Ramesh S/o Late Shri G. Rangarajan v. Hebbar Sree Vaishnava Sabha (Karnataka, Bangalore)
2025-12-12
E.S.INDIRESH
body2025
DigiLaw.ai
JUDGMENT : E.S. INDIRESH, J. 1. This appeal is preferred by the defendants, assailing the judgment and decree dated 12.08.2013 in O.S.No.8756/2007 on the file of XIX Additional City Civil and Sessions Judge, Bengaluru City, decreeing the suit of the plaintiff-Hebbar Sree Vaishnava Sabha (for short “Sabha”) in part. 2. For the sake of convenience, the parties herein are referred as per their ranking before the Trial Court. 3. The plaint averments are that, the plaintiff is a Registered Society under the provisions of Karnataka Societies Registration Act, 1960, and the President of the Society has been authorized to file the suit. Defendants No.1 and 2 are the former Secretary and Treasurer of the Central Committee of the plaintiff-Sabha during 2005. It is further stated in the plaint that the plaintiff is the owner of property bearing No.22, Seshadri Road, Bengaluru-09 and a portion of the property was let out to Karnataka Power Corporation Limited (for short “KPCL”) by the plaintiff on specified terms and conditions as agreed between the parties. The KPCL, being a tenant of the said premises had agreed to pay the rents to the plaintiff- Sabha. The lease period was extended up to 31.12.2004. In the meanwhile, the Rent Committee of the plaintiff- Sabha had taken a decision to enhance the rent in respect of the let out premises while renewing the lease period. Accordingly, the lease period has been renewed from 01.01.2005 for a period upto 31.12.2009 with enhanced rent. It is further stated in the plaint that, the Central Committee of the plaintiff-Sabha held a meeting on 02.01.2005 in which, defendants No.1 and 2 and several other Central Committee members of the plaintiff-Sabha, accorded approval for engaging a Liaisoning Officer to get enhanced rent to be payable by the KPCL in respect of the demised premises in question. In the said meeting, fee of the Liaisoning Officer was fixed at Rs.6,50,000/-. Accordingly, defendant No.3 was identified as Liaisoning Officer as per the said Resolution. 4. It is the case of the plaintiff that the said Resolution passed by the Central Committee is contrary to the bye- laws of the plaintiff-Sabha and also there is no provision in the bye-laws of plaintiff-Sabha for appointment of Liaisoning Officer by paying a huge amount to deal with the tenants and to get enhanced rent.
4. It is the case of the plaintiff that the said Resolution passed by the Central Committee is contrary to the bye- laws of the plaintiff-Sabha and also there is no provision in the bye-laws of plaintiff-Sabha for appointment of Liaisoning Officer by paying a huge amount to deal with the tenants and to get enhanced rent. Hence, it is the contention of the plaintiff that the Resolution dated 02.01.2005 is contrary to bye-law and same is not binding on the plaintiff. It is further stated in the plaint that on 07.01.2005, another Resolution was passed to make payment of Rs.2,00,000/- from the account of plaintiff- Sabha, through Cheque bearing No.023370 dated 08.01.2005 drawn on Canara Bank, Madhavanagara Branch, Bengaluru, in the name of the Secretary of the plaintiff-Sabha. The said amount was drawn and voucher for the said amount for making payment to defendant No.3. The said voucher was signed by the defendants No.1 and 2. It is further averred in the plaint that the Resolutions dated 13.01.2005 and 18.01.2005, were passed by the Managing Committee for transferring and for drawing a further sum of Rs.4,50,000/- from the account of the plaintiff-Sabha and thereafter, a Cheque for a sum of Rs.4,50,000/- was drawn from the account of the plaintiff-Sabha and same was signed by defendants No.1 and 2 and voucher was given by defendant No.3 for having received the amount. Insofar as voucher is concerned, the defendant No.1 and 2 have acknowledged and signed the same. Therefore, it is the case of the plaintiffs that Resolutions dated 02.01.2005, 07.01.2005, 13.01.2005 and 18.01.2005 are contrary to bye-laws of the plaintiff-Sabha. It is the grievance of the plaintiff- Sabha that defendants No.1 and 2 were not authorized to draw such a huge amount to be payable to defendant No.3, being a Liaisoning Officer and therefore, the defendants have misappropriated an amount of Rs.6,50,000/- belonging to the plaintiff-Sabha. It is also stated in the plaint that the rent for demised premises was enhanced to Rs.5,06,455/- w.e.f. 01.01.2005 and the said amount was agreed to be enhanced before December 2004 itself and as such, there was no necessity for appointment of Liaisoning Officer by the defendants. Therefore, the defendants are liable to pay a sum of Rs.6,50,000/- with interest to the plaintiff. Hence, the plaintiff has filed O.S.No.8756/2007 before the Trial Court. 5.
