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Raja Himanshu Dhar Singh Vs. Additional Registrar, Co-operative Societies and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAllahabad High Court
Decided On
Case NumberWrit Appeal No. 272 of 1960
Judge
Reported inAIR1962All439
ActsCo-operative Societies Act, 1912 - Sections 43(1) and 43(2); Code of Civil Procedure (CPC) , 1908 - Sections 100 and 101 - Order 19, Rule 1
AppellantRaja Himanshu Dhar Singh
RespondentAdditional Registrar, Co-operative Societies and anr.
Appellant AdvocateHira Lal Verma and ;Uma Kant, Advs.
Respondent AdvocateStanding Counsel for Opposite Party 1 and ;K.C. Sinha and ;Jagdish Sarup, Advs. for Opposite Party 2
DispositionPetition dismissed
Excerpt:
.....the decision would bind all the members unless the act complained of is a fraud on the minority or is ultra vires the association. j see no difference in principle between the cases of the secretary of a club and of a corporation like the district board which has been created under the district boards act. jagdish swarup that in the present case there was good reason, for the secretary to have cancelled the meeting. 2. the notice must be frank, clear and free from trickiness, and if any special business is to be transacted this must be clearly stated. their importance is enhanced in proceedings like a writ where no parol evidence is recorded and if a party makes a definite allegation and the other party does not controvert it for summons the deponent of that affidavit for..........third submission it may be stated that the relationship between the members of an unincorporated members' club is governed by the law of contract and if the members have agreed to certain terms which are embodied in the rules then in existence or to be made thereafter, in accordance with the terms agreed upon by the members, those rules must govern their relationship. if the rules provided that the decision of a particular question must be by a majority, the decision would bind all the members unless the act complained of is a fraud on the minority or is ultra vires the association. in all other matters about which the rules are silent, the majority does not have any right to coerce the minority. (see n. f. harwell v. john jackson : air1948all146 ).9. it is true that in the present.....
Judgment:

Jagdish Sahai, J.

1. Raja Himanshu Dhar Singh, who is a member of the Hind Provincial Flying Club, has come up to his Court under Article 226 of the Constitution of India with a prayer that a writ of certiorari or any other writ, order or direction in the nature of certiorari be issued quashing the order passed by the respondent No. 1 the Additional Registrar, Co-operative Societies, U. P., Lucknow, on the 3rd of October, 1960.

2. The Hind Provincial Flying Club (hereinafter referred to as the Club) is a society registered under the Co-operative Societies Act. According to the allegations made by the petitioner the respondent No. 2 Sri B. P. Singh, who is the secretary of the club, issued a notice calling the tenth annual general meeting of the Club at the Club Office for the 15th of May, 1960, at 4 p. m. It is further alleged that notices under the signature of the respondent No. 2 were served on the members of the Club-On the morning of 15th of May, 1960, a notice was published in the local newspapers to the effect that the meeting scheduled to be held that day at 4 p. m. had been cancelled. Some of the members however assembled at the scheduled time on the appointed day and a meeting was in fact field. The respondent No. 2 treating the proceedings of the meeting mentioned above to be invalid, moved the Deputy Registrar, Co-operative Societies, U. P., (hereinafter called the Deputy Registrar) to decide the dispute as required by the provisions of the Cooperative Societies Act (hereinafter called the Act). The Deputy Registrar referred the matter for arbitration, to the Assistant Registrar purporting to act under Rule 115 of the rules framed under the Act.

The Assistant Registrar gave his award and declared the meeting dated the 15th of May, 1960, to have been regularly held and further held that the proceedings of that meeting were valid. The respondent No. 2 aggrieved by the award mentioned above filed an appeal before the respondent No. 1 the Additional Registrar, Co-operative Societies, U. P., (hereinafer called the Additional Registrar). The Additional Registrar allowed the appeal and set aside the award made by the Assistant Registrar by his order dated 3rd of October, 1960. It is that order which is sought to be quashed.

3. I have heard Mr. H. L. Varma in support of the petition and Mr. Jagdish Swarup and Mr. Sridhar Misra for the respondents. Four submissions have been made by Mr. Varma before me. They are:

1. No appeal lay to the Registrar Or the Additional Registrar nor was a revision application competent.

2. Rules 133 and 135 are ultra vires because they are outside the scope of the powers conferred by the Act on the State Government to frame rules.

3. The Secretary had no authority to cancel the meeting.

4. The quorum in the meeting dated 15th of May, 1960, was complete and the said meeting did not suffer from the defect of want of quorum.

