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2008 DIGILAW 665 (ORI)

SAHEED SPORTING CLUB v. KALYAN RAY CHOUDHURY

2008-08-07

B.N.MAHAPATRA, B.S.CHAUHAN

body2008
JUDGMENT : B.S. Chauhan, C.J. - This writ appeal has been filed against the Judgment and order of the learned Single Judge dated 17.07.2008 passed in W.P. (C) No. 14594 of 2007 by which the learned Single Judge dismissed the writ petition upholding the Judgment and order of the First Appellate Court dated 22.09.2007 passed in F.A.O. No. 124 of 2007 (Annex.-11) by which the Appellate Court has set aside the order dated 22.08.2007 passed by the learned Civil Judge (Senior Division) i.e. the trial Court granting interim relief while considering the application being I.A. No. 41 of 2007 in C.S. No. 36 of 2007. 2. The facts and circumstances giving rise to this appeal are that the Appellant No. 1 namely, Saheed Sporting Club which is a registered society bearing Registration No. 3929-130/1985-86 having its registered office at Kesharpur of Cuttack Town. The registration was made in 1986 under the Societies Registration Act, 1860 (hereinafter called the 'Act'). Appellant No. 2 claims to be the Secretary of that Club. The elections of the Club had been held from time to time. On 24.4.2000 an election of office Bearers of the Society was held for a term of two years in which the present Appellant No. 2 and the Respondent were selected as President and Secretary of the Club respectively. But just after expiry of three months the General Body of the Society passed a resolution dated 23.7.2000 setting up a new set of office bearers, by which the Appellant No. 2 and Respondent were also selected as the office bearers for a period of four years i.e. from 23.07.2000 to 22.7.2004. After expiry of the terms of the said Committee, on 22.7.2004, as elections were not held the office bearers claimed to continue in the office. The present Appellant No. 2 claims himself to be the President of the Club filed C.S. No. 176 of 2005 against the Respondent seeking a large number of reliefs including a prayer to pass an order restraining the Respondent from interfering with the day to day affairs of the management of the Club and to utilize his official seals and nomenclature. During the pendency of the suit, it appears that a General Body Meeting was held but no agreement for holding a fresh election could be reached. During the pendency of the suit, it appears that a General Body Meeting was held but no agreement for holding a fresh election could be reached. Respondent claimed that a meeting of the General Body was held on 23.1.2005 wherein he was selected as the Secretary of the Club for a period of four years up to 22.1.2009. The General Body passed another resolution dated 19.11.2006 declaring earlier election dated 23.1.2005 as illegal and void and resolved to elect the Appellant No. 2 as the Secretary of the Club along with other office bearers for a period of two years. The suit filed by the Appellant No. 2 was contested by the Respondent and it was disposed of vide Judgment and decree dated 29.11.2006. The Appellant No. 2 filed a suit No. 36 of 2007 along with injunction application being I.A. No. 41 of 2007. The learned Trial Court disposed of the said injunction application vide order dated 22.8.2007 restraining the Respondent from functioning as Secretary of the Club till disposal of the suit. Being aggrieved, the present Respondent challenged the said order by filing F.A.O. No. 127 of 2007, which has been allowed by the Appellate Court vide order dated 22.09.2007 against which the present Appellant No. 2 filed the writ petition which has been disposed of vide impugned order dated 17.07.2008 by the learned Single Judge refusing to interfere with the order passed by the Appellate Court so far as interim relief was concerned. However, direction to the learned Civil Judge to dispose of the Civil Suit No. 36 of 2007 within the stipulated time was issued. Hence this appeal. 3. Sri N.C. Panigrahi, learned Senior counsel appearing for the Appellant has vehemently contended that as the trial Court had considered all the pros and cons and granted the interim relief there was no occasion for the Appellate Court to reverse the said order. The writ Court has erred not appreciating the submissions advanced on behalf of the present Appellant and not reversing the order of the first Appellate Court. The balance of convenience is in favour of the Appellant No. 2 as he has been duly elected by the General Body by passing a subsequent resolution dated 19.11.2006. The writ Court has erred not appreciating the submissions advanced on behalf of the present Appellant and not reversing the order of the first Appellate Court. The balance of convenience is in favour of the Appellant No. 2 as he has been duly elected by the General Body by passing a subsequent resolution dated 19.11.2006. Period for which the suit No. 176 of 2005 was filed has lapsed, thus the Judgment and order passed in the first suit has become meaningless and has lost all its efficacy. Appellate Court ought to have taken into consideration the development subsequent to the Judgment of the Civil Court in the first suit and thus it could not have placed any reliance thereon. The appeal deserves to be allowed. 