DELHI LAWN TENNIS ASSOCIATION v. SHYAM MINOTRA — 1991 DIGILAW 308 (DEL)

M. C. Jain ( 1 ) THIS is an appeal directed against the order of the learned Single Judge dated 8th February. 1991. whereby the learned Single Judge confirmed the interim order made on 17. 1. 1991 and restrained the defendent appel- lant from holding extra ordinary general meeting in persuance to the notice dated 3/1/1991 and the learned Judge further restrained the Joint Secretary Mr. Shyam Minotra and the Treasurar Mr. Anil K. Khanna, respondent No. 4 from acting otherwise than the rules of the appellant Association during the pendency of the suit. The learned Judge further expressed that it would not beappropriate to declare the result of the voting at this stage on the first resolution in the notice dated 3. 1. 1991 regarding which the meeting was allowed to be held on 19. 1. 1991. ( 2 ) WE may state a few relevant facts giving rise to the present appeal. ( 3 ) DELHI Lawn Tennis Association is a society registered under the Societies Registration Act, 1860. The President of the said Association received requisitions in writing from three affiliated clubs to convene extra ordinary general meeting to pass a vote of no confidence in the Hon. Secretary. Treasurer, Joint Secretary, the seven Vice President and seven members of the Council and in case the no confidence motion is passed, to elect the new Council. On receipt of these requisition the President issued a notice dated 3. 1. 1991 for calling the extra ordinary general meeting on 19. 1. 1991 at 10. 30 a. m. at the office of the Association. It was specifically stated in the notice that the extra ordinary general meeting is convened for passing the following specific resolutions : (1) To pass a vote of no confidence against the Hony. Secretary, Joint Secretary, Treasurar, seven Vice President and seven members of the present council; (2) If the above resolution of no confidence is passed to elect the new council to ensure continuity in the interest of the Association, namely, seven Vice Presidents, Hony. Secretary, Hony. Joint Secretary, Hony. Treasurar, who will be ex-officio members of the council and seven members out of the members of the Association who are not its office bearers. Secretary, Hony. Joint Secretary, Hony. Treasurar, who will be ex-officio members of the council and seven members out of the members of the Association who are not its office bearers. ( 4 ) NOMINATIONS for the election of office bearers were also called and in connection with the aforesaid resolution to be considered in the extra ordinary general meeting, other matters were also specified in the notice. ( 5 ) THE respondents filed a suit for permanent injunction restraining the defendant society from holding the extra ordinary general meeting on 19. 1. 91. The learned Judge observed that four plaintiffs have been arrayed in the array of plaintiffs but in fact the plaint was signed by only Shri Anil K. Khanna and in view of that it was observed that the suit is filed by the sole plaintiff being plaintiff No. 4. It may be stated that the suit was filed on 16. 1. 1991 and an application for interim relief bearing No. 996/89 was also filed on which an interim order was passed but that order was modified on 19. 1. 1991 and with respect to item No. 1, the meeting was allowed to beheld at 5. 00 p. m. on 19. 1. 1991 and an Observer was appointed. The learned Judge after considering the provisions of the memorandum and the rules and regulations of the defendant Association was of the view that it is quite explicit that office bearers and the members of the Council are to be elected in the annual general meeting which is described as one of the ordinary businesses of the annual general meeting of the defendant and any other business transaction at an extra ordinary general meeting shall be deemed to be special business. The learned Judge did not agree with the submission that the rules are silent as regards holding of extra ordinary general meeting and for passing no confidence resolution in all Council Members and the office bearers and for their reflection in the extra ordinary general meeting. According to the learned Judge both the resolutions sought to be passed in the extra ordinary general meeting go hand-in-hand and the notice calling the extra ordinary general meeting is also not proper for the reasons stated by the learned Judge in the impugned order. According to the learned Judge both the resolutions sought to be passed in the extra ordinary general meeting go hand-in-hand and the notice calling the extra ordinary general meeting is also not proper for the reasons stated by the learned Judge in the impugned order. They are:- " (I) It does not tell the office bearers and members as to the nature of their misconduct for which "no confidence" motion is sought to be passed against them, which, to my mind, is the basic concept of the rules of natural justice as any such resolution, if passed, is going to affect the reputation of the persons concerned; (ii) The names of the office bearers and Council members sought to beelected have not been communicated to the voters; (iii) Council had no opportunity to exercise its power to nominate the office bearer, though, it was contended that Council has never in the past exercised this power. This occasion, perhaps, never arose. A rule can not set at naught be mere pleading practice; (iv) If the nominations are examined, there is no proposer and no seconder; (v) Some of the office bearers and members against whom resolution of "no confidence" is sought to be passed have been renominated for the fresh election to the Council. (vi) Under Rule H (b), it would be the existing Council which would decide all questions of eligibility of person nominated or elected as office bearers or Council members. If the two resolutions are passed this will have the effect of effecting this rule. " ( 6 ) THE learned Judge further observed that the fact, however, remaines that a mete "no confidence" resolution against Council members and the office bearers without fresh elections has no meaning and that resolution, even if passed, would remain in vacuum. He further categorically expressed that the rules of the defendant Association do not permit holding of the election in the extra ordinary general meeting. ( 7 ) THE learned Judge also adverted to the allegations made against the Joint Secretary and the Treasurar and on that basis it was observed that both the Joint Secretary and Treasurar are acting against the rules of the defendant Association and as such he restrained both of them from acting otherwise than the rules of the defendant Association during the pendency of the suit. ( 8 ) MR. ( 8 ) MR. D. K. Nag, learned counsel for respondents No. 2 and 4 submitted that this appeal is incompetent and could not be maintainable in view of the provisions of Section 6 of the Societies Registration Act. ( 9 ) SECTION 6 of the above Act reads as under : "6. Suits by and against societies.