asia and as per records available he is still the
Principal Office Bearer of above Associations and Federations.
4. It is also contended by the learned Senior Counsel that petitioner No.1
was never an Executive Member of Ice Skating Association, however, he
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managed to get included in the Electoral College of 2nd respondent-
Association and also contested for the post of Vice President and got elected
for the term 2020-2024. It is also contended that petitioner No.1 also filed
WP No.13556 of 2024 representing Amateur Wushu Association of Telangana
as President and also General Secretary of District Olympic Association of
Hyderabad, and the same is against the Rules as a person can be a Member
or Office Bearer of only one State Sports Association during the period he was
representing Telangana Olympic Association. It is also contended that 2nd
petitioner is not a Member of General Body nor participated in the elections
in the year 2020, however as permitted under the By-laws of TOA, the 2nd
petitioner was co-opted as Associate Joint Secretary of 2nd respondent
Association and 2nd petitioner does not have voting right during Executive
Committee Meeting or General Body Meeting and therefore the 2nd
respondent does not have locus or right to challenge any resolutions of either
Executive Committee or General Body.
5. It is also contended by the learned Senior Counsel that 3rd respondent's
name was forwarded by Telangana Modern Pentathlon Association though he
was not elected Executive Committee Member of that Association, however,
inadvertently the then Returning Officer included his name even though it is
the Principal Office Bearers like President, Secretary, Treasurer etc. alone who
have voting right, but he was elected as Treasurer. It is also contended that
during his tenure, the 3rd respondent has serious allegations of
misappropriation and the Executive Committee unanimously suspended him
from the post of Treasurer which was challenged by filing OP No.1 of 2024 on
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the file of XXV Additional Chief Judge, City Civil Court, Hyderabad. It is also
contended that the 3rd petitioner got his name nominated by the Telangana
Modern Pentathlon Association to represent that Association in the General
Body of Telangana Olympic Association and also as Voter, and his nomination
was objected to and after considering the complaints received by the
Returning Officer, he was asked to clarify and thereafter the 3rd petitioner
withdrew his nomination for the post of Treasurer, and these facts clearly
state that 3rd petitioner himself participated in the elections being conducted
by the Returning Officer.
6. It is further contended by the learned Senior Counsel that a writ
petition is not maintainable in the instant case, as any dispute amongst
Members, and any dispute between Members and Association should be
resolved under the provisions of Section 23 of the Telangana Societies
Registration Act, 2001, and the By-law No.33 of Telangana Olympic
Association clearly states that the disputes shall be settled by Arbitration only
under the provisions of Arbitration and Conciliation Act, 1996.
7. It is to be noted that connected writ petitions, namely, WP Nos.13382,
13549, 13556, 13557 and 13559 of 2024 have also been filed either in
individual capacity or in the capacity of affiliated Association of the Telangana
Olympic Association. The common grievance in all these writ petitions is that
the present incumbent Executive Committee's term is from 2020-2024 and its
term expired on 08.02.2024, and the Committee is illegally continuing in
office and conducting Executive Committee Meetings and Special General
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Body Meetings, without the necessary strength of Members. It is also alleged
that the Committee is removing Members without following due procedure
contemplated in the By-Laws, and further the Committee has
misappropriated the funds of the Association and no Statements of Accounts
were audited, no expenditure details were placed in the meetings for
ratification. It is to be noted that cases were registered against certain Office
Bearers of the Telangana Olympic Association under various offences, as
brought out in the preceding paragraphs. Further, the Election Notification
issued by the Returning Officer, Hon' ble Mr. Justice C. Praveen Kumar (retd)
has also been challenged raising the ground that the certain individuals were
unduly removed from the list of voters.
8. It is to be noted that challenge in all these writ petitions is with regard
to the very continuation and functioning of the present incumbent Executive
Committee beyond its term (which ended on 08.02.2024), and the alleged
illegalities, including termination of Members and misappropriation of funds,
committed by the Executive Committee. The predominant ground taken in
these writ petitions is with regard to the maintainability of the writ petition.
