High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. PALANIVELU
The Ootacamund Club Represented by its Secretary The Nilgiris
Versus
H.S. Mehta
C.R.P. (P.D.) Nos.1020, 1021 &1022 of 2009,& M.P.Nos.1 of 2009
Decided on: 01-10-2009
Indian Companies Act 1882 - Allegations of irregularities and violations of bye-laws by Club committee members - Dispute over show cause notice and expulsion from membership - Court's analysis of jurisdiction and rejection of plaint under Order 7 Rule 11 of CPC
Fact of the Case:
The petitioner, a permanent member of the defendant Club, alleged irregularities and violations of bye-laws by the committee members. The Club issued a show cause notice for expulsion from membership, leading to a legal dispute.
Finding of the Court:
The Court analyzed the jurisdiction of the civil court and rejected the plaint under Order 7 Rule 11 of CPC, stating that the dispute did not fall within the indoor management of the club and that the plaint had sufficient pleadings with specific causes of action.
Issues: Jurisdiction of civil court, rejection of plaint under Order 7 Rule 11 of CPC
Ratio Decidendi: The Court held that the dispute did not fall within the indoor management of the club and that the plaint had sufficient pleadings with specific causes of action, justifying the rejection of the plaint under Order 7 Rule 11 of CPC.
Final Decision: All the Civil Revision Petitions were dismissed, and the trial court was directed to dispose of the case within three months.
Common Order:
1. The allegations contained in I.A.No.484 of 2008 (C.R.P.(PD).No.1021 of 2009) in brief are as follows:
1.(a) The defendant Club was incorporated in the year 1889 under the provisions of Indian Companies Act 1882. The Articles of Association described the classes of members in detail. The business and affairs of the Club are to be maintained by a committee consisting of a President and 12 other members who are to be elected annually at every Annual General Meeting. The petitioner is a permanent member having been elected on 211. 1994. He has been noticing that the bye laws of the Club was maneuvered for the advantage of committee members and every time of such flouting of the rights and he used to bring the same to the notice of the committee. But they were dismissed as minor incidents. The secretary of the Club on 9. 2001, while the petitioner was in the dance floor, demanded him to leave the dance floor and wear his jacket. While the Club was celebrating the Planters Ball on that day and while dancing he had removed his jacket, the petitioner brought the conduct of the secretary to the President. Totally suppressing his complaint, the Club issued notice on 010. 2001 on the strength of complaint by the secretary stating that an enquiry would be held on 210. 2001. Inspite of his unconditional apology, the Club suspended him on 210. 2001 for three months.
1.(b) Yet another incident took place while passing of the accounts at the Annual General Meeting on 25. 2004. The petitioner forwarded queries on 14.06.2004 as to the accounts. He brought the irregularities to the notice of the Registrar of Companies since he had raised the issue of accounts invoking Agenda -5. The committee of the Club had deliberately omitted this. His suggestion for incorporating changes in the bye laws has been met with a stony silence. Suggestions are to the effect that ordinary members could question the actions of committee members, hence they were not tabled before the Annual General Meeting.
1.(c) With reference to the Annual General Meeting to be held on 28.05.2005, the petitioner submitted his candidature to the post of committee member on 15. 2005 together with his nomination signed by a proposer. He sent 65 proxy forms endorsed in his favour for the said Annual General Meeting. The secretary of the Club had endorsed that some of the proxies sent by the petitioner were revoked by the members. He has no authority to scrutinise and reject the proxy forms and it is only the responsibility of the scrutinising committee. The petitioner was declared as not elected in the said meeting. Again the petitioner lodged a complaint with the Registrar of Companies as to the commissions and omissions committed by the committee and brought out various discrepancies. The elections have not been held in a fair and proper manner.
1.(d) During the inspection several irregularities in the books of accounts have come to light and flagrant violations too. Out of 21 violations, the Club applied for compounding 12 offences of which 4 offences were compounded. On 16.09.2007, in the presence of President and other committee members, the staff of the Club served liquor from three outlets. In addition to this, the Club was collecting corkage as is borne out by the secretarys circular. The petitioner sought clarification from the president on this issue but of no avail and hence he was forced to approach Excise Department for clarification. He lodged a complaint with regard to the violation and since there was no response, he approached the High court, Madras, for direction and directions were issued in writ petitions filed by this petitioner.
1.(e) The complaints lodged against the Club by the petitioner are genuine and have resulted in their being subjected to departmental action. In order to victimise him for the activities, the Club issued a show cause notice on 29. 2008. It is nothing else but an act of vindictiveness, since he has been pointing o
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