Section 15 of Societies Registration Act would disentitle defaulting members from being given any notice, even if their membership was not terminated or ceased: Supreme Court
Justices Vikram Nath & Ahsanuddin Amanullah [23-01-2024]
 

Read Order: ADV BABASAHEB WASADE & ORS v. MANOHAR GANGADHAR MUDDESHWAR & ORS [SC- CIVIL APPEAL NO. 10846 OF 2018]

Tulip Kanth

New Delhi, January 24, 2024: Referring to section 15 of the Societies Registration Act, 1860, the Supreme Court has held that members in default of membership fee would not be entitled to vote and would not be counted as members of the Society. The Top Court opined that if they are not to be counted as members, then there would be no illegality or for that matter any prejudice being caused by not issuing any notice as the same would be an exercise in futility.

The matter revolved around one Shikshan Prasarak Mandal, Mul society registered under the Societies Registration Act, 1860 as a charitable society since 1946. The Society in its turn framed its rules and regulations. Later on, the Society was registered as a Public Trust under the Bombay Public Trusts Act, 1950.

The effective office bearers of the Society namely the President, Vice-President and the Secretary of the Society expired. Even prior to the death of the President due to his poor health, the Executive Body under his presidentship passed a resolution in 1997 empowering Advocate Babasaheb Wasade (appellant No. 1) to be designated as the Working President and he was required to look after day-to-day affairs and management of the Society.

As there was no elected President, Vice-President or the Secretary, 16 members of the Society requested appellant No.1 to summon extraordinary meeting to hold the elections. The elections were held on 08.09.2002 and a new Executive Committee was elected with appellant No.1 as the President and appellant No.2 as the Secretary.  Objections were filed by 7 persons alleging to be members of the Society on the ground that notice had not been served on them and that appellant No.1 had no authority to issue notice to summon a meeting for election. It was also alleged in the objections that the signatory nos. 12 to 16 to the request letter were not valid members of the Society and were yet to be approved by the Executive Committee. Further signatory nos. 4 to 7 of the same objection had retired and hence, they ceased to be members.

The Assistant Charity Commissioner allowed the objections. The appellant preferred an appeal before the Joint Charity Commissioner, Nagpur which was allowed. Against this, Miscellaneous Civil Application was filed by the Objectors before the District Judge-4, Chandrapur, which was allowed. Aggrieved by the same, the First Appeal was preferred before the Bombay High Court which had since been dismissed by the impugned order, giving rise to the present appeal.

The Division Bench, comprising Justice Vikram Nath & Justice Ahsanuddin Amanullah, was of the view that in the absence of the office bearers authorised under the bye- laws who could convene the meeting, the only option left for convening the meeting could either be with the Working President on his own or upon the requisition made by the members to convene a meeting.“There is a doctrine of necessity where under given circumstances an action is required to be taken under compelling circumstances”, the Bench stated while referring to Charan Lal Sahu vs. Union of India [LQ/SC/1989/648] & Election Commission of India v. Dr Subramaniam Swamy [LQ/SC/1996/861].

“In the present case, had the Working President not convened the meeting, the elections of the executive body would have been in limbo for an unreasonable amount of time. The convening of the meeting by the Working President upon the requests by the 16 surviving members was a necessity at the time”, the Bench further added.

Noting the fact that the President and Secretary who were authorized under the bye- laws had died and no election had been held for replacing them and even the Vice-President and the Joint-Secretary had also passed away, the Bench held that the only person who could be said to be managing the affairs of the Society was the Working President Mr. Wasade, and in particular, when all the 16 surviving and valid members had made a request for convening a meeting, no fault could be found with the decision of the Working President Mr. Wasade to convene the meeting. In such situation, the Top Court was of the view that the convening of the meeting for holding the elections couldn’t be faulted with.

Referring to section 15 of the Societies Registration Act, the Bench said, “The specific language used is that such members in default of membership fee would not be entitled to vote and would not be counted as members of the Society. If they were not entitled to vote and they were not to be counted as members, there would be no illegality or for that matter any prejudice being caused by not issuing any notice as the same would be an exercise in futility.”

Moreover, the Bench observed that in the bye-laws of the present Society or the Rules of the Society, there is no such provision of automatic cessation of membership where a member goes in default of payment of membership fee for more than three months. However, the effect of the proviso to Section 15 of the Registration Act which admittedly is applicable to the Society, the Objectors have to be treated as suspended members and therefore, would not be entitled to any notice as they had no right to vote or to be counted as members. Once they are not to be counted as members, there was no occasion to give them notice as such Non-issuance of notice to the Objectors would not vitiate the proceeding of the special meeting, the Bench held.

“…we may record that a clear reading and interpretation of the proviso to Section 15 of the Registration Act would disentitle such defaulting members from being given any notice even if their membership was not terminated or ceased”, it added.

The Bench held that the contesting respondent would have no locus to maintain the petition before the District Judge. Although the contesting respondent claimed himself to be the Vice-President of the Society but he had not been able to substantiate his claim. On this ground alone the District Judge ought to have dismissed the petition.

The Bench also observed that upon superannuation or cessation of their employment, four signatories (Members 4 to 7) could not have continued as members of the Society in the category of Employee Members even upon their superannuation by merely paying the yearly subscription fee thereby blocking the entry of the persons, who were still employees.

Therefore, allowing the appeal, the Bench accepted the Change Report. The Top Court concluded the matter by observing, “Moreover, we find that the stalemate in the Society has continued for a pretty long time, which does not bode well for any institution, much less an institution which is running educational institutions and is required to be run in a fair, transparent and legal manner.” The Top Court directