SWATI ULHAS KERKAR AND ORS. versus SANJAY WALAVALKAR AND ORS.

[2021] 3 S.C.R.

ASWATI ULHAS KERKAR AND ORS.

SANJAY WALAVALKAR AND ORS.

(Civil Appeal No. 412 of 2021)

BFEBRUARY 10, 2021

[A. M. KHANWILKAR AND S. RAVINDRA BHAT, JJ.]

Societies – 22 persons (including appellants) were inductedon 17.09.17 as members of the Society by the Managing Committee,despite the pending requisition expressing no confidence against itC– Decision set aside by Registrar – Upheld by High Court –Challenged by the Society, Chairman and Secretary – SLP wasdismissed with the observation that if the 22 persons who were dis-membered assail the decision of the High Court, the issue can beconsidered on merits – Present appeal – Held: Decision of the thenDManaging Committee dtd.17.09.17, suffers from the vice of unseemlyhaste, and thus is colourable exercise of power and non-est in theeyes of law – It cannot be viewed differently for 5 appellants justbecause of prior date of application – This is precisely the effect ofthe decision of the Registrar in his operative order [paragraph (A)]as applicable to the appellants and similarly placed two otherEpersons, who are not before Supreme Court – High Court rightlyupheld that conclusion of the Registrar vide impugned judgmentwhile dismissing the writ petition of the Society – Order passed bythe Registrar (paragraph (A) of operative order) as affirmed by theHigh Court, clarified – Applications made by the appellants andFsimilarly placed two other persons for grant of membership of theSociety, are deemed to be pending and/or revived and be consideredby the newly constituted Managing Committee on its own merits,keeping in mind the observations made in the present judgment –Societies Registration Act, 1860.GSocieties – Continuation of election process pending thepresent appeal – Challenge to – Held: Not maintainable at theinstance of the appellants as their status is merely that of theapplicants for grant of membership – Until they are admitted asmembers of the Society, they would have no right to participate inthe election process.H

Partly allowing the appeal, the Court

HELD: 1.1 According to respondent No. 1, the questionwhether the appellants have been legally and properly admittedas members or not is lis between the existing members and theManaging Committee, to which the appellants herein arestrangers and have no locus in that regard. This argument istenuous and cannot be sustained. For, the real question posed atthe instance of these appellants is whether they had right to beconsidered for being admitted as members of the Society andfurther whether the order of the Registrar results indismembering them despite they being validly admitted asmembers at the relevant point of time vide decision of the thenManaging Committee dated 17.09.2017. Indeed, it is open tothe existing members to object to any new person being admittedas member of the Society by the outgoing Managing Committeeand that would be lis between the existing members and theoutgoing Managing Committee. That, however, does not denudethe appellants of cause of action, who desired to be admitted asmembers of the Society being eligible in all respects, to beconsidered for such admission. Similarly, if person has beendismembered by the Society including on account of directionissued by the competent authority, such person will haveindependent remedy to assail that decision. In either case,therefore, being affected by such non-consideration or by virtueof dismembering, the aggrieved person would be competent topursue remedy before the concerned forum for redressal of hisgrievance and for enforcement of his legal rights. The appellantswere admitted by the then Managing Committee to be membersof the Society, but they have been subsequently dismemberedonly because of the order passed by the Registrar having becomefinal. Further, they were made party to the proceedings beforethe Registrar, who had set aside the decisions of the thenManaging Committee, dated 17.09.2017. Thus understood, theobjection regarding maintainability of challenge to the decisionof the Registrar and of the High Court by such affected persons(appellants herein) cannot be countenanced. [Paras 37, 38][1192-G-H; 1193-A-E]

A1.2 It is true that the appellants did not file separate writpetition before the High Court despite the unambiguous orderpassed by the Registrar on 09.03.2018 directly affecting them indeclaring the decision of the then Managing Committee dated17.09.2017 to admit them as members of the Society, as illegal,arbitrary and to set it aside on that count. However, undisputedly,Bthat part of the order of the Registrar was assailed by the Societybefore the High Court by way of Writ Petition. The reliefs claimedin the stated writ petition by the Society were, to also espousethe cause of the appellants herein. For, the appellants wereadmitted by the then Managing Committee as members of theCSociety. They came to be dismembered subsequently only becauseof the order of the Registrar of setting aside the decision of thethen Managing Committee dated 17.09.2017 attaining finality.Indubitably, the Society is competent to espouse the cause of itsmembers and more so to justify its actions in the form of decisionof the then Managing Committee in office. The appellants hereinDcannot be faulted for having directly assailed the decision of theHigh Court confirming the declaration and subject order of theRegistrar resulting in their being dismembered from themembership of the Society. The rejection of earlier special leavepetition filed by the Society and the office bearers of the thenEManaging Committee will not come in the way of the appellantsherein to espouse their cause in their own rights. The appellantscannot be denuded of their right to assail the order of theRegistrar and of the High Court denying them of their coreright of being considered to be admitted as member of the Society,being eligible in all respects. [Paras 39, 40][1193-F-H; 1194-A-FC, E-G]2.1 22 persons (including appellants herein) had appliedfor being admitted as member of the respondent-Society between12.09.2016 to 19.12.2016. Notably, 5 appellants (out of 22persons) had already submitted their application until 18.10.2016Gbefore the stated requisition was moved by 18 out 32 existingmembers of the Society on 07.11.2016 expressing no confidencein the then Managing Committee. Indisputably, requisition/noticeof no confidence makes no reference to the apprehension aboutany attempt being made by the office bearers of the thenHManaging Committee to change the constitution (membership

pattern) of the Society. The membership applications were placedfor consideration of the Managing Committee, in its meetingconvened on 02.01.2017 for that purpose but the decision wasdeferred. The problem in the present case is the manner ofconsideration of stated applications of appellants (and two others)by the outgoing Managing Committee including by unjustlyprotracting the requisition for convening SGBM demanded bymajority of existing members. For, upon receipt of suchrequisition, it was the bounden duty of the Secretary of the Society,in terms of clause 3(v), to immediately issue notice to conveneSGBM within 15 days from the date of receipt of requisition andto issue 15 days’ notice to all the members intimating about dateof such meeting. The Secretary had issued such notice on22.11.2016 scheduling SGBM for 07.12.2016. But, before thedate of meeting, the Managing Committee deferred the SGBMon some specious objection. That meeting was not held. Instead,the then Managing Committee hastened to take decision aboutadmitting 22 new members in its meeting held on 17.09.2017 bygiving short notice of only one day. This action did not findfavour with the Registrar for the reasons recorded in his decisiondated 09.03.2018 including for setting aside the minutes ofManaging Committee meeting dated 17.09.2017, some of whichcommended to the High Court as is discerned from the impugnedjudgment. [Paras 42, 44][1195-F-H; 1196-A-B, C-F]

2.2 For some acts of commission or omission of the thenManaging Committee, the appellants who are otherwise eligibleto be enrolled as members of the Society in their own rights neednot be denied of the same. They have right to be consideredfor being admitted as members of the Society by the newly electedManaging Committee. [Para 47][1197-G-H]

