Supreme Court of India
SWATI ULHAS KERKAR AND ORS.versusSANJAY WALAVALKAR AND ORS.
- Citation
- 2021 INSC 74
- Decided
- 10 February 2021
- Disposal
- Case Partly allowed
- Bench
- A M KHANWILKAR
Holding
The Managing Committee’s decision of 17 September 2017 is a colourable exercise of power and non‑est; the applications of the appellants and similarly placed persons are deemed pending/revived and must be considered by the newly constituted Managing Committee on merits.
Summary
The Supreme Court examined whether the admission of 22 persons, including the appellants, as members of Prabodhan Education Society on 17 September 2017 was valid despite a pending no‑confidence requisition against the then Managing Committee. The Registrar had set aside that admission as illegal and arbitrary, a decision upheld by the High Court. The appellants, who were later dismembered, challenged the Registrar’s order and the High Court judgment. The Court held that the Managing Committee’s decision was a colourable exercise of power, suffered from unseemly haste and was non‑est, and therefore the applications of the appellants and similarly placed persons are deemed pending and must be considered by the newly constituted Managing Committee on merit. The appeal was partly allowed, restoring the status of the applications while rejecting the appellants’ claim to participate in the election process until they are admitted as members.
Issues considered
- Whether the admission of the 22 persons as members by the then Managing Committee on 17 September 2017, in the face of a pending no‑confidence requisition, was legal.
- Whether the Registrar’s order setting aside that admission was valid.
- Whether the High Court’s decision upholding the Registrar’s order is maintainable.
- Whether the appeal filed by the dismembered applicants is maintainable.
- What is the proper status of the applications of the appellants and similarly placed persons.
Legislation cited
Subjects
society lawmembership admissionno‑confidence motionmanaging committeecolourable exercise of powerSocieties Registration Actspecial leave petitionelection processrevival of applications
Judgment
1170 [2021]REPORTS
SUPREME COURT 3 S.C.R. 1170 [2021] 3 S.C.R.
A SWATI ULHAS KERKAR AND ORS.
v.
SANJAY WALAVALKAR AND ORS.
(Civil Appeal No. 412 of 2021)
B FEBRUARY 10, 2021
[A. M. KHANWILKAR AND S. RAVINDRA BHAT, JJ.]
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
C
– 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 dis-
membered assail the decision of the High Court, the issue can be
considered on merits – Present appeal – Held: Decision of the then
D 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
E
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
F 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.
G 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.
H
1170
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1171
WALAVALKAR AND ORS.
Partly allowing the appeal, the Court A
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 B
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 C
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 D
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, E
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 F
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 G
of the Registrar and of the High Court by such affected persons
(appellants herein) cannot be countenanced. [Paras 37, 38][1192-
G-H; 1193-A-E]
H
1172 SUPREME COURT REPORTS [2021] 3 S.C.R.
A 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,
B
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
C 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
D
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
E 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-A-
F
C, 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
G 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
H Managing Committee to change the constitution (membership
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1173
WALAVALKAR AND ORS.
pattern) of the Society. The membership applications were placed A
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
B
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 C
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
D
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 E
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 F
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 G
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
H
1174 SUPREME COURT REPORTS [2021] 3 S.C.R.
A 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
B
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.
C 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
D
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
E (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][1198-
B-G]
F 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
G 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/
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1175
WALAVALKAR AND ORS.
modified, to mean that the applications made by the appellants A
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-A-
B
B]
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 C
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 Co- D
op. 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.
E
Case Law Reference
[2015] 3 SCR 997 referred to Para 14
[2005] 3 SCR 592 referred to Para 25
[2004] 1 Suppl. SCR 841 referred to Para 27 F
[2011] 12 SCR 1070 referred to Para 31
[1980] 1 SCR 1071 referred to Para 31
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 412 of
2021.
G
From the Judgment and Order dated 28.05.2020 of the High Court
of Judicature at Bombay at Goa in Writ Petition No. 373 of 2018.
Tushar Mehta, SG, Huzefa Ahmadi, Vinay Navare, Sr. Advs.,
Ms. Anshula Vijay Kumar Grover, Ivo D’Costa, Arun R. Pedneker, Ms.
H
1176 SUPREME COURT REPORTS [2021] 3 S.C.R.
A Mukti Chowdhary, R. P. Gupta, Sahil Tagotra, Advs. for the appearing
parties.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J.
B 1. The central question in this appeal is: Whether the invalidation
of membership of appellants and the impleaded appellants1 (and two
others), solely on the ground that the then Managing Committee on its
way out and facing no confidence motion before the Special General
Body Meeting2 demanded by the majority of existing members of the
Society ought not to have hastened admission of new members, is just
C and proper and the appropriate direction necessary in that regard?
FACTUAL MATRIX
2. Briefly stated, Prabodhan Education Society3 is a registered
society under the Societies Registration Act, 18604. The Society consisted
D of 32 members – before induction of 22 persons (including the appellants)
as members on 17.09.2017 and their subsequent removal in terms of the
impugned decision.
3. The bye-laws of the Society mandate that the elections to the
Karyakari Samiti (Managing Committee) be held every three years. The
elections to the Managing Committee were due in September 2013,
E
however, there was a delay in conducting elections, which ultimately
came to be held on 05.10.2014. While the Managing Committee elected
in 2014 was at the helm of affairs of the Society, it was served with a
requisition dated 07.11.2016 signed by 18 of the 32 existing members of
the Society, to convene a SGBM for removal of the Chairman, Secretary
F and Treasurer and for conducting elections therefor. The removal of the
Managing Committee was sought on various grounds of abuse of power
and mismanagement, resulting in loss of confidence.
4. In furtherance of the said requisition, the Secretary vide letter
dated 22.11.2016, scheduled a SGBM on 07.12.2016. However, upon
G objections raised by the members of the Managing Committee to hold
such SGBM, the said decision came to be reviewed and the SGBM
1
For short, “the appellants”
2
For short, “SGBM”
3
For short, “the Society”.
