J. KRISHNA MOORTHY v. BANGALORE TURF CLUB — 1975 DIGILAW 120 (KAR)

( 1 ) THESE two appeals are preferred against the common order whereby the First Additional Civil Judge, Bangalore City granted temporary injunction against the directors of the Bangalore Turf Club Ltd. ( 2 ) APPELLANT in M. F. A. No. 500 of 1974 is the plaintiff in the court below. He is one among the 300 members of the Bangalore Turf Club Ltd, which is a public limited company incorporated under the Companies Act, 1956, to carry on the business of the Bangalore Race Club and other activities connected with the running of horse races. The business and management of the company is vested in the committee consisting of 9 elected members and 4 nominated by the State Government. ( 3 ) DURING the races held on 8th December 1973, there was too much commotion and unruly behaviour from these who came to witness the races. The police who were on the scene, did not effectively act to maintain law and carder, with the result that the races had to be cancelled, much against the will of the members of the committee. The elected members were very much annoyed by the inaction of the police, and they passed a resolution on 8th December 1973, the effect of which was the subject matter of the suit instituted by the plaintiff. ( 4 ) THE plaintiff contending that the elected members have tendered their resignation by their resolution dated 8th December 1973, and therefore have no right to remain as committee members and take part in the subsequent mettings, brought a suit for declaration that they have ceased to be the committee members as well as Stewards with effect from 8th December 1973. He has also sought for permanent injunction to restrain them from exercising powers as committee members and Stewards. Lastly, he has prayed for a direction to the Company to call for an extraordinary general body meeting for the purpose of filling up the casual vacancies caused as a consequence of the resignations of the elected members. Interrupting the narration, I have to refer to some more events that followed after the resolution dated 8th December 1973. The Secretary to government Home Department met the committee members and requested them to reconsider their decision embodied in the resolution dated 8th december 1973. The said Secretary is also a member of the committee being the Government nominee. Interrupting the narration, I have to refer to some more events that followed after the resolution dated 8th December 1973. The Secretary to government Home Department met the committee members and requested them to reconsider their decision embodied in the resolution dated 8th december 1973. The said Secretary is also a member of the committee being the Government nominee. He appears to have given, a categorical assurance to the committee that adequate police, arrangements for the maintenance of law and order and for protection of life and property would be made and the miscreants would be severely dealt with. In view of that assurance the the committee met again on 11th December 1973 and passed a resolution stating that on the assurance given by the Commissioner for Home Affairs and on the request of the Club Members, Owners, Trainers, Bookmakers, jockeys and other members of the Racing fraternity, the elected members have no reason to press fof their conditional resignation as the circumstances which compelled them to do so were sought to be fully remedied. They have also passed a resolution to resume the winter meetings as per the prospectus already published with the time schedule from 21st December 1973. Pursuant to the said resolutions, the elected members continued to function as committee members. The regular meetings of the committee were held and the business of the Company had been transacted as usual. The extraordinary general body meeting of the Company was also, held on 18th February 1974. The plaintiff who, was present in that meeting, did not raise any objection regarding the continuance of the elected members. ( 5 ) ON 21st March, 1974, the plaintiff brought the suit contending that the elected members, after their resignations by resolution dated 8th december 1973 have no, right to manage the affairs of the Company. The contention of defendants 2 to 10 was that they did not intend to resign outright, but the offered their conditional resignations to serve as a threat to government to maintain law and order, and when the Commissioner for home has assured the protection, they withdrew their conditional resignations. The plaintiff, however, contending to the contrary, obtained an ex-parte injunction restraining the defendants from functioning as committee members. Immediately after service of notice, the defendants moved the court for vacating the ad interim injunction. The plaintiff, however, contending to the contrary, obtained an ex-parte injunction restraining the defendants from functioning as committee members. Immediately after service of notice, the defendants moved the court for vacating the ad interim injunction. The learned Civil Judge, after hearing the parties, reached the conclusion that defendants 2 to 5 and 7 to 10 have tendered their resignations on 8th December, 1973, but not defendant-6. He also held that the resignations became immediately operative and could not have been withdrawn on a subsequent date, as it was done by the defendants. He said that defendant-6 was not a party to the resolution dated 8th December, 1973 and therefore could not be said to have resigned. He further observed that under Art. 37 of the Memorandum and Articles of Association of the Company, defendant-6 could co-opt, the club members