-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. Appeal (Lodging) No.643 of 2006 Appeal (Lodging) No.643 of 2006 Appeal (Lodging) No.643 of 2006 In Notice of Motion No.2457 of 2006 In Suit No.2173 of 2006 1. Royal Western India Turf Club Ltd. 2. B.A. Engineer, Secretary, Royal Western India Turf Club Ltd. 3.(a) Dr.Cyrus S. Poonawalla (b) Shivlal Daga (c) Vivek Jain (d) Sunil Jhangiani (e) Champaklal Zabveri all members of the Managing Committee of Royal Western India Turn Club Ltd. ... ... Appellants [Org.Deft.Nos.1, 2, 3(a), (b), (d), (e) & (i)] Versus 1. Vinayak J. Gaekwad 2.(a) K.N.Dhunjibhoy (b) Shyam Ruia (c) Vijay Shirke (d) Dr.Vijaypath Singhania (e) K.N. Dhunjibhoy (f) Vivek Jain (g) Sunil Jhangiani all members of the Managing Committee of Royal Western India Turb Club Ltd. 3. Committee of Stewards of Royal Western India Turf Club Limited, being (a) Dr.C.S. Poonawalla (b) Shivlal Daga (c) Vivek Jain (d) Sunil Jhangiani (e) Suresh Talwar (f) Masoom Master (g) Champaklal Zaveri 4. Board of Appeal of Royal Western India Turf Club Ltd. (a) A.S. Nariewala -2- (b) Kumar Dalal (c) D.N. Adenwalla (d) Zavary S. Ponawalla (e) Mohit Lalwani (f) Byram Jeejeebhoy (g) A.P. Sinha 5. Kalu Singh, Jamadar of the Plaintiff 6. (a) Dr.D. Swaminathan, Sr.Vet Officer (b) Dr.Praful, Asst.Vet Officer/Sampling in-charge. 7.(a) Shujat Hussain, Sr.Stipendiary Steward (b) Riyaz M. Khan-Stipendiary Steward (c) G. Venkatesan-Asst.Stipendiary Steward 8. Capt. Jamshed Appoo, Horse Owner, Partner of Deft.No.3(a). 9. (a) Ram Shroff (b) Raj Shroff Both Owners of the Glory. ... ... Respondents (Org.Plff and Deft.Nos. 3(c), (f), (g) & (h) and Nos.4 to 10) W I T H Appeal No.608 of 2006 Appeal No.608 of 2006 Appeal No.608 of 2006 In Notice of Motion No.2457 of 2006 In Suit No.2173 of 2006 1. Committee of Stewards of Royal Western India Turf Club Ltd. being (a) Dr.C.S. Poonawala (b) Shivlal Daga (c) Vivek Jain (d) Sunil Jhangiani (e) Suresh Talwar (f) Masoom Master (g) Champaklal Zaveri 2. Board of Appeal of Royal Western India Turn Club Ltd. (a) Kumar Dalal (b) D.N.Adenwalla (c) Zavary S. Poonawalla -3- 3. (a) Dr.D. Swaminathan, Sr.Vet Officer (b) Dr.Praful, Asst.Vet Officer/ Sampling in-charge. 4. (a) Shujat Hussain, Sr.Stipendary Steward (b) Riyaz M. Khan-Stipendary Steward (c) G. Venkatesan-Asst.Stipendary Steward. .. .. Appellants (Org.Deft.Nos.4 & 5 (b), (c), (d), 7 & 8) Versus 1. Vinayak J. Gaekwad .. (original Plaintiff) 2. Royal Western India Turf Club Ltd. 3. B.A. Engineer, Secretary, Royal Western India Turf Club Ltd. 4. Managing Committee of Royal Western India Turf Club Ltd through its members : (a) Dr.Cyrus S. Poonawalla (b) Shivlal Daga (c) K.N.Dhunjibhoy (d) Vivek Jain (e) Sunil Jhangiani (f) Shyam Ruia (g) Vijay Shirke (h) Dr.Vijayapath Singhania (i) Champaklal Zaveri 5. Board of Appeal of Royal Western India Turn Club Ltd. (a) A.S.Nariewala (b) Mohit Lalwani (c) Byram Jeejeebhoy (d) A.P. Sinha 6. Kalu Singh, Jamadar of the Plaintiff 7. Capt. Jamshed Appo, Horse Owner, Partner of Deft.No.3(a) 8. (a) Ram Shroff (b) Raj Shroff both Owners of the Glory. .. .. Respondents (Org. Deft.Nos.1, 2, 3, 5(a),(e),(f),(g), 6, 9, -4- 10) Mr.I.M.Chagla, Senior Advocate with Mr.Z.P.Bharucha, Mr. R.N.Sethna, Mr.K. Kalyaniwala with Mrs.Sanidha Vedpathak i/by M/s.Maneksha Sethna for appellants in Appeal (L) No.643 of 2006 and for respondent Nos.2, 3, 4(a), 4(b), 4(d), 4(e) and 4(i) in Appeal No.608 of 2006. Mr.Janak Dwarkadas, Senior Advocate with Mr.Mohan Bir Singh for respondent No.2(b) in Appeal (L) No.643 of 2006 and for respondent No.4(a) in Appeal No.608 of 2006. Mr.Virag Tulzapurkar, Senior Advocate with Mr.A.S.Doctor i/by M/s.Deven Dwarkadas & Partners for respondent No.1 in both Appeals. Mr.Mahesh Jethmalani, Senior Advocate with Mr.P.G.Sabnis for respondent No.4(e) in both Appeals. Mr.M.P.S.Rao with Mr.Jaydeep Mitra i/by Ms.Trupti Sanghavi for respondent No.5 in Appeal (L) No.643 of 2006 and for respondent No.6 in Appeal No.608 of 2006. Mr.Navroz Seervai, Senior Advocate with Mr.Birendra Saraf and Mr.Hemang Parekh i/by M/s.Shiralkar & Co. for res.Nos.3, 4(b), 4(c), 4(d), 6 an d7 in Appeal (L) No.643 of 2006. Mr.Satish Maneshinde i/by M/s.N.S.Nappinai & Co. for respondent No.8 in Appeal (L) No.643 of 2006 and for respondent No.7 in Appeal No.608 of 2006. ------ CORAM : H.L. GOKHALE & CORAM : H.L. GOKHALE & CORAM : H.L. GOKHALE & J.P. DEVADHAR, JJ. J.P. DEVADHAR, JJ. J.P. DEVADHAR, JJ. DATE OF RESERVATION OF JUDGMENT: 23rd August 2006 DATE OF RESERVATION OF JUDGMENT: 23rd August 2006 DATE OF RESERVATION OF JUDGMENT: 23rd August 2006 DATE OF PROUNCEMENT OF JUDGMENT : 5th September DATE OF