H 4
For short, “the 1860 Act”.
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1177
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
stood cancelled. That decision was communicated to the members of A
the general body vide letter dated 03.12.2016.
5. Aggrieved by the cancellation of the SGBM by the Managing
Committee, Sanjay Walavalkar (respondent No. 1 herein and one other
member of the Society) approached the High Court of Bombay, Bench
at Goa5 vide Writ Petition No. 1195 of 2016 for the following reliefs: B
“(a) This Honourable Court be pleased to issue a writ of mandamus
or a writ in the nature of mandamus or any other appropriate writ,
order or direction commanding the Respondent No.4 to convene
a Special General Body Meeting to transact the agenda as
requisitioned by the 18 requisitioning members vide their letter C
dated 07.11.2016 addressed to the Chairman/Secretary of the said
society and to hold the same under the supervision and control of
the Respondent Nos.2 and/or 3 as the observers to oversee such
meeting.
(b) This Honourable Court be pleased to issue a writ of mandamus D
or a writ in the nature of mandamus or any other appropriate writ,
order or direction commanding the Respondent Nos. 2 and/or
Respondent No.3 to direct the Respondent No.4 to convene a
Special General Body Meeting to transact the agenda as
requisitioned by the 18 requisitioning members vide their letter
dated 07.11.2016 addressed to the Chairman/Secretary of the said E
society and to hold the same under the supervision and control of
the Respondent Nos.2 and/or 3 as the observers to oversee such
meeting.”
6. Indisputably, 22 persons (including the appellants – vide letters
dated 12.09.2016, 19.09.2016, 22.09.2016, 18.10.2016, 12.12.2016 and F
19.12.2016) had filed applications for being enrolled as a member of the
Society. The Secretary issued notice dated 29.12.2016 proposing to
convene a meeting of the Managing Committee on 02.01.2017 to induct
new members. The induction was, however, deferred. The Secretary
issued another notice on 16.09.2017 for convening a meeting of the G
Managing Committee on 17.09.2017, to consider induction of new
members. In that meeting, the Managing Committee went on to induct
the aforesaid 22 persons (including the appellants) as members, despite
5
For short, “the High Court”
6
For short, “AGM” H
1178 SUPREME COURT REPORTS [2021] 3 S.C.R.
A objections raised by the Treasurer. In the same meeting, it was decided
to convene an Annual General Body Meeting6 on 08.10.2017 for
conducting elections to constitute new Managing Committee. The relevant
portion of the minutes of meeting dated 17.09.2017 is as under:
“3. It was decided that the 34th General Body Meeting be convened
B on Sunday, 8th October 2017 at 10:00 AM, in the school premises.
Notices be sent 15 days in advance.
4. Following new 22 (Twenty two) members were inducted today
as members of Prabhodhan Education Society (General Body).
(Their applications were pending since Sept/Oct 2016). It was
C done to complete the pending work/task of the present committee
before expiry of the term.
...
Shri Vithal G.P. Parrikar, the Treasurer, raised his objection to
induction of new members. He said he would not mind their
D induction after General Body and expressed fear that this act
may invite contempt of court.”
7. Respondent No. 1, aggrieved by the said development, sought
additional reliefs in the above writ petition as under:
“(a) This Hon’ble Court be pleased to declare that the Notice
E
dated 29/12/2016 addressed by the Secretary of the Respondent
No.4, thereby proposing to convene the meeting of the Managing
Committee inter-alia to induct new members to the General Body
of the Respondent No.4 is illegal and bad in law and the same be
quashed and set aside.
F
(b) This Hon’ble Court be pleased to declare that the holding of
the Meetings of the Managing Committee of the Prabodhan
Education Society on 17/09/2017 and 18/09/2017 and the decisions
taken there-at (including in respect of induction of Respondent
No.5 to 26) are illegal and non-est and the same be quashed and
G set aside and the Respondent No.5 to 26 be restrained from acting
as members of the Respondent No.4 for all intents and purposes.
(c) This Honourable Court be pleased to restrain the Managing
Committee of the Respondent No.4 from admitting or inducting
any new members to the General Body of the Respondent No.4,
H pending holding of the Special General Body Meeting as
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1179
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
requisitioned by 18 members of the Respondent No.4 vide their A
letter dated 07.11.2016.”
8. As the decision of the Managing Committee dated 17.09.2017
came to be assailed before the Court, the Managing Committee deferred
elections.
9. The High Court vide interim order dated 05.10.2017 permitted B
respondent No. 1, to bring on record the 22 newly inducted members, as
they were likely to be affected by the outcome of the further reliefs
claimed in the stated writ petition. The relevant portion of the interim
order is extracted hereunder:
“1. The matter is moved urgently at the instance of the Petitioner. C
It could not be taken up yesterday.
2. Mr Kantak, learned Senior Advocate on behalf of the 4th
Respondent, states, on instructions, that the elections scheduled
on 8th October 2017 will be deferred till 5th November 2017.
D
3. However, it is pointed out that the term of the current Managing
Committee and its office bearers ends by 7th October 2017. In
view of the statement made, the present Managing Committee
will continue as a pro tem or caretaker Managing Committee till
the next elections but will not take any major financial, policy or
other decisions until that time. It may attend to routine management E
and administrative issues alone.
4. List the Petition high on the supplementary board on 31st
October 2017.
5. In the meantime, leave to amend to join the newly inducted
F
members. Amendment to be carried out without need of
verification by 10th October 2017. Notice to be issued to the newly
added Respondents returnable on 31st October 2017. An
amendment is also permitted to add an additional prayer. Liberty
to file an additional affidavit after the amendment is carried out.”
