....

I. NELSON AND ANR.

KALLA YAM PASTORA TE AND ORS.

SEPTEMBER 14. 2006

[S.B. SINHA AND DAL VEER BHANDARI, JJ.)

Constitution of India-Articles 25 and 26-Societies Registration Act, 1860-Tamil Nadu Societies Registration At, 1975-Sections 44 and 53-

Suit filed before High Court to declare elections of a. Society as null and C void-Advocate Commissioner appointed by the High Court held elections and submitted a Report stating that the Society has become defunct-High Court set aside the elections on that ground-Correctness of-Held, State Act provides for mechanism for removal of a defunct Society fiwn the Register of Societies and dissolve the registered Society-It is for the authorities under the Act and not the High Court to look into whe1her a Society has D become defimct-Hence, setting aside the elections on the ground that the Society has become defunct is not valid

A Church, initially registered under the Societies Registration Act, 1860, came to be governed under the Tamil Nadu Societies Registration Act,

1975. The Church runs a large number of schools and hospitals. A suit was E filed against the Church before High Court to declare the elections conducted by its Society as null and void. The High Court appointed an Advocate Commissioner to hold the elections. The Commissioner conducted the elections and submitted a report to the High Court stating that the Society has become defunct The High Court, on the basis of the report, gave directions F to the elected members of the Society to apply for fresh registration with the Registrar of Societies. On non-compliance of the directions, the High Court set aside the elections of the Society. Appellant and one another, who were elected members, filed an application for impleading them as parties to the suit before the High Court. The High Court dismissed the application on the ground that the elections have already been declared null and void. The High G Court appointed an Administrator for managing the Society.

In appi:al to this Court, the appellants contended that the High Court erred in declaring the elections null and void since the Registrar of Societies

219 H

A appointed under the Tamil Nadu Societies Registration Act, 1975 has sufficient powers to inquire into the affairs of a Society and cancel registration or order winding up or remove defunct societies from the Register; that the elections, conducted under the supervision of the Advocate Commissioner, have not been held to be unfair; that the order passed by the High Court on the basis of the purported consent o~ other elected members, without making them B as parties, is a nullity; that the appointment of the Administrator was beyond the jurisdiction of the High Court; and that it violated the fundamental rights of the appellants under Articles 25 and 26 of the Constitution of India.

Allowing the appeals, the Court

HELD: I.I. The Tamil Nadu Societies Registration Act, 1975 provides for the mode and manner in which registration of a society is to be cancelled and winding up of a society and removal of a defunct ri.gistered society from the registers maintained by the Inspector General of Registration. The statutory authority under the Act abdicated itself of its statutory functions. It D was for the statutory authorities to take recourse to such actions as are provided for in the Act and Rules framed thereunder. In the event, the Society became defunct or other statutory requirements were not complied with by the members of the Society, penal measures could hae been taken but in no situation the elections of the office bearers could have been set aside.

1221-E, F; 226-A, B, C, D, El

1.2. Right •o contest an election of an office bearer of the Society is a statutory right of the member thereof. Such a right also exists under the byelaws of the society. Once a valid election was held, the High Court could not have directed setting aside of an election only on the purported ground that it F became defunct. The High Court in a pending suit cc1uld not have done so. It

should have relegated the parties to take recourse to such remedies as are available in law for questioning the validity of 1:he election before the appropriate forum. 1226-E-F; 227-0-E)

Board of Control for Cricket in India and Anr. v. N..:taji Cricket Club G and Ors., 120051 4 sec 741, referred to.

1.3. Keeping in view the interest of the general public, the Court can oversee its functions in case of mismanagement of charitable organisations, although run by minorities. The rights under Articles 25 and 26 of the Constitution of India are not absolute and unfettered. The right to manage H does not carry with it a right to mismanage. 1227-H; 228-AI

...

!. NELSON v. KALLA YAM PASTORAT2[S.B.SINHA, J.] 221

Guruvayoor Devaswom Managing Committee and Anr. v. C.K. Rajan A and Ors., (20031 7 SCC 546, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4123 of2006 .

From the Judgment and Order dated 8.4.2005 of the High Court of Judicature at Madras in CMP Nos. 4646 to 4653 in OSA Nos. 265 to 272 of B 2003.