3.1 It would be unwise to accede to the submission that atleast the case of 5 appellants, who had applied for grant ofmembership before the majority of the existing members hadmoved no confidence motion on 07.11.2016 be treated differently.At the instance of these appellants it is not permissible to reopenthe findings and conclusion reached by the High Court, as regardsillegality committed by the then Managing Committee in deferringthe SGBM despite the mandate in that regard in terms of clause

A3(v) of the bye-laws and instead hastening the process ofadmitting 22 new members thereby changing the constitution ofthe Society of only 32 existing members. That finding andconclusion has become final with the rejection of the SLP filed bythe Society and the office bearers of the then ManagingCommittee on 15.06.2020. Resultantly, it must follow that theBdecision of the then Managing Committee dated 17.09.2017admitting 22 new members has been rendered non-est. This logicuniformly applies to all the 22 persons enrolled as new membersof the respondent-Society. There is no legal basis to segregatethe claim of 5 appellants on the basis of date of (prior) applications.CIndubitably, merely upon making an application it does not followthat he/she would stand admitted as member of the Society.The applicant must fulfil other eligibility and procedural conditionsand eventually, the Managing Committee must find the candidaturefit and deserving for being admitted as member of the Society.In other words, the decision of the then Managing CommitteeDdated 17.09.2017, “as whole”, suffers from the vice of unseemlyhaste, and thus colourable exercise of power and non-est in theeyes of law. It cannot be viewed differently for 5 appellants justbecause of prior date of application. This is precisely the effect ofthe decision of the Registrar in his operative order [paragraphE(A)] as applicable to the appellants and similarly placed two otherpersons, who are not before this Court. The High Court rightlyupheld that conclusion of the Registrar vide impugned judgmentdismissing the writ petition of the Society. [Paras 48, 49][1198-B-G]F3.2 Appellants challenged the continuation of electionprocess and having been taken forward to constitute the newlyelected Managing Committee despite pendency of this appeal.This grievance cannot be maintained at the instance of theseappellants- as the status of these appellants is merely that of theapplicants for grant of membership. Until they are admitted asGmembers of the Society, they would have no right whatsoever toparticipate in the election process culminated in June 2020. [Para52][1199-F-G]

3.3 The order passed by the Registrar (paragraph (A) ofhis operative order) as affirmed by the High Court is clarified/H

modified, to mean that the applications made by the appellantsand similarly placed two other persons for grant of membershipof the Society, are deemed to be pending and/or revived and beconsidered by the newly constituted Managing Committee on itsown merits in accordance with law, keeping in mind theobservations made in this judgment. [Para 53][1199-H; 1200-A-B]

Vipulbhai M. Chaudhary v. Gujarat Cooperative MilkMarketing Federation Limited & Ors. (2015) 8 SCC 1: [2015] 3 SCR 997; Zoroastrian Cooperative HousingSociety Ltd. & Anr. v. District Registrar, CooperativeSocieties (Urban) & Ors. (2005) 5 SCC 632 : [2005] 3SCR 592; Rajendra N. Shah v. Union of India & Anr.(2013) SCC OnLine Guj 2242; Kusum Ingots & AlloysLtd. v. Union of India & Anr. (2004) 6 SCC 254 : [2004]1 Suppl. SCR 841; Mukund L. Abhyankar v. ChiefExecutive Officer, National Federation of Urban Co-op. Bank and Credit Societies Ltd. & Ors. (2017) 241DLT 358; T. Varghese George v. Kora K. George &Ors. (2012) 1 SCC 369 : [2011] 12 SCR 1070; State ofPunjab & Anr. v. Gurdial Singh & Ors. (1980) 2 SCC471 : [1980] 1 SCR 1071 – referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 412 of2021.

From the Judgment and Order dated 28.05.2020 of the High Courtof Judicature at Bombay at Goa in Writ Petition No. 373 of 2018.

Tushar Mehta, SG, Huzefa Ahmadi, Vinay Navare, Sr. Advs.,Ms. Anshula Vijay Kumar Grover, Ivo D’Costa, Arun R. Pedneker, Ms.

AMukti Chowdhary, R. P. Gupta, Sahil Tagotra, Advs. for the appearingparties.

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J.

B1. The central question in this appeal is: Whether the invalidationof membership of appellants and the impleaded appellants[1] (and twoothers), solely on the ground that the then Managing Committee on itsway out and facing no confidence motion before the Special GeneralBody Meeting[2] demanded by the majority of existing members of theSociety ought not to have hastened admission of new members, is justCand proper and the appropriate direction necessary in that regard?

FACTUAL MATRIX

2. Briefly stated, Prabodhan Education Society[3] is registeredsociety under the Societies Registration Act, 1860[4]. The Society consistedDof 32 members – before induction of 22 persons (including the appellants)as members on 17.09.2017 and their subsequent removal in terms of theimpugned decision.

3. The bye-laws of the Society mandate that the elections to theKaryakari Samiti (Managing Committee) be held every three years. Theelections to the Managing Committee were due in September 2013,Ehowever, there was delay in conducting elections, which ultimatelycame to be held on 05.10.2014. While the Managing Committee electedin 2014 was at the helm of affairs of the Society, it was served with arequisition dated 07.11.2016 signed by 18 of the 32 existing members ofthe Society, to convene SGBM for removal of the Chairman, SecretaryFand Treasurer and for conducting elections therefor. The removal of theManaging Committee was sought on various grounds of abuse of powerand mismanagement, resulting in loss of confidence.

4. In furtherance of the said requisition, the Secretary vide letterdated 22.11.2016, scheduled SGBM on 07.12.2016. However, uponGobjections raised by the members of the Managing Committee to holdsuch SGBM, the said decision came to be reviewed and the SGBM

1 For short, “the appellants”

2 For short, “SGBM”

3 For short, “the Society”.

H4 For short, “the 1860 Act”.

stood cancelled. That decision was communicated to the members ofthe general body vide letter dated 03.12.2016.

5. Aggrieved by the cancellation of the SGBM by the ManagingCommittee, Sanjay Walavalkar (respondent No. 1 herein and one othermember of the Society) approached the High Court of Bombay, Benchat Goa[5] vide Writ Petition No. 1195 of 2016 for the following reliefs:

“(a) This Honourable Court be pleased to issue writ of mandamusor writ in the nature of mandamus or any other appropriate writ,order or direction commanding the Respondent No.4 to convenea Special General Body Meeting to transact the agenda asrequisitioned by the 18 requisitioning members vide their letterdated 07.11.2016 addressed to the Chairman/Secretary of the saidsociety and to hold the same under the supervision and control ofthe Respondent Nos.2 and/or 3 as the observers to oversee suchmeeting.