4. We have considered the submissions made on behalf of the Appellants and perused the record. Section 4 of the Act provides that the list of office bearers of the Managing Committee is to be filed before the Registrar of the Societies once in very year on or before the fourteenth day succeeding the day on which, according to the rules of the society, the annual general meeting of the society is held. So far as the State of Orissa is concerned it has amended the Act by the Societies Registration (Orissa Amendment Act) 1969 inserting Section 4-A, 4-B and 4-C in the said Act. Section 4-A provides that in case there is any change in personnel on the list filed u/s 4 during the year to which such list relates, it shall be intimated to the Registrar of Societies within two months of such change. Section 4-B imposes obligation on the office bearers to send the list of changes. Section 4-C provides that not sending such list as required u/s 4-A would be a punishable offence and the person found guilty of, it can be imposed a fine. 5. Therefore, it is evident from the aforesaid statutory provisions that the list of the office bearers of the managing committee shall be made available to the Registrar of Societies on or before 14th day succeeding the date of annual general body meeting of the Society. If there is any change subsequent thereto, it shall also be communicated. Non-communication thereof would be a punishable offence. If there is any change subsequent thereto, it shall also be communicated. Non-communication thereof would be a punishable offence. Bye laws framed by the Society on 16.3.1985 clearly stipulate that the Society shall be governed in conformity of the provisions contained in the Act. Membership of the Society can be given to any major person if he fulfils other requirements mentioned therein. However, the membership can be terminated only if such a decision is taken by 2/3rd majority of the General Body by passing a resolution. It shall be recorded in the resolution book and should be approved by the Additional Registrar of the Societies within a period of two months of the passing the resolution. The membership can be terminated only on three grounds, i.e. (i) if the member does not attend three consecutive meetings, (ii) he resigns, dies, becomes a man of unsound mind, insolvent or convicted in criminal offence, and (iii) if a particular member's activities are found detrimental to the aims and object of the Society. 6. So far as the constitution of the Executive Committee is concerned, it shall be by the members of Directive Body which is selected by the General Body. However, in case the General Body thinks it proper, it may also select or elect the members of the Executive Committee. The annual General Body meeting of the Society shall be held before 14th day of January of each year and the resolution passed in that meeting shall be submitted to the Additional Registrar within one month for approval. Bye-laws further provide as under: General Body means the total members of the Society and it shall be the sole authority of the Society. It will meet annually before fourteenth day of January and copy of the resolution shall be submitted to the Additional Registrar within one month for approval. Audit The accounts of the Society shall be audited annually by a qualified Auditor or Government Auditor. 7. The aforesaid Bye-laws make it clear that every activity of the Society shall be in consonance with the statutory provisions of the Act. Annual General Body meeting shall be held before 14th of January of each year and any resolution passed therein shall be sent for approval of the Additional Registrar. 7. The aforesaid Bye-laws make it clear that every activity of the Society shall be in consonance with the statutory provisions of the Act. Annual General Body meeting shall be held before 14th of January of each year and any resolution passed therein shall be sent for approval of the Additional Registrar. Therefore, by combined reading of the statutory provisions and the bye-laws, it becomes clear that the list of office bearers shall be communicated to the Registrar of Societies u/s 4 as per the resolution of the Annual General meeting of the Society and if any change is made subsequent thereto, the same shall also be communicated to the Registrar of Societies. Resolution of the general body for removal of the member requires approval of the Additional Registrar as it is provided in the Bye-laws of the Society. 8. Admittedly, the present Appellant No. 2 filed earlier suit No. 176 of 2005 seeking permanent injunction restraining the Respondent from interfering with, the day to day affairs of the management of the club and utilizing the official seal and nomenclature of the club in any manner whatsoever. The suit was disposed of by Judgment and decree dated 29.11.2006. There had been allegation of misappropriation of funds of the said club. Account of the club is to be audited by Government Auditor. It is not pleaded that the same had ever been audited. The Treasurer is responsible for accounts of the Society as per the Bye-laws" but he is not being involved herein. The Plaintiff-Appellant failed to establish the said charges. Issue No. 5 : as to whether the Respondent was to be permanently restrained from interfering with the day to day affairs of the management of the club and utilizing its seals and nomenclature, was decided against Plaintiff. It is alleged in the subsequent suit filed by the Appellants that during the proceeding of the said suit Appellant came to know about the alleged election dated 23.1.2005 in which the