* IN THE HIGH COURT OF DELHI AT NEW DELHI % DateofDecision:October^ ,2006 + W.P.(CLNo.l3095/2005 SHRI SAI SEWA DAL (REGD) PETITIONER Through: Mr.Manmohan,Sr. Advocate with Mr.M.B. Singh, Advocate Versus UNION OF INDIA & ORS .... RESPONDENTS Through: Mr.Rajan Sabharwal,Advocate for respondent No.I. Mr.S.D. Kaushik, Advocate for respondent Nos.2 to 4. Mr.A.K. Singla, Sr. Advocate with Mr.R.R. Sahay, Advocate for respondent No.6. CORAM: HON'BLE MR. JUSTICE ANIL KUMAR 1. Whetherreporters of Local papers may be allowed to see the judgment? 2. To be referred to the reporter or not? 3. Whether the judgment should be reported in the Digest? Anil Kumar, J. Rule. 1. The learned counsel for the parties state that no other affidavits are to be filed and the matter be taken up for final disposal. 2. The learned counsel for the petitioner restricts his prayer to appointmentof Mr.JusticeK.Ramamoorthy(Retd.),who is appointedby respondentNo.6 as observer for the election of management committee of respondent No.6 to be held on mcj 13095of2005 Page1 of 29 Digitally Signed By:AMULYA Signing Date:24.08.2023 15:13 Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified A j 6.10.2006,to be appointedas a Court observer/administratorgiving him all necessary andincidentalpowersto ensurefree andfairelectionsof respondentNo.6 andtill then managementof Sai Temple at LodhiRoad,Delhibe also done by him. 3. Brief facts to comprehend the disputes are that the petitioner is a society registered under the Societies Registration Act and is engaged in doing various religious, charitable, social and secular activities and to provide all kind of related facilities to the devotees of all religious institutions, temples, gurudwaras, churches etc. 4. The grievance of the petitioner is that while providing volunteers and charitableservicesin Saitemplelocatedat Lodhi Road which is one of Delhi'soldest templeof Sai Babaand is also knovraas"ChhotaShirdi"they have come acrossgreat illegalities,misuseand embezzlementof funds, donationsand charityworthcroresof rupees. 5. The petitioner contended that it reported the said illegalitiesto concemed authorities and departments but no action has been taken till date and consequently the state of affairs of the temple are going from bad to worse unabated and there is no law or authority to check the public money being swindled away or being misused for personal use by the members of the so called ad-hoc committee of respondent No.6. 6. Accordingto the petitionerthe day to day affairs of respondentNo.6 are being managed illegally, un-authorizedly, arbitrarily and autocratically by so called ad-hoc committee headed by its self styled Honorary secretary Sh.S.K.Kapoorwith the assistance/connivanceof his friends such as Mr.O.P.Sharmawho is working as the manager,and his family members which includes his son Mr.Romi Kapoor. The WP(C) 13095of2005 Page 2 of 29 ^3 A affairs of the temple are being run on the personal whims and fancies of Sh.S.K.Kapoorand his associates and there is no duly elected and constituted managingcommitteeto manage the affairsof the temple becauseneitherthe general bodymeetingnor electionofthemanagingcommitteehas takenplacefor thelastover eight years. According to the petitioner even the authentic list of members of respondentNo.6 is not there and the original and founder members have either expiredorhave shiftedtheirresidenceorhave stoppedcomingto thetempleortaking interest in respondent No.6 society due to arbitrary and illegal activities of \ Sh.S.K.Kapoor. 7. Accordingto the rules and regulationsthe managingcommitteeis requiredto be constituted and elected in the following manner:- " One member for every 10 members of the Samaj subjectto a minimum of 6 and a maximum number of 21 members exclusive of the President and all other office bearers." 8. Accordingto the rules and regulationsof respondentNo.6, the society has founder members, life members, ordinary members and honorary members. The affairs of the respondent No.6 are to be managed by a managing committee. Accordingto the rules and regulationsof respondentNo.6 the managingcommitteeof the Samaj is as follows MANAGING COMMITTEE OF THE SAMAJ: The affairs of the Samaj will be managed and administered by a body which shall be known as MANAGING BODY composed of and shall be constituted as under:- 1. President 2. Vice President (two) (One Senior Vice President and the other Junior Vice President. fVP(C) 13095of2005 Page 3 of 29 One of which Sh.R.S.Chitnis shall be permanent Ex-Officio President not subject to elections, during his life time and so long as he does not cease to be a member of the Samaj.) 3. Secretary 4. Joint Secretary 5. Treasurer 6. Joint Treasurer The ManagingCommitteecomposed of and constitutedwill be elected on the following basis:- "One member for every 10 members of the Samaj subject to a minimum of 6 and maximum number of 21 members exclusive ||^ ofthe Presidentand all otheroffice-bearers." 9. The powers and functionsof the managingcommitteeare also detailedinthe rules and regulations which are as follows:- . "a) The ManagingCommitteeshall manage and administerthe affairs of the Samaj in accordance with the Rules and Bye-laws made hereunder and in furtherance of the objects incorporated in the Memorandum of Association subject to the general control and directions of the General Body of the Samaj and shall have all powers which may be necessary or expedient for the purpose. b) Without prejudice to the generality of the powers conferred by the foregoing sub-rule the managing committee shall have the power or powers:- i. to scrutinise, consider and take decision on application for membership of the Samaj without assigning any reasons; ii. to prepare, plan and execute schemes for the achievement of the objects of the Samaj as embodied in the Memorandum of Association; iii. to receive, to have custody and to utilise funds and money of the Samaj for the achievement of the objects of the Samaj; iv. to engage, appoint and control such staff as may be necessary for smooth and efficient administration, management and control of the affairs of the Samaj and WP(C) 13095of2005 Page4 of 29 institutions established maintained and controlled by the Samaj; V. to enter into agreements for and on behalf of the Samaj; vi. to sue and defend all legal actions against the Samaj on behalf of the Samaj; vii. to appointcommitteesor sub-committeesfor disposalof business of the Samaj or for advice in any matter relating to and connected with the Samaj; viii. to make, adopt and vary from time to time bye-laws for the regulation and for ^y purpose connected with the management and administration of the affairs of the Samaj and for furtheranceof its objects, in particularto make, adopt and vary from time to time bye-laws for conducting the business of the Managing Committee and the Committees or Sub-Committees to be appointed by it; ix. to open an account/accountswith Bank/Banks and operate the same with the joint signatures of the President or Senior Vice President and Treasurer or Joint Treasurer; X. to invest the funds of the Samaj in Government or other approved securitiesand otherwise in profitablebonds, shares and equities; 10. The rules and regulations of respondent No.6 also categorically detail the powers of the general body. They are as under:- "a) All properties movable or immovable or of any other kind shall vest in the General Body. b) For the purpose of carrying out the objects of the Samaj, the General Body shall exercise all the powers and authority of the Samaj not vested in the Managing Committee. c)The General Body may appoint any Committee or Committees with such functions and powers as may be determined by it or by the Rules, Regulations or Bye-laws of the Association and for this purpose any of the functions of the Managing Committee may be allotted to such Committee or WP(C)13095 of2005 Page 5 of 29 a.(. Committees. d) The General Body shall have power to make Bye-laws which are not inconsistent with the Rules and Regulations. e) The General Body shall have power to amend or alter the Rules and Regulations and Bye-laws of the Samaj in the marmerprovided in these Rules and Regulations." 11. Accordingto the rules and regulationsof respondentNo.6 it is the duty of the generalbody of the Samaj andthe managingcommitteeto electnew membersof the managing committeeand office bearers. The elections as detailed in the rules and regulations are as underl ie " It shall be the duty of the GeneralBody of the Samaj and the First Managing Committee to elect new members of the ManagingCommitteeand office-bearers.The retiringmembers will he eligible for re-election. The presentPresidentof the Samaj beingthe foundershallbe a permanent Senior Vice Presidentof the Samaj and will not have to seek re-election during his life time. All members of the Samaj who are life members of the Samaj or have paid membershipsubscriptionsfor a minimumperiod of six months from the date of annual elections will be entitled to vote at the General