Societies – 22 persons (including appellants) were inducted on 17.09.17 as members of the Society by the Managing Committee, despite the pending requisition expressing no confidence against it – Decision set aside by Registrar – Upheld by High Court – Challenged by the Society, Chairman and Secretary – SLP was dismissed with the observation that if the 22 persons who were dismembered assail the decision of the High Court, the issue can be considered on merits – Present appeal – Held: Decision of the then Managing Committee dtd.17.09.17, suffers from the vice of unseemly haste, and thus is colourable exercise of power and non-est in the eyes of law – It cannot be viewed differently for 5 appellants just because of prior date of application – This is precisely the effect of the decision of the Registrar in his operative order [paragraph (A)] as applicable to the appellants and similarly placed two other persons, who are not before Supreme Court – High Court rightly upheld that conclusion of the Registrar vide impugned judgment while dismissing the writ petition of the Society – Order passed by the Registrar (paragraph (A) of operative order) as affirmed by the High Court, clarified – Applications made by the appellants and similarly placed two other persons for grant of membership of the Society, are deemed to be pending and/or revived and be considered by the newly constituted Managing Committee on its own merits, keeping in mind the observations made in the present judgment – Societies Registration Act, 1860.
Societies – Continuation of election process pending the present appeal – Challenge to – Held: Not maintainable at the instance of the appellants as their status is merely that of the applicants for grant of membership – Until they are admitted as members of the Society, they would have no right to participate in the election process.
Partly allowing the appeal, the Court
HELD: 1.1 According to respondent No. 1, the question whether the appellants have been legally and properly admitted as members or not is a lis between the existing members and the Managing Committee, to which the appellants herein are strangers and have no locus in that regard. This argument is tenuous and cannot be sustained. For, the real question posed at the instance of these appellants is whether they had a right to be considered for being admitted as members of the Society and further whether the order of the Registrar results in dismembering them despite they being validly admitted as members at the relevant point of time vide decision of the then Managing Committee dated 17.09.2017. Indeed, it is open to the existing members to object to any new person being admitted as member of the Society by the outgoing Managing Committee and that would be a lis between the existing members and the outgoing Managing Committee. That, however, does not denude the appellants of cause of action, who desired to be admitted as members of the Society being eligible in all respects, to be considered for such admission. Similarly, if a person has been dismembered by the Society including on account of direction issued by the competent authority, such a person will have independent remedy to assail that decision. In either case, therefore, being affected by such non-consideration or by virtue of dismembering, the aggrieved person would be competent to pursue remedy before the concerned forum for redressal of his grievance and for enforcement of his legal rights. The appellants were admitted by the then Managing Committee to be members of the Society, but they have been subsequently dismembered only because of the order passed by the Registrar having become final. Further, they were made party to the proceedings before the Registrar, who had set aside the decisions of the then Managing Committee, dated 17.09.2017. Thus understood, the objection regarding maintainability of challenge to the decision of the Registrar and of the High Court by such affected persons (appellants herein) cannot be countenanced. [Paras 37, 38][1192G-H; 1193-A-E]
1.2 It is true that the appellants did not file separate writ petition before the High Court despite the unambiguous order passed by the Registrar on 09.03.2018 directly affecting them in declaring the decision of the then Managing Committee dated 17.09.2017 to admit them as members of the Society, as illegal, arbitrary and to set it aside on that count. However, undisputedly, that part of the order of the Registrar was assailed by the Society before the High Court by way of Writ Petition. The reliefs claimed in the stated writ petition by the Society were, to also espouse the cause of the appellants herein. For, the appellants were admitted by the then Managing Committee as members of the Society. They came to be dismembered subsequently only because of the order of the Registrar of setting aside the decision of the then Managing Committee dated 17.09.2017 attaining finality. Indubitably, the Society is competent to espouse the cause of its members and more so to justify its actions in the form of decision of the then Managing Committee in office. The appellants herein cannot be faulted for having directly assailed the decision of the High Court confirming the declaration and subject order of the Registrar resulting in their being dismembered from the membership of the Society. The rejection of earlier special leave petition filed by the Society and the office bearers of the then Managing Committee will not come in the way of the appellants herein to espouse their cause in their own rights. The appellants cannot be denuded of their right to assail the order of the Registrar and of the High Court denying them of their core right of being considered to be admitted as member of the Society, being eligible in all respects. [Paras 39, 40][1193-F-H; 1194-AC, E-G]
