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2001 DIGILAW 391 (KAR)

P. Nagappaiaya Maiya v. Central Council of Institute of Chartered Accountants of India

2001-04-20

R.GURURAJAN

body2001
ORDER R. Gururajan, J.—Three Chartered Accountants of Bangalore City have preferred this petition seeking for the following prayer: The Petitioners herein therefore pray that this Hon'ble Court may be pleased to issue a writ of mandamus or any other appropriate writ or order or direction as the case may be directing the Central Council of the Institute of Chartered Accountants of India, the first Respondent herein to make over to the Bangalore branch of the Institute of Chartered Accountants of India, the third Respondent herein adequate funds as provided in Direction 43(a) of the Directions namely two thirds of the membership fees of the members of the branch concerned collected under regulation; these shall be made over to the branch concerned by the Central Council framed under the Chartered Accountants Act and the Regulations framed thereunder in the interest of the justice and equity. 2. Petitioners state in the petition that this petition is filed for the common cause of entire professional community in Bangalore. Respondent 1 is constituted under the Chartered Accountants Act (for short the Act) for management of the affairs of the Institute of Chartered Accountants of India (for short the Institute) and for discharging various assignments mentioned under the Act. 3. Central Council is constituted consisting of 24 persons elected exclusively by the members of the Institute and six persons nominated by the Central Government. In all there are 30 persons/members as contemplated under Section 9 of the Act. 4. Section 30 of the Act provided for a power to make Regulation for carrying out object of the Act by way of notification in the matter. The Respondents have provided Regulation called Chartered Accountant Regulation 1988 (for short Regulation) providing for regional councils, branches of regional councils in this Country. The Bangalore branch of SIRC, Respondent was constituted in the year 1962. It was set up by the council in Southern region, there are more than 3,900 members on Zone and the council has given directions with regard to the manner of functioning of this branch at Bangalore. 5. The Respondent 3 is governed by a Committee of Management and the members of the Committee Management are residents of Bangalore and the said Committee has to elect a Chairman, Vice Chairman, Secretary and a Treasurer. For proper administration of the Management of the Bangalore branch, Respondent 3, funds are required to meet various lawful expenditure. 5. The Respondent 3 is governed by a Committee of Management and the members of the Committee Management are residents of Bangalore and the said Committee has to elect a Chairman, Vice Chairman, Secretary and a Treasurer. For proper administration of the Management of the Bangalore branch, Respondent 3, funds are required to meet various lawful expenditure. These funds are to be provided by the Central Council. Direction 42 of the Directions framed under the Regulations provide for Finance and Accounts of the branch. Direction 43 of the Directions provide for 2/3 of the membership fee of the members of the branch concerned collected under Regulation 6; these shall be made over to the branch concerned by the Central Council. 6. The Managing Committee of the Bangalore Branch has an office to meet the growing needs of the members in Bangalore, substantial donations were collected from the members in this regard. The Petitioner 1 was the Chairman of the Managing Committee of Respondent 3 and relinquished his office in 1996. He is very much concerned about the progress of the Respondent 3 in Bangalore. Petitioners complain that for want of funds the office at Bangalore is suffering. The Petitioner 1 further states that representations were made to Respondent 2 and the same has not been placed before the Respondent 1. The Petitioner 1 being dissatisfied with the state of affairs was forced to raise the issue in public. The members of the council are enemical to Petitioner 1 and they harass him in several ways. With these facts the Petitioners seek for a mandamus in these petitions. 7. Notice was issued pursuant to which the Respondents have entered appearance and filed a detailed counter in the matter. They contend that the Petitioner cannot maintain the petition in this Court. They also say that there is no legal right vested in the Petitioner seeking for mandamus in the matter. They also referred to certain proceeding between Petitioner 1 and the Institute, they also gave the details with regard to their activities and also the money spent by them in terms of the regulation. They also say that Respondent 1 sanctioned and released several amounts to the branch at Bangalore. In conclusion they want the petition to be dismissed. 8. Heard the Counsels on either side. 9. They also say that Respondent 1 sanctioned and released several amounts to the branch at Bangalore. In conclusion they want the petition to be dismissed. 8. Heard the Counsels on either side. 9. At the outset let me remind myself as to when a writ of mandamus could be issued by this Court. The Constitution of India provides for issue of various prerogative writs in terms of the powers conferred under Article 226 of the Constitution of India. The High Court and the Supreme Court have issued various writs in the light of the powers conferred to these Courts in terms of Article 226 and Article 32 of the Constitution. There are various types of writs available to parties such as writ in the nature of habeas corpus, mandamus, certiorari and prohibition. A writ of mandamus is understood as a command which is of English origin. Halsbury's laws of England on mandamus says: The order of mandamus is of a most extensive remedial nature and is in form a command issuing from the High Court of Justice, directed to any person, Corporation or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. 10. It is a well settled principle of law that there must be a demand and refusal of relief for a writ of mandamus. Refusal is a condition precedent for issuing writ of mandamus. Writ of mandamus does not lie in the absence of demand for justice. 