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2000 DIGILAW 838 (KAR)

Nataraj v. State of Karnataka

2000-12-14

G.C.BHARUKA, K.R.PRASAD RAO

body2000
ORDER G.C. Bharuka, J.—The Petitioners claiming to be the members of the Respondent-Karnataka State Cricket Association (in short "the Association") have approached this Court for quashing Item No. 11 of its Managing Committee Resolution dated 20.3.2000 (Annexure-A) on the ground that it amounts to infringement of their statutory rights of voting as protected under the proviso to Sub-section (2) of Section 6 of the Karnataka Societies Registration Act, 1960 (in short 'the Act'). 2. The present writ petitions have been placed before us on being referred by the learned Single Judge under Section 9 of the Karnataka High Court Act, 1961. 3. The Association is a society registered under the Act. According to its registered memorandum of Association its object inter alia is to control, regulate, help, encourage, promote and develop the game of cricket in the whole of the State of Karnataka. The Association has framed its Rules which were registered with the memorandum containing provisions relating to the admission of members, general meetings, proceedings at such meeting including voting by members, the governing body and proceedings of the meeting of the governing body as required under Section 6(2) of the Act. The rules are called "Rules of the Karnataka State Cricket Association" (in short "the Rules"). These Rules have been subjected to certain amendment in 1999 but for resolving the present controversies the amendments so made are not relevant and therefore those are not being taken into account. RE: RELEVANT PROVISIONS UNDER THE RULES 4. Rule 1(d) of the Rules defines the "Members" to mean 'Founder Members', 'Founder Life Members' and 'Founder Institutional Members' subject to the privileges mentioned in the Rules. 5. Rule 6 of the Rules prescribes the criterions for being the 'Founder Life Member' and the 'Founder Member' which are as under: Rule 6. Members: a) Founder Life Members : Life Members on the Rolls of the Association as on 31.3.1974 shall be Founder Life Members. There shall be no direct enrollment of Founder Life Members. Founder Life Member shall not be liable to pay any further subscription. b) Founder Members: Members on the Rolls of the Association as on 31.3.1974 shall be Founder members. There shall be no direct enrollment of Founder members. c) *** *** *** *** 6. Similarly, Rule 7 of the Rules sets out the attributes of 'Associates' which are as follows- Rule 7. b) Founder Members: Members on the Rolls of the Association as on 31.3.1974 shall be Founder members. There shall be no direct enrollment of Founder members. c) *** *** *** *** 6. Similarly, Rule 7 of the Rules sets out the attributes of 'Associates' which are as follows- Rule 7. Associates: a) Life Associates: Any individual who is above 18 years of age and who is interested in or playing Cricket may be taken as a Life Associate on payment of a lump-sum of Rs, 25,000/- to the Association. (Thereafter he is not liable for any further payment). b) Associates: Any individual who is above 18 years of age born or domiciled in the State of Karnataka and who is residing within the area of Association and who is interested in or playing Cricket may be taken as 'ASSOCIATES' on being admitted as such and on payment of Rs. 5,000/-. c) Institutional Associates: Clubs, Gymkhanas, Institutions, Associations my also be taken as Institutional Associates on being admitted as such and on payment of Rs. 5,000/-. The Clubs, Gymkhanas, Institutions and Associations must be functioning for at least two seasons within the jurisdiction of the Association, before they apply for "Institutional Associate-ship" (However Cricket Clubs belonging to defence services may be taken as "Institutional Associates" as soon as they move into the Areas of the Association). 7. Rule 8 of the Rules makes provision for admission to Associate-ship. For convenience, this rule is being reproduced here under. It reads- 8. Admission to Associate-ship: The application to become Associates shall be made in writing to the Honorary Secretary of the Association in the Prescribed form accompanied by Admission fee and associate fee. The applicant shall duly be introduced by two Founder Members (Life, Associates or Institutional). The Committee may accept or reject any application without assigning any reason therefore Any applicant whose application has been rejected shall not be eligible for Associate-ship until after the expiry of the period of six months from the date of rejection of the application for Associate-ship. 8. Rule 9 of the Rules sets out the procedure for admission to Membership. This is a material provision for the present purpose. It reads as here under: 9. 8. Rule 9 of the Rules sets out the procedure for admission to Membership. This is a material provision for the present purpose. It reads as here under: 9. Admission to Membership: The application for admission to membership shall be made in writing to the Honorary Secretary of the Association in the prescribed form accompanied by the admission fee and the annual subscription. The application shall be duly proposed by a members of the Association and seconded by another member. The Committee may accept or reject any application without assigning any reason therefore An applicant whose application for membership has been rejected shall not be eligible for membership until after the expiry of a period of 6 months from the date of rejection of the application for membership. 