[2023] 12 S.C.R. 307 : 2023 INSC 827
CHEN KHOI KUI
v.
LIANG MIAO SHENG & ORS.
(Civil Appeal No.5849-50 of 2023)
SEPTEMBER 13, 2023
[ANIRUDDHA BOSE* AND SUDHANSHU DHULIA, JJ.]
Issue for consideration: Whether the Registrar of Society,
empowered to grant registration under West Bengal Societies
Registration Act 1961, also has the power to cancel such registration.
West Bengal Societies Registration Act 1961 – Power to
review or cancel registration of the society by the registrar
who earlier granted the registration:
Held: Registrar of the Society can cancel registration granted
to the Society by exercising power of procedural review which
is inherent within the authority who passed the order – There is
no substantive power of review provided in the Act – On facts,
in pursuance of an earlier Division Bench judgment of the High
Court which held that even though there is no substantive power
of review provided in the Act, the power of procedural review is
inherent within the authority who passes the order, the Registrar
allowed the application seeking cancellation of the registration
granted earlier of a High School as a society, alleging forgery and
fabrication of signatures – In appeal, the Referee Judge rightly held
that the vital difference between a power of substantive review and
a power of procedural review, was not present in the mind of the
Registrar; and that the Registrar proceeded to exercise a power
of substantive review, which was not available to him in terms
of such order and that too without reference to the application
for registration that succeeded – Said order does not calls for
interference. [Paras 6, 7, 9, 12 and 15]
Grindlays Bank Ltd. v. Central Government Industrial
Tribunal and Others (1980) (Supp) SCC 420:[1981]
SCR 341; Kapra Mazdoor Ekta Union v. Birla Cotton
Spinning and Weaving Mills Ltd. and Another (2005)
13 SCC 777:[2005] 2 SCR 888; Rina Mukherjee and
Another v. New India Assurance Co. Ltd. and Another
(2008) ACJ 1248 – referred to.
* Author
308 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.5849-5850 of
2023
From the Judgment and Order dated 19.09.2018 and 12.06.2019 of
the High Court at Calcutta in APO No.542 of 2017.
Siddhartha Mitra, Sr. Adv., Kunal Chatterji, Sumitava Chakraborty,
Ms. Maitrayee Banerjee, Rohit Bansal, Advs. for the Appellant.
Rana Mukherjee, Sr. Adv., Prosit Sen, Sourav Sen, Ms. Daisy
Hannah, Soumitra G. Chaudhary, Chanchal Kumar Ganguli, Advs.
for the Respondents.
The Judgment of the Court was delivered by
ANIRUDDHA BOSE, J.
Delay condoned.
2. Leave granted.
3. The main question which arises for adjudication in this appeal is as
to whether the Registrar of Society, empowered to grant registration
under West Bengal Societies Registration Act 1961, also has the
power to cancel such registration. There is no specific provision in
the statute granting such authority the power to review or cancel his
own decision. The root of the dispute lies in what appears to be a
conflict between two groups of the chinese tannery owners in Kolkata
over the control of a school. The school in question, as per pleadings,
came into existence in the year 1929 as ‘Pei May Chinese School’,
and operated out of a small hut in an area commonly referred to as
China Town. Subsequently, the Chinese Tannery Owners’ Association
in Kolkata set up the school on a large tract of land in a locality
known as Tangra. As per the appellant, the school was moved to this
location, now carrying the street address P-1 and 2, Iswar Mondal
Lane, Kolkata-700046. The tanners of Chinese origin at one point
of time constituted an affluent and vibrant trade group in Kolkata in
the field of processing and production of leather goods and they
still have a presence in that sector. The Chinese Tannery Owners’
Association was registered as a society in the year 1967 under the
West Bengal Societies Registration Act, 1961. The Regulation of the
Association, a copy of which has been annexed at page 72 of the
paperbook records that the said association had been functioning
since 1944 and has a school of its own known as Pei May School.