10. The above writ petition was ultimately disposed of vide order G
dated 08.11.2017, directing the Inspector General of Societies/District
Registrar7 to decide the dispute on its merits as per law, in the following
words:
7
For short, “the Authority” H
1180 SUPREME COURT REPORTS [2021] 3 S.C.R.
A “8. ..... Since the Petitioner has already approached the Inspector
General under Section 20(A) and the Inspector General is
considering the complaint and that it is the grievance of the
Petitioner that certain developments have taken place pending
the decision of the complaint, even the subsequent grievance of
the Petitioner can be considered by the Inspector General on its
B
own merits. Since the Inspector General is an authority under the
Act, it will be appropriate that the matter is first looked into by the
Authority under the Act, before this Court is called upon to decide
the issue of internal management of the society at first instance.
.....
C
10. Accordingly, we dispose of the Writ Petition by directing
Respondent No.3 i.e. the Inspector General, before whom the
complaint is made by the Petitioner is pending, to consider the
additional grievance made by the Petitioner as well. The Inspector
General will decide the matter on its own merits as per law. All
D contentions of all parties are kept open, including the one mentioned
above.
11. The ad-interim order passed in this petition, in the form of
statement recorded will continue till disposal of the complaint and
two weeks thereafter.”
E
11. Pursuant to the aforesaid order, respondent No. 1 filed a
consolidated complaint dated 16.11.2017 before the Authority. The
Authority registered Case No. DRN/RDS/794/2017 wherein it adjudged
three original complaints dated 13.10.2016, 04.11.2016 and 05.12.2016
along with the consolidated complaint.
F
12. The Authority, after having heard the parties to the complaint
as well as the newly inducted 22 members, vide judgment and order
dated 09.03.2018, was pleased to issue directions and also set aside the
decision of the Managing Committee dated 17.09.2017 giving membership
to 22 persons (including the appellants) on the ground that the same was
G illegal and arbitrary. The operative order of the Authority is reproduced
hereunder:
“A) I hereby declare that the induction of Shri. Gajanan
Harishchandra Mandrekar, Shri Subhash Vinayak Desai,
Adv. Sau. Swati Ulhas Kerkar, Dr. Sitaram V. Korgaonkar,
H Shri Pandharinath Lakshman Mapari, Dr. Bhiva Ladu Malik,
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1181
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
Shri Milind Vaman Karkhanis, Shri Krishnaraj Narcinha A
Sukerkar, Shri. Atmaram Vaman Gaonkar, Shri. Pravin Punaji
Neswankar, Shri. Sandeep V. Palni, Shri. Kiran Ramchandra
Naik, Shri. Datta Purushottam Naik, Shri. Shashank
Gokuldas Kamat, Shri. Audhut Ramchandra Kamat, Sau.
Medha R. Prabhudessai, Shri. Devidas J. Saraf, Shri. Abhai
B
Bhamaikar, Shri. Ashish Sarvottam Prabhudessai, Shri.
Vivek P. Navare, Shri. Vasudev Subrai Naik Khaunte and
Dr. Kedareshwar P.S. Narvekar, as members of the
Prabodhan Education Society, by virtue of the decision taken
by the majority members of the managing committee at its
meeting held on 17.09.2017, is illegal, arbitrary and is C
hereby set-aside;
B) I hereby declare that the decision of the majority members of
the managing committee of the Prabodhan Education Society not
to hold the SGM as requisitioned by 18 members vide their letter
dated 07.11.2016, is illegal, arbitrary, de-hors the power of the D
managing committee and mala-fide;
C) For the detailed stated in the foregoing part of this Order, I
hereby declare and hold the act of managing committee as guilty
of mismanagement of affairs of the Prabodhan Education Society
and breach of their fiduciary obligations towards the general body E
of the society;
D) I hereby direct the managing committee of the Prabodhan
Education Society and particularly its Secretary Shri Velingkar to
take step to convene an Annual General Body Meeting of the
Society, within a period of 7 days from the date of receipt of this F
Order, with due procedure laid there in under the Societies
Registration Act for the specific purpose of holding elections to
the various posts of the managing committee of the Prabodhan
Education Society for the period 2018-2021;
E) with the view to ensure free, fair and impartial conduct of G
elections, I hereby direct that the aforesaid proposed AGM shall
be held under the supervision, direction and control of Shri Suraj
Vernekar, Civil Registrar-cum-Sub Registrar as the observer; and
that the agenda concerning elections of managing committee
H
1182 SUPREME COURT REPORTS [2021] 3 S.C.R.
A members shall be transacted first, before any other item/business
is taken up for consideration;
F) I hereby direct the managing committee elected after the
forthcoming elections (subject to the approval of the general body)
may frame necessary rules concerning regulation of its affairs.
B Considering the situation in which the society is placed presently
and considering the fact that there are certain gaps in the byelaws
of the society concerning certain aspects, the managing committee
may consider formulating rules on the following amongst other
issues:
C i. Rules giving further details on the manner in which the managing
committee shall act after receiving requisitions by members
directing it to convene a SGM.
ii. Rules stipulating whether any other item (such as induction of
new members or change to the constitution of the society etc.
D shall be permitted during the pendency and consideration of a
requisition under Clause 3(V) of the Society byelaws;
iii. Rules whether there should be any cap/outer limit on the
maximum number of members that can be inducted at any given
point of time and further whether such induction of new members
E can be done on the eve elections (if not, up till what time can such
induction be done);
iv. Rules dealing with the manner and prescribing further details
as to how meetings of the managing committee and the general
body shall be held (including prescribing notice period for meetings,
F mode/manner of intimation etc.),
v. Rules dealing with procedural aspects of conduction meetings
and recording of minutes etc.”
(emphasis supplied)
13. Assailing the said judgment and order, the Society represented
G through Secretary, Chairman and Secretary (in individual capacity) filed
Writ Petition No. 373 of 2018 before the High Court, wherein, the stay
granted in the previous proceedings was extended until disposal of the
writ petition by an interim order dated 22.03.2018.