(b) This Honourable Court be pleased to issue writ of mandamusor writ in the nature of mandamus or any other appropriate writ,order or direction commanding the Respondent Nos. 2 and/orRespondent No.3 to direct the Respondent No.4 to convene aSpecial General Body Meeting to transact the agenda asrequisitioned by the 18 requisitioning members vide their letterdated 07.11.2016 addressed to the Chairman/Secretary of the saidsociety and to hold the same under the supervision and control ofthe Respondent Nos.2 and/or 3 as the observers to oversee suchmeeting.”6. Indisputably, 22 persons (including the appellants – vide lettersdated 12.09.2016, 19.09.2016, 22.09.2016, 18.10.2016, 12.12.2016 and19.12.2016) had filed applications for being enrolled as member of theSociety. The Secretary issued notice dated 29.12.2016 proposing toconvene meeting of the Managing Committee on 02.01.2017 to inductnew members. The induction was, however, deferred. The Secretaryissued another notice on 16.09.2017 for convening meeting of theManaging Committee on 17.09.2017, to consider induction of newmembers. In that meeting, the Managing Committee went on to inductthe aforesaid 22 persons (including the appellants) as members, despite

5 For short, “the High Court”

6 For short, “AGM”

Aobjections raised by the Treasurer. In the same meeting, it was decidedto convene an Annual General Body Meeting[6] on 08.10.2017 forconducting elections to constitute new Managing Committee. The relevantportion of the minutes of meeting dated 17.09.2017 is as under:

“3. It was decided that the 34[th] General Body Meeting be convenedBon Sunday, 8[th] October 2017 at 10:00 AM, in the school premises.Notices be sent 15 days in advance.

4. Following new 22 (Twenty two) members were inducted todayas members of Prabhodhan Education Society (General Body).(Their applications were pending since Sept/Oct 2016). It wasCdone to complete the pending work/task of the present committeebefore expiry of the term.

Shri Vithal G.P. Parrikar, the Treasurer, raised his objection toinduction of new members. He said he would not mind theirDinduction after General Body and expressed fear that this actmay invite contempt of court.”

7. Respondent No. 1, aggrieved by the said development, soughtadditional reliefs in the above writ petition as under:

“(a) This Hon’ble Court be pleased to declare that the NoticeEdated 29/12/2016 addressed by the Secretary of the RespondentNo.4, thereby proposing to convene the meeting of the ManagingCommittee inter-alia to induct new members to the General Bodyof the Respondent No.4 is illegal and bad in law and the same bequashed and set aside.F

(b) This Hon’ble Court be pleased to declare that the holding ofthe Meetings of the Managing Committee of the PrabodhanEducation Society on 17/09/2017 and 18/09/2017 and the decisionstaken there-at (including in respect of induction of RespondentNo.5 to 26) are illegal and non-est and the same be quashed andGset aside and the Respondent No.5 to 26 be restrained from actingas members of the Respondent No.4 for all intents and purposes.

(c) This Honourable Court be pleased to restrain the ManagingCommittee of the Respondent No.4 from admitting or inductingany new members to the General Body of the Respondent No.4,Hpending holding of the Special General Body Meeting as

requisitioned by 18 members of the Respondent No.4 vide theirletter dated 07.11.2016.”

8. As the decision of the Managing Committee dated 17.09.2017came to be assailed before the Court, the Managing Committee deferredelections.

9. The High Court vide interim order dated 05.10.2017 permittedrespondent No. 1, to bring on record the 22 newly inducted members, asthey were likely to be affected by the outcome of the further reliefsclaimed in the stated writ petition. The relevant portion of the interimorder is extracted hereunder:

“1. The matter is moved urgently at the instance of the Petitioner.It could not be taken up yesterday.

2. Mr Kantak, learned Senior Advocate on behalf of the 4thRespondent, states, on instructions, that the elections scheduledon 8th October 2017 will be deferred till 5th November 2017.

3. However, it is pointed out that the term of the current ManagingCommittee and its office bearers ends by 7th October 2017. Inview of the statement made, the present Managing Committeewill continue as pro tem or caretaker Managing Committee tillthe next elections but will not take any major financial, policy orother decisions until that time. It may attend to routine managementand administrative issues alone.

4. List the Petition high on the supplementary board on 31stOctober 2017.

5. In the meantime, leave to amend to join the newly inductedmembers. Amendment to be carried out without need ofverification by 10th October 2017. Notice to be issued to the newlyadded Respondents returnable on 31st October 2017. Anamendment is also permitted to add an additional prayer. Libertyto file an additional affidavit after the amendment is carried out.”

10. The above writ petition was ultimately disposed of vide orderdated 08.11.2017, directing the Inspector General of Societies/DistrictRegistrar[7 ]to decide the dispute on its merits as per law, in the followingwords:

7 For short, “the Authority”

“8. ..... Since the Petitioner has already approached the InspectorGeneral under Section 20(A) and the Inspector General isconsidering the complaint and that it is the grievance of thePetitioner that certain developments have taken place pendingthe decision of the complaint, even the subsequent grievance ofthe Petitioner can be considered by the Inspector General on itsown merits. Since the Inspector General is an authority under theAct, it will be appropriate that the matter is first looked into by theAuthority under the Act, before this Court is called upon to decidethe issue of internal management of the society at first instance.

10. Accordingly, we dispose of the Writ Petition by directingRespondent No.3 i.e. the Inspector General, before whom thecomplaint is made by the Petitioner is pending, to consider theadditional grievance made by the Petitioner as well. The InspectorGeneral will decide the matter on its own merits as per law. AllDcontentions of all parties are kept open, including the one mentionedabove.

11. The ad-interim order passed in this petition, in the form ofstatement recorded will continue till disposal of the complaint andtwo weeks thereafter.”E

11. Pursuant to the aforesaid order, respondent No. 1 filed aconsolidated complaint dated 16.11.2017 before the Authority. TheAuthority registered Case No. DRN/RDS/794/2017 wherein it adjudgedthree original complaints dated 13.10.2016, 04.11.2016 and 05.12.2016along with the consolidated complaint.F

12. The Authority, after having heard the parties to the complaintas well as the newly inducted 22 members, vide judgment and orderdated 09.03.2018, was pleased to issue directions and also set aside thedecision of the Managing Committee dated 17.09.2017 giving membershipto 22 persons (including the appellants) on the ground that the same wasGillegal and arbitrary. The operative order of the Authority is reproducedhereunder:

“A) I hereby declare that the induction of Shri. GajananHarishchandra Mandrekar, Shri Subhash Vinayak Desai,Adv. Sau. Swati Ulhas Kerkar, Dr. Sitaram V. Korgaonkar,HShri Pandharinath Lakshman Mapari, Dr. Bhiva Ladu Malik,

Shri Milind Vaman Karkhanis, Shri Krishnaraj NarcinhaSukerkar, Shri. Atmaram Vaman Gaonkar, Shri. Pravin PunajiNeswankar, Shri. Sandeep V. Palni, Shri. Kiran RamchandraNaik, Shri. Datta Purushottam Naik, Shri. ShashankGokuldas Kamat, Shri. Audhut Ramchandra Kamat, Sau.Medha R. Prabhudessai, Shri. Devidas J. Saraf, Shri. AbhaiBhamaikar, Shri. Ashish Sarvottam Prabhudessai, Shri.Vivek P. Navare, Shri. Vasudev Subrai Naik Khaunte andDr. Kedareshwar P.S. Narvekar, as members of thePrabodhan Education Society, by virtue of the decision takenby the majority members of the managing committee at itsmeeting held on 17.09.2017, is illegal, arbitrary and ishereby set-aside;B) I hereby declare that the decision of the majority members ofthe managing committee of the Prabodhan Education Society notto hold the SGM as requisitioned by 18 members vide their letterdated 07.11.2016, is illegal, arbitrary, de-hors the power of themanaging committee and mala-fide;