Body meeting and every member shall have one vote onlyfor the electionof everypost in the Samaj. Only those members of the Samaj will be entitled to seek election or re-election to the Managing Committee who are either Life Members of the Samaj or have paid membership ^ subscriptionfor the wholeperiodofthe year. A member of the Samaj whose membership subscription has been in arrears of three months consecutively will cease to be a member of the Samaj and before he is re-admitted to the membership of the Samaj shall have to pay membership subscription for the whole of the period during which he had ceased to he a member of the Samaj and also for a further remaining period of the year. VACANCY Any casual vacancy in the membership of the First Managing WP(C) 13095 of2005 Page 6 of 29 . \ \ Committee may be filled in by the President. Any casual vacancy in the membership of the subsequent Managing Committee shall be filled up by the Managing Committee. The Managing Committee will function notwithstanding any vacancy or vacancies therein and notwithstanding any defect in its constitution and no act or proceeding of the Managing Committee shall be invalidated by reason of any vacancy or vacancies in the Managing Committee or any defect in its constitution. The Managing Committee will have powers to fill in casual vacancies till the next General meeting." 12. The petitioner contended that in the Sai temple daily donations and charities from devotees in the shape of cash, clothes and ornaments are received on an average to the tune of Rs.1.00 lakh and the offerings are much more on Thursdays. Though the donation boxes are installed but they are neither locked nor they are opened as provided in the Constitution by Sh.S.K.Kapoor who is opening them secretly and privately as per his convenience and consequently except Sh.S.K.Kapoor and his accomplices, no one knows how much donations are actually coming to respondent No.6. According to the rules and regulations of respondent No.6 a definite procedure is prescribed which is as under;- "That every such donation box shall be locked and sealed under the seal of the President or the Secretary of the Samaj and shall be opened every three months in the presence of the President or Senior Vice President, Secretary or Joint Secretary, Treasurer or Joint Treasurer and any two members of the managing committee." 13. The petitioner also highlighted gross irregularities committed in respondent No.6 which is a charitable institution. According to the petitioner true accounts are not maintained of donations and charities and false and manipulated records are made for last many years and there have been numerous cases of swindling, theft, embezzlement etc of the public money. The petitioner categorically stated about theft WP(C) 13095 of2005 Page 7 of 29 -I of Rs.60,000/-by an employee of respondentNo.6, Mr.T.P.Singhas the theft hy Mr.T.P.Singhwas reported by a security agency to local police first instead of Mr.S.K.Kapoor.The local police is alleged to have recoveredthe amount and also registered a case of theft against Mr.T.P.Singhwhich matter was hushed up in connivance with the ad-hoc committee of respondent No.6. 14. The petitioneralso contendedahout misappropriationof funds of temple by the officebearersin July, 1997 and the complaintby Mr.S.S.Gera.Accordingto the petitioner,managementcommitteeofrespondentNo.6 in connivancewithabuilderof LajpatNagarhad embezzledlakhsofrupees.The contractfor construction/renovation of OPD andVishramSadanat AllIndiaInstituteof MedicalScienceswasawardedto the builderin contraventionof the provisionsofthe constitutionof respondentNo.6. The petitionerplaced reliance on the report ofthe charteredaccountantM/s.Singh K.V.Gupta and Company fomiing part of audit report under Section 12A9(b) of Income Tax Act where it was observed that the working of respondentNo.6 is unacceptableas the same is arbitrary,illegaland in contraventionofbye laws ofthe society and mandatory practice and procedure as provided by the Societies Act, IncomeTax etc. Regardingverificationofdonationsthesaidreportsreadsasunder:- Regarding verification of donations it reads as under (on internal page 6 para 2(a) of the report): "We have not verified the donations of valuable items received during the year as no such list of items haS" heen given to us by the Treasurer. Further, no list of individual items approved by the approved valuer has been given to us, so as to indicate total stock of such items lying with the