THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY C.R.P.Nos.4782, 4783. 4784 and 5692 of 2009 Date: 16th February, 2010 CRP Nos.4782, 4783 & 4784 of 2009: Between: 1. Sri V.Hanumantha Rao & Ors. …Petitioners and 1. Sri Lagadapati Rajagopal & Ors. …Respondents *** CRP No.5692 of 2009: Between: Sri Lagadapati Rajagopal …Petitioner and 1. Sri V.Hanumantha Rao & Ors. …Respondents *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY C.R.P.Nos.4782, 4783. 4784 and 5692 of 2009 COMMON ORDER: These Civil Revision Petitions arise out of the orders passed on interlocutory applications in O.P.No.1340 of 2009 on the file of III Additional Chief Judge, City Civil Court, Hyderabad. Since common questions of fact and law are involved in all these revision petitions, they are heard together and are being disposed of by this common order. 2. Background facts in a nutshell leading to filing of these revisions are:- Andhra Pradesh Olympic Association (hereinafter referred to as ‘APOA’) is a Society registered under Societies Registration Act (21 of 1860) now governed under the Andhra Pradesh Societies Registration Act, 2001. It has got its own Constitution, Memorandum of Association and By-laws. Clause 19 of the constitution of APOA deals with election process. The Executive Committee decided in its meeting held on 17.05.2009 to conduct elections to the Executive Committee for a term of four years i.e., from 2009 to 2013. The Executive Committee also appointed A.Ramulu as Returning Officer and K.Ramji as Assistant Returning Officer. The Returning Officer issued election schedule for the posts of President, Vice-Presidents, General Secretary, Joint Secretaries, Treasurer, and Executive Committee Members. Election schedule issued by the Returning Officer is as follows: The date of issue of Nomination Forms 12.00 Noon to 4.00 P.M. on 01.06.2009 (Monday) to 08.06.2009 (Monday) Last date and time for receipt of Nominations 5.00 P.M. on 08-06-2009 (Monday) Scrutiny of Nominations 5.00 P.M. on 09-06-2009 (Tuesday) Display of valid Nominations after scrutiny on the Notice Board of A.P. Olympic Association 5.00 P.M. on 10-06-2009 (Wednesday) Last date and time for withdrawals By 4.00 P.M. on 13-6-2009 (Saturday) Display of Final List of Nominations on the Notice Board of A.P. Olympic Association 5.00 P.M. on 16-6-2009 (Tuesday) Elections (if necessary) On 21-06-2009 (Sunday) between 2.00 P.M. and 4.00 P.M. followed by counting on 21st June, 2009 (Sunday) Counting of Votes Immediately after conclusion of voting. Declaration of Results After completing the process of counting on 21-6-2009 (Sunday) Final list of contesting candidates for election to the Executive Committee of the APOA has been notified by the Returning Officer on 16.06.2009 at 5.00 P.M. The final list of contesting candidates is as follows: S.No. Name of the Post No. of Posts S.No. Name of the candidates Name of the Association represented 01. PRESIDENT ONE (1) 1 S.KODANDARAMAIAH VOLLEYBALL 2 LAGADAPATI RAJAGOPAL ATHLETIC 3 K.E.PRABHAKAR ANDHRA KABADDI 02 VICE PRESIDENT FOUR (4) 1. CH.AMAR KUMAR ANDHRA BALL BADMINTON 2. BAJRANG SHARMA AQUATIC 3. DR.BANDA PRAKASH JUDO 4. G.GOPICHAND GUNTUR DOA 5. A.P.JITHENDER REDDY SOFTBALL 6. D.KRISHNA DAS SRIKAKULAM DOA 7. A.MOGILAIAH KARIMNAGAR DOA 8. A.NARSING RAO WRESTLING 9. C.B.R.PRASAD CYCLING 10. K.RANGA RAO ATHLETIC 11. G.M.SAMPATH KUMAR HYDERABAD DOA 12. S.M. SULTAN TABLE TENNIS 13. L.VENKATARAM REDDY VOLLEYBALL 14. DR.S.VENUGOPALA CHARY ADILABAD DOA 03 GENERAL SECRETARY ONE (1) 1. B.K.HARANATH HYDERABAD CARROM 2. K.JAGADISHWER YADAV HYDERABAD KABADDI 04 JOINT SECRETARIES THREE (3) 1. CHERUKURI SATYANARAYANA ARCHERY 2. P.MALLA REDDY RANGA REDDY DOA 3. MACHA RAMALINGA REDDY WOMEN CRICKET 4. E.MUKESH ATYA PATYA 5. S.R.PREMRAJ SEPAK TAKRAW 6. B.VENKATRAMAIAH WEIGHT-LIFTING 05 TREASURER ONE (1) 1. K.P.RAO KRISHNA DOA 2. RAMPERSHAD SRIVASTAV ROLLER SKATING 06. EXECUTIVE COMMITTEE MEMBERS (DOA) FIVE (5) 1. R.NARAYANA REDDY ADILABAD DOA 2. K.PADMANABHAM E.G. DOA 3. N.RAJESHWER REDDY MAHABOOBNAGAR DOA 4. T.RAJU MEDAK DOA 5. M.A.RAWOOF KURNOOL DOA 