“Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.”

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 123 of 2021

[Arising out of Special Leave Petition (Crl.) No. 1876 of 2018]

M/s. Kalamani Tex & Anr ..... Appellant(s)

                                       VERSUS

P. Balasubramanian ..... Respondent

JUDGEMENT

Surya Kant, J:

Leave Granted.

2. M/s. Kalamani Tex (Appellant No.1) and its managing partner–

B.   Subramanian   (Appellant   No.2)   are   in   appeal   challenging   the

judgment dated 09.11.2017 passed by the High Court of Judicature at

Madras, whereby the order of acquittal of the Judicial Magistrate,

Tiruppur was reversed and the appellants have been convicted under

Section 138 of the Negotiable Instruments Act, 1881 (in short, ‘NIA’).

Consequently, Appellant No.2 has been sentenced to undergo three

months Simple Imprisonment and a fine of Rs. 5,000/­.

Page | 1

Facts

3. The   instant   proceedings   have   originated   out   of   a   complaint

preferred by P. Balasubramanian (Complainant­Respondent) against

the appellants. The respondent is the proprietor of a garment company

named   and   styled   as   ‘Growell   International’,   which   along   with

Appellant No.1 was engaged in a business arrangement, whereby they

agreed   to   jointly   export   garments   to   France.   Certain   issues   arose

regarding delays in shipment and payment from the buyer, due to

which, the appellants had to pay the respondent a sum of Rs 11.20

lakhs.   To   that   end,   Appellant   No.2   issued   a   cheque   on   behalf   of

Appellant No. 1 bearing no.897993 dated 07.11.2000 in favour of the

respondent and also executed a Deed of Undertaking on the same day

wherein Appellant No.2 personally undertook to pay the respondent in

lieu of the initial expenditure incurred by the latter. The respondent

presented the said cheque to the bank on 29.12.2000 for collection

but it was returned with an endorsement that there were insufficient

funds   in   the   account   of   appellants.   In   wake   of   the   cheque   being

dishonoured, the respondent issued a notice dated 08.01.2001 asking

the appellants to pay the amount within 15 days. The appellants in

their reply dated 27.01.2001 denied their liability and claimed that

blank cheques and signed blank stamp papers were issued to help the

respondent in some debt recovery proceedings, and not because of any

Page | 2

legally enforceable debt. 

4. The respondent then lodged a private complaint under section

138 and 142 of the NIA read with Section 200 of the Code of Criminal

Procedure,   1973   (in   short   ‘CrPC’)   before   the   Judicial   Magistrate,

Tiruppur. In order to substantiate his claim, the respondent himself

entered the witness box and produced documentary evidence such as

the cheque issued by Appellant No.2. The respondent in his chiefexamination initially contended that the subject amount had been

received by the appellants from the foreign buyer. However, when

recalled   on   a   later   date,   the   respondent   produced   the   Deed   of

Undertaking dated 07.11.2000, whereunder, the 2nd Appellant had

acknowledged the liability towards respondent. One PS Shanmugham

(PW­2) who was working as Manager in State Bank of India, Tiruppur

Overseas Branch, was also examined by the respondent. 

5. Appellant No.2 in his statement under Section 313 CrPC plainly

denied   the   allegations   and   disputed   the   existence   of   any   liability

towards   the   respondent.   The   appellants   also   examined   one   V.

Rajagopal (DW­1) who at the relevant time was working as Assistant

Manager in State Bank of India, Tiruppur Overseas Branch. DW­1

mainly deposed on the inability of the respondent to pay back the

credit that was advanced to him, and the subsequent debt recovery

proceedings initiated against him. The appellants did not lead any

documentary evidence in their defence. 

Page | 3

6. The trial Court disbelieved the respondent’s claim and observed

that he had failed to establish a legally enforceable liability on the date

of issue of cheque. The Court held that since the basic ingredients of

an   offence   under   Section   138   of   the   NIA   were   not   satisfied,   the

complaint was liable to be dismissed. 

7. Discontented with the order of the trial Court, the respondent

preferred a criminal appeal before the High Court, wherein, the Court

noted that Appellant No.2 had admitted his signatures on both the

Cheque and the Deed of Undertaking and had thus acknowledged the

appellants’ liability. The High Court therefore vide impugned judgment

allowed the criminal appeal and convicted both the appellants under

Section 138 of NIA. Appellant No. 2 was awarded a sentence of three

months simple imprisonment with a fine of Rs. 5,000/­ (or 20 days

simple imprisonment in lieu thereof). Additionally, Appellant No.1 was

directed to pay a fine of Rs. 5,000/­, in default of which, Appellant

No. 2 would undergo another one­month simple imprisonment. 

8. The aggrieved appellants are now before this Court. It may be

mentioned at the outset that when the SLP came up for hearing on

12.03.2018, their learned Counsel agreed to deposit the entire amount

in   dispute   and   in   deference   thereto,   the   appellants   have   on

11.04.2018 deposited a sum of Rs. 11.20 lakhs with the Registry of

this Court.

Page | 4

CONTENTIONS

9. Learned Senior Counsel for the appellants, nonetheless, desired

to argue the case on merits and contended that there was no legally

enforceable liability on the date of issuance of the cheque and that

blank stamp papers signed by Appellant No.2 were misused by the

respondent   to   forge   the   Deed   of   Undertaking   dated   07.11.2000.

Placing   reliance   on  Murugesan   v.   State   Through   Inspector   of

Police1

, he urged that the view taken by the trial Court was a possible

view, and the High Court committed patent illegality and exceeded its

jurisdiction in reversing the acquittal. Learned Senior Counsel also

cited  Reena  Hazarika  v.  State  of  Assam2

to argue that the High

Court did not take notice of the defence raised by the appellants which

has caused serious prejudice to them. He passionately put forth the

principles laid down in  Basalingappa v. Mudibasapp3

 and  Kumar

Exports  v.  Sharma  Carpets4

, and submitted that the presumption

drawn against an accused under Section 118 and Section 139 of the

NIA is rebuttable through a standard of “preponderance of probability”,

which has been successfully met by the appellants in the present

case. 

10. On   the   other   hand,   learned   Counsel   for   the   respondent

1

(2012) 10 SCC 383, ¶ 32.

2

(2019) 13 SCC 289, ¶ 20.

3

(2019) 5 SCC 418.

4

(2009) 2 SCC 513.

Page | 5

maintained that the decision of the High Court is well reasoned and

founded upon due consideration of all relevant factors of the case.

Laying stress on the undisputed signatures on the cheque and the

Deed   of   Undertaking   dated   07.11.2000,   he   asserted   that   the

appellants have admitted  their existing liability of Rs.11.20 lakhs.

Lastly, while pointing out the financial loss suffered by the respondent

and the adverse impact on his business, learned Counsel prayed for

suitable compensation.

ANALYSIS

11. The short question which falls for our consideration is whether

the High Court erred in reversing the findings of the trial Court in

exercise of its powers under Section 378 of CrPC? 

12. Having   given   our   thoughtful   consideration   to   the   rival

submissions, we do not find any valid ground to interfere with the

impugned judgment. It is true that the High Court would not reverse

an order of acquittal merely on formation of an opinion different than

that of the trial Court. It is also trite in law that the High Court ought

to have compelling reasons to tinker with an order of acquittal and no

such interference would be warranted when there were to be two

possible conclusions.5

  Nonetheless, there are numerous decisions of

this Court, justifying the invocation of powers by the High Court under

Section 378 CrPC, if the trial Court had, inter alia, committed a patent

5 CK Dasegowda and Others v. State of Karnatak, (2014) 13 SCC 119 ¶14.

Page | 6

error of law or grave miscarriage of justice or it arrived at a perverse

finding of fact.6

13. On a similar analogy, the powers of this Court under Article 136

of   the   Constitution   also   do   not   encompass   the   re­appreciation   of

entirety of record merely on the premise that the High Court has

convicted the appellants for the first time in exercise of its appellate

jurisdiction. This Court in Ram Jag v. State of UP7

, Rohtas v. State

of  Haryana8 and  Raveen Kumar v. State  of  Himachal  Pradesh9

,

evolved its own limitations on the exercise of powers under Article 136

of   the   Constitution   and   has   reiterated   that   while   entertaining   an

appeal by way of special leave, there shall not ordinarily be an attempt

to re­appreciate the evidence on record unless the decision(s) under

challenge are shown to have committed a manifest error of law or

procedure or the conclusion reached is ex­facie perverse.  

14. Adverting to the case in hand, we find on a plain reading of its

judgment that the trial Court completely overlooked the provisions

and   failed   to   appreciate   the   statutory   presumption   drawn   under

Section 118 and Section 139 of NIA. The Statute mandates that once

the signature(s) of an accused on the cheque/negotiable instrument

are established, then these ‘reverse onus’ clauses become operative. In

6 State of UP v. Banne, (2009) 4 SCC 271,¶ 27; Ghurey Lal v. State of U.P., 

(2008) 10 SCC 450, ¶70.

7

(1974) 4 SCC 201, ¶ 14.

8

(2019) 10 SCC 554, ¶ 12.

9 2020 SCC Online SC 869, ¶ 14.

Page | 7

such a situation, the obligation shifts upon the accused to discharge

the   presumption   imposed   upon   him.   This   point   of   law   has   been

crystalized by this Court in  Rohitbhai  Jivanlal  Patel   v.   State   of

Gujarat10 in the following words:

“In   the   case  at   hand,   even   after   purportedly   drawing   the

presumption under Section 139 of the NI Act, the trial court

proceeded to question the want of evidence on the part of the

complainant as regards the source of funds for advancing loan

to the accused and want of examination of relevant witnesses

who   allegedly   extended   him   money   for   advancing   it   to   the

accused. This approach of the trial court had been at variance

with   the   principles   of   presumption   in   law.   After   such

presumption, the onus shifted to the accused and unless the

accused had discharged the onus by bringing on record such

facts   and   circumstances   as   to   show   the   preponderance   of

probabilities   tilting   in   his   favour,   any   doubt   on   the

complainant's  case   could  not  have   been   raised  for  want  of

evidence regarding the source of funds for advancing loan to

the appellant­accused…..”

