HIGH COURT OF ORISSA: CUTTACK. W.P.(C) No. 19826 of 2010 In the matter of an application under Articles 226 and 227 of the Constitution of India. --------- Sri Sanjay Kumar Neura …… Petitioner -Versus- ED FUTA, General Secretary, TRF of RI, one Rotary Centre,1560, Sherman Avenue, Evanston, IL 60201-3698 USA and others. …… Opp. Parties. For Petitioner : M/s. R.Ch. Sarangi, M.K.Pattnaik, S.S.Mohanty, S.Jena and A.K.Mohanty For Opp. Parties : M/s. S.M.Patnaik, R.R.Sahoo, D.Mohanty and S.K.Nanda Mr.B.H.Mohanty. PRESENT: THE HONOURABLE SHRI JUSTICE B.K. PATEL Date of hearing – 13.1.2011 : Date of judgment – 17.3.2011 B.K. PATEL, J. Petitioner has assailed in this writ application legality of the order dated 11.10.2010 passed in F.A.O. No. 105 of 2009 by the learned Additional Special Judge (Vigilance)-cum-Additional District Judge, Bhubaneswar confirming the order dated 19.12.2009 passed in I.A. No. 558 of 2008 by the learned Civil Judge (Junior Division), Bhubaneswar. 2. Petitioner represents a Rotary Club under the Rotary International. Manual of Procedure (MOP) of the Rotary International provides bye-laws and other procedural guidelines for the organization. The opposite parties are office bearers of Rotary International. 3. It is averred that opposite party no. 1 by a letter under an E- mail dated 1.12.2008 instructed the petitioner to discontinue the membership of Sri P.K.Swain, Ex-President of the Club on or before 31.12.2008 for his involvement in financial mismanagement. It was stipulated in the letter that in the event of non-compliance of the direction, membership of the Club would be terminated. The petitioner, it is averred, replied that termination of membership of Sri Swain, without following due procedure provided under the bye-laws, would give rise to legal complications and, accordingly, intimated that termination of membership of Sri Swain was not possible. Opposite parties vide their letter dated 15.12.2008 reiterated their earlier direction, inter alia, threatening to discontinue membership of the Club in case the direction to discontinue membership of Sri Swain was not carried out. The direction with regard to discontinuation of membership of Sri Swain, according to the petitioner, being not in accordance with bye-laws, the petitioner Club did not carry out the direction. However, apprehending termination of membership of the Club, the petitioner instituted C.S. No. 452 of 2008 and filed I.A. No. 558 of 2008 for interim relief under Order 39 Rules 1 and 2 read with Section 151 of the C.P.C.. Learned Civil Judge (Junior Division), Bhubaneswar by order dated 27.12.2008, passed under Order 39 Rule 3 of 2 the C.P.C. granted interim protection and issued notice to the opposite parties to show cause. Opposite parties entered appearance and on their motion, interim relief granted was modified by way of clarification by order dated 27.12.2008 to the extent that the protection was with regard to threat for termination as per letter under the E-mail dated 1.12.2008. In spite of the interim order the membership of the petitioner Club was terminated during the pendency of the suit not on the ground of disobedience of the direction but for non-payment of the dues before expiry of 270 days from the due date. It is asserted by the petitioner that the Club was never in default in payment of dues and, therefore, the termination of the membership of the club is in violation of bye-laws for which the Club is entitled to the interim remedy of restoration of membership by way of mandatory injunction. 4. Opposite party nos. 1 to 3 submitted a joint written statement which was adopted by other opposite parties. In the written statement it is asserted that the suit has become infructuous in view of termination of membership of the Club. Also, maintainability of the suit is challenged on the assertion that termination of the Club was affected on a cause which is independent of cause of action for which the suit has been filed. It is alleged that once the Rotary International terminated the membership of petitioner Club for default in payment of dues and communicated the order of termination dated 9.3.2009, the petitioner is not entitled to any 3 relief claimed in the suit. The action of Rotary International being well within its jurisdiction, cannot be questioned in any forum. In view of the provisions under the bye-laws, Rotary International has every right to suspend and terminate a Club. It is pleaded that letters dated 1.12.2008 and 15.12.2008 contained mere warning and did not give rise to cause of action to bring any action. 5. Learned Civil Judge (Junior Division), Bhubaneswar on consideration of the rival contentions, dismissed I.A. No. 558 of 2008 as infructuous. Learned Appellate Court confirmed the order mainly on the ground that action taken by Rotary International in accordance with provisions under the bye-laws does not warrant adjudication or interference by Court. 