2.1 22 persons (including appellants herein) had applied for being admitted as member of the respondent-Society between 12.09.2016 to 19.12.2016. Notably, 5 appellants (out of 22 persons) had already submitted their application until 18.10.2016 before the stated requisition was moved by 18 out 32 existing members of the Society on 07.11.2016 expressing no confidence in the then Managing Committee. Indisputably, requisition/notice of no confidence makes no reference to the apprehension about any attempt being made by the office bearers of the then Managing Committee to change the constitution (membership pattern) of the Society. The membership applications were placed for consideration of the Managing Committee, in its meeting convened on 02.01.2017 for that purpose but the decision was deferred. The problem in the present case is the manner of consideration of stated applications of appellants (and two others) by the outgoing Managing Committee including by unjustly protracting the requisition for convening SGBM demanded by majority of existing members. For, upon receipt of such requisition, it was the bounden duty of the Secretary of the Society, in terms of clause 3(v), to immediately issue notice to convene SGBM within 15 days from the date of receipt of requisition and to issue 15 days’ notice to all the members intimating about date of such meeting. The Secretary had issued such notice on 22.11.2016 scheduling SGBM for 07.12.2016. But, before the date of meeting, the Managing Committee deferred the SGBM on some specious objection. That meeting was not held. Instead, the then Managing Committee hastened to take a decision about admitting 22 new members in its meeting held on 17.09.2017 by giving a short notice of only one day. This action did not find favour with the Registrar for the reasons recorded in his decision dated 09.03.2018 including for setting aside the minutes of Managing Committee meeting dated 17.09.2017, some of which commended to the High Court as is discerned from the impugned judgment. [Paras 42, 44][1195-F-H; 1196-A-B, C-F]
2.2 For some acts of commission or omission of the then Managing Committee, the appellants who are otherwise eligible to be enrolled as members of the Society in their own rights need not be denied of the same. They have a right to be considered for being admitted as members of the Society by the newly elected Managing Committee. [Para 47][1197-G-H]
3.1 It would be unwise to accede to the submission that at least the case of 5 appellants, who had applied for grant of membership before the majority of the existing members had moved no confidence motion on 07.11.2016 be treated differently. At the instance of these appellants it is not permissible to reopen the findings and conclusion reached by the High Court, as regards illegality committed by the then Managing Committee in deferring the SGBM despite the mandate in that regard in terms of clause 3(v) of the bye-laws and instead hastening the process of admitting 22 new members thereby changing the constitution of the Society of only 32 existing members. That finding and conclusion has become final with the rejection of the SLP filed by the Society and the office bearers of the then Managing Committee on 15.06.2020. Resultantly, it must follow that the decision of the then Managing Committee dated 17.09.2017 admitting 22 new members has been rendered non-est. This logic uniformly applies to all the 22 persons enrolled as new members of the respondent-Society. There is no legal basis to segregate the claim of 5 appellants on the basis of date of (prior) applications. Indubitably, merely upon making an application it does not follow that he/she would stand admitted as a member of the Society. The applicant must fulfil other eligibility and procedural conditions and eventually, the Managing Committee must find the candidature fit and deserving for being admitted as a member of the Society. In other words, the decision of the then Managing Committee dated 17.09.2017, “as a whole”, suffers from the vice of unseemly haste, and thus colourable exercise of power and non-est in the eyes of law. It cannot be viewed differently for 5 appellants just because of prior date of application. This is precisely the effect of the decision of the Registrar in his operative order [paragraph (A)] as applicable to the appellants and similarly placed two other persons, who are not before this Court. The High Court rightly upheld that conclusion of the Registrar vide impugned judgment dismissing the writ petition of the Society. [Paras 48, 49][1198B-G]
3.2 Appellants challenged the continuation of election process and having been taken forward to constitute the newly elected Managing Committee despite pendency of this appeal. This grievance cannot be maintained at the instance of these appellants- as the status of these appellants is merely that of the applicants for grant of membership. Until they are admitted as members of the Society, they would have no right whatsoever to participate in the election process culminated in June 2020. [Para 52][1199-F-G]
3.3 The order passed by the Registrar (paragraph (A) of his operative order) as affirmed by the High Court is clarified/modified, to mean that the applications made by the appellants and similarly placed two other persons for grant of membership of the Society, are deemed to be pending and/or revived and be considered by the newly constituted Managing Committee on its own merits in accordance with law, keeping in mind the observations made in this judgment. [Para 53][1199-H; 1200-AB]
Vipulbhai M. Chaudhary v. Gujarat Cooperative Milk Marketing Federation Limited & Ors. (2015) 8 SCC 1 : [2015] 3 SCR 997; Zoroastrian Cooperative Housing Society Ltd. & Anr. v. District Registrar, Cooperative Societies (Urban) & Ors. (2005) 5 SCC 632 : [2005] 3 SCR 592; Rajendra N. Shah v. Union of India & Anr. (2013) SCC OnLine Guj 2242; Kusum Ingots & Alloys Ltd. v. Union of India & Anr. (2004) 6 SCC 254 : [2004]
1 Suppl. SCR 841; Mukund L. Abhyankar v. Chief Executive Officer, National Federation of Urban Coop. Bank and Credit Societies Ltd. & Ors. (2017) 241 DLT 358; T. Varghese George v. Kora K. George & Ors. (2012) 1 SCC 369 : [2011] 12 SCR 1070; State of Punjab & Anr. v. Gurdial Singh & Ors. (1980) 2 SCC
471 : [1980] 1 SCR 1071 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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