11. This Court in the case of A. Prabhakar Reddy Vs. State of Karnataka and Ors. reported in AIR 1980 Kar 207 at para 9 ruled as under: As a rule this Court exercising its jurisdiction under Article 226 of the Constitution will issue a writ of mandamus to the Authorities like the 1st and 2nd Respondents if they failed to discharge their duties arising out of the legal obligations, in spite of written demand. It is only when such duties are cast on the authorities and they fail to perform them, the right to seek a writ of mandamus arises in favour of the citizen. It is only when such duties are cast on the authorities and they fail to perform them, the right to seek a writ of mandamus arises in favour of the citizen. Again in para 11 it is ruled that: Further, as a matter of rule, no High Court will issue a writ of mandamus unless the aggrieved person has made a written demand on the Authorities concerned to enforce what he claims to be his legal right. Mr. Gangi Reddy fairly concedes that no written demand has been made calling up the Selection Committee or the State to re-allot him to Bangalore Medical College. 12. Again the Apex Court in Kamini Kumar Das Choudhury Vs. State of West Bengal and Others, AIR 1972 SC 2060 , the Supreme Court had ruled at page 2065 that: A demand for justice and its refusal must precede the filing of petition asking for direction or writ of mandamus. This judgment has been subsequently noticed by the Supreme Court in the case of Amrit Lal Berry and Another Vs. Collector of Central Excise, New Delhi and Others, AIR 1975 SC 538 at para 25 as under: In the petition of K.N. Kapur and Others, we do not even find an assertion that any representation was made against any violation of a Petitioners' right. Hence, the rule recognised by this Court in Kamini Kumar Das Choudhury Vs. State of West Bengal and Others, AIR 1972 SC 2060 at p. 2065 that a demand for justice and its refusal must precede the filing of a petition asking for direction or writ of mandamus, would also operate against the Petitioners. 13. In the light of these decisions it is clear that a mandamus cannot be issued for a mere asking for unless a demand is made to a Public Authority. There is a salient object behind this principle. Writ of mandamus as mentioned earlier is a compulsion by a Court to perform a public duty. Before such compulsion that body must have an opportunity by way a demand or a representation in the matter of its duty. To my repeated question to the Counsel for the Petitioner, the Petitioner's Counsel states that no demand as such was made to the Respondents. Annexure-C is only a memorandum to one Mr. Kale in the year 1995. There is no specific reference to this aspect of the matter. To my repeated question to the Counsel for the Petitioner, the Petitioner's Counsel states that no demand as such was made to the Respondents. Annexure-C is only a memorandum to one Mr. Kale in the year 1995. There is no specific reference to this aspect of the matter. Again Annexure-D is only a internal circular issued to its members. Counsel admits no such demand is made either to the 2nd Respondent or 3rd Respondent in the matter. In the circumstances I am clear in my mind that no mandamus could be issued at the instance of the Petitioners as sought for in this petition. 14. The Chartered Accountants Act, 1949 provides for framing of Regulations which also being framed known as Chartered Regulation 1988. The directions of the Central Council regarding the functions of the branches and original council provides for various contingencies. Chapter H of the directions provide for finance and accounts. Direction 43 provides for funds of the branch consisting of two thirds of the membership fees of the members of the branch concerned collected under Regulation 6, and it shall be made over to the branch by the Central Council. 15. A reading of this direction give an indication that it is a internal arrangement between Central Council and the State Council. Unless Petitioners make a specific demand to Respondent 3 in the matter of entitlement of 2/3 membership fee as unless Respondent 3 makes a demand on Respondent 1 no mandamus can be issued at the instance of the Petitioners. That too that there being no demand or refusal. It is an internal affair of arranging of finance between the branch and the Central Council. At any rate I do not want go into the controversial issue with regard to locus of the Petitioners or with regard to their right to compel in the matter of 2/3rd membership fee in this petition in the absence of a demand. 16. However, the Counsel relies on a judgment of this Court in 1984 (1) KarLJ 689. That case is clearly distinguishable on facts. That is a case in which this Court directed the Respondent by way of public interest. This petition is not filed by way of public interest as I see. 16. However, the Counsel relies on a judgment of this Court in 1984 (1) KarLJ 689. That case is clearly distinguishable on facts. That is a case in which this Court directed the Respondent by way of public interest. This petition is not filed by way of public interest as I see. Moreover it is a well settled law that a public interest could be maintained only when an aggrieved party is unable to maintain a petition against the Competent Authority. It cannot be said that Respondent 3 is so weak or is unable to maintain any petition. 3rd Respondent has no grievance in the matter. At any rate I do not want to give any definite finding in this matter since in my opinion suffice to dispose of the petition as being not maintainable in the light of no demand which is absent either by the Petitioners to Respondent 3 or to the Respondent 1 and in the absence of any demand by Respondent seeking of 2/3 fee to the Respondent 1 in terms of directions to the Petitioners and also I do not want to go into the allegation and counter allegation by the Petitioners and Respondents in the matter. 17. This petition is rejected reserving liberty to the Petitioners to make a demand specifically to the Respondent 3 to collect 2/3rd in terms of directions from the Respondent 1 with a copy to Respondent 1. It is also open to the Respondent 3 if so desired in view of the non-availability of 2/3rds to make a demand to Respondent 1 for appropriate orders. 18. With these observations this petition is rejected. Parties to bear their own costs.