in the vacancies that were caused on the resignations of the defendants and the summer meeting of the races could be managed by the present committee by filling up the vacancies by such co-option. Lastly, the learned Judge said that the plaintiff as a share-holder, has a right to maintain himself in full membership with all the rights and privileges appertaining to that status and has got a right to complain against the usurpation of the office by defendants 2 to 5 and 7 to 10 and not granting an injunction would cause more injury to the plaintiff and the Company, than by granting injunction. ( 6 ) THE plaintiff, aggrieved by the vacating of the injunction against defendant-6 and the observation made by the Court relating to the power of defendant-6 to co-opt, other members of the Club in the vacancies caused on the resignation of other defendants, has come up in appeal before this court and his appeal is numbered as M. F. A. No, 500 of 1974. The Company along with defendants 2 to 5, 7 and 8 have preferred the appeal challenging the injunction granted by the court below, and that appeal is registered as m. F. A. No. 654 of 1974. ( 7 ) 1 would first take up the appeal of the Company. The Company along with defendants 2 to 5, 7 and 8 have preferred the appeal challenging the injunction granted by the court below, and that appeal is registered as m. F. A. No. 654 of 1974. ( 7 ) 1 would first take up the appeal of the Company. The question involved herein is whether the discretion exercised by the court below in granting the interlocutory injunction against the appellants restraining them from acting as committee members of the Club, was proper and reasonable, and whether it falls within the norms governing such injunction. ( 8 ) THE traditional theory underlying the grant or refusal of interlocutory injunctions has always been that the Court abstains from expressing any opinion upon the merits of the case until the hearing, but acts merely to minimise the sum total of irreparable damage to the litigants. However, in recent times the tendency has been to adopt a more robust attitude, and to be guided more and more by the apparent strength or otherwise ot the plaintiff's case as revealed by the affidavits. Though this procedure has been commonly followed, and has become popular, the court however, should guard itself from "deciding the case" on motion. 1 am constrained to make this observation because, the lower Court in this case has virtually decided the case, while granting the interlocutory injunction. Such practice, if I may add, is wholly undesirable. The experience reminds me that the standard of justice done on motion is very often misled and different from that arrived at the trial of the cage. ( 9 ) LET me now turn to the merits of the contention. I do not want to reproduce hereunder the lengthy resolutions which are the subject matter of the suit. I proceed on the assumption or basis that the plaintiff has made out a prima facie case in the sense that the case ha has proved calls for an answer. In other words, his case may nt be frivolous or vexatious, and might appear stronger on the balance of probabilities. But that by itself is no ground for any court to issue injunction. What matters is the balance of convenience. It must be a major consideration. The court must decide in whose favour the balance of convenience lies. In other words, his case may nt be frivolous or vexatious, and might appear stronger on the balance of probabilities. But that by itself is no ground for any court to issue injunction. What matters is the balance of convenience. It must be a major consideration. The court must decide in whose favour the balance of convenience lies. A man who seeks the aid of the court by way of interlocutory injunction must, as a rule, he able to satisfy the Court that its interference is necessary to protect him from that species of injury which the Court calls irreparable, before the legal right can be established upon trial. The Court must pertinently put the question, "will the plaintiff suffer irreparable damage if no injunction is granted now?" Last but not the least the Court always must look to the conduct of the plaintiff and will refuse to interfere even in cases where it acknowledges his right unless his conduct in the matter has been fair and honest and in particular without acquiescence or delay. ( 10 ) IN this case, even if I start off with a prima. facie case, which is the essential prelude to the granting of interlocutory relief, it seems to me, that the plaintiff has failed to tilt the balance of convenience in his favour. The opinion to the contrary expressed by the Court below, is not only arbitrary but also on the erroneous apprach to the merits of the matter. The reasons in support of the conclusion of the Court below, if I may summarise, ape these: First, it proceeded on the conclusion that defendants 2 to 5 and 7 to 10 will not be affected as they have ceased to be the members of the committee. Second, it said that the 6th defendant L. S. Venkaji Rao may co-opt them as members of the committee, as Art. 37 empowers him to co-opt club members. Lastly, it observed that even otherwise, the remaining Directors cquld function effectively to manage the affairs of the company. On the first ground, it was further said that the Directors having resigned unconditionally, have no power to withdraw their resignations. It is because of this conclusion, I said earlier that the Court has decided the matter in dispute once for all on the motion without going to trial at all. On the first ground, it was further said that the Directors having resigned unconditionally, have