The address of the school is also specified therein. The appellant
[2023] 12 S.C.R. 309
CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.
claims to be the secretary of the school, which according to him was
operated by the Chinese Tannery Owners’ Association.
4. Dispute arose when the Registrar, under the aforesaid Statute,
granted certificate of Registration in the name of ‘Pei May Chinese
High School’ as an independent society on 19.02.2010 in response to
an application made by the respondents herein. The address of this
society has been shown to be P-1-2, Iswar Mondal Lane over which
the Chinese Tannery Owners’ Association claim title. The appellant
contends that the said association has no connection whatsoever
with Pei May Chinese High School. This dispute was initially raised
with the Registrar by filing a complaint. The appellant, on 17.08.2010,
had submitted to the Registrar copies of letters by seven individuals
who had been shown as office bearers/members of the “Pei May
Chinese High School” society. Their letters were broadly to the effect
that they were never appointed in such capacity, as was shown in
the memorandum of association of the “school society”. The said
letters carried the request for cancelling the registration of Pei May
Chinese High School as a society. There were allegations of forgery
and fabrication of signatures in this set of complaints.
5. It appears such disputes were taken to the civil court and criminal
proceeding was also instituted. A writ petition was also filed by the
appellant in which cancellation of the said registration was asked
for. The civil suit was instituted by the Chinese Tannery Owners’
Association in the year 2016 in the Court of Civil Judge, Junior
Division at Sealdah, registered as T.S. No.142/2016. This was a
suit for declaration and injunction and the substantive relief of the
plaintiff therein was to restrain the respondents from interfering with
the administration of Pei May Chinese High School. It appears that
in an interlocutory proceeding taken out in connection with that suit,
ad-interim injunction was granted in favour of the appellant.
6. From the year 2011, there have been several rounds of litigations by
and between the rival parties. The order of the Registrar, from which
the present proceeding originates was passed in pursuance of an
earlier Division Bench judgment of the Calcutta High Court in APOT
No. 498 of 2015 delivered on 14.01.2016. This judgment records:-
“The entire issue in the appeal revolves round the question whether
the Registrar of Societies has power to cancel the order passed by
him on 25-1-2012. An application came to be presented before the
310 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
Registrar complaining that the application consists of forged signature
of one Chung Chis Ping. Admittedly, a criminal case is registered and
investigation is pending so far as allegation of forgery is concerned.
In that view of the matter the observation of the Registrar that on
observation it does not appear that the signature of the other person
namely Chung Shih Ping who has signed as Chung Chih Ping has
not been forged is premature. On what basis he comes to such
finding is also not spelt out in the impugned order which is under
challenge before the learned Single Judge.
So far as the question of power of review, apparently there is no
substantive power of review provided in the Act in question. So far as
the procedural review, it is inherent within the authority who passes
the order. In that view of the matter, learned Judge was justified in
remanding the matter to the Registrar of Societies.
Coming to the argument of learned Senior Counsel Mr. Bandopadhyay
with regard to sections 25 and 26 of the Societies Registration Act,
1961, we are of the opinion, it has no application since they operate
altogether under a different circumstance. It is left to the wisdom of
the Registrar in the above circumstances to proceed with the matter
keeping in mind the pendency of the criminal investigation as regards
allegation of forgery of the signature, as mentioned above.
With these observations, the appeal and application are disposed of.”
7. The Registrar had passed an order for cancelling the registration on
19.04.2016 and it was, inter-alia, held in this order:-
“Hence, the matter is taken up for compliance of the Hon’ble Court’s
order and to avoid further prolixity, I have decided to pass a reasoned
order. I have gone through the writ applications, Mandamus Appeal,
the applications for stay file thereon, arguments put forward by the
parties in dispute and their learned Advocates and the solemn orders
passed by the Hon’ble Court and the provisions of law which were
referred by the Hon’ble Court as well as the contesting parties. It is
evident from Clause- I (a) of the Memorandum of Association of the
Chinese Tannery Owners’ Association, that the school in question (Pei
May School) at 1 & 2, Iswar Mondal Lane, Kolkata - 700046 shall
run under the auspices of the Chinese Tannery owners’ Association
registered under West Bengal Societies Registration Act, 1961 having
its registration umber S/8546 of 1967-68.