PROUNCEMENT OF JUDGMENT : 5th September DATE OF PROUNCEMENT OF JUDGMENT : 5th September 2006 2006 2006 JUDGMENT : (Per H.L. Gokhale, J.) JUDGMENT : (Per H.L. Gokhale, J.) JUDGMENT : (Per H.L. Gokhale, J.) 1. First of the above two Appeals i.e. Appeal (Lodging) No.643 of 2006 is filed by a -5- Company registered under the Companies Act, 1956 which, inter alia, conducts, supervises and oversees all horse racing in Western India (Mumbai and Pune). The 1st respondent to this Appeal is by occupation a Trainer of horses and is permitted to operate in the race course for training the horses for various owners whose horses run the races. The 1st appellant-Club desires that the horse races at its club should be genuine and fair and that there should not be any doping of the horses who run the races. 2. At the time of a race on 23rd March 2006, one of the successful horses was Glory by name and who was trained by respondent No.1. It is alleged by the 1st appellant-Club that at the end of the race when the urine sample of this horse was collected by a Jamadar working under the 1st respondent, he mixed it with water. The urine sample is collected to test whether any horse has been doped. The appellants amongst others charged the 1st respondent for the vicarious liability and after holding an enquiry, suspended his licence as a trainer. The original order of suspension was passed on 26th March 2006 by the Committee of Stewards of the 1st appellant. That order was carried in Appeal to respondent No.4 i.e. Board -6- of Appeal. The Board of Appeal reduced the punishment to suspension of the licence for a period of five and half months by its order dated 28th April 2006. 3. Being aggrieved by this order, the 1st respondent herein (original plaintiff) filed Suit No.2173 of 2006 wherein the first prayer is for a declaration that the above two decisions are null and void. The second prayer is for a permanent injunction restraining the defendants from acting upon and/or enforcing the order dated 28th April 2006. The third prayer is to seek compensation as detailed in Exhibit-AV to the Plaint quantifying the claim at Rs.31,75,368/- with further interest from the date of filing of the Suit till payment. The 1st respondent (original plaintiff) also prayed for an injunction restraining the appellants herein (original defendant No.1) from implementing and enforcing the aforesaid two decisions. 4. The 1st respondent took out a Notice of Motion bearing No.2457 of 2006 for the very interim relief. The Motion was heard by a learned Single Judge for ad-interim order and has been pleased to grant the relief by an order dated 2nd -7- August 2006. The ad-interim order has been granted in terms of prayer clause (d) of the Motion, whereby the appellants herein are restrained from enforcing the said decisions and/or from obstructing the 1st respondent herein from carrying on the activities as a Trainer. It is material to note that though the second impugned order is passed on 28th April 2006, the Suit is filed two and half months later in July 2006. Being aggrieved by this ad-interim order, this Appeal has been preferred by the appellants. The second connected Appeal being Appeal No.608 of 2006 is filed by the Committee of Stewards. The ad-interim order passed by the learned Single Judge has been stayed in the meanwhile. 5. We have heard Appeal (Lodging) No.643 of 2006 filed by the 1st appellant-Club. The Appeal has been argued at length by the Counsel representing the appellants as well as the 1st respondent. Since a decision on this ad-interim order will practically operate as a decision on the Motion itself, the Counsel for the parties have agreed that while deciding this Appeal, this Court may as well dispose of the Motion. They have made their submissions on the Motion accordingly. -8- 6. On behalf of the appellants, it was principally pointed out that the 1st respondent is a licensee and is permitted to come into the premises of the Club only as a Trainer of a horse. With a view to see to it that the races are run fairly, the appellants have set up closed circuit surveillance cameras (CCTV) to monitor various developments concerning the races. On 23rd March 2006, after the particular event was over, this horse Glory was declared to be successful. At the end of the race, the Jamadar attending the horse is supposed to take the horse to an enclosure where the urine sample is collected. In the instant case, there is no dispute that on the CCTV it is seen that the Jamadar was collecting the urine sample and at that time he mixed up some water in the bag in which the sample was collected. It is material to note