no power to withdraw their resignations. It is because of this conclusion, I said earlier that the Court has decided the matter in dispute once for all on the motion without going to trial at all. The question whether the defendants have resignd conditionally or otherwise still remains to be decided in the suit. The Court ought not to have jumped to that conclusion in the truncated proceedings at the preliminary stage itself. ( 11 ) LET me now see whether the second ground upon which the court shifted the balance of convenience in favour of the plaintiff is valid. It apparently depended upon Art. 37 of the Articles of Association of tht company. It provides : " Whenever there is a vacancy, remaining elected members of the committee shall appoint a club member to fill the vacancy. " the Court said that L. S. Venkaji Rao was the elected member. He has not resigned and therefore he could co-opt under the above Article, other club members or defendants 2 to 5 and 7 to 10 to carry on the business of the company without difficulty. It seems to me that that question; appears to be not free from doubt. The Article provides that when there is a vacancy remaining elected members of the committee shall appoint a club member to fill the vacancy. (Underlining italics is mine ). The Article prima facie provides authority to the elected members of the committee to fill up a casual vacancy in the committee of management. By the said Article it is doubtful whether one elected member could appoint or co-opt simultaneously 8 other club members to make good the deficiency in the membership of the committee. If that is allowed to be done, it would be destroying the democratic structure of the committee and defeating the very purpose of its constitution. It seems to me that the lower Court has given a hazardous advice to Venkaji Rao and I would not subscribe to the said view. ( 12 ) THIS takes me to the last ground found favour with the lower court to tip the baance of convenience in favour of the plaintiff. It was said that the remaining five Directors could effectively manage the affairs of the Company. ( 12 ) THIS takes me to the last ground found favour with the lower court to tip the baance of convenience in favour of the plaintiff. It was said that the remaining five Directors could effectively manage the affairs of the Company. Among them, one is the elected member whose case is also under credible dispute in the suit as to whether he hae resigned along with other defendants or not. The remaining four are nominated members. It was urged for the appellant that the business of the Company is such that it cannot be carried on by nominated members alone. They cannot find time due to their official pre-occupation. This aspect of the case pleaded by the Company in the affidavit filed by its Secretary, was not at all considered by the lower Court. I agree with learned Counsel, that racing being a highly tchnical matter, it would be difficult for the official nominees to carry on the functions and duties of the Company without the advice and assistance of the other experienced elected members of the committee. ( 13 ) IT is thus seen that all the grounds upon which the lower Court has shifted the balance of convenience in favour of the plaintiff are either doubtful or untenable. The defendants are not strangers. They cannot be said to have usurped the offices. They were once validly elected members. The Company has had no complaint against their continuing as such. The plaintiff has not alleged any mismanagement or bad faith against them. He has not shown how the interests of the Comppany or his own interest as member thereof wag in a way prejudicially affected or irrepparably going to be impaired by the continuance of defendants 2 to 10 during the pendency of the suit. He is one of the 200 members of the Company. His right to, exercise a vote at the general meeting of the Company has not been taken away. His privileges as a member thereof have not been affected. He has not established that his personal right is required to be protected during the trial of the suit. In these circumstances, it seems to me that the balance of convenience lies in favour of the defendants for refusing interim relief to the plaintiff. ( 14 ) THIS takes me to the conduct of the plaintiff. He has not established that his personal right is required to be protected during the trial of the suit. In these circumstances, it seems to me that the balance of convenience lies in favour of the defendants for refusing interim relief to the plaintiff. ( 14 ) THIS takes me to the conduct of the plaintiff. The Company's business has been carried on as usual. After the resolution dt. 11th Decr, 1973, the committees with the respondents met several times and the winter session of the races was successfully completed with the commencement of summer session. The extraordinary general body meeting of the Company was held on 18th Feby 1974 which was presided over by defendant 2. The plaintiff was present in that meeting. He did not raise any objection to the continuance of the elected members. No one else also raised any such objection. It was only on 21st March, 1974 the plaintiff instituted the suit. This delay, if not acquiescence on the part of the plaintiff, is sufficient to deny him the interim relief. ( 15 ) IN the view that I have taken, it is unnecessary to consider the appeal MFA. 500 of 1974 preferred by the plaintiff. ( 16 ) IN the result, MFA. 654 cf 1974 is allowed; the order impugned therein is set aside; consequently, MFA. 500 of 1974 fails and is dismissed. ( 17 ) IN the circumstances, I make no order as to costs. --- *** --- .