Treasurer. However, a list has heen given to us dated August 8, 1995 by Shri Narender Mohan Jain, approvedvaluers, givingthe sum total value of the items. In the said list, no individual items have heen valued and the sameis not acceptableforthe followingreasons " WP(C)13095of2005 Page8of 29 Further, regarding donation (on page 7 in para 3) it reads as under: "Donations in kind are recorded in the financial books at the value realized which is different from the price quoted by the donor. The vastra as sold at the disoration of the person authorized for sale of Vastra and the rate of discount is not >fixed." And in para 6 on page 7 it records: "We have not physicallyverifiedthe fixed assets of the Samaj as no such records are maintained by the Samaj in spite of our repeatedobservationsin earlieryears" Regardingthe maintenanceof record of expensesthe report in 1 para 8 states as under: "We haveverifiedthe medicalexpensesonlyon the basisof bill of purchaseproducedbeforeus. Stockofmedicinesand X-ray films as on March are not shown in the account as per the past practiceand the same is treated as the expenditurein the year of payment. However,the Samaj has given us Certificate of stock with regardsto quantityof medicinesand X-ray films as on 3H' March, 1996, which we have not been able to verify in the absence of proper records." Withregardto utilizationof funds it says as underin para 12 on page 9: "In the absence of necessaryinformation it is not possible for us to verify whether the income or property of the Samaj has utilized for the benefit of the persons referred to in section 13(3) of Income Tax Act, 1961. We have relied only on the certificate of the Secretary in this regard that no person as referred above have derived any benefit from the use of income • or property of the Samaj." In respect of meeting of the Management Committee the report observers in para 18 on pages 10 as under: "The meetings of the Management Committee have not been conducted in accordance with the provisions of the Bye-Laws of the Society." 15. The petitioner claimed that for last eight years neither the general body meetinghas been held nor electionof managingcommitteehas been held and the so WP(C) 13095of2005 Page9of 29 called ad-hoc committee is having free hand. 16. Inthe circumstancespetitionerclaimedfor appointmentof anadministratoror receiverto take over and manage the day to day affairs of the temple till the new managementcommitteeis electedto manage the affairsofrespondentNo.6 and for directionsto respondentNos.l &2 to take appropriatenecessarylegalactions against respondentNos.3 to 5and ad-hoccommitteeheadedby Sh.S.K.Kapoof. 17. The petitionerfiledapetitionon the premisethatthe petitionerand respondent No.6 are cooperativesocieties,however,subsequentlyon the objectionbeingtakenby the respondentsthe petitionwas amended and in place ofRegistrarofCooperative Societies,RegistrarofSocieties,GovernmentofNCTofDelhiwas impleaded. 18. The respondentNo.6 filed a counteraffidavitof Shri S.K.Kapoorinresponse to the show cause notice alleging himselfto be honorary Secretaryof Sai Bhakt Samaj. Itwas assertedthatrespondentNo.6 isa societyregisteredunderthe Societies RegistrationAct and the Petitionerhas no locus standito file the petitionwith regard to the affairs of respondent No.6 society inasmuch the petitioner is not a member of respondent No.6 society. It was stated that only a member of the society can raise issues about the management of the society. According to respondent No.6, petitioner wants to usurp the respondent No.6 society, which is a religious and charitable society. It was admitted that the present managing committee of respondentNo.6 Societywas electedby a special general body meetingheld on 19"^ July, 1998 as prior to election in 1998, no elections were held since 1991 and considerabledamage was done to the functioningof the society. It was stated that WPfC) 13095 of2005 Page 10 of 29 ) againstsome of themembersof thepreviousmanagingcommittee,FIR No.'?39/1997 had also been registeredand subsequentlypolice filed a report in respectof alleged offenders as untraced, however, the Magistrate concerned directed the police to carry on further investigationwhereafterpolice filed a report dated 15"^ November,2002 and the matter was adjournedfor pre-summoningevidenceon 6"^ July, 2006. Mr. S.K. Kapoor, alleged HonorarySecretaryof respondentNo.6, also relied on a letter dated 2f' June, 2004 alleged to be defamatory by the general secretary of the petitionersocietywho lateronresignedas GeneralSecretaryofpetitionersocietyand apologizedthroughhis letterdated 14"" September,2004. It was contendedthat the writ petitionhas been filed with taintedmotives as the presentmanagingcommittee has taken over the management. 