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Andhra High Court · body

2004 DIGILAW 29 (AP)

P. R. Balarami Reddy v. Hyderabad Boat Club A. P.

2004-01-08

G.YETHIRAJULU

body2004
( 1 ) THIS revision petition is filed by the petitioner in O. P. No. 28 of 1995 against the order of the Chief Judge, City Civil Court, hyderabad dated 4-10-2001. ( 2 ) THE respondent herein is the respondent in the said petition. The respondent is a social organization registered under the A. P. (Telangana Area) Public Societies registration Act with registered No. 1574 established in the year 1932. The object of the respondent club is to entertain the members. The petitioner is a practicing Advocate in hyderabad and Secunderabad. On 24-6-1993 he made oh application to the respondent enclosing a cheque bearing No. 889566 dated 24-6-1993 for Rs. 5,000/- seeking membership of the club. The petitioner contended that he was admitted as a member of the club and a membership card No. P078 was issued to him. Since then he is utilizing the club for his social activities by paying the requisite bills without any default. He was also entertaining guests in the club since 1 1/2 years prior to the petition. On 16-1-1995 when the petitioner went to the club along with his guests, the employee of the respondent served him a letter dated 4-12-1994 mentioning that due to unavoidable circumstances the managing committee decided to terminate his membership with immediate effect and requested him to pay the dues of Rs. 606/ -. The action of the respondent terminating the membership of the petitioner without any notice or assigning reasons is illegal and arbitrary. The respondent has no right to terminate the membership of the petitioner unilaterally and it is against the principles of natural justice. It is mala fide and bad under law. There is no category named as "special temporary Membership" under the rules and bye-laws of the respondent. The petitioner has not contravened any rules and bye-laws of the respondent, therefore, the termination of the membership is liable to be set aside. ( 3 ) THE respondent resisted the petition contending that the respondent club consists of four types of members viz. , (1) life members, (2) members, (3) temporary members, and (4) honorary members. The petitioner applied for membership of the club on 18-6-1993. By that time about 34 applications were pending for admission. There were no vacancies for membership to admit them as members. , (1) life members, (2) members, (3) temporary members, and (4) honorary members. The petitioner applied for membership of the club on 18-6-1993. By that time about 34 applications were pending for admission. There were no vacancies for membership to admit them as members. The Managing committee treated all the applications as special cases, including the application of the petitioner, to utilize the facilities of the club as special temporary members, till a decision is taken to admit or reject the applications. They were exempted from paying any subscription. The petitioner availed the facility of the club as a special temporary member. The Managing committee of the club in the meeting dated 3-12-1994 considered the applications and decided to reject them and terminated the special temporary membership of all those persons with immediate effect. The petitioner was informed about the same through its letter dated 4-12-1994. The petitioner was never admitted as a member and he was merely permitted to avail the facilities of the club as special temporary member till 4-12-1994. The petitioner did not enclose any cheque to his application for membership. He was admitted as a member of the club. He was given only special temporary membership. The petitioner was never allowed to entertain any guests. Rule 14 of, the bye-laws empowered the Managing committee of the club to admit or reject the applications for membership. Therefore, the question of giving opportunity to the petitioner before rejecting his application does not arise. The Managing Committee has got every right to terminate the membership to temporary members. The petitioner and 33 others were allowed to avail the facilities of the club as a special case by styling them as "special Temporary members". They were given the facility of availing the facilities of the club without any subscription. The petitioner is not entitled for admission as a member of the club, as of right. He is not entitled for the declaration as prayed for. The petition is therefore liable to be dismissed. ( 4 ) THE lower court after taking up the matter for consideration whether the petitioner is entitled for declaration as prayed for, conducted an enquiry. In the said enquiry the petitioner got himself examined as p. W. 1 and marked Exs. A-1 to A-4. The petition is therefore liable to be dismissed. ( 4 ) THE lower court after taking up the matter for consideration whether the petitioner is entitled for declaration as prayed for, conducted an enquiry. In the said enquiry the petitioner got himself examined as p. W. 1 and marked Exs. A-1 to A-4. On behalf of the respondent R. W. 1, the manager of the