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2013 DIGILAW 70 (CAL)

Sajjan Kumar Agarwal v. Mahipal Singh Mohnot

2013-02-06

JYOTIRMAY BHATTACHARYA, MRINAL KANTI SINHA

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JUDGMENT JYOTIRMAY BHATTACHARYA, J. This Miscellaneous Appeal is directed against the judgment and order passed by the learned Judge, 7th Bench, City Civil Court at Calcutta on 3rd February, 2012 in Title Suit 2371 of 2011. The defendants, in a Suit for declaration and injunction filed by the plaintiffs/respondents, are the appellants before this Court. The plaintiffs and the defendants No.2 to 5 are all members of the defendant no.1 Association namely, M/s. Indian Welding Dealers Association (hereinafter referred to the said Association). The plaintiffs filed the said suit by raising an election dispute therein. They claimed that the election of the Executive Committee members of Indian Welding Dealers Association which was held on 18th December, 2011 was bad and illegal inasmuch as such election was held without following the election rules as provided in the Bye Laws and/or the Memorandum of Articles of the said Association. They, thus, prayed for setting aside of the said election. Permanent injunction was also sought for restraining the defendant no.4 and Executive Committee members of the Association from acting as President and members of the Association till the disposal of the suit. Certain other incidental relief’s have also been prayed for in the instant suit. After filing the said suit the plaintiffs filed an application for temporary injunction for restraining the respondent no.4 and Executive Committee of the defendant no.1 (Indian Welding Dealers Association) from acting as a President and Executive Committee member of the said Association till the disposal of the suit. Ad interim order of injunction has also been sought for in similar term. The legality of the election of the Executive Committee members of the said Association was challenged by the plaintiffs in the said suit on various grounds including the ground of non-observance of various provisions of the election rules contained in the Bye-Laws and/or in the Memorandum of Articles of the Association. Specific complaints regarding violation of the following clauses of the Articles of the said Association have been mentioned in the plaint as well as in the injunction application:- Clause 34(d): AT least 60 days before the date of annual General Meeting the Honorary Secretary shall issue a circular letter to all members of the Association inviting them to communicate to him in writing with full particulars specifically required therein so as to reach him at least 45 days before the date of the meeting. If they offer to nominate themselves or their delegates, as the case may be, for election as any office bearer of the Association or as a member of the Committee. Such nomination must be proposed and seconded by two members entitled to vote and must bear the consent of the candidate to be nominated. Clause 34 sub-Clause j(i); Ballot papers will be issued in the A.G.M. signed by either by the Executive Secretary or other officers appointed by the Election Committee to all members present in person in the Annual General Meeting. Final candidate list along with ballot paper to be sent before 25 (twenty-five) days at least to all outside Calcutta members only by courier or under certificate of posting or by registered post. It is alleged by the plaintiffs that election notice was issued by the then Honorary General Secretary on 18th October, 2011 intimating the members of the said Association that the election of the office bearers of their said Association for the year 2011-12 and 2012-13 would be held during the 38th Annual General Meeting to be held on 18th December, 2011. Nominations were invited from the members of the said Association who wanted to contest the election for the post of office bearers. Details of the election programme such as, last date for filing nomination paper, date of scrutiny of the nomination paper, last date of withdrawal of nomination, publication of final list of candidates whose nomination papers are found to be in order and date of election and publication of result and formation of new Committee were notified in the said election notice. However, the venue where such election and/or 38th Annual General Meeting would be held, was not mentioned in the said election notice. The venue where such election would be held, was subsequently notified on 9th November, 2011 whereby the members of the said Association were informed that the 38th Annual General Meeting of the Association would be held on 18th December, 2011 at Rose Valley Hotel and Entertainment Limited, Mandarmoni, West Bengal. The plaintiffs contended that selection of such venue for holding the Annual General Meeting at Mandarmoni was contrary to the provision contained in Clause 9 of the Memorandum of Articles of the Association which provides that in the year of election, the Annual General Meeting should be held in the city of Calcutta. The plaintiffs contended that selection of such venue for holding the Annual General Meeting at Mandarmoni was contrary to the provision contained in Clause 9 of the Memorandum of Articles of the Association which provides that in the year of election, the Annual General Meeting should be held in the city of Calcutta. This mistake regarding wrong selection of venue for holding Annual General Meeting was subsequently rectified by an addendum issued by the Association whereby the members of the Association were informed that the 38th Annual General Meeting of the said Association would be held at Indian Chamber of Commerce, 4 India Exchange Place, 10th Floor, Calcutta. Detailed itinerary of the said Annual General Meeting was subsequently published intimating its members that the Annual General Meeting session would commence at 3 P.M. on the said date after the voting period would be over. Time for casting the vote was fixed from 10 A.M. to 12 Noon. The plaintiffs complain that the itinerary shows that the Election Rules as provided in Clause 34 