19. Respondent No.6 categorically pleaded that it is neither a state nor instrumentalityof statenor a publicauthorityand, therefore,it is not amenableto writ jurisdictionand in any case no member of respondentNo.6 has requisitionedany meeting and member by and large wants the presentmanagingcommitteeto continue its effort. Emphasis was also led on by respondent No.6 on various charitable and socially useful good work done by it. Referring to various activities carried on by the Honorary Secretary on behalf of respondent No.6, it was pleaded that those activities were possible only with utmost devotion and contributions from the devotees of Shri Sai Baba. Shri S.K. Kapoor in his counter affidavit contended that he is one of the foundermembersand Shri O.P. Sharmaisthe Managerofthe societyappointedby its managingcommittee. Allegationthathissonwas tryingto take over variousmatters pertainingto the societywas not admittedand it was statedthat affairsofrespondent No.6 societyare beingmanagedby aduly electedmanagingcommitteecomprisingits WP(C)13095of2005 jj „j-29 President, Vice President, Honorary Secretary, Joint Secretary, Treasurer, Joint Treasurer and eight members. The allegations regarding misappropriationand mismanagement were denied. 20. The respondentNo.6 also produced the notice dated ll"^ April, 2006 for callinga general body meeting of the Samaj on 14"^ May, 2006 at 10.30 AM. The agendaofthegeneralbodymeetingwas asunder:- > 1. Confirmation of the minutes of the Annual General Body Meeting held on 19"^ July, 1998.(CopyAttached) 2. ReportoftheHony. Secretary.(Tofollow) 3. To approve the Audited accounts for the financial years upto 31" March,2005 alongwith Auditor'sreportareattachedherewith. 4. Consideration of Resolutions, if any proposed. 5. Election of President, Vice President, Hony. Secretary, Joint Secretary, Treasurer, Joint Treasurer and 11 members of the ManagingCommittee,immediatelyafter the GeneralBody Meeting tentatively at 12.30 P.M 6. Any other(s)with the permissionof the Chair. 21. Shri S.K. Kapoor filed another additional affidavit dated 26^*^ May, 2006 deposing that membership was not frozen and members were admitted between 2001 and 2004, however,petitionerfiled an applicationbeing CMNo.5734 of 2006 seeking to restrain respondent No.6 from holding general body meeting and elections of the managingcommittee. Since the electionprocesshas alreadybeen set in motion, by order dated 5"^ May, 2006, the court declined to interfere and adjourned the application. Shri S.K.Kapoor, deponent, contended that elections to five posts. President,Vice President,Secretary,Treasurerand Joint Treasurerwere unopposed WP(C)13095of2005 Page12of 29 c and, therefore,the candidateswere declaredelectedunopposedevenbefore 14"'May, 2006 and the general body meeting and electionsto the remainingpost of General Secretary and 11 exeeutivemembershad to he postponeddue to astay ordergranted by the Court of Civil Judge, Tis Hazari Courts, Delhi. The deponenton behalfof respondentNo.6 also assertedthat one member,Shri AbhayK. Chauhan,was caught on close-circuitcamerapickinga currencynote who filed a eivilsuitbeingNo.968 of 2006 and obtainedan ex parte order. Shri S.K. Kapoorstatedthat for admissionand enrolment of members, approval from the general body is not required and the enrolment and admission of members are within the power of the Managing Committee. Regarding approval of members enrolledin 2000 and 2004, it was statedthat it was not on the agendaof GeneralBody scheduledfor 14"' May, 2006. ( The HonorarySecretaryalso emphasizedthat once the electionprocesshas been put in motion,the same couldnot be interferedand regardingthe interimorderpassedby learned Civil Judge, it was submitted that same was obtained by Shri Abhay K. Chauhanbymis-representationandbymanipulation. 