[2023] 12 S.C.R. 311
CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.
If a new society (Pei May Chinese High School) is emerged with a
separate entity at the same address of Pei May School which is a part
of Chinese Tannery Owners’ Association and wish to register under
West Bengal Societies Registration Act, 1961 then the Memorandum
of Association of Chinese Tannery Owners’ Association is to be
amended to that effect and to be approved from the Registrar of
Societies. But I have not found any of such documents in the records
wherein the Chinese Tannery owners’ Association applied for such
amendment of their Memorandum of Association.
I have not gone through the merits of the criminal proceedings
pending in this issue on which the decision to be taken by the
competent authority concerned but emphasis is only given on the
matter of justification of issuance of certificate to Pei May Chinese
High School. In my opinion, the application for registration of Pei
May Chinese High School under the separate ambit of a registered
society i.e. Chinese Tannery Owners Association, in violation of the
provision of the Act and the registration so obtained by suppressing
the fact, is liable to be cancelled.
Hence, being empowered by Section 22 of the Bengal General
Clauses Act, 1899 mentioned in the order of the Hon’ble Justice Arijit
Banerjee dated 16,07.2015, I am passing this order of cancellation
of the registration granted under West Bengal Societies Registration
Act, 1961 dated in respect of Pei May Chinese High School bearing
registration number S/ lL/68216 of 2009-10.
Hence forth the very society cannot function as a society registered
under West Bengal Societies Registration Act, 1961.
This is further to note that this order cannot be cited as precedent
case unless it is specifically directed by the Court of law.”
8. The order of the Registrar passed on 19.04.2016 was unsuccessfully
assailed before a Single Judge of the High Court in Writ Petition
No.391 of 2016 and Writ Petition No.518 of 2016. There was difference
of opinion between the learned Judges of the Division Bench of the
Calcutta High Court, in a Letters Patent Appeal filed by the respondent
no.1 and others against the decision of the learned Single Judge
sustaining the cancellation order. The presiding Judge opined that
the Registrar’s decision was correct whereas the companion Judge
held that such an issue could not be dealt with by the Registrar as it
was not in the nature of procedural review. The companion Judge in
312 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
her differing view observed that since the issue of fraud and forging
signatures is already pending before the “Court below,” possibly
implying pendency of the civil suit and the criminal proceeding, the
decisions in such cases would provide complete relief to the parties.
In case the court arrived at a finding that the signatures appended
to the Memorandum of Association were forged then the Registrar in
exercise of his procedural power to review his own registration order
would be free to take a decision to deregister the society as fraud
vitiates everything, and in case the court opines that the complaint
does not have any merits then the certificate of registration will not
be open for scrutiny.
9. In terms of the Clause 36 of the Letters Patent Act, 1865 of the
Calcutta High Court, the matter was referred to a third Judge and the
Referee Judge formulated the following two questions for answering
the reference:-
“1. Whether the Registrar of Firms, Societies and Non-trading
Corporations, West Bengal, the respondent no.2 in the writ
petition (hereafter the Registrar), did have the power to cancel
the registration earlier granted in the name of “Pei May Chinese
High School” on the ground that such registration was obtained
by the appellants/writ petitioners (hereafter the appellants) by
suppression of material facts?
2. If the first question were answered in the affirmative, whether
the Registrar prior to passing the impugned order of cancellation
extended due and reasonable opportunity to the appellants in
consonance with the principles of natural justice to defend the
allegation levelled against them by the respondent no.4, Mr.
Chen Khoi Kui. (hereafter the objector)?”
10. Analysing the distinction between procedural review and substantiative
review, the Referee Judge answered above questions in the following
terms:-
“36. What the 1961 Act expressly bars is registration of a society
under a name which is identical with, or too nearly resembles, the
name of any other society which has been previously registered.