Therefore, the defendants are liable to pay a sum of Rs.6,50,000/- with interest to the plaintiff. Hence, the plaintiff has filed O.S.No.8756/2007 before the Trial Court. 5. After service of summons, defendants No.1 and 2 entered appearance and filed written statement denying the averments made in the plaint. In the written statement, it is stated that defendant No.1 was the Secretary and defendant No.2 was the Treasurer of the plaintiff-Sabha. It is also stated in the written statement as to the Resolution dated 02.01.2005 wherein defendant No.3 was appointed as Liaisoning Officer. The defendants 1 and 2 have clearly denied the payment of Rs.2,00,000/- and Rs.4,50,000/- to defendant No.3. It is the defense of the defendants that a portion of the building which was let out to KPCL in the year 1994 and the tenancy came to an end on 01.01.1995. Accordingly, the plaintiff-Sabha agreed to lease out the premises for a period of 15 years with renewal, after successive completion of 5 years, by enhancing 15% of the rent. It is also stated that first 5 years period was commenced from 01.01.1995 till 31.12.1999 and the rent was fixed at Rs.8/- per sq.ft. It is also stated in the written statement that lease period was further renewed from 01.04.2005, by enhancing rent at Rs.9.20% per sq.ft. It is the case of the defendants 1 and 2 that, KPCL was not paying for lift service and maintenance charges to the plaintiff-Sabha and as such, during 5 years renewal period i.e., 01.01.2005 to 31.12.2009, rent was agreed to be paid at Rs.10.55/- per sq.ft. In this regard, a meeting was convened by the plaintiff-Sabha to appoint a Liaisoning Officer, authorizing him to seek for enhancement of the rent. Accordingly, emergent Central Committee meeting was held on 02.01.2005 to discuss about the enhancement of rents with the KPCL. In the said Resolution, Central Committee members appointed Liaisoning Officer and authorized the Office Bearers to take steps to enhance the rent. In terms of the said Resolution, 7 office bearers of the plaintiff- Sabha decided to pay the remuneration in a sum of Rs.6,50,000/- to the Liaisoning Officer, as the plaintiff- Sabha will be benefited to the tune of Rs.60,00,000/- to Rs.70,00,000/- in the said rent deal.
In terms of the said Resolution, 7 office bearers of the plaintiff- Sabha decided to pay the remuneration in a sum of Rs.6,50,000/- to the Liaisoning Officer, as the plaintiff- Sabha will be benefited to the tune of Rs.60,00,000/- to Rs.70,00,000/- in the said rent deal. Hence, it is the case of the defendants that the averment made in the plaint that the defendants have withdrawn Rs.6,50,000/- from the bank account for the purpose of paying to defendant No.3, is being misappropriated by them is incorrect. Hence, the defendants have sought for dismissal of the suit. 6. Based on the pleadings on record, the Trial Court has framed the following issues: (i) Whether the plaintiff proves that resolution dated 02.01.2005 passed by the Committee is illegal? (ii) Whether plaintiff proves that defendants are liable to pay a sum of Rs.8,40,000/- along with interest at the rate of 18% p.a. on Rs.6.5 lakhs? (iii) Whether the plaintiff proves cause of action? (iv) Whether the defendants prove that suit is not maintainable as pleaded in the written statement? (v) Whether the plaintiff is entitled for the decree sought? (vi) What decree or order? 7. In order to establish their case, the plaintiff has examined one witness as P.W.1 and got marked 33 documents as Ex.P1 to Ex.P33. The defendants examined one witness as D.W.1 and got marked 5 documents as Ex.D1 to Ex.D5. 8. The Trial Court, after considering the material on record, by judgment and decree dated 12.08.2013 partly decreed the suit and held that the defendants No.1 to 3 are jointly and severally liable to pay Rs.6,50,000/- to the plaintiff with interest at the rate of 12% p.a. from 18.01.2005 till the date of realization. Feeling aggrieved by the same, the defendants 1 and 2 have preferred this Regular First Appeal. 9. I have heard Sri.Harish Kumar M.S., learned counsel appearing for the appellants/defendants and Sri.Amshuman M., learned counsel for the respondent/plaintiff. 10. Sri.Harish Kumar M.S., learned counsel appearing for the appellants contended that, defendants No.1 and 2 being office bearers of the plaintiff-Sabha have acted pursuant to the Resolution passed by the Central Committee with regard to payment of Rs.6,50,000/- to the Liaisoning Officer/defendant No.3.