6. R.SURYANARAYANA VIZIANAGARAM DOA 7. M.SWAMY CHARAN WARANGAL DOA 06 (B) EXECUTIVE COMMITTEE MEMBERS (SSA) TEN (10) 1. BENNY FRANCIS TELANGANA AMATEUR BODY BUILDERS 2. T.HARSHA VARDHAN PRASAD TAEKWONDO 3. J.JAIRAJ KORFBALL 4. B.KAILASH YADAV JUDO 5. P.KANTHAIAH HYDERABAD HOCKEY 6. P.MALLESHA POWERLIFTING 7. PARAG WADHAVKAR WUSHU 8. PHANIRAJ PAMPATI FENCING 9. A.PRASANNA KUMAR REDDY WOMEN HOCKEY 10. N.POTHURAJU RAMAKRISHNA ANDHRA BODY BUILDING 11. R.D.PRASAD ATYA PATYA 12. M.RAMAKRISHNA AQUATIC 13. M.A.SALEEM TELANGANA AMATEUR BODYBUILDERS 14. R.SATYANARAYANA CYCLE POLO 15. S.SOMESHWAR RAO NETBALL 16. K.SURYANARAYANA WEIGHTLIFTING 17. R.VENKATA RAO ANDHRA BALL BADMINTON 18. K.VIJAYA PRASAD REDDY HYDERABAD BALL BADMINTON 3. In the meanwhile a suit being O.S.No.723 of 2009 on the file of the Junior Civil Judge, Visakhapatnam, came to be filed by Visakha Olympic Association represented by its President Sri T.Harshavardhan Reddy to stall the election scheduled on 21.06.2009. One K.P.Rao, Consultant and Secretary, Krishna District Olympic Association also filed O.P.No.1170 of 2009 on the file of the Chief Judge, City Civil Court, Hyderabad, under Section 23 of the A.P. Societies Registration Act, questioning the entire election process commenced by the Returning Officer- A.Ramulu. Visakha Olympic Association and K.P.Rao failed to get any interim orders in the proceedings initiated by them. There was no legal hurdle for holding the election on 21.06.2009. A General Body meeting was convened on the same day. A.Ramulu-3rd respondent rescued himself from acting as Returning Officer. The General Body seemed to have requested Indian Olympic Association Observer Sri Gurbir Singh to act as Returning Officer in place of A.Ramulu. Election as scheduled was not held. The General Body took up various items of agenda including the election to the Executive Committee. Some of the members in the General Body proposed the names of the candidates as office bearers of APOA, for the election of which schedule had already been given, and all the office bearers of APOA were stated to have been elected unanimously. The entire process of electing office bearers of APOA was stated to be in the presence of Gurbir Singh; who has been nominated as independent observer on behalf of the Indian Olympic Association. V.Hanumantha Rao, S.Kodanda Ramaiah, A.Narsinga Rao and Sri M.A.Rawoof have filed O.P.No.1340 of 2009 on the file of III Additional Chief Judge, City Civil Court, Hyderabad challenging the legality and validity of, and the mode and manner in which the election of the President and the General Secretary of APOA was held in Annual General Body Meeting dated 21.6.2009. They also moved I.A.No.2362 of 2009 under Order XL read with Sections 94 and 151 CPC to appoint a Receiver by suspending the self- declared alleged unanimous election of the respondents 1 and 2 (Lagadapati Rajagopal and K.Jagadishwer Yadav) to office bearer posts of President and Secretary of APOA pending disposal of the O.P.; I.A.No.2360 of 2009 under Sections 36 to 39 of the Specific Relief Act read with Sections 94 and 151 CPC to grant ad-interim injunction restraining the respondents 4 and 5 not to grant affiliation/recognition to the self-declared alleged unanimous election of the respondents 1 and 2 to office bearers posts of President and Secretary of APOA pending disposal of the O.P.; and I.A.No.2361 of 2009 under Sections 36 to 39 of the Specific Relief Act read with Sections 94 and 151 CPC to grant ad-interim injunction restraining respondents 1 and 2 or any of their nominees from operating, withdrawing or meddling with the funds of APOA lying in the respondents 6 and 7 Banks pending disposal of the O.P Whereas, Lagadapati Rajagopal-1st respondent in the O.P., filed I.A.No.2850 of 2009 under Sections 7 and 8(1) of the Arbitration and Conciliation Act, 1996 read with Section 21(1) of CPC with a prayer to dismiss the O.P. in view of the arbitration clause contained in Clause 27 of the Constitution of APOA and specific bar contained in Sections 7 and 8(1) of the Arbitration and Conciliation Act, 1996. 