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2024 Supreme(Online)(DEL) 31636
HIGH COURT OF DELHI
Vikas Mahajan, J
RAMJAS FOUNDATION – Appellant
Versus
SMT SHUBRA GUPTA AND OTHERS – Respondent
CS(OS) 11/2024
For the Appellants/Petitioners: Mr. Alok Kumar, Sr. Adv., Mr. Amanullah, Mr. Amit Kr. Singh, Mr. Varun Maheshwari, Mr. Manan Soni, Mr. Azhar Ali
For the Respondents: Mr. Vinod Kumar Khurana, Mr. Vivek Sood, Sr. Adv., Mr. Ashim Shridhar, Ms. Radhika Gupta, Mr. Sachit Jolly, Ms. Mansha Anand, Mr. Arun Vohra, Mr. S.N. Pandey
The court affirmed the validity of the AGM and the election of office bearers, ruling that the defendants' actions violated the Memorandum of Association.
Headnote:(A) Code of Civil Procedure - Order XXXIX Rules 1 and 2, Section 151 - Dispute regarding the validity of a Managing Committee's elections - Plaintiff contended that the defendants violated the Memorandum of Association (MoA) by not accepting the results of the 102nd AGM held on 17.11.2023, where new office bearers were elected - Defendants claimed the AGM was illegal due to procedural violations and lack of quorum. (Paras 1-6, 34-46)
(B) Legal Standing - The plaintiff must establish prima facie validity of the AGM and that the defendants acted contrary to the MoA - The court found the plaintiff's claims regarding the legality of the AGM persuasive, given the attendance of a quorum and adherence to the MoA. (Paras 39-41)
(C) Interim Relief - The court granted interim relief to the plaintiff, restraining the defendants from conducting further elections or interfering with the plaintiff's management until the suit is resolved. (Paras 49-50)
Facts of the case:
The plaintiff, Ramjas Foundation, filed a suit to declare the notice for a subsequent AGM issued by the defendants as null and void, claiming that the defendants were engaged in illegal activities contrary to the MoA. The 102nd AGM was held on 17.11.2023, where new office bearers were elected, but the defendants refused to acknowledge it.
Findings of Court:
The court found that the 102nd AGM was validly convened, and the elections conducted therein were lawful, thus granting the plaintiff's application for interim relief.
Issues: The main issues were whether the 102nd AGM was valid and if the defendants' actions constituted a breach of the MoA.
Ratio Decidendi: The court held that the elections held in the 102nd AGM were valid as they complied with the MoA's requirements, and the defendants' subsequent meetings were unauthorized.
Result: Plaintiff's application for interim relief granted.
| Table of Content |
|---|
| 1. clarification of applications filed by both parties. (Para 1 , 2) |
| 2. background of the ramjas foundation and the agm. (Para 3 , 4 , 5 , 6 , 7 , 10) |
| 3. details of the contested meetings and actions taken. (Para 8 , 9 , 12 , 13 , 14) |
| 4. arguments from the plaintiff regarding the validity of the agm. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21) |
| 5. counterarguments from the defendants on the legality of the agm. (Para 22 , 23 , 24 , 25 , 26 , 27) |
| 6. rejoinder by the plaintiff addressing the defendants' claims. (Para 28 , 29 , 30 , 31) |
| 7. court's overview of the case and parties' positions. (Para 32 , 33 , 34 , 35 , 36) |
| 8. court's analysis of the moa and agm's compliance. (Para 37 , 38 , 39 , 40 , 41 , 42) |
| 9. further court observations on the validity of the agm. (Para 43 , 44 , 45 , 46 , 47) |
| 10. court's decision on the interim relief sought by the plaintiff. (Para 48 , 49 , 50) |
| 11. application for impleadment by new parties. (Para 51 , 52 , 53 , 54 , 55 , 56) |
| 12. arguments from the applicants for impleadment. (Para 57 , 58 , 59 , 60 , 61 , 62) |
| 13. plaintiff's opposition to the impleadment application. (Para 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70) |
| 14. court's ruling on the impleadment application. (Para 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80) |
JUDGMENT
VIKAS MAHAJAN, J.
I.A. 299/2024 (under Order XXXIX Rules 1 and 2 r/w Section 151 CPC by the plaintiff)
I.A. 11164/2024 (under Section 151 of CPC filed on behalf of defendant nos. 1 and 3)
1. At the outset it needs to be clarified that the arguments were heard in the I.A. No. 299/2024 filed by the plaintiff Foundation under order XXXIX Rule 1 and 2 read with section 151 of the CPC, but the order vide which judgment was reserved inadvertentlydoes not mention the number of the said application. It mentions the I.A. No. 11164/2024 filed by the defendant nos. 1 and 3 under section 151 of the CPC seeking restraint on Sh. Vinod Kumar Gupta, Sh. Mahendra Kumar Chawla and Sh. Atul Gupta from falsely claiming to be the elected members of the plaintiff Foundation, as well as, from conducting any meetings under the garb of managing committee of the plaintiff Foundation during the pendencyof the suit.
2. It may be noticed that as the reliefs prayed in I.A. 11164/2024 depend upon the outcome of I.A. 299/2024, therefore, both the applications are being decided bythis common order.
3. Sans the unnecessary details, the facts which are relevant for deciding the controversyin the I.A. No. 11164/2024 are that the present suit is filed by the Chairman of the Managing Committee of Ramjas Foundation (hereinafter referred to as “MCRF”) who is stated to be duly appointed in its 102nd Annual General Meeting (also called Ordinary General Meeting and hereinafter referred to as “AGM”) of the Foundation held on 17.11.2023.
4. The defendant nos. 1 – 3 are the members of the Foundation. The defendant no. 1 is the Ex-President of the Foundation, defendant no. 2 is the Ex-Chairman of MCRF and defendant no. 3 is the Ex-Secretary of MCRF.
5. The main grievance of the plaintiff is that the defendants are not willing to accept the mandate of 102nd AGM held on 17.11.2023 and are working / carrying on activities in breach of the Memorandum of Association (hereinafter referred to as “MoA”) of the Foundation.
6. It is the case of the plaintiff that the defendants did not call any meeting of MCRF except the one held on 11.01.2023 and have taken decisions as per their whims and fancies without placing the same before the MCRF. The defendant no. 2 has also entered into a settlement of Rs. 22,00,000/- in collusion with defendant nos. 1 and 3 with respect to the assets of the Foundation without the approval of MCRF and thus, caused loss of more than crores to the Foundation. Various other allegations have been made by the plaintiff. In nutshell, it is the case of the plaintiff that the defendants are involved in mismanagement and illegal functioning of the Foundation in violation of its MoA.
7. The plaint alleges that plaintiff Foun