C) For the detailed stated in the foregoing part of this Order, Ihereby declare and hold the act of managing committee as guiltyof mismanagement of affairs of the Prabodhan Education Societyand breach of their fiduciary obligations towards the general bodyof the society;

D) I hereby direct the managing committee of the PrabodhanEducation Society and particularly its Secretary Shri Velingkar totake step to convene an Annual General Body Meeting of theSociety, within period of 7 days from the date of receipt of thisOrder, with due procedure laid there in under the SocietiesRegistration Act for the specific purpose of holding elections tothe various posts of the managing committee of the PrabodhanEducation Society for the period 2018-2021;

E) with the view to ensure free, fair and impartial conduct ofelections, I hereby direct that the aforesaid proposed AGM shallbe held under the supervision, direction and control of Shri SurajVernekar, Civil Registrar-cum-Sub Registrar as the observer; andthat the agenda concerning elections of managing committee

CDEF

Amembers shall be transacted first, before any other item/businessis taken up for consideration;

F) I hereby direct the managing committee elected after theforthcoming elections (subject to the approval of the general body)may frame necessary rules concerning regulation of its affairs.BConsidering the situation in which the society is placed presentlyand considering the fact that there are certain gaps in the byelawsof the society concerning certain aspects, the managing committeemay consider formulating rules on the following amongst otherissues:

Ci. Rules giving further details on the manner in which the managingcommittee shall act after receiving requisitions by membersdirecting it to convene SGM.

ii. Rules stipulating whether any other item (such as induction ofnew members or change to the constitution of the society etc.Dshall be permitted during the pendency and consideration of arequisition under Clause 3(V) of the Society byelaws;

iii. Rules whether there should be any cap/outer limit on themaximum number of members that can be inducted at any givenpoint of time and further whether such induction of new membersEcan be done on the eve elections (if not, up till what time can suchinduction be done);

iv. Rules dealing with the manner and prescribing further detailsas to how meetings of the managing committee and the generalbody shall be held (including prescribing notice period for meetings,Fmode/manner of intimation etc.),v. Rules dealing with procedural aspects of conduction meetingsand recording of minutes etc.”

(emphasis supplied)

13. Assailing the said judgment and order, the Society representedGthrough Secretary, Chairman and Secretary (in individual capacity) filedWrit Petition No. 373 of 2018 before the High Court, wherein, the staygranted in the previous proceedings was extended until disposal of thewrit petition by an interim order dated 22.03.2018.

14. The High Court vide final judgment and order dated 28.05.2020,framed and adjudged five issues. The issues read as under:

“1. Can Society, on its own, maintain writ petition against anorder passed by statutory authority concerning the resolutionsits Governing Body or Managing Committee passed?

2. Is the impugned order ultra vires of the Registrar? In thealternative, has the Registrar got the power to rule on theallegations of mismanagement by the Managing Committee?

3. Has the Managing Committee committed an illegality in notconvening the Special General Body Meeting at the request of 18of 32 Society members?

4. In the absence of any provision in the bylaws or under the actfor bringing up no-confidence motion or to remove the officebearers, could the applicants have insisted on having SpecialGeneral Body meeting for discussing those issues?

5. Has the Managing Committee legitimately inducted 22 newmembers, especially, pending the writ petition and on the eve ofthe elections?”

While addressing the fourth issue, the High Court placed relianceon decision of this Court in Vipulbhai M. Chaudhary v. GujaratCooperative Milk Marketing Federation Limited & Ors.[8 ]and heldthat no confidence motion can be maintained even in absence of provisiontherefor in the bye-laws. The relevant portion of the impugned judgmentis reproduced below:

“71. Vipulbhai M. Chaudhary, I reckon, clinches the issue. Inany democratically constituted institution, the office bearerscontinue to hold the office during the pleasure of the membersthat have chosen those office bearers. Sometimes the governingrules or regulations of that institution are silent about how thegoverning members must account for their misdeeds ormaladministration when their tenure is subsisting. But it is no licensefor them to wreak havoc in the name of administration and annihilatethe institution. In other words, it is institutionally inherent that thegoverning members must administer the affairs of the institution

faithfully, honestly, and diligently; they should always remainaccountable to the members for their omissions and commissions.In the same reckoning, the members’ right to unseat thesegoverning members is equally inherent in the scheme of the things,despite no express provision to that effect, say, in the byelaws.

B72. So we cannot hear the petitioners saying that they were justifiedin not holding the SGBM. In this context, we may reiterate whatthe Registrar has held: once the majority members, especially intune with the bylaws, required the Managing Committee to hold ageneral body meeting for whatever purpose, it is the ManagingCommittee’s bounden duty to abide by that demand. Let us assumeCthat the majority members wanted the general body meeting todiscuss frivolous or unimportant issues; still it is not for theManaging Committee to sit in judgement over the tenability of themajority members’ demand. Once meeting convened, it is for theentire body of the membership to examine the demands and decideDon them. This observation, as made by the Registrar, remainseven more relevant because, here, the allegations concerned thevery Managing Committee.

74. Nevertheless, for the reasons mentioned above, I must confirmEthe findings of the Registrar that the Managing Committee hasacted with material irregularity by refusing to abide by the majoritymembers’ demand for an SGBM. Now, we will examine the lastissue, keeping in view our answer to this issue.”

With respect to the fifth issue, pertaining to the validity of inductionFof the 22 new members, the High Court disagreed with the findings ofthe Authority on material aspects. However, it held that the same wasbad being taken by the Managing Committee pending no confidencerequisition. The High Court adverted to the dictum in Vipulbhai (supra)and observed thus:

G“95. Then, what vitiates the Managing Committee’s decision toinduct new members?

96. We have already held that the Managing Committee’s refusalto hold the SGBM even when majority members demanded is anact of illegality. Now, we should examine the induction of the new

members in the context of that refusal. On the converse, if therewas no demand for an SGBM by the majority and no expressionof no-confidence, then the governing body may induct newmembers at any stage during its tenure—the beginning, the middle,or the end of the tenure making no difference.

97. Here, the majority members—18 out of 32—demanded anSGBM; it was, among other things, to express their no confidenceagainst certain office bearers, too. The case holding of VipulbhaiM. Chaudhary dispels all doubts about whether the statute orthe byelaws should provide for unseating of an office bearer. Noneed. It is constitutionally conferred right.

98. Thus, inferentially, we may hold that once majoritymembers express no confidence on the governing body orany office bearer and demand an SGBM, until the governingbody proves its majority, it loses legitimacy to take policydecisions. And that legitimacy includes induction of newmembers. Otherwise, the moment governing body, that is theManaging Committee, faces no-confidence motion, the easy—and devious—way out for the governing body is put the SGBMon hold, induct new members indiscriminately, alter the membershipequation, and then hold the SGBM. It is abuse of power thatupsets the democratic design of any society and that shouldbe struck at.

99. So the inescapable conclusion is that the ManagingCommittee inducting new members in the face of noconfidence and the impending SGBM is illegal and arbitrary.”

(emphasis supplied)

Finally, the High Court concluded by holding thus:

“Under these circumstances, I refuse to interfere with theimpugned order, dated 9th March 2018, of the District Registrar.As result, I dismiss the writ petition. No order on costs. Interimrelief, if any, stands vacated.”