that in Clauses 2, 4 and 11 of his application for a Trainer’s licence the 1st respondent has accepted the following terms:- "2. I have familiarized myself with the procedures laid down from time to time by the Stewards of the Club for holding enquiries and/or otherwise dealing with -9- matters arising out of and pertaining to racing. I accept the validity and reasonableness of the procedure and agree to be bound and observe all the decisions and orders of the Stewards of the Club as well as the Board to Appeal under the Articles of Association of the Club. 4. I take the full responsibility for the horse in my charge or which will subsequently come into and to be responsible to the Stewards of the Club for my irregularities or breaches in the Rules, Regulations or Notices in connection with any of the horses in my charge. 11. I accept that as a licensee of the Club I have an obligation towards ensuring that racing is properly conducted and administered and I shall not take any solution or step which will have the effect of in any way disrupting or adversely affecting racing. " 7. It is further material to note that before the race is run the Trainer has signed a document -10- confirming certain details. In that document addressed to the Secretary of the 1st appellant-Club, he has accepted that when the race will be run on 23rd March 2006, the urine sample of his horse Glory will be collected in the presence of his Jamadar Kalu Singh Rathod. Thereafter he has declared and certified in Clause-3 thereof as follows:- " I am responsible for the collection of urine sample from my horse and that the urine sample collected from the horse named hereinabove has properly been sealed and packed by the horse’s representative in my presence or in the presence of my representative." 8. In view of the fact that water was seen being mixed up with the urine sample on the CCTV, initially a preliminary enquiry was conducted on the very day by the Stipendiary Stewards into this incident of tampering. The notes of enquiry were recorded. Thereafter a regular enquiry was conducted by the Committee of Stewards on 26.3.2006. At the time of enquiry the Chairman of the Committee informed the 1st appellant about the purpose of the meeting, as to what was the -11- allegation, then recorded the explanation of Jamadar Kalu Singh and the 1st respondent-Trainer as well as the owner of the horse. Upon the insistence of the owner, the second sample of the urine of the horse was collected but the Chairman of the Committee clarified that the second sample would have no legal value. He did observe that everything will depend upon the result of the original urine sample but it was clear to every one that the enquiry was into the allegation of tampering. Therefore, the question to be gone into was not merely as to what would be the result of the sample but whether any such act of tampering was indulged into by the Jamadar and whether he and the Trainer would be responsible for it. After the aforesaid preliminary enquiry was conducted on the same date, a notice for a regular enquiry had been served on the Trainer on 25th March 2006 calling upon him for an enquiry into the incident of tampering with the urine sample of Glory on 23rd March 2006. The transcripts of the earlier enquiry were made available to him. Detailed statements of Kalu Singh and Trainer were recorded when the enquiry was held and their explanation was sought. Before proceeding with the regular enquiry, the Committee of Stewards considered the notes of the -12- preliminary enquiry made by the Stipendiary Stewards amongst other documents. During the enquiry the 1st respondent-Trainer clearly admitted that it was a very stupid act on the part of the Jamadar. At the end of the enquiry, the Stewards decided to withdraw the licence of the Jamadar and not to renew it for a period of five years. As far as the 1st respondent is concerned, they decided that his licence will also be withdrawn and it will not be granted for one year i.e. upto and inclusive of 9th April 2007. 9. The 1st respondent filed an Appeal against the said order before the Board of Appeal and as noted above, the Appeal has led to reduction of punishment to withdrawal of licence and non-renewal till five and half months. 