4. On behalf of the petitioners in all the I.As, 16 documents were marked as Exs.P-1 to P-16 and on behalf of the respondents, two documents were marked as Exs.R-1 and R-2. On considering the material brought on record and on hearing the counsel appearing for the parties, the learned III Additional Chief Judge, City Civil Court, Hyderabad, by a common order dated 18.08.2009 dismissed all the applications. Hence, the petitioners in O.P.No.1340 of 2009 have filed CRP Nos.4782, 4783 and 4784 of 2009 assailing the orders passed in I.A.Nos.2362, 2361 and 2360 of 2009 respectively and whereas, the 1st respondent in O.P.No.1340 of 2009 has filed CRP No.5692 of 2009 assailing the order passed in I.A.No.2850 of 2009. 5. Heard Sri Unnam Muralidhar Rao, learned counsel appearing for the petitioners in C.R.P.Nos.4782 to 4784 of 2009 and Sri K.G.K.Prasad, learned counsel appearing for the 1st respondent in C.R.P.Nos.4782 to 4784 of 2009 and petitioner in C.R.P.No.5692 of 2009. Sri S. Satyam Reddy, learned counsel appearing for the 2nd respondent in C.R.P.Nos.4782 to 4784 of 2009 adopted the arguments of Sri K.G.K.Prasad. 6. The parties will hereinafter be referred as they are arrayed in O.P.No.1340 of 2009. 7. Learned counsel appearing for the petitioners (petitioners in O.P.No.1340 of 2009) submits that the Returning Officer having issued election schedule ought not have given a go-bye to the procedure contemplated in the election schedule. A further submission has been made that the successor in office of the Returning Officer has to commence the proceedings from where his predecessor left. Once the election schedule has been issued, it is impermissible for the general body to cancel election of office bearers of APOA through ballot papers and put it as one of the items of agenda in the general body meeting. The learned counsel took me to the provisions of the Constitution of APOA. Much emphasis has been laid on Clause 19 of the Constitution of APOA, which reads as hereunder: “19. ELECTION PROCESS: i) The Executive Committee shall decide on the election schedule and appoint a returning officer for the purpose. ii) The General Secretary shall, as per the resolution of the Executive Committee, send notices to all the eligible members, i.e, the members in good standing, as per clause 9, and not otherwise disqualified, enclosing thereto the list of eligible voters, election schedule, nomination forms and the address of the returning officer to whom the nominations are to be sent. iii) The notice shall be despatched to the official address of the members and members of the Executive Committee by registered post with acknowledgement due or delivered personally obtaining acknowledgement, at-least 21 days before the date of the scheduled meeting. iv) The postal receipt of registration or acknowledgement of service of notice shall be deemed to be conclusive and final evidence of despatch and non-receipt of the notice sent so, shall not be a ground for questioning the election held thereafter. v) The acknowledgement by the returning officer in the prescribed form shall be the only evidence for the receipt of nomination form. vi) A candidate, contesting for one office shall not be entitled to contest for another office. vii) Employees of Sports Authority of Andhra Pradesh and Sports Authority of India are not eligible to seek election to the Executive Committee of A.P. Olympic Association or to the Executive Committee of its affiliated units. viii) In case of a contest, the returning officer shall prepare a ballot paper in consultation with the General Secretary. ix) The elections are to be held, by the Returning Officer on the floor of the General Body Meeting of the Association specifically convened for the purpose. Counting is to be carried out in the General Body Meeting and the results of the elections shall be declared there only. The Returning Officer is empowered to appoint Assistant Returning Officers of his choice, from amongst the non- contestants, for assisting him in conducting the elections. The results declared are to be signed by