15. Once  the 2nd  Appellant had  admitted his signatures on the

cheque and the Deed, the trial Court ought to have presumed that the

cheque was issued as consideration for a legally enforceable debt. The

trial   Court   fell   in   error   when   it   called   upon   the   ComplainantRespondent to explain the circumstances under which the appellants

were liable to pay. Such approach of the trial Court was directly in the

10 (2019) 18 SCC 106, ¶ 18.

Page | 8

teeth   of   the   established   legal   position   as   discussed   above,   and

amounts to a patent error of law. 

16. No doubt, and as correctly argued by senior counsel for the

appellants, the presumptions raised under Section 118 and Section

139 are rebuttable in nature. As held in  MS  Narayana  Menon   v.

State of Kerela11, which was relied upon in Basalingappa (supra), a

probable defence needs to be raised, which must meet the standard of

“preponderance   of   probability”,   and   not   mere   possibility.   These

principles were also affirmed in the case of Kumar Exports (supra),

wherein   it   was   further   held   that   a   bare   denial   of   passing   of

consideration would not aid the case of accused. 

17. The   appellants   have   banked   upon   the   evidence   of   DW­1   to

dispute the existence of any recoverable debt. However, his deposition

merely highlights that the respondent had an over­extended credit

facility with the bank and his failure to update his account led to debt

recovery proceedings. Such evidence does not disprove the appellants’

liability and has a little bearing on the merits of the respondent’s

complaint.   Similarly,   the   appellants’   mere   bald   denial   regarding

genuineness of the Deed of Undertaking dated 07.11.2000, despite

admitting the signatures of Appellant No. 2 thereupon, does not cast

any doubt on the genuineness of the said document. 

18. Even if we take the arguments raised by the appellants at face

11 (2006) 6 SCC 39, ¶ 32.

Page | 9

value that only a blank cheque and signed blank stamp papers were

given to the respondent, yet the statutory presumption cannot be

obliterated. It is useful to cite Bir Singh v. Mukesh Kumar12, where

this court held that:

“Even a blank cheque leaf, voluntarily signed and handed over

by the accused, which is towards some payment, would attract

presumption under Section 139 of the Negotiable Instruments

Act, in the absence of any cogent evidence to show that the

cheque was not issued in discharge of a debt.”

19. Considering the fact that there has been an admitted business

relationship   between   the   parties,   we   are   of   the   opinion   that   the

defence raised by the appellants does not inspire confidence or meet

the standard of ‘preponderance of probability’. In the absence of any

other relevant material, it appears to us that the High Court did not

err   in   discarding   the   appellants’   defence   and   upholding   the   onus

imposed upon them in terms of Section 118 and Section 139 of the

NIA.

20. As regard to the claim of compensation raised on behalf of the

respondent, we are conscious of the settled principles that the object

of Chapter XVII of the NIA is not only punitive but also compensatory

and restitutive. The provisions of NIA envision a single window for

criminal liability for dishonour of cheque as well as civil liability for

realisation of the cheque amount. It is also well settled that there

12 (2019) 4 SCC 197, ¶ 36.

Page | 10

needs to be a consistent approach towards awarding compensation

and   unless   there   exist   special   circumstances,   the   Courts   should

uniformly levy fine up to twice the cheque amount along with simple

interest at the rate of 9% per annum.13

21. The   respondent,   nevertheless,   cannot   take   advantage   of   the

above   cited   principles   so   as   to   seek   compensation.   The   record

indicates that neither did the respondent ask for compensation before

the   High  Court  nor has   he   chosen   to  challenge   the  High   Court’s

judgment. Since, he has accepted the High Court’s verdict, his claim

for compensation stands impliedly overturned. The respondent, in any

case, is entitled to receive the cheque amount of Rs.11.20 lakhs which

the appellant has already deposited with the Registry of this Court. 

CONCLUSION:

22. For the reasons stated above, the present appeal is liable to be

dismissed. We order accordingly. Ordinarily and as a necessary sequel

thereto, Appellant No.2 would be liable to undergo the sentence of

simple imprisonment as awarded by the High Court. However, given

the peculiar facts and circumstances of the case, namely, that the

appellants   volunteered   and   thereafter   have   deposited   the   cheque

amount with the Registry of this Court in the year 2018, we are

inclined to take a lenient view. The impugned judgment of the High

Court   dated   09­11­2017   is   thus   modified,   and   it   is   directed   that

13 R. Vijian v. Baby, (2012) 1 SCC 260 ¶20.

Page | 11

Appellant No.2 shall not be required to undergo the awarded sentence.

The   registry   of   this   Court   is   directed   to   transfer   the   amount   of

Rs.11.20   lakhs   along   with   interest   accrued   thereupon   to   the

respondent within two weeks.

………………………….. J.

(N.V. RAMANA)

………..………………… J.

(SURYA KANT)

…………………………...J.

(ANIRUDDHA BOSE)

NEW DELHI

DATED :10.02.2021

Page | 12

seaman’s Claim for disability compensation= Dilated Cardiomyopathy condition would not facilitate any benefit to the appellant under Section 47 of the Disability Act.

[REPORTABLE]

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.150 OF 2021

NAWAL KISHORE SHARMA APPELLANT(S)

VERSUS

UNION OF INDIA AND ORS. RESPONDENT(S)

J U D G M E N T

Hrishikesh Roy, J.

1. The appellant challenges the judgement dated

26.03.2019 in the Civil Writ Jurisdiction Case

No.3160/2012, whereunder, the High Court of

Judicature at Patna had rejected the seaman’s Claim

for disability compensation[under clause 21 of the

National Maritime Board Agreement (hereinafter

referred to as “the Agreement”)] and thereby

endorsed the order dated 07.10.2011 (Annexure P21)

of the Shipping Corporation of India (hereinafter

1

referred to as the ‘SCI’ for short).According to

the SCI, the appellant’s was not a case of

accidental injury during duty on the vessel and

therefore,only severance compensation is payable to

the appellant. This is because the Seaman is

capable of performing other kinds of job and his

day-to-day normal work is not affected.

2. The appellant was earlier registered in the

SCI’s offshore fleet service but at the relevant

time he was released at his own request with effect

from 19.08.1996 and transferred to the SCI’s

foreign going seaman’s roster, with fresh

registration. Those in seaman’s roster category,

are engaged oncontract,specific for the sea going

vessel. The appellant joined as a crew on the

foreign going vessel on 18.09.2009 and he was

discharged on 18.06.2010 with the declaration of

being permanently unfit for sea service, due to

Dilated Cardiomyopathy.

2

3. On the above facts, Mr. V. Chidambresh, the

learned Senior Counsel argues that seaman is

entitled to100% disability compensation under

Clause 21 of the Agreement. According to the Senior

Counsel, Dilated Cardiomyopathy or heart’s reduced

blood pumping capacity, should be understood as an

internal injury covered by Clause 5.9.F (ii) of the

Agreement which speaks of “A rating on being

medically unfit for sea service at seas as a

result of injurywhilst in employment”.The term

“injury”,according to the counsel should cover

anything impairing the health of the appellant. Mr.

Chidambresh argues that injury need not be

manifested externally or blood oozing kind but

should alsocoveran impaired heart. The appellant’s

counsel relies on anarticle on Marine Safety, by

Mr.Dilipan Thomas and also the writings of

Mr.Markas Ollie Barker to argue that cardio

vascular disease is one of theseveral occupational

diseases about which, the seafarers have been

cautioned by the authors. The failure by the SCI to

accommodate the seaman in an alternative

3

job(suitable for the appellant’s medical condition)

is next contended to be in contravention of Section

47 of the Personswith Disabilities (Equal

Opportunities, Protection of Rights and Full

Participation) Act, 1995 (hereinafter referred to

as“the Disability Act”).

4. Mr. Shiv Kumar Suri, the learned counsel for

the SCI per contra contends that the seaman never

suffered any accidental injury during the sea

voyage on the vessel and since the disability

compensation is restricted only to cases of

incapacitation resulting from injury during the

voyage, the claim for disability compensation was

rightly rejected by the High Court and the SCI

authority. Mr. Suri highlights that the Claimant’s

heart condition does not fall within the contours

of an “injury” for the purpose of Clause 5.9.F

(ii). It is, therefore, argued that the appellant

is covered by Clause 25, which applies to cases of

persons declared medically unfit for sea service

4

instead of Clause 21, which is triggered in cases

of 100% disability suffered during and in course of

employment. According to the SCI’s counsel, a

person may be unfit for Seaman’s duty but may be

100% fit for doing another job of general nature.

Refuting the appellant’s argument on the footing of

the Disability Act, Mr. Suri argues that Dilated

Cardiomyopathy is nowhere mentioned in the

Disability Act and therefore an alternatejob,

suitable for the seaman’s medical condition, cannot

be claimed under the Act. Adverting to the

temporary nature of the appellant’s engagement as a

freelance seafarer and his contractual engagement

for about 9 months (from 29.09.2009 to 18.06.2010),

the SCI counsel contends that the short stint on

the vessel cannot reasonably be the basis for the

impaired heart function, particularly when, no

injury was suffered during the sea voyage.The

medical condition of the appellant is attributed by

the counsel to excessive liquor consumption and the

same has nothing to do with the seaman’s work on

the vessel.

5

5. In his turn, Mr. Viramjit Banerjee, the

learned ASG contends that there is no causal

connection between the Claimant’s medical condition

with the nature of his employment in the sea going

vessel. The Counsel submits that unless proximate

connection between the seaman’s work on the vessel

and his medical condition is established,

disability compensation cannot be allowed.