In view of the overarching nature of grievance in all the writ petitions,
attention of the Court was drawn to various judgments/case-law on various
facets of the grievance right from maintainability of the writ petitions to the
Election Notification, and arguments were advanced both in common and
also touching the specifics of the allegations in individual writ petitions as
they occurred, this Court is inclined to discuss the grievance in totality in all
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the writ petitions in view of inter-connectedness of the grievance in the writ
petitions.
9. As stated in preceding paragraphs, keeping in view the challenge laid to
the very continuation of the Executive Committee, which forms the basis for
all the actions taken by it, this Court deems it expedient to discuss the case
law in all these writ petitions as they are relied on by the learned counsel,
and as they are commonly applicable.
10. Learned Senior Counsel relied on Lakshmi Charan Sen v. AKM Hassan
Uzzaman 1, Union of India v. International Trading Company 2, GhulamQadir
v. Special Tribunal 3, PHR Invent Educational Society v. UCO Bank 4, State of
Orissa v. ram Chandra Dev 5, Jaipur Vidyut Vitran Nigam Limited v. MB
Power 6, All India SC and ST Railway Employees Association v. E.
Venkateshwarlu 7, Gita Devi Aggarwal v. Commissioner of Income Tax 8.
11. Having considered the respective submissions, and perusing the
material on record, including the judgments relied on by the learned counsel
for the parties, it is to be noted that the 2nd respondent-Association is an
entity registered under the Societies Registration Act, 2001. Admittedly, the
present incumbent Executive Committee was elected for the term 2020-2024
and its term expired on 08.02.2024. It is vehemently contended that the
(1985) 4 SCC 689
(2003) 5 SCC 437
(2002) 1 SCC 33
2024 SCcOnLine SC 528
AIR 1964 SC 685
2024 SCC OnLine 26
2003 SCC OnLine AP 97
MANU/SC/0210/1969
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present Executive Committee members of 2nd respondent-Association have
resorted to serious financial irregularities, non-conforming to the procedures
stipulated in the by-laws for conducting annual general meetings, auditing of
financial statements, etc. At this juncture, it is relevant to note that the 2nd
respondent-Association is a Society under the Societies Registration Act,
2001, and it is not a body corporate, or an entity, established under the
Central or State Act. It is therefore relevant to examine if a writ is
maintainable in the given facts of the case.
12. I have perused the judgments relied on by the learned counsel for both
the parties, both for and against, on the aspect of maintainability of the writ
petition.
13. It is now settled that for a writ petition to be maintainable under
Article 226 of the Constitution of India, the entity against which the grievance
is made out should either be State/Government or an Instrumentality of the
State under Article 12 of the Constitution of India. In this context, it would be
pertinent to deal with what constitutes an Instrumentality of State under
Article 12 of the Constitution of India.
14. To elucidate on that aspect, it would be relevant to note that in
Ramana Dayaram Shetty v. The International Airport Authority of India 9, the
Hon' ble Supreme Court had the occasion to deal with the issue as to "what
constitutes an Instrumentality of the State under Article 12 of the Constitution
of India". Ramana Dayaram Shetty (supra) was a case where the petitioner
1979 (3) SCC 489
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therein had challenged a tender notification issued by the Airport Authority
as arbitrary and illegal by reason of not conforming to the tender standards.
The Hon' ble Supreme Court, while referring to various precedent judgments,
like, Rajasthan State Electricity Board v. Mohan Lal 10, broadly laid out a
certain non-exclusive set of parameters which an entity has to satisfy so as to
qualify being called an Instrumentality of the State under Article 12. The Hon'
ble Supreme Court, while observing that Corporations established by statute
or incorporated under law are an instrumentality or agency of the
Government, if they satisfied certain tests, like (i) the source of the share
capital, (ii) The extent of State control over the Corporation, and whether it
is "deep and pervasive", (iii) whether the Corporation has a monopoly
status, (iv) whether the functions of the Corporation are of public
importance and closely related to governmental functions; and(v) Whether,
what belonged to a Government Department formerly was transferred to
the Corporation.