10. Sri.Harish Kumar M.S., learned counsel appearing for the appellants contended that, defendants No.1 and 2 being office bearers of the plaintiff-Sabha have acted pursuant to the Resolution passed by the Central Committee with regard to payment of Rs.6,50,000/- to the Liaisoning Officer/defendant No.3. That apart, the plaintiff- Sabha enhanced the rent from the KPCL and therefore, it is contended that the plaintiff has filed suit against defendants with ulterior motive on account of political grudge by the present office bearers of the plaintiff-Sabha. It is also contended by the learned counsel appearing for the appellants that the plaintiff-Sabha has not authorized its President/ Sri.H.S.Vijay Kumar to file a suit and represent in the matter. As such, in the absence of the Resolution made by the plaintiff-Sabha, the authorized person has no authority under law to depose before the Court on behalf of the plaintiff and to continue the proceedings before the Trial Court. Accordingly, learned counsel for the appellant sought for interference of this Court. 11. Nextly, it is contended by the learned counsel appearing for the appellants, by referring to Ex.P2 where in the transfer of amount has been made in favour of the Liaisoning Officer, as the services of the Liaisoning Officer was utilised by the plaintiff-Sabha and the said aspect of the matter was ignored by the Trial Court and accordingly, sought for interference of this Court. 12. Lastly, it is contended by the learned counsel appearing for the appellants, by recourse to Ex.P11-notice dated 1 st June 2007 addressed by the plaintiff to all the Central Committee members, who in all 24 in numbers, however, suit has been filed against defendants No.1 and 2 only and therefore, the suit itself is not maintainable before the Trial Court and this aspect of the matter was ignored by the Trial Court and accordingly, sought for interference of this Court. 13. Per contra, Sri.Amshuman, learned counsel appearing for the respondent/plaintiff by referring to the Memorandum of Association and Rules of Hebbar Sree Vaishnava Sabha-plaintiff wherein clause 39 of the Memorandum of Association authorizes the President to file a suit and to defend the suit filed against the plaintiff- Sabha, and as such countered the submission made by the learned counsel appearing for the appellant.
It is further submitted by the learned counsel for the respondent by referring to the Annual General Body Meeting of the plaintiff-Sabha for the years 2005-06 and 2006-07, wherein the majority members have authorized the President of the Sabha to take such steps against the defendants to recover a sum of Rs.6,50,000/- together with interest and accordingly sought for dismissal of the appeal. 14. In respect of the contention raised by the learned counsel appearing for the appellant as to the fact that the suit has been filed only against defendants No.1 and 2, being Secretary and Treasurer of the erstwhile Managing Committee, learned counsel appearing for the respondent submitted that defendants 1 and 2 have signed the Cheques and the vouchers in which amount is being said to have been paid in favour of defendant No.3 and therefore, it is contended by the learned counsel appearing for the respondent that Trial Court after considering entire material on record, rightly decreed the suit in part and therefore, sought for dismissal of the appeal. 15. In the light of the submissions made by the learned counsel appearing for the parties, the following points would arise for consideration in this appeal: (i) Whether the suit filed by the plaintiff in the name of the President is maintainable? (ii) Whether the finding recorded by the Trial Court on issue No.1 requires interference in this appeal? (iii) Whether the judgment and decree passed by the Trial Court requires interference by this Court.? 16. In order to answer the aforementioned points for consideration, it is not in dispute that defendants No.1 and 2 are the Secretary and Treasurer of the erstwhile office bearers of the plaintiff-Sabha respectively, during 2005. It is the case of the plaintiff that, there was no occasion for the plaintiff-Sabha to appoint the Liaisoning Officer for enhancement of rent with the KPCL, as the said renewal of rent with enhancement rate was already concluded with KPCL. However, it is the case of the plaintiff that, the defendants have sought to get the Central Committee Resolution to make unjust gain from the plaintiff-Sabha.