Sub-Clause j(i) was not followed as the election was held before commencement of the Annual General Meeting. The plaintiffs further complain that the election notice dated 18th October, 2011 was a defective one as it was issued without specifying the venue where such election and/or Annual General Meeting would be held. It is contended by them that fixation of a wrong venue for holding such election and Annual General Meeting and rectification of such mistake by issuance of subsequent notice by the Honorary President of the said Association, were all done subsequent to the issuance of the election notice and thereby the minimum notice period as prescribed under Clause 34(d) was not followed as 60 days time gap between publication of the election notice coupled with the addendum issued for rectification of the venue and the date of holding election, was not maintained. These violations of the election Rules were intimated to the concerned authority of the Association in the protest letter dated 18th December, 2011 written by several members of the said Association including the plaintiff no.2 who prayed for redressal of their grievances before the authority concerned, but the authority concerned without making any effort to redress the grievances of the petitioners, proceeded to hold such Annual General Meeting as per the defective schedule, by keeping the protest letter of the members of the Association unattended. Under such circumstances the aforesaid suit was filed and interim injunction was sought for by the plaintiffs as the illegal Committee which was allegedly formed on the basis of such illegal election was trying to manage the affairs of the said Association. The defendants/appellants contested the said proceeding by filing objection denying the allegations made out by the plaintiffs/respondents in their application for temporary injunction. It was contended by the defendants that as such there was no violation of the relevant provisions of the Election Rules contained in the bye-laws of the said Association, in the process of holding the Annual General Meeting and/or the holding the election of the office bearers of the Association. It was further contended that even if there was some minor violation and/or infraction from the Election Rules and/or Bye-Laws but still then since such violation and/or infraction was not very serious in nature and further since the plaintiffs did not suffer any prejudice for the alleged violation and/or infraction of the Election Rules, the relief by way of temporary injunction which was prayed for by the plaintiffs in their said application, should not be granted. The learned Trial Judge, after considering the pleadings of the respective parties, came to a finding that the plaintiffs succeeded in making out a prima facie case for going for trial in the said suit. The learned Trial Judge also found that the Bye-Laws and/or the Election Rules were not followed in the process of holding such election and/or Annual General Meeting. As such, the plaintiffs’ prayer for temporary injunction was allowed by the learned Trial Judge by the impugned order. Being aggrieved by the judgment and/or order passed by the learned Trial Judge, allowing the plaintiffs’ application for temporary injunction, the defendants filed the instant appeal. We have heard the learned counsel appearing for the parties. As such, the plaintiffs’ prayer for temporary injunction was allowed by the learned Trial Judge by the impugned order. Being aggrieved by the judgment and/or order passed by the learned Trial Judge, allowing the plaintiffs’ application for temporary injunction, the defendants filed the instant appeal. We have heard the learned counsel appearing for the parties. We have considered the material on records including the relevant By-Laws and/or Election Rules and/or the Articles of Association of the defendant no.1 Association. In course of making submission, Mr. Basu, learned Senior Counsel, appearing for the appellant strenuously argued before us that there was no violation of any relevant provision of the Bye-Laws and/or Election Rules in the process of holding such election and even if there was any violation of Bye-Laws and/or Election Rules, such violation was minor in nature and the members of the said Association including the plaintiffs, having not suffered any prejudice for such alleged violation of the Bye-Laws and/or Election Rules in the process of holding election, the plaintiffs/respondents cannot get any relief in the said temporary injunction proceeding. He further contended that the election Rules and/or Bye-laws does not provide that the venue for holding the Annual General Meeting and/or holding election should be fixed and circulated amongst the members of the Association along with the election notice. He further submitted that there is no rule which provides that the venue for holding Annual General Meeting and/or holding election should be fixed and circulated amongst its members 60 days before the date of holding such election and/or Annual General Meeting. Mr. Basu, thus, contended that even if the venue was wrongly fixed initially at Mandarmoni but such venue was subsequently changed and a Calcutta address was selected which was in conformity with Clause 9 of the Articles of the Association and the same was circulated amongst its members well in advance of the date which was scheduled for holding such election. As such, according to Mr. Basu, no member of the Association could have suffered any prejudice either for fixation of a wrong venue or for delayed circulation of the changed venue from Mandarmoni to the Calcutta address. In support of such submission he relied upon the following decisions of the Hon’ble Supreme Court: (i) Oriental Insurance Company Limited vs. S. Balakrishan reported in (2003) 11 SCC 734; (ii) Ravi S. Nayek vs. Union of India and Ors. In support of such submission he relied upon the following decisions of the Hon’ble Supreme Court: (i) Oriental Insurance Company Limited vs. S. Balakrishan reported in (2003) 11 SCC 734; (ii) Ravi S. Nayek vs. Union of India and Ors. Reported in AIR 1994 SC 1558 ; By relying upon the aforesaid decisions of the Hon’ble Supreme Court, he invited us to interfere with the impugned order. Mr. Chatterjee, learned Advocate, appearing for the plaintiffs/respondents refuted such submission of Mr. Basu by contending inter alia that the Bye-Laws and/or the Election Rules were not followed either in holding the Annual General Meeting or in holding the election of the members of the Executive Committee. He pointed out that sixty days’ notice, which was required to be given for holding such election, was not given in the instant case. He contended that the provision contained in Clause 34(d) was not followed either in holding the Annual General Meeting or in holding the election of the office bearer in the instant case. He further contended that selection of a wrong venue contrary to the Bye-Laws and subsequent rectification thereof by issuance of addendum on a later date, certainly caused prejudice to the members of the Association as the members of the Association were not put on notice about the venue of holding such Annual General Meeting and/or election of the office bearer at the Calcutta address 60 days before the date of holding such election. Mr. Chatterjee thus, wanted to impress upon us that the venue for holding the Annual General Meeting and/or holding of such election should have been notified in the election notice itself and since admittedly notice regarding selection of such venue at Calcutta address was not issued along with the election notice, the election held on 18th December, 2011 cannot be held to be legal and valid. He further pointed out that election was held before commencement of the Annual General Meeting which is another violation of the election Rules. He pointed out that the Election Rules contained in Clause 34j(i) provides that election of the office bearer should be held in the Annual General Meeting itself and since such mandate was not adhered to in the present case, impugned election cannot be held to be legal. Mr. He pointed out that the Election Rules contained in Clause 34j(i) provides that election of the office bearer should be held in the Annual General Meeting itself and since such mandate was not adhered to in the present case, impugned election cannot be held to be legal. Mr. Chatterjee further contended that when the Rules prescribe certain procedure for holding the election and/or Annual General Meeting, such Rules are required to be strictly followed in holding such election and/or Annual General Meeting and any violation and/or infraction from such Rules, upsets the entire election and the outcome thereof. In support of his submission he relied upon the decision of the Hon’ble Supreme Court in the case of Bhavnagar University vs. Palitana Sugar Mill (Pvt. Ltd.) & Ors. Reported in (2003) 2 SCC 111 , wherein it was held that when a statutory authority is required to do a thing in a particular manner then the same must be done in that manner alone. He further pointed out that the election notice which was issued on 18th October, 2011 and all other circulars which were issued subsequently concerning such Annual General Meeting were all withdrawn by a subsequent letter issued by the Honorary General Secretary on 26th November, 2011 by which all earlier circulars were superseded. By drawing our attention to the said letter, Mr. Chatterjee submitted that after withdrawal of the said election notice and all subsequent circulars relating to Annual General Meeting, no election could have been held on 18th December, 2011 and even if such election was held, such election was illegal and inoperative and the office bearers who were allegedly elected in the said Annual General Meeting, cannot be allowed to manage the affairs of the said Association. He further contended that the decisions which were cited by Mr. Basu has no application in the instant case as the set of facts in which those ratios were settled are completely different from the set of facts in the present case. In support of his submission he has relied upon a decision of the Hon’ble Supreme Court in the case of Union of India vs. Chajju Ram (deceased) by LRS & Ors. In support of his submission he has relied upon a decision of the Hon’ble Supreme Court in the case of Union of India vs. Chajju Ram (deceased) by LRS & Ors. reported in (2003) 5 SCC 568 ; wherein it was held that a decision is an authority for what it decides and not what can be logically deduced there from and a little difference in facts or additional facts may lead to a different conclusion. Let us now consider the effect of the submission of the learned Advocates of the respective parties in the facts of the instant case. We find substance in the aforesaid contention of Mr. Chatterjee as, in our view, the election notice which was published on 18th October, 2011 was incomplete and insufficient inasmuch as such notice was issued without mentioning the venue where such election would be held. We further find that venue for holding such Annual General Meeting and/or holding such election at the Calcutta address was circulated long after the issuance of the election notice. When such defect in the election notice was cured by notifying the venue, that date, in our view, should be construed as the date of publication of election notice and if the said date is construed as the date of publication of election notice, then 60 days’ notice as contemplated in Clause 34(d) was certainly not there. In the present set of facts, we have no hesitation to hold that the impugned election and/or the Annual General Meeting was not held in the manner as it was required to be held under the Bye-Laws and the election Rules of the said Association. Fixation of a wrong venue for holding such election contrary to the Bye-Laws and subsequent change thereof which the members of the said Association was put on notice on a subsequent date, in our view, caused prejudice to the members of the said Association. That apart despite a complaint was made by the members of the said Association to the concerned authority by pointing out several illegalities in issuance of such election notification, such