WITH

Civil Appeal Nos. 4124 and 4122 of2006.

V. Giri, Ajay K. Jain, Dileep Pillai, Sajith P., M.P. Vinod, Dr. A. Francis Julian, Ashwani Bhardwaj, A. Mariarputham, Aruna Mathur and Mini N. Nair (for Mis. Arputham Aruna & Co.) for the Appellants.

T.L.V. Iyer, S. Rajappa, Sumit Kumar, M.A. Chinnasamy and Ambrish

Kumar for the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted.

The Indian Evangelical Lutheran Church ('the Church', for short) has E a large congregation consisting of several pastorates in the Church Council.

It was registered under the Societies Registration Act, 1860 (for short, 'the

1860 Act'). It runs a lerge number of schools and hospitals.

The State of Tamil Nadu enacted 'Tamil Nadu Societies Registration Act, 1975' (for short, 'the 1975 Act'). Section 3 of the 1975 Act specifies the F societies which may be registered thereunder, subject to the exceptions contained in Sub-Section (2) thereof. Section 4 provides for compulsory registration of such societies which are specified therein. The Act contemplated registration of such societies within such period as may be prescribed. Section 5 provides for optional registration. Section 36 provides for the power of Registrar to inquire into the affairs of the registered society. Cancellation of G registration is envisaged under Section 37 thereof. Section 38 provides for cancellation of registration of society carrying on unlawful activities. The effect of cancellation of registration is laid down in Section 39. Section 40 provides for winding up of registered society. In case a society becomes defunct, its name can be removed from the Register maintained by the Registrar H

222 SUPREME COURT REPORTS [:!0061 s1rpp 6 S.C R.

A upon following the procedures laid down therein. Oders passed by the Registrar directing cancellation of registration are appealable under Section 45 thereof. Section 53 of the Act raises a legal fiction that every society registered under the Societies Registration Act, 1860, inter alia. shall be deemed to be registered under the Act and the bye-laws of such socit:ty shall. in so far as they are not inconsistent with any provision of the Act, continue in force B until altered or rescinded. Allegedly, regular election~ were not held. Some

mis-management had also allegedly taken place.

A suit came to be filed by one Rev. M.S. Poomani Raj in the High Court of Judicature at Madras against the Church, Rev. J. Issac Moon. C. Deniel C Rajagamberam and Rev. U. Jacob praying. inter alia. for the following reliefs

"(a) For a declaration that the elections conducted by the third defendant for the Circles. Synods and IELC withvut the assistance and effective participation of the Plaintiff and the fourth Defendant is non est in law and therefore null and void.

(b) Granting permanent injunction restraining the third dd'endant

from functioning as election commissioner of IELC including the Synod and circles of IELC

(c) Granting mandatory injunction directi.1g the fourth defendant E and the plaintiff to act as election commis; ion of the IELC including the synods and circles of IELC and to conduct elections for the

IELC. Synods and circles at all levels or in the alternative appoint an Advocate Commissioner to conduct dections for all the Circles.

Synods and IELC."

F Indisputably, by an order dated 1.12.2003, a~ Advocate Commissioner was appointed to hold elections. Elections were held under the supervision of the said Advocate Commissioner. Whereas :lection in respect of the Ambur Synod was held in December, 2003; that of Trivandrum Synod was held in April/May, 2004. Election of the Nagercoil Synod was held in May, G 2004. Election held in respect of IELC was also hdd on 6.6.2004. The learned Advocate Commissioner, however, submitted a n:port in which he contended that the society has become defunct. A Division Bench of the High Court, opined :

" ..... newly elected officers could not confirm whether the registration H of the Apex Body of IELC under the provisions of the Societies

l. NELSON v. KALLA YAM PASTORA TE [S.B SINHA. J.] 223

Registration Act, 1860 continued to be in force under the provisions A of the new Act, viz., Societies Registration Act, 1975, by periodical renewal, as contemplated under law, as in the absence of any such renewal, the apex body of lELC would itself become defunct.

