D. Dwarakanantha Reddy vs Chaitnya Bharathi Educational Society ...

J U D G M E N T CIVIL APPEAL No. 2197 OF 2007 Arising out of Special Leave Petition (Civil) No. 288 OF 2007 WITH CIVIL APPEAL No. 2198 OF 2007 Arising out of Special Leave Petition (Civil) Nos. 294 of 2007 DR. B. AVANINDRA REDDY Appellant Versus CHAITNYA BHARATHI EDUCATIONAL SOCIETY & OTHERS Respondents WITH CIVIL APPEAL No. 2196 OF 2007 Arising out of Special Leave Petition (Civil) Nos. 374 of 2007 DR. SRI VUNGARALA VENKATA SRIDHAR RAO Appellant Versus CHAITNYA BHARATHI EDUCATIONAL SOCIETY & OTHERS Respondents C.K. THAKKER, J.

3. Short facts giving rise to the present litigation are that M/s Chaitanya Bharathi Educational Society ('Society' for short) was registered in the year 1979 under the Andhra Pradesh (Talengana Area) Public Societies Registration Act, 1350 Fasli, vide Registration No. 964 of 1979. Its objects as specified in the Memorandum of Association are

(a) To establish, manage, aid and maintain educational and other institutions, to impart education and training at all stages for the promotion of Engineering, Medicine, Pharmacy, Agriculture, Commerce, Literature, Arts and Sciences and Management and other subjects and allied activities for diffusion of useful knowledge and training, specially to instill self-confidence, creative thinking and entrepreneurship in the students and trainees.

(c) To act as a Trust Board to accept endowments, bequests, donations, subscription, grants from institutions, both Private and Public, Corporate bodies, and Government and other transferee of property made to the Society and administer them on the terms agreed to.

5. It is the case of the appellants that in exercise of power under Clause 11(i) of the Articles of Association, the Board of Governors on January 20, 2000 resolved to induct nine persons as Promoter-Members into the General Body of the Society. It was unanimous decision of the Board. It was also their case that the resolution was subsequently accepted and approved by the General Body of the first respondent-society in its meeting dated March 22, 2006. Thus, the appellants had become and continued to remain as Promoter-Members of the society. They are, therefore, entitled to participate in the election of Board of Governors as per the Memorandum and Articles of Association. The appellants stated that they received a caveat from the first respondent-society on October 23, 2006 stating therein that their claim as Promoter-Members of the society and insisting and calling for General Body Meeting was not tenable because the very admission of the appellants as Promoter- Members was null and void. It was further stated by the appellants that on October 24, 2006, 118th Meeting of the Board of Governors of first respondent-society was convened. Under Item No. 4 (any other item), induction of admission of nine persons was questioned. It was resolved that the appellants could not be said to be legally inducted members and their induction was totally illegal and unlawful. The resolution dated January 27, 2000 was merely a 'proposal' with a condition that nine persons would be admitted as members at an appropriate time. The resolution dated March 22, 2006 passed by the General Body of the Society admitting them as Promoter-Members was without authority and null and void. A consequential letter was written by the Secretary of the Society that the admission of the appellants as Promoter-Members was invalid and illegal and they were not eligible to be members of the society.

6. Being aggrieved by the above resolution, the appellants filed Original Petition in the Court of Chief Judge, City Civil Court, Hyderabad for a declaration that they were legally inducted members and were entitled to participate in the management and administration of the Society. A prayer was also made to grant permanent injunction from conducting election to the Governing Body without including the appellants. The appellants also filed application for interim injunction under Order 39, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code') restraining the first respondent from holding election of the Governing Body of the first respondent- society without including Promoter-Members and without giving them opportunity of participating the election process.

8. Being aggrieved by the order passed by the trial Court, the appellants preferred Revision Petitions. The High Court, as observed earlier, dismissed all Revision Petitions holding that the trial Court was right in dismissing the application as no prima facie case had been made out. The High Court also directed the trial Court to dispose of Original Petitions within a period of three months from the date of receipt of the copy of the order. The above order has been challenged by all the appellants in this Court.

(c) DONOR Any person who pays a sum of Rs.50,000/- or more but less than Rs. one lakh shall be called 'Donor' and their membership in the Society is for a period of twelve years only.

(i) Any person who pays Rs.20,000/- or more but less than Rs.30,000/- shall be called 'Member' and is to be treated as Member for a period of twelve years. This class of membership shall be restricted to only two hundred members.

(iii)(a) Firms, Institutions, Associations or Groups of Persons are also entitled for the membership to any of the classes mentioned above and shall be entitled to nominate one representative on their behalf to the General Body and such person once nominated shall represent in the General Body during the tenure of the membership of such Firm, Institution, Association or Group of Persons.

26. In view of the fact that the appellants had not been expelled or removed from Membership, in our considered opinion, the observations in Halsbury's Laws of England have no application to the case on hand.

31. In our opinion, no particulars, much less sufficient particulars, have been placed on record to show that the action taken by the Society was mala fide or had been taken in colourable exercise of power. A question of law which arises for the consideration of the Court is as to whether the appellants had become Promoter-Members. If the answer is in the affirmative, they are entitled to certain rights. But if the answer is in the negative, they cannot be treated as Promoter- Members. Considering the facts and documentary evidence on record, the trial Court found that no prima facie case has been made out. It, therefore, did not grant interim relief. The said order had been confirmed by the High Court. The High Court, in our opinion, rightly observed in the operative part of the order that it was a fit case to decide the main matter and accordingly a direction was issued to decide the Original Petition within three months.

32. For the foregoing reasons, in our opinion, the orders passed by the Courts below cannot be said to be illegal or unlawful. The appeals deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, however, there shall be no order as to costs.

33. Before parting with the matter, we may clarify that we have not entered into correctness or otherwise of the allegations and counter-allegations made by the parties and have decided the controversy on a limited issue as to legality and sustainability of the order refusing interim relief in an application filed by the appellants under Order 39, Rules 1 and 2 read with Section 151 of the Code and we may not be understood to have expressed any opinion on the merits of the matter. As and when the matters will be taken up by the trial Court for hearing, they will be decided on their own merits without being influenced by the observations made in this judgment.

34. The appeals are accordingly dismissed, however, with no order as to costs.