Supreme Court: In an appeal against the judgment and order passed by the Bombay High Court, whereby the appeal was dismissed, thereby confirming the order passed by the District Judge, which confirmed the order passed by the Assistant Charity Commissioner, Nagpur rejecting the change report filed by the appellants, the division bench of Vikram Nath* and Ahsanuddin Amanullah, JJ. while setting aside the impugned order and accepting the change report, has directed fresh elections for the new executive committee of the Society by the Charity Commissioner in accordance with law within six months from the receipt of a copy of this Judgment. Further, it held that the proviso to Section 15 of the Societies Registration Act, 1860 [the Registration Act] would disentitle defaulting members from being given any notice even if their membership was not terminated or ceased.
Background:
‘Shikshan Prasarak Mandal’ is a society registered under the Registration Act as a charitable society since 1946. The Society in its turn framed its rules and regulations. Later, the Society was registered as a Public Trust under the Bombay Public Trusts Act, 1950. The rules and regulations of the Society were incorporated as its byelaws and were duly registered under the Trusts Act. The Society members were required to pay an annual membership subscription of Rs. 11/- per year to the Society.
Prior to the death of the President due to his poor health, the Executive Body under his presidentship passed a resolution empowering the appellant 1 to be designated as the Working President.
As there was no elected President, Vice-President or the Secretary, 16 members of the Society requested appellant to summon extraordinary meeting to hold the elections. Pursuant to this, the appellant acting as Working President, issued notice for summoning a special meeting for the elections of new Executive Body. The elections were held on 08-09-2002 and a new Executive Committee was elected with appellant 1as the President and appellant 2 as the Secretary. Accordingly, a Change Report was submitted under Section 22 of the Trusts Act before the Assistant Charity Commissioner. Objections were filed by 7 people claiming to be members of the Society, that notice had not been served on them and that appellant 1 had no authority to issue notice to summon a meeting for election. It was also alleged in the objections that the signatory to the request letter were not valid members of the Society and were yet to be approved by the Executive Committee. Further other signatories of the same objection had retired and hence, they ceased to be members.
The Assistant Charity Commissioner allowed the objections and accordingly rejected the Change Report. The appellant preferred an appeal before the Joint Charity Commissioner, which was allowed, and the Change Report was accepted. Against this, an application was filed by the Objectors before the District Judge, which was allowed. Aggrieved by the same, a first appeal was preferred before the Bombay High Court which was dismissed by the impugned order, giving rise to the present appeal.
Issues and Analysis:
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Whether the Working President could have convened the election meeting as according to the Objectors, it was only the Secretary or in the alternative the President who could have convened the meeting under the byelaws?
The Court said that in the absence of the office bearers authorised under the bye laws who could convene the meeting, the only option left for convening the meeting could either be with the working president on his own or upon the requisition made by the members to convene a meeting.
Referring to the ‘doctrine of necessity’, the Court said that had the Working President did not convene the meeting, the elections of the executive body would have been in limbo for an unreasonable amount of time. The convening of the meeting by the Working President upon the requests by the 16 surviving members was a “necessity” at the time.
Further, after taking note of the Clause 11 of the Byelaws, which recognizes a Working President and defines his rights and duties, the Court said that the working president had no option but to call for a general body meeting in accordance with the rights and duties conferred upon him.
Further, it added that no alternative has been suggested by the Objectors as to who could convene the meeting. Alternatively, the President and Secretary who were authorized under the bye laws had died and no election had been held for replacing them. Even the Vice-President and the Joint-Secretary had also passed away and they had also not been replaced by any fresh elections. The only person who could be said to be managing the affairs of the Society was the Working President, and when all the 16 surviving members had made a request for convening a meeting, no fault could be found with the decision of the Working President to convene the meeting.
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Whether the 7 Objectors were entitled to a notice for the meeting of 08-09-2002 in view of their disqualification under Section 15 of the Registration Act? Whether lack of notice to the said 7 Objectors would vitiate the entire election meeting of 08-09-2002?
After taking note of Section 15 in the Societies Registration Act, 1860, the Court said that members in default of membership fee would not be entitled to vote and would not be counted as members of the Society. Thus, if the 7 Objectors were not entitled to vote and they were not to be counted as members, there would be no illegality or for that matter any prejudice being caused by not issuing any notice as the same would be an exercise in futility.
The Court noted that in the byelaws of the present Society or the Rules of the Society, there is no such provision of automatic cessation of membership, where a member goes in default of payment of membership fee for more than three months. However, the effect of the proviso to Section 15 of the Registration Act, the Objectors have to be treated as suspended members and therefore, would not be entitled to any notice as they had no right to vote or to be counted as members. Thus, it was held that the non-issuance of notice to the Objectors would not vitiate the proceeding of the special meeting held on 08-09-2002
Therefore, the Court held that the proviso to Section 15 of the Registration Act would disentitle such defaulting members from being given any notice even if their membership was not terminated or ceased.
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Whether the private respondents had the locus to be heard before any forum or to file an appeal/petition against the order of the Joint Charity Commissioner?
The Court said that, during the pendency of the appeal before the Joint Charity Commissioner the 7 objectors had died. The Joint Charity Commissioner decided in favour of the appellants and directed for accepting the Change Report. The contesting respondent preferred a petition before the District Judge. He was neither an objector before the Assistant Charity Commissioner nor a valid member of the Society. Thus, he would have no locus to maintain the petition before the District Judge.
Thus, the Court set aside the impugned judgment of the High Court and the other authorities adverse to the appellants and accepted the change report.
Further, the Court addressed the grey area concerning the four signatories to the requisition for calling a General Body Meeting and noted that they had retired from service. Yet even after this, they continued to pay their subscription and as such, their membership continued. The Court said that they could not have continued as members of the Society in the category of Employee Members even upon their superannuation by merely paying the yearly subscription fee thereby blocking the entry of the persons, who were still employees.
[Babasaheb Wasade v. Manohar Gangadhar Muddeshwar, 2024 SCC OnLine SC 63, decided on 23-01-2024]
*Judgment Authored by: Justice Vikram Nath
Know Thy Judge | Supreme Court of India: Justice Vikram Nath