club was examined, but no documents were marked on its behalf. ( 5 ) THE lower court after considering the evidence adduced by both parties dismissed the petition observing that except oral evidence of the petitioner there is no6vidence to prove that he was admitted as a member. Ex. A-1-card issued by the respondent is silent about his membership. No procedure is contemplated to give notice to the temporary member before termination. The petitioner failed to prove that he is the permanent member of the club, The evidence of R. W. 1 is reliable since he is the Manager of the club and if the petitioner Was admitted only as a temporary member, the Managing committee under Rule 17 has power to terminate his membership and he was rightly terminated without issuing any notice. There is no illegality committed by the respondent in terminating the membership and the petitioner has no right to continue as a member. ( 6 ) THE petitioner being aggrieved by the order of the lower court dated 4-10-2001 preferred this revision petition questioning its validity and legality. ( 7 ) THE point for consideration is whether the revision petitioner is entitled for declaration as prayed for and whether the order of the lower court is liable to be set aside? point: ( 8 ) THE application for membership, the respondent club issuing the membership card, and the petitioner availing facilities of the club for a period of 1 1/2 years are not in dispute. The petitioner contended that he paid the membership fee of Rs. 5,000/- through a cheque and also paid necessary charges payable from time to time, He was taking guests to the club along with him and as he is a permanent member of the club, it is unjust on the part of the respondent to terminate his membership without assigning any reasons or without prior notice, which amounts to violation of the principles of natural justice. The learned counsel for the respondent contended that pending consideration of the application of the petitioner and 33 others, they were permitted as "special Temporary Members" of the club without any charge and, as the managing committee decided to reject the applications, on 4-12-1994 the impugned order was served on the petitioner. The learned counsel further contended that since the petitioner was only a special temporary member, the question of issuing any prior notice does not arise and the Managing Committee has every power to terminate such members without any prior notice or without assigning any reasons. In the light of the contentions of the respective parties, it is appropriate to refer to the relevant bye-laws and the evidence adduced by both parties. ( 9 ) THE respondent club is known as the hyderabad Boat Club. It was established in the year 1932. The club has framed its own rules and Bye-laws dated 25-6-1994. Rule 14 (a) deals with membership of the club, and Rule 14 (b) (i) deals with the procedure for membership of the club and the same reads thus: 14. Membership: The member who is proposing or seconding for membership should be a permanent member and should have five years standing. (a) There shall be the following classes of members, (i) Life Members, (ii) members, (iii) Temporary Members, (iv) Honorary members. The total membership of Life Members, members and Honorary Members do not exceed 1,000 unless it is sanctioned by the General Body. The managing Committee is empowered to take Temporary Members according to the convenience and need of the Club. (b) (i) Applications for the membership shall be submitted to the managing Committee accompanied by an amount equivalent to the admission fee for the class of Membership applied for. Every application for the membership shall be supported by the recommendation of two members other than members of the Managing committee, one of whom shall propose the name and the other shall second the same. No member shall propose or second for more than two applications in a calender year. Admission of the new members shall be subject to the approval of the managing Committee by 2/3 majority by secret ballot. No reasons shall be assigned for rejecting the application. In case the application for membership is rejected, the applicant shall be charged rs. No member shall propose or second for more than two applications in a calender year. Admission of the new members shall be subject to the approval of the managing Committee by 2/3 majority by secret ballot. No reasons shall be assigned for rejecting the application. In case the application for membership is rejected, the applicant shall be charged rs. 500/- (Rupees five hundred only) per month or part thereof for the period of utilization of the Club. ( 10 ) RULE 14 (b) (ii) deals with the conditions of the Member provisionally admitted and the same reads as follows: any new member provisionally admitted shall be treated as Temporary member for three months, before the managing Committee decide him/her for a permanent membership i. e. , members provisionally admitted shall be called applicant members and shall be under probation for three months. During this period such member cannot entertain guests. ( 11 ) RULE 14 (b) (iv) and (v) read as follows: (iv) The name of every applicant member shall be notified on the notice board of the Club. (v) The admission fee for Life Members will be Rs. 40,000/- (Rupees forty thousand only ). The admission fee for ordinary members shall be rs. 15,000/- (Rupees fifteen thousand only) and a monthly subscription of Rs. 40/- (Rupees forty only ). The Temporary members will be charged Rs. 500/- (Rupees five hundred only) per month. However, fixing of monthly subscription and other fee will be decided and fixed by the Managing committee from time to time. ( 12 ) RULE 17 of the Rules lays down the power of the Managing Committee in approving the application for membership of the club. It reads as follows: the Managing Committee or the honorary Secretary shall admit any person to a temporary membership provided that the application be proposed and seconded by two members. The period of such membership shall not exceed 3 months in a calender year and such member shall not be entitled to attend any business meeting of the Club. The temporary membership can be cancelled at any time without assigning any reasons. ( 13 ) RULE 24 deals with the period during which the application for membership has to be disposed of and the same reads as follows: 24. Noapplication for membership shall be kept pending for more than 3 (three) months from the date of application. The temporary membership can be cancelled at any time without assigning any reasons. ( 13 ) RULE 24 deals with the period during which the application for membership has to be disposed of and the same reads as follows: 24. Noapplication for membership shall be kept pending for more than 3 (three) months from the date of application. ( 14 ) IN the light of the above provisions, the evidence has to be scrutinized to come to a conclusion whether the action of the respondent in terminating the membership of the petitioner is sustainable, ( 15 ) THE petitioner produced Ex. A-1- membership card. It was signed by the honorary secretary of the club mentioning the name of the petitioner and membership number as "p-078". The petitioner contends that since Ex. A-1 indicates that he was admitted as a member of the club, he shall not be treated in any other capacity and when once he is a member, he is not liable to be terminated unless and until he is attributed the default in payment of the necessary fees and charges. He filed Ex. A-4-counterfoil of the cheque said to be issued by him on 24-6-1993, but the respondent is denying such payment. Since the respondent averred that the petitioner and 33 others were admitted to avail the facilities of the club free of charge, the payment of the membership fee does not assume much importance. Ex. A-2-notice issued by the respondent on 4-12-1994 reads as follows: we regret to inform you that due to unavoidable circumstances the managing committee in its meeting held on 3-12-1994 has decided to terminate the special temporary membership which is offered to you with immediate effect. You are hereby requested to clear the Bar dues of Rs. 606/- immediately. ( 16 ) EX. A-3 is the copy of the bye-laws of the respondent club and the relevant rules have already been extracted in the above paras. ( 17 ) THE petitioner as P. W. 1 deposed that he applied for membership of the respondent on24-6-1993andpaidrs. 5,000/-by enclosing a cheque to the application. He was admitted as a member of the club and issued Ex. A-1- membership card. He was attending the club and also entertaining his guests in the club. On 16-1-1995 when he went to the club, he was served with Ex. 5,000/-by enclosing a cheque to the application. He was admitted as a member of the club and issued Ex. A-1- membership card. He was attending the club and also entertaining his guests in the club. On 16-1-1995 when he went to the club, he was served with Ex. A-2-termination letter on the ground that he was admitted as a special temporary member. There is no category of special temporary membership under the Rules and Bye-laws. Rule 14 authorises the management to give the temporary membership for three months only. He was admitted as a permanent member of the club. As the respondent encashed the cheque sent by him along with the application, the respondent cannot terminate his membership without giving any notice, as required under Rules 19 and 21. In the cross-examination he stated that he was given card after one month of the application. He denied a suggestion that he was given temporary membership for three months only. He has not received any notice to attend the general body meeting of the club and he denied a suggestion that he is not a member of the club. ( 18 ) THE evidence placed by the petitioner is establishing that the club received his application, issued a membership card to him, and allowed him to avail the facilities of the club for a period of 1 1/2 years. Against the above evidence placed by the petitioner, the respondent did not produce any records of the club to prove its contentions regarding the membership of the petitioner, ( 19 ) THE respondent examined only R. W. 1 the Manager of the club. His evidence