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1183
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
14. The High Court vide final judgment and order dated 28.05.2020, A
framed and adjudged five issues. The issues read as under:
“1. Can a Society, on its own, maintain a writ petition against an
order passed by a statutory authority concerning the resolutions
its Governing Body or Managing Committee passed?
2. Is the impugned order ultra vires of the Registrar? In the B
alternative, has the Registrar got the power to rule on the
allegations of mismanagement by the Managing Committee?
3. Has the Managing Committee committed an illegality in not
convening the Special General Body Meeting at the request of 18
of 32 Society members? C
4. In the absence of any provision in the bylaws or under the act
for bringing up a no-confidence motion or to remove the office
bearers, could the applicants have insisted on having a Special
General Body meeting for discussing those issues?
D
5. Has the Managing Committee legitimately inducted 22 new
members, especially, pending the writ petition and on the eve of
the elections?”
While addressing the fourth issue, the High Court placed reliance
on a decision of this Court in Vipulbhai M. Chaudhary v. Gujarat
E
Cooperative Milk Marketing Federation Limited & Ors. 8 and held
that no confidence motion can be maintained even in absence of provision
therefor in the bye-laws. The relevant portion of the impugned judgment
is reproduced below:
“71. Vipulbhai M. Chaudhary, I reckon, clinches the issue. In
F
any democratically constituted institution, the office bearers
continue to hold the office during the pleasure of the members
that have chosen those office bearers. Sometimes the governing
rules or regulations of that institution are silent about how the
governing members must account for their misdeeds or
maladministration when their tenure is subsisting. But it is no license G
for them to wreak havoc in the name of administration and annihilate
the institution. In other words, it is institutionally inherent that the
governing members must administer the affairs of the institution
8
(2015) 8 SCC 1 H
1184 SUPREME COURT REPORTS [2021] 3 S.C.R.
A faithfully, honestly, and diligently; they should always remain
accountable to the members for their omissions and commissions.
In the same reckoning, the members’ right to unseat these
governing members is equally inherent in the scheme of the things,
despite no express provision to that effect, say, in the byelaws.
B 72. So we cannot hear the petitioners saying that they were justified
in not holding the SGBM. In this context, we may reiterate what
the Registrar has held: once the majority members, especially in
tune with the bylaws, required the Managing Committee to hold a
general body meeting for whatever purpose, it is the Managing
Committee’s bounden duty to abide by that demand. Let us assume
C that the majority members wanted the general body meeting to
discuss frivolous or unimportant issues; still it is not for the
Managing Committee to sit in judgement over the tenability of the
majority members’ demand. Once meeting convened, it is for the
entire body of the membership to examine the demands and decide
D on them. This observation, as made by the Registrar, remains
even more relevant because, here, the allegations concerned the
very Managing Committee.
.....
74. Nevertheless, for the reasons mentioned above, I must confirm
E the findings of the Registrar that the Managing Committee has
acted with material irregularity by refusing to abide by the majority
members’ demand for an SGBM. Now, we will examine the last
issue, keeping in view our answer to this issue.”
With respect to the fifth issue, pertaining to the validity of induction
F of the 22 new members, the High Court disagreed with the findings of
the Authority on material aspects. However, it held that the same was
bad being taken by the Managing Committee pending no confidence
requisition. The High Court adverted to the dictum in Vipulbhai (supra)
and observed thus:
G “95. Then, what vitiates the Managing Committee’s decision to
induct new members?
96. We have already held that the Managing Committee’s refusal
to hold the SGBM even when majority members demanded is an
act of illegality. Now, we should examine the induction of the new
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1185
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
members in the context of that refusal. On the converse, if there A
was no demand for an SGBM by the majority and no expression
of no-confidence, then the governing body may induct new
members at any stage during its tenure—the beginning, the middle,
or the end of the tenure making no difference.
97. Here, the majority members—18 out of 32—demanded an B
SGBM; it was, among other things, to express their no confidence
against certain office bearers, too. The case holding of Vipulbhai
M. Chaudhary dispels all doubts about whether the statute or
the byelaws should provide for unseating of an office bearer. No
need. It is a constitutionally conferred right.
C
98. Thus, inferentially, we may hold that once majority
members express no confidence on the governing body or
any office bearer and demand an SGBM, until the governing
body proves its majority, it loses legitimacy to take policy
decisions. And that legitimacy includes induction of new
members. Otherwise, the moment a governing body, that is the D
Managing Committee, faces a no-confidence motion, the easy—
and devious—way out for the governing body is put the SGBM
on hold, induct new members indiscriminately, alter the membership
equation, and then hold the SGBM. It is abuse of power that
upsets the democratic design of any society and that should E
be struck at.
99. So the inescapable conclusion is that the Managing
Committee inducting new members in the face of no
confidence and the impending SGBM is illegal and arbitrary.”
(emphasis supplied) F
Finally, the High Court concluded by holding thus:
“Under these circumstances, I refuse to interfere with the
impugned order, dated 9th March 2018, of the District Registrar.
As a result, I dismiss the writ petition. No order on costs. Interim
G
relief, if any, stands vacated.”
15. In view of disposal of the Writ Petition No. 373 of 2018, the
Civil Registrar-cum-Sub Registrar of Societies, vide letter dated
01.06.2020, directed the Secretary to convene an AGM to conduct
elections for constituting a new Managing Committee by 04.06.2020
H
1186 SUPREME COURT REPORTS [2021] 3 S.C.R.
A (within 7 days from the date of High Court’s order dated 28.05.2020),
failing which the Authority shall conduct such elections forthwith.
16. In the meantime, aggrieved by the impugned decision of the
High Court, the Society, Chairman and Secretary approached this Court
vide SLP (Civil) No. 7352 of 2020 on 04.06.2020. Simultaneously, the
B Chairman and Secretary also addressed letter dated 04.06.2020 to the
Authority, informing that the Managing Committee held a meeting on
03.06.2020 wherein it had decided to fix the AGM tentatively on
28.06.2020 for holding elections. Further, it informed that final date of
election would be fixed at a later date, after withdrawal of Section 144
of Cr.P.C., 1973 which was in force due to lockdown ordered on account
C of prevailing pandemic situation (Covid-19).
