Case: Swati Ulhas Kerkar and Ors Vs. Sanjay Walavalkar and Ors

confidence requisition by the majority (18 out of 32), it had lost legitimacy to take any policy decision regarding the management and administration of the Society, which included induction of new members. The High Court expounded about the danger of resorting to such stratagem — as it was likely to upset the constitution (membership pattern) of the Society and inevitably strengthen the hands of the office bearers of the outgoing Managing Committee and enable them to clung to the power, despite being under a cloud due to expression of no confidence against them by majority of members vide letter dated 07.11.2016. 46. The view so taken by the High Court in the impugned judgment has been assailed by the appellants. According to them, at least 5 appellants had submitted applications for being inducted as member of the Society, much before the majority of existing members (18 out of 32) had moved requisition on 07.11.2016. Even the remaining applicants (17 out of 22 including appellant herein) had submitted applications in December 2016 itself, which were placed for consideration before the then Managing Committee on 02.01.2017 and finally on 17.09.2017. Until that date, there was no restrictive order issued by any Court or competent forum against the then Managing Committee prohibiting it from admitting new members. Further, no case has been made out that the appellants were ineligible to become member of the Society or that they had not submitted the prescribed form or failed to pay prescribed fees therefor. Furthermore, there is no finding by the Registrar or in particular by the High Court that the appellants were the henchmen of the office bearers of the then Managing Committee. The Registrar as well as the High Court have proceeded on the basis of surmise and hypothesis that the appellants were being inducted as new members to strengthen the hands of office bearers of the then Managing Committee and to defuse the threat of removal from the office due to the pending no confidence motion against them. 47. We find force in the argument of the appellants that for some acts of commission or omission of the then Managing Committee, the appellants who are otherwise eligible to be enrolled as members of the Society in their own rights need not be denied of the same. They have a right to be considered for being admitted as members of the Society by the newly elected Managing Committee. 48. Be that as it may, we now proceed to examine the argument of the appellants that at least the case of 5 appellants, who had applied for grant of membership before the majority of the existing members had moved no confidence motion on 07.11.2016 be treated differently. After cogitating over all facets, we are of the considered opinion that it would be unwise to accede to this submission. We say so because as noted earlier, at the instance of these appellants it is not permissible to reopen the findings and conclusion reached by the High Court, as regards illegality committed by the then Managing Committee in deferring the SGBM despite the mandate in that regard in terms of clause 3(v) of the bye-laws and instead hastening the process of admitting 22 new members thereby changing the constitution of the Society of only 32 existing members. That finding and conclusion has become final with the rejection of the SLP filed by the Society and the office bearers of the then Managing Committee on 15.06.2020. Resultantly, it must follow that the decision of the then Managing Committee dated 17.09.2017 admitting 22 new members has been rendered non-est. This logic uniformly applies to all the 22 persons enrolled as new members of the respondent-Society. There is no legal basis to segregate the claim of 5 appellants on the basis of date of (prior) applications. Indubitably, merely upon making an application it does not follow that he/she would stand admitted as a member of the Society. The applicant must fulfil other eligibility and procedural conditions and eventually, the Managing Committee must find the candidature fit and deserving for being admitted as a member of the Society. In other words, the decision of the then Managing Committee dated 17.09.2017, as a whole, suffers from the vice of unseemly haste, and thus colourable exercise of power and non-est in the eyes of law. It cannot be viewed differently for 5 appellants just because of prior date of application. 49. This is precisely the effect of the decision of the Registrar in his operative order [paragraph (A)] as applicable to the appellants and similarly placed two other persons, who are not before us. The High Court has rightly upheld that conclusion of the Registrar vide impugned judgment dismissing the writ petition of the Society. 50. In our opinion, however, the Registrar as well as the High Court, after so observing, ought to have clarified the position that the parties (appellants and Society) are relegated to the situation as it obtained prior to 17.09.2017. That would have been a just and proper order. That means the applications filed by the appellants and similarly placed two other persons between September 2016 to December 2016, ought to be regarded as pending for scrutiny and for being processed by the newly constituted Managing Committee after conducting elections, which were due since October 2016. To this limited extent, the appellants ought to succeed in the present appeal. We say so because the Registrar as well as the High Court has not given any finding regarding ineligibility of the appellants to be member of the Society. In any case, that would be a matter to be considered by the newly constituted Managing Committee in the first instance, on case-to-case basis, on its own merits in accordance with law uninfluenced by any observation made by the Registrar, the High Court or for that matter in this judgment. If the decision is adverse to any applicant, he would be free to pursue further remedies as may be permissible in law.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]36. The High Court, vide impugned judgment, went on to hold against the Society due to the manner in which the requisition of no confidence motion moved by the majority of the existing members (18 out of 32) to convene SGBM came to be delayed and frustrated by the stratagem adopted by the then Managing Committee, who had allegedly indulged in mismanagement and maladministration of the affairs of the Society. That action of the then Managing Committee has been held to be illegal and bad in law as it was bordering on colourable exercise of power. Having said that, the High Court then dealt with the issue of justness of induction of 22 new members (including appellants herein) by the then Managing Committee vide decision dated 17.09.2017 and declared the same as illegal being consequence of illegal action of not convening the SGBM demanded by the majority of members of the Society for removal of office bearers and instead hastening the induction of new members. The finding of the High Court that the decision of the then Managing Committee dated 17.09.2017 hastening the admission of 22 new members whilst no confidence motion was pending, is illegal and bad in law has become final with the dismissal of SLP filed by the Society vide order dated 15.06.2020.According to respondent No. 1, the question whether the appellants have been legally and properly admitted as members or not is a lis between the existing members and the Managing Committee, to which the appellants herein are strangers and have no locus in that regard. This argument, in our opinion, is tenuous and cannot be sustained. For, the real question posed at the instance of these appellants is whether they had a right to be considered for being admitted as members of the Society and further whether the order of the Registrar results in dismembering them despite they being validly admitted as members at the relevant point of time vide decision of the then Managing Committee dated 17.09.2017. Indeed, it is open to the existing members to object to any new person being admitted as member of the Society by the outgoing Managing Committee and that would be a lis between the existing members and the outgoing Managing Committee. That, however, does not denude the appellants of cause of action, who desired to be admitted as members of the Society being eligible in all respects, to be considered for such admission. Similarly, if a person has been dismembered by the Society including on account of direction issued by the competent authority, such a person will have independent remedy to assail that decision. In either case, therefore, being affected by such non-consideration or by virtue of dismembering, the aggrieved person would be competent to pursue remedy before the concerned forum for redressal of his grievance and for enforcement of his legal rights.38. In the present case, the appellants were admitted by the then Managing Committee to be members of the Society, but they have been subsequently dismembered only because of the order passed by the Registrar having become final. Further, they were made party to the proceedings before the Registrar, who had set aside the decisions of the then Managing Committee, dated 17.09.2017. Thus understood, the objection regarding maintainability of challenge to the decision of the Registrar and of the High Court by such affected persons (appellants herein) cannot be countenanced.t is true that the appellants did not file separate writ petition before the High Court despite the unambiguous order passed by the Registrar on 09.03.2018 directly affecting them in declaring the decision of the then Managing Committee dated 17.09.2017 to admit them as members of the Society, as illegal, arbitrary and to set it aside on that count. However, undisputedly, that part of the order of the Registrar was assailed by the Society before the High Court by way of Writ Petition No. 373 of 2018. The reliefs claimed in the stated writ petition by the Society were, to also espouse the cause of the appellants herein. For, the appellants were admitted by the then Managing Committee as members of the Society. They came to be dismembered subsequently only because of the order of the Registrar of setting aside the decision of the then Managing Committee dated 17.09.2017 attaining finality. Indubitably, the Society is competent to espouse the cause of its members and more so to justify its actions in the form of decision of the then Managing Committee in office. So understood, the appellants herein cannot be faulted for having directly assailed the decision of the High Court confirming the declaration and subject order of the Registrar resulting in their being dismembered from the membership of the Society. As a matter of fact, this Court while dismissing SLP (Civil) No. 7352 of 2020 filed by the Society, vide order dated 15.06.2020, had made it amply clear that if the 22 persons, who have been dismembered, were to file independent special leave petition(s) questioning the correctness of the order of the Registrar in setting aside the decision of the then Managing Committee dated 17.09.2017 resulting in their being dismembered from the Society and of the High Court confirming that part of the Registrars order, that challenge could be considered on its own merits. To put it differently, the limited issue involved in this appeal is expressly kept open by this Court for being agitated by the appellants. Indeed, this observation came to be made by this Court whilst rejecting the challenge of the Society and the office bearers of the then Managing Committee to the decision of the Registrar and of the High Court vide impugned judgment. Nevertheless, as aforesaid, the rejection of earlier special leave petition filed by the Society and the office bearers of the then Managing Committee will not come in the way of the appellants herein to espouse their cause in their own rights.40. Reverting to the merits of the issue involved in this appeal, we must hasten to add that the appellants cannot be denuded of their right to assail the order of the Registrar and of the High Court denying them of their core right of being considered to be admitted as member of the Society, being eligible in all respects. They claim to possess the requisite qualification and had expressed intention to abide by the bye-laws of the Society. Their right to be considered for being admitted as members of the Society cannot be linked to the acts of commission and omission of the office bearers of the then Managing Committee. Neither the Registrar nor the High Court has dismembered the appellants on the ground of being ineligible in any manner or because it has been established that they were the henchmen of the office bearers of the then Managing Committee. Notably, even the no confidence motion does not mention that the then Managing Committee wanted to intentionally change the constitution of the Society (membership pattern) by admitting new members. In that sense, until contrary is proved the appellants (and two others) must be regarded as bonafide applicants. Only the decision of the then Managing Committee dated 17.09.2017, stands vitiated for the reason noted by the High Court. Admittedly, at least five appellants had submitted their applications for being admitted as members of the Society even before the no confidence motion was moved on 07.11.2016. It is a different matter that upon consideration of request for admitting as members of the Society, the newly elected Managing Committee may accept or reject the same on merits. Depending upon that outcome, the appellants may even resort to further remedies permissible in law.42. For the present, it is not necessary for us to dwell upon the wider question of whether the membership in the respondent- Society is one of open membership concept or otherwise. Suffice it to note that 22 persons (including appellants herein) had applied for being admitted as member of the respondent-Society between 12.09.2016 to 19.12.2016. Notably, 5 appellants (out of 22 persons) had already submitted their application until 18.10.2016 before the stated requisition was moved by 18 out 32 existing members of the Society on 07.11.2016 expressing no confidence in the then Managing Committee. Indisputably, requisition/notice of no confidence makes no reference to the apprehension about any attempt being made by the office bearers of the then Managing Committee to change the constitution (membership pattern) of the Society. The membership applications were placed for consideration of the Managing Committee, in its meeting convened on 02.01.2017 for that purpose but the decision was deferred.43. Be it noted that as per clause 1(c) of the bye-laws, it is the prerogative of the Managing Committee to admit a person as member of the Society or to reject his application without assigning any reason therefor. The eligibility for being enrolled as a member of the Society is spelt out in clause 1(a). The further condition in clause 1(c) is of being proposed by the member of the Managing Committee and submitting application in the prescribed form and payment of prescribed fee.44. The problem in the present case is the manner of consideration of stated applications of appellants (and two others) by the outgoing Managing Committee including by unjustly protracting the requisition for convening SGBM demanded by majority of existing members. For, upon receipt of such requisition, it was the bounden duty of the Secretary of the Society, in terms of clause 3(v), to immediately issue notice to convene SGBM within 15 days from the date of receipt of requisition and to issue 15 days notice to all the members intimating about date of such meeting. The Secretary had issued such notice on 22.11.2016 scheduling SGBM for 07.12.2016. But, before the date of meeting, the Managing Committee deferred the SGBM on some specious objection. That meeting was not held. Instead, the then Managing Committee hastened to take a decision about admitting 22 new members in its meeting held on 17.09.2017 by giving a short notice of only one day. This action did not find favour with the Registrar for the reasons recorded in his decision dated 09.03.2018 including for setting aside the minutes of Managing Committee meeting dated 17.09.2017, some of which commended to the High Court as is discerned from the impugned judgment.45. The High Court had adverted to each of the findings of the