22. In a suitfor injunetionfiledby oneof the membersagainstrespondentNo.6 in whichaninterimorderdated 12'"May, 2006was passed. The operativeportionofthe ^ interim order is as under:- "In the facts and circumstances, I am of the opinion that plaintiff is entitled for interim protection. Accordingly, the application under Order 39 Rules 1 and 2 is allowed and the defendant is directed not to allow members as shown in Annexure A of the plaint to participate in the General Body Meetingscheduledto be held on 14'" May, 2006 for the purposeofapproval of inductionof said members and in eventualityof their names not being approved in General Body Meeting, the defendant is further directed not to allow the said membersto participatein the election of executive committee to be held on the same date. However, nothing said hereinabove shall tantamount to have any expression on the merits of the case. Announced in the open court." WP(C)13095of2005 Page13of 29 j 23. Annual GeneralBody Meetingof M"' May, 2006 was not held for whichthe notice dated ll"^ April, 2006 was given on one of the ground that most of the membersof the managingcommitteehadbeendeclaredelectedunopposed. 24. Anapplicationbeing CMP 8924 of 2006 was filedbya monitoringcommittee of respondentNo.6 for interventionand necessarydirectioncontendingthat when the GeneralBodyMeetingwas convenedon 14"^ May, 2006, none ofthe membersofad- hoc committeewhere Shri S.K. Kapooris allegedto the HonorarySecretaryhad come nor was the returning officer appointed for the election was present. In the circumstances,59 membersof Shri Sai BhakatSamaj who had assembledfor General BodyMeetingdecidedto holdthe-meetingin theirabsenceand appointedMrs.Shalini Uppal to chair the meeting. As the ad-hoc committeewhose HonorarySecretaryis Mr.S.K. Kapoor failed to conduct the election and participate in General Body Meeting, a monitoring committee of nine members was appointed to ensure the holdingof elections. The minutes of the General Body Meetingheld on 14"^ May, 2006 were filed. The minutes incorporatedthat Shri S.K. Kapoormisinterpretedthe order deliberately in order to confuse the members and represented that in order to avoid multiplicityof the proceedings,the GeneralBody Meeting which was to be held at 10.30 am is postponedsine die and thereforethe agenda for GBM of 14"^ May, 2006 also stood postponed whereas the leamed Civil Judge had only directed the names of the members who have not been approvedin the GeneralBody Meetingbe not allowed to participate in the election of the Executive Committee. 25. The minutesrecordedbythe ManagingCommitteealso incorporatedthat Shri M.K. Gupta and Manager of the Samaj, shri O.P. Sharma suddenlyappearedat the WP(C)13095of2005 Page14of 29 -u. venue at 11.15 am and startedrepresentingthat the GeneralBody Meetinghas been stayedby the court. Shri S.K. Kapooralso came afterwardsbut the memberspresent appointed a Monitoring Committee to look into day-to-day affairs of the Samaj includingfinancialaffairs and operationsof the Samaj. On 14"^ May, 2006, it was also resolvedthat new members shown in the directoryof 2006 are per se illegal and againstthe writtenconstitutionofrespondentNo.6 and, therefore,they shouldnot be allowed to participatein the election or General Body Meeting. The Monitoring Committeealso decidedthat the donationboxes shallbe openedand cash etc. shallbe counted in presenceof at least two or three membersof the MonitoringCommittee and the ad-hoc committee shall inform the members of MonitoringCommitteeby givingat leasttwo days' intimation. ri 26. The MonitoringCommitteealso called for a meeting for 6'^ August, 2006. RespondentNo.6 through Shri S.K. Kapoor opposed the said applicationof the MonitoringCommitteecontendingthat a GeneralBody Meetingcan be convenedby the Honorary Secretary as per the decisions of the Managing Committee, by the President or on a requisitionsigned in writing by not less than 30% or 1/10"' members with at least 21 days notice. 27. It was asserted that four weeks' notice is required for calling a General Body A Meeting and Monitoring Committee has no authority to call for General Body Meeting or hold elections and in any case meeting for 6"^ August, 2006 called by notice dated 19"^ July, 2006 which is not a four weeks notice. Regarding14'*^ May, 2006 Meeting, it was stated that the returning officer put the candidates nominations on May, 2006 and after withdrawal of nominations the final list of contestants were put up by the returningofficeron the noticeboard on lO"^ May, 2006 and since JVPfCJ 13095 of2005 Page 15 of 29 therewas no oppositionfor thepost ofPresident,Vice President,Secretary,Treasurer and JointTreasurer,they were electedunopposedand, therefore,the GBM convened for H"' May, 2006 was postponedand also becausean exparte orderof Civil Judge dated 12"" May, 2006 was received therefore, GBM was postponed to avoid multiplicity of litigations. 28. The tvrit petition was thereafteramended by