9. Clause (a) of Rule 10 of the Rules prescribes the admission fees and the annual subscription for Associates and the members. Clause (c) of this rule speaks about the privileges which the members will be entitled to enjoy. Sub-clause (iii) of Clause (c) of Rule 10 is again material and is being reproduced hereunder: 10(c) Privileges: (i) *** *** *** *** (ii) *** *** *** *** (iii) Only Founder Life Members, Founder Members and Founder Institutional Members shall be eligible for all privileges of the Association including the right of attending, contesting and voting at all the General Meetings of the Association. 10. Rule 10(d) of the Rules makes provisions for filling of the vacancies of Founder Life Member or Founder Membership arising because of death, default, resignation or removal of such members. The entire dispute between the parties revolves around interpretation of Clause (2) of Rule 10(d). This sub-rule reads as under.- 10(d) Vacancy: i) *** *** *** *** ii) Vacancies caused in Founder Life Membership, Founder Membership (either by death, default, resignation or by removal) may be filled up by the Managing Committee at its discretion from among the Life Associates and Associates respectively. In case of vacancies in Founder Institutional Membership (either by default, resignation, liquidation or removal) may be filled up by the Managing Committee at its discretion from amongst the Institutional Associates. The admission to Founder Life or Institutional Membership is based on seniority basis as per Rule 9. RE: MATERIAL FACTS 11. In case of vacancies in Founder Institutional Membership (either by default, resignation, liquidation or removal) may be filled up by the Managing Committee at its discretion from amongst the Institutional Associates. The admission to Founder Life or Institutional Membership is based on seniority basis as per Rule 9. RE: MATERIAL FACTS 11. The General Body of the Association at its meeting held on 30.8.1997 resolved to authorise the Managing Committee of the Association to fill up the vacancies of Founder Members and Founder Life Members from amongst the existing Associates and Life Associates giving due consideration to their seniority. Accordingly, the secretary of the Association issued circular dated 28.10.1997 (Annexure-R1 to the counter statement) to first 150 Associates and first 50 Life Associates, giving option to them to make applications in the enclosed proforma for applying for securing applications to become Founder Members. The last date for exercising the option was till upto 31.12.1997. 12. The Petitioners who were associates of the Association as on the date of the resolution dated 30.8.1997 taken by the General Body and were found to be eligible as per their seniority as Associates, were served with the copy of the said circular along with the above proforma. The Petitioners exercised their options and on scrutiny, they being found eligible for conversion from Associates to Members, were issued with prescribed application form to complete the formalities. The Petitioners completed the formalities of filing the application as per their own understanding and paid the requisite admission fee. During the period November-December 1997, 120 of such Associates including the Petitioners were made Members of the Association against the existing vacancies. They started exercising their voting rights as members in the General Body Meetings and enjoying all the privileges available to members of the Association. 13. When the state of affairs existed as above, suddenly to their dismay and surprise, the Managing Committee of the Association passed the impugned resolution as at Item No. 11 of its proceedings dated 20.3.2000 (Annexure-A) which is to the following effect: 11. Membership Issues: The Hon. Secretary placed before the Committee a detailed Note which was earlier presented to the Finance Committee and already formed part and parcel of the minutes of the Finance Committee as cited in Clause 9 above. Membership Issues: The Hon. Secretary placed before the Committee a detailed Note which was earlier presented to the Finance Committee and already formed part and parcel of the minutes of the Finance Committee as cited in Clause 9 above. The said Note was exhaustive and the Hon. Secretary also placed the list of forty persons as per the list whose forms have not been properly proposed or seconded. Legal opinion of Sri B.K. Sampath Kumar, Legal Counsel was also placed before the Committee and there were deliberations on various aspects of this issue and it was highlighted that if the forms have not been properly submitted to the organisation and action taken thereon, the membership is deemed to be void right from its inception. Sri H.B. Datar explained to the Committee that in order to set best traditions and improve the procedures and principles of the organisation, it will not be correct to promote such of those people whose induction at inception itself is wrong to continue. He however emphasised that they should be treated as "Associates" in their respective seniority. 