Respondent claimed to have been selected as Secretary of the club. The Appellant ought to have amended the plaint and challenged the said election. In subsequent suit, the same relief has been sought without challenging the earlier election. The Appellant ought to have amended the plaint and challenged the said election. In subsequent suit, the same relief has been sought without challenging the earlier election. So, indirectly, instead of challenging the said election or seeking declaration that the said election was void, a decree of permanent injunction is sought against the Respondent restraining him from functioning as a Member or Secretary of the Society and an injunction not to-release annual grant in his favour or make any correspondence whatsoever. His election is not under challenge. What is being claimed that his election was disapproved by the General Body meeting dated 19.11.2006. His election was declared illegal and invalid. His membership was also terminated. The ground of challenge to the said election has been that he had been elected by non-members and defaulter members also participated therein. There is nothing in the Bye laws of the Society preventing the defaulter members to participate in the election. There is nothing on record to show as whose names as the office bearers had been sent as per the provisions of Section 4 of the Act. More so, it is evident that any resolution of the Society would require approval of the Additional Registrar within a stipulated period. It is nobody's case that any resolution terminating the membership of the Respondent had ever been approved by the said Authority. 9. The aforesaid bye-laws provide in a crystal clear language that every resolution would require approval of the Additional Registrar of the Societies prior to giving effect to the same. There is nothing on record to show that any resolution, passed from time to time by the General Body, had ever been approved by the said authority. 10. Approval means confirming, ratifying, assenting, sanctioning or consenting to some act or thing done by another. The very act of approval in part, the act of passing Judgment, the use of discretion and determining as an adjudication therefrom unless limited by the context of the Statute. Vide Aruna Shanker v. State of U.P. and Anr. 1984 All. L.J. 1031; and Vijayadevi Navalkishore Bhartia and Another Vs. Land Acquisition Officer and Another, ). 11. There can be no quarrel to the settled legal proposition that if statute provides for approval of an Authority, the order cannot be given effect to unless it is approved and the same remains inconsequential and unenforceable. 1984 All. L.J. 1031; and Vijayadevi Navalkishore Bhartia and Another Vs. Land Acquisition Officer and Another, ). 11. There can be no quarrel to the settled legal proposition that if statute provides for approval of an Authority, the order cannot be given effect to unless it is approved and the same remains inconsequential and unenforceable. A Full Bench of Allahabad Court in Shakir Husain Vs. Chandoo Lal and Others held that any order is good unless disapproved. But where approval is requited, the order does not become effective until it is so approved. 12. A similar view has been reiterated in Shanta Prasad v. Collector, Naini Tal and Ors. 1978 ALJ 126. 13. A Division Bench of the Allahabad High Court in Mohammad Ali Vs. The State of Uttar Pradesh and Others, considered a case under the provisions of U.P. Municipalities Act, 1916, providing for appointment subject to approval of the Government and considered the distinction between the appointment with permission of the Government and with approval of the Government. The Court observed as under: When a person is employed under a power which is to be exercised subject to the approval of a higher authority or the Government, the appointment holds good so long as the higher authority or the Government has not disapproved of it. There is a distinction between an appointment with the permission of a higher authority or the Government, and an appointment subject to the approval of the higher authority or the Government. An appointment which is to be made with the permission of a higher authority or the Government cannot be made unless the permission is first obtained, but an appointment which can be made subject to the approval of a higher authority or the Government may be made and will be rendered invalid only when it is disapproved by the higher authority. 14. A Constitution Bench of the Hon'ble Supreme Court In Union of India (UOI) and Others Vs. Bhim Sen Walaiti Ram, considered the similar provision requiring approval by the authority concerned and the Court held as under: It is, therefore, clear that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation, the person, whose bid has been provisionally accepted, is entitled to withdraw his bid. Bhim Sen Walaiti Ram, considered the similar provision requiring approval by the authority concerned and the Court held as under: It is, therefore, clear that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation, the person, whose bid has been provisionally accepted, is entitled to withdraw his bid. When the bid is so withdrawn and before the confirmation of the Chief Commissioner the bidder will not be liable for damages on account of any breach of contract or for the short-fall of the re-sale. An acceptance of an offer may be either absolute or conditional. If the acceptance is conditional, the offer can be withdrawn at any moment until absolute acceptance has taken place. While deciding the said case, the Hon'ble Supreme Court placed reliance upon the Judgment of the Court of Appeal in Hussey v. Hornepayne; (1878) 8 Ch.D. 670 where offer was accepted (subject to the title being approved by the solicitor. In that case, it was held that the contract became conclusive only on being approved by the solicitor and prior to that it was merely a conditional acceptance and contract did not stand concluded. 