Consequently, the election conducted to the post of office bearers of lELC would become futile exercise and therefor, it may not be proper B for this Court to approve the election of a defunct society, without regulating the registration, inasmuch as the office bearers of the society also representing the lELC Trust Association, which is said to have been incorporated under the provisions of the Companies Act, as the Trust Association is managing vast properties both movable and immovable, apart from having established and administering several C schools (elementary, middle, secondary and higher secondary) and also hospitals."

The elected members were directed to apply for fresh registration.

Directions were passed by the High Court from time to time. However, by an order dated 22.12.2004, the learned Court proceeded on the basis that all the D elected members were parties before it stating :

"A reading of the repo1i dated 22.12.2004 clearly shows that the list of voters, members of the IELC Apex Body and the synods were not duly registered with the Registrar of Societies and in which event the very conduct of the election as well as the result thereon become E a nullity and lack legal sanctity for want of compliance of the registration of the constitutional bye laws of the Societies with the Registrar of Societies." +

On the aforementioned premise it was directed : F "As brought to our notice by the election officer, all the parties, who participated in the election and appeared before us, are equally responsible for the above lapse. Therefore finding it an absolute necessity to regulate the registration of the respective bodies in accordance with the provisions of the Act and also the entire affairs G administration and management of the society in question, an interim arrangement pending such regularization strictly in accordance with the provisions of the Act including the constitutional bye laws to the respective IELC Apex Body and three synods with the Registrar of Societies has become inevitable, as agreed by the learned counsel H

A appearing on behalf of all the parties in the above appeals, both the elected office bearers and the contested candidates."

The appellant herein and one T.K. Christopher Stalin filed an application for impleading them as parties, inter alia, on the premise that they were validly elected. By reason of the impugned order dated 8.4.2005, the Division B Bench of the High Court dismissed the said petition:;, staling :

"Therefore, even though the petitioner~ claim themsehes as elected members to the respective offices, in view of the report of the learned Advocate Commissioner dated 22.12.2004, referred to above, the very conduct of the elections as well as the results declared thereon shall become a nullity as the respective societies have become defunct.

Considering the fact that the election conducted has already become a nullity, the question of impleading the petitioners, much less recalling the order dated 22.12.2004 made in O.S.A. Nos.265 to 272 of 2003 does not arise."

On or about 17.8.2005, the Division Bench appointed Mr. Justice J.

Kanakaraj as an Administrator with an Associate Member.

The appellants in other appeals did not approach the High Court at all.

E Learned counsel for the appellants contended -

(i) The provisions of the Tamil Nadu Act being self-contained, inter alia, 12roviding for cancellation of registration and passing of orders of winding up of societies and removal of defunct societies, the High Court misdirected F itself in passing the impugned order:

(ii) The elections held under the supervision of the learned Advocate Commissioners having not been held to be unfair, the same could not have been set aside, particularly. when they were not parties thereto;

(iii) The order passed by the High Court on the basis of purported consent is a nullity; and

(iv) The appointment of Administrator wa:; beyond the jurisdiction of the High Court, as thereby the fundamental rights of the appellants under Articles 25 and 26 were violated.

I. NELSON v. KALLA YAM PASTORATE [S.B. SINHA . .I.) 225

Mr. T.L.V. Iyer, the learned Senior counsel appearing on behalf of the A respondents, on the other hand, would submit

(i) As admittedly the term in respect of two Synods, namely, Trivandrum and Nagercoil Synod has already expired and that of Ambur Synod would expire in December, 2006 and that of the Church Council on 7 .6.2007, th is Court should not interfere with the impugned judgment and may direct holding B of elections under the supervision of the Administrators;

(ii) Some of the elected members of the Council having been represented before the High Court and consented to the impugned orders, the appellants herein should not be permitted to take a different stand.

The constitution of the Church is not in dispute. The Church Council consists of President and 15 members. It has 3 Synods. 7 members from each Synod are represented in the Church Council. The Church Council, thus, consists of 36 members. Only 17 of them were before the High Court.

We have noticed hereinbefore the reliefs sought for in the suit.

It is true that elections were being held under the supervision of an Advocate Commissioner for sometime past. We will also assume iltat there had been some mismanagement of the Church of the properties on the part

of the elected representatives. We may also proceed on a further assumption E that the provisions of the 1975 Act had also not been complied with. The question, however, remains that as the appellants before us were not parties in the High Court, the impugned order is whether sustainable in law. The High Court proceeded to set aside all the elections in their entirety on the premise that the society has become a defunct one.