10. When the Motion was heard by the learned Single Judge, she was impressed by the fact that some influence appeared to have been exerted on a member of the Appellate Committee and that a Member thereof was intimidated into deciding the Appeal in a particular manner. The learned Judge was also impressed by the submission that the urine sample had been collected to find out whether there was any prohibited substance -13- therein, implying that the act of dilution by itself was not the misconduct alleged. The learned Judge also held that the appellants did not establish that the 1st respondent was vicariously liable for the act of the Jamadar and the procedure adopted was not in consonance with the principles of natural justice. This led to the learned Judge passing the ad-interim order in terms of prayer clause (d) which restrained the appellants from enforcing their decisions. This order is challenged in the present Appeals. 11. It was submitted on behalf of the appellants that the allegation against the Trainer was that the Jamadar, who was the attendant working under him, tampered with the urine sample. The act of tampering itself was something which required an appropriate action. The fact that the urine sample did not show any damaging input is not something for which the 1st respondent or Jamadar could be exonerated. 12. It was submitted on behalf of the appellants that the 1st respondent was a licensee and his licence could be determined or revoked if any such mis-demeanour was detected. That was a term of the licence which could be seen from the -14- relevant clauses of the licence which are quoted above. 13. Mr.Chagla, learned Counsel appearing for the appellants, submitted that when it comes to taking an appropriate action against the licensee, as a third party, he was on a much weaker footing when compared with an employee as against his employer or member of a Club as against the Club. Even so, in the present case, first a preliminary enquiry was held, thereafter a detailed enquiry by the Committee of Stewards and the 1st respondent was afforded an opportunity to file an Appeal which was also decided by the Authority concerned. In his submission, the principles of natural justice could not be carried to an extreme proposition. The enquiry notes clearly show that the 1st respondent understood the purpose for which the enquiry was being conducted. He had fully participated therein and thereafter the report was made by the Committee of Stewards giving reasons and holding the Trainer also vicariously liable and directed that his licence be suspended. 14. Our attention was drawn to Rule 202 of the Rules of Racing framed by the 1st appellant-Club -15- which are effective from 14th December 2005. Reliance was placed on Rule 202(i) and (viii) of these Rules which read as follows:- " 202. The Stewards and/or the Stewards of the Club shall fine and/or punish and/or warn off and/or exclude and/or eject and/or disqualify and/or suspend or withdraw licences, for any reason or reasons, from any race course or place where these Rules are in force, any of the following persons viz.: (i) Any person who in their opinion has been guilty of any dishonest, corrupt, fraudulent, or improper practice or dishonourable action in connection with racing anywhere. (viii) Any person who conspires or connives with any other person for the commission of, or shall connive with any other person being guilty of any corrupt of fraudulent practice in relation to racing to any place; or " 15. Mr.Chagla then referred us to a judgment -16- of the Chancery Division in the case of Maclean Maclean Maclean vs. The Workers’ Union reported in 1 Ch. (1929) vs. The Workers’ Union reported in 1 Ch. (1929) vs. The Workers’ Union reported in 1 Ch. (1929) page 602 page 602 page 602. That was a case of disqualification of a member of a Trade Union. The plaintiff therein had issued circulars in connection with the election to the Executive Committee of the Trade Union without obtaining approval from the Committee. When he stood for the election to the post of President of the Union, the attention of the Executive Committee was drawn to this fact and the Committee thereafter fined and disqualified him. Before doing that a day was fixed at his convenience for affording him a hearing in regard to the breach of rules. He attended that meeting, stated his case and then withdrew. The Committee thereupon resolved that he had committed a serious breach of the rule in question and then he was excluded from membership of the Union. It was held in that matter that the Court had no jurisdiction to vary or to set aside the decision of the domestic Tribunal if in giving its decision the Tribunal had acted honestly in accordance with its own rules and in good faith. As far as the distinction between a Court of justice and a domestic Tribunal is concerned, what is observed in that judgment is quite apt which reads as follows:- -17- "Speaking generally, it is useful to bear in mind the very