However, it is the case of the plaintiff that, the defendants have sought to get the Central Committee Resolution to make unjust gain from the plaintiff-Sabha. It is to be noted that the Memorandum of Association and bye-laws of the plaintiff-Sabha are produced before this Court along with a memo by the learned counsel for the respondent and the same was accepted, as the learned counsel representing the appellant did not raise any objection to the same. 17. In this regard, Bye-law 39 of the Memorandum of Association reads as under: “39(a) The Sabha and upasabha may maintain libraries and reading rooms for the benefit of the members of the Sabha and levy fee on members using them. (b) Suits by or against the Sabha shall be in the name of the Sabha represented by its President.” 18. It is also to be noted from Agenda VI of the Annual General Body Meeting (AGM) of the Central Committee members during 2005-06 wherein at paragraph 17 it is stated as follows: “Accordingly, majority of members through Voice vote authorized President to take such steps as are necessary under law to recover sum of Rs.6,50,000/- together with interest from the concerned directly responsible for the alleged misappropriation and authorized President to incur legal expenses.” 19. A perusal of the Memorandum of Association and the Resolution passed in the Annual General Body Meeting would indicate that as per clause 39(b) of the Bye-laws, suits by or against the plaintiff-Sabha shall be in the name of the Sabha represented by its President. In the Annual General Body Meeting, in order to take action against the defendants for recovery of sum of Rs.6,50,000/- is concerned, a Resolution has been passed in the AGM. In the backdrop of these aspects, it is relevant to extract the declaration of law made by this Court in the case of B.H. Inamdar vs. B.F. Swamy, ILR 1991 KAR 1654 , wherein an identical issue was raised with regard to the capacity of the persons in whose name the Society may sue or be sued. In this regard, paragraphs 10 to 12 reads as under: “10.
In this regard, paragraphs 10 to 12 reads as under: “10. Article 17 of the Memorandum of Association provides that the Secretary of the Association for the time being or any other person authorised by the Board in that behalf shall represent the Association in any legal proceeding that may be instituted by or against the Association. Article 17 therefore deals with a situation where a decision has already been taken to file or defend a suit. Once the suit is properly instituted, Article 17 authorises the Secretary to represent the Society in that suit. The authority to file a suit is quite different from the authority to represent the Society in a suit which has been validly instituted. In my view, Articles 10 and 17 read together do not substantiate the plea that the Secretary has been authorised to institute suits on behalf of the Society. The decision to file or defend suits must be taken by the Board itself since the power to administer the affairs and conduct the activities of the association vests in the Board. It is important that power to institute or defend suits must vest in the Board, it is open to the Secretary or President or Principal Secretary to file or not to file a suit resulting in abuse of power. Where the Society has a just claim, the Secretary may not file a suit. Conversely, where the Society has a sound defence, the Secretary may concede the claim in Court. With a view to avoid such eventualities Article 10 of the Memorandum of Association vests power in the Board itself to file or defend suits. In my view, therefore, unless the Board by a resolution authorises the filing of a suit, the Secretary on his own cannot institute a suit against any person. 11. In the instant case, no resolution has been brought on record authorising the filing of a suit. The Secretary therefore had no authority to file a suit on behalf of the Society. The Courts below, therefore, were justified in holding that the suit filed by the plaintiff was not properly instituted in the absence of a resolution passed by the Board authorising him to file such a suit. 12. The Appellate Court has referred to some of the decisions cited at the Bar.
The Courts below, therefore, were justified in holding that the suit filed by the plaintiff was not properly instituted in the absence of a resolution passed by the Board authorising him to file such a suit. 12. The Appellate Court has referred to some of the decisions cited at the Bar. I find that most of those decisions have taken the view That Section 6 of the Societies Registration Act (1860), which is in the same terms as Section 15 of the Karnataka Act, is only an enabling provision which enables the Society by rules and regulations to determine in whose name the Society may sue or be sued. I may however refer to the decision of the Punjab High Court in the case of PATIALA AVIATION CLUB, PATIALA v. THE PRESIDING OFFICER, LABOUR COURT, LUDHIANA AND OTHERS . In that decision, an appeal was filed by the Manager of the Club. He was clearly incompetent to file the suit, because the Manager was not the President, Chairman, Principal Secretary or the Trustees of the club. There was also no special authorisation in favour of the Manager. In that view of the matter, I have no doubt that in view of Article 10 of the Memorandum of Association the decision to file a suit must be that of the Board, In the instant case, there is nothing to show that under the rules and regulations it has been determined as to in whose name the Society may sue or be sued and that does not prevent the governing body to nominate a person in that behalf. But even if such determination were to be made under the rules and regulations that would only determine in whose name the Society may sue or be sued. The power however to file or defend suits shall vest in the board and unless the board by a resolution so authorises no suit can be filed even by a person in whose name the Society may sue or be used, The Courts below have taken a correct view of law. Therefore, I find no merit in this Regular Second Appeal and it is accordingly dismissed. There will be no order as to costs.” 20.