F While passing the impugned orders, the High Court did not notice the relevant provisions of the 1975 Act. The councilors representing the parties, for one reason or the other, did not also bring to the notice of the High Court the effect of the provisions of the 1975 Act, vis-a-vis, the 1860 Act. The society, presumably keeping in view the nature of its activities, was required to be compu.lsorily registered. It is, however, not in dispute that it was so G registered under the Central Act of 1860. Once it is held that the society was registered under the 1860 Act; in terms of Section 53 of the 1975 Act it shall be deemed to be registered thereunder. The effect of a legal fiction is wellknown. Legal fiction created, it is trite, must be given full effect.

226 SUPRE\, IE COLRI RFPOR rs [21.1161Sl.l'P.6 s.c R.

A We have noticed hereinbefore some uf th.: provisions of the 1975 Act.

It. undoubted!}. :s a complew code. It not uniy provides for the mode and manner in whKh r.:gistration of a society i> to be cancelled but also tor winding. up of a >oci.:ty and removal of a ddi.mct registert:d society from the

registt:r~ maintain..:d by the lnsrector Cienaal of Registration. A society need B O<'t necessarily be !idd h• ha1e become dd'unct only because certain statutory provisions have not ~11:en complied with by it.

We fail to und.:rstand as to 1h) the Inspector Genral of Registration. who was impkaded as a party in the suit, also did not bring the relevant provisions of the Tamil Nadu Act tc• ; b,· utice of the High Court. The C statutory authority. whik allow mg the :n1pugned order to be passed by the High Court, abdicated itself of its statutory functions. The society might not be, in fact. registerd as such under the 1975 Act, but. as it was registered under the 1860 Act we hJVt: no other option but to hold that it was deemd to be registered aho under the 1975 Act. Having regard to the provi-.ion' containt:d in Stction 5.1 threuf. once the >ocidy became a society re~.i'L< ~J D under the 197 5 Act. all !ht' umscqunces arising th.:reunder shall cn, uc. lt

wm .. therefor.:. for 1:1.: statutc; r~ authorities to tah.t: recouf', t: to such action, as are provided for in the I lf'5 Act ur tht' Ruks framed th.:reundcr. In thc event. th.: society became defunct or other statutory rquin:merits were not complied with by tbc :nembers oftht: socidy. penal measure' .:uuld have bcc:n E taken but in nu si:uatiJn the election of the office bean:rs could have been

set aside. Right tu contest an election of an office-beara of the society is a statutory right of the member tlreof. Such a right also exists under the byelaws of the society. It is not the case of the rspondnts that the bye-laws uf the society an; invalid in law. Once a valid election was held. the High Court. in our opinion. could not have dm:cted setting aside of an dectiun F only on the purported ground that it became defunct. An almost similar question came up bdore this Court in Board of ( 'umro/ fur Crick<!! in lndiu

& Anr. \. N<!la/i Cricket Cluh & Ors .. !'.:005] 4 SCC 7-l t. wherein this Court. despite its jurisdiction under Article t 4.~ of the ConstitJtion of India. did nut venture to consider th<: validity or otherwi-.e of the dection of the office- (.i beart:rs of BCCI as they had not bt:en impleadcd as rarties therein, stating:

"On 11-10-2004, we had, afkr hearing the :ounsd for the partit:s, observed that if a situation arises this Court would go into the validity of the election of the office-bearers of the Bmird held in the meding dated 29-9-2004, but. as indicated hereinbefore, we did so under a H mistaken belief that the Board would be represented by the new

I. NELSON v. KALLA YAM PASTORATE [S.B. SlNHA.J.] 227

office-bearers and, thus, all parties would be before us. However, it A now stands admitted that the officecbearers either in their personal capacity or official capacity are not before us. They may have notice of the pendency of this proceeding. They may be sitting on the fence and watching the proceedings of this Court. But, unless they are made parties in these proceedings, we would not be in a position to entertain B the dispute as regards validity of the meeting of 29-9-2004 resulting

in the election of the office-bearers. Giving an opportunity of hearing to the elected members in a dispute of this nature is imperative and not a matter of mere procedure, formality or technicality. The election dispute, therefore, must be adjudicated upon by a proper forum."

