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IN THE HIGH COURT AT CALCUTTA
I.P. MUKERJI, BISWAROOP CHOWDHURY, JJ.
Eastern Indian Motion Picture Association & Ors. - Appellants
Versus
Mr. Milan Bhowmik & Ors. – Respondents
APO 3 of 2024, GA 1 of 2023, CS 224 of 2021 with APO 4 of 2024
Decided On : 09-02-2024
Companies Act - Election Dispute - Section 8 of the Companies Act, 2013 - Section 241(1)(a) and 244(1)(b) - The court affirmed the jurisdiction of the civil court to entertain the election dispute despite the provisions of the Companies Act, 2013. The court held that the plaintiffs' decision to directly approach the civil court was proper due to the uncertainty of obtaining a waiver from the tribunal. The court also appointed Joint Administrators to oversee the election of the executive committee of the association.
Fact of the Case:
The plaintiffs challenged the election of the executive committee of the association for the tenure 2021-2023, alleging violations of the Articles of Association and Election Conduct Rules.
Finding of the Court:
The court affirmed the jurisdiction of the civil court to entertain the election dispute and appointed Joint Administrators to oversee the election of the executive committee.
Issues: Jurisdiction of the civil court to entertain the election dispute, appointment of Joint Administrators.
Ratio Decidendi: The court held that the plaintiffs' decision to directly approach the civil court was proper due to the uncertainty of obtaining a waiver from the tribunal. The court also affirmed the jurisdiction of the civil court to entertain the election dispute and appointed Joint Administrators to oversee the election of the executive committee.
Final Decision: The court affirmed the jurisdiction of the civil court to entertain the election dispute and appointed Joint Administrators to oversee the election of the executive committee.
Key Points: - The civil court has jurisdiction to entertain election disputes despite Companies Act provisions (!) (!) (!) . - Direct approach to civil court is justified due to uncertainty in obtaining tribunal waiver (!) (!) (!) . - The plaintiffs, being only two members, did not have the requisite strength to apply under Section 244(1)(b) (!) (!) . - The tribunal may waive eligibility requirements, but such waiver is uncertain and could cause unnecessary delay (!) (!) . - The court affirmed its jurisdiction and allowed the election dispute to be tried (!) (!) (!) . - Joint Administrators were appointed to oversee the election process (!) . - The election procedure was challenged on grounds of manipulated voter lists and ineligible committee members (!) (!) . - The court directed preparation of a correct voter list and holding of a fair election (!) (!) . - The judgment ensures the association's executive committee election is conducted under court supervision (!) (!) . - No order as to costs was made in the judgment (!) .
JUDGMENT :
I.P. Mukerji, J.
1. These two appeals with common facts were heard out together, after dispensing with all formalities. We dispose of these appeals and connected applications by this common judgment and order.
APO 3 of 2024:
2. Eastern India Motion Pictures Association, the appellant/first defendant is an association of members. It was incorporated as a company limited by guarantee under the Companies Act, 1955 and now one under Section 8 of the Companies Act, 2013. It has its registered office at 98E, B N Sircar Sarani, Kolkata – 72. Two members Milan Bhowmik and Md. Nurul Hassain producers of Bengali films are members of this association, plaintiffs in the suit and respondents in this appeal. The suit (C.S 224 of 2021) was filed by them as co-plaintiffs challenging the election of the executive committee of the association for the tenure 2021-23. The plaintiffs claims that the election of the defendant Nos.2, 4, 5, 6, 7, 8, 10, 11, 16, 18, 19, 20, 21, 22, 24, 25, 26, 28, 29, 30 and 31 as President and Executive Committee members of the association was null and void. There was violation of the articles of the association and election conduct rules of the organisation. These defendants have also joined the appeal with the association.
3. This appeal arises out of a judgment and order dated 8th February, 2023 passed by a learned Single Judge of this Court in an application made by the association and the defendants mentioned in that order for rejection of the plaint and dismissal of the suit (GA 2 of 2022). By the said impugned judgment and order, this application was dismissed.
4. Hence this appeal.
5. On 20th November, 2023 the appeal appeared in our list to be admitted. As the point involved was very short we heard out the appeal on the day of admission itself.
6. This appeal is preferred by the association and its executive committee members. They say that they were elected for the year 2021 to 2023.
7. At this point of time it is essential to set out the reliefs sought in the plaint:-
b) Decree for declaration that a meeting held by the President/ executive members on and from 06-08-2021 to till date will be declared as null and void.
c) Decree for declaration that the decisions taken by the President, members of the executive committee of the tenure 2019-2021 and Secretary in contraventions to the clauses as enshrined in the Article of Association to till date will be declared as null and void.
d) Decree for declaration the monetary transaction has been committed by the President or Secretary in determent to the interest of the EIMPA that will compensated from their personal earnings to the association.
e) Decree for declaration that the members who had renewed their membership after 30th April, 2021 had been candidates and/or casted their voting rights in contravention to the Clause 31 and 32 of the Article of Association to be declared as void ab initio.
f) Decree for declaration that the lapses condoned for the candidates by the President being an ex-officio is to be declared as null and void.
g) The plaintiffs are thus entitled to decree of permanent injunction restraining the defendants being number 2, 4, 5, 6, 7, 8, 10, 11, 16, 18, 19, 20, 21, 22, 24, 25, 26, 28, 29, 30, 31 their men, agents, assigns and/or legal representatives from not only continuing as in the post of the President or executive Committee members who have been elected for the tenure 2021-2023 of the prestigious association and also to take decisions.
h) A special officer may be appointed and re-election among the valid members keeping a parity with the Clauses 31 and 32 of the Article of Association and the clauses enshrined in the Election Conduct Rules.
i) Cost at the Hon’ble Court
The civil court has jurisdiction to entertain election disputes, and in cases of uncertainty in obtaining a waiver from the tribunal, direct approach to the civil court is justified.
Writ petitions challenging internal election disputes in associations are not maintainable under Article 226 of the Constitution.
A plaintiff who has acquiesced in or condoned the alleged irregularities or illegalities cannot come to Court with clean hands and is not entitled to the discretionary relief of an interim injunction....
No Appeal lies against a finding when the decree has not gone against the person filing the Appeal.
Regulatory codes governing national organizations are clarificatory in nature and apply to all constituents. An electoral process founded on reliance upon non-existent judicial authority is fundament....
The central legal point established in the judgment is that a petitioner must fulfill the conditions for membership as per the Bye-laws and exhaust alternative statutory remedies before approaching t....
Statutory provision, namely Section 36 of the Tamil Nadu Societies Registration Act, also is not empowering the Registrar of Co-operative Societies to go into the election dispute.
Power can only be given by the board of directors of the company in exercise of its statutory power by passing the resolution under the provisions of Section 291 of the Companies Act in favour of a d....
The central legal point established in the judgment is the validity of the General Body meeting and election process under the Societies Registration Act, 1975.
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