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IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. Parthiban, J.
Prithiviraj Jagannathan, Councillor, the Federation of Motor Sports Clubs of India - Applicant
Versus
The Federation of Motor Sports Clubs of India (FMSCI) represented by its Secretary-General and ors. – Respondents
O.A.No.727 of 2020 in C.S.No.388 of 2020
Decided On : 21-06-2021
Civil Procedure Code,1908 - Order 1 - Rule 8 - Companies Act, 1956 - Section 25 - Elected Councillor - Permanent injunction - Applicant/plaintiff is one of Councillors duly elected to hold office in 1st respondent/ defendant Company - 1st respondent/ defendant is Apex body in a Federation of Motor Sports Clubs of India which is a Company incorporated under Section 25 of Companies Act, 1956 - Company was incorporated - Object of Company was to promote and encourage Motor Sports amongst amateurs and professionals and to issue competition licences for various motor sports - 1st defendant is also a recognised Federation by Ministry of Sports and Youth Affairs, Government of India and is also a recognised body with International Federation of Motor Sports - 1st defendant is governed by Articles of Association, hereinafter referred to as 'AoA' - In terms of Clause 5 of AoA, there are 6 classes of Members namely, Founder, Ordinary,Associate Affiliate, Registered and Provisional Registered Members - As far as Founder Members are concerned, 5 Clubs were named in AoA at time of incorporation of Company - Whether Club should be made a party or not for maintaining suit, such an issue can always be decided at time of determination of suit, in future – Held, CASC has been part of 1st defendant Company as Founder Member for past 48 years and admittedly, applicant/plaintiff has been nominee of CASC and President of Council 1st defendant for 14 years - This is particularly so that in terms of Clause 37 of AoA, Council shall contain maximum of only 10 members and hence every vote in Council Meetings will have significant value and effect in running affairs of Federation- On behalf of 1st defendant, a compilation of decision was submitted, but this Court does not find any of decisions could be applied to factual matrix of the present case - Court, in fact, finds that though the compilation was circulated, no particular reference has been drawn to any ratio in decisions which could be squarely applied to present case on hand - More particularly, in House of Lords 1914 decision enclosed therewith no particular reference is pointed out as to its relevance to case on hand - Original Application is allowed.
The judgement indicates that a suit against a private sports club for declaration or injunction is maintainable when the plaintiff has a sufficient legal interest and the suit involves the protection of individual rights related to the club's functioning. The court recognizes that a nominee or representative of the club can maintain a suit to challenge decisions or actions that are alleged to be beyond the authority of the club's governing documents or that are otherwise illegal or arbitrary.
Furthermore, the court emphasizes that the validity of the plaintiff's standing depends on whether the club's nomination or membership status remains valid and whether the club has been properly represented in the proceedings. If the club itself has not been removed from its membership or disqualified under the governing rules, the individual representing it may have a right to maintain the suit independently.
The judgement also highlights that procedural requirements, such as obtaining leave under specific procedural rules, can be bypassed if the plaintiff's individual rights are directly affected and if the suit is based on the plaintiff's personal capacity as a duly elected or nominated member.
In summary, the court appears to support the view that legal action in the form of a suit for declaration or injunction against a private sports club is permissible when the individual has a direct, personal interest and the club's legal or administrative status remains intact, even if the club's formal registration or recognition is questioned.
ORDER :
The applicant herein is the plaintiff in the suit. The suit has been filed for declaring the decision of the Council of the 1st defendant/1st respondent dated 26.10.2020 under Agenda item No.17 communicated to the applicant/plaintiff through e-mail dated 17.11.2020 preventing/barring the applicant/plaintiff from acting and functioning as a Councillor of FMSCI on the ground of the status of CASC in respect of its registration is illegal, null and void and for permanent injunction restraining the respondents/ defendants from in any manner excluding the participation of the applicant/plaintiff in the Council meetings or any other Sub-Committee meetings of the 1st defendant/1st respondent so long as he is an elected Councillor in the 1st defendant/1st respondent.
2. The brief facts which gave rise to the filing of the Suit and the present Original Application are stated hereunder.
(b) The 1st defendant is governed by Articles of Association, hereinafter referred to as 'AoA'. In terms of Clause 5 of AoA, there are 6 classes of Members namely, Founder, Ordinary,Associate , Affiliate, Registered and Provisional Registered Members. As far as the Founder Members are concerned, 5 Clubs were named in the AoA at the time of the incorporation of the Company in 1973 and they are as follows:
(i) the Madras Motor Sports Club, Madras.
(ii) the Bangalore Motor Sports Club, Bangalore.
(iii) the Coimbatore Auto Sports Club, Coimbatore.
(iv) the Indian Automotive Racing Club Ltd., Bombay.
(v) the Calcutta Motor Sports Club, Calcutta.
(c) The applicant/ plaintiff herein represents one of the Founder Members, namely, the Coimbatore Auto Sports Club, Coimbatore, hereinafter referred to as 'CASC', on being duly elected as one of the Councillors of the 1st defendant Company which is akin to the post of Director in a Company.
(d) As per Clause 37 of AoA, the council shall contain minimum of 8 and maximum of 10 members and the member so elected shall be in the office for a period of two successive Annual General meetings and each Council member shall have one vote only. The applicant/plaintiff herein is admittedly an elected councillor nominated by one of the Founder Members, CASC and according to him, he has been elected and served as a President of the 1st defendant Company for several years.
3. The dispute which gave rise to the filing of the present Suit arose in 2020, when one of the Councillors raised an issue as to the status of CASC, as one of the 5 Founder Members on the ground that the CASC, which had all along been representing as a registered society had been declared defunct and also struck off the rolls and was also a dissolved Society in terms of the Societies Registration Act, 1959, and therefore, not entitled to continue as a Founder Member. As a consequence of which, CASC lost its status being an unregistered body and the applicant/plaintiff herein being a nominee of the non-existent Society, he cannot represent CASC any more, since the right to continue as a representative of the Club only on he being nominated by the Founder Member namely, CASC.
4. The dispute that was raised by one of the Councillors has ultimately snow balled into a action by the Council in their General Meeting dated 26.10.2020 wherein among various other Agendas, this particular issu
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