Mr. Debnath Ghosh, Adv., Mr. Sushovit Dutt Majumder, Adv., Mr. Sarosij Dasgupta, Adv., Mr. Souvik Ganguly, Adv.

1. This present appeal arises out of a judgment and order dated February 20, 2019 passed by the learned Additional District Judge, 15th Court, Alipore, South 24 Parganas, in Misc. Case (Arbitration) No. 79 of 2018.

The Factual Background

2. The appellant no. 1, i.e. the Indian Golf Union, is a society registered under the West Bengal Societies Registration Act, 1961 and is a federation of all the golf associations in the different states in India. The respondent no. 1, i.e. West Bengal Golf Society, is also a society registered under the West Bengal Societies Registration Act, 1961 and is a union or federation of certain golf clubs in the State of West Bengal. The respondent no. 1 was a member association of the appellant no. 1.

3. The appellant no. 1 issued a notice dated May 4, 2018 for an Extra-ordinary General Meeting ('E.G.M.') of its members, which included the respondent no. 1, to be held on June 6, 2018. The main purpose of this meeting was to amend the Rules and Regulations (2014) of the appellant no. 1. The significant changes brought about in this E.G.M. to the Rules and Regulations (2014) was the mode of settlement of disputes and the criteria for affiliation of a State Golf Association with the appellant no. 1. The existing dispute resolution mechanism in the Rules and Regulations (2014) was replaced by Rule 66 of the Rules and Regulations (2018). Both the old and the new Rules on dispute resolution are set out herein below:-

whom parties to the disputes in the Union will select one arbitrator each and the third arbitrator out of the said panel will be mutually agreed upon by the two arbitrators. The arbitration proceedings should be completed within the period specified under the Arbitration Act or within the time extended by the arbitrators with the consent of the parties."

Similarly, the old Rule 2(c) of the Rules and Regulations (2014) specifying the criteria for membership, was replaced by the new Rule 2(c) of the Rules and Regulations (2018), both Rules are set out below:-

The Rules and Regulations (2018), after being passed in the E.G.M. of June 6, 2018, were filed before the Registrar of Societies, Government of West Bengal on June 7, 2018. The Registrar took them on record on August 24, 2018.

4. The respondent no. 1 was denied membership of the appellant no. 1 on the basis of the new Rule 2(c) of the Rules and Regulations (2018) of the appellant no. 1 as introduced by the said E.G.M. held on June, 6, 2018. Being aggrieved by this, the officials of the respondent no. 1 sent multiple letters to the Registrar of Societies, Government of West Bengal on June, 8, 2018, July 17, 2018, November 26, 2018 and November 29, 2018. Thereafter, the respondent no. 1 sought to invoke arbitration under Rule 70 of the Rules and Regulations (2014) by a letter dated December 12, 2018.

5. The respondent no. 1 allegedly found from the website of the appellant no. 1 that an Annual General Meeting ('A.G.M.') of the appellant no. 1 was to be held on December 15, 2018. The respondent no. 1 also allegedly found that this notification for an A.G.M. to be held on December 15, 2018 was dated December 22, 2018.

6. Thereafter, the respondent no. 1 filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the learned District Judge at Alipore, 24 Parganas, South in Misc. Case (Arbitration) No. 79 of 2018. In this application, the respondent no. 1, inter alia, alleged that: (i) The E.G.M. dated June 6, 2018 and notified on May 4, 2018 was void and illegal, being in contravention of the Rules and Regulations (2014) of the appellant no. 1; (ii) the enclosure to the notice dated May 4, 2018, which contained the Rules and Regulations (2014) and the proposed amendments to it in tabular format, was deceptive since it misrepresented the Rules and Regulations (2014), and, therefore, the placing of the amendments to the Rules and Regulations (2014) before the Registrar for taking on record amounted to fraud on the part of the appellants; (iii) despite the respondents' repeated requests for certified copies of the Rules and Regulations (2018), the said Rules of 2018 were not made available to them with mala fide motive; (iv) the respondent no. 1 had sent multiple letters to the Registrar of Societies pointing out these irregularities, in response to which the Registrar of Societies had on multiple occasions directed the appellant no. 1 to furnish an appropriate 6 response with the respondent no. 1 whilst sending a copy of the same to the Registrar; (v) on one occasion, in response to the Registrar's direction dated June 15, 2018 for furnishing a response by the appellant no. 1 to the allegations made by the respondent no. 1 in its letter to the Registrar dated June 8, 2018, one Bhanwar Singh, supposedly the General Manager of the appellant no. 1, sent a letter dated June 25, 2018 mainly denying the right of the respondent no. 1 to question the propriety of the E.G.M. on June 6, 2018 due to respondent no. 1 not being a member of the appellant no. 1; (vi) however, the Honorary Secretary of the appellant no. 1 by a letter dated July 2, 2018 stated that this aforementioned letter of June 25, 2018 had not been issued or approved by the Governing Council of the appellant no. 1; (vii) the alleged notification of the A.G.M. to be held on December 15, 2018 was supposedly notified on December 22, 2018 along with a list of the Electoral College excluding the respondent no. 1; (viii) the notified A.G.M. was illegal and wrongful, inter alia, firstly, because it contravened Rule 14 of the Rules and Regulations (2014), secondly, because there was no decision to hold such a meeting in the last Governing Council meeting of the appellant no. 1 held on July 7, 2018 and, thirdly, because there was no notice in accordance with Rule 18 of the Rules and Regulations (2014).

