CHEN KHOI KUIversusLIANG MIAO SHENG & ORS.

                  [2023] 12 S.C.R. 307 : 2023 INSC 827



                             CASE DETAILS

                             CHEN KHOI KUI
                                      v.
                     LIANG MIAO SHENG & ORS.
                    (Civil Appeal No.5849-50 of 2023)
                          SEPTEMBER 13, 2023
     [ANIRUDDHA BOSE AND SUDHANSHU DHULIA, JJ.]

                              HEADNOTES

      Issue for consideration: Whether the Registrar of Society, empowered
to grant registration under West Bengal Societies Registration Act 1961,
also has the power to cancel such registration.
     West Bengal Societies Registration Act 1961 – Power to review or
cancel registration of the society by the registrar who earlier granted
the registration:
      Held: Registrar of the Society can cancel registration granted to the
Society by exercising power of procedural review which is inherent within
the authority who passed the order – There is no substantive power of
review provided in the Act – On facts, in pursuance of an earlier Division
Bench judgment of the High Court which held that even though there is no
substantive power of review provided in the Act, the power of procedural
review is inherent within the authority who passes the order, the Registrar
allowed the application seeking cancellation of the registration granted
earlier of a High School as a society, alleging forgery and fabrication of
signatures – In appeal, the Referee Judge rightly held that the vital difference
between a power of substantive review and a power of procedural review,
was not present in the mind of the Registrar; and that the Registrar proceeded
to exercise a power of substantive review, which was not available to him
in terms of such order and that too without reference to the application for
registration that succeeded – Said order does not calls for interference.
[Paras 6, 7, 9, 12 and 15]


                                     307
308          SUPREME COURT REPORTS                        [2023] 12 S.C.R.



        LIST OF CITATIONS AND OTHER REFERENCES

     Grindlays Bank Ltd. v. Central Government Industrial Tribunal and
Others (1980) (Supp) SCC 420:[1981] SCR 341; Kapra Mazdoor Ekta
Union v. Birla Cotton Spinning and Weaving Mills Ltd. and Another (2005)
13 SCC 777:[2005] 2 SCR 888; Rina Mukherjee and Another v. New India
Assurance Co. Ltd. and Another (2008) ACJ 1248 – referred to.
       OTHER CASE DETAILS INCLUDING IMPUGNED
              ORDER AND APPEARANCES
     CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.5849-5850
of 2023
     From the Judgment and Order dated 19.09.2018 and 12.06.2019 of
the High Court at Calcutta in APO No.542 of 2017.
      Appearances:
    Siddhartha Mitra, Sr. Adv., Kunal Chatterji, Sumitava Chakraborty,
Ms. Maitrayee Banerjee, Rohit Bansal, Advs. for the Appellant.
    Rana Mukherjee, Sr. Adv., Prosit Sen, Sourav Sen, Ms. Daisy
Hannah, Soumitra G. Chaudhary, Chanchal Kumar Ganguli, Advs. for the
Respondents.
       JUDGMENT / ORDER OF THE SUPREME COURT

                              JUDGMENT

      ANIRUDDHA BOSE, J.
      Delay condoned.
      2. Leave granted.
      3. The main question which arises for adjudication in this appeal is as
to whether the Registrar of Society, empowered to grant registration under
West Bengal Societies Registration Act 1961, also has the power to cancel
such registration. There is no specific provision in the statute granting
such authority the power to review or cancel his own decision. The root
of the dispute lies in what appears to be a conflict between two groups of
       CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.                           309
                 [ANIRUDDHA BOSE, J.]