6. While rejecting the claim for disability

compensation, the SCI recorded in the impugned

order dated 07.10.2011 (Annexure P21) that this was

not a case of a seaman becoming incapacitated on

account of an accidental injury suffered on the

vessel. Since, the relevant Clause 5.9. F(ii)

specifically speaks of being medically unfit as a

result of injury while in employment and the claim

was not based on injury, the disability

compensation was held to be unmerited.

6

7. The High Court while considering the challenge

to the SCI’s rejection order, considered the

literature relied upon by the appellant.The learned

Judge while appreciating that reduced blood pumping

capacity of the heart could be one of the

occupational diseasesof the seafarer, the

disability compensation is not merited unless 100%

incapacity is found in course of employment on the

vessel. Here however, there is nothing to show that

the seaman was not fit for another job of general

nature.The High Court interpreted both Clause 21

and Clause 25 and found that the appellant’s

casedoes not fall in the category of Clause 21

since there is no impediment inhis performance of

normal day to day affairs. In other words,the seafaring work may not be feasible but the person is

capable of discharging duty of another job of

general nature. The High Court,therefore, found no

basis to overturn the SCI’s rejection of the claim

for Disability compensation.

7

8. It would be appropriate at this stage to

extract Clause 5.9.F (ii) of the Agreement

providing for 100% disability compensation. The

same reads as under:

“A rating on being medically unfit for

sea service at seas as a result of

injury whilst in employment shall be

paid 100% compensation”.

9. The above Clause is part of the National

Maritime Board Agreement which governs the parties.

The National Maritime Board Agreement is the

outcome of collective bargaining between Indian

Ship Owners Association and the Seafarers’ Union,

governing the terms and conditions of a seaman.

10. Since, the purport ofClause 21 covering

disability compensation and Clause 25 covering

severance compensation are to be

considered,bothclauses are extractedbelow:-

“21. Death and Disability Compensation:

8

…………………………………………………………………………………………………………

……………………………………………………………………………………………………….

Death compensation-Rs.12.85 Lacs.

100% disability compensation-Rs.14.85

Lacs.

In case of rating declared partially

incapacitated whilst in employment above

Disability Compensation shall be paid on

proportionate basis. This Death

&Disability Compensation shall not be

paid if the death and/or disability has

resulted due to the rating’s own wilful

act.”

“25. Severance Compensation:

With effect from 01/04/2006, a Rating

borne on a Company’s Roster continuously

for a period of not less than 5 years if

declared permanently medically unfit for

sea service by Company’s Medical

Officer, severance compensation to be

paid to such

Rating as under:

For Ratings below age of 55 years:

@3 months’ Basic Wages per year of

articled service including applicable

leave periods on Company’s vessels and

@1 ½ months’ Basic Wages per year of

prospective service subject to a minimum

compensation of Rs.2,75,000/-.

9

For Ratings between age of 55 to 58

years:

@ 3 months Basic Wages per year of

prospective service subject to 4 months

Basic Wages of Compensation of

Rs.1,75,000/- whichever is higher.

For Ratings above age of 58 years:

@3 months’ Basic Wages per year of

prospective service subject to 4 months

Basic Wages or Compensation of

Rs.1,25,000/- whichever is higher.

The above provision of compensation will

not be applicable to a rating dealt with

under the provisions Death and

Disability Compensation.”

11. As can be seen from above, 100% compensation

is payable to a seaman under Clause 5.9. F (ii) in

a situation where a seaman is found medically unfit

for sea service, as a result of injury, while in

employment. But it is not the case of either side

that the appellant had suffered anyaccidental

injury in course of his engagement in the sea

vessel. The question then is, whether the term

10

“injury”, should be construed in the manner

suggested by the appellant’s counsel as anything

which diminishes the health status of a seaman.

Such broad interpretation in the context of the

specific expression in the agreement would in our

view,efface the intent of the agreement between the

parties. Merely because of the beneficial

objective, the clear expression in the agreement

must not be ignored to give another meaning which

could not have been the intention or the

understanding, of the contracting parties.

12. To secure coverage of Clause 5.9.F (ii), the

incapacity must relate to injury being suffered

whilst in employment.In the present case, the

appellant never claimed to have suffered any injury

during his ship duty. Moreover, the impaired

heart function cannot reasonably be attributed to

his nine month engagement. In such circumstances,

although the seaman commenced his engagement with a

fitness certificate, it would be unreasonable, in

11

our view,to relate the medical condition of the

appellantas having causal connection with his sea

voyage engagement.

13. In the above context, we have also perused the

extracted passage from the article on marine safety

and cardiovascular disease of MrDilipan Thomas.

According to the author, “Cardio-vascular disease

is as commonly found in seafaring community as in

the general population”. Thus, it can at best be a

general observation relating to both seamen and

people in general and not specific for the

seafaring community.

14. Insofar as the other extract relied by the

appellant’s counsel, there is some confusion. This

is because the extract was attributed to MrMarkas

Ollie Barkarbut a search on the origin of the

quoted portion revealed that this was actually

lifted from the abstract of the article titled

“Risk of Cardiovascular Diseases in Seafarers” by

MrMarcus Oldenburg, in the International Maritime

Health,2014. Since the concerned passage was quoted

12

in the High Court’s judgment and also relied upon

by the appellant, we have examined the context in

which it was written. It is then seen that subject

of the studyi.e.German seafarers, were only assumed

to have slightly increased risk of coronary

disease, even though they displayed similar

predicated risk as the reference population for

comparison.The concerned passagespeaks of jobrelated cardio risk factors for seafarers. But in

the present case no material is produced to

correlate the appellant’s impaired heart function

with the 9 month engagement in the ship. In the

absence of any connecting link between the job and

the medical condition, thedisability compensationin

our opinion is not merited.

15. The Clause 21 applies to a case of total

disability but this is not a case of 100%

disablement.To say it another way, the Dilated

Cardiomyopathy condition may prevent the man from

performing sea service but the same will not be an

impediment for him to perform other jobs. With this

13

interpretation,the High Court held that only

severance compensation under Clause 25 is payable

for the seaman. We see no reason to reach another

conclusion on the implication of Clause 21

andClause 25,for the appellant.

16. The appellant’s counsel has relied on,

Divisional Controller, NEKRTC vs. Sangamma and

Ors.1

, and Mackinnon Mackenzie & Co. Pvt. Ltd. vs.

Rita Fernandez2. In these cases, the impairment

had occurred in the course of employment. For

instance, in Sangammacase, the bus conductor

suffered chest pain while on duty and was admitted

to the hospital.Howeverin the case in hand, no

linkage between the on ship duty and the

appellant’s medical condition, could be

established. Thus, the first cited case will be of

no assistance to the appellant.

17. In the Rita Fernandez (supra), which related

to a seafarer’s cardiac ailment, the log-book of

the ship had recorded entry relating to the

12005 (2) LLN 776

21969 (2) LLJ 812

14

employee’s hospitalization for treatment of cardiac

ailment. But in the present case nosuch log entry

from the vessel had been produced.In Rita

Fernandez judgement, the Court itself had

highlighted the need for establishing the causal

connection for considering compensation under

Section 3 of the Workmen Compensation Act,1923.But

in the present case, the appellant’s medical

condition could not be linked to his shortterm

engagement.Therefore, the cited ratio is of no

assistance for the disability compensation claim.

18. Let us now deal with the appellant’s argument

that his heart ailment should be understood as a

disability under the Disability Act and

consequential benefits be accorded to him. Section

2(i) of the Act takes into account visual

disability, locomotor disability, mental

illness,mental retardation, hearing impairment and

leprosy. A heart ailment is not covered within the

definition of disabilityin the Act and we would

hesitate to import words, which the legislature

15

chose not to, in their definition of disability.

When the 1995 Act was replaced by the Rights of

Persons with Disabilities Act, 2016, “a person

with disabilities” was defined under Section 2(s)

as a person with long term physical, mental,

intellectual, or sensory impairment which prevent

his full and effective participation in society.

Section 2(zc) defines, “specified disability” as

those mentioned in the Schedule to the 2016 Act. In

the said Schedule, “physical disability”,

“intellectual disability”, “mentalbehaviour”, are

specified.The dilated Cardiomyopathy conditionof

the appellantis neither a specified disability

noris the same relatable to the broad spectrum

ofimpairments, which hindershis full and effective

participation in society. Therefore, we are of the

considered opinion that Dilated Cardiomyopathy

condition of the appellant does not bring his case

within the ambit of either the 1995 Act or of the

2016 Act.The High Court, therefore, was correct in

concluding that Dilated Cardiomyopathy condition

16

would not facilitate any benefit to the appellant

under Section 47 of the Disability Act.

19. For the reasons aforesaid, the appeal is found

devoid of merit and is dismissed leaving the

parties to bear their own cost.

………………………………………………J.

[SANJAY KISHAN KAUL]

………………………………………………J.

[DINESH MAHESHWARI]

………………………………………………J.

 [HRISHIKESH ROY]

NEW DELHI

FEBRUARY10, 2021

17

Whether the invalidation of membership of appellants and the impleaded appellants1 (and two others), solely on the ground that the then Managing Committee on its way out and facing no confidence motion before the Special General Body Meeting2 demanded by the majority of existing members of the Society ought not to have hastened admission of new members, is just and proper and the appropriate direction necessary in that regard?

 Whether   the invalidation   of   membership   of   appellants   and   the   impleaded appellants1   (and two others), solely on the ground that the then Managing Committee on its way out and facing no confidence motion before the Special General Body Meeting2  demanded by the majority of existing members of the Society ought not to have hastened admission of new members, is just and proper and the appropriate direction necessary in that regard?