7. The respondent no. 1 in its Section 9 application cited Rule 70 of the Rules and Regulations (2014) as the arbitration agreement between the parties covering the dispute between them and, inter alia, 7 sought injunction against the appellant no. 1 from: (i) holding its A.G.M. on December 15, 2018 and/or any other date in violation of the Rules and Regulations of the appellant no. 1; (ii) holding or conducting any election of the Office Bearers or to the Governing Council in the A.G.M. to be held on December 15, 2018; (iii) giving effect or further effect to the purported notice of the A.G.M. allegedly dated December 22, 2018; (iv) acting in furtherance of the said notice and from approving the accounts for the financial year 2017-2018 without approval of the accounts for the financial year 2016-2017 in any manner whatsoever; (v) acting and/or taking any steps in pursuance of the resolutions and/or decisions to be adopted and/or passed at the A.G.M. to be held on December 15, 2018. Finally, the respondent no. 1 also sought, inter alia, that the Registrar of Societies, West Bengal, be directed to submit a photocopy of all documents filed by the appellants to the said Registrar in connection with the taking on record of the purported amendments made to the Rules and Regulations (2014) of the appellant no. 1 in the E.G.M. of June 6, 2018 within 3 days.

8. The learned Trial Judge passed an order dated December 14, 2018 granting interim relief to the respondent no. 1 and restraining the appellant no. 1 from giving any effect to the purported notice dated December 22, 2018 and from holding any A.G.M. till the disposal of the issue of the ad-interim injunction, which would be taken up by the court below in the next date. The Trial Judge also stated in this order that so far 8 as the maintainability point was concerned, it would be taken up for consideration at a later date.

9. After such an order was passed by the learned Trial Judge, the appellants filed an appeal, being F.M.A. No. 14 of 2019, against the said order in this Hon'ble Court. The Division Bench of this High Court passed an order dated January 7, 2019 stating that the parties were in agreement that no useful purpose would be served by the said appeal being taken up, since the entire matter, including the point on the maintainability of the petition, could be worked out before the court of first instance. The order of the Division Bench stated that it did not seek to prejudice either side and that the court of first instance would be entitled to decide the matter, including the point on the maintainability of the petition, in accordance with law and free of any impediment. Thereafter, the appellants appealed against this order of the Division Bench in the Hon'ble Supreme Court as well. The Supreme Court disposed of the appeal on February 18, 2019, directing the Trial Court to pronounce judgment within the period of 3 days from the date of such order.

10. In the meantime, a written objection was filed in the Trial Court by the appellants to the Section 9 application preferred by the 9 respondents. In the written objection, the appellants stated, inter alia, that:

matter of this arbitration proceeding even if the present proceedings were assumed, for the sake of argument, to be maintainable.

11. In response to the written objection, the respondents filed a rejoinder, which specifically denied each of the allegations made in the written objection and stated that:

1 from being a member of the appellant no. 1 as a State Golf Association.

12. The appellants, in the Trial Court, also filed a supplementary affidavit disclosing the names of the 8 golf clubs recognised by the appellant no. 1 in West Bengal, as found in the website of the appellant no. 1 along with the report of accounts of the appellant no. 1 for the year ending March 31, 2010 and March 31, 2015 respectively.

13. The respondents filed a rejoinder to the supplementary affidavit on behalf of the appellants. The said rejoinder specifically denied of all the allegations made in the supplementary affidavit and stated that 5 out of the 8 golf clubs disclosed by the appellants to the members of the appellant no. 1 could not qualify as such under the Rules and Regulations (2014) of the appellant no. 1. It was also stated that such golf clubs were 14 Army Environmental Parks and Training Associations and not 'Golf Clubs', as defined by Rule 1(a) of the Rules and Regulations (2014), with their being only 3 golf clubs in the State of West Bengal.

14. On consideration of the materials on record and the submissions made by the parties, the learned Trial Judge passed the impugned order dated February 20, 2019, the relevant portions of the said impugned order are reproduced herein below:-

15. Mr. S.N. Mookherjee, learned Senior Counsel for the appellants, submits that the conclusion arrived at by the learned Trial Judge that dispute had cropped up between the parties with regard to the eligibility of the respondent no. 1 for membership of the appellant no. 1 under the Rules and Regulations (2018) of the appellant no. 1 was based on an incorrect fact since the Rules and Regulations (2018) were not pending final approval before the Registrar of Societies, contrary to what was held by the learned Trial Judge. Mr. Mookherjee submits that in the written objection filed before the learned Trial Judge, the appellants had disclosed the approval granted by the Registrar of Societies under the 16 West Bengal Societies Registration Act, 1961 (hereinafter the "1961 Act"). He submits that the records show that the Rules and Regulations (2018) were filed before the Registrar on June 7, 2018 and were taken on record on August 24, 2018, with intimation being sent to the appellant no. 1, meaning that the said Rules (2018) have statutory effect under Section 9(4) of the 1961 Act. Hence, Mr. Mookherjee submits, the learned Trial Judge could not have held that the Rules and Regulations (2018) were pending final approval before the Registrar of Societies.

16. The learned Senior Counsel submits that this is further proved by the production of the records relating to the approval granted to the Rules and Regulations (2018) by the Registrar of Societies on September 5, 2019 in this Hon'ble Court pursuant to an order of this Hon'ble Court dated August 28, 2019. Therefore, Mr. Mookherjee submits, the directions of the learned Trial Judge are liable to be set aside, and the appellant no. 1 cannot be restrained from holding an Annual General Meeting in accordance with the amended Rules and Regulations (2018) as filed with the Registrar of Societies. This is argued to be more so because the Delhi High Court by an order dated December 12, 2018 in a writ petition, being W.P. (C) No. 6179 of 2018, has not interdicted any election or A.G.M. of the appellant no. 1 and has specifically provided that the A.G.M. and the result of the election in the said A.G.M. of the appellant no. 1 would be subject to final decision on the writ petition. 17

17. Mr. Mookherjee argues that though the respondents did not file an appeal and/or cross-objection against the impugned order, extensive arguments have been made by the respondents regarding the E.G.M. on June 6, 2018 along with the notice convening the same and the resolutions passed thereat. Mr. Mookherjee argues that the respondents cannot be permitted to raise such arguments. He states that there is no challenge to the said E.G.M. and/or the resolution passed therein in the Section 9 proceedings in the court below.