the returning officer and also are to be countersigned by the President of the General Body meeting. The result/results so announced shall be final and binding on all members concerned. x) Voting by proxy is not permissible. xi) Entry to the General Body meeting shall be restricted only to the eligible members in good standing and on production of identification cards issued for the purpose.” The learned counsel would further contend that since election of the respondents 1 and 2 is not in accordance with the provisions of the Constitution of APOA, they are to be restrained from acting as the President and the General Secretary respectively pending O.P.No.1340 of 2009 and a Receiver is to be appointed to manage the affairs of APOA pending the O.P., and that the lower Court has failed to exercise its discretionary power properly and therefore, the same is required to be corrected by this Court in exercise of supervisory jurisdiction under Article 227 of the Constitution of India. 8. In support of his submissions reliance has been placed on the following decisions: 1) Indian Potash Ltd. Vs. Potash Research Institute of India [1] 2) The Church of North India V. The Anglican Church of India[2] (Patna High Court) 3) K.Murugan Vs. Fencing Association of India3 4) Gegong Apang and others Vs. Sanjoy Tassar4 5) A.P. Foot Ball Association Vs. District Foot Ball Association5 6) Manohar Lal Chopra Vs. Raj Bhadur Rao Raja Seth Hiralal6 7) Shavax Vs. Masood Hosain7 8) Naresh Chandra Vs. District Magistrate, Nainital8 9) Shridhar Misra Vs. Jaichandra9 10) Ujjal Vs. Netai Chand Koley10 11) N.Radhakrishnan Vs. Maestro Engineers and others11 12) G.S.Mander Vs. Indian Olympic Association12 13) Andhra Evangelical Luthern Church, Guntur Vs. B.Syamsundar and others13 14) Natraj Studios (P) Ltd. Vs. Navarang Studios14 15) Rajkot Municipal Corporation Vs. State15 16) Jamiruddin Ansari Vs. Central Bureau of Investigation16 17) State of U.P Vs. Tipper Chand17 18) Yeswant Vs. Usha Kumar18 19) Union of India Vs. Naresh Chand19 20) Industrial Credit and Investment Corporation of India Ltd. Vs. Karnataka Ball Bearings Corporation Ltd.20 9. Sri K.G.K.Prasad, learned counsel appearing for the 1st respondent in C.R.P.No.4782 to 4784 of 2009 and the petitioner in C.R.P.No.5692 of 2009 submits that in view of Clause 27 of the constitution of APOA, the dispute among the members of the APOA is required to be settled through arbitration, and, therefore, the O.P filed by the petitioners invoking the jurisdiction of the Court is to be rejected at the threshold. Reference to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 is peremptory in nature and where an arbitration agreement exists, the Court has to direct the parties to go for arbitration. He would also submit that general body of the association of APOA is the supreme authority and the resolutions passed by the general body cannot be put to judicial scrutiny and none of the members of the annual general body meeting can be permitted to question the resolutions passed on 21.06.2009 including the election of the office bearers of the association. He would further submit that the general body is competent to appoint a successor-in-office of Ramulu, who rescued himself from discharging his duties as Returning Officer and as the members of the general body of APOA elected the office bearers unanimously, their election cannot be questioned by any of the members of the association on whatsoever ground may be. In elaborating his argument, learned counsel would contend that the provisions of Section 23 of the Andhra Pradesh Societies Registration Act, 2001 have to yield to the provisions of Section 8 of the Arbitration and Conciliation Act, 1996 and in which case reference of disputes among members to the arbitrator is mandatory. The learned counsel would also submit that the power of superintendence conferred on the High Court under Article 227 is very limited and in the given facts and circumstances, the trial Court exercised discretion properly in dismissing the applications filed by the petitioners seeking appointment of receiver and restraining the respondents 1 and 2 from discharging the functions as President and General Secretary and therefore, the orders passed by the trial Court do not warrant interference by this Court in exercise of powers under Article 227 of the Constitution of India. 