- Every society registered under this Act may sue or be sued in the name of the president, chairman, or principal secretary, or trustees, as shall be determined by the rules and regulations of the society and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion : Provided that it shall be competent for any person having a claim or demand against the society; to sue the president or chairman, or principal, secretary or the trustees thereof, if on application to the governing body some other officer or person be not nominated to be the defendant. ( 10 ) ACCORDING to Mr. Nag, this Section provides as to by whom and against whom suits in respect of societies can be filed the matter may either be governed by rules and regulations of the society or in default in the name of such a person as shall be appointed by the governing body for the occasion. Mr. Nag submitted that until and unless the Secretary is appointed by the governing body for filing the appeal, the appeal filed on behalf of the Association is not maintainable. The proviso to Section 6 makes a provision for sueing the Society in respect of any claim or demand. The proviso contemplates filing the suit President the defendant or the Chairman or the principal secretary or trustees of the society unless someone else is nominated on an application to that effect is made to the governing body. ( 11 ) MR. Nag, in support of his contention, placed reliance on Murti Singh Raghunathji v. Joginder Singh and others, P. L. R. Vol. 71 (1969) Pb. and Hary. 302. In that case by resolution of the society, the President of the Society was authorised to file the suit. The question was whether that authority is sufficient to file an appeal. The words "for the occasion" came to be interpreted which occur in the main provision of Section 6. 71 (1969) Pb. and Hary. 302. In that case by resolution of the society, the President of the Society was authorised to file the suit. The question was whether that authority is sufficient to file an appeal. The words "for the occasion" came to be interpreted which occur in the main provision of Section 6. It was held that the authority to institute a suit ended after disposal of the suit and that authority would not be a valid authority for filing of an appeal. ( 12 ) IT may be stated that Section 6 is an enabling provision. The society may sue and be sued as provided under Section 6. It is pertinent to note that the suit was instituted against the appellant through its Secretary. There was no application made by the plaintiff as contemplated in the proviso to Section 6. The present appeal has been filed by the Association through the Secretary as was arrayed in the array of defendants by the plaintiffs before the learned Single Judge. When the plaintiffs have themselves arrayed the Association through the Secretary as defendant, then it does not lie in their mouth to object to the filing of the appeal by the Association through its Secretary. Any person who has been impleaded as a defendant and against whom an order has been obtained by the plaintiff, in our opinion, has a right to prefer an appeal and that right cannot be denied to him in view of the nature of the provision of Section 6 of the Societies Registration Act, being only enabling. ( 13 ) SO we find no merit in the preliminary objection raised by the learned counsel for the respondent. ( 14 ) THE main question which arises for consideration in this appeal is as to whether an extra ordinary general meeting can be convened on requisition for the purpose of considering the no confidence motion moved by the requisitionists. The learned Judge took the view that having regard to the provisions of the rules and regulations of the society, that such an extra ordinary general meeting for the said purpose is not permissible. The learned Judge has REFERRED TO to various provisions of rules and regulations and on that basis made such an observation. The learned Judge took the view that having regard to the provisions of the rules and regulations of the society, that such an extra ordinary general meeting for the said purpose is not permissible. The learned Judge has REFERRED TO to various provisions of rules and regulations and on that basis made such an observation. ( 15 ) IT Is true that the rules and regulations of the society are silent on the question of calling of extra ordinary general meeting for the purpose of considering no confidence motion, but the question is even when the rules and regulations are silent, whether such a right can be denied to the members of the society. ( 16 ) RULE C makes a provision for nomination and the nomination can be made by the Council or by any two affiliated members. The management of the Association is to be done by a Council to be elected at its annual general meeting. Rule F provides for tenure of office of the office bearers and members of the Council. The office bearers shall hold office for two continuous years or after the expiry of that period, until their successors are elected and shall be eligible for re-election. The members shall hold office for one year or until their successors are elected and shall be eligible for election. Clause (i) of rule G provides for the ordinary business of the annual general meeting and one of the ordinary business is to elect the Council. Sub rule (ii) of rule G provides for convening of extra ordinary general meeting by the President at any time and by the Secretary within six weeks after receipt by him of a requisition in writing to that effect by three or more affiliated clubs. A further condition is laid down that even such a requisition shall specify the business for which meeting is to be convened and no other business shall be transacted at such a meeting. ( 17 ) IT would appear from these provisions of rules that they are silent about moving of a resolution of no confidence of office bearers and the members of the Council. ( 17 ) IT would appear from these provisions of rules that they are silent about moving of a resolution of no confidence of office bearers and the members of the Council. In view of these provisions the learned Judge was of the opinion that it