Registrar regarding factual aspects. It is unnecessary to analyse the same in the present appeal, considering the cause propounded by the appellants. What is relevant is the view taken by the High Court that the then Managing Committee was amiss in admitting the 22 new members. The High Court agreed with the view of the Registrar that only after the outgoing Managing Committee had secured the trust vote and confidence of the majority of SGBM, it could have proceeded to admit new members. For, with the issue of no confidence requisition by the majority (18 out of 32), it had lost legitimacy to take any policy decision regarding the management and administration of the Society, which included induction of new members. The High Court expounded about the danger of resorting to such stratagem — as it was likely to upset the constitution (membership pattern) of the Society and inevitably strengthen the hands of the office bearers of the outgoing Managing Committee and enable them to clung to the power, despite being under a cloud due to expression of no confidence against them by majority of members vide letter dated 07.11.2016.47. We find force in the argument of the appellants that for some acts of commission or omission of the then Managing Committee, the appellants who are otherwise eligible to be enrolled as members of the Society in their own rights need not be denied of the same. They have a right to be considered for being admitted as members of the Society by the newly elected Managing Committee.48. Be that as it may, we now proceed to examine the argument of the appellants that at least the case of 5 appellants, who had applied for grant of membership before the majority of the existing members had moved no confidence motion on 07.11.2016 be treated differently.After cogitating over all facets, we are of the considered opinion that it would be unwise to accede to this submission. We say so because as noted earlier, at the instance of these appellants it is not permissible to reopen the findings and conclusion reached by the High Court, as regards illegality committed by the then Managing Committee in deferring the SGBM despite the mandate in that regard in terms of clause 3(v) of the bye-laws and instead hastening the process of admitting 22 new members thereby changing the constitution of the Society of only 32 existing members. That finding and conclusion has become final with the rejection of the SLP filed by the Society and the office bearers of the then Managing Committee on 15.06.2020. Resultantly, it must follow that the decision of the then Managing Committee dated 17.09.2017 admitting 22 new members has been rendered non-est. This logic uniformly applies to all the 22 persons enrolled as new members of the respondent-Society. There is no legal basis to segregate the claim of 5 appellants on the basis of date of (prior) applications. Indubitably, merely upon making an application it does not follow that he/she would stand admitted as a member of the Society. The applicant must fulfil other eligibility and procedural conditions and eventually, the Managing Committee must find the candidature fit and deserving for being admitted as a member of the Society. In other words, the decision of the then Managing Committee dated 17.09.2017, as a whole, suffers from the vice of unseemly haste, and thus colourable exercise of power and non-est in the eyes of law. It cannot be viewed differently for 5 appellants just because of prior date of application.49. This is precisely the effect of the decision of the Registrar in his operative order [paragraph (A)] as applicable to the appellants and similarly placed two other persons, who are not before us. The High Court has rightly upheld that conclusion of the Registrar vide impugned judgment dismissing the writ petition of the Society.50. In our opinion, however, the Registrar as well as the High Court, after so observing, ought to have clarified the position that the parties (appellants and Society) are relegated to the situation as it obtained prior to 17.09.2017. That would have been a just and proper order. That means the applications filed by the appellants and similarly placed two other persons between September 2016 to December 2016, ought to be regarded as pending for scrutiny and for being processed by the newly constituted Managing Committee after conducting elections, which were due since October 2016. To this limited extent, the appellants ought to succeed in the present appeal. We say so because the Registrar as well as the High Court has not given any finding regarding ineligibility of the appellants to be member of the Society. In any case, that would be a matter to be considered by the newly constituted Managing Committee in the first instance, on case-to-case basis, on its own merits in accordance with law uninfluenced by any observation made by the Registrar, the High Court or for that matter in this judgment. If the decision is adverse to any applicant, he would be free to pursue further remedies as may be permissible in law.52. While parting and for the completion of record, we may advert to the challenge of the appellants to the continuation of election process and having been taken forward to constitute the newly elected Managing Committee despite pendency of this appeal. In light of our above analysis, this grievance cannot be maintained at the instance of these appellants - as the status of these appellants is merely that of the applicants for grant of membership.