6. In assailing orders passed by learned Civil Judge (Jr.Divn), Bhubaneswar and learned Additional Special Judge (Vigilance)-cum- Additional District Judge Bhubaneswar, it was strenuously contended that orders passed by learned courts below are against the mandate of law as provided under Articles 14 and 21 of the Constitution of India. It was argued that there is utter failure in appreciation of materials on record. It was contended that learned Appellate Court has acted in excess of jurisdiction by disposing of the FAO on a ground which was not raised before the learned Civil Judge (Junior Division), Bhubaneswar. It was argued that reliance placed by the learned Appellate Court on an order of 4 the Hon’ble Supreme Court passed in a Special Leave Petition is misplaced. It was further contended that learned courts below failed to take note of the fact that opposite parties victimized the petitioner Club in defiance of order of ad interim injunction. In such circumstances, it was urged, the trial court is required to be directed to issue direction to the parties to maintain status quo in respect of the membership of the petitioner Club as on the date of institution of the suit. 7. Per contra, it was strenuously contended by the learned counsel for the opposite parties that both the learned courts below have rightly held that the prayer of the petitioner has become infructuous for which there is no scope for interference with the orders passed by learned Civil Judge (Junior Division) and learned Appellate Court. Also upon reference to provisions under MOP it was submitted that action taken by opposite parties is well within scope of authority under the bye-laws. 8. Before dealing with rival contentions raised on behalf of the parties, it is pertinent to refer to the relevant provisions under the bye- laws as regards the power and function of the Rotary International which is the Apex Body. Article-3.030.1 provides: “Suspension or termination for failure to pay Dues. The board may suspend or terminate the membership of any Club which fails to pay its dues or other financial obligations to RI or approved contributions to the District fund.” 5 As regards obligations of affiliated Rotary Clubs to pay their dues, it has been provided: “Clubs with Past Due Financial Obligations to RI. All clubs are notified of the Board’s policy on non payment of per capita dues and other financial obligations to RI in the letter transmitting each semi-annual report. (RCP 9.020.1) The termination notification is sent to the club by registered mail, and copies of the notification are sent to the governors and director (s) in the area. (RCP 9.020.3., 9.020.6) RI has adopted the following procedures for collecting club past due financial obligations. 1. Reminder notices to clubs with unpaid financial obligations in excess of US $250 will be sent 90 days (three months) from due date. 2. Termination of clubs with unpaid financial obligations in excess of $250 will occur 180 days (six months) from due date. 3. Any terminated club that has fully paid its financial obligations, which will include a $ 10 per member reinstatement fee for a minimum of 10 members, within 270 days (nine months) from the due date will be reinstated. 4. Unpaid financial obligations of $50 or less will be written off after 270days from the due date. 5. Letters requesting payment will be sent to clubs with balances of $250 or less, but termination will not be mentioned. 6. A record of clubs with consistent patterns of nonpayment under $50 will be maintained. After two cycles of nonpayment, the general secretary has discretionary authority to suspend RI serves to the club. 7. Records of all write-offs of club financial obligations will be maintained for review by the Board at any time.(RCP 9.020.2.) Reinstatement of Clubs Terminated Due to Nonpayment of Financial Obligations. 6 A terminated club may only seek to be reinstated up to one year (365 days) after its termination. When a club seeks reinstatement within 90 days of termination, it must pay the full amount of its outstanding financial obligations at the time of termination, all semiannual dues payments that have continued to accrue during the period between termination and reinstatement, and a US $10 per member reinstatement fee. When a club seeks reinstatement more than 90 days but less than 365 days after termination, it must fulfill all the requirements of a club seeking to be reinstated within 90 days of termination and, in addition, complete an application for reinstatement and pay a US$15 per member application fee. A club seeking reinstatement may only revise its membership list within one year (365 days) of the semiannual period due date. If only partial payment is made by the 365 days day following termination, that amount will be applied to the terminated club’s delinquent financial obligation. Terminated clubs that do not fulfill their entire financial responsibility-i.e., the full amount of their outstanding financial obligations at the time of termination, all semiannual dues payments that have continued to accrue during the period between termination and reinstatement, the application fee, and the reinstatement fee-within 365 days of termination lose their original charter and are not eligible for reinstatement. (RCP 9.020.7.)” 