the chinese tannery owners in Kolkata over the control of a school. The
school in question, as per pleadings, came into existence in the year 1929
as ‘Pei May Chinese School’, and operated out of a small hut in an area
commonly referred to as China Town. Subsequently, the Chinese Tannery
Owners’ Association in Kolkata set up the school on a large tract of land
in a locality known as Tangra. As per the appellant, the school was moved
to this location, now carrying the street address P-1 and 2, Iswar Mondal
Lane, Kolkata-700046. The tanners of Chinese origin at one point of time
constituted an affluent and vibrant trade group in Kolkata in the field of
processing and production of leather goods and they still have a presence
in that sector. The Chinese Tannery Owners’ Association was registered
as a society in the year 1967 under the West Bengal Societies Registration
Act, 1961. The Regulation of the Association, a copy of which has been
annexed at page 72 of the paperbook records that the said association had
been functioning since 1944 and has a school of its own known as Pei May
School. The address of the school is also specified therein. The appellant
claims to be the secretary of the school, which according to him was operated
by the Chinese Tannery Owners’ Association.
      4. Dispute arose when the Registrar, under the aforesaid Statute,
granted certificate of Registration in the name of ‘Pei May Chinese High
School’ as an independent society on 19.02.2010 in response to an application
made by the respondents herein. The address of this society has been shown
to be P-1-2, Iswar Mondal Lane over which the Chinese Tannery Owners’
Association claim title. The appellant contends that the said association
has no connection whatsoever with Pei May Chinese High School. This
dispute was initially raised with the Registrar by filing a complaint. The
appellant, on 17.08.2010, had submitted to the Registrar copies of letters
by seven individuals who had been shown as office bearers/members of
the “Pei May Chinese High School” society. Their letters were broadly to
the effect that they were never appointed in such capacity, as was shown in
the memorandum of association of the “school society”. The said letters
carried the request for cancelling the registration of Pei May Chinese High
School as a society. There were allegations of forgery and fabrication of
signatures in this set of complaints.
     5. It appears such disputes were taken to the civil court and criminal
proceeding was also instituted. A writ petition was also filed by the appellant
310          SUPREME COURT REPORTS                        [2023] 12 S.C.R.


in which cancellation of the said registration was asked for. The civil suit
was instituted by the Chinese Tannery Owners’ Association in the year
2016 in the Court of Civil Judge, Junior Division at Sealdah, registered as
T.S. No.142/2016. This was a suit for declaration and injunction and the
substantive relief of the plaintiff therein was to restrain the respondents
from interfering with the administration of Pei May Chinese High School.
It appears that in an interlocutory proceeding taken out in connection with
that suit, ad-interim injunction was granted in favour of the appellant.
     6. From the year 2011, there have been several rounds of litigations
by and between the rival parties. The order of the Registrar, from which
the present proceeding originates was passed in pursuance of an earlier
Division Bench judgment of the Calcutta High Court in APOT No. 498 of
2015 delivered on 14.01.2016. This judgment records:-
      “The entire issue in the appeal revolves round the question whether
      the Registrar of Societies has power to cancel the order passed by
      him on 25-1-2012. An application came to be presented before the
      Registrar complaining that the application consists of forged signature
      of one Chung Chis Ping. Admittedly, a criminal case is registered and
      investigation is pending so far as allegation of forgery is concerned.
      In that view of the matter the observation of the Registrar that on
      observation it does not appear that the signature of the other person
      namely Chung Shih Ping who has signed as Chung Chih Ping has
      not been forged is premature. On what basis he comes to such finding
      is also not spelt out in the impugned order which is under challenge
      before the learned Single Judge.
      So far as the question of power of review, apparently there is no
      substantive power of review provided in the Act in question. So far as
      the procedural review, it is inherent within the authority who passes
      the order. In that view of the matter, learned Judge was justified in
      remanding the matter to the Registrar of Societies.
      Coming to the argument of learned Senior Counsel Mr. Bandopadhyay
      with regard to sections 25 and 26 of the Societies Registration Act,
      1961, we are of the opinion, it has no application since they operate
      altogether under a different circumstance. It is left to the wisdom of
      CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.                          311
                [ANIRUDDHA BOSE, J.]