In the present case, it is not in doubt that the names of the two
societies are different, although it is true that the Chinese Tannery
Owners’ Association has been registered under the 1961 Act, with a
disclosure that Pei May Chinese High School is a sister organisation
[2023] 12 S.C.R. 313
CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.
of such association. However, whether registration obtained by the
appellants in the name of Pei May Chinese High School is the result
of any fraud or is otherwise statutorily barred, is not too clearly
reflected in the order of cancellation passed by the Registrar. In
order to ensure that an allegation of suppression of a material fact
succeeds, it is incumbent on the party alleging to prove it by reference
to documents on record at the time the application for registration
of the appellants was being considered. The 1961 Act requires
that registration be applied for with particulars to be disclosed in a
memorandum together with the rules and regulations of the proposed
registered society. No form of memorandum has been statutorily
prescribed. In the absence of such form, one is left to wonder what
are the queries that are required to be answered for registration to
ensue. The memorandum submitted by the appellants has not been
shown to be on the records of the writ appeal. The memorandum
or its contents not being on record and the Registrar too not having
referred to it in his impugned order, the degree of suppression and
also whether it is of a material fact which, if disclosed, could have
had the effect of summary rejection of the application for rejection
cannot be ascertained and it is difficult in the exercise of the present
jurisdiction to return a finding one way or the other.
37. In Shri Krishnan v. Kurukshetra University, (1976) 1SCC311,
the Supreme Court while considering the claim of a law student to
take an examination which the respondent university had refused,
observed in paragraph 7 that:
“*** It is well settled that where a person on whom fraud is committed
is in a position to discover the truth by due diligence, fraud is not
proved. It was neither a case of suggestio falsi, or suppressio veri. ***”
(italics in original)
38. In my view, because of ignorance or otherwise, the Registrar
did not act within the parameters of the jurisdiction laid down by the
Hon’ble Division Bench in its order dated January 14, 2016, which
is apparent on the face of the record. He proceeded to exercise a
power of substantive review, which was not available to him in terms
of such order and that too without reference to the application for
registration of the appellants that succeeded. The vital difference
between a power of substantive review and a power of procedural
review, evidently, was not present in the mind of the Registrar. If at
314 [2023] 12 S.C.R.
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all there was suppression on the part of the appellants, it had to be
shown that such suppression was akin to a fraud that had resulted
in an order granting registration in violation of a statutory provision.
That has not been shown. It is for this reason that, on facts and in
the circumstances, I answer the first point of difference noted above
in the negative.
39. In view of such answer, question of answering the second point
does not arise.
40. Thus, though I agree with the learned Judge who proposed that
the order of the learned Judge dated May 18, 2017 should be set
aside and the appeal allowed, I am also of the view that leaving the
parties to battle it out before the civil court may not be appropriate
in the circumstances. There being an allegation of fraud levelled by
one party against the other and bearing in mind the law relating to
fraud noticed above, coupled with observance of the order of the
Hon’ble Division Bench dated January 14, 2016 in the breach by the
Registrar, much to the detriment and prejudice of both the parties,
it would only be fit and proper to set aside the order impugned in
the writ petition and the judgment and order under appeal, and to
order a further remand of the matter to the Registrar for taking an
appropriate decision not only by adhering to the said order of January
14, 2016 but also in the light of the observations made hereinabove.
It is ordered accordingly. To support such course of action, which is
different from those directed by the differing Judges of the Hon’ble
Division Bench, I may refer to the decisions of referee Judges of this
Court in the decisions reported in 2014 (4) CHN (CAL) 242 (Shivani
Properties Private Limited vs. Bank of India) and 2015 (2) CLJ (CAL)
141 (Tapas Paul vs. State of West Bengal & Ors.), and the unreported
decision dated January 31, 2019 in APO 508 of 2017 (Sri Ami yo
Bhusan Das vs. United Bank of India & Ors.) rendered by me.
