ADV BABASAHEB WASADE & ORS. [APPELLANT(S)]  Vs.  MANOHAR GANGADHAR MUDDESHWAR & ORS.  [RESPONDENT(S)]

CIVIL APPEAL NO. 10846 OF 2018

(2JB, VIKRAM NATH and AHSANUDDIN AMANULLAH JJ., delivered by VIKRAM NATH, J.)

Facts: The present appeal assails the correctness of the judgment and order dated 20.07.2017, passed by the Nagpur Bench of the Bombay High Court in First Appeal No. 811 of 2016, whereby the Appeal was dismissed, thereby confirming the order passed by the District Judge-IV, Chandrapur which confirmed the order passed by the Assistant Charity Commissioner, Nagpur rejecting the change report filed by the appellants.

Issue: Whether the Defaulting Members under Societies Registration Act are Entitled to Notice for Meeting Of Election Even If Their Membership Was Not Terminated Or Ceased?

Arguments on behalf of counsel for appellants:

The arguments of Shri Naphade on behalf of the appellants are briefly summarised hereunder:

1. Today none of the Objectors are alive. The private respondents to this appeal having not raised any objections to the Change Report, cannot be heard because they are neither trustees or members of any category of the Society.
2. Consistent finding recorded by the Authorities, the District Judge and the High Court is that the 7 Objectors were in default in payment of their annual subscription and therefore, were not entitled to any notice for the meeting of the elections as they were prohibited from voting and being counted as member under Section 15 of the Societies Registration Act. The Courts below committed an error in holding that due to lack of service of notice, the proceedings of meeting dated 08.09.2002 were vitiated.

• The appellants are in effective control of the Society as also the Trust and have been functioning in accordance with its bye-laws for more than two decades and they are continuing to hold elections from time to time, and should therefore, not be disturbed.

1. The reasoning given by the Courts below that as there was no order of cancellation of membership or cessation of the membership, the 7 Objectors would be entitled to notice and the question whether they would be allowed to vote or not would be a separate issue.
2. Reliance has been placed upon by Shri Naphade on a judgment of this Court in the case of Hyderabad Karnataka Education Society Versus Registrar of Societies and Others , where a provision similar to Section 15 of the Registration Act was being considered and this Court held that the provision was valid and a member defaulting in payment of subscription would for all practical purposes be deemed to not be a member entitled to notice

Arguments on behalf of counsel for respondents:

On the other hand, Mr. Hooda has strongly relied upon the reasoning given by the High Court.

1. He has submitted that it suffers from infirmity, warranting any interference.
2. The appellants are not entitled to any relief from this Court, as they were not entitled to convene the meeting for the elections. Appellant No.1 was neither Secretary nor President and under the bye-laws, it is the Secretary who would convene the meeting.

• He further reiterated that the effect of Section 15 of the Registration Act would not be of cancelling the membership of the Objectors. Referring to the Hyderabad Karnataka Education Society (supra) case, Mr. Hooda submitted that in the aforesaid case under the bye-laws there was a provision that if there was a default, the membership would stand cancelled, which is not the case here as there is no such provision under the bye-laws. According to him, the said judgment would be of no help to the appellant as it would not apply to the present case.

20. Lastly, it was submitted that a number of signatories to the requisition dated 20.08.2002 and also elected as executive members on 08.09.2002, were not members of the Society at that time for the reason that either they had retired or were never elected as per the bye-laws.

Held: The court allowed the present appeal and held that, “The impugned judgment and order of the High Court as also the orders rejecting the Change Report regarding General Body Meeting dated 08.09.2002 are set aside and the Change Report is accepted. However, having allowed the appeal, before parting, we would like to address one grey area, which having been left unexplained cannot be brushed aside. Insofar as it relates to four signatories to the Requisition for calling a General Body Meeting, specifically being Members from the category of Employee Members, from a perusal of the available record, it transpires that they had retired from service. Yet even after this, they had continued to pay their subscription and as such, their membership had continued. In this context, the obvious question that arises is that once the said Members were Employee Members, their categorisation as such was dependent on them being in service. On retirement, the said signatories would cease to be employees, come out of the category of Employee Members and their membership in the Society could not have continued. Upon superannuation or cessation of their employment, such four signatories could very well have been made members of the Society, but there is no indication on the record that they were made members of the Society by a specific resolution and thereafter continued as members and paid the subscription fee(s).”