17. On the other hand, since the Managing Committee failed to
convene an AGM within 7 days, the Authority vide notice dated 09.06.2020
convened an AGM on 25.06.2020 for conducting elections.
D 18. Be that as it may, the stated SLP filed by the Society was
listed before this Court on 15.06.2020, whence the same came to be
disposed of in the following terms:
“We decline to interfere in this Special Leave Petition at the
instance of the petitioners. The Special Leave Petition is dismissed
E accordingly.
If the 22 person(s) who have been dis-membered file
independent Special Leave Petition(s) to assail the decision
of the High Court at their instance, the issue can be
considered on its own merits.
F Pending applications, if any, stand disposed of.”
(emphasis supplied)
19. Taking cue from the aforementioned observations made by
this Court, the appellants have approached this Court, by way of this
appeal, to impugn the order dated 28.05.2020 passed by the High Court.
G With permission of this Court, 12 other persons (out of the 22 dismembered
persons) similarly placed as the original appellants have been impleaded
as appellants in this appeal.
20. During pendency of the present proceedings, in response to
the Authority’s notice dated 09.06.2020, the Secretary addressed letter
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1187
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
dated 22.06.2020, informing that as per the bye-laws, 15 days’ notice is A
essential for convening an AGM and the same cannot be convened within
7 days as directed by the Authority. The said letter also informed that
the direction vide order dated 09.03.2018 was only to start the process
of elections and not to conduct elections per se. Further, the Managing
Committee had convened a meeting on 20.06.2020 to fix the AGM on
B
12.07.2020 for conducting elections. On the same day, the Secretary
had also addressed a letter to the District Magistrate seeking permission
to conduct elections on 12.07.2020.
21. The appellants had addressed letters to the Authority on
24.06.2020 informing about the pendency of the present appeal and
requesting to defer the elections. Despite receiving this intimation, the C
Authority proceeded to conduct the elections on 25.06.2020 and
constituted the new Managing Committee. This Court upon being
appraised of the said development, vide order dated 25.06.2020, clarified
that any steps taken by the Authority would be subject to the outcome of
this proceedings. The order reads thus: D
“Permission to file Special Leave Petition is granted.
Heard learned counsel for the petitioner(s).
It has been brought to our notice that despite the pendency of this
Special Leave Petition and which fact was brought to the notice E
of the Registrar, for reasons best known to the Registrar, he
hastened the election process.
This factual position be placed on record by way of a formal
application, to be filed by the petitioner(s) and for appropriate
reliefs, as may be advised. F
In addition, it will be open to the left over persons who are similarly
placed as the petitioner(s), to file a formal application for impleading
them as party to the present proceedings.
Both these applications to be filed within one week from today
through email/online. G
Issue notice to the respondents on this Special Leave Petition and
proposed applications, returnable within four weeks.
Dasti, in addition, is permitted.
H
1188 SUPREME COURT REPORTS [2021] 3 S.C.R.
A Any steps taken by the Registrar, including elections
allegedly conducted by him today, i.e. 25.06.2020 will be
subject to the outcome of this Special Leave Petition.”
(emphasis supplied)
22. Curiously, the District Magistrate, in response to the letter
B dated 22.06.2020 of the Secretary, refused to grant permission to conduct
elections on 12.07.2020 in view of the restrictions imposed under Section
144 of Cr.P.C. The same was intimated by letter dated 10.07.2020.
23. Meanwhile, the newly elected Managing Committee addressed
letters dated 25.06.2020 and 11.07.2020 to the schools run by the Society
C intimating about the change in management of the Society as well as the
schools.
24. We may now advert to the challenge before us in the present
appeal.
D SUBMISSIONS
25. The thrust of the arguments of the appellants is that in terms
of clause 1(c) of the bye-laws of the Society, a person automatically
gets inducted as member of the Society upon submitting application in
the prescribed form along with prescribed fees. As such, the appellants
were validly inducted as members of the Society as they had duly
E
submitted their applications in form prescribed under the bye-laws of
the Society. Reliance was placed upon the dictum of this Court in
Zoroastrian Cooperative Housing Society Ltd. & Anr. v. District
Registrar, Cooperative Societies (Urban) & Ors.9 to contend that the
right to membership in any Society would have to be tested on the
F touchstone of the bye-laws and nothing else.
26. It was urged that in any case 5 out of the 22 persons had
submitted their applications for membership before the requisition of no
confidence had been moved. Whereas, rest of the persons had filed
their applications in December 2016. It was urged that their applications
G for membership were eventually approved on 17.09.2017 after noting
that each one of them was an eminent and well acclaimed person in
educational field. Moreover, the Managing Committee had wide discretion
to induct a member and they did exercise that power bonafide whilst
inducting the appellants. Reliance was placed on the findings of the High
Court
9
to contend that the decision taken by the Managing Committee (to
H (2005) 5 SCC 632
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1189
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
induct appellants) was during the subsistence of its tenure and cannot be A
faulted with. It was also urged that the High Court had noted that there
was no illegality in admitting the members on the eve of elections or at
the end of the tenure of the Managing Committee. Further, there was no
finding by the Courts below that the appellants did not fulfil the
requirements under the bye-laws.
B
27. It was submitted that reliance upon the decision of this Court
in Vipulbhai (supra) by the High Court was misplaced as the said decision
concerned a co-operative society, whereas the Society in this case is
registered under the 1860 Act. Further, it was urged that the said decision
was based on the 97th Amendment to the Constitution of India10, which
had been struck down by a Division Bench of Gujarat High Court in C
Rajendra N. Shah v. Union of India & Anr.11. Reliance was then
placed on the dictum of this Court in Kusum Ingots & Alloys Ltd. v.