is to the effect that the petitioner applied for membership on 18-6-1993. By that time 33 applications were pending with the respondent. The petitioner was declined membership, but they have decided to admit him as a "special Temporary Member" till regular membership is allotted without any payment. They have not collected any amount from the petitioner. Ultimately on 3-12-1994 there was a resolution of the managing Committee rejecting membership to the petitioner and it was communicated to him. The petitioner is not a permanent member of the respondent club. In the cross-examination he narrated the procedure for admission of a member into the club. According to him, a person has to make an application duly attested by two witnesses for membership by paying the requisite fee. The petitioner is not a permanent member of the respondent club. In the cross-examination he narrated the procedure for admission of a member into the club. According to him, a person has to make an application duly attested by two witnesses for membership by paying the requisite fee. After approval of the application by the committee, members will be admitted. The membership card will be issued according to category. The card will be issued as per the category of membership admitted by the managing committee. He further stated that as per the bye-laws, there is no category of "special Temporary Member". Temporary membership will be given for a short period of three months and beyond three months temporary membership will not be given. After the application he has not issued any notice to the petitioner asking for payment of subscription and to comply with the formalities. ( 20 ) THE learned counsel for the revision petitioner contended that the respondenthas violated the principles of natural justice by not issuing notice before issuing the termination order. In support of his contention he relied on a judgment of the supreme Court in National Textile Workers union v. P. R. Ramakrishnan wherein the supreme Court held that the Court must observe the principles of natural justice. ( 21 ) THE above decision is in respect of the performance of a Court which failed to follow the principles of natural justice, therefore the decision is not directly applicable to the facts of this case, though the principles of natural justice are supposed to be observed by every agency to indicate that there is fair dealing of the matter and every opportunity is given to the person against whom an order is passed. ( 22 ) THE learned counsel for the revision petitioner also contended that notice to a member of the club cannot be waived on the ground that he is not in the city. It has to be sent to his permanent address or through publication in newspaper. In support of his contention he relied on a decision of the allahabad High Court in Kanwaldeep Singh v. Asstt. Registrar, Firms, Societies and Chits, faizabad, wherein the Allahabad High Court held that notice to a member of a society registered under the Societies Registration act, who has gone out of city cannot be waived. In support of his contention he relied on a decision of the allahabad High Court in Kanwaldeep Singh v. Asstt. Registrar, Firms, Societies and Chits, faizabad, wherein the Allahabad High Court held that notice to a member of a society registered under the Societies Registration act, who has gone out of city cannot be waived. It has to be sent to the permanent address of the member or through publication in newspaper. ( 23 ) THIS decision indicates that whenever an action is proposed to be taken against a member of the Society, the management has to issue notice affording opportunity before termination of membership. ( 24 ) IN Ram Kumar v. State of West Bengal a division Bench of Calcutta High Court held that so long as the purposes of the society are not altered, it cannot lawfully do something not sanctioned by its objects. ( 25 ) THE above decision, which relates to the amendment or alteration of the rules is not directly applicable to the facts of the case on hand. ( 26 ) THE revision petitioner contended that the society is not expected to describe him as "special Temporary Member", since there is such no category of membership incorporated in the Rules. ( 27 ) THE learned counsel for the revision petitioneralsosubmitted that the respondent club having accepted the application of the revision petitioner and having issued the identity card, allowing him to continue as a member for 1 1/2 years, is not expected to unilaterally terminate the membership and cannot reject the application after 1 1/2 years. It amounts to promissory estoppel. In support of his contention, he relied on a judgment of this Court in K. Narmada v. Secy. , Medical and health Deptt. ,a. P. ( 28 ) THE facts coveredby the above decision relate to the admission of a student who is under-aged and they are different from the facts of the case on hand, therefore, the above decision is not applicable to the facts of this case. ( 29 ) AS per the evidence of R. W. 1, there is no correspondence between the petitioner and the respondent at any time before issuing of the notice of