2009 Supreme(Mad) 3949
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
For the Petitioner: T.V. Ramanujam, Senior Counsel, for M/s. R. Ramanlaal,
Advocate.
For the Respondent:M.S. Krishnan, Senior Counsel, for M/s. Sarvabhuman Associates, Advocates.
The main legal point established is that the Civil Court has jurisdiction to adjudicate disputes related to the indoor management of private clubs, and the plaintiff has the right to seek relief under Section 9 of the C.P.C.
Headnote:
Indian Companies Act 1882 - Dispute over Club Management - Sections 9 and 92 of the C.P.C. - Civil Court's Jurisdiction - Indoor Management Doctrine
Fact of the Case:
The petitioner, a member of the defendant Club, alleged irregularities and violations of bye-laws by the committee members. The Club issued a show cause notice for disciplinary action, leading to a legal dispute.
Finding of the Court:
The Court found that the dispute related to the indoor management of the club, falling within the jurisdiction of a Civil Court. The Court rejected the defendant Club's plea to dismiss the suit, emphasizing the plaintiff's right to seek relief under Section 9 of the C.P.C.
Issues: The main issues were the jurisdiction of the Civil Court to adjudicate the dispute and the applicability of the indoor management doctrine.
Ratio Decidendi: The Court held that the Civil Court had jurisdiction to determine the dispute, as it related to the indoor management of the club. The Court emphasized that the plaintiff's right to seek relief under Section 9 of the C.P.C. could not be dismissed.
Final Decision: The Civil Court rejected the defendant Club's plea to dismiss the suit, affirming its jurisdiction to adjudicate the dispute.
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 out seve