18. Mr. Mookherjee argues that it would be evident from the Section 9 application made by the respondents, that no prayer challenging the validity of the said E.G.M. had been made. In fact, Mr. Mookherjee argues, the only relief that had been sought in the Section 9 application was a restraint order against the appellant no. 1 from holding the A.G.M. to be convened on December 15, 2018 and/or any other date and/or from holding or conducting any election of the Office Bearers and/or the Governing Council of the appellant no. 1 and/or giving effect to the notice convening such A.G.M. and/or taking any steps on the basis of the resolutions passed at the A.G.M. Accordingly, Mr. Mookherjee argues the challenges to the said E.G.M. and/or the resolutions passed therein and the notice convening the said E.G.M. cannot be the subject-matter of the present appeal. Mr. Mookherjee states that it is a settled principle of law 18 that a court entertaining a suit cannot travel beyond the pleadings and that the court cannot record findings on issues that are not part of the pleadings. For this point, Mr. Mookherjee has placed reliance on the judgment of the Supreme Court in Shivaji Balaram Haibatti v. Avinash Maruthi Pawar , reported in 2018 (11) SCC 652, at paragraph 26 of the report. Mr. Mookherjee argues that no evidence can be led on pleas that have not been specifically raised and no amount of evidence and/or arguments can cure the defects in the pleadings, as held by the Supreme Court in Ravinder Singh v. Janmeja Singh & Ors. , reported in 2000 (8) SCC 191, at paragraph 7 of the report and Bacchaj Nahar v. Nilima Mandal & Anr., reported in 2008 (17) SCC 491, at paragraphs 13 and 17 of the report.

19. Mr. Mookherjee states that it is a well-settled principle that no relief can be granted to an applicant, when there is no prayer for a particular relief and no pleadings to support such relief. Instead, if the court considers and grants such relief, it will lead to miscarriage of justice, as held in Bachhaj Nahar (supra) at paragraph 13 of the report. Moreover, Mr. Mookherjee submits that the Registrar of Societies has appeared before this Court and duly submitted that the amended Rules and Regulations have been filed and have been taken on record, as would be evident from the order dated September 5, 2019. Mr. Mookherjee states that even if the Rules of 2018 were not registered they would still have contractual force among the members, as held in Sri Sanatan Dharam 19 Sabha & Anr. v. The Registrar, Firms, Societies and Chits, U.P., Lucknow & Ors. , reported in AIR 1989 All 189, at paragraphs 5-12 of the report.

20. It is also argued by the learned Senior Counsel that the respondent no. 1 applied for re-affiliation under the said amended 2018 Rules and that the respondents had sought to gain support of 50 per cent of the golf clubs, which included the 5 golf clubs under the Army Zone. Mr. Mookherjee argues that these clubs in the Army Zone had gone on to refuse affiliation with the respondent no. 1. This had meant that the respondent no. 1 had failed to get 50 per cent support of the golf clubs in the State of West Bengal, thereby failing to become a member of the appellant no. 1 under the amended Rules. In support of this contention, Mr. Mookherjee draws our attention to the email correspondence exchanged by and between the parties from August 17, 2018 to October 26, 2018. He argues that it would be evident from these emails that the respondent no. 1 had accepted that it had lost affiliation under the amended Rules, that it was required to obtain support of 50 per cent of the golf clubs in the State of West Bengal, and that it was taking steps in this regard. Mr. Mookherjee submits that the fact that the respondent no. 1 had sought to gain support of 50 per cent of the golf clubs in the State of West Bengal, including the 5 golf clubs in the Army Zone, is evidenced from the correspondence exchanged between the respondent no. 1 and (i) Mount View Ecological Park and Training Area, Bengdubi from September 20 14, 2018 to November 1, 2018, (ii) Kripan Ecological Park and Training Area, Binnaguri from September 14, 2018 to October 12, 2018, (iii) Rohini Ecological Park and Training Area, Sukhna from September 14, 2018 to October 31, 2018, (iv) Fort William Environmental Park and Training Area, Kolkata from September 14, 2018 to November 12, 2018, (v) Kalimpong Environmental Park and Training Area from September 14, 2018 to October 10, 2018. Mr. Mookherjee argues that this correspondence shows that the 5 Army clubs were willing to join the respondent no. 1, as particularly evidenced by the letter dated September 15, 2018 sent from the Headquarters of the Eastern Command to the President of the respondent no. 1. However, according to Mr. Mookherjee, the correspondence reveals that the respondent no. 1 then asked for the articles of association and the annual reports of the Army clubs, which they clearly would not have, thus leading to the cancellation of their requests for affiliation by the letter dated November 16, 2018.

21. Mr. Mookherjee argues that these facts had been deliberately suppressed in the court below, and once they had been pointed out in the written objection of the appellants, the respondents had, as a complete afterthought alleged that the 5 Army Zone clubs in the State of West Bengal were not entities that could qualify as golf clubs under the Rules and Regulations (2014). Mr. Mookherjee states that the appellants had filed a supplementary affidavit in the court below to disclose documents that proved that the 5 Army Zone clubs were golf clubs and were 21 recognised as being affiliated to the appellant no. 1. Further, according to Mr. Mookherjee, the definition of 'Golf Club' under the Rules and Regulations (2014) makes it clear that any entity that is affiliated to the appellant no. 1 having a functional golf course with 9 holes and maintaining any such standards as provided by the appellant no. 1's Governing Council from time-to-time would classify as golf clubs, with the 5 Army clubs satisfying such criteria.