10. In support of his submissions, reliance has been placed on the decisions of the Supreme Court in Thirumuruga Kirupananda Variyar Thavathiru Sundara Swamigal Medical Educational and charitable Trust Vs. State of Tamilandu21, Agri Gold Exims Ltd.Vs. Sri Lakshmi Knits & Wovens22, Rashtriya Ispat Nigam Ltd. Vs. Verma Transport Co.23 and M/s.Jhabbu Mal Jang Bahadur Vs. Nanak Chand Aggrawal and another24 . 11. Learned counsel contends that the 3rd petitioner-A.Narsing Rao has filed memo as well as petition before the District Judge to dismiss the O.P, in so far as he is concerned, and in which case, C.R.P Nos. 4782 of 2009, 4783 and 4784 of 2009 arising out of orders passed in I.A.No.2362 of 2009, I.A.No.2361 of 2009, I.A.No.2360 of 2009 in O.P.No.1340 of 2009 respectively on the file of the III Additional Chief Judge, City Civil Court, Hyderabad are liable to be dismissed. Copies of the memo as well as the petition filed by Narsing Rao before the District Court have been placed on record. Learned counsel appearing for the petitioners in C.R.P.Nos.4782 to 4784 of 2009 filed counter memo on 10.12.2009 with a prayer to treat the three C.R.Ps to have been filed only by petitioners 1, 2 and 4. Subsequently, the learned counsel appearing for the petitioners placed on record another memo withdrawing the earlier counter memo along with a copy of the petition filed by Narsing Rao-3rd respondent in the trial Court. Since the petitions filed by Narsing Rao are stated to be pending in the trial Court, I have chosen to ignore the memos and counter memo filed by the parties for the purpose of deciding these revisions on merits. 12. I do not want to burden the judgment by referring the proposition of law laid down in the judgments cited by the learned counsel appearing for the parties. It is suffice to refer some of the judgments cited by the learned counsel. 13. In Shridhar Misra Vs. Jaichandra (9 supra), the Allahabad High Court held that ordinarily the Civil Court will not interfere with the internal management of a Society registered under the Societies Registration Act at the instance of some of the members of the Society. But this rule is subject to the following exceptions: (1) where the impugned action is ultra vires the Society; (2) the act complained of constitutes a fraud; and (3) where the impugned action is illegal. If a case falls under any of these exceptions, it is open to some of the members of the Society to file a suit in the Civil Court challenging the act done in the name of the Society. 14. In Agri Gold Exims Ltd. Vs. Sri Lakshmi Knits & Wovens (22 supra), the Supreme Court held that in view of proviso to Section 8 of the Arbitration and Conciliation Act, 1996 wherever arbitration agreement exists, the Court is under obligation to refer the parties to arbitration. 15. In Rashtriya Ispat Nigam Ltd. v. Verma Transport Co., (23 supra) , the Supreme Court considered the distinction between Section 34 of the repealed 1940 Act and Section 8 of 1996 Act and held as hereunder: Section 34 of the repealed 1940 Act employs the expression `steps in the proceedings’. Only in terms of Section 21 of the 1940 Act, the dispute could be referred to arbitration provided the parties thereto agreed. Under the 1940 Act, the suit was not barred. The Court would not automatically refer the dispute to an Arbitral Tribunal. In the event, it having arrived at a satisfaction that there is no sufficient reason that the dispute should not be referred and no steps in relation thereto was taken by the applicant, it could stay the suit. Section 8 of the 1996 Act contemplates some departure from Section 34 of the 1940 Act. Whereas Section 34 of the 1940 Act contemplated stay of the suit; Section 8 of the 1996 Act mandates a reference. Exercise of discretion by the judicial authority, which was the hallmark of Section 34 of the 1940 Act, has been taken away under the 1996 Act. The direction to make reference is not only mandatory, but the arbitration proceedings to be commenced or continued and conclusion thereof by an arbitral award remain unhampered by such pendency. Section 8 of the 1996 Act is peremptory in nature. In a case where there exists an arbitration agreement, the Court is under obligation to refer the parties to arbitration in terms of the arbitration agreement. 