15. The Hon' ble Supreme Court further observed that the list is not
exhaustive and by its very nature, it cannot be, because, with increasing
assumption of new tasks, growing complexities of management and
administration and the necessity of continuing adjustment in relations
between the Corporation and Government, calling for flexibility, adaptability
and innovative skills, it is not possible to make an exhaustive enumeration of
the tests which would invariably and in all cases provide an unfailing
answer to the question whether a Corporation is a governmental
AIR 1967 SC 1857
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instrumentality or agency. The Hon' ble Supreme Court further observed
that no one single factor will yield a satisfactory answer to the question and
the Court will have to consider the cumulative effect of these factors, in
arriving at its decision on the basis of facts and circumstances of each case.
16. The Hon' ble Supreme Court further held in Ramana Dayaram Shetty
(supra) while discussing the status of Airports Authority (1st respondent
therein) as follows:
"It will be seen from these provisions that there are certain
features of the 1st respondent which are eloquent and throw
considerable light on the true nature of the 1st respondent. In
the first place, the chairman and members of the 1st
respondent are all persons nominated by the Central
Government and the Central Government has also the power
to terminate their appointment as also to remove them in
certain specified circumstances. The Central Government is
also vested with the power to take away the management of
any airport from the 1st respondent and to entrust it to any
other person or authority and for certain special reasons, the
Central Government can also supersede the 1st respondent.
The Central Government has also power to give directions in
writing, from time to time on questions of policy and these
directions are declared binding on the 1st respondent. The 1st
respondent has no share capital but the capital needed by it
for carrying out its functions is provided wholly by the Central
Government. The balance of the not profit made by the 1st
respondent after making provision for various charges, such as
reserve funds, had and doubtful debts depreciation in assets
etc. does not remain with the 1st respondent and is required
to be paid over lo the Central Government. The 1st respondent
is also required to submit to the Central Government for its
approval a statement of the programme of its activities as also
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the financial estimate and it must follow as a necessary
corollary that the 1st respondent can carry out only such
activities and incur only such expenditure as is approved by
the Central Government. The audited accounts of the 1st
respondent together with the audit report have to be
forwarded to the Central Government and they are required
to be laid before both Houses of Parliament. So far as the
functions of the 1st respondent are concerned, the entire
department of the Central Government relating to the
administration of airports and air navigation services together
with its properties and assets, debts, obligations and
liabilities, contracts, causes of action and pending litigation is
transferred to the 1st respondent and the 1st respondent is
charged with carrying out the same functions which were,
until the appointed date, being carried out by the Central
Government. The employees and officers on the 1st
respondent are also deemed to be public servants and the 1st
respondent as well as its members, officers and employees
are given immunity for anything which is in good faith done or
intended to be done in pursuance of the Act or any rule or
regulation made under it. The 1st respondent is also given
power to frame Regulations and to provide that contravention
of certain specified Regulations shall entail penal
consequence. These provisions clearly show that every test
discussed above is satisfied in the case of the 1st respondent
and they leave no doubt that the 1st respondent is an
instrumentality or agency of the Central Government and falls
within the definition of 'State' both on the 'narrow view taken
by the majority in Sukhdev v. Bhagat Ram 11 as also on the
broader view of Mathew, J., adopted by us."
17. In the light of the law laid down by the Hon' ble Supreme Court in
Ramana Dayaram Shetty (supra), it is to be noted in the instant case that the
1975 (1) SCC 421
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President and Members of the 2nd respondent-Association are neither
nominated or appointed by the State Government, nor the 2nd respondent-
Association is required under any Act passed by the Parliament or State
Legislature to submit its programme of activities and financial estimates, nor
that the 2ndrespondent can carry out only such activities and incur only such
expenditure as is approved by the State Government. Further, the 2nd
respondent's audited accounts together with the audit report is not required
to be laid before the Houses of State Legislature. Therefore, the 2nd
respondent does not qualify to be an Instrumentality of the State under
Article 12 of the Constitution of India.