1

REPORTABLE

IN THE SUPREME COURT OF INDIA 

CIVIL APPELLATE JURISDICTION 

CIVIL APPEAL NO. 412 OF 2021

(Arising out of S.L.P. (Civil) No. 8138 of 2020)

Swati Ulhas Kerkar and Ors.       … Appellants

versus

Sanjay Walavalkar and Ors.             …Respondents

J U D G M E N T

A. M. KHANWILKAR, J.

1. The   central   question   in   this   appeal   is:   Whether   the

invalidation   of   membership   of   appellants   and   the   impleaded

appellants1

  (and two others), solely on the ground that the then

Managing Committee on its way out and facing no confidence

motion before the Special General Body Meeting2

 demanded by the

majority of existing members of the Society ought not to have

hastened admission of new members, is just and proper and the

appropriate direction necessary in that regard?

1

    For short, “the appellants” 

2

    For short, “SGBM”

2

FACTUAL MATRIX

2. Briefly stated, Prabodhan Education Society3

 is a registered

society under the Societies Registration Act, 18604

.  The Society

consisted   of   32   members   –   before   induction   of   22   persons

(including the appellants) as members on 17.09.2017 and their

subsequent removal in terms of the impugned decision.

3. The bye­laws of the Society mandate that the elections to the

Karyakari Samiti (Managing Committee) be held every three years.

The elections to the Managing Committee were due in September

2013, however, there was a delay in conducting elections, which

ultimately came to be held on 05.10.2014. While the Managing

Committee   elected   in   2014   was   at   the   helm   of   affairs   of   the

Society, it was served with a requisition dated 07.11.2016 signed

by 18 of the 32 existing members of the Society, to convene a

SGBM for removal of the Chairman, Secretary and Treasurer and

for conducting elections therefor. The removal of the Managing

Committee was sought on various grounds of abuse of power and

mismanagement, resulting in loss of confidence. 

4. In   furtherance   of   the   said   requisition,   the   Secretary   vide

letter   dated   22.11.2016,   scheduled   a   SGBM   on   07.12.2016.

3 For short, “the Society”.

4 For short, “the 1860 Act”.

3

However, upon objections raised by the members of the Managing

Committee  to  hold  such SGBM, the  said decision  came to be

reviewed   and   the   SGBM   stood   cancelled.   That   decision   was

communicated to  the  members of the general body vide letter

dated 03.12.2016.

5. Aggrieved by the cancellation of the SGBM by the Managing

Committee, Sanjay Walavalkar (respondent No. 1 herein and one

other   member   of   the   Society)   approached   the   High   Court   of

Bombay, Bench at Goa5

 vide Writ Petition No. 1195 of 2016 for the

following reliefs:

“(a) This Honourable Court be pleased to issue a writ of

mandamus or a writ in the nature of mandamus or any

other appropriate writ, order or direction commanding

the Respondent No.4 to convene a Special General Body

Meeting to transact the agenda as requisitioned by the

18   requisitioning   members   vide   their   letter   dated

07.11.2016 addressed to the Chairman/Secretary of the

said society and to hold the same under the supervision

and control of the Respondent Nos.2 and/or 3 as the

observers to oversee such meeting. 

(b) This Honourable Court be pleased to issue a writ of

mandamus or a writ in the nature of mandamus or any

other appropriate writ, order or direction commanding

the   Respondent   Nos.   2   and/or   Respondent   No.3   to

direct   the   Respondent   No.4   to   convene   a   Special

General   Body   Meeting   to   transact   the   agenda   as

requisitioned   by   the   18   requisitioning   members   vide

their   letter   dated   07.11.2016   addressed   to   the

Chairman/Secretary of the said society and to hold the

same   under   the   supervision   and   control   of   the

Respondent Nos.2 and/or 3 as the observers to oversee

such meeting.”

5 For short, “the High Court”

4

6. Indisputably,   22   persons   (including   the   appellants   –   vide

letters   dated   12.09.2016,   19.09.2016,   22.09.2016,   18.10.2016,

12.12.2016   and   19.12.2016)   had   filed   applications   for   being

enrolled as a member of the Society. The Secretary issued notice

dated 29.12.2016 proposing to convene a meeting of the Managing

Committee on 02.01.2017 to induct new members.  The induction

was, however, deferred. The Secretary issued another notice on

16.09.2017 for convening a meeting of the Managing Committee

on 17.09.2017, to consider induction of new members.   In that

meeting, the Managing Committee went on to induct the aforesaid

22   persons   (including   the   appellants)   as   members,   despite

objections raised by the Treasurer. In the same meeting, it was

decided   to   convene   an   Annual   General   Body   Meeting6

  on

08.10.2017 for conducting elections to constitute new Managing

Committee. The relevant portion of the minutes of meeting dated

17.09.2017 is as under:

“3. It was decided that the 34th General Body Meeting be

convened on Sunday, 8th 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 today as members of Prabhodhan Education

Society (General Body). (Their applications were pending

since   Sept/Oct   2016).   It   was   done   to   complete   the

pending   work/task   of   the   present   committee   before

expiry of the term.

6 For short, “AGM”

5

...

Shri   Vithal   G.P.   Parrikar,   the   Treasurer,   raised   his

objection   to   induction   of   new   members.   He   said   he

would not mind their induction after General Body and

expressed   fear   that   this   act   may   invite   contempt   of

court.”

7. Respondent No. 1, aggrieved by the said development, sought

additional reliefs in the above writ petition as under:

“(a) This Hon'ble Court be pleased to declare that the

Notice dated 29/12/2016 addressed by the Secretary of

the Respondent No.4, thereby proposing to convene the

meeting of the Managing Committee inter­alia to induct

new members to the General Body of the Respondent

No.4 is illegal and bad in law and the same be quashed

and set aside. 

(b) This Hon'ble Court be pleased to declare that the

holding of the Meetings of the Managing Committee of

the Prabodhan Education Society on 17/09/2017 and

18/09/2017 and the decisions taken there­at (including

in respect of induction of Respondent No.5 to 26) are

illegal and non­est and the same be quashed and set

aside and the Respondent No.5 to 26 be restrained from

acting   as   members   of   the   Respondent   No.4   for   all

intents and purposes. 

(c) This Honourable Court be pleased to restrain the

Managing   Committee   of   the   Respondent   No.4   from

admitting or inducting any new members to the General

Body of the Respondent No.4, pending holding of the

Special General Body Meeting as requisitioned by 18

members of the Respondent No.4 vide their letter dated

07.11.2016.”

8. As the decision of the Managing Committee dated 17.09.2017

came to be assailed before the Court, the Managing Committee

deferred elections.

9. The   High   Court   vide   interim   order   dated   05.10.2017

permitted   respondent   No.   1,   to   bring   on   record   the   22   newly

6

inducted   members,   as   they   were   likely   to   be   affected   by   the

outcome of the further reliefs claimed in the stated writ petition.

The relevant portion of the interim order 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

4th   Respondent,   states,   on   instructions,   that   the

elections   scheduled   on   8th   October   2017   will   be

deferred till 5th November 2017.

3.   However,   it   is   pointed   out   that   the   term   of   the

current   Managing   Committee   and   its   office   bearers

ends by 7th October 2017. In view of the statement

made, the present Managing Committee will continue

as a pro tem or caretaker Managing Committee till the

next elections but will not take any major financial,

policy or other decisions until that time. It may attend

to   routine   management   and   administrative   issues

alone.

4. List the Petition high on the supplementary board

on 31st October 2017.

5. In the meantime, leave to amend to join the newly

inducted   members.   Amendment   to   be   carried   out

without   need   of   verification   by   10th   October   2017.

Notice to be issued to the newly added Respondents

returnable on 31st October 2017. An amendment is

also permitted to add an additional prayer. Liberty to

file   an   additional   affidavit   after   the   amendment   is

carried out.”

10. The above writ petition was ultimately disposed of vide order

dated   08.11.2017,   directing   the   Inspector   General   of

Societies/District Registrar7

to decide the dispute on its merits as

per law, in the following words:

“8. ..... Since the Petitioner has already approached the

Inspector   General   under   Section   20(A)   and   the

Inspector General is considering the complaint and that

7 For short, “the Authority”

7

it   is   the   grievance   of   the   Petitioner   that   certain

developments have taken place pending the decision of

the complaint, even the subsequent grievance of the

Petitioner can be considered by the Inspector General

on its own merits. Since the Inspector General is an

authority under the Act, it will be appropriate that the

matter is first looked into by the Authority under the

Act, before this Court is called upon to decide the issue

of internal management of the society at first instance. 

.....

10.   Accordingly,   we   dispose   of   the   Writ   Petition   by

directing Respondent No.3 i.e. the Inspector General,

before whom the complaint is made by the Petitioner is

pending, to consider the additional grievance made by

the Petitioner as well. The Inspector General will decide

the matter on its own merits as per law. All contentions

of   all   parties   are   kept   open,   including   the   one

mentioned above.

11. The ad­interim order passed in this petition, in the

form of statement recorded will continue till disposal of

the complaint and two weeks thereafter.”

11. Pursuant to the aforesaid order, respondent No. 1 filed a

consolidated   complaint   dated   16.11.2017   before   the   Authority.

The Authority registered Case No. DRN/RDS/794/2017 wherein it

adjudged three original complaints dated 13.10.2016, 04.11.2016

and 05.12.2016 along with the consolidated complaint.

12. The   Authority,   after   having   heard   the   parties   to   the

complaint   as   well   as   the   newly   inducted   22   members,   vide

judgment   and   order   dated   09.03.2018,   was   pleased   to   issue

directions   and   also   set   aside   the   decision   of   the   Managing

Committee dated 17.09.2017 giving membership to 22 persons

(including the appellants) on the ground that the same was illegal

8

and arbitrary.  The operative order of the Authority is reproduced

hereunder:

“A) I  hereby  declare   that   the   induction  of  Shri.

Gajanan   Harishchandra   Mandrekar,   Shri   Subhash

Vinayak  Desai,  Adv.  Sau.  Swati  Ulhas  Kerkar,  Dr.

Sitaram   V.   Korgaonkar,   Shri   Pandharinath

Lakshman   Mapari,   Dr.   Bhiva   Ladu   Malik,   Shri

Milind Vaman Karkhanis, Shri Krishnaraj Narcinha

Sukerkar,   Shri.   Atmaram   Vaman   Gaonkar,   Shri.