15. In State of Orissa and Others Vs. Harinarayan Jaiswal and Others, the Apex Court held that where the statutory provision provides for approval or acceptance by an authority the State reserves for itself the right to accept or reject even the highest bid and in such an eventuality the auction bidder cannot enforce the contract prior to approval as required under the provisions. 16. In State of Uttar Pradesh and Others Vs. Vijay Bahadur Singh and Others, the Supreme Court held that the State is entitled to change or revise the policy even subsequent to the acceptance of the provisional bid. The bid becomes final once being approved by the competent authority if approval is required by law. However, if State changes its policy prior to confirmation/approval of the bid, the person, i.e., the highest bidder, cannot raise any grievance whatsoever. 17. In Trilochan Mishra, etc. Vs. State of Orissa and Others, ; and Laxmikant and others Vs. Satyawan and others it was held that a public auction stands completed on approval by the competent authority and prior to that, no right is accrued in favour of the highest bidder. 18. 17. In Trilochan Mishra, etc. Vs. State of Orissa and Others, ; and Laxmikant and others Vs. Satyawan and others it was held that a public auction stands completed on approval by the competent authority and prior to that, no right is accrued in favour of the highest bidder. 18. While dealing with the approval of the award under the Land Acquisition Act, 1894, the Supreme Court in Vijayadevi Navalkishore Bhartia and Another Vs. Land Acquisition Officer and Another held that the authority granting approval does not act as an Appellate Authority. The Court observed as under: In the context of an administrative act, the word 'approval' does not mean anything more than either confirming, rectifying, assenting, sanctioning or consenting. This is only an administrative power which limits the jurisdiction of the authority to apply its mind to see whether the proposed award is acceptable to the Government or not. 19. The settled legal proposition, referred to above, makes it clear that where there is a requirement of approval by the statutory authority, proposal/acceptance of a bid/resolution etc. remains inoperative till it is approved. It becomes effective only after accord of approval. 20. Mr. Panigrahi, learned Senior Counsel has placed a heavy reliance on the Judgment of the Allahabad High Court in Sri Sanatan Dharam Sabha and Another Vs. The Registrar, Firms, Societies and Chits, U.P., Lucknow and Others wherein the provisions of Section 4-A which provided for similar obligations as under the Orissa Amendment Act had been held not to be mandatory. There can be no quarrel of such a proposition but in the case of the present Society Bye laws provide for approval and in case bye-laws are not given strict adherence, the office bearers should be held guilty of not acting in consonance with the said bye laws. 21. Learned Trial Court while considering the application for interim relief has considered large number of aspects and particularly took note of the submissions made by the present Appellant that the election dated 23.1.2005 was invalid and illegal and made an observation that his election had been declared illegal and invalid by the General Body meeting dated 19.11.2006. It further observed that the question as to whether the election of the office bearers on 23.1.2005 is valid or the election dated 19.1.2006 is valid will be decided in the original suit. It further observed that the question as to whether the election of the office bearers on 23.1.2005 is valid or the election dated 19.1.2006 is valid will be decided in the original suit. Therefore, the issue of validity of the election dated 23.1.2005 and subsequent election dated 19.11.2006 is yet to be determined. In such fact situation, in case the election dated 23.1.2005 is found to be valid, then subsequent election dated 19.11.2006 would be of no significance. Admittedly, learned Trial Court did not take into consideration the issue as to whether the findings on Issue No. 5 in the earlier suit had any bearing on the subsequent suit though issue was agitated before it by the Respondent. Therefore, the question does arise as to whether it could be a fit case for the trial Court to grant interim injunction. 22. In Premji Ratansey Shah and Others Vs. Union of India (UOI) and Others the Supreme Court held that temporary injunction should be granted by a Court after considering all the pros and cons of the case in a given set of facts to protect the Plaintiff and the relief of temporary injunction cannot be granted just on merely asking that relief for the reason that such a relief is discretionary and equitable. 