4. I will take the Submissions seriatim. Rule 133 of the rules reads as follows:-

''133. Any party considering itself aggrieved by the award of an arbitrator or arbitrators may appeal to the Registrar within one month of the date of the communication of the award, and the Registrar shall pass such orders as he deems fit provided that the time taken in obtaining a copy of the award shall be excluded in counting the period of one month.'

Rule 135 runs as follows:-

'135. The Registrar may review his own order or revise that of an Assistant Registrar or revise an award given by an arbitrator or arbitrators or the orders passed in appeal by an Assistant Registrar, against an award, within six months of such order or award; provided such review or revision is in his judgment necessary in the interest of equity, justice and good conscience.'

5. A perusal of these two provisions clearly reveals that a right of appeal has been conferred against any award made under the provisions of the Act. Mr. Varma has contended that it is well established law that a right of appeal is a creature of the statute, and the submission is that inasmuch as the Act does not provide for an appeal against an award the appeal was not competent. In my judgment the submission is based on a misconception of the meaning of the expression 'creature of the statute'. If a rule has been framed under a statute it becomes for all purposes a part of the statute itself and there is good authority for the proposition that a right of appeal conferred by means of a rule can be validly exercised. In the case of Attorney General v. Sillem, (1864) 10 HLC 704, it was held by the House of Lords that under certain circumstances a right of appeal can be conferred by means of a rule.

In the cases of Venkayya v. Pullayya, AIR 1942 Mad 466 and Kishan Singh v. Bachan Singh, AIR 1942 Lah 201 it was again held that a right of appeal can be conferred by the rules. In fact this Court in the case of Dilli v. Deputy Director of Consolidation, 1960 All LJ 92 while considering the question whether a right of appeal could be conferred by rules framed under the U. P. Consolidation of Holdings Act held that it could be so conferred. I am therefore unable to agree that merely because the right of appeal has been conferred by the rules it has not been validly conferred. The same is true with regard to revisional powers.

6. Coming to the second submission it may be staged that the argument has been that Section 43 of the Act which deals with the rule making powers does not confer any power on the State Government to frame a rule with regard to appeals otherwise than provided by Clause (s) of Sub-section (2) of that section. It has been urged that Clause (s) of Sub-section (2) is to the effect that subject to the provisions of Section 39 an appeal shall lie from the orders of the Registrar and that the power to frame a rule conferred by section 43 is confined to making a rule only with regard to a right of appeal against an order passed by the Registrar, It has been strenuously contended that the effect of Clause (s) is that no power exists to provide for appeals in other cases, I am unable to agree with this submission. Section 43 (1) provides that the state Government may for the whole or any part of the State and for any registered society or class of such societies make rules to carry out the purposes of the Act, and Sub-section (2) opens with the words:

'In particular and without prejudice to the generality of the foregoing power ........'

In other words, it is clear that what is pro vided in Sub-section (2) is no impediment to what is provided in Sub-section (1). What is contained in Clauses (a) to (t) of Sub-section (2) of Section 43 is not exhaustive in the matter of rule making power. The view that I am taking finds support from a decision of the Judicial Committee of the Privy Council in Emperor v. Sibnath Banerji . In that case the question to be considered by their Lordships was whether under Section 2 of the Defence of India Act a rule could be framed which was not covered by any of the clauses contained in the second part of that rule though it could be included in the general powers conferred by the first part of the rule. The Federal Court took the view that it could not be done.

The Privy Council reversed the decision and observed as follows:-

'Their Lordships are unable to agree with the learned Chief Justice of the Federal Court on his statement of the relative positions of Sub-sections (1) and (2) of Section 2, Defence of India Act, and counsel for the respondents in the present appeal was unable to support that statement, or to maintain that Rule 26 was invalid. In the opinion of their Lordships, the function of Sub-section (2) is merely an illustrative one; the rule-making power is conferred by Sub-section (1), and 'the rules' which are referred to in the opening sentence of Sub-section (2) are the rules which are authorised by, and made wider, Sub-section (1); the provisions of Sub-section (2) are not restrictive of Sub-section (1), as indeed is expressly stated by the words 'without prejudice to the generality of the powers conferred by Sub-section (1)'. There can be no doubt--as the learned Judge himself appears to have thought--that the general language of Sub-section (1) amply justifies the terms of Rule 26, and avoids any of the criticisms which the learned judge expressed in relation to Sub-section (2)''.