There is. therefore, no reason as to why the elected members should not be allowed to carry on the activities of the society wherefor they were duly elected. We may, however, hasten to add that when we say so, we do not intend to pronounce on the validity or otherwise of the elections held. If any application has been filed by a person aggrieved for setting aside an election,

the same undoubtedly will have to be disposed of in accordance with law. D

But, for the reasons stated hereinbefore, in our opinion, the High Court m ihe pending suit could not have done so. It should have relegated the pa11ics to take recourse to such remedies as are available in law for questioning the validity of the election before the appropriate forum(s).

We are also not impressed by the submissions made by the learned counsel appearing on behalf of the appellants, in particular by Dr. A. Francis Julian and Mr. A. Mariarputham, that the rights of the appellants under Articles 25 and 26 of the Constitution have been infringed by reason of the impugned judgment. The said appellants had not got themselves impleaded

F as parties in the suit. The specific activities of the Church which will allegedly attract provisions of Articles 25 and 26 of the Constitution have not been specified. How the purported fundamental rights of the members of the society would be infringed, have not been clearly stated. Such a question cannot be permitted to be raised for the first time before this Court in absence of foundational facts. The Church, indisputably, carries on secular activities G also.

Keeping in view the interest of the general public, we see no reason as to why in a case of mismanagement of such charitable organizations, although run by minorities, the Court cannot oversee its functions. The Courts, H

A indisputably, act as guardian of such societies. [See Guruvayoor Devaswom Managing Commillee & Anr. v. C.K. Rajan & Ors., [2003] 7 SCC 546. Even otherwise. rights under Articles 25 and 26 of the Constitution are not absolute and unfettered. The right to manage, it goes without saying, does not carry

1~ ith it a right to mismanage.

B Before us. a report of the learned Administrator had been placed. It now appears that the learned Administrators had succeeded in obtaining exemption from the operation of the 1975 Act. subject to certain conditions. The effect of an order passed by a statutory authority under the 1975 Ai; t, therefore, in our opinion, unless any other order or orders are passed m future by a C competent court of law should be given effect to. It stands admitted that the tenure of the elected members in respect of Trivandrum .ind Nagercoil Synods being two years is over. However, the said tenure is yet to expire in respect of Ambur Synod; the tenure whereof is three years. The tenure of the Church Council again is of three years. It expires on 6.6.2007. We, therefore, are of the opini011 that subject to any other or further order that may be passed by D any forum having appropriate jurisdiction in regard thereto, the elected members in respect of Ambur Synod and Church Council may take over their respective activities from the Administrators. The Administrators shall, however, continue to oversee the functions of the Church Council and Ambur Synod. The e!ections in respect of the Nagercoil Synod and Triv andrum Synods would E furthermore be conducted under the supervision of the ; earned Administrators.

We could request the learned Administrators to see that the elections of the two Synods are held a:; expeditiously as possible. Tht: Chartered Accountant appointed by the learned Administrators shall continue to function and shall submit a report before the Church Council with a copy to the learned

F Administrators. The proceeding, if any, initiated for setting aside election of any of the office-bearers of the Council of Ambur Synod, shall, however, continue and may be disposed of expeditiously.

The Inspector General of Registration would he at liberty to carry on its statutory function(s) and in the event, the office-bearers of the Council have failed to comply with the statutory requirements, an appropriate action G in regard thereto may be taken, as is permissible in law.

It would be open to the plaintiffs, if they so des.ire, to file an appropriate application for amendment of the plaint, having regard to the subsequent events. If such an application for amendment of plaint is filed and allowed, H the appellants before us would be impleaded as parties. The parties are given

l. NELSON v. KALLA YAM PASTORA TE [S.B. SINHA. J.] 229

liberty to approach the High Court for any other or further order(s) or A direction(s).

This appeal is allowed with the aforementioned observations and directions. In the facts and circumstances of this case, however, the parties are directed to bear their own costs.

B.S.

Appeals allowed.