Union of India & Anr.12 to contend that though an appeal had been
preferred before this Court against the decision of Gujarat High Court in
Rajendra N. Shah (supra), the same is pending adjudication (vide Civil D
Appeal Nos. 9108-9109 of 2014) and there being no order suspending
the operation of the said judgment, the 97th Amendment is not currently
in existence. Therefore, the decision in Vipulbhai (supra) was
inapplicable. The appellants also relied upon a decision of Delhi High
Court in Mukund L. Abhyankar v. Chief Executive Officer, National
Federation of Urban Co-op. Bank and Credit Societies Ltd. & Ors. 13 E
to urge that the fundamental basis of the decision in Vipulbhai
(supra)stood fully eroded without the 97th Constitutional Amendment.
28. The appellants also submitted that the Authority hastened the
election despite being informed of the pendency of the present appeal.
This was done to defeat the rights of the appellants. It is contended that F
mala fides of the authorities are manifest from the fact that permission
to conduct the election proposed by the Managing Committee was refused
by the District Magistrate in view of the Covid-19 protocol, while the
election scheduled by the Authority during the same time was conducted
in breach of the said protocols. Further, as on the date of elections, the G
electoral college consisted of 52 members including 30 existing members
and the 22 dismembered persons. However, despite pendency of the
10
For short, “the 97 th Amendment”
11
2013 SCC OnLine Guj 2242
12
(2004) 6 SCC 254
13
(2017) 241 DLT 358 H
1190 SUPREME COURT REPORTS [2021] 3 S.C.R.
A present appeal (wherein the rights of the 22 dismembered persons are
under consideration), the Authority conducted elections with electoral of
only 30 members. This was nothing short of abuse of process of law.
29. Per contra, respondent no. 1 contended that the appellants
were aware of the proceedings before the Authority yet chose not to
B challenge its judgment and order. Hence, the appellants are bound by
the findings therein. Resultantly, it is not open to the appellants to assail
the order of the High Court. Further, with the dismissal of SLP (preferred
by the Society, Chairman and Secretary), the order of the High Court
stands confirmed and it cannot be further challenged. In that, the finding
that the Managing Committee inducted 22 persons illegally and arbitrarily,
C also had attained finality. Significantly, the appellants had no right
whatsoever, much less vested right on the date of election and ex-
consequenti no locus to file the present appeal.
30. It was urged that the said 22 persons were intentionally
inducted by the then office bearers of the Society, so as to alter the
D composition of the Society in their favour and to consolidate their control
over the Society. Further, it was submitted that the SLP (filed by the
Society, Chairman and Secretary) was dismissed on 15.06.2020 and on
the same day, the appellants approached this Court by filing fresh appeal
through the same Advocate-on-Record, which clearly shows collusion
E between them. Furthermore, the controversy is about the validity of
induction of the appellants and not their removal. As such, the lis is
inter-se between the Managing Committee and members and the
appellants being outsiders had no causal connection with the Society
whatsoever. Even if the appellants had any vested right, that stood
defeated by the order of the Authority and of the High Court confirming
F the same including this Court.
31. It was then contended that the High Court had rightly held
that in democratically constituted institutions, the office bearers continue
to hold office during the pleasure of the members and they can be
unseated despite any express provision in the bye-laws. Reliance was
G placed upon a decision of this Court in T. Varghese George v. Kora K.
George & Ors.14 to urge that the Managing Committee had no power to
take any policy decision once a no confidence motion is moved, as that
would be against their fiduciary duties towards the Society. It was
14
(2012) 1 SCC 369
15
H (1980) 2 SCC 471
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1191
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
submitted that any decision taken after the no confidence motion is moved A
ought to be tested on the touchstone of ‘legal malice’ or malice in fact,
whilst relying upon the decision of this Court in State of Punjab & Anr.
v. Gurdial Singh & Ors.15.
32. It was also urged that the appellants cannot claim the principle
of open membership as envisaged in Section 22 of the Goa Co-operative B
Societies Act, 2001, to apply to them. For, the respondent-Society is not
a co-operative society. At best, the applications of the 22 members may
be considered afresh.
33. The argument set forth by the Authority is that this appeal is
not maintainable as the impugned order dated 28.05.2020 has attained C
finality upon dismissal of the SLP (Civil) No. 7352 of 2020 (filed by the
Society, Chairman and Secretary). It is urged that upon disposal of Writ
Petition No. 373 of 2018 vide order dated 28.05.2020, the interim order
therein stood vacated and the elections were required to be conducted
since there was no order staying the elections. In fact, the High Court in
its order had observed that elections should be conducted expeditiously. D
It was submitted that the Authority had to conduct elections due to
inaction of the Managing Committee in that regard. It was then urged
that the Authority conducted elections on 25.06.2020, that too one month
after the order dated 28.05.2020, by duly putting the members on 15
days’ notice, which cannot be termed as acting in undue haste. The E
learned Solicitor General, for the Authority elaborated upon Vipulbhai
(supra) to contend that the said judgment had rightly dealt with the
democratic principles, which apply to cooperative societies and other
societies alike. It was submitted that the said judgment is binding and
does not lose its force as the democratic principles were in existence
since a long time and were merely given a constitutional frame by the F
97th Amendment. It was further submitted that in light of the said decision,
no confidence motion is maintainable even in absence of express provision
in that regard in the bye-laws; and the silence in the bye-laws cannot be
treated as a gap. Finally, it was urged that in a democratically governed
body, members can be inducted by the Managing Committee only when G
it enjoys confidence of the members. However, once the requisition of
no confidence was pending, the Managing Committee ought not to have
inducted new members into the Society and more so as many as 22 in
number which would inevitably change the constitution of the Society.