7. This decision was followed by our Supreme Court in Santosh Kumar Jain v. State : 1951CriLJ757 . In view of these weighty pronouncements it cannot be seriously urged that the rule-making power did not extend to frame Rules 133 and 135 of the Rules. In my judgment this submission also is without substance.

8. Coming to the third submission it may be stated that the relationship between the members of an unincorporated members' club is governed by the law of contract and if the members have agreed to certain terms which are embodied in the rules then in existence or to be made thereafter, in accordance with the terms agreed upon by the members, those rules must govern their relationship. If the rules provided that the decision of a particular question must be by a majority, the decision would bind all the members unless the act complained of is a fraud on the minority or is ultra vires the association. In all other matters about which the rules are silent, the majority does not have any right to coerce the minority. (See N. F. Harwell v. John Jackson : AIR1948All146 ).

9. It is true that in the present case there is no provision in the rules relating to the club which bars a secretary to cancel a meeting which is already fixed to be held at a scheduled time. In the case of Barwell (supra), the Full Bench held that if the rules did not provide for the dissolution of the club then even the majority could not dissolve the club. That was because it was held that the rules operated as a sort of terms of a contract and the parties could not either improve upon them or avoid them. The secretary cannot therefore perform any function which the rules do not authorise him to perform. There is another way of looking at the same matter. The secretary is the creature of the rules. The extent of this powers have got to be called out from the rules themselves and he cannot exercise any power which the rules themselves do not confer. In the case of a district board the Supreme Court in Hira Devi v. District Board of Shahjahanpur : [1952]1SCR1122 held that a district board being the creature of the statute could not exercise any power which was not provided for by the statute itself. J see no difference in principle between the cases of the secretary of a club and of a corporation like the district board which has been created under the District Boards Act. I have no doubt in my mind that the secretary exceeded his functions and acted without jurisdiction in cancelling the meeting. But the question still remains whether the proceedings held in, the meeting dated 15th of May, 1960, can be deemed to be void and ineffective.

Mr. Jagdish Swamp has contended that there can be nothing wrong in a secretary cancelling a meeting it the meeting had been convened illegally. It was urged that it was the directors alone who could have convened a meeting and if the meeting was convened without any directions from the directors, the secretary would be within his right in cancelling that meeting. Apart from the legal question, even on facts there is no material which can support this argument. There is nothing to show that the meeting was convened without the directions of the directors. There is also nothing to show that the meeting was cancelled under the directions of the directors. The notice of cancellation has been seen by me. It does not purport to have been issued under the directions of the directors. There can be no manner of doubt that the notice is suggestive of the meeting having been cancelled on the initiative of the secretary himself.

I am, therefore, unable to agree with Mr. Jagdish Swarup that in the present case there was good reason, for the secretary to have cancelled the meeting. I have no difficulty in concluding that the act of the secretary was completely ultra vires. But the question still remains as to what validity would the proceedings held in the meeting of 15th of May, 1960, have in view of the fact that there is an allegation made on behalf of the respondents that a very large number of members of the club were not informed of the meeting.

The general law with regard to the convening of meetings has been stated, by Shackleton in his book, 'Meetings, Law and Practice' 1934 edition, at page 30 in the following words:-

'When notice is necessary, the following general rules must be observed.

1. Every person, entitled to attend the meeting must be summoned, unless he be beyond reasonable summoning distance or is too ill to attend.

2. The notice must be frank, clear and free from trickiness, and if any special business is to be transacted this must be clearly stated.

3. The notice must be served strictly in accordance with the regulations of the body on whose behalf it is given and if any particular method is prescribed by Act of Parliament this also must be observed.

4. An irregular notice may be ratified by the appropriate body at a subsequent meeting.'

10. In the case of R. v. Langhorn, (1836) 4 A E 538 the question requiring consideration was whether the proceedings of a meeting in which a mayor was elected but of which no notice had been, served on the absent burgess, were valid or void. Justice Coleridge remarked that -

'The notice is served mot for the personal benefit of the recipient, but as an admonition to him to perform a public duty, and a person undertaking a public office cannot exempt himself from these admonitions.'

After observing as above he held that the meeting had been invalidly held.

11. Bye-law 21 of the Bye-laws of the Club (hereinafter referred to as the Bye-laws) reads as follows:-

'21. Ordinarily a notice of the General meeting mentioning the place, date and time of the meeting and the business to be transacted thereat shall be given to all members or delegates (when the delegate system is introduced) at least a fortnight before the date on which the meeting is to be held and in the case of annual general meetings it may also be accompanied by a copy of the annual administration report, audit certificate and balance sheet. But non-receipt of such a notice by any member or delegate (system is introduced) shall not invalidate the proceedings of the meting.''