22. Mr. Mookherjee argues that in a Section 9 application, the court must be convinced that there exists a valid arbitration agreement between the parties, which has not been superseded, as held in SBP & Co. v. Patel Engineering Ltd. & Anr., reported in 2005 (8) SCC 618, at paragraph 19 of the report and in Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engineering Ltd. , reported in 2019 (9) SCC 209, at paragraphs 6, 17, 19, 24-25, 27-29, 34, 36 and 37 of the report. Mr. Mookherjee argues that the arbitration agreement is severable from the main contract and, as a consequence, a challenge to the validity of the Rules of 2018 does not mean that the arbitration agreement in itself is invalid. Mr. Mookherjee has submitted that since the Rules of 2014 have been superseded, the arbitration agreement in the 2018 Rules is the one that is applicable. He also states that the contention of the respondents that the arbitration agreement in the 2018 Rules does not apply because the said Rules are disputed as void ab initio is incorrect. In support of this submission, Mr. Mookherjee has placed reliance on the speeches of Lord 22 Porter and Lord Wright in Heyman & Anr. v Darwins Ltd. , reported in [1942] A.C. 356, the decision of the English Commercial Court in Harbour Assurance Co. (U.K.) Ltd. v Kansa General International Insurance Co. Ltd. & Ors. , reported in [1992] Lloyd's Rep. 81, at pp. 86-87 of the report, the decision of the English Court of Appeal in Harbour Assurance Co. (U.K.) Ltd. v Kansa General International Insurance Co. Ltd. & Ors. , reported in [1993] 3 All E.R. 897, at pp. 901-904, 906-908, 910-911, 913-916 of the report, the decision of the U.K. Privy Council in Fiona Trust & Holding Corpn. v Privalov, reported in [2007] 4 All E.R. 951, at paragraphs 17-30 and 32 of the report, the decision of the Supreme Court in A. Ayyasamy v. A Paramasivam & Ors. , reported in 2016 (10) SCC 386, at pp. 417-419 of the report, Wellington Associates Ltd. v. Kirit Mehta , reported in 2000 (4) SCC 272, at paragraphs 7, 11-13 of the report, Shin Satellite Public Co. Ltd. v. M/s. Jain Studios Ltd., reported in 2006 (2) SCC 628, at paragraphs 15, 26-27 of the report, Young Achievers v. IMS Learning Resources Pvt. Ltd. , reported in 2013 ( 10) SCC 535 and Union of India v. Kishorilal Gupta & Bros. , reported in AIR 1959 SC 1362, at paragraphs 8-12 of the report.

23. Per contra, Mr. Ranjan Bachawat, learned Senior Counsel for the respondents, submits that the Rules and Regulations (2018) that were promulgated by the amendment of the Rules and Regulations (2014) in the E.G.M. of June 6, 2018 are a nullity since they have been brought into 23 effect by perpetuating fraud on the members of the appellant no. 1, the Registrar of Societies and all concerned. In this connection, reliance has been placed on the judgment of the Supreme Court in S.P. Chengalvaraya Naidu (dead) by L.R.s v. Jagannath (dead) by L.R.s & Ors., reported in 1994 (1) SCC 1. Mr. Bachawat, without prejudice to the aforesaid submission, argues that the arbitration clause in the Rules and Regulations (2014) would remain in force even if it is assumed (but not admitted) that the Rules and Regulations (2018) are applicable, since the arbitration clause survives as a distinct contract from the main agreement between the parties. In this regard, Mr. Bachawat has placed reliance on the judgment of the Supreme Court in N. Srinivasa v. Kuttukuran Machine Tools Ltd. , reported in 2009 (5) SCC 182, at paragraph 37 of the report. It is argued that the arbitration clause is a collateral term of the contract, which relates to the resolution of disputes and not performance, and even if the performance come to an end, or if there is termination due to breach, or frustration, or repudiation, the arbitration agreement survives for the resolution of disputes under the contract. For these points, Mr. Bachawat places reliance on the judgments of the Supreme Court in Nat'l Agricultural Coop. Marketing Federation India Ltd. v. Gains Trading Ltd. , reported in 2007 (5) SCC 692, at paragraph 6 of the report, M/s. Magma Leasing and Finance Ltd. & Anr. v. Potluri Madhavilata & Anr. , reported in 2009 (10) SCC 103, at paragraph 14 of the report and Today Homes and Infrastructure Pvt. Ltd. v. Ludhiana Improvement Trust , reported in 2014 (5) SCC 68, at paragraphs 13-14 of the report. It is further stated that even if the 24 eligibility of the party falls below the required criteria, its right to seek arbitration would still survive, in this connection, reliance is placed on the judgment of the Supreme Court in Tata Industries Ltd. & Anr. v. Grasim Industries Ltd. , reported in 2008 (10) SCC 187, at paragraph 46 of the report.

24. Mr. Bachawat argues that the respondents have not admitted the purported amended Rules of 2018 because the correspondence between the parties cited by Mr. Mookherjee reveals that correspondence is "without prejudice" to the rights of the respondent no. 1 as a member and that the said correspondence specifically does not admit that the Rules of 2018 are valid since it states that the respondent no. 1 is having to apply for membership despite already being a member. In support of this contention, Mr. Bachawat draws particular attention to the letter dated August 17, 2018 sent by the Director General of the appellant no. 1, which states that the appellant no. 1 has amended its Rules and Memorandum of Association, but does not state that the Rules have been taken on record by the Registrar. Mr. Bachawat states that by an email dated September 1, 2018 sent by the respondent no. 1 to the appellant no. 1, the respondent no. 1 had asked for the Rules of 2018, but the Rules were not sent to the respondent no. 1. This implies that there could not have been waiver, as argued by Mr. Mookherjee. Since the respondents did know what the Rules were, they could not have acquiesced to them, and, hence, the letters dated September 14, 2018, October 12, 2018 and 25 November 12, 2018 could not be treated as waiver. Mr. Bachawat argues that for waiver to operate there needs to be an intentional and positive abandonment of a right, with full knowledge of the same, and not merely silence, as held in Sonell Clocks & Gifts Ltd. v. New India Assurance Company Ltd. , reported in 2018 (9) SCC 784, at paragraph 13 of the report and Power Control Appliances & Ors. v. Sumeet Machines Pvt. Ltd. , reported in 1994 (2) SCC 448, at paragraphs 26-29 of the report.