16. The proposition of law laid down in Abdul Kadir Shamsuddin Bubere Vs. Madhav Prabhakr Oak and another[ AIR 1962 SC 406] and Haryana Telecome Ltd. Vs. Sterlite Industries (India) Ltd. [ AIR 1999 SC 2354] has been referred with approval in N.Radhakrishnan Vs. Maestro Engineers and others [12 supra], and it has been held as hereunder:- “Sub-section (1) of Section 8 provides that where the judicial authority before whom an action is brought in a matter, will refer the parties to arbitration the said matter in accordance with the arbitration agreement. This, however, postulates, in our opinion, that what can be referred to the Arbitrator is only that dispute or matter which the Arbitrator is competent or empowered to decide”. 17. In Andhra Evangelical Luthern Church, Guntur Vs. B.Syamsundar and others (13 supra), a learned Single Judge of this Court considered Section 23 of the A.P. Societies Registration Act, 2001 and observed as hereunder:- “ The Andhra Pradesh Societies Registration Act, 2001 is a comprehensive enactment, which deals with the registration, management, administration, dissolution and winding up of the societies in the State of Andhra Pradesh. The provisions of the present Act govern the activities of such societies in all aspects. In view of the language of sub-section (2) of section 32, the activity of those societies registered under the repealed enactments also is governed by the provisions of the new Act of 2001. Section 23 of the Act deals with the disputes regarding the management. The disputes arising among the “committee” which is defined to mean a body of the persons to whom the management of the society is entrusted by its bye-laws or the members of the society in respect of any matter relating to the affairs of the society is required to be resolved under the provisions of either the Arbitration and Conciliation Act, 1996 or by filing an application to the District Court concerned. Therefore, in my view, the jurisdiction of the Civil Courts to entertain the disputes, which would fall within the ambit of Section 23 of the Act, is by a necessary implication barred. The dispute involved in the present case is in my view squarely falls within the ambit of Section 23 of the Andhra Pradesh Societies Registration Act, 2001 extracted above. The legal principle regarding the exclusion of the jurisdiction of the Civil Court fell for consideration of their Lordships of the Supreme Court in the decision reported in Venkataraman & Co. Vs. State of Madras [AIR 1966 SC 1089]. A Constitutional Bench of majority held as follows: “If a statute imposes liability and creates an effective machinery for deciding questions of law or fact arising in regard to that liability, it may, by necessary implication, bar the maintainability of a civil suit in respect of the said liability….” 18. M/s. Jhabbu Mal Jang Bahadur Vs. Nanak Chand Aggrawal (24 supra), it has been held that whether a matter should be referred to arbitration or not will also be a difference arising out of the agreement capable of being resolved by arbitration. Paragraph 3 of the judgment needs to be noted and it is thus:- “ I have heard Mr.Ahluwalia. It appears to me that the present arbitration court even be covered by the original arbitration clause because in every difference one party is in the right and the other is in the wrong, and it is only when there has been an effective adjudication that the right to arbitrate under a clause like this ceases to exist: Chandan Mull Vs. Donald Cambell (1919)23 Cal WN 707 at p.713 (PN HL). Moreover, the Courts below have overlooked