     the Registrar in the above circumstances to proceed with the matter
     keeping in mind the pendency of the criminal investigation as regards
     allegation of forgery of the signature, as mentioned above.
     With these observations, the appeal and application are disposed of.”
     7. The Registrar had passed an order for cancelling the registration
on 19.04.2016 and it was, inter-alia, held in this order:-
     “Hence, the matter is taken up for compliance of the Hon’ble Court’s
     order and to avoid further prolixity, I have decided to pass a reasoned
     order. I have gone through the writ applications, Mandamus Appeal,
     the applications for stay file thereon, arguments put forward by the
     parties in dispute and their learned Advocates and the solemn orders
     passed by the Hon’ble Court and the provisions of law which were
     referred by the Hon’ble Court as well as the contesting parties. It is
     evident from Clause- I (a) of the Memorandum of Association of the
     Chinese Tannery Owners’ Association, that the school in question (Pei
     May School) at 1 & 2, Iswar Mondal Lane, Kolkata - 700046 shall
     run under the auspices of the Chinese Tannery owners’ Association
     registered under West Bengal Societies Registration Act, 1961 having
     its registration umber S/8546 of 1967-68.
     If a new society (Pei May Chinese High School) is emerged with a
     separate entity at the same address of Pei May School which is a part
     of Chinese Tannery Owners’ Association and wish to register under
     West Bengal Societies Registration Act, 1961 then the Memorandum of
     Association of Chinese Tannery Owners’ Association is to be amended
     to that effect and to be approved from the Registrar of Societies. But
     I have not found any of such documents in the records wherein the
     Chinese Tannery owners’ Association applied for such amendment of
     their Memorandum of Association.
     I have not gone through the merits of the criminal proceedings pending
     in this issue on which the decision to be taken by the competent
     authority concerned but emphasis is only given on the matter of
     justification of issuance of certificate to Pei May Chinese High School.
     In my opinion, the application for registration of Pei May Chinese High
     School under the separate ambit of a registered society i.e. Chinese
312           SUPREME COURT REPORTS                         [2023] 12 S.C.R.


      Tannery Owners Association, in violation of the provision of the Act
      and the registration so obtained by suppressing the fact, is liable to
      be cancelled.
      Hence, being empowered by Section 22 of the Bengal General
      Clauses Act, 1899 mentioned in the order of the Hon’ble Justice Arijit
      Banerjee dated 16,07.2015, I am passing this order of cancellation
      of the registration granted under West Bengal Societies Registration
      Act, 1961 dated in respect of Pei May Chinese High School bearing
      registration number S/ lL/68216 of 2009-10.
      Hence forth the very society cannot function as a society registered
      under West Bengal Societies Registration Act, 1961.
      This is further to note that this order cannot be cited as precedent case
      unless it is specifically directed by the Court of law.”
      8. The order of the Registrar passed on 19.04.2016 was unsuccessfully
assailed before a Single Judge of the High Court in Writ Petition No.391
of 2016 and Writ Petition No.518 of 2016. There was difference of opinion
between the learned Judges of the Division Bench of the Calcutta High
Court, in a Letters Patent Appeal filed by the respondent no.1 and others
against the decision of the learned Single Judge sustaining the cancellation
order. The presiding Judge opined that the Registrar’s decision was correct
whereas the companion Judge held that such an issue could not be dealt
with by the Registrar as it was not in the nature of procedural review. The
companion Judge in her differing view observed that since the issue of
fraud and forging signatures is already pending before the “Court below,”
possibly implying pendency of the civil suit and the criminal proceeding,
the decisions in such cases would provide complete relief to the parties.
In case the court arrived at a finding that the signatures appended to the
Memorandum of Association were forged then the Registrar in exercise of
his procedural power to review his own registration order would be free to
take a decision to deregister the society as fraud vitiates everything, and in
case the court opines that the complaint does not have any merits then the
certificate of registration will not be open for scrutiny.
     9. In terms of the Clause 36 of the Letters Patent Act, 1865 of the
Calcutta High Court, the matter was referred to a third Judge and the Referee
Judge formulated the following two questions for answering the reference:-
      CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.                           313
                [ANIRUDDHA BOSE, J.]