25. Placing reliance on the decision of the Supreme Court in Union of India v Kishorilal Gupta & Bros. , reported in AIR 1959 SC 1362, at paragraphs 9-10 of the report, Mr. Bachawat argues that if the superseding contract is disputed as void ab initio then the arbitration agreement in that supposedly superseding contract cannot govern the dispute between the parties. Mr. Bachawat also distinguishes the judgments cited by the appellants in support of their contention that the arbitration clause in the Rules and Regulations (2018) is applicable and that the said arbitration clause does not apply to the dispute between the parties in this case. Mr. Bachawat contends that the respondent no. 1 was all along a member of the appellant no. 1 and that the attempt to deny its membership is wrongful and mala fide, with the ouster of the respondent no. 1 itself justifying the grant of interim relief. Mr. Bachawat states that the Registrar has the power to not take alterations to the Rules on record under Section 9(2) of the 1961 Act and since it is not beyond the power of the Registrar to do so, it cannot be denied that the respondents' objections 26 are pending before the Registrar. Mr. Bachawat states that once it is recognised the E.G.M. was called illegally, the Rules and Regulations become null and void, since there cannot be a building without the plinth and since the provisions of the West Bengal Societies Registration Act, 1961 are mandatory. For these points, reliance is placed on the judgments in TRF Ltd. v. Emergo Engineering Projects Ltd. , reported in 2017 (8) SCC 377, at paragraph 57 of the report and Sanjay Budhia Family Trust & Ors. v. Tripura Enclave Residents' Welfare Assocn . & Ors., reported in 2015 (5) CHN 584, at paragraphs 15-24 of the report. It is submitted that the Trial Judge did not err here and that his reasons can be supplemented by the appellate court, following the unreported judgment of this Hon'ble Court dated March 17, 2006 in F.M.A.T. No. 956 of 2006 (B.C.C.I. v. Jag Mohan Dalmiya).

26. Since we observed that there was much controversy with regard to whether the Registrar of Societies had taken the amended Rules and Regulations of the appellant no. 1 on record or not, we directed the Registrar of Societies to be present in Court by our order dated August 28, 2018. The Registrar of Societies appeared before us on September 5, 2019 and we recorded in our order of the same date that the amended Rules and Regulations of the appellant no. 1 had been accepted by the Registrar and recorded on August 24, 2018. Mr. Samrat Sen, learned Senior Counsel on behalf of the Registrar, also submitted that the various letters sent by the Registrar to the appellant no. 1 were not show-cause notices 27 but communications made to the appellant no. 1 and to the respondent no. 1 to communicate the decisions of the appellants to the respondents. Discussion of the Law and Issues

27. After examination of the lengthy submissions made by the parties, there are two questions which arise for our consideration:

28. It is a trite proposition of law that a valid arbitration agreement must exist between the parties and cover the dispute between them before the powers under Section 9 are exercised, as held by the Supreme Court in SBP & Co. v. Patel Engineering Ltd. & Anr., reported in 2005 (8) SCC 618, at paragraph 19 of the report.

29. Before determining whether an arbitration agreement exists between the parties with regard to their dispute, it would be appropriate to ask: what is the dispute between the parties? As is revealed from the pleadings in the court below and the submissions before us, the controversy between the parties is whether the Rules and Regulations (2014) had been followed by the appellant no. 1 in amending those Rules and Regulations in the E.G.M. dated June 6, 2018. The substance of the dispute, therefore, relates not with the Rules and Regulations (2018), but the Rules and Regulations (2014). Indeed, there is controversy between the parties on the eligibility of the respondent no. 1 to be a State Golf Association under the amended Rules and Regulations of the appellant no. 1, but the source of that controversy is not because of the Rules and Regulations (2018), in and of themselves, but because the Rules and Regulations (2018) were supposedly not validly and properly amended in accordance with the Rules and Regulations (2014), which had the effect of excluding the respondent no. 1 from the membership of appellant no. 1 and then preventing the re-inclusion of the respondent no. 1 as a member of the appellant no. 1.

30. Mr. Mookherjee has strenuously argued that no arbitration agreement exists between the parties in relation to their dispute because the Rules and Regulations (2014) have undergone novation and have been replaced by the Rules and Regulations (2018), with the arbitration agreement in the 2014 Rules (i.e. Rule 70 of the 2014 Rules) being 29 replaced by the arbitration agreement in the 2018 Rules (i.e. Rule 66 of the 2014 Rules). Mr. Bachawat's contention in rebuttal to this is that the 2018 Rules are void ab initio so the alleged novation has not happened and the arbitration agreement in the 2014 Rules has not been superseded by the arbitration agreement in the 2018 Rules. Mr. Mookherjee responds to that argument by stating that the doctrine of severability means that the challenge to the validity of the 2018 Rules does not render the arbitration agreement in them invalid. Mr. Bachawat refutes that counter- argument by stating that a superseding contract that is void ab initio cannot be severed from the arbitration agreement contained in it. In order to evaluate the submissions of both counsels, we need to explore the doctrine of severability.