9. The learned Civil Judge (Junior Division), Bhubaneswar dismissed the prayer for temporary injunction on the ground that membership has been terminated by Rotary International due to default in payment of dues. While confirming the said order learned Appellate Court has relied upon observation of Hon’ble Apex Court made in the order dated 2.5.2005 in Special Leave Appeal (Civil) No. 8587 of 2005 to the effect : “In the matter of disputes relating to clubs, ordinary Civil Courts do not interfere and the dispute should be left to be 7 adjudicated upon by the internal mechanism provided by the Constitution of the club, no fault can be found with the view taken by the High Court.” 10. Petitioner Club is a constituent of Rotary International the apex body. Their affairs are guided by the MOP. Provisions extracted above confer right on the Rotary International to suspend or terminate membership of any Club which fails to pay dues or discharge any other financial obligation. Detail procedure has also been laid down providing for consequence that would follow on the termination of membership under Article 3.050. Procedure for appeal of Board action has also been provided under Article 5.030. Thus, the MOP is a self contained code providing for penalty as well as remedy. Petitioner’s Club has not shown any cause for not resorting to remedy available under the MOP before approaching the Court. In such circumstances, the learned Appellate Court relying upon observation of the Hon’ble Supreme Court cited above, declined to interfere with the order of the learned Civil Judge (Junior Division), Bhubaneswar rejecting petitioner’s application for temporary injunction. In the above cited Special Leave Appeal, relating to dispute concerning election to the office of Governor of Rotary International, Hon’ble Supreme upheld the order passed by Delhi High Court declining to exercise supervisory powers under Article 227 of the Constitution of India. Therefore, there is no illegality on the part of the learned Appellate Court in placing reliance on 8 the observations of the Hon’ble Supreme Court made in the order passed on a Special Leave Petition. 11. As has been observed, constitution of the Rotary International provides for internal mechanism for resolution of disputes between the constituents and apex body. Placing reliance on the decision of the Hon’ble Supreme Court in Fuljit Kaur vs. State of Punjab and others: 2010 (3) Civil Court Cases 434, learned counsel for the petitioner strenuously urged that the above quoted observation, having been made while disposing of a Special Leave Petition, is not binding on courts. . In Fuljit Kaur vs. State of Punjab and others (supra), it has been pointed out that dismissal of Special Leave Petition in limine by Hon’ble Supreme Court does not mean that the reasoning of the judgment of the High Court against which the Special Leave Petition has been filed stands affirmed. Such an order does not constitute any declaration of law or a binding precedent. The contention of the learned counsel for the petitioner is fallacious and factually unfounded, in as much as while dismissing the above referred Special Leave Petition the Hon’ble Supreme Court dealt with the nature of order passed by the High Court against which Special Leave Petition was filed. Observations regarding non-interference with disputes relating to clubs which should be left to be adjudicated upon by the internal mechanism provided by the Constitution of the club is a general statement with regard to entertainment of such disputes by Civil Court. Therefore, 9 there is no infirmity on the part of the learned Appellate Court in placing reliance on the observations of the Hon’ble Supreme Court. 12. Learned counsel for the petitioner also argued that the order of the learned Appellate Court refusing to entertain the appeal on merit amounts to denial of statutory right of appeal and deprivation of the petitioner from the protection under Articles 14 and 21 of the Constitution of India. Petitioner, having failed to show any cause for not resorting to internal mechanism for remedy provided under MOP, has no scope to urge that the learned Appellate Court was bound to adjudicate the dispute by entering into factual controversies raised by the petitioner. 