     “1. Whether the Registrar of Firms, Societies and Non-trading
     Corporations, West Bengal, the respondent no.2 in the writ petition
     (hereafter the Registrar), did have the power to cancel the registration
     earlier granted in the name of “Pei May Chinese High School” on
     the ground that such registration was obtained by the appellants/writ
     petitioners (hereafter the appellants) by suppression of material facts?
     2. If the first question were answered in the affirmative, whether the
     Registrar prior to passing the impugned order of cancellation extended
     due and reasonable opportunity to the appellants in consonance with
     the principles of natural justice to defend the allegation levelled
     against them by the respondent no.4, Mr. Chen Khoi Kui. (hereafter
     the objector)?”
     10. Analysing the distinction between procedural review and
substantiative review, the Referee Judge answered above questions in the
following terms:-
     “36. What the 1961 Act expressly bars is registration of a society
     under a name which is identical with, or too nearly resembles, the
     name of any other society which has been previously registered. In
     the present case, it is not in doubt that the names of the two societies
     are different, although it is true that the Chinese Tannery Owners’
     Association has been registered under the 1961 Act, with a disclosure
     that Pei May Chinese High School is a sister organisation of such
     association. However, whether registration obtained by the appellants
     in the name of Pei May Chinese High School is the result of any fraud
     or is otherwise statutorily barred, is not too clearly reflected in the
     order of cancellation passed by the Registrar. In order to ensure that
     an allegation of suppression of a material fact succeeds, it is incumbent
     on the party alleging to prove it by reference to documents on record
     at the time the application for registration of the appellants was being
     considered. The 1961 Act requires that registration be applied for
     with particulars to be disclosed in a memorandum together with the
     rules and regulations of the proposed registered society. No form of
     memorandum has been statutorily prescribed. In the absence of such
     form, one is left to wonder what are the queries that are required to
     be answered for registration to ensue. The memorandum submitted
314           SUPREME COURT REPORTS                         [2023] 12 S.C.R.


      by the appellants has not been shown to be on the records of the writ
      appeal. The memorandum or its contents not being on record and
      the Registrar too not having referred to it in his impugned order, the
      degree of suppression and also whether it is of a material fact which,
      if disclosed, could have had the effect of summary rejection of the
      application for rejection cannot be ascertained and it is difficult in
      the exercise of the present jurisdiction to return a finding one way or
      the other.
      37. In Shri Krishnan v. Kurukshetra University, (1976) 1SCC311, the
      Supreme Court while considering the claim of a law student to take
      an examination which the respondent university had refused, observed
      in paragraph 7 that:
       “*** It is well settled that where a person on whom fraud is committed
      is in a position to discover the truth by due diligence, fraud is not
      proved. It was neither a case of suggestio falsi, or suppressio veri. ***”
                                                           (italics in original)
      38. In my view, because of ignorance or otherwise, the Registrar did
      not act within the parameters of the jurisdiction laid down by the
      Hon’ble Division Bench in its order dated January 14, 2016, which is
      apparent on the face of the record. He proceeded to exercise a power
      of substantive review, which was not available to him in terms of such
      order and that too without reference to the application for registration
      of the appellants that succeeded. The vital difference between a power
      of substantive review and a power of procedural review, evidently, was
      not present in the mind of the Registrar. If at all there was suppression
      on the part of the appellants, it had to be shown that such suppression
      was akin to a fraud that had resulted in an order granting registration
      in violation of a statutory provision. That has not been shown. It is for
      this reason that, on facts and in the circumstances, I answer the first
      point of difference noted above in the negative.
      39. In view of such answer, question of answering the second point
      does not arise.
      40. Thus, though I agree with the learned Judge who proposed that
      the order of the learned Judge dated May 18, 2017 should be set aside
      CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.                           315
                [ANIRUDDHA BOSE, J.]

     and the appeal allowed, I am also of the view that leaving the parties
     to battle it out before the civil court may not be appropriate in the
     circumstances. There being an allegation of fraud levelled by one party
     against the other and bearing in mind the law relating to fraud noticed
     above, coupled with observance of the order of the Hon’ble Division
     Bench dated January 14, 2016 in the breach by the Registrar, much
     to the detriment and prejudice of both the parties, it would only be fit
     and proper to set aside the order impugned in the writ petition and
     the judgment and order under appeal, and to order a further remand
     of the matter to the Registrar for taking an appropriate decision not
     only by adhering to the said order of January 14, 2016 but also in the
     light of the observations made hereinabove. It is ordered accordingly.
     To support such course of action, which is different from those directed
     by the differing Judges of the Hon’ble Division Bench, I may refer to
     the decisions of referee Judges of this Court in the decisions reported
     in 2014 (4) CHN (CAL) 242 (Shivani Properties Private Limited vs.
     Bank of India) and 2015 (2) CLJ (CAL) 141 (Tapas Paul vs. State of
     West Bengal & Ors.), and the unreported decision dated January 31,
     2019 in APO 508 of 2017 (Sri Ami yo Bhusan Das vs. United Bank of
     India & Ors.) rendered by me.
     41. The objector and the appellants shall be heard within four weeks
     from date of receipt of a copy of this judgment and order. The Registrar
     shall, immediately after hearing is closed, proceed to consider the
     contentious issues and render his decision within a further period of a
     month thereafter. Needless to observe, the Registrar ought to decide in
     the light of the observations made in this order and whatever decision
     is taken by him must have the support of reasons.
     42. The reference is answered accordingly and the writ appeal stands
     disposed of, without costs.”
     11. On the point of power of the Registrar to cancel his own order, the
Referee Judge, whose judgment is under appeal, has cited the provisions
of Section 22 of the Bengal General Clauses Act, 1899 which stipulates:-
     “22. Power to issue to include power to add to, amend, vary or
     rescind orders etc.— Where, by any Bengal Act or West Bengal Act,
     a power to issue orders, rules, bye-laws, or notifications is conferred,
316          SUPREME COURT REPORTS                          [2023] 12 S.C.R.