H
1192 SUPREME COURT REPORTS [2021] 3 S.C.R.
A 34. We have heard Mr. Huzefa Ahmadi, learned senior counsel
and Ms. Anshula Grover, learned counsel for appellants; Mr. Tushar
Mehta, learned Solicitor General, Mr. Arun R. Pedneker, learned Standing
Counsel for the State of Goa and Ms. Mukti Chowdhary, learned counsel
for the Authority; and Mr. Vinay Navare, learned senior counsel and
Mr. R.P. Gupta, learned counsel for respondent No. 1.
B
CONSIDERATION
35. At the outset, be it noted that the scope of present appeal is
limited to the question of justness of induction of the appellants as members
of the Society by the then Managing Committee on its way out and
C despite the pending requisition expressing no confidence against it;
including the correctness and sweep of the order passed by the Registrar
and as upheld by the High Court vide impugned judgment, qua the
appellants herein. No other issue decided by the Registrar or the High
Court need be addressed in the present appeal at the instance of these
appellants.
D
36. The High Court, vide impugned judgment, went on to hold
against the Society due to the manner in which the requisition of no
confidence motion moved by the majority of the existing members (18
out of 32) to convene SGBM came to be delayed and frustrated by the
stratagem adopted by the then Managing Committee, who had allegedly
E indulged in mismanagement and maladministration of the affairs of the
Society. That action of the then Managing Committee has been held to
be illegal and bad in law as it was bordering on colourable exercise of
power. Having said that, the High Court then dealt with the issue of
justness of induction of 22 new members (including appellants herein)
F by the then Managing Committee vide decision dated 17.09.2017 and
declared the same as illegal being consequence of illegal action of not
convening the SGBM demanded by the majority of members of the
Society for removal of office bearers and instead hastening the induction
of new members. The finding of the High Court that the decision of the
then Managing Committee dated 17.09.2017 hastening the admission of
G 22 new members whilst no confidence motion was pending, is illegal and
bad in law has become final with the dismissal of SLP filed by the Society
vide order dated 15.06.2020.
37. Before we dwell upon the core issue involved in this appeal, it
is apposite to examine the preliminary objection raised by respondent
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1193
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
No. 1 regarding maintainability of the appeal at the instance of these A
appellants. 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, in our opinion, is tenuous and cannot be sustained. For,
B
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 C
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
D
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 E
of his grievance and for enforcement of his legal rights.
38. In the present case, 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 F
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.
G
39. It is then urged by respondent no.1 that these appellants had
not challenged the decision of the Registrar dated 09.03.2018 before the
High Court and thus had acquiesced of the same. Resultantly, they were
not entitled to maintain this appeal. It is true that the appellants did not
file separate writ petition before the High Court despite the unambiguous
H
1194 SUPREME COURT REPORTS [2021] 3 S.C.R.
A 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 No. 373 of 2018. The reliefs claimed in the stated writ
B
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
C 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. So understood, 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.
D
As a matter of fact, this Court while dismissing SLP (Civil) No. 7352 of
2020 filed by the Society, vide order dated 15.06.2020, had made it amply
clear that if the 22 persons, who have been dismembered, were to file
independent special leave petition(s) questioning the correctness of the
order of the Registrar in setting aside the decision of the then Managing
E Committee dated 17.09.2017 resulting in their being dismembered from
the Society and of the High Court confirming that part of the Registrar’s
order, that challenge could be considered on its own merits. To put it
differently, the limited issue involved in this appeal is expressly kept open
by this Court for being agitated by the appellants. Indeed, this observation
came to be made by this Court whilst rejecting the challenge of the
F
Society and the office bearers of the then Managing Committee to the
decision of the Registrar and of the High Court vide impugned judgment.
Nevertheless, as aforesaid, 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
G their cause in their own rights.
40. Reverting to the merits of the issue involved in this appeal, we
must hasten to add that 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
H Society, being eligible in all respects. They claim to possess the requisite
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1195
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
qualification and had expressed intention to abide by the bye-laws of the A
Society. Their right to be considered for being admitted as members of
the Society cannot be linked to the acts of commission and omission of
the office bearers of the then Managing Committee. Neither the Registrar
nor the High Court has dismembered the appellants on the ground of
being ineligible in any manner or because it has been established that
B
they were the henchmen of the office bearers of the then Managing
Committee. Notably, even the no confidence motion does not mention
that the then Managing Committee wanted to intentionally change the
constitution of the Society (membership pattern) by admitting new
members. In that sense, until contrary is proved the appellants (and two
others) must be regarded as bonafide applicants. Only the decision of C
the then Managing Committee dated 17.09.2017, stands vitiated for the
reason noted by the High Court. Admittedly, at least five appellants had
submitted their applications for being admitted as members of the Society
even before the no confidence motion was moved on 07.11.2016. It is a
different matter that upon consideration of request for admitting as
D
members of the Society, the newly elected Managing Committee may
accept or reject the same on merits. Depending upon that outcome, the
appellants may even resort to further remedies permissible in law.
41. For elaborating this grievance of the appellants, we must advert
to the bye-laws of the Society under which the appellants had submitted
application(s) for being admitted as member of the respondent-Society. E
Bye-law 1(a) postulates that any person irrespective of his race, caste,
religion and sex, shall be entitled to be considered for being admitted as
member upon complying with the conditions specified therein. The other
relevant clause in the bye-laws is clause 1(c), which reads thus:
“1) MEMBERSHIP: F
(c) Members shall be admitted by the Karyakari Samiti only on
an application made in the prescribed form and on payment of the
prescribed fees. Such application form shall be considered only
when it is proposed by a member of the Karyakari Samiti. The
Karyakari Samiti is competent to reject any application without G
assigning any reason therefor.”
42. For the present, it is not necessary for us to dwell upon the
wider question of whether the membership in the respondent-Society is
one of open membership concept or otherwise. Suffice it to note that 22
H
1196 SUPREME COURT REPORTS [2021] 3 S.C.R.
A 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/
B
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
C purpose but the decision was deferred.
