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2024 Supreme(Online)(MP) 42469

HIGH COURT OF MADHYA PRADESH
SUSHRUT ARVIND DHARMADHIKARI, Duppala Venkata Ramana, JJ
Anil Sanghvi – Appellant
Versus
Registrar Firms And Societies – Respondent
WP 27769/2023



Advocates:
Vinay Gandhi,Advocate General

The court ruled that the conversion of a Society into a Company during ongoing litigation constituted contempt, emphasizing the need for adherence to bye-laws and conducting elections based on the valid list of members from 30.01.2016.

Headnote:(A) Madhya Pradesh Societies Registration Act, 1973 - Section 27 - Companies Act, 2013 - Conversion of Society to Company - The Society, during the pendency of litigation, converted itself into a Company, violating court orders, which led to contempt proceedings. The court emphasized the need for adherence to bye-laws and the legitimacy of the governing body. The last undisputed election was held on 30.01.2016, and the court directed fresh elections based on this list, while restraining all parties from financial decisions until the new governing body is in place. (Paras 1, 3, 14, 46, 74)

(B) Contempt of Court - The Society's conversion into a Company during litigation was deemed contemptuous, undermining the court's authority and the rule of law. (Paras 3, 74)

(C) Election Procedure - The court mandated that elections must be conducted based on the valid list of members as of 30.01.2016, ensuring compliance with the bye-laws. (Paras 46, 74)

(D) Judicial Conduct - The court expressed disapproval of the parties' conduct in litigation, highlighting the importance of proper pleadings and documentation. (Paras 2, 3)

ORDER

The matter is heard finally with the consent of parties.

1. This is the second round of litigation arising out of limited remand by the Hon’ble Supreme Court to decide the issue of list of voters based on which election should be held in the Respondent No. 4 Society, namely, ‘Shree Astha Foundation for Education Society’ (hereinafter referred to as ‘Society’).

“In absence of pleadings, the truth often hides, for justice delayed is justice denied.”

2. Before we advent into the merits of the case, at the very outset, we express resentment towards both the parties for the way in which they pursued first round of litigation with insufficient pleadings and without documents that had direct nexus with the core dispute involved in the present matter. Without detailed pleadings,the appreciation of critical facts andkey arguments remained unaddressedin the earlier roundand led to present round of litigation. The absence of proper submissions underscores the timely pursuit of justice and the efficiency of entire judicial system. Nevertheless, we are obligated to perform our judicial duty and ensure dispensation of justice.

3. Adding to our despair, we are further compelled to express our strong disapproval regarding the conduct of Society for making travesty of the judicial process, undermining the dignity of the Court and showing complete lack of respect for the rule of law. Why we say so is because despite the operation of the order dated 23.04.2024, Passed by this Court in Writ Petition No. 27769/2023 (in the first round of litigation). order dated 08.07.2024, Interim order passed by this Court during pendency of matter after limited remand. 3Interim order passed by this Court during pendency of matter after limited remand.and order dated 31.07.2024 passed by this Court along with order dated 15.05.2024, Order passed by the Hon’ble Supreme Court in Civil Appeal No(s). 6448/2024 remanding the matter to this Court for limited purpose to decide the issue of voter list. passed by the Hon’ble Supreme Court, the Society during the pendency of the matter converted itself from a Society to a Company and got itself registered under Companies Act, 2013, on 24.06.2024. To put it otherwise, the Society in blatant violation of the aforesaid orders, converted itself from ‘Shree Astha Foundation for Education Society’ to ‘M/s Shri Astha Foundation for Education, A Company registered under Companies Act, 2013, having its registered office at Safe Parisar, Gram Kanadia, Kanadia Road, Indore – 452016, Madhya Pradesh (Earlier known as “Shri Astha Foundation for Education Society” until 23.06.2024.(hereinafter referred to as ‘Company’).The said factum was brought on record vide I.A. No. 7051/2024, Allowed after judgment was reserved and subsequent developments were taken on record.filed by Respondent No. 4 Society on 08.08.2024. The contents of the aforesaid I.A. are relevant and thus reproduced as under –

“APPLICATION TO BRING ON RECORD BEFORE THIS HON’BLE COURT, THE SUBSEQUENT DEVELOPMENTS IN RESPECT OF RESPONDENT NO. 4; AND TO BRING ON RECORD THAT SUCH SUBSEQUENT DEVELOPMENT DOES NOT IN ANY MANNER, AFFECT THE PRESENT ‘LIS’:

May it please the This Hon’ble Court,

1. That it is submitted that during the pendency of this petition, the Respondent No. 4 has undergone a technical change in its nomenclature, the bona-fide disclosure of which before this Hon’ble Court, is undertaken by it as its bounden duty, even though such disclosure does not affect the nature of lis pending before this Hon’ble Court.

2. That it is submitted that on 20/08/2022, the Respondent No. 4 has passed a Resolution to carry out its conversion from being a Society into a Company under the Companies Act, 2013 in the form of a Company having charitable objects. Such resolution as duly passed in accordance with law, by the Respondent No. 4, has not caused any contravention or violation to the provisions of the M.P. Societies Registration Act, 1973. It is seen that such decision to cause c

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