Pravin   Punaji   Neswankar,   Shri.   Sandeep   V.   Palni,

Shri.   Kiran   Ramchandra   Naik,   Shri.   Datta

Purushottam   Naik,   Shri.   Shashank   Gokuldas

Kamat,   Shri.   Audhut   Ramchandra   Kamat,   Sau.

Medha   R.   Prabhudessai,   Shri.   Devidas   J.   Saraf,

Shri.   Abhai   Bhamaikar,   Shri.   Ashish   Sarvottam

Prabhudessai, Shri. Vivek P. Navare, Shri. Vasudev

Subrai   Naik   Khaunte   and   Dr.   Kedareshwar   P.S.

Narvekar, as members of the Prabodhan Education

Society,   by   virtue   of   the   decision   taken   by   the

majority  members  of   the  managing   committee   at

its meeting held on 17.09.2017, is illegal, arbitrary

and is hereby set­aside;

B) I hereby declare that the decision of the majority

members of the managing committee of the Prabodhan

Education   Society   not   to   hold   the   SGM   as

requisitioned by 18 members vide their letter dated

07.11.2016, is illegal, arbitrary, de­hors the power of

the managing committee and mala­fide;

C) For the detailed stated in the foregoing part of

this   Order,   I   hereby   declare   and   hold   the   act   of

managing committee as guilty of mismanagement of

affairs of the Prabodhan Education Society and breach

of their fiduciary obligations towards the general body

of the society;

D) I hereby direct the managing committee of the

Prabodhan   Education   Society   and   particularly   its

Secretary Shri Velingkar to take step to convene an

Annual General Body Meeting of the Society, within a

period of 7 days from the date of receipt of this Order,

with due procedure laid there in under the Societies

Registration   Act   for   the   specific   purpose   of   holding

elections   to   the   various   posts   of   the   managing

9

committee of the Prabodhan Education Society for the

period 2018­2021;

E) with the view to ensure free, fair and impartial

conduct of elections, I hereby direct that the aforesaid

proposed AGM shall be held under the supervision,

direction   and   control   of   Shri   Suraj   Vernekar,   Civil

Registrar­cum­Sub Registrar as the observer; and that

the   agenda   concerning   elections   of   managing

committee members shall be transacted first, before

any other item/business is taken up for consideration;

F) I hereby direct the managing committee elected

after the forthcoming elections (subject to the approval

of   the   general   body)   may   frame   necessary   rules

concerning regulation of its affairs.   Considering the

situation in which the society is placed presently and

considering the fact that there are certain gaps in the

byelaws of the society concerning certain aspects, the

managing committee may consider formulating rules

on the following amongst other issues:

i. Rules giving further details on the manner in

which the managing committee shall act after receiving

requisitions   by   members   directing   it   to   convene   a

SGM.

ii. Rules stipulating whether any other item (such

as   induction   of   new   members   or   change   to   the

constitution   of   the   society   etc.   shall   be   permitted

during the pendency and consideration of a requisition

under Clause 3(V) of the Society byelaws;

iii. Rules whether there should be any cap/outer

limit on the maximum number of members that can be

inducted   at   any   given   point   of   time   and   further

whether such induction of new members can be done

on the eve elections (if not, up till what time can such

induction be done);

iv. Rules dealing with the manner and prescribing

further details as to how meetings of the managing

committee   and   the   general   body   shall   be   held

(including   prescribing   notice   period   for   meetings,

mode/manner of intimation etc.),

v. Rules   dealing   with   procedural   aspects   of

conduction meetings and recording of minutes etc.”

(emphasis supplied)

10

13. Assailing   the   said   judgment   and   order,   the   Society

represented   through   Secretary,   Chairman   and   Secretary   (in

individual capacity) filed Writ Petition No. 373 of 2018 before the

High Court, wherein, the stay granted in the previous proceedings

was extended until disposal of the writ 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 a Society, on its own, maintain a writ petition

against   an   order   passed   by   a   statutory   authority

concerning   the   resolutions   its   Governing   Body   or

Managing Committee passed?

2. Is the impugned order ultra vires of the Registrar? In

the alternative, has the Registrar got the power to rule

on the allegations of mismanagement by the Managing

Committee?

3. Has the Managing Committee committed an illegality

in not convening the Special General Body Meeting at

the request of 18 of 32 Society members?

4. In the absence of any provision in the bylaws or

under the act for bringing up a no­confidence motion or

to remove the office bearers, could the applicants have

insisted on having a Special General Body meeting for

discussing those issues?

5. Has the Managing Committee legitimately inducted

22 new members, especially, pending the writ petition

and on the eve of the elections?”

While addressing the fourth issue, the High Court placed reliance

on   a   decision   of   this   Court   in  Vipulbhai   M.   Chaudhary   v.

11

Gujarat   Cooperative   Milk   Marketing   Federation   Limited  &

Ors.8 and held that no confidence motion can be maintained even

in   absence   of   provision  therefor   in   the  bye­laws.  The  relevant

portion of the impugned judgment is reproduced below:

“71.  Vipulbhai   M.   Chaudhary,   I   reckon,   clinches   the

issue. In any democratically constituted institution, the

office   bearers   continue   to  hold   the   office  during   the

pleasure of the members that have chosen those office

bearers. Sometimes the governing rules or regulations

of that institution are silent about how the governing

members   must   account   for   their   misdeeds   or

maladministration when their tenure is subsisting. But

it is no license for them to wreak havoc in the name of

administration and annihilate the institution. In other

words, it is institutionally inherent that the governing

members must administer the affairs of the institution

faithfully, honestly, and diligently; they should always

remain accountable to the members for their omissions

and commissions. In the same reckoning, the members'

right   to   unseat   these   governing   members   is   equally

inherent in the scheme of the things, despite no express

provision to that effect, say, in the byelaws. 

72. So we cannot hear the petitioners saying that they

were justified in not holding the SGBM. In this context,

we may reiterate what the Registrar has held: once the

majority members, especially in tune with the bylaws,

required   the   Managing   Committee   to   hold   a   general

body meeting for whatever purpose, it is the Managing

Committee's bounden duty to abide by that demand. Let

us   assume   that   the   majority   members   wanted   the

general   body   meeting   to   discuss   frivolous   or

unimportant   issues;   still   it   is   not   for   the   Managing

Committee to sit in judgement over the tenability of the

majority members' demand. Once meeting convened, it

is for the entire body of the membership to examine the

demands   and   decide   on   them.   This   observation,   as

made   by   the   Registrar,   remains   even   more   relevant

because,   here,   the   allegations   concerned   the   very

Managing Committee. 

.....

8   (2015) 8 SCC 1

12

74. Nevertheless, for the reasons mentioned above, I

must   confirm   the   findings   of   the   Registrar   that   the

Managing   Committee   has   acted   with   material

irregularity   by   refusing   to   abide   by   the   majority

members' demand for an SGBM. Now, we will examine

the last issue, keeping in view our answer to this issue.”

With   respect   to   the   fifth   issue,   pertaining   to   the   validity   of

induction of the 22 new members, the High Court disagreed with

the findings of the Authority on material aspects.  However, it held

that the same was bad being taken by the Managing Committee

pending no confidence requisition. The High Court adverted to the

dictum in Vipulbhai (supra) and observed thus:

“95.   Then,   what   vitiates   the   Managing   Committee’s

decision to induct new members? 

96.   We   have   already   held   that   the   Managing

Committee’s   refusal   to   hold   the   SGBM   even   when

majority members demanded is an act of illegality. Now,

we should examine the induction of the new members

in the context of that refusal. On the converse, if there

was no demand for an SGBM by the majority and no

expression of no­confidence, then the governing body

may induct new members 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 an SGBM; it was, among other things, to

express   their   no   confidence   against   certain   office

bearers,   too.   The   case   holding   of  Vipulbhai   M.

Chaudhary dispels all doubts about whether the statute

or the byelaws should provide for unseating of an office

bearer. No need. It is a constitutionally conferred right. 

98.  Thus,   inferentially,   we   may   hold   that   once

majority   members   express   no   confidence   on   the

governing body or any office bearer and demand an

SGBM, until the governing body proves its majority,

it loses legitimacy to take policy decisions. And that

legitimacy   includes   induction   of   new   members.

13

Otherwise, the moment a governing body, that is the

Managing Committee, faces a no­confidence motion, the

easy—and devious—way out for the governing body is

put   the   SGBM   on   hold,   induct   new   members

indiscriminately, alter the membership equation, and

then hold the SGBM. It is abuse of power that upsets

the   democratic   design   of   any   society   and   that

should be struck at.

99.  So   the   inescapable   conclusion   is   that   the

Managing Committee inducting new members in the

face  of  no  confidence  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

the   impugned   order,   dated   9th   March   2018,   of   the

District   Registrar.   As   a   result,   I   dismiss   the   writ

petition. No order on costs. Interim relief, if any, stands

vacated.”

15. In view of disposal of the Writ Petition No. 373 of 2018, the

Civil Registrar­cum­Sub Registrar of Societies, vide letter dated

01.06.2020, directed the Secretary to convene an AGM to conduct

elections   for   constituting   a   new   Managing   Committee   by

04.06.2020 (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 the

High Court, the Society, Chairman and Secretary approached this

Court   vide   SLP   (Civil)   No.   7352   of   2020   on   04.06.2020.

Simultaneously, the Chairman and Secretary also addressed letter

14

dated 04.06.2020 to the Authority, informing that the Managing

Committee held a meeting on 03.06.2020 wherein it had decided

to fix the AGM tentatively on 28.06.2020 for holding elections.

Further, it informed that final date of election would be fixed at a

later date, after withdrawal of Section 144 of Cr.P.C., 1973 which

was in force due to lockdown ordered on account of prevailing

pandemic situation (Covid­19).