18. Further, the Hon' ble Supreme Court in Heavy Engineering Mazdoor
Union v. State of Bihar 12, held as follows:
"The question which arose in this case was whether a
reference of an industrial dispute between the Heavy
Engineering Corporation Limited (hereinafter referred to as
the 'Corporation') and the Union made by the State of Bihar
under section 10 of the Industrial Disputes Act, 1947 was
valid. The argument of the Union was that the industry in
question was "carried on under the authority of the Central
Government" and the reference could, therefore, be made
only by the Central Government. The Court held that the
words "under the authority" mean "pursuant to the authority,
such as where an agent or a servant acts under of pursuant to
the authority of his principal or master" and on this view, the
Court addressed itself to the question whether the
Corporation could be said to be carrying on business pursuant
to the authority of the Central Government. The answer to
AIR 1970 SC 82
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this question was obviously 'no' because the Corporation was
carrying on business in virtue of the authority derived from its
memorandum and articles of association and not by reason of
any authority granted by the Central Government. The
Corporation, in carrying on business, was acting on its own
behalf and not on behalf of the Central Government and it
was therefore not a servant or agent of the Central
Government in the sense that its actions would bind the
Central Government."
19. Though it is contended that the 2nd respondent-Association receives
funds from Indian Olympic Association and State Government and others, it is
to be noted that neither the powers to conduct the day to day business and
affairs of the 2nd respondent-Association flow from any "authority" bestowed
by the Government so as to imply that the Government is executing its works
through 2nd respondent as an instrumentality of the State, nor the 2nd
respondent is carrying out the affairs/activities in the capacity of an Agent to
the Government, which ultimately bind and make the Government
answerable to the actions of the 2nd respondent-Association.
20. In view of the foregoing, it cannot be said the 2nd respondent-
Association is an Instrumentality of the State so as to maintain a writ petition
under Article 226 of the Constitution of India. The 2nd respondent-Association
is an entity registered under the Societies Registration Act, 2001. In case of
dispute amongst the Members of the Association or on any matter relating to
the affairs of the Association, the dispute resolution mechanism provided
under Section 23 of the Act, 2001 is appropriate recourse to the petitioners.
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21. The dispute in the present case is essentially between members with
regard to the election process, and therefore the dispute squarely falls within
the ambit of Section 23 of the Societies Registration Act, 2001. For the sake of
reference, Section 23 of the Societies Registration Act, 2001 is extracted
hereunder:
"23. Dispute regarding management - In the event of any
dispute arising among the Committee or the members of the
society, in respect of any matter relating to the affairs of the
society, any member of the society may proceed with the
dispute under the provisions of the Arbitration and
Conciliation Act, 1996 (Central Act 26 of 1996), or may file an
application in the District Court concerned and the said Court
shall after necessary inquiry pass such order as it may deem
fit."
22. To elucidate further as to whether the election dispute comes under
the phrase "any matter relating to the affairs of the society", it would be
relevant to refer to C. Vasudeva Rao v. State of A.P. 13, wherein the Hon' ble
High Court of A.P. held as follows:
"The expression "any dispute" is wide enough to cover even
the disputes relating to election of the members of the
committee. So, any dispute arising among the committee,
albeit, it be a dispute pertaining to the election of office
bearers of the Executive Committee, squarely falls within the
expression "any matter relating to the affairs of the society"
as has been used in Section 23 of the 2001 Act. The
expressions "any dispute" and "any matter relating to the
affairs of the society" are too wide enough even to cover the
Writ Petition No.8696 of 2022 (High Court of A.P.)
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election dispute relating to the election of the office bearers
of the Executive Committee or any matter relating to the
affairs of the society. Even an election of office bearers of the
Executive Committee relates to the affairs of the Society."
23. The Hon' ble Division Bench of this Court in Mrs. Nirmala Kale v. The
Society of Trustees of Indigenous Churches 14, upheld that a writ petition
against the Society is not maintainable as it does not fall under Article 12 of
the Constitution of India and does not perform public duty.
24. Accordingly, the writ petition is disposed of leaving open to the
petitioners to avail the remedies available to them under law. No costs.
Miscellaneous petitions, if any pending, shall stand closed.
__________________________
JUSTICE NAGESH BHEEMAPAKA
29th October, 2024
ksm
Writ Appeal No.1551 of 2013 (Telangana High Court)