31. The severability of an arbitration agreement, although possessing much doctrinal force across jurisdictions for very many years, is now statutorily enshrined in both the Arbitration and Conciliation Act, 1996 and the UNCITRAL Model Law, which has served as the basis for the harmonisation of arbitration law across the world. Article 16(1) of the Model Law declares:

arbitration regime by ensuring that challenges to the validity of the underlying contract do not defeat the very mechanism of arbitration that the parties have selected to assess such and other challenges.

32. These points have been repeatedly cemented in the case law. The English law on this subject can be divided into pre-1996 seperability, from Heyman to Harbour, and post-1996 separability in relation to the jurisdiction of the arbitral tribunal to decide such issue. The doctrine of seperability establishes that an arbitration agreement has a separate life from the contract, for which it provides the means of resolving disputes. 31 This enables the arbitration agreement to survive a breach of the contract of which it is a clause. (See Russell on Arbitration (21st edn.)). To begin at the ostensible beginning, we find an expression of the severability doctrine, decided at the pre-1996 stage, in the House of Lords' decision in Heyman & Anr. v Darwins Ltd. , reported in [1942] A.C. 356., which has been followed by the Supreme Court in National Thermal Power Corpn. v. Singer Co. & Ors. , reported in 1993 (3) SCC 551 : AIR 1993 SC 998), where Lord Macmillan states (at pp. 373-374 of the report):

33. The next significant case we find in the reports is the House of Lords' case of Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corpn. Ltd., reported in [1981] A.C. 909, where the esteemed Lord Diplock, following Heyman (supra), declares tritely and lucidly (at p. 980 of the report):

34. Thereafter, the English Arbitration Act, 1996 bought about a significant change in Section 7 of the English Act. Section 7 reads:

(emphasis added) (footnotes omitted) In this regard two cases are worth mentioning. The first is Lesotho Highlands Development Authority v Impregilo SpA & Ors., reported in [2006] 1 A.C. 221, where Lord Steyn (at paragraph 21 of the report), affirming Hoffmann L.J.'s speech in Harbour Assurance (supra), states that:

(emphasis added) 34 The second final case worth mentioning is the English Court of Appeal case of Fiona Trust & Holding Corpn. v Privalov, reported in [2007] 2 Lloyd's Rep. 267 (C.A.), which was affirmed by the House of Lords, reported in [2008] 1 Lloyd's Rep. 254, where Lord Hoffman states (at paragraph 17 of the report):

35. The Indian cases reflect completely the position of the law in England, post 1996, and uphold the doctrine of severability as enshrined in Section 16 of the Arbitration and Conciliation Act, 1996 cited above. For example, the Patna High Court in its judgment in the case of Cecon Engineers Pvt. Ltd. v. Shanta Devi , reported in AIR 2014 Pat 45 has stated (at paragraph 9 of the report) that:

The aforementioned judgment cites two Supreme Court judgments, namely, M/s. Reva Electric Car Company Pvt. Ltd. v. M/s. Green Mobil, reported in 2012 (2) SCC 93 and M/s. Magma Leasing and Finance Ltd. & Anr. v. Potluri Madhavilata & Anr., reported in 2009 (10) SCC

103. Both these cases have upheld the doctrine of severability, Reva Electric (supra) has done so at paragraphs 33-34 of the report, stating in no uncertain terms that:

(emphasis added) In apparent contrast, the English High Court in DDT Trucks of North America Ltd. & Ors. v DDT Holdings Ltd. [2007] EWHC 1542 (Comm.), reported in [2007] 2 Lloyd's Rep. 213 holds (at paragraphs 15- 16 of the judgment):

The arbitrator may, when deciding upon his jurisdiction under said arbitration agreement in the old contract, conclude that the old contract has been validly superseded and that the new contract is not void ab initio, thereby concluding that he/she does not have jurisdiction to decide on his own jurisdiction. But for a court to go into that question of whether the contract has or has not been validly superseded in order to decide upon the arbitrator's jurisdiction will offend the kompetenz-kompetenz principle because that would prevent the arbitrator from being allowed to decide on his own jurisdiction. In summary, therefore, when scenario (ii) appears in front of us and the dispute is that the supposedly superseding contract is void ab initio, we will be inclined to hold that it is the arbitration agreement in the older contract which governs that dispute, for that would allow the arbitrator under that arbitration agreement to decide 44 if the new contract is void ab initio and thereby decide if he/she has jurisdiction at all or not. Of course, all of this is stated under the assumption that in scenario (ii) the validity and existence of the arbitration agreement in the old contract is itself not under challenge, for in that case the court will have to then decide the validity and existence of the arbitration agreement in the old contract as well.

42. To summarise the discussion above, we may say that: the principle severability of an arbitration agreement applies when the validity of the contract to which it is attached is under question. But when the contract whose validity is under question has been superseded by a new contract then the arbitration agreement in the old contract cannot be severed and then attached to a new contract. However, if the validity of the new superseding contract is itself in question then severability does not operate to allow the arbitration agreement in the new contract to govern the dispute of whether the new contract is void ab initio. Instead, the arbitration agreement in the old contract is the one that governs that dispute of whether the new contract is void ab initio.