17. On the other hand, since the Managing Committee failed to

convene an AGM within 7 days, the Authority vide notice dated

09.06.2020   convened   an   AGM   on   25.06.2020   for   conducting

elections.

18. Be that as it may, the stated SLP filed by the Society was

listed before this Court on 15.06.2020, whence the same came to

be disposed of in the following terms:

“We decline to interfere in this Special Leave Petition at

the   instance   of   the   petitioners.   The   Special   Leave

Petition is dismissed accordingly.

If the 22 person(s) who have been dis­membered file

independent  Special  Leave  Petition(s)  to  assail  the

decision   of   the   High   Court   at   their   instance,   the

issue can be considered on its own merits.

Pending applications, if any, stand disposed of.”

(emphasis supplied)

19. Taking cue from the aforementioned observations made by

this Court, the appellants have approached this Court, by way of

15

this appeal, to impugn the order dated 28.05.2020 passed by the

High Court. With permission of this Court, 12 other persons (out

of the 22 dismembered persons) similarly placed as the original

appellants have been impleaded as appellants in this appeal.

20. During pendency of the present proceedings, in response to

the Authority’s notice dated 09.06.2020, the Secretary addressed

letter dated 22.06.2020, informing that as per the bye­laws, 15

days’ notice is essential  for convening an AGM and the  same

cannot be convened within 7 days as directed by the Authority.

The said letter also informed that the direction vide order dated

09.03.2018 was only to start the process of elections and not to

conduct elections per se.  Further, the Managing Committee had

convened a meeting on 20.06.2020 to fix the AGM on 12.07.2020

for conducting elections. On the same day, the Secretary had also

addressed a letter to the District Magistrate seeking permission to

conduct elections on 12.07.2020.

21. The  appellants had  addressed letters  to  the Authority on

24.06.2020 informing about the pendency of the present appeal

and   requesting   to   defer   the   elections.   Despite   receiving   this

intimation, the Authority proceeded to conduct the elections on

25.06.2020 and constituted the new Managing Committee.  This

16

Court upon being appraised of the said development, vide order

dated 25.06.2020, clarified that any steps taken by the Authority

would be subject to the outcome of this 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 this Special Leave Petition and which fact

was brought to the notice of the Registrar, for reasons

best known to the Registrar, he hastened the election

process.

This factual position be placed on record by way of a

formal application, to be filed by the petitioner(s) and

for appropriate reliefs, as may be advised.

In addition, it will be open to the left over persons who

are similarly placed as the petitioner(s), to file a formal

application   for   impleading   them   as   party   to   the

present proceedings.

Both these applications to be filed within one week

from today through email/online.

Issue notice to the respondents on this Special Leave

Petition and proposed applications, returnable within

four weeks.

Dasti, in addition, is permitted.

Any   steps   taken   by   the   Registrar,   including

elections   allegedly   conducted   by   him   today,   i.e.

25.06.2020 will be subject to the outcome of this

Special Leave Petition.”

(emphasis supplied)

22. Curiously, the District Magistrate, in response to the letter

dated 22.06.2020 of the Secretary, refused to grant permission to

conduct   elections   on   12.07.2020   in   view   of   the   restrictions

17

imposed under Section 144 of Cr.P.C. The same was intimated by

letter dated 10.07.2020.

23. Meanwhile,   the   newly   elected   Managing   Committee

addressed letters dated 25.06.2020 and 11.07.2020 to the schools

run by the Society intimating about the change in management of

the Society as well as the schools.

24. We may now advert to the challenge before us in the present

appeal.

SUBMISSIONS

25. The thrust of the arguments of the appellants is that in terms

of clause 1(c) of the bye­laws of the Society, a person automatically

gets   inducted   as   member   of   the   Society   upon   submitting

application in the prescribed form along with prescribed fees. As

such, the appellants were validly inducted as members of the

Society as they had duly submitted their applications in form

prescribed under the bye­laws of the Society. Reliance was placed

upon   the   dictum   of   this   Court   in  Zoroastrian   Cooperative

Housing Society Ltd. & Anr. v. District Registrar, Cooperative

Societies   (Urban)   &   Ors.9

  to   contend   that   the   right   to

9

(2005) 5 SCC 632

18

membership   in   any   Society   would   have   to   be   tested   on   the

touchstone of the bye­laws and nothing else. 

26. It was urged that in any case 5 out of the 22 persons had

submitted their applications for membership before the requisition

of no confidence had been moved.  Whereas, rest of the persons

had filed their applications in December 2016. It was urged that

their applications for membership were eventually approved on

17.09.2017 after noting that each one of them was an eminent

and well acclaimed person in educational field.   Moreover, the

Managing Committee had wide discretion to induct a member and

they   did   exercise   that   power   bonafide   whilst   inducting   the

appellants.  Reliance was placed on the findings of the High Court

to contend that the decision taken by the Managing Committee (to

induct appellants) was during the subsistence of its tenure and

cannot be faulted with.  It was also urged that the High Court had

noted that there was no illegality in admitting the members on the

eve   of   elections   or   at   the   end   of   the   tenure   of   the   Managing

Committee.   Further, there was no finding by the Courts below

that the appellants did not fulfil the requirements under the byelaws.

19

27. It   was   submitted   that   reliance   upon   the   decision   of   this

Court in Vipulbhai  (supra) by the High Court was misplaced as

the said decision concerned a co­operative society, whereas the

Society in this case is registered under the 1860 Act. Further, it

was   urged   that   the   said   decision   was   based   on   the   97th

Amendment to the Constitution of India10

, which had been struck

down by a Division Bench of Gujarat High Court in Rajendra N.

Shah v. Union of India & Anr.11. Reliance was then placed on

the dictum of this Court in Kusum Ingots & Alloys Ltd. v. Union

of   India  &  Anr.12 to contend that though an appeal had been

preferred before this Court against the decision of Gujarat High

Court   in  Rajendra   N.   Shah  (supra), the   same   is   pending

adjudication (vide Civil Appeal Nos. 9108­9109 of 2014) and there

being no order suspending the operation of the said judgment, the

97th  Amendment   is   not   currently   in   existence.   Therefore,   the

decision in  Vipulbhai  (supra) was inapplicable.   The appellants

also relied upon a decision of Delhi High Court in  Mukund  L.

Abhyankar v. Chief Executive Officer, National Federation of

10   For short, “the 97th Amendment”

11   2013 SCC OnLine Guj 2242

12   (2004) 6 SCC 254

20

Urban Co­op. Bank and Credit Societies Ltd. & Ors.13 to urge

that the fundamental basis of the decision in  Vipulbhai  (supra)

stood fully eroded without the 97th Constitutional Amendment.

28. The appellants also submitted that the Authority hastened

the election despite being informed of the pendency of the present

appeal.  This was done to defeat the rights of the appellants. It is

contended that mala fides of the authorities are manifest from the

fact   that   permission   to   conduct   the   election   proposed   by   the

Managing Committee was refused by the District Magistrate in

view of the Covid­19 protocol, while the election scheduled by the

Authority during the same time was conducted in breach of the

said protocols.  Further, as on the date of elections, the electoral

college consisted of 52 members including 30 existing members

and the 22 dismembered persons.  However, despite pendency of

the present appeal (wherein the rights of the 22 dismembered

persons   are   under   consideration),   the   Authority   conducted

elections with electoral of only 30 members.   This was nothing

short of abuse of process of law.

29. Per contra, respondent no. 1 contended that the appellants

were aware of the proceedings before the Authority yet chose not

13   (2017) 241 DLT 358

21

to challenge its judgment and order.   Hence, the appellants are

bound by the findings therein.  Resultantly, it is not open to the

appellants to assail the order of the High Court. Further, with the

dismissal   of   SLP   (preferred   by   the   Society,   Chairman   and

Secretary), the order of the High Court stands confirmed and it

cannot   be   further   challenged.   In   that,   the   finding   that   the

Managing Committee inducted 22 persons illegally and arbitrarily,

also had attained finality.   Significantly, the appellants had no

right whatsoever, much less vested right on the date of election

and ex­consequenti no locus to file the present appeal. 

30. It was  urged that the said 22 persons were intentionally

inducted by the then office bearers of the Society, so as to alter the

composition of the Society in their favour and to consolidate their

control over the Society. Further, it was submitted that the SLP

(filed by the Society, Chairman and Secretary) was dismissed on

15.06.2020 and on the same day, the appellants approached this

Court by filing fresh appeal through the same Advocate­on­Record,

which clearly shows collusion between them. Furthermore, the

controversy is about the validity of induction of the appellants and

not   their   removal.   As   such,   the  lis  is   inter­se   between   the

Managing   Committee   and   members   and   the   appellants   being

22

outsiders had no causal connection with the Society whatsoever.

Even if the appellants had any vested right, that stood defeated by

the order of the Authority and of the High Court confirming the

same including this Court. 

31. It was then contended that the High Court had rightly held

that in democratically constituted institutions, the office bearers

continue to hold office during the pleasure of the members and

they can be unseated despite any express provision in the byelaws.   Reliance was placed upon a decision of this Court in  T.

Varghese George  v.  Kora K.  George & Ors.14 to urge that the

Managing Committee had no power to take any policy decision

once a no confidence motion is moved, as that would be against

their fiduciary duties towards the Society. It was submitted that

any decision taken after the no confidence motion is moved ought

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

principle of open membership as envisaged in Section 22 of the

Goa Co­operative Societies Act, 2001, to apply to them.   For, the

14 (2012) 1 SCC 369

15 (1980) 2 SCC 471

23

respondent­Society   is   not   a   co­operative   society.   At   best,   the

applications of the 22 members may be considered afresh.