Therefore, I find no merit in this Regular Second Appeal and it is accordingly dismissed. There will be no order as to costs.” 20. Having taken note of the declaration of law made by this Court in the aforementioned case and the reasons assigned therein would indicate that, there must be a Resolution passed by the Office Bearers of the Central Committee to authorize a person to file a suit against the defendants. In this regard, since the suit has been filed by the then President of the Sabha based on the AGM, could not be accepted unless there is a Resolution to that effect that has been passed in accordance with the Memorandum of Association and the Rules of the Sabha is concerned. It is well established principle in law that, filing a suit by the Office Bearers of the Society is different from representing the suit in the matter. In that view of the matter, since the Resolution has not been passed by the Central Committee to file a suit against the defendants and in the absence of the same, I am of the view that the finding recorded by the trial Court requires to be interfered with in this appeal as the same has caused miscarriage of justice. 21. Secondly, insofar as the submission of the learned counsel appearing for the appellant as to filing of suit against the defendants only by exonerating remaining office bearers on political vendetta, I have carefully examined the averments made in the notice dated 1 st June 2007 (Ex.P11) wherein the notice has been issued to all the then 24 Committee members seeking explanation as to the recovery of Rs.6,50,000/- being paid to defendant No.3. However, a perusal of the averments made in the plaint would indicate that the plaintiff has made a pick and chosen to file a suit against the then Secretary and the Treasurer, i.e. defendants No.1 and 2 despite the same, as per Ex.P1-Resolution, the Central Committee has resolved to appoint a Liaisoning Officer and make necessary payment towards Liaisoning charges and the said decision is the outcome of the deliberation in the meeting consisting of all the committee members.
In this regard it is relevant to extract the unanimous decision taken by the Central Committee which reads as under: “Ultimately, after lengthy discussions, it is unanimously resolved that a sum not exceeding 10% (percent) of the total enhanced rent be paid towards liaisoning charges. It was further resolved that the mode & modality of payment be left to the office bearers.” (Emphasised by me) 22. It is also to be noted that, though the plaintiff has filed a suit for recovery of money against defendants No.1 and 2, however the plaintiff has not challenged the emergent Resolution, authorizing defendants No.1 and 2 to sign the vouchers and such other decisions of the Central Committee insofar as making payment to Liaisoning fee/charges to defendant No.3. In that view of the matter, I am of the view that the finding recorded by the Trial Court, particularly with regard to issue No.1 requires to be interfered with in this appeal, as the said finding is contrary to the Resolution produced at Ex.P1, where the Central Committee has unanimously authorized the then Office Bearers to take a decision in the matter as to the payment of Liaisoning charges. In that view of the matter, I am of the view that the Trial Court has utterly ignored the Resolution produced at Ex.P1. In that view of the matter, the reasons and finding assigned by the Trial Court requires to be interfered with, as the same has caused miscarriage of justice to the defendants, penalizing monetarily by making pick and choose of the office bearers, contrary to the memorandum of Association of the plaintiff-Sabha, as while arriving at conclusion to direct the defendants to pay the liaisoning charges which has been paid to defendant No.3. It is also forthcoming from the order sheet that the defendant No.3 has been placed ex-parte and therefore, points for consideration referred to above favour defendants No.1 and 2. 23. In the result, I pass the following: ORDER (i) The appeal is allowed. (ii) The judgment and decree dated 12.08.2013 in O.S.No.8756/2007 on the file of XIX Additional City Civil land Sessions Judge at Bangalore City is hereby set aside. (iii) The suit of the plaintiff is hereby dismissed.