15. In view of disposal of the Writ Petition No. 373 of 2018, theCivil Registrar-cum-Sub Registrar of Societies, vide letter dated01.06.2020, directed the Secretary to convene an AGM to conductelections for constituting new Managing Committee by 04.06.2020

A(within 7 days from the date of High Court’s order dated 28.05.2020),failing which the Authority shall conduct such elections forthwith.

16. In the meantime, aggrieved by the impugned decision of theHigh Court, the Society, Chairman and Secretary approached this Courtvide SLP (Civil) No. 7352 of 2020 on 04.06.2020. Simultaneously, theBChairman and Secretary also addressed letter dated 04.06.2020 to theAuthority, informing that the Managing Committee held meeting on03.06.2020 wherein it had decided to fix the AGM tentatively on28.06.2020 for holding elections. Further, it informed that final date ofelection would be fixed at later date, after withdrawal of Section 144of Cr.P.C., 1973 which was in force due to lockdown ordered on accountCof prevailing pandemic situation (Covid-19).

17. On the other hand, since the Managing Committee failed toconvene an AGM within 7 days, the Authority vide notice dated 09.06.2020convened an AGM on 25.06.2020 for conducting elections.

D18. Be that as it may, the stated SLP filed by the Society waslisted before this Court on 15.06.2020, whence the same came to bedisposed of in the following terms:

“We decline to interfere in this Special Leave Petition at theinstance of the petitioners. The Special Leave Petition is dismissedEaccordingly.

If the 22 person(s) who have been dis-membered fileindependent Special Leave Petition(s) to assail the decisionof the High Court at their instance, the issue can beconsidered on its own merits.

FPending applications, if any, stand disposed of.”

(emphasis supplied)

19. Taking cue from the aforementioned observations made bythis Court, the appellants have approached this Court, by way of thisappeal, to impugn the order dated 28.05.2020 passed by the High Court.GWith permission of this Court, 12 other persons (out of the 22 dismemberedpersons) similarly placed as the original appellants have been impleadedas appellants in this appeal.

20. During pendency of the present proceedings, in response tothe Authority’s notice dated 09.06.2020, the Secretary addressed letterH

dated 22.06.2020, informing that as per the bye-laws, 15 days’ notice isessential for convening an AGM and the same cannot be convened within7 days as directed by the Authority. The said letter also informed thatthe direction vide order dated 09.03.2018 was only to start the processof elections and not to conduct elections per se. Further, the ManagingCommittee had convened meeting on 20.06.2020 to fix the AGM on12.07.2020 for conducting elections. On the same day, the Secretaryhad also addressed letter to the District Magistrate seeking permissionto conduct elections on 12.07.2020.

21. The appellants had addressed letters to the Authority on24.06.2020 informing about the pendency of the present appeal andrequesting to defer the elections. Despite receiving this intimation, theAuthority proceeded to conduct the elections on 25.06.2020 andconstituted the new Managing Committee. This Court upon beingappraised of the said development, vide order dated 25.06.2020, clarifiedthat any steps taken by the Authority would be subject to the outcome ofthis proceedings. The order reads thus:

“Permission to file Special Leave Petition is granted.

Heard learned counsel for the petitioner(s).

It has been brought to our notice that despite the pendency of thisSpecial Leave Petition and which fact was brought to the noticeof the Registrar, for reasons best known to the Registrar, hehastened the election process.

This factual position be placed on record by way of formalapplication, to be filed by the petitioner(s) and for appropriatereliefs, as may be advised.

In addition, it will be open to the left over persons who are similarlyplaced as the petitioner(s), to file formal application for impleadingthem as party to the present proceedings.

Both these applications to be filed within one week from todaythrough email/online.

Issue notice to the respondents on this Special Leave Petition andproposed applications, returnable within four weeks.

Dasti, in addition, is permitted.

1188SUPREME COURT REPORTS

AAny steps taken by the Registrar, including electionsallegedly conducted by him today, i.e. 25.06.2020 will besubject to the outcome of this Special Leave Petition.”

(emphasis supplied)

22. Curiously, the District Magistrate, in response to the letterBdated 22.06.2020 of the Secretary, refused to grant permission to conductelections on 12.07.2020 in view of the restrictions imposed under Section144 of Cr.P.C. The same was intimated by letter dated 10.07.2020.

23. Meanwhile, the newly elected Managing Committee addressedletters dated 25.06.2020 and 11.07.2020 to the schools run by the SocietyCintimating about the change in management of the Society as well as theschools.24. We may now advert to the challenge before us in the presentappeal.

SUBMISSIONSD

25. The thrust of the arguments of the appellants is that in termsof clause 1(c) of the bye-laws of the Society, person automaticallygets inducted as member of the Society upon submitting application inthe prescribed form along with prescribed fees. As such, the appellantswere validly inducted as members of the Society as they had dulyEsubmitted their applications in form prescribed under the bye-laws ofthe Society. Reliance was placed upon the dictum of this Court inZoroastrian Cooperative Housing Society Ltd. & Anr. v. DistrictRegistrar, Cooperative Societies (Urban) & Ors.[9] to contend that theright to membership in any Society would have to be tested on theFtouchstone of the bye-laws and nothing else.

26. It was urged that in any case 5 out of the 22 persons hadsubmitted their applications for membership before the requisition of noconfidence had been moved. Whereas, rest of the persons had filedtheir applications in December 2016. It was urged that their applicationsGfor membership were eventually approved on 17.09.2017 after notingthat each one of them was an eminent and well acclaimed person ineducational field. Moreover, the Managing Committee had wide discretionto induct member and they did exercise that power bonafide whilstinducting the appellants. Reliance was placed on the findings of the HighHCourt to contend 9 (2005) 5 SCC 632that the decision taken by the Managing Committee (to

induct appellants) was during the subsistence of its tenure and cannot befaulted with. It was also urged that the High Court had noted that therewas no illegality in admitting the members on the eve of elections or atthe end of the tenure of the Managing Committee. Further, there was nofinding by the Courts below that the appellants did not fulfil therequirements under the bye-laws.

27. It was submitted that reliance upon the decision of this Courtin Vipulbhai (supra) by the High Court was misplaced as the said decisionconcerned co-operative society, whereas the Society in this case isregistered under the 1860 Act. Further, it was urged that the said decisionwas based on the 97[th] Amendment to the Constitution of India[10], whichhad been struck down by Division Bench of Gujarat High Court inRajendra N. Shah v. Union of India & Anr.[11]. Reliance was thenplaced on the dictum of this Court in Kusum Ingots & Alloys Ltd. v.Union of India & Anr.[12 ]to contend that though an appeal had beenpreferred before this Court against the decision of Gujarat High Court inRajendra N. Shah (supra), the same is pending adjudication (vide CivilAppeal Nos. 9108-9109 of 2014) and there being no order suspendingthe operation of the said judgment, the 97[th] Amendment is not currentlyin existence. Therefore, the decision in Vipulbhai (supra) wasinapplicable. The appellants also relied upon decision of Delhi HighCourt in Mukund L. Abhyankar v. Chief Executive Officer, NationalFederation of Urban Co-op. Bank and Credit Societies Ltd. & Ors.[13]to urge that the fundamental basis of the decision in Vipulbhai(supra)stood fully eroded without the 97[th] Constitutional Amendment.28. The appellants also submitted that the Authority hastened theelection despite being informed of the pendency of the present appeal.This was done to defeat the rights of the appellants. It is contended thatmala fides of the authorities are manifest from the fact that permissionto conduct the election proposed by the Managing Committee was refusedby the District Magistrate in view of the Covid-19 protocol, while theelection scheduled by the Authority during the same time was conductedin breach of the said protocols. Further, as on the date of elections, theelectoral college consisted of 52 members including 30 existing membersand the 22 dismembered persons. However, despite pendency of the

10 For short, “the 97th Amendment”

11 2013 SCC OnLine Guj 2242

12 (2004) 6 SCC 254

13 (2017) 241 DLT 358

Apresent appeal (wherein the rights of the 22 dismembered persons areunder consideration), the Authority conducted elections with electoral ofonly 30 members. This was nothing short of abuse of process of law.