33. The argument set forth by the Authority is that this appeal is

not maintainable as the impugned order dated 28.05.2020 has

attained finality upon dismissal of the SLP (Civil) No. 7352 of 2020

(filed by the Society, Chairman and Secretary).   It is urged that

upon disposal of Writ Petition No. 373 of 2018 vide order dated

28.05.2020,   the   interim   order   therein   stood   vacated   and   the

elections were required to be conducted since there was no order

staying the elections. In fact, the High Court in its order had

observed that elections should be conducted expeditiously. It was

submitted   that   the   Authority   had   to   conduct   elections  due   to

inaction of the Managing Committee in that regard.  It was then

urged that the Authority conducted elections on 25.06.2020, that

too one month after the order dated 28.05.2020, by duly putting

the members on 15 days’ notice, which cannot be termed as acting

in undue haste. The learned Solicitor General, for the Authority

elaborated   upon  Vipulbhai  (supra) to   contend   that   the   said

judgment had rightly dealt with the democratic principles, which

apply to cooperative societies and  other societies alike. It was

submitted that the said judgment is binding and does not lose its

24

force as the democratic principles were in existence since a long

time and were merely given a constitutional frame by the 97th

Amendment. It was further submitted that in light of the said

decision, no confidence motion is maintainable even in absence of

express provision in that regard in the bye­laws; and the silence in

the bye­laws cannot be treated as a gap.  Finally, it was urged that

in a democratically governed body, members can be inducted by

the Managing Committee only when it enjoys confidence of the

members.   However, once the requisition of no confidence was

pending, the Managing Committee ought not to have inducted new

members into the Society and more so as many as 22 in number

which would inevitably change the constitution of the Society.

34. We have heard Mr. Huzefa Ahmadi, learned senior counsel

and   Ms.   Anshula   Grover,   learned   counsel   for   appellants;   Mr.

Tushar Mehta, learned Solicitor General, Mr. Arun R. Pedneker,

learned Standing Counsel for the State of Goa and Ms. Mukti

Chowdhary,   learned   counsel   for   the   Authority;   and   Mr.   Vinay

Navare,   learned   senior   counsel   and   Mr.   R.P.   Gupta,   learned

counsel for respondent No. 1.

CONSIDERATION

25

35. At the outset, be it noted that the scope of present appeal is

limited to the question of justness of induction of the appellants as

members of the Society by the then Managing Committee on its

way   out   and   despite   the   pending   requisition   expressing   no

confidence against it; including the correctness and sweep of the

order passed by the Registrar and as upheld by the High Court

vide impugned judgment,  qua  the appellants herein.   No other

issue   decided   by   the   Registrar   or   the   High   Court   need   be

addressed   in   the   present   appeal   at   the   instance   of   these

appellants.  

36. The High Court, vide impugned judgment, went on to hold

against the Society due to the manner in which the requisition of

no   confidence   motion   moved   by   the   majority   of   the   existing

members (18 out of 32) to convene SGBM came to be delayed and

frustrated   by   the   stratagem   adopted   by   the   then   Managing

Committee, who had allegedly indulged in mismanagement and

maladministration of the affairs of the Society.  That action of the

then Managing Committee has been held to be illegal and bad in

law as it was bordering on colourable exercise of power.  Having

said that, the High Court then dealt with the issue of justness of

induction of 22 new members (including appellants herein) by the

26

then Managing Committee vide decision dated 17.09.2017 and

declared the same as illegal being consequence of illegal action of

not convening the SGBM demanded by the majority of members of

the Society for removal of office bearers and instead hastening the

induction of new members.  The finding of the High Court that the

decision   of   the   then   Managing   Committee   dated   17.09.2017

hastening the admission of 22 new members whilst no confidence

motion was pending, is illegal and bad in law has become final

with the dismissal of SLP filed by the Society vide order dated

15.06.2020.

37. Before we dwell upon the core issue involved in this appeal, it

is   apposite   to   examine   the   preliminary   objection   raised   by

respondent No. 1 regarding maintainability of the appeal at the

instance of these appellants.  According to respondent No. 1, the

question whether the appellants have been legally and properly

admitted as members or not is a lis between the existing members

and the Managing Committee, to which 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 whether they

had a right to be considered for being admitted as members of the

27

Society and further whether the order of the Registrar results in

dismembering   them   despite   they   being   validly   admitted   as

members at the relevant point of time vide decision of the then

Managing Committee dated 17.09.2017.  Indeed, it is open to the

existing members to object to any new person being admitted as

member of the Society by the outgoing Managing Committee and

that would be a lis between the existing members and the outgoing

Managing   Committee.     That,   however,   does   not   denude   the

appellants   of   cause   of   action,   who   desired   to   be   admitted   as

members   of   the   Society   being   eligible   in   all   respects,   to   be

considered for such admission.   Similarly, if a person has been

dismembered  by  the  Society  including  on  account  of  direction

issued   by   the   competent   authority,   such   a   person   will   have

independent   remedy   to   assail   that   decision.     In   either   case,

therefore, being affected by such non­consideration or by virtue of

dismembering,   the   aggrieved   person   would   be   competent   to

pursue remedy before the concerned forum for redressal of his

grievance and for enforcement of his legal rights.  

38. In the present case, the appellants were admitted by the then

Managing Committee to be members of the Society, but they have

been subsequently dismembered only because of the order passed

28

by the Registrar having become final.   Further, they were made

party to the proceedings before the Registrar, who had set aside

the decisions of the then Managing Committee, dated 17.09.2017.

Thus   understood,   the   objection   regarding   maintainability   of

challenge to the decision of the Registrar and of the High Court by

such affected persons (appellants herein) cannot be countenanced.

39. It is then urged by respondent no.1 that these appellants had

not   challenged   the   decision   of   the  Registrar   dated   09.03.2018

before  the   High   Court   and   thus   had   acquiesced   of   the   same.

Resultantly, they were not entitled to maintain this appeal.  It is

true that the appellants did not file separate writ petition before

the High Court despite the unambiguous order passed by the

Registrar on 09.03.2018 directly affecting them in declaring the

decision of the then Managing Committee dated 17.09.2017 to

admit them as members of the Society, as illegal, arbitrary and to

set it aside on that count.  However, undisputedly, that part of the

order of the Registrar was assailed by the Society before the High

Court by way of Writ Petition No. 373 of 2018.  The reliefs claimed

in the stated writ petition by the Society were, to also espouse the

cause of the appellants herein.  For, the appellants were admitted

by the then Managing Committee as members of the Society.  They

29

came to be dismembered subsequently only because of the order

of the Registrar of setting aside the decision of the then Managing

Committee dated 17.09.2017 attaining finality.   Indubitably, the

Society is competent to espouse the cause of its members and

more so to justify its actions in the form of decision of the then

Managing   Committee  in   office.    So  understood,  the   appellants

herein cannot be faulted for having directly assailed the decision

of the High Court confirming the declaration and subject order of

the   Registrar   resulting   in   their   being   dismembered   from   the

membership of the Society.  As a matter of fact, this Court while

dismissing SLP (Civil) No. 7352 of 2020 filed by the Society, vide

order dated 15.06.2020, had made it amply clear that if the 22

persons, who have been dismembered, were to file independent

special leave petition(s) questioning the correctness of the order of

the Registrar in setting aside the decision of the then Managing

Committee dated 17.09.2017 resulting in their being dismembered

from the Society and of the High Court confirming that part of the

Registrar’s order, that challenge could be considered on its own

merits.   To put it differently, the limited issue involved in this

appeal is expressly kept open by this Court for being agitated by

the appellants.  Indeed, this observation came to be made by this

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Court whilst rejecting the challenge of the Society and the office

bearers of the then Managing Committee to the decision of the

Registrar   and   of   the   High   Court   vide   impugned   judgment.

Nevertheless, as aforesaid, the rejection of earlier special leave

petition filed by the Society and the office bearers of the then

Managing Committee will not come in the way of the appellants

herein to espouse their cause in their own rights.

40. Reverting to the merits of the issue involved in this appeal,

we must hasten to add that the appellants cannot be denuded of

their right to assail the order of the Registrar and of the High

Court denying them of their core right of being considered to be

admitted as member of the Society, being eligible in all respects.

They   claim   to   possess   the   requisite   qualification   and   had

expressed intention to abide by the bye­laws of the Society.  Their

right   to   be   considered   for   being   admitted   as   members   of   the

Society cannot be linked to the acts of commission and omission

of the office bearers of the then Managing Committee.  Neither the

Registrar nor the High Court has dismembered the appellants on

the ground of being ineligible in any manner or because it has

been established that they were the henchmen of the office bearers

of the then Managing Committee.  Notably, even the no confidence

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motion   does   not   mention   that   the   then   Managing   Committee

wanted   to   intentionally   change   the   constitution   of   the   Society

(membership pattern) by admitting new members.  In that sense,

until contrary is proved the appellants (and two others) must be

regarded as bonafide applicants.   Only the decision of the then

Managing Committee dated 17.09.2017, stands vitiated for the

reason   noted   by   the   High   Court.   Admittedly,   at   least   five

appellants had submitted their applications for being admitted as

members of the Society even before the no confidence motion was

moved   on   07.11.2016.     It   is   a   different   matter   that   upon

consideration of request for admitting as members of the Society,

the newly elected Managing Committee may accept or reject the

same on merits.   Depending upon that outcome, the appellants

may even resort to further remedies permissible in law.

41. For elaborating this grievance of the appellants, we must

advert to the bye­laws of the Society under which the appellants

had submitted application(s) for being admitted as member of the

respondent­Society.     Bye­law   1(a)   postulates   that   any   person

irrespective of his race, caste, religion and sex, shall be entitled to

be considered for being admitted as member upon complying with

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the conditions specified therein.  The other relevant clause in the

bye­laws is clause 1(c), which reads thus:

“1) MEMBERSHIP:

(c) Members shall be admitted by the Karyakari

Samiti   only   on   an   application   made   in   the

prescribed   form   and   on   payment   of   the

prescribed fees. Such application form shall be

considered   only   when   it   is   proposed   by   a

member of the Karyakari Samiti. The Karyakari

Samiti   is   competent   to   reject   any   application

without assigning any reason therefor.”