14. Pursuant to the above resolution of the Managing Committee, the Secretary of the Association under his letter dated 27.3.2000 (Annexure 'B') informed the Petitioners and others similarly situated members that since their application for membership was not found to be in conformity with the Rules, therefore, the Managing Committee had resolved to treat them as Associates only. The Petitioners, being aggrieved by the said resolution of the Managing Committee as communicated to them through the Secretary under Annexure 'B', have filed these writ petitions questioning the competence of the Managing Committee to pass such a resolution and for quashing thereof with a further prayer to declare that they continue to be the members of the Association. 15. A reading of the resolution at Annexure 'A' makes it clear that membership of the Petitioners and other similarly situated Members have been declared to be void merely on the ground that their application forms had not been properly proposed and seconded. 16. 15. A reading of the resolution at Annexure 'A' makes it clear that membership of the Petitioners and other similarly situated Members have been declared to be void merely on the ground that their application forms had not been properly proposed and seconded. 16. Smt. Nagarathna, learned Counsel appearing for the Petitioners, has submitted that since the Petitioners had been made members under Rule 10(d)(ii) of the Rules, which had vested the discretion in the Managing Committee to fill up the vacancies arising out of death, default, resignation or by removal of Founder Life Member or Founder Members in accordance with their seniority, the requirement of proposer or seconder for admission to membership under Rule 9 of the Rules was wholly inconsequential and therefore the impugned resolution of the Managing Committee was ex facie contrary to the Rules and cannot be sustained in law. 17. On the otherhand, Mr. R.N. Narashimamurthy, learned Senior Counsel appearing for the Respondent-Association, has submitted that where membership is sought to be acquired under Rule 9 or Rule 10(d) of the Rules, the requirement of having a proposer and seconder is imperative and if this pre-requisite is not fulfilled then even the Managing Committee cannot make any Associate to be a Member. His further submission is that if any membership is conferred on any Associate without fulfilling the requirement of having proposer or seconder, then action of the Managing Committee will be ab initio void and the membership so granted has to be treated as non est from the very inception. His submission was that viewed from this legal perspective, no infirmity can be found in the impugned resolution of the Managing Committee placed at Annexure 'A' and the subsequent communication made by the Secretary of the Association. 18. Mr. His submission was that viewed from this legal perspective, no infirmity can be found in the impugned resolution of the Managing Committee placed at Annexure 'A' and the subsequent communication made by the Secretary of the Association. 18. Mr. Narashimamurthy, learned Senior Counsel appearing for the Respondent-Association, has also taken the objection of maintainability of the writ petition on the ground that the Association is not a State within the meaning of Article 12 of the Constitution of India and therefore irrespective of the fact whether the impugned resolution at Annexure 'A' and the consequent communication at Annexure 'B' are legally valid or invalid, the writ petitions filed by the Petitioners cannot be entertained by this Court under Article 226 of the Constitution of India and their only remedy is to approach the Civil Court for enforcement of their right, if available to them within the framework of the Rules of the Association. 19. Considering the rival contentions raised at the Bar, in our opinion, we have to delve upon two questions, namely, (i) whether this Court can entertain writ petition against the action or resolution passed by an Association like the Karnataka State Cricket Association under Article 226 of the Constitution, and (ii) if the writ petition is found to be maintainable, whether the impugned resolution at Annexure 'A' can be said to be valid in law? 20. Keeping in view the activities of the Association, which arranges domestic and international cricket matches and trains players to represent the nation at international sports events and monopolistic status it has acquired in the area, it cannot be said that it is engaged only in some private activities and the game of cricket for enjoyment of its members alone. We can take judicial notice of the fact that cricket matches, which are held and organised by the Association has wider repercussions on the emotions of the citizens of the nation. Therefore, public watch these matches with great involvement and results are seen as advancing or defeating the national interest in the field of sport. Therefore, actions or decisions taken by the Association like the Cricket Association cannot be treated as falling exclusively in the private law area. Management of such Associations in accordance with rules and decisions taken by it must stand to the test of fairness and strictly legal as per its memorandum and rules and regulations. Therefore, actions or decisions taken by the Association like the Cricket Association cannot be treated as falling exclusively in the private law area. Management of such Associations in accordance with rules and decisions taken by it must stand to the test of fairness and strictly legal as per its memorandum and rules and regulations. It is because of the above reason that in various countries these have been treated as part of public activity permitting the Courts to interfere with arbitrary actions of the controlling bodies like the Respondent-Association (See: Wade's Administrative Law, 7th Edition, under the heading "Review of Non-Statutory Action" page 659). 