The submission on behalf of the petitioner has been that there is no difference between the non-receipt of a notice and a notice not being sent at all and that inasmuch as bye-law No. 21 protects the proceedings of a meeting of which notice was not served though issued it should also be deemed to protect what transpired at a meeting in respect of which notices were not sent to some of the members. I am unable to agree with this contention. Bye-law No. 21 has got to be strictly construed because it affects the absolute and unqualified right of every member of the club to participate in the deliberations held in a meeting. It would be inconsistent with his right as a member to be deprived of the right of being invited to the meeting. The rule contained in bye-law No. 21 is a rule of convenience framed only in order to protect proceedings from being invalidated on grounds of mere technicalities e.g., the non-receipt of a notice, but the provisions of that bye-law cannot be stretched to a case where no notice was issued at all. It cannot therefore be doubted that if the complaint of the respondents is correct that notice to a large number of members was never issued the proceedings of the meeting dated 15th of May, 1960, must be held to be void. It may however be stated that there is no evidence on the record on the basis of which a conclusion could be safely arrived at that there was in fact no invitation for the meeting to a large number of members. It is a pure question of fact whether or not no notice was issued to some of the members. In the counter affidavit there as an allegation that no notices were issued to some of the members. Inasmuch as no rejoinder affidavit has been filed, the allegation contained in the counter affidavit remains uncontroverted.

There is therefore no escape from the conclusion that in fact notices were not issued to some of the members of the club. This to my mind is a defect which cannot be cured. Mr. Varma has contended that there is a finding in the award of the Assistant Registrar that the respondents have not been able to substantiate their allegation that notices were not issued to some of the members. Even, though that is so the allegations made in the counter affidavit cannot be robbed of their full effect especially when the petitioner has not chosen to controvert them. The position of affidavits is that of a statement on oath. Their importance is enhanced in proceedings like a writ where no parol evidence is recorded and if a party makes a definite allegation and the other party does not controvert it for summons the deponent of that affidavit for cross-examination the only conclusion at which, Courts can arrive is that the allegations being uncontroverted and not challenged by cross-examination must be accepted. The view that I am taking finds support from the decision of the Supreme Court in the case of Mehta Parikh and Co. v. Commr. of Income-tax : [1956]30ITR181b(SC) and of this Court in Kanpur Steel Co., Ltd. v. Commissioner of Income-tax, : [1957]32ITR56(All) .

12. Mr. Varma has contended that it is not the practice of this Court to interfere with findings of fact recorded by inferior tribunals and therefore I should not depart from the finding recorded by the Assistant Registrar that the respondents were unable to substantiate before him that their allegation that no notice had been issued to some of the members. In my judgment this argument is not legally sound. There is no law which prevents this Court from investigating a pure question of fact while exercising its writ jurisdiction under Article 226 of the Constitution. No such limitations as are imposed under Sections 100 and 101 of the Code of Civil Procedure in a second appeal have been imposed by the Constitution on this Court while exercising its jurisdiction under Article 226 of the Constitution.

Mr. Varma has not been able to explain why the petitioner did not make an application to this Court to send for the despatch register of the club. Mr. Varma has also not answered the question which I repeatedly put to him as to what prevented the petitioner from filing a rejoinder affidavit controverting the allegation, that so far as the petitioner knew notices had been sent to all the members of the club. Inasmuch as the petitioner took no steps to controvert the allegations made in the counter affidavit and took no steps to summon the despatch register it does not lie in the mouth of the learned counsel for the petitioner to say that this Court is bound by the findings recorded by the Assistant Registrar which may or may not be correct. The fate of the petition has got to be decided not on the basis of what the Assistant Registrar has written but on the basis of the evidence on the record before me and if the petitioner did not care to challenge the allegations in the counter affidavit or to summon the deponent of that affidavit for cross-examination, he is himself to blame, I therefore overrule this submission of Mr. Varma.

13. In view of these findings it is not necessary to consider the last submission of Mr. Varma and to enquire whether quorum in the meeting was complete or not. If notices had not been issued to all the members of the club the meeting was illegal and its proceedings are void.

14. For the reasons mentioned above inmy judgment there are no merits, in this petition. It is accordingly dismissed but there isno order as to costs.


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