29. Per contra, respondent no. 1 contended that the appellantswere aware of the proceedings before the Authority yet chose not toBchallenge its judgment and order. Hence, the appellants are bound bythe findings therein. Resultantly, it is not open to the appellants to assailthe order of the High Court. Further, with the dismissal of SLP (preferredby the Society, Chairman and Secretary), the order of the High Courtstands confirmed and it cannot be further challenged. In that, the findingthat the Managing Committee inducted 22 persons illegally and arbitrarily,Calso had attained finality. Significantly, the appellants had no rightwhatsoever, much less vested right on the date of election and ex-consequenti no locus to file the present appeal.

30. It was urged that the said 22 persons were intentionallyinducted by the then office bearers of the Society, so as to alter theDcomposition of the Society in their favour and to consolidate their controlover the Society. Further, it was submitted that the SLP (filed by theSociety, Chairman and Secretary) was dismissed on 15.06.2020 and onthe same day, the appellants approached this Court by filing fresh appealthrough the same Advocate-on-Record, which clearly shows collusionEbetween them. Furthermore, the controversy is about the validity ofinduction of the appellants and not their removal. As such, the lis isinter-se between the Managing Committee and members and theappellants being outsiders had no causal connection with the Societywhatsoever. Even if the appellants had any vested right, that stooddefeated by the order of the Authority and of the High Court confirmingFthe same including this Court.

31. It was then contended that the High Court had rightly heldthat in democratically constituted institutions, the office bearers continueto hold office during the pleasure of the members and they can beunseated despite any express provision in the bye-laws. Reliance wasGplaced upon decision of this Court in T. Varghese George v. Kora K.George & Ors.[14 ]to urge that the Managing Committee had no power totake any policy decision once no confidence motion is moved, as thatwould be against their fiduciary duties towards the Society. It was

14 (2012) 1 SCC 369H15 (1980) 2 SCC 471

submitted that any decision taken after the no confidence motion is movedought to be tested on the touchstone of ‘legal malice’ or malice in fact,whilst relying upon the decision of this Court in State of Punjab & Anr.v. Gurdial Singh & Ors.[15].

32. It was also urged that the appellants cannot claim the principleof open membership as envisaged in Section 22 of the Goa Co-operativeSocieties Act, 2001, to apply to them. For, the respondent-Society is nota co-operative society. At best, the applications of the 22 members maybe considered afresh.

33. The argument set forth by the Authority is that this appeal isnot maintainable as the impugned order dated 28.05.2020 has attainedfinality upon dismissal of the SLP (Civil) No. 7352 of 2020 (filed by theSociety, Chairman and Secretary). It is urged that upon disposal of WritPetition No. 373 of 2018 vide order dated 28.05.2020, the interim ordertherein stood vacated and the elections were required to be conductedsince there was no order staying the elections. In fact, the High Court inits order had observed that elections should be conducted expeditiously.It was submitted that the Authority had to conduct elections due toinaction of the Managing Committee in that regard. It was then urgedthat the Authority conducted elections on 25.06.2020, that too one monthafter the order dated 28.05.2020, by duly putting the members on 15days’ notice, which cannot be termed as acting in undue haste. Thelearned Solicitor General, for the Authority elaborated upon Vipulbhai(supra) to contend that the said judgment had rightly dealt with thedemocratic principles, which apply to cooperative societies and othersocieties alike. It was submitted that the said judgment is binding anddoes not lose its force as the democratic principles were in existencesince long time and were merely given constitutional frame by the97[th] Amendment. It was further submitted that in light of the said decision,no confidence motion is maintainable even in absence of express provisionin that regard in the bye-laws; and the silence in the bye-laws cannot betreated as gap. Finally, it was urged that in democratically governedbody, members can be inducted by the Managing Committee only whenit enjoys confidence of the members. However, once the requisition ofno confidence was pending, the Managing Committee ought not to haveinducted new members into the Society and more so as many as 22 innumber which would inevitably change the constitution of the Society.

A34. We have heard Mr. Huzefa Ahmadi, learned senior counseland Ms. Anshula Grover, learned counsel for appellants; Mr. TusharMehta, learned Solicitor General, Mr. Arun R. Pedneker, learned StandingCounsel for the State of Goa and Ms. Mukti Chowdhary, learned counselfor the Authority; and Mr. Vinay Navare, learned senior counsel andMr. R.P. Gupta, learned counsel for respondent No. 1.BCONSIDERATION

35. At the outset, be it noted that the scope of present appeal islimited to the question of justness of induction of the appellants as membersof the Society by the then Managing Committee on its way out andCdespite the pending requisition expressing no confidence against it;including the correctness and sweep of the order passed by the Registrarand as upheld by the High Court vide impugned judgment, qua theappellants herein. No other issue decided by the Registrar or the HighCourt need be addressed in the present appeal at the instance of theseappellants.D36. The High Court, vide impugned judgment, went on to holdagainst the Society due to the manner in which the requisition of noconfidence motion moved by the majority of the existing members (18out of 32) to convene SGBM came to be delayed and frustrated by thestratagem adopted by the then Managing Committee, who had allegedlyEindulged in mismanagement and maladministration of the affairs of theSociety. That action of the then Managing Committee has been held tobe illegal and bad in law as it was bordering on colourable exercise ofpower. Having said that, the High Court then dealt with the issue ofjustness of induction of 22 new members (including appellants herein)Fby the then Managing Committee vide decision dated 17.09.2017 anddeclared the same as illegal being consequence of illegal action of notconvening the SGBM demanded by the majority of members of theSociety for removal of office bearers and instead hastening the inductionof new members. The finding of the High Court that the decision of thethen Managing Committee dated 17.09.2017 hastening the admission ofG22 new members whilst no confidence motion was pending, is illegal andbad in law has become final with the dismissal of SLP filed by the Societyvide order dated 15.06.2020.