complaint having not been attended by the concerned authority before holding such election, in our view, caused further prejudice to the members of the Association including the plaintiffs. That apart despite a complaint was made by the members of the said Association to the concerned authority by pointing out several illegalities in issuance of such election notification, such complaint having not been attended by the concerned authority before holding such election, in our view, caused further prejudice to the members of the Association including the plaintiffs. We also find that even the election was not held as per the provision contained in Clause 34j(i) which provides that election should be held in the Annual General Meeting. Here is the case where we find that such election was held before commencement of the Annual General Meeting which is a total departure from the Bye-Laws. That apart we find that such election was held after withdrawal of the election notice. The election notice dated 18th October, 2011 and all other notices issued in connection with the Annual General Meeting were subsequently withdrawn by notice issued by the Honorary General Secretary on 26th November, 2011. We thus, hold that after withdrawal of the said election notice, no valid election could have been held and as such the Committee which was formed on the basis of such invalid election cannot be allowed to run the affairs and functions of the said Association till the disposal of the suit. We thus, hold that a strong prima face case has been made out by the plaintiffs in the instant case. We further hold that the plaintiffs will certainly suffer prejudice, if the said illegally constituted body, is allowed to function and/or to manage the affairs the Society. As such we hold that the balance of convenience and inconvenience is in favour of granting injunction. We have also considered the decisions which were cited by the learned Counsel of the respective parties. However, we are of the view, that the decisions which were cited by Mr. Basu have no application in the present case as the set of facts in which the said judgments were delivered by the Hon’ble Supreme Court are completely different from the set of facts of the present case which is now before us. On perusal of the decision of the Hon’ble Supreme Court in the case of Oriental Insurance Company Limited Vs. S. Balakrishna (Supra), we find that that was a case on service jurisprudence which has no correlation with the facts on the present case. On perusal of the decision of the Hon’ble Supreme Court in the case of Oriental Insurance Company Limited Vs. S. Balakrishna (Supra), we find that that was a case on service jurisprudence which has no correlation with the facts on the present case. As such the principle laid down by the Hon’ble Supreme Court therein has no application in the present case. The other decision which was cited by Mr. Basu i.e. Ravi S. Nayek Vs. Union of India (Supra) also has no application in the present case as the points for determination raised in the said case were completely different from the point of determination raised in the present case. In the said case a question was raised as to whether an order passed by the High Court in a writ petition challenging the validity of disqualification of a member of the Legislative Assembly, passed by the Speaker, can be ignored by the Speaker on the view that his order could not be a subject matter of court proceeding as his decision was final. The said question was answered by the Hon’ble Apex Court by declaring that the Speaker, while passing an order, in exercise of his power under sub-paragraph (1) of paragraph 6 of the Tenth Schedule, functions as a Tribunal and the order passed by him is subject to judicial review under Articles 32, 136, 226 and 227 of the Constitution of India. The said decision of the Hon’ble Supreme Court, in our view, has no impact in the present case, as no such issue is raised in the present case before us. When under such circumstances, the learned Trial Judge passed an order of temporary injunction by restraining the respondent no.4 and the Executive Committee members of the defendant no.1 Association from acting as a President and Executive Committee members of the said Association till the disposal of the suit, we do not find any justifiable reason to interfere with the said order of the learned Trial Judge. However, since a vacuum has been created in the administration and/or management of the affairs of the said Association because of the injunction order passed by the learned Trial Judge, this Court feels that an ad hoc interim arrangement should be made for management of the affairs of the said Association till the disposal of the suit. However, since a vacuum has been created in the administration and/or management of the affairs of the said Association because of the injunction order passed by the learned Trial Judge, this Court feels that an ad hoc interim arrangement should be made for management of the affairs of the said Association till the disposal of the suit. Accordingly we form a Committee consisting of one member as per the plaintiffs’ choice namely, Sri Anil Kumar Jindal and another member from the defendants’ side namely Sajjan Kumar Agarwal who will jointly manage and look after the affairs of the said Association under the supervision of Mr. Sibasish Ghosh, the Special Officer already appointed over the said Association in this appeal, with this direction that the said Committee will manage and look after the affairs of the said Association under the supervision of the appointed Special Officer till the disposal of the suit. The remuneration of the Special Officer is fixed at Rs.10,000/- per month to be paid from the fund of the defendant no.1 Association. The learned Trial Judge is directed to expedite the hearing of the suit as far as possible so that the suit may be disposed of within six months from the date of communication of this order. The appeal is, thus, disposed of. Urgent Xerox certified copy of this judgment, if applied for, be given to the parties as expeditiously as possible. I agree.