41. The objector and the appellants shall be heard within four weeks
from date of receipt of a copy of this judgment and order. The Registrar
shall, immediately after hearing is closed, proceed to consider the
contentious issues and render his decision within a further period
of a month thereafter. Needless to observe, the Registrar ought
to decide in the light of the observations made in this order and
whatever decision is taken by him must have the support of reasons.
42. The reference is answered accordingly and the writ appeal stands
disposed of, without costs.”
[2023] 12 S.C.R. 315
CHEN KHOI KUI v. LIANG MIAO SHENG & ORS.
11. On the point of power of the Registrar to cancel his own order, the
Referee Judge, whose judgment is under appeal, has cited the
provisions of Section 22 of the Bengal General Clauses Act, 1899
which stipulates:-
“22. Power to issue to include power to add to, amend, vary or
rescind orders etc.— Where, by any Bengal Act or West Bengal
Act, a power to issue orders, rules, bye-laws, or notifications is
conferred, then, that power includes a power, exercisable in the
like manner and subject to the like sanction and conditions (if any),
to add to, amend, vary or rescind any orders, rules, bye-laws or
notifications so issued.”
12. Citing the judgments of this Court in the cases of Grindlays Bank
Ltd. -vs- Central Government Industrial Tribunal and Others
[1980 (Supp) SCC 420] and Kapra Mazdoor Ekta Union -vs- Birla
Cotton Spinning and Weaving Mills Ltd. and Another [(2005) 13
SCC 777], and also a decision of the same High Court in the case of
Rina Mukherjee and Another -vs- New India Assurance Co. Ltd.
and Another [(2008) ACJ 1248], the Referee Judge opined that the
Registrar had proceeded to exercise his power of substantive review
and that too without reference to the application for registration that
succeeded. This has been recorded in paragraph 38 of the judgment
impugned, which we have reproduced above.
13. One of the points raised on behalf of the appellant before us is that
the judgment of the Division Bench delivered on 14.01.2016 not
having been appealed against, has attained finality and it was not
permissible for the Division Bench, and subsequently by the Referee
Judge to re-examine the question as to the manner in which the
Registrar had exercised his power. But we find that the Referee
Judge has not addressed any issue already covered by the decision of
the Division Bench delivered on 14.01.2016. The Division Bench has
explained the position of law on the aspect of power of substantive
review and procedural review. The Referee Judge has only applied
the same principle to test the order of the Registrar. Thus, we do
not think the principle of constructive res judicata applied against
the respondents so far as this point is concerned. Moreover, before
the Referee Judge, the dispute centred around the decision taken
by the Registrar after the Division Bench had delivered the judgment
on 14.01.2016 and it formed a fresh cause of action.
316 [2023] 12 S.C.R.
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14. On behalf of the respondents, it has been submitted that the FIR
No.673/2010 dated 19.10.2010 in which the same allegation of forged
signatures was made stood closed with submission of final report
by the Investigating Officer before the concerned court. It has been
submitted before us that the person accused in the criminal case
(respondent no.14) has been discharged by the ACJM, Sealdah by an
order passed on 07.04.2021. But this fact, in our opinion, does not
conclude the dispute and in any event closure report cannot result in
final determination of the dispute between two sets of parties on the
adjudication of allegations of filing false and fabricated documents
before the Registrar of Societies. Otherwise, the respondents have
defended the judgment which is under appeal before us.
15. We are of the view that the impugned judgment does not suffer from
any legal shortcoming warranting our interference.
16. It has also been argued before us that Chinese Tannery Owners’
Association is the owner of the land where the subject school is
located. On this point, we would add that in the event the respondents
cannot demonstrate their right to run the school on the land owned
by the said Association without their permission, that factor may also
be taken into consideration by the Registrar and that could also be
a ground for cancellation of registration. But any decision on that
count shall be subject to final adjudication by the civil court if an
action on that count is pending before the civil court.
17. The present appeal shall stand disposed of in the above terms.
18. Pending application(s), if any, shall stand disposed of.
19. There shall be no order as to costs.
Headnotes prepared by: Nidhi Jain Result of the case : Appeal disposed of.