42.  For the present, it is not necessary for us to dwell upon the

wider question of whether the membership in the respondentSociety is one of open membership concept or otherwise.  Suffice it

to note that 22 persons (including appellants herein) had applied

for being admitted as member of the respondent­Society between

12.09.2016   to   19.12.2016.     Notably,   5   appellants   (out   of   22

persons) had already submitted their application until 18.10.2016

before the stated requisition was moved by 18 out 32 existing

members of the Society on 07.11.2016 expressing no confidence in

the then Managing Committee.  Indisputably, requisition/notice of

no confidence makes no reference to the apprehension about any

attempt being made by the office bearers of the then Managing

Committee to change the constitution (membership pattern) of the

Society.     The   membership   applications   were   placed   for

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consideration of the Managing Committee, in its meeting convened

on 02.01.2017 for that purpose but the decision was deferred.

43. Be it noted that as per clause 1(c) of the bye­laws, it is the

prerogative   of   the   Managing   Committee   to   admit   a   person   as

member   of   the   Society   or   to   reject   his   application   without

assigning any reason therefor.  The eligibility for being enrolled as

a member of the Society is spelt out in clause 1(a).  The further

condition in clause 1(c) is of being proposed by the member of the

Managing Committee and submitting application in the prescribed

form and payment of prescribed fee.

44. The   problem   in   the   present   case   is   the   manner   of

consideration of stated applications of appellants (and two others)

by   the   outgoing   Managing   Committee   including   by   unjustly

protracting   the   requisition   for   convening   SGBM   demanded   by

majority   of   existing   members.     For,   upon   receipt   of   such

requisition,   it   was   the   bounden   duty   of   the   Secretary   of   the

Society, in terms of clause 3(v), to immediately issue notice to

convene   SGBM   within   15   days   from   the   date   of   receipt   of

requisition   and   to   issue   15   days’   notice   to   all   the   members

intimating about date of such meeting.  The Secretary had issued

such   notice   on   22.11.2016   scheduling   SGBM   for   07.12.2016.

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But, before the date of meeting, the Managing Committee deferred

the SGBM on some specious objection.   That meeting was not

held.  Instead, the then Managing Committee hastened to take a

decision about admitting 22 new members in its meeting held on

17.09.2017 by giving a short notice of only one day.  This action

did not find favour with the Registrar for the reasons recorded in

his   decision   dated   09.03.2018   including   for   setting   aside   the

minutes of Managing Committee meeting dated 17.09.2017, some

of which commended to the High Court as is discerned from the

impugned judgment.  

45. The High Court had adverted to each of the findings of the

Registrar regarding factual aspects.  It is unnecessary to analyse

the same in the present appeal, considering the cause propounded

by the appellants. What is relevant is the view taken by the High

Court that the then Managing Committee was amiss in admitting

the 22 new members.  The High Court agreed with the view of the

Registrar that only after the outgoing Managing Committee had

secured the trust vote and confidence of 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 of 32), it had

lost   legitimacy   to   take   any   policy   decision   regarding   the

35

management and administration of the Society, which included

induction of new members.  The High Court expounded about the

danger of resorting to such stratagem — as it was likely to upset

the constitution (membership pattern) of the Society and inevitably

strengthen   the   hands   of   the   office   bearers   of   the   outgoing

Managing  Committee  and   enable them  to   clung  to  the  power,

despite being under a cloud due to expression of no confidence

against them by majority of members vide letter dated 07.11.2016.

46. The   view   so   taken   by   the   High   Court   in   the   impugned

judgment has been assailed by the appellants.  According to them,

at   least   5   appellants   had   submitted   applications   for   being

inducted as member of the Society, much before the majority of

existing   members   (18   out   of   32)   had   moved   requisition   on

07.11.2016.     Even   the   remaining   applicants   (17   out   of   22

including   appellant   herein)   had   submitted   applications   in

December 2016 itself, which were placed for consideration before

the   then   Managing   Committee   on   02.01.2017   and   finally   on

17.09.2017.  Until that date, there was no restrictive order issued

by   any   Court   or   competent   forum   against   the   then   Managing

Committee prohibiting it from admitting new members.  Further,

no case has been made out that the appellants were ineligible to

36

become member of the Society or that they had not submitted the

prescribed   form   or   failed   to   pay   prescribed   fees   therefor.

Furthermore, there is no finding by the Registrar or in particular

by the High Court that the appellants were the henchmen of the

office bearers of the then Managing Committee.  The Registrar as

well as the High Court have proceeded on the basis of surmise and

hypothesis   that   the   appellants   were   being   inducted   as   new

members to strengthen the hands of office bearers of the then

Managing Committee and to defuse the threat of removal from the

office due to the pending no confidence motion against them.  

47. We find force in the argument of the appellants that for some

acts of commission or omission of the then Managing Committee,

the   appellants   who   are   otherwise   eligible   to   be   enrolled   as

members of the Society in their own rights need not be denied of

the same.  They have a right to be considered for being admitted

as   members   of   the   Society   by   the   newly   elected   Managing

Committee.

48. Be that as it may, we now proceed to examine the argument

of the appellants that at least the case of 5 appellants, who had

applied for grant of membership before the majority of the existing

members   had   moved   no   confidence   motion   on   07.11.2016   be

37

treated differently.   After cogitating over all facets, we are of the

considered   opinion   that   it   would   be   unwise   to   accede   to   this

submission.  We say so because as noted earlier, at the instance of

these appellants it is not permissible to reopen the findings and

conclusion   reached   by   the   High   Court,   as   regards   illegality

committed   by   the   then   Managing   Committee   in   deferring   the

SGBM despite the mandate in that regard in terms of clause 3(v) of

the bye­laws and instead hastening the process of admitting 22

new members thereby changing the constitution of the Society of

only   32   existing   members.     That   finding   and   conclusion   has

become final with the rejection of the SLP filed by the Society and

the office bearers of the then Managing Committee on 15.06.2020.

Resultantly, it must follow that the decision of the then Managing

Committee dated 17.09.2017 admitting 22 new members has been

rendered  non­est.    This   logic   uniformly   applies   to   all   the   22

persons   enrolled   as   new   members   of   the   respondent­Society.

There is no legal basis to segregate the claim of 5 appellants on

the basis of date of (prior) applications.  Indubitably, merely upon

making an application it does not follow that he/she would stand

admitted as a member of the Society.   The applicant must fulfil

other   eligibility   and   procedural   conditions   and   eventually,   the

38

Managing Committee must find the candidature fit and deserving

for being admitted as a member of the Society.  In other words, the

decision of the then Managing Committee dated 17.09.2017, “as a

whole”,   suffers   from   the   vice   of   unseemly   haste,   and   thus

colourable exercise of power and  non­est  in the eyes of law.   It

cannot be viewed differently for 5 appellants just because of prior

date of application.

49. This is precisely the effect of the decision of the Registrar in

his operative order [paragraph (A)] as applicable to the appellants

and similarly placed two other persons, who are not before us.

The High Court has rightly upheld that conclusion of the Registrar

vide   impugned   judgment   dismissing   the   writ   petition   of   the

Society.  

50. In our opinion, however, the Registrar as well as the High

Court, after so observing, ought to have clarified the position that

the parties (appellants and Society) are relegated to the situation

as it obtained prior to 17.09.2017.  That would have been a just

and   proper   order.     That   means   the   applications   filed   by   the

appellants   and   similarly   placed   two   other   persons   between

September   2016   to   December   2016,   ought   to   be   regarded   as

pending   for   scrutiny   and   for   being   processed   by   the   newly

39

constituted Managing Committee after conducting elections, which

were   due   since   October   2016.     To   this   limited   extent,   the

appellants ought to succeed in the present appeal.   We say so

because the Registrar as well as the High Court has not given any

finding regarding ineligibility of the appellants to be member of the

Society.  In any case, that would be a matter to be considered by

the newly constituted Managing Committee in the first instance,

on case­to­case basis, on its own merits in accordance with law

uninfluenced by any observation made by the Registrar, the High

Court or for that matter in this judgment.   If the decision is

adverse   to   any   applicant,   he   would   be   free   to   pursue   further

remedies as may be permissible in law.

51. To conclude, we uphold the view taken by the High Court

that the decision of the Managing Committee dated 17.09.2017

suffers from the vice of colourable exercise of power and thus,

illegal and bad in law.   The same is  non­est  in the eyes of law.

However, the parties (appellants and Society) need to be relegated

to the stage before 17.09.2017, meaning thereby the applications

submitted   by   the   appellants   and   two   other   similarly   placed

persons for grant of membership, be regarded as pending and/or

deemed to be revived in terms of this judgment.  Their applications

40

for grant of membership be considered by the newly constituted

Managing Committee on its own merits in accordance with law.

All contentions available to the parties in that regard are left open.

52. While   parting   and   for   the   completion   of   record,   we   may

advert to the challenge of the appellants to the continuation of

election process and having been taken forward to constitute the

newly   elected   Managing   Committee   despite   pendency   of   this

appeal.   In light of our above analysis, this grievance cannot be

maintained at the instance of these appellants ­ as the status of

these   appellants   is   merely   that   of   the   applicants   for   grant   of

membership.  Until they are admitted as members of the Society,

they would have no right whatsoever to participate in the election

process culminated in June 2020.

53. Accordingly,   this   appeal   partly   succeeds   to   the   extent   of

clarifying/modifying the order passed by the Registrar (paragraph

(A) of his operative order) as affirmed by the High Court, to mean

that the applications made by the appellants and similarly placed

two other persons for grant of membership of the Society, are

deemed to be pending and/or revived and be considered by the

newly   constituted   Managing   Committee   on   its   own   merits   in

41

accordance with law, keeping in mind the observations made in

this judgment.

54. The   appeal   is   disposed   of   in   the   above   terms.   Pending

applications, if any, also stand disposed of. No order as to costs.

..................................J.

    (A.M. Khanwilkar)      

...................................J.

    (S. Ravindra Bhat)   

New Delhi;

February 10, 2021.