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2007 Supreme(SC) 276
2007(3) Supreme 974
SUPREME COURT OF INDIA
(From Andhra Pradesh High Court)
C.K. Thakker and Altamas Kabir, JJ.
D. Dwarakanatha Reddy — Appellant
versus
Chaitanya Bharathi Educational Society & Ors. — Respondents
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) No. 294 of 2007)
With
Civil Appeal No. 2196 of 2007
(Arising out of Special Leave Petition (Civil) No. 374 of 2007)
Decided on 27-4-2007
Counsel for the Parties :
For the Appellant : K.K. Venugopal, Soli J. Sorabjee and Ravindra Shrivastava, Sr. Advocates, Dr. S.K. Verma, Kunal Verma, Ramakanth Reddy, Ranbir Singh Yadav, Arjun Garg, Ardhendunauli Kr. Prasad, M. Mannam and Rajul Shrivastava, Advocates.
For the Respondents : K. Rajendra Chowdhary, Sr. Advocate, K. Swami, Mrs. Prabha Swami, Rakesh K. Sharma, Ms. Bina Madhavan, S. Udaya Kumar Sagar, Venayagam and Ms. Mishi Choudhari (for M/s Lawyers Knit & Co.), Advocates.
Headnote:Civil Procedure Code, 1908 — Order 39 Rules 1 and 2, Section 151 — Interim injunction — Refusal to grant — Respondent Society was registered in year 1972 — Appellants case that Board of Governors on 20-1-2000 resolved to induct nine persons as Promoter-Members into the General Body of the Society — Case of Society being that appellants were never legally inducted as Promoter-Members and their so called induction was not in consonance with law — Appellants filed petition for a declaration that they were legally inducted members — Application filed for interim injunction for restraining respondent from holding election of Governing Body without including Promoter-Members and without giving them opportunity of participating in the election process — City Civil Court dismissed application observing that no prima facie case had been made out by appellants — Order of trial Court upheld by the High Court — Whether trial Court or the High Court committed any illegality in refusing interim relief — (No) — Andhra Pradesh (Telangana Area) Public Societies Registration Act, 1350 Fasli — Section 23.
Held : It is thus clear that nine persons were selected and as stated in the minutes, they “will be inducted” into General Body as per the Constitution of the Society. It is not even the case of the appellants that they had paid an amount of Rs.1 lakh before or on January 27, 2000. In fact, from the record it is clear that in 2006 when a meeting of the General Board was convened on March 22, 2006 and the action of the Governing Board was accepted, such amount was not paid by the appellants. Even on October 24, 2006, when 118th meeting of the Board of Governors of the Society was convened, it was stated that the appellants had not paid an amount of rupees one lakh for becoming a Promoter-Member and hence a resolution passed by the Board of Governors of the Society on January 27, 2000 inducting them as ‘Promoter Members’ and also a resolution, dated March 22, 2006 passed by the General Body could not be said to be legal and the action was nullity. It was also observed that the so-called Resolution No. 3 dated October 3, 1981 amending the Articles of Association was neither passed by the Board of Governors nor approved by the General Body either on that day or at any later date. The Articles of Association of 1979, therefore, were in force. For the qualification for membership as ‘Promoter’ of the Society, rupees one lakh had to be paid. Since no such payment was made by the persons claiming Promoter-Members, their membership was ‘void’. It was only thereafter that the appellants directly deposited the amount in the bank in the name of the Society without even informing the Society about such payment. (Para 21)
Prima facie, we are of the view that the contention of the Society is well founded that such an amount ought to have been paid by a person before he is admitted as Patron Member in the light of the phraseology used in Clause 4 (b) of the Articles of the Association. We are, however, conscious of the fact that the main matter is pending before the trial Court. We may, therefore, hasten to add that we are dealing with the contention of the appellants and the arguments of the respondents only for a limited purpose of deciding the appeal which has been filed against an interlocutory order refusing interim relief. In our opinion, it cannot be said that by not granting interim relief, the Courts below had committed an error of law or of jurisdiction. (Para 22)
To us, this is not a case of mutual mistake as contended by the appellants. According to the appellants, when no period is prescribed for payment of rupees one lakh, such amount can be paid at any time or in any case, within a ‘reasonable period’. Prima facie, it appears to us that the amount ought to be paid before or at the time of becoming Member. Hence, even if there was a mistake, it was not a ‘mutual mistake’ as sought to be argued by the appellants. So-called payment was made only after the impugned resolution was passed and that too without informing the Society. It is also pertinent to note that the payment was made by the appellants on October 26, 2006 and a petition was filed in the Court under Section 23 of the Act on October 29, 2006 along with an application for the interim relief. But even in the application for interim relief, the factum of payment of amount after the resolution was passed was not disclosed by the applicants. (Para 28)
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. For the foregoing reasons, in our opinion, the orders passed by the Courts below cannot be said to be illegal or unlawful. (Paras 31 and 32)
JUDGMENT
C.K. Thakker, J. — Leave granted.
2. All these appeals arise out of a common judgment and order passed by the High Court of Judicature, Andhra Pradesh at Hyderabad on January 2, 2007 in Civil Revision Petition Nos. 6269, 6353 and 6301 of 2006. By the said order, all the Revision Petitions were dismissed by the High Court and the order passed by the Court of IInd Additional Chief Judge, City Civil Court, Hyderabad on December 1, 2006 in I.A. Nos. 4192 and 4194 of 2006 in O.P. Nos. 20070 of 2006 and 2146 of 2006 is confirmed.
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.
(b) To devise ways and means and accord facilities for candidates to specialize in all or any of the above subjects (i.e.) to develop Centres of excellence for research in the above subjects with Industrial Orientation.
(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.
(d) To try to offer medical and clinical facilities to the needy by opening the necessary hospitals, aid clinical laboratories or X-Ray Institutions, and to run, maintain Homes, Residential Houses etc., for the needy either by purchasing the necessary equipment or by approaching such institutions or the Governments including those of other Countries, for donation of such equipment and the land and buildings necessary for locating such equipments and Institutions.
(e) To offer consultancy services in any area directly or through the Institutions owned and managed by the Society.
(f) To carry on activities for any other charitable purposes and activities of General Public Utility.
4. There were 13 Founding Members who then constituted General Body as well as Governing Council/Executive Body who were distinguished persons from various professions. The Articles of Association of the first respondent-society enumerate categories of membership in Clause 4 as (i) Patron, (ii) Promoter, (iii) Donor; and (iv) Member (ordinary member). Clause 5 provides for termination of membership. Whereas functions of the General Body have been specified in Clause 7, functions of the Board of Governors have been dealt with in Clause 11. Sub-clause (i) thereof enacts that the Board of Governors ‘have the power to admit new members of the Society on a proposal sponsored by at least two members of the Board of Governors’. Clause 12 relates to meetings of the Board of Governors.
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 r
