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High Court Of Delhi
SARBJIT SINGH - Appellant
Versus
ALL INDIA FINE ARTS AND CRAFTS SOCIETY - Respondent
Interim Application 2514 of 1988
Decided On : 05/24/1989
SOCIETIES REGISTRATION ACT, 1860 - SECTION 15 - MEMBERSHIP OF SOCIETY - REGISTER OF MEMBERS - ANNUAL GENERAL MEETING - HOLDING OF - TIME FOR - MANDATORY - ELECTION OF OFFICE BEARERS - TIME FOR - MANDATORY - EXPULSION OF MEMBER - NOT PERMITTED - NATURAL JUSTICE - VIOLATION OF - ADMINISTRATOR - APPOINTMENT OF - CIRCUMSTANCES WARRANTING.
Fact of the Case:
Plaintiffs, members of defendant society, filed suit seeking to restrain defendants from renewing/negotiating lease deed with British Council and from parting with possession of premises. Plaintiffs also sought appointment of administrator to ensure compliance with Memorandum and Articles of Association of society.
Finding of the Court:
1. Section 15 of the Societies Registration Act, 1860, postulates that a member of a society shall be a person who, having been admitted therein according to the rules and regulations thereof, shall have paid a subscription or shall have signed the roll or list of members thereof, and shall not have resigned in accordance with such rules and regulations. 2. Annual General Meeting of the society shall be held every year on some convenient date between first day of April and last day of October to be fixed by the Council. Notice of this meeting together with a copy of the audited Balance Sheet and the Agenda be posted to each member at least 15 clear days before the date of the meeting. 3. Expulsion of any member is not contemplated by section 15 of the Act. Any dispute between the parties has to be referred to the principal court of original civil jurisdiction in the district where the chief building of the society is located. 4. In view of the mandatory provisions of the Memorandum and Articles of Association which require the Annual General Meeting to be held each year within a specified time, the contention of the defendants that non-holding of Annual General Meeting is directory and not mandatory cannot be accepted.
Issues: 1. Whether the plaintiffs are entitled to maintain the suit? 2. Whether the defendants are conducting the affairs of the society in contravention of the Memorandum and Articles of Association of the Society? 3. Whether an Administrator should be appointed to regularise the affairs of the Society?
Ratio Decidendi: 1. Section 15 of the Societies Registration Act, 1860, postulates that a member of a society shall be a person who, having been admitted therein according to the rules and regulations thereof, shall have paid a subscription or shall have signed the roll or list of members thereof, and shall not have resigned in accordance with such rules and regulations. Therefore, the plaintiffs, who are members of the society, are entitled to maintain the suit. 2. The defendants are conducting the affairs of the society in contravention of the Memorandum and Articles of Association of the Society by not holding the Annual General Meeting every year during the period April to October, by not preparing the audited accounts of the Society, and by not maintaining a register of members. 3. In view of the disputes between the members and the Society, and the failure of the defendants to comply with the requirements of the Memorandum and Articles of Association of the Society and the Societies Registration Act, it is necessary to appoint an Administrator to regularise the affairs of the Society.
Final Decision: The court appointed an Administrator to administer the affairs of the Society, to ensure that the Annual General Meeting is held in accordance with the law and elections are held in accordance with the Memorandum and Articles of Association of the Society.
( 1 ) BY this order, I propose to deal with an application filed by the plaintiffs under Order 39 Rules 1 and 2 of the Code of Civil Procedure, and objections re- garding maintainability of the above said suit.
( 2 ) BY the application, the plaintiffs prayed that defendants No. 1, 2 and 3, its employees and agents be restrained from in any manner renewing/negotiating or executig a fresh lease deed with respect to the premises of All India Fine Arts and Crafts Society Building, Rafi Marg, New Delhi, which is occupied by the British Cbuncil. The plaintiffs also seek to restrain: the defendants from parting with possession of any part of the premises. The plaintiffs also seek an order from this Court restraining defendant No. 2, S. S. Bhagat, and defendant No. 3, Jag Mohan Chopra, from acting as Secretary and Chairman of the All India. Fine Arts and Crafts Society, defendant No. 1, tall tits annual General Meeting is held as per law and as per Memorandum and Articles of Association of defendant No. 1 Society.
( 3 ) DURING the course of arguments, it has also been stated that inasmuch as the provisions of the Memorandum and Articles of Association of defendant No. 1 Society have been violated, an administrator be appointed for the purposes of ensuring compliance of the provisions of the Memorandum and Articles of Association, particularly holding of the mandatory Annual General Meetings of the Society, and having elections in accordance therewith.
( 4 ) THE plaintiffs Sarbjit Singh, M. K. Puri and Man Simran Singh had filed this suit, asserting that plaintiff No. 1 is a life member of defendant No. 1, and that plaintiffs No. 2 and 3 are members, and ex office bearers of defendant No. 1 Society.
( 5 ) IT is asserted that defendant No. 1 is registered under the Societies Registration Act, 1860. That defendants No. 2 and 3 are the Secretary of the society, that defendant No. 3 was elected as Chairman of the Suciety at a meeting held on 16th January, 1988.
( 6 ) THE plaintiffs assert that the Annual General Meetings of the Society at which the new office bearers of the Society are to be elected, have not been held for two years in contravention of Article VI of the Memorandum and Articles of Association of the Society. It is asserted that according to Article VI, the Annual General Meetings of the Society have to be held every year on some convenient date between 1st day of April and last day of October, and have to be fixed by the Council. Notices for holding the Annual General Meeting have to be accompanied by the audited balance-sheet and the agenda for the meeting, which have to bo posted to each member of defendant No. 1 Society at lesta 15 clear days before the date of the meeting. It has also to be accompanied by a report of the work of the Society during the past year and the audited balance-sheet together with budget for the next year, which has to be presented at the meeting, for adoption and approval.
( 7 ) IT is asserted that the notices for the 58th/59th Annual General Meeting for the years 1985-86 and 1986-87 sent by defendant No. 2. which notified that the Annual General Meeting of the Society was to be held on Saturday, 16th January, 1988. was not a proper notice. It is also noted that the notice stipulated that the Apnual General Meeting which was to be held on 27-12-19s7 will be held on 16-1-1988.
( 8 ) IT is asserted that letting out of a portion of the premises to the British Council at a monthly rental of Rs. 1. 50 lacs by defendant No. 2 is a commercial activity which is illegal and invalid, and has no sanction for the Memorandum of the Society. It is also asserted that defendant No. 2 in. connivance with defendant, in breach of the provisions of the Societies Registration Act, 1860 let out the premises to the British Council for commercial purposes. It is also asserted that defendants No. 2 and 3 are tampering with the records of the Society to cover up the misuse.
( 9 ) IT is further asserte
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