43. On consideration of our understanding of the doctrine of severability, we may return to the dispute between the parties, i.e. whether the Rules and Regulations (2014) were amended properly and validly by the E.G.M. of June 6, 2018. In other words, the dispute between 45 the parties is whether the Rules and Regulations (2018) are void ab initio or not or whether there has been a valid supersession of the Rules and Regulations (2014). In such circumstances, the Rules and Regulations (2014) are required to be looked into and considered to find out if the procedure in the Rules of 2014 has been followed in adopting the Rules of 2018. The Rules and Regulations (2014) survive to that extent. The validity of the 2018 Rules is itself the dispute, which means that, following Kishorilal Gupta (supra), the arbitration agreement in the 2018 Rules cannot apply here, as the dispute is arising out of the Rules and Regulations (2014). The question of the validity of the 2018 Rules depends upon whether the 2014 Rules were followed in bringing about amendments to the 2014 Rules. Thus, as argued by Mr. Bachawat, it would be the arbitration agreement in the Rules and Regulations (2014), i.e. Rule 70 of those Rules, which would be applicable to the dispute between the parties. Hence, the first issue is resolved in favour of the respondents: there exists an arbitration agreement between the parties which governs the dispute between them, so the learned Trial Judge had the jurisdiction to entertain the application under Section 9 of the Arbitration and Conciliation Act, 1996. However, this finding should not influence the arbitrator/arbitral tribunal should there be an issue raised with regard to its jurisdiction, in view of the Rules of 2018, by either of the parties in course of arbitration. The arbitrator's autonomy to decide its own jurisdiction is not affected by our finding.

The Second Issue

44. We now come to the issue of whether the learned Trial Judge has exercised his discretion correctly in restraining the appellants from giving any effect to the notification dated December 22, 2018 (with the corrigendum issues thereafter) for conducting an A.G.M. and directing the appellant no. 1 to allow the respondent no. 1 to participate in the election and voting process.

45. Section 9 of the Arbitration and Conciliation Act, 1996 confers jurisdiction upon the court to make orders by way of interim measures, so as to assist the arbitral tribunal in cases of urgency before there is an arbitration or during arbitral proceedings or at any time after the making of an arbitral award but before its enforcement. The order of the court under Section 9 is intended to protect the subject-matter of the proceedings and to secure the interest of the party claiming such relief. The exercise of the Court's powers under Section 9 of the Arbitration and Conciliation Act to grant interim reliefs is governed by certain settled principles. One of the foundational cases which illuminates the principles which govern the exercise of a court's powers under Section 9 is Adhunik Steels Ltd. v. Orissa Manganese and Minerals (P) Ltd. reported in 2007 (7) SCC 125. The judgement of the Supreme Court in this case states that since Section 9 does not provide any specific guidelines or 47 rules of procedure or requirements for the exercise of the court's powers under it, the court must follow the ordinary rules and requirements for the grant of interim measures when dealing with an application under Section 9 . The relevant paragraph of the said judgment i.e. paragraph 11 of the report where this principle is enunciated is reproduced herein below:-

46. The judgment in Adhunik Steel (supra) judgment has reaffirmed that the three cardinal principles of (i) prima facie case (ii) balance of convenience (iii) irreparable loss or injury needs to be satisfied in order for an interim measure to be granted under Section 9 . 48

47. The requirement that a prima facie case needs to be established has been fleshed out in the case law on Order XXXIX, Rules 1- 2 of the Code of Civil Procedure , 1908. Applying the principles developed in such case law on Order XXXIX mutatis mutandis in the context of Section 9 , we can say that the acid test of whether a prima facie case is established requires us to ask whether the petitioner in the Section 9 application can show that, in all probability, the petitioner is entitled to obtain permanently the interim measure sought by it, as would appear in the preliminary stage of the trial before going into the evidence from the pleadings and the admitted documents. The petitioner, in short, needs to make out an arguable case on merit that may stand to trial. In the words of the Division Bench of the Delhi High Court in Krishan Murgai v. Superintendence Company of India (P) Ltd. , reported in AIR 1979 Del 232, at paragraph 1 of the report:-

(emphasis added)

50. The final requirement for grant of interim measures under Section 9 of the Arbitration and Conciliation Act requires irreparable loss and injury to the plaintiff if the measure is not granted. This requirement implies that the court must exercise its discretion in a Section 9 application sparingly and only in those cases, where, after exercising extreme caution, it is clear that the arbitration proceeding is likely to be frustrated if the interim measure is not granted and that the defendant is likely to render the entire arbitration process infructuous by frittering 52 away the properties or funds that could from part of the compensation to the plaintiff. This also means that the injury to the plaintiff due to not granting the interim measure should be such that it cannot be compensated by an award of damages. Authority on these two points is found in, firstly, the Division Bench judgment of the Delhi High Court in C.V. Rao & Ors. v. Strategic Port Investments KPC Ltd. & Ors. , reported in 2014 (4) Arb LR 9 (Del) (DB), at paragraph 37 of the report, which is quoted herein below:

51. In the instant appeal, we can see good reason to interfere with the discretion exercised by the learned Trial Judge. As revealed from a 53 proper reading of the impugned order, the learned Trial Judge has not examined (i) whether there is a prima facie case in favour of the respondents, (ii) whether the balance of convenience is in the respondents' favour and (iii) whether there would be irreparable loss or injury to the respondents if the appellant no. 1 was restrained from conducting its A.G.M. under the Rules and Regulations (2018) of the appellant no. 1. This clearly shows that the impugned order has not been passed with an application of mind to the relevant considerations and the law, which, as has been held by the Division Bench of the Allahabad High Court in U.P. Avas Evam Vikash Parishad & Ors. (supra) at paragraph 17 of the report, is a ground for an appeal court to interfere with the order. As shall be explained, none of the cardinal principles for the grant of a restraining order under Section 9 of the Arbitration and Conciliation Act, 1996 are satisfied here.