13 Learned counsel for the petitioner also placed reliance on T.P.Daver vs. Lodge Victoria: AIR 1963 SC 1144, wherein it has been held that the source of power of associations like clubs to expel their members is the contract on the basis of which they become members, to urge that the petitioner has basically alleged breach of contract against the opposite parties which dispute ought to be decided by the civil court. It was further submitted that membership of the petitioner club was terminated without complying with the provisions under the MOP. However, petitioner has instituted the suit before membership was terminated. Allegation with regard to non-compliance of bye-laws was an apprehension on the basis of letters dated 1.12.2008 and 15.12.2008. Membership of petitioner Club has been terminated on a ground 10 independent of the warning contained in said letters giving rise to an altogether new cause of action. It has been observed by the learned Civil Judge (Junior Division), Bhubaneswar that dispute regarding nonpayment of dues by the petitioner Club has no nexus with pleading in the plaint which is confined to apprehension arising of letters dated 1.12.2008 and 15.12.2008. 14. Learned Civil Judge (Junior Division), Bhubaneswar passed ad interim injunction under Order 39, Rule 3 of the C.P.C. restraining the opposite parties from terminating the membership of the petitioner Club only on the ground mentioned in the said letters. It was specifically observed that the opposite parties were at liberty to take action in accordance with their bye-laws. Admittedly, membership of the petitioner Club has been terminated for alleged default in payment of dues. Provisions relating to termination of membership of a club on such ground and consequences there upon, as extracted above, as well as other provisions relating to appeal of Board action provide mechanism for redressal of dispute notwithstanding the fact that relationship between the apex body and constituent members is contractual. Therefore, decision in T.P.Daver vs. Lodge Victoria (supra) is of not assistance to the petitioner. 15. Petitioner is yet to challenge action of the opposite parties terminating the membership on the ground of non-payment of dues. In the present proceeding, there is no scope to adjudicate the validity of such termination which requires adjudication of factual controversy as to 11 whether petitioner Club was in default of payment of dues. In such circumstances, learned Civil Judge (Junior Division), Bhubaneswar held the proceeding in I.A. No. 558 of 2008 to be infructuous. In Printers (Mysore) Private Ltd. vs. Pothan Joseph: AIR 1960 SC 1156, cited on behalf of the petitioner, it has been observed that it is ordinarily not open to the appellate court to substitute its own exercise of discretion for that of the trial Judge. Considering the facts and circumstances of the case, restrain adopted by the learned Additional Special Judge (Vigilance)-cum- Additional District Judge, Bhubaneswar, in hesitating to interfere with the order passed by the learned Civil Judge (Junior Division), Bhubaneswar does not appear to be unjust or illegal. Learned counsel for the petitioner has failed to point out any circumstance compelling the learned Appellate Court to interfere with the order passed by learned Civil Judge (Junior Division), Bhubaneswar. 16. Learned counsel for the petitioner has placed a number of decisions of the Hon’ble Supreme Court and High Courts to canvass the contention that Courts are not devoid of the power to take into account events which take place subsequent to be filing of the suit. It was submitted by the learned counsel for the petitioner that there is no quarrel over such proposition of law. However, it was, argued that subsequent events must have nexus with the cause of action on which suit has been filed. At the risk of repetation, it may be reiterated that termination of membership of petitioner Club during pendency of the suit on the ground 12 of non-payment of dues gave rise to a cause of action which is altogether different from the cause of action arising out of the warning contained in the letters dated 1.12.2008 and 15.12.2008. 17. In view of the above discussion, there appears no merit in any of the contentions raised on behalf of the petitioner so as to interfere with the orders passed by the learned Additional Special Judge (Vigilance)-cum- Additional District Judge, Bhubaneswar and Civil Judge (Junior Division), Bhubaneswar by invoking jurisdiction under Articles 226 and 227 of the Constitution of India. Therefore, the writ petition is dismissed. ..………………….. B.K. Patel, J. Orissa High Court, Cuttack, Dated 17th March,2010/B. Jhankar 13