43. Be it noted that as per clause 1(c) of the bye-laws, it is the
prerogative of the Managing Committee to admit a person as member
of the Society or to reject his application without assigning any reason
therefor. The eligibility for being enrolled as a member of the Society is
D spelt out in clause 1(a). The further condition in clause 1(c) is of being
proposed by the member of the Managing Committee and submitting
application in the prescribed form and payment of prescribed fee.
44. The problem in the present case is the manner of consideration
of stated applications of appellants (and two others) by the outgoing
E 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.
F 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
G 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.
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1197
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
45. The High Court had adverted to each of the findings of the A
Registrar regarding factual aspects. It is unnecessary to analyse the
same in the present appeal, considering the cause propounded by the
appellants. What is relevant is the view taken by the High Court that the
then Managing Committee was amiss in admitting the 22 new members.
The High Court agreed with the view of the Registrar that only after the
B
outgoing Managing Committee had secured the trust vote and confidence
of the majority of SGBM, it could have proceeded to admit new members.
For, with the issue of no confidence requisition by the majority (18 out of
32), it had lost legitimacy to take any policy decision regarding the
management and administration of the Society, which included induction
of new members. The High Court expounded about the danger of C
resorting to such stratagem — as it was likely to upset the constitution
(membership pattern) of the Society and inevitably strengthen the hands
of the office bearers of the outgoing Managing Committee and enable
them to clung to the power, despite being under a cloud due to expression
of no confidence against them by majority of members vide letter dated
D
07.11.2016.
46. The view so taken by the High Court in the impugned judgment
has been assailed by the appellants. According to them, at least 5
appellants had submitted applications for being inducted as member of
the Society, much before the majority of existing members (18 out of 32)
had moved requisition on 07.11.2016. Even the remaining applicants (17 E
out of 22 including appellant herein) had submitted applications in
December 2016 itself, which were placed for consideration before the
then Managing Committee on 02.01.2017 and finally on 17.09.2017. Until
that date, there was no restrictive order issued by any Court or competent
forum against the then Managing Committee prohibiting it from admitting F
new members. Further, no case has been made out that the appellants
were ineligible to become member of the Society or that they had not
submitted the prescribed form or failed to pay prescribed fees therefor.
Furthermore, there is no finding by the Registrar or in particular by the
High Court that the appellants were the henchmen of the office bearers
of the then Managing Committee. The Registrar as well as the High G
Court have proceeded on the basis of surmise and hypothesis that the
appellants were being inducted as new members to strengthen the hands
of office bearers of the then Managing Committee and to defuse the
H
1198 SUPREME COURT REPORTS [2021] 3 S.C.R.
A threat of removal from the office due to the pending no confidence motion
against them.
47. We find force in the argument of the appellants that 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
B 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.
48. Be that as it may, we now proceed to examine the argument
of the appellants that at least the case of 5 appellants, who had applied
C for grant of membership before the majority of the existing members
had moved no confidence motion on 07.11.2016 be treated differently.
After cogitating over all facets, we are of the considered opinion that it
would be unwise to accede to this submission. We say so because as
noted earlier, at the instance of these appellants it is not permissible to
reopen the findings and conclusion reached by the High Court, as regards
D 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
E 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
F 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
G 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.
H
SWATI ULHAS KERKAR AND ORS. v. SANJAY 1199
WALAVALKAR AND ORS. [A. M. KHANWILKAR, J.]
49. This is precisely the effect of the decision of the Registrar in A
his operative order [paragraph (A)] as applicable to the appellants and
similarly placed two other persons, who are not before us. The High
Court has rightly upheld that conclusion of the Registrar vide impugned
judgment dismissing the writ petition of the Society.
50. In our opinion, however, the Registrar as well as the High B
Court, after so observing, ought to have clarified the position that the
parties (appellants and Society) are relegated to the situation as it obtained
prior to 17.09.2017. That would have been a just and proper order. That
means the applications filed by the appellants and similarly placed two
other persons between September 2016 to December 2016, ought to be
regarded as pending for scrutiny and for being processed by the newly C
constituted Managing Committee after conducting elections, which were
due since October 2016. To this limited extent, the appellants ought to
succeed in the present appeal. We say so because the Registrar as well
as the High Court has not given any finding regarding ineligibility of the
appellants to be member of the Society. In any case, that would be a D
matter to be considered by the newly constituted Managing Committee
in the first instance, on case-to-case basis, on its own merits in accordance
with law uninfluenced by any observation made by the Registrar, the
High Court or for that matter in this judgment. If the decision is adverse
to any applicant, he would be free to pursue further remedies as may be
permissible in law. E
51. To conclude, we uphold the view taken by the High Court that
the decision of the Managing Committee dated 17.09.2017 suffers from
the vice of colourable exercise of power and thus, illegal and bad in law.
The same is non-est in the eyes of law. However, the parties (appellants
and Society) need to be relegated to the stage before 17.09.2017, meaning F
thereby the applications submitted by the appellants and two other
similarly placed persons for grant of membership, be regarded as pending
and/or deemed to be revived in terms of this judgment. Their applications
for grant of membership be considered by the newly constituted Managing
Committee on its own merits in accordance with law. All contentions G
available to the parties in that regard are left open.
52. While parting and for the completion of record, we may advert
to the challenge of the appellants to the continuation of election process
and having been taken forward to constitute the newly elected Managing
Committee despite pendency of this appeal. In light of our above analysis, H
1200 SUPREME COURT REPORTS [2021] 3 S.C.R.
A 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.
B 53. Accordingly, this appeal partly succeeds to the extent of
clarifying/modifying the order passed by the Registrar (paragraph (A)
of his operative order) as affirmed by the High Court, 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
C Committee on its own merits in accordance with law, keeping in mind
the observations made in this judgment.
54. The appeal is disposed of in the above terms. Pending
applications, if any, also stand disposed of. No order as to costs.
D
Divya Pandey Appeal partly allowed.
E
F
G
H
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