37. Before we dwell upon the core issue involved in this appeal, itis apposite to examine the preliminary objection raised by respondentH

No. 1 regarding maintainability of the appeal at the instance of theseappellants. According to respondent No. 1, the question whether theappellants have been legally and properly admitted as members or not isa lis between the existing members and the Managing Committee, towhich the appellants herein are strangers and have no locus in that regard.This argument, in our opinion, is tenuous and cannot be sustained. For,the real question posed at the instance of these appellants is whetherthey had right to be considered for being admitted as members of theSociety and further whether the order of the Registrar results indismembering them despite they being validly admitted as members atthe relevant point of time vide decision of the then Managing Committeedated 17.09.2017. Indeed, it is open to the existing members to object toany new person being admitted as member of the Society by the outgoingManaging Committee and that would be lis between the existingmembers and the outgoing Managing Committee. That, however, doesnot denude the appellants of cause of action, who desired to be admittedas members of the Society being eligible in all respects, to be consideredfor such admission. Similarly, if person has been dismembered by theSociety including on account of direction issued by the competentauthority, such person will have independent remedy to assail thatdecision. In either case, therefore, being affected by such non-consideration or by virtue of dismembering, the aggrieved person wouldbe competent to pursue remedy before the concerned forum for redressalof his grievance and for enforcement of his legal rights.

38. In the present case, the appellants were admitted by the thenManaging Committee to be members of the Society, but they have beensubsequently dismembered only because of the order passed by theRegistrar having become final. Further, they were made party to theproceedings before the Registrar, who had set aside the decisions of thethen Managing Committee, dated 17.09.2017. Thus understood, theobjection regarding maintainability of challenge to the decision of theRegistrar and of the High Court by such affected persons (appellantsherein) cannot be countenanced.

39. It is then urged by respondent no.1 that these appellants hadnot challenged the decision of the Registrar dated 09.03.2018 before theHigh Court and thus had acquiesced of the same. Resultantly, they werenot entitled to maintain this appeal. It is true that the appellants did notfile separate writ petition before the High Court despite the unambiguous

ABC

Aorder passed by the Registrar on 09.03.2018 directly affecting them indeclaring the decision of the then Managing Committee dated 17.09.2017to admit them as members of the Society, as illegal, arbitrary and to setit aside on that count. However, undisputedly, that part of the order ofthe Registrar was assailed by the Society before the High Court by wayof Writ Petition No. 373 of 2018. The reliefs claimed in the stated writBpetition by the Society were, to also espouse the cause of the appellantsherein. For, the appellants were admitted by the then ManagingCommittee as members of the Society. They came to be dismemberedsubsequently only because of the order of the Registrar of setting asidethe decision of the then Managing Committee dated 17.09.2017 attainingCfinality. Indubitably, the Society is competent to espouse the cause of itsmembers and more so to justify its actions in the form of decision of thethen Managing Committee in office. So understood, the appellants hereincannot be faulted for having directly assailed the decision of the HighCourt confirming the declaration and subject order of the Registrarresulting in their being dismembered from the membership of the Society.DAs matter of fact, this Court while dismissing SLP (Civil) No. 7352 of2020 filed by the Society, vide order dated 15.06.2020, had made it amplyclear that if the 22 persons, who have been dismembered, were to fileindependent special leave petition(s) questioning the correctness of theorder of the Registrar in setting aside the decision of the then ManagingECommittee dated 17.09.2017 resulting in their being dismembered fromthe Society and of the High Court confirming that part of the Registrar’sorder, that challenge could be considered on its own merits. To put itdifferently, the limited issue involved in this appeal is expressly kept openby this Court for being agitated by the appellants. Indeed, this observationcame to be made by this Court whilst rejecting the challenge of theFSociety and the office bearers of the then Managing Committee to thedecision of the Registrar and of the High Court vide impugned judgment.Nevertheless, as aforesaid, the rejection of earlier special leave petitionfiled by the Society and the office bearers of the then ManagingCommittee will not come in the way of the appellants herein to espouseGtheir cause in their own rights.

40. Reverting to the merits of the issue involved in this appeal, wemust hasten to add that the appellants cannot be denuded of their right toassail the order of the Registrar and of the High Court denying them oftheir core right of being considered to be admitted as member of theHSociety, being eligible in all respects. They claim to possess the requisite

qualification and had expressed intention to abide by the bye-laws of theSociety. Their right to be considered for being admitted as members ofthe Society cannot be linked to the acts of commission and omission ofthe office bearers of the then Managing Committee. Neither the Registrarnor the High Court has dismembered the appellants on the ground ofbeing ineligible in any manner or because it has been established thatthey were the henchmen of the office bearers of the then ManagingCommittee. Notably, even the no confidence motion does not mentionthat the then Managing Committee wanted to intentionally change theconstitution of the Society (membership pattern) by admitting newmembers. In that sense, until contrary is proved the appellants (and twoothers) must be regarded as bonafide applicants. Only the decision ofthe then Managing Committee dated 17.09.2017, stands vitiated for thereason noted by the High Court. Admittedly, at least five appellants hadsubmitted their applications for being admitted as members of the Societyeven before the no confidence motion was moved on 07.11.2016. It is adifferent matter that upon consideration of request for admitting asmembers of the Society, the newly elected Managing Committee mayaccept or reject the same on merits. Depending upon that outcome, theappellants may even resort to further remedies permissible in law.

41. For elaborating this grievance of the appellants, we must advertto the bye-laws of the Society under which the appellants had submittedapplication(s) for being admitted as member of the respondent-Society.Bye-law 1(a) postulates that any person irrespective of his race, caste,religion and sex, shall be entitled to be considered for being admitted asmember upon complying with the conditions specified therein. The otherrelevant clause in the bye-laws is clause 1(c), which reads thus:

“1) MEMBERSHIP:

(c) Members shall be admitted by the Karyakari Samiti only onan application made in the prescribed form and on payment of theprescribed fees. Such application form shall be considered onlywhen it is proposed by member of the Karyakari Samiti. TheKaryakari Samiti is competent to reject any application withoutassigning any reason therefor.”

42. For the present, it is not necessary for us to dwell upon thewider question of whether the membership in the respondent-Society isone of open membership concept or otherwise. Suffice it to note that 22

Apersons (including appellants herein) had applied for being admitted asmember of the respondent-Society between 12.09.2016 to 19.12.2016.Notably, 5 appellants (out of 22 persons) had already submitted theirapplication until 18.10.2016 before the stated requisition was moved by18 out 32 existing members of the Society on 07.11.2016 expressing noconfidence in the then Managing Committee. Indisputably, requisition/Bnotice of no confidence makes no reference to the apprehension aboutany attempt being made by the office bearers of the then ManagingCommittee to change the constitution (membership pattern) of the Society.The membership applications were placed for consideration of theManaging Committee, in its meeting convened on 02.01.2017 for thatCpurpose but the decision was deferred.43. Be it noted that as per clause 1(c) of the bye-laws, it is theprerogative of the Managing Committee to admit person as memberof the Society or to reject his application without assigning any reasontherefor. The eligibility for being enrolled as member of the Society isDspelt out in clause 1(a). The further condition in clause 1(c) is of beingproposed by the member of the Managing Committee and submittingapplication in the prescribed form and payment of prescribed fee.