termination of membership covered by Ex. A-2. ( 29 ) AS per the evidence of R. W. 1, there is no correspondence between the petitioner and the respondent at any time before issuing of the notice of termination of membership covered by Ex. A-2. As per the procedure prescribed under the Rules, the club has to dispose of the applications within three months from the date of application, either accepting or rejecting the membership. It is the discretion of the Managing Committee of the club to categorise the applicants depending upon the admission fee they are prepared to pay, the social status and other aspects. According to R. W. 1, the application of the petitioner was rejected on 3-12-1994, but there is no communication to the effect that his application was rejected. On the other hand, Ex. A-2-letter indicates that his membership was terminated. The respondent did not place any material, including the minutes Book of the club, if any, the list of permanent members and other categories of members. They did not produce any material to show whether there was any correspondence between the parties or any communication to the petitioner regarding the allotment of membership, rejection of the application etc. When the respondent issued a membership card to the petitioner, it is for the respondent to explain under what circumstances they issued the membership card. If the version of the respondent that the petitioner and 33 others were admitted as special Temporary Members is correct, it is for the respondent to explain as to when such decision was taken and what is the material on record to show that for want of vacancies in permanent membership, they were admitted as Special Temporary members. The respondent also did not explain as to why it took 1 1/2 years to take a decision on the applications made by the petitioner and others and after keeping the applications pending for such a long period why they have suddenly taken a decision without assigning any reasons to terminate the membership. There is no explanation from the respondent as to why the petitioner was allowed to avail the facilities of the club for 1 1/2 years making him to understand that he can continue as a member of the club for ever. In Ex. A-2-letter no reasons are assigned for terminating the membership of the petitioner. There is no explanation from the respondent as to why the petitioner was allowed to avail the facilities of the club for 1 1/2 years making him to understand that he can continue as a member of the club for ever. In Ex. A-2-letter no reasons are assigned for terminating the membership of the petitioner. The question of termination arises either on account of default committed by the petitioner or on account of misconduct in the premises of the club. In the absence of the above reasons, the respondent is not supposed to take a unilateral decision terminating the membership of the petitioner. As per Ex. A-2, it is not the case of rejection of the application of the petitioner, but it is the termination of membership. Unless and until the petitioner is granted admission on the basis of his application, the question of termination of his membership does not arise. In the light of the above circumstances, I find sufficient force in the contention of the revision petitioner that the respondent failed to assign any reasons in Ex. A-2, and also failed to provide him an opportunity by issuing a notice indicating the reasons for their proposal to terminate his membership. Issuing order terminating the membership of the club suddenly after allowing the petitioner to avail the facilities of a member for 1 1/2 years amounts to violation of the principles of natural justice, therefore, the termination order is held void, arbitrary and illegal and it is liable to be set aside. The lower court passed the impugned order solely relying on the evidence of R. W. 1 and confirmed the order of the Managing committee of the respondent in terminating the membership of the petitioner. In the light of the foregoing, discussion, I find sufficient grounds to allow the revision petition. ( 30 ) IN the result, the revision petition is allowed. The impugned order of the lower court and the order of termination issued by the respondent club are set aside. The respondent club shall permit the petitioner to continue the status, which was given to him till it takes the steps, if any, according to rules. ( 30 ) IN the result, the revision petition is allowed. The impugned order of the lower court and the order of termination issued by the respondent club are set aside. The respondent club shall permit the petitioner to continue the status, which was given to him till it takes the steps, if any, according to rules. The respondent is at liberty to collect such fee and charges on par with others, including admission fee, if any, and to take necessary action in the event of failure of the petitioner paying such charges admissible as on the date of this order. The respondent is also at liberty to admit the petitioner as a member in one of the categories of membership available under the Rules. Each party to bear its own costs.