23. In S.M. Dyechem Ltd. v. Cadbury (India) Ltd. AIR 2000 SC 2114 , the Supreme Court considered the principle governing the grant of temporary injunction, observing that the three basic principles, i.e. prima facie case, balance of convenience and irreparable injury, have to be considered in a proper perspective in the facts and circumstances of a particular case and in case the said principles have not been properly applied, the Appellate Court can interfere in an interlocutory proceeding under Order 39 Rules 1 and 2 of the Code. 24. In Mahadeo Savlaram Shelke and Others Vs. Puna Municipal Corporation and Another the Supreme Court held that the Courts, in cases where injunctions are to be granted, should necessarily consider the effect on public purposes thereof and also Suitably mould the relief. 25. In National Airport Authority and Others Vs. Vijaydutt it was held as under: Apart from what has been stated above, relief of temporary injunction is an equitable one and is in the domain of the Courts judicial discretion. 25. In National Airport Authority and Others Vs. Vijaydutt it was held as under: Apart from what has been stated above, relief of temporary injunction is an equitable one and is in the domain of the Courts judicial discretion. Therefore, even where the three well-known conditions {prima facie case, balance of convenience and irreparable injury) requisite for grant of the relief exist, the Court, on the facts and in the circumstances of the case, in exercise of its discretion judiciously, may still refuse the relief as where there has been delay and the party applying for the relief has not come with clean hands. 26. Similar view has been reiterated in Ajay Mohan and Others Vs. H.N. Rai and Others, wherein the Court has observed that interim relief should be granted provided it is established that : (i) there existed a prima facie case, (ii) balance of convenience lay in their favour, and (iii) unless the prayer was granted, they would suffer an irreparable injury. 27. In the The Municipal Corporation of Delhi Vs. Shri Suresh Chandra Jaipuria and Another the Supreme Court, while dealing with the provisions of Section 41(h) of the Specific Reliefs Act, 1963, laid down that injunction, which is a discretionary equitable relief, cannot be granted when an equally efficacious relief is obtainable in any other usual mode or proceeding except in the cases of breach of trust. 28. In Dalpat Kumar and another Vs. Prahlad Singh and others, the Supreme Court while dealing with the issue observed as under: The phrases 'prima facie case' 'balance of convenience' and 'irreparable loss' are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by man's ingenuity in given facts and circumstances,' but always is hedged with sound exercise of judicial discretion to meet the ends of justice. The facts rest eloquent and speak for themselves. It is well nigh impossible to find from facts prima facie case and balance of convenience. 29. It is settled proposition that relief of injunction is the relief in equity and Court should not help a person who himself is guilty of doing a wrongful act or has not complied with the requirement of statutory provisions, (vide Krishna Ram Mahale (Dead), by his Lrs. Vs. Mrs. Shobha Venkat Rao K.V. Narayan v. S. Sharana Gowda and Anr. It is settled proposition that relief of injunction is the relief in equity and Court should not help a person who himself is guilty of doing a wrongful act or has not complied with the requirement of statutory provisions, (vide Krishna Ram Mahale (Dead), by his Lrs. Vs. Mrs. Shobha Venkat Rao K.V. Narayan v. S. Sharana Gowda and Anr. : AIR 1986 Kar 77 and Hem Chand Jain v. Anil Kumar : AIR 1993 Del. 99 ). 30. The question of granting relief particularly in election matter where declaration of validity of election is under challenge has to be considered entirely in different prospective for the reason that in case a person who claims to hold the office is restrained to perform his duties during the trial Ns tenure of office may lapse and the trial could not be concluded and in case ultimately the suit is dismissed, it would not be possible for the Court to compensate him in any manner whatsoever. Vide Rameshwar Dayal Vs. Sub-Divisional Officer Ghatampur and Others, . 31. As observed above, the office bearers had not acted in consonance with the bye-laws though admittedly the Society is to be governed by the bye-laws. Admittedly, issue of cancellation of membership of the Respondent is under challenge. It has been the specific case of the Appellants before the Trial Court that membership of the Respondent has been cancelled vide resolution dated 19.11.2006. The question does arise; whether it could be given effect to without approval of the Additional Registrar as provided under the bye-laws. It is not the case of the Appellant that termination of the membership of the Respondent had ever been approved by the Additional Registrar of the Societies. This aspect has not been examined by the Trial Court at all. The Appellate Court has taken note of the Judgment and decree of the earlier suit and it was right in reaching the conclusion that in case the Respondent is restrained from functioning as Secretary of the Club, he would suffer irreparable and substantial loss; balance of convenience was also in his favour and not in favour of the Appellant. 32. In view of the above, the Judgment of the learned Single Judge does not warrant interference. We do not find any merit in the appeal and the same is accordingly dismissed. B.N. Mahapatra, J. 33. I agree. Final Result : Dismissed