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High Court Of Calcutta
AJIT KUMAR SENGUPTA, S. K. SEN
KALYAN KUMAR DUTTA GUPTA - Appellant
Versus
B.M.VERMA - Respondent
Appeal 19 Of 1992
Decided On : 04/19/1994
EXPULSION OF CLUB MEMBER - INTERIM INJUNCTION - JURISDICTION OF CIVIL COURT - DOMESTIC ENQUIRY - STAY OF PROCEEDINGS - MALA FIDE CONDUCT OF CLUB AUTHORITIES - BIAS AND VIOLATION OF NATURAL JUSTICE - BALANCE OF CONVENIENCE.
Fact of the Case:
Appellant, a member of the Royal Calcutta Turf Club (RCTC), was accused of diverting club funds to a company he managed. The club formed a committee to investigate the allegations and recommend expulsion. Appellant filed suit seeking an injunction to restrain the club from proceeding with the domestic enquiry and expulsion. The trial court refused to grant the injunction.
Finding of the Court:
The court held that the civil court has jurisdiction to interfere in the domestic affairs of a club if the club has acted without jurisdiction, in bad faith, or without giving the expelled member a chance of defense or explanation. The court found that the appellant had made out a prima facie case of mala fide conduct and violation of natural justice by the club authorities. The court also found that the balance of convenience was in favor of granting the injunction, as both the domestic enquiry and the criminal prosecution were based on the same facts.
Issues: 1. Whether the civil court has jurisdiction to interfere in the domestic affairs of a club? 2. Whether the appellant has made out a prima facie case of mala fide conduct and violation of natural justice by the club authorities? 3. Whether the balance of convenience is in favor of granting the injunction?
Ratio Decidendi: 1. The civil court has jurisdiction to interfere in the domestic affairs of a club if the club has acted without jurisdiction, in bad faith, or without giving the expelled member a chance of defense or explanation. 2. The appellant has made out a prima facie case of mala fide conduct and violation of natural justice by the club authorities by alleging that the committee formed to investigate the allegations was biased and that the club authorities had given press interviews making allegations against the appellant. 3. The balance of convenience is in favor of granting the injunction, as both the domestic enquiry and the criminal prosecution were based on the same facts.
Final Decision: The court allowed the appeal and granted an injunction restraining the club from proceeding with the domestic enquiry and expulsion of the appellant.
( 1 ) THE appeal arises out of an order passed by the Learned single Judge refusing to pass interim order of injunction restraining respondent Nos. 5, 6 and 7 and/ or their servants and agents from proceeding with the proposed Domestic Enquiry set up by the Club on 29/02/1992 and/or proceeding for expulsion of the plaintiff/ appellant from the Club; alternatively injunction restraining defendants/respondents and/or their servants and agents from proceeding with expulsion of the plaintiff/ appellant from the club till the pending Criminal Case being No. 794 of 1991 between State v. Kalyan Kumar Dutta Gupta was finally disposed of.
( 2 ) THE plaintiff/ appellant has impugned the legality and / or validity of the formation of the "committee" Comprising the defendant/respondents Nos. 5, 6 and 7 as being wrongful, illegal, and ultra-vires the Rules of R. C. T. C. and thus void, ab initio and nullity and praying for an injunction restraining the defendant, their servants, agents and/ or assigns from proceeding with the meeting for expulsion of the plaintiff, injunction restraining respondents Nos. 5, 6 and 7 and / or their servants and agents from proceeding with the domestic enquiry during the pending of the said Criminal Case being Nos. 794 of 1991 and till it is finally resolved and / or disposed of by the Court and for other reliefs.
( 3 ) THE facts, inter alia, leading to this appeal and the application which are necessary for the purpose of determination of the real question involved are set out hereinafter :
( 4 ) IN or about 1840 Royal Calcutta Turf Club hereinafter referred to as R. C. T. C. was established as an unincorporated Member's Club, inter alia, to encourage the horse and / or pony racing amongst the public.
( 5 ) IN or about 1977 the petitioner was elected a Member of the said Club.
( 6 ) IN 1985 petitioner was elected "steward" of the said Club. Other Stewards of R. C. T. C. at the material time were the following person (i) Mr. Sunil Singh Roy, (ii) Mr. Kalyan Kumar Dutta Gupta (Plaintiff), (iii) Mr. P. L. Roy, (iv) Mr. H. M. Sookies (Defendant No. 2) and (v) Mr. B. M. Verma (Defendant No. 1 ).
( 7 ) IN 1988 - 1989 R. C. T. C. took a policy decision that each Steward for the purpose of administrative convenience looked after the activities of the five departments of said Club and the responsibilities of each department was divided as under: --DEPARTMENT steward in Charge a) Corporate Planning and development and to Co-ordinate with other Turf authorities. Mr. Sunil Singh Roy b) Bacing mr. Kalyan Kumar Dutta Gupta. . . . (Plaintiff)c) Financial and Administration Labour; and mr. P. L. Roy Mr. H. H. Sookies (Defendant No. 2)book makers mr. B. M. Verma (Defendant No. 1)
( 8 ) IN the same year the Stewards of the Club passed a Resolution inter alia deciding to invest the surplus fund for a short term deposit to attract interest income thereform. It appears that the said Club had surplus fund nearly to the extent of Rs. 1. 5 crores, and pursuant to the decision, the sub-committee on Finance and Administration of the club decided to invest the said fund with Messrs. Classic Leasing Co. Ltd. @ 14 per cent per annum.
( 9 ) BETWEEN June and December 1989 R. C. T. C. invested on the recommendation of the plaintiff /appellant with the following Firm/company. 1. Messrs. Ciffee Stewards Consultant P. Ltd. Rs. 15,00,000. 00 2. Messrs. V. C. K. Share Brokers. Rs. 20,00,000. 00 3. Messrs. Eastern Financiers Ltd. Rs. 5,00,000. 00 @ 20 per cent per annum. @@@
( 10 ) HOWEVER, Messrs. V. C. K. Share Brokers paid back the loan amount to R. C. T. C. and, thereafter, the said club lent and advanced to Messrs Castle Plaza Pvt. Ltd. a sum of Rs. 17. 5 lacs.
( 11 ) IN 8/05/1991, Eastern Financiers Ltd. paid back and/ or refunded the said sum of Rs. 5 lacs to R. C. T. C.
( 12 ) IN March/june, 1991 during the audit of the said Club, the Financial controller, one Nikilesh Maitra, drew the notice of the authori
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