      then, that power includes a power, exercisable in the like manner and
      subject to the like sanction and conditions (if any), to add to, amend,
      vary or rescind any orders, rules, bye-laws or notifications so issued.”
     12. Citing the judgments of this Court in the cases of Grindlays Bank
Ltd. -vs- Central Government Industrial Tribunal and Others [1980
(Supp) SCC 420] and Kapra Mazdoor Ekta Union -vs- Birla Cotton
Spinning and Weaving Mills Ltd. and Another [(2005) 13 SCC 777],
and also a decision of the same High Court in the case of Rina Mukherjee
and Another -vs- New India Assurance Co. Ltd. and Another [(2008)
ACJ 1248], the Referee Judge opined that the Registrar had proceeded to
exercise his power of substantive review and that too without reference to
the application for registration that succeeded. This has been recorded in
paragraph 38 of the judgment impugned, which we have reproduced above.
      13. One of the points raised on behalf of the appellant before us is that
the judgment of the Division Bench delivered on 14.01.2016 not having
been appealed against, has attained finality and it was not permissible for the
Division Bench, and subsequently by the Referee Judge to re-examine the
question as to the manner in which the Registrar had exercised his power.
But we find that the Referee Judge has not addressed any issue already
covered by the decision of the Division Bench delivered on 14.01.2016.
The Division Bench has explained the position of law on the aspect of
power of substantive review and procedural review. The Referee Judge has
only applied the same principle to test the order of the Registrar. Thus, we
do not think the principle of constructive res judicata applied against the
respondents so far as this point is concerned. Moreover, before the Referee
Judge, the dispute centred around the decision taken by the Registrar after
the Division Bench had delivered the judgment on 14.01.2016 and it formed
a fresh cause of action.
       14. On behalf of the respondents, it has been submitted that the FIR
No.673/2010 dated 19.10.2010 in which the same allegation of forged
signatures was made stood closed with submission of final report by the
Investigating Officer before the concerned court. It has been submitted before
us that the person accused in the criminal case (respondent no.14) has been
discharged by the ACJM, Sealdah by an order passed on 07.04.2021. But this
fact, in our opinion, does not conclude the dispute and in any event closure
       CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.                             317
                 [ANIRUDDHA BOSE, J.]

report cannot result in final determination of the dispute between two sets
of parties on the adjudication of allegations of filing false and fabricated
documents before the Registrar of Societies. Otherwise, the respondents
have defended the judgment which is under appeal before us.
     15. We are of the view that the impugned judgment does not suffer
from any legal shortcoming warranting our interference.
       16. It has also been argued before us that Chinese Tannery Owners’
Association is the owner of the land where the subject school is located. On
this point, we would add that in the event the respondents cannot demonstrate
their right to run the school on the land owned by the said Association without
their permission, that factor may also be taken into consideration by the
Registrar and that could also be a ground for cancellation of registration.
But any decision on that count shall be subject to final adjudication by the
civil court if an action on that count is pending before the civil court.
      17. The present appeal shall stand disposed of in the above terms.
      18. Pending application(s), if any, shall stand disposed of.
      19. There shall be no order as to costs.


Headnotes prepared by:                                        Appeal disposed of.
Nidhi Jain