wide differences between the principles applicable to Courts of justice and those applicable to domestic tribunals. In the former the accused is entitled to be tried by the judge according to the evidence legally adduced and has a right to be represented by a skilled legal advocate. All the procedure of a modern trial, including the examination and cross-examination of the witnesses and the summing-up, if any, is based on these two circumstances. A domestic tribunal is in general a tribunal composed of laymen. It has no power to administer oath and, a circumstance which is perhaps of greater importance, no party has the power to compel the attendance of witnesses. It is not bound by the rules of evidence; it is indeed probably ignorant of them. It may act, and it sometimes must act, on mere hearsay, and in many cases the members present or some of them (like in English jury in ancient days) are themselves both the witnesses and the judges. Before such a tribunal -18- counsel have no right of audience and there are no effective means for testing by cross-examination the truth of the statements that may be made. The members of the tribunal may have been discussing the matter for weeks with persons not present at the hearing, and there is no one even to warn them of the danger of acting on preconceived views." Thereafter it referred to the observations of Court of Appeal (per Bowen, L.J.) in Leeson vs. Leeson vs. Leeson vs. General Council of Medical Education and General Council of Medical Education and General Council of Medical Education and Registration (43 Ch. D. 366) Registration (43 Ch. D. 366) Registration (43 Ch. D. 366) to the following effect:- " There must be due inquiry. The accused person must have notice of what he is accused. He must have an opportunity of being heard, and the decision must be honestly arrived at if he has had a full opportunity of being heard." 16. The second judgment relied upon by Mr.Chagla was in the case of T.P.Daver vs. Lodge T.P.Daver vs. Lodge T.P.Daver vs. Lodge Victoria No.863, S.C. Belgaum & ors. reported in Victoria No.863, S.C. Belgaum & ors. reported in Victoria No.863, S.C. Belgaum & ors. reported in AIR 1964 SC 1144 AIR 1964 SC 1144 AIR 1964 SC 1144. This was a case where a member -19- of a Masonic Lodge was removed from its membership on the ground that he had committed 12 masonic offences. He was sent the notice of the complaint against him and was informed that he was entitled to be present and to state his defence. The member concerned submitted his answers in extenso to the charges levelled against him. In a special meeting of the Lodge the charges were read out and were put to vote after receiving comments from the members. The members held that each of the charges was proved and then the order excluding him from membership was passed. An Appeal was filed to the District Grand Lodge Bombay and then to the Grand Lodge of Scotland which confirmed that decision. On a Suit being filed to challenge these decisions and the matter being carried to the Apex Court, it referred with approval to the above cited decision in Maclean vs. The Workers’ Union (supra). The Apex Court then observed in paragraph 9 as follows:- " The following principles may be gathered from the above discussion. (1) A member of a masonic lodge is bound to abide by the rules of the lodge; and if the rules provide for expulsion, he shall be expelled only in the manner provided by the rules. -20- (2) The lodge is bound to act strictly according to the rules; whether a particular rule is mandatory or directory falls to be decided in each case, having regard to the well settled rules of construction in that regard. (3) The jurisdiction of a civil court is rather limited; it cannot obviously sit as a court of appeal from decisions of such a body; it can set aside the order of such a body, if the said body acts without jurisdiction or does not act in good faith or acts in violation of the principles of natural justice as explained in the decisions cited supra. " 17. The third case relied upon by Mr.Chagla is concerning a similar Turf Club. This was also a case of cancellation of Trainer’s licence on a drug being administered to a horse. In the judgment of the Privy Council in the case of Lennox Arthur Patrick O’Reilly & ors. vs. Cyril Lennox Arthur Patrick O’Reilly & ors. vs. Cyril Lennox Arthur Patrick O’Reilly & ors. vs. Cyril Cuthbert Gittens reported in AIR (36) 1949 Privy Cuthbert Gittens reported in AIR (36) 1949 Privy Cuthbert Gittens reported in AIR (36) 1949 Privy Council 313 Council 313 Council 313 what is stated in paragraph 15 thereof is quite relevant