44. The problem in the present case is the manner of considerationof stated applications of appellants (and two others) by the outgoingEManaging Committee including by unjustly protracting the requisition forconvening SGBM demanded by majority of existing members. For, uponreceipt of such requisition, it was the bounden duty of the Secretary ofthe Society, in terms of clause 3(v), to immediately issue notice to conveneSGBM within 15 days from the date of receipt of requisition and to issue15 days’ notice to all the members intimating about date of such meeting.FThe Secretary had issued such notice on 22.11.2016 scheduling SGBMfor 07.12.2016. But, before the date of meeting, the Managing Committeedeferred the SGBM on some specious objection. That meeting was notheld. Instead, the then Managing Committee hastened to take decisionabout admitting 22 new members in its meeting held on 17.09.2017 byGgiving short notice of only one day. This action did not find favour withthe Registrar for the reasons recorded in his decision dated 09.03.2018including for setting aside the minutes of Managing Committee meetingdated 17.09.2017, some of which commended to the High Court as isdiscerned from the impugned judgment.

45. The High Court had adverted to each of the findings of theRegistrar regarding factual aspects. It is unnecessary to analyse thesame in the present appeal, considering the cause propounded by theappellants. What is relevant is the view taken by the High Court that thethen Managing Committee was amiss in admitting the 22 new members.The High Court agreed with the view of the Registrar that only after theoutgoing Managing Committee had secured the trust vote and confidenceof the majority of SGBM, it could have proceeded to admit new members.For, with the issue of no confidence requisition by the majority (18 out of32), it had lost legitimacy to take any policy decision regarding themanagement and administration of the Society, which included inductionof new members. The High Court expounded about the danger ofresorting to such stratagem — as it was likely to upset the constitution(membership pattern) of the Society and inevitably strengthen the handsof the office bearers of the outgoing Managing Committee and enablethem to clung to the power, despite being under cloud due to expressionof no confidence against them by majority of members vide letter dated07.11.2016.46. The view so taken by the High Court in the impugned judgmenthas been assailed by the appellants. According to them, at least 5appellants had submitted applications for being inducted as member ofthe Society, much before the majority of existing members (18 out of 32)had moved requisition on 07.11.2016. Even the remaining applicants (17out of 22 including appellant herein) had submitted applications inDecember 2016 itself, which were placed for consideration before thethen Managing Committee on 02.01.2017 and finally on 17.09.2017. Untilthat date, there was no restrictive order issued by any Court or competentforum against the then Managing Committee prohibiting it from admittingnew members. Further, no case has been made out that the appellantswere ineligible to become member of the Society or that they had notsubmitted the prescribed form or failed to pay prescribed fees therefor.Furthermore, there is no finding by the Registrar or in particular by theHigh Court that the appellants were the henchmen of the office bearersof the then Managing Committee. The Registrar as well as the HighCourt have proceeded on the basis of surmise and hypothesis that theappellants were being inducted as new members to strengthen the handsof office bearers of the then Managing Committee and to defuse the

[2021] 3 S.C.R.

Athreat of removal from the office due to the pending no confidence motionagainst them.

47. We find force in the argument of the appellants that for someacts of commission or omission of the then Managing Committee, theappellants who are otherwise eligible to be enrolled as members of theBSociety in their own rights need not be denied of the same. They have aright to be considered for being admitted as members of the Society bythe newly elected Managing Committee.

48. Be that as it may, we now proceed to examine the argumentof the appellants that at least the case of 5 appellants, who had appliedCfor grant of membership before the majority of the existing membershad moved no confidence motion on 07.11.2016 be treated differently.After cogitating over all facets, we are of the considered opinion that itwould be unwise to accede to this submission. We say so because asnoted earlier, at the instance of these appellants it is not permissible toreopen the findings and conclusion reached by the High Court, as regardsDillegality committed by the then Managing Committee in deferring theSGBM despite the mandate in that regard in terms of clause 3(v) of thebye-laws and instead hastening the process of admitting 22 new membersthereby changing the constitution of the Society of only 32 existingmembers. That finding and conclusion has become final with the rejectionEof the SLP filed by the Society and the office bearers of the thenManaging Committee on 15.06.2020. Resultantly, it must follow that thedecision of the then Managing Committee dated 17.09.2017 admitting22 new members has been rendered non-est. This logic uniformly appliesto all the 22 persons enrolled as new members of the respondent-Society.There is no legal basis to segregate the claim of 5 appellants on the basisFof date of (prior) applications. Indubitably, merely upon making anapplication it does not follow that he/she would stand admitted as memberof the Society. The applicant must fulfil other eligibility and proceduralconditions and eventually, the Managing Committee must find thecandidature fit and deserving for being admitted as member of theGSociety. In other words, the decision of the then Managing Committeedated 17.09.2017, “as whole”, suffers from the vice of unseemly haste,and thus colourable exercise of power and non-est in the eyes of law. Itcannot be viewed differently for 5 appellants just because of prior dateof application.

49. This is precisely the effect of the decision of the Registrar inhis operative order [paragraph (A)] as applicable to the appellants andsimilarly placed two other persons, who are not before us. The HighCourt has rightly upheld that conclusion of the Registrar vide impugnedjudgment dismissing the writ petition of the Society.

50. In our opinion, however, the Registrar as well as the HighCourt, after so observing, ought to have clarified the position that theparties (appellants and Society) are relegated to the situation as it obtainedprior to 17.09.2017. That would have been just and proper order. Thatmeans the applications filed by the appellants and similarly placed twoother persons between September 2016 to December 2016, ought to beregarded as pending for scrutiny and for being processed by the newlyconstituted Managing Committee after conducting elections, which weredue since October 2016. To this limited extent, the appellants ought tosucceed in the present appeal. We say so because the Registrar as wellas the High Court has not given any finding regarding ineligibility of theappellants to be member of the Society. In any case, that would be amatter to be considered by the newly constituted Managing Committeein the first instance, on case-to-case basis, on its own merits in accordancewith law uninfluenced by any observation made by the Registrar, theHigh Court or for that matter in this judgment. If the decision is adverseto any applicant, he would be free to pursue further remedies as may bepermissible in law.

51. To conclude, we uphold the view taken by the High Court thatthe decision of the Managing Committee dated 17.09.2017 suffers fromthe vice of colourable exercise of power and thus, illegal and bad in law.The same is non-est in the eyes of law. However, the parties (appellantsand Society) need to be relegated to the stage before 17.09.2017, meaningthereby the applications submitted by the appellants and two othersimilarly placed persons for grant of membership, be regarded as pendingand/or deemed to be revived in terms of this judgment. Their applicationsfor grant of membership be considered by the newly constituted ManagingCommittee on its own merits in accordance with law. All contentionsavailable to the parties in that regard are left open.

52. While parting and for the completion of record, we may advertto the challenge of the appellants to the continuation of election processand having been taken forward to constitute the newly elected ManagingCommittee despite pendency of this appeal. In light of our above analysis,

Athis grievance cannot be maintained at the instance of these appellants -as the status of these appellants is merely that of the applicants for grantof membership. Until they are admitted as members of the Society, theywould have no right whatsoever to participate in the election processculminated in June 2020.

B53. Accordingly, this appeal partly succeeds to the extent ofclarifying/modifying the order passed by the Registrar (paragraph (A)of his operative order) as affirmed by the High Court, to mean that theapplications made by the appellants and similarly placed two other personsfor grant of membership of the Society, are deemed to be pending and/or revived and be considered by the newly constituted ManagingCCommittee on its own merits in accordance with law, keeping in mind

the observations made in this judgment.

54. The appeal is disposed of in the above terms. Pendingapplications, if any, also stand disposed of. No order as to costs.

Divya Pandey

Appeal partly allowed.