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Merely making an application does not follow that he would stand admitted as member of the Society

The applicant must fulfill other eligibility and procedural conditions and eventually, the Managing Committee must find the candidature fit and deserving for being admitted as a member of the Society. (Para 48)

Swati Ulhas Kerkar and Ors. V/s Sanjay Walavalkar and Ors.

CIVIL APPEAL NO. 412 OF 2021 (Arising out of S.L.P. (Civil) No. 8138 of 2020)

Decided on 10th February, 2021

A two-judge bench of Supreme Court consisting of Justice A.M. Khanwilkar and Justice S. Ravindra Bhat decided to dismiss the appeal of considering the 22 dismembered appellants as members of the society.

The factual matrix of the case consists of Prabodhan Education Society consisting of 32 members before induction of 22 persons (including the appellants) as members. the Managing Committee elected in 2014 was served with a requisition dated 07.11.2016 signed by 18 of the 32 existing members of the Society, to convene a Special General Body Meeting (SGBM) for removal of the Chairman, Secretary and Treasurer and for conducting elections, therefore. The Managing Committee went on to induct the aforesaid 22 persons (including the appellants) as members, despite objections raised by the Treasurer.

The Appellants submitted that (i) 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. (ii) 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. (iii) despite the 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 an abuse of process of law

The Respondents contended (i) that the appellants were aware of the proceedings before the Authority yet chose not 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. (ii) that 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. (iii) 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. (iv) 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. (v) 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 respondent ­Society is not a co­operative society. At best, the applications of the 22 members may be considered afresh.

The High Court vide final judgment and order 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 no­ confidence 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?”

Dependence was laid on Vipulbhai M. Chaudhary v. Gujarat Cooperative Milk Marketing Federation Limited & Ors. (2015) 8 SCC 1 to clarify most of the above issues raised.

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 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. (Para 45)

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 the ineligibility of the appellants to be a 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 case­ to ­case 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.

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 accordance with the law, keeping in mind the observations made in this judgment. (Para 53)

This appeal was disposed of. Other pending applications, if any stand disposed of.