21. It is because of the above reason, the Supreme Court, after reviewing those of the judgments on the issue at hand, in the case of Air India Statutory Corporation, etc. Vs. United Labour Union and others, AIR 1997 SC 645 , Pr. 26 has held that: 26. From the above discussion, the following principles would emerge:(1) *** *** *** *** (9) Functions of an instrumentality, agency or person are of public importance following public interest element. (10) The instrumentality, agency or person must have an element of authority or ability to effect the relations with its employees or public by virtue of power vested in it by law, Memorandum of Association or bye-laws or Articles of Association. (ii) The instrumentality, agency or person renders an element of public service and is accountable to health and strength of the workers, men and women, adequate means of livelihood, the security for payment of living wages, reasonable conditions of work, decent standard of life and opportunity to enjoy full leisure and social and cultural activities to the workmen. (12) Every action of the public authority, agency or instrumentality or the person acting in public interest or any act that gives rise to public element should be guided by public interest in exercise of public power or action hedged with public element and is open to challenge. It must meet the test of reasonableness, fairness and justness. (13) If the exercise of the power is arbitrary, unjust and unfair, the public authority, instrumentality, agency or the person acting in public interest, though in the field of private law, is not free to prescribe any unconstitutional conditions or limitations in their actions. 22. It must meet the test of reasonableness, fairness and justness. (13) If the exercise of the power is arbitrary, unjust and unfair, the public authority, instrumentality, agency or the person acting in public interest, though in the field of private law, is not free to prescribe any unconstitutional conditions or limitations in their actions. 22. In the above view of the matter, keeping in view the nature of the activities conducted by the Respondent-Association and the impact of such activities on public interest, in our opinion, we will not be justified in rejecting the present writ petition on the ground of maintainability. As of law, the question of maintainability of a writ petition under Article 226 of the Constitution is more in the nature of misnomer. It is well settled that Courts do not interfere in all disputes as a rule of prudence and not on the ground of lack of jurisdiction. Therefore, the preliminary objection raised on behalf Respondent-Association is rejected. 23. So far as the issue on merits is concerned, from the facts as found above and coupled with the provisions contained in Rule 10(d)(ii) of the Rules, it is clear that the Managing Committee of the Respondent-Association had conferred the status of being Members on the Petitioners by exercising its discretion to fill up the vacancies arising out of death, resignation or removal of Founder Life Members and Founder Members, from among the Associates by strictly adhering to their seniority. The discretion of the Managing Committee was not subject to fulfilling of any formalities like the one as required to be followed for acquiring membership under Rule 9 of the Rules. Once such a discretion is exercised offering membership to the Associates under Rule 10(d)(ii) of the Rules and the Associates act upon such offers and thereafter they are conferred with the membership, in our considered opinion, the same cannot be withdrawn by spinning out some technical flaws in restrospectivity. 24. We are of the further view that once the Managing Committee admits the Associates as members and they are allowed to act as such on their payment of requisite fee and subscription, the Rule of estoppel applies against the Managing Committee to revoke the membership retrospectively. 24. We are of the further view that once the Managing Committee admits the Associates as members and they are allowed to act as such on their payment of requisite fee and subscription, the Rule of estoppel applies against the Managing Committee to revoke the membership retrospectively. It has to be borne in mind that after a person is admitted as member it can be cancelled or revoked only prospectively and that too by following the principles of natural justice and only on the grounds that are available under the Act and the Rules of the Association for the purpose. 25. For the aforesaid reasons, the impugned resolution dated 27.3.2000 at Annexure 'A' and the consequential letter dated 27.3.2000 cannot be sustained in law, which are accordingly quashed. 26. In the result, the writ petitions are allowed. The parties to bear their own costs.