52. We may first consider whether a prima facie case has been established by asking two questions, in accordance with the law explained above: First, would the respondents, on the balance of probabilities, get the relief of a permanent injunction against the appellants from holding A.G.M.s in accordance with the Rules and Regulations (2018)? Second, is there a serious issue for the arbitral tribunal to consider here? The answer to both those questions is returned in the negative when one considers that the Rules and Regulations (2018) have been taken on record by the Registrar of Societies. Had there been a fair chance of the 54 Rules and Regulations (2018) being null and void or illegal, the Registrar, taking cognizance of the letters sent by the respondents, would have made enquiries or done something more before taking the Rules on record or would have refused to do so altogether. As rightly pointed out by Mr. Sen, learned Senior Counsel for the Registrar, the letters sent by the Registrar to the appellants (with regard to the respondents' grievances with the amendment of the Rules) were not in the nature of show-cause notices, since the content of those letters does nothing more than request the appellants to respond to the allegations of the respondents. If the Rules and Regulations (2018) were taken on record by the Registrar, then the probability that the respondents would ultimately be able to get a permanent injunction against the appellants from holding an A.G.M. under the Rules and Regulations (2018) is far from high. In the same way, the fact of the Rules and Regulations (2018) being taken on record means that the arbitral tribunal does not have a serious issue to try in respect of the validity of the said Rules, when viewed at the interim stage. In other words, the respondents have not been able to make out a prima facie case for getting an injunction restraining the appellants from holding an A.G.M. under the Rules and Regulations (2018) on December 15, 2018. The learned Trial Judge was simply in error on the facts in holding that the dispute over the Rules was pending before the Registrar, and in proceeding to make his ruling on that basis.

53. We may draw further support for this conclusion by examining the correspondence between the parties with regard to the application by the respondent no. 1 for re-affiliation with the appellant no.

1. The wording of these communications does not prima facie indicate that the respondent no. 1 is truly seeking to re-affiliate with the appellant no. 1 "without prejudice" to its existing status as a member. Indeed, the email dated September 14, 2018 from the President of the respondent no. 1 to the Director General of the appellant no. 1 states that "we [i.e. the respondent no. 1] have also been asked to apply for affiliation, whereas, we are already affiliated to the Union [i.e. the appellant no. 1]". But these words must be understood in their proper context (see Chairman and MD, NTPC Ltd. v. Reshmi Contructions, Builders & Contractors , reported in 2004 (2) SCC 663, at paragraph 32 of the report). The lines after these quoted words reveal that these quoted words are meant to be a query, since the email goes on to ask for the exact basis on which the respondent no. 1 has been asked to submit the names of its members. Moreover, the correspondence thereafter reveals a clear intent to submit to the Rules of 2018 by the respondent no. 1. By an email dated September 25, 2018, the President of the respondent no. 1 clearly asks the Director General of the appellant no. 1 for the list of clubs in the State of West Bengal, stating that the respondent no. 1 would not be able to take any action on re-affiliating itself without such a list. Furthermore, by an email dated October 25, 2018, sent by the President of the respondent no. 1 to the Director General of the appellant no. 1, it is clear that the respondent no. 1 wishes to be compliant with the Rules of 2018, since it is 56 stated in the email that the respondent no. 1 has been asking for the new Rules multiple times due its desire to be compliant with them. This aforesaid email also states that the respondent no. 1 had been seeking the names of the clubs for clarification and that it was taking action to affiliate them all, in compliance with the appellant no. 1's directions. That this aforesaid email was sent after the respondent no. 1's application for affiliation without support of the Army clubs was rejected by the appellant no. 1's email dated October 25, 2018 is of great significance. Had the respondent no. 1 truly felt that the Army clubs were not clubs and had the respondent no. 1 truly sought to re-affiliate with the appellant no. 1 "without prejudice", it would not have sought to convey its desire to comply with the new Rules and to affiliate the Army clubs in accordance with the appellant no. 1's requirements without any protest. Thus, at the interim stage, it would appear that prima facie the respondent no. 1 had acquiesced to the Rules of 2018, thereby making its case for interim relief under Section 9 even weaker.

54. The balance of convenience is simply not in favour of the respondents. The prevention of the respondent no. 1 from holding its A.G.M. on December 15, 2018 and from conducting the election of the Office Bearers and Governing Council of the appellant no. 1 in that A.G.M. has led to the possibility of the appellant no. 1 being de-recognised by the appropriate authority. In fact, we have had to pass an order stating that during the pendency of this appeal, the appellant no. 1 may cite the said 57 order to prevent de-recognition. In such circumstances, restraining the appellant no. 1 from conducting its A.G.M. and also approving its accounts therein is simply too drastic an interruption for it to be capable of compensation in damages if the arbitration is decided in the favour of the appellants. It is simply requiring the appellant to undertake a hardship that is greater than is just and convenient.

55. Finally, there is no reason to believe that there would be irreparable loss to the respondent no. 1 if the A.G.M. dated December 15, 2018 of the appellant no. 1 was conducted without the respondent no. 1 being in the Electoral College for the election of the Office Bearers and Governing Council of the appellant no. 1. Erring on the side of caution, as the law requires, there is no reason to believe that if the appellant no. 1 had its A.G.M. on December 15, 2018 and elected its Governing Council and approved its accounts therein, then the arbitration process would be rendered infructuous or frustrated. The losses that may be suffered by the respondent no. 1 due to it not being capable of participating in this A.G.M. would not cause undue hardship compared to the prejudice likely to be caused if the injunction is allowed to continue. The respondent has not been able to make out a case of an "irreparable prejudice" that is likely to be caused in the event the interim order is not passed. Conclusion 58

56. Thus, for the reasons given above, the appeal is allowed. The impugned order of the learned Trial Judge is set aside. We reiterate that nothing in this order may be construed as a final expression of opinion on the merits of the controversy between the parties, which the arbitral tribunal may eventually decide. The arbitral tribunal shall decide the disputes between the parties uninfluenced by the observations made by us in this order. This order also disposes of C.A.N. 4948 of 2019. There shall, however, be no order of costs.

Urgent Photostat copies of this order shall be provided to the parties on the usual undertakings (Soumen Sen, J.) I agree.

(Ravi Krishan Kapur, J.)