is the business of the general body at the annual general meeting to elect the Council and the tenure of office of the office bearers and members also lead to the conclusion that their tenure cannot be reduced by passing no confidence motion. ( 18 ) DESPITE the aforesaid provisions in the rules and regulations of the society, it is to be seen as to whether such a business can be transacted in the extra ordinary general meeting on the requisition submitted by the requisite number of members. Requisitions were made by the three affiliated Clubs as provided in the Rules of the rule is complied with by three affiliated clubs, is provided in the Rules for calling an extra ordinary general meeting for the aforesaid two purposes. ( 19 ) IT may be stated that the general body of the Association is supreme. The Council is elected by the general body. When Council is elected by the general body, then it is the right of the general body to over throw the Council, i. e. to pass a no confidence motion against the Council or its office bearers or its members. That is an inherent and implicit right of the general body. Simply because the rules and regulations make no provision for no confidence motion, it does not mean that the general body is not possessed of such a power, authority or right. From the very rules and regulations it would appear that it is a democratic society, required to function on democratic principles. When it is so, in our opinion, in an extra ordinary general meeting, this business can be transacted on the requisition as to whether the general body has confidence in the Council as a whole or in the office bearers or the specified office bearers or members of the Council. When it is so, in our opinion, in an extra ordinary general meeting, this business can be transacted on the requisition as to whether the general body has confidence in the Council as a whole or in the office bearers or the specified office bearers or members of the Council. ( 20 ) IN the light of what we have considered we do not agree with the view expressed by the learned Single Judge that no confidence motion is not open for consideration at an extra ordinary general meeting which may be called by the President on the requisition of requisite requisitionists. That being so, it was legitimate for the President to call the meeting on 19. 1. 1991. ( 21 ) IN the above view of the matter, in our opinion, rules of natural justice will not come into play. So long as the office bearers and members of the Council enjoy the confidence of the general body, they will continue to enjoy that office. The moment they lose the confidence, a resolution to that effect can be passed by the general body. In connection with passing of a no confidence motion, in our opinion, principles of natural justice are not attracted. The very foundation of the democratic functioning is that the general body has a right to remove the office bearers of the members of the Council as a whole as it hag right to elect so it has a right to remove them by passing a no confidence motion. ( 22 ) WHEN we concede that the general body has a right to consider the no confidence motion, then it is equally implicit that till the Council is elected, some arrangement has to be made for the management of the society and that very meeting which passes no confidence motion, may consider bow and in what manner the management is to continue till the election of the Council takes place. The situation in the present case is, that the extra ordinary general meeting has already been convened and voting on no confidence motion has already taken place but its result has not been declared. So in this connection it would be proper to direct declaration of the result after counting. The situation in the present case is, that the extra ordinary general meeting has already been convened and voting on no confidence motion has already taken place but its result has not been declared. So in this connection it would be proper to direct declaration of the result after counting. In case no confidence motion is passed, the President may convene another extra ordinary general meeting for the purpose of considering the matter relating to management of the Association till fresh elections of the Council are held and till then the President may manage the affairs of the Association. ( 23 ) TWO applications (C. M. Nos. 1128 and 1171/91.) have been moved, one by Shri G. N. S. Bhargava and the other by Shri Shyam Minotra, under Order I, Rule 10 of the Code of Civil Procedure, As already noticed above, the suit was filed by Anil K. Khanna and Shyam Minotra did not even sign the plaint. Virtually he was not a party to the suit. However, if any direction is given by the learned Single Judge and he feels aggrieved by any direction, he should have come in appeal. So far as the present appeal is concerned, it has been filed by the Association in connection with adverse orders passed against the Association and so, in our opinion, it is not necessary to implead G. N. S. Bhargava as well as Shyam Minotra in the present appeal. Both the applications deserve to be dismissed and they are dismissed as such. ( 24 ) ACCORDINGLY we allow this appeal and set aside the order of the learned Single Judge and direct that in the presence of the Observer Shri R. C. Verma, Advocate, counting of ballots may be done. Mr. Verma will obtain the ballot boxes from the Court and the counting shall be done at the office of the Association after notice to the office bearers and members of the Council as well as other members. A notice shall also be displayed at the Notice Board of the Association. In case no confidence motion is passed, we further direct the President of the Association to call an extra ordinary general meeting for the purpose of holding election of the Council and till that is done, he will continue to manage the affairs of the Association. A notice shall also be displayed at the Notice Board of the Association. In case no confidence motion is passed, we further direct the President of the Association to call an extra ordinary general meeting for the purpose of holding election of the Council and till that is done, he will continue to manage the affairs of the Association. ( 25 ) THE President shall call fresh nominations and election of the Council shall be conducted in acordance with the rules and regulations of the Association. ( 26 ). Mr. R. C. Verma, Observer shall be paid a sum of Rs, 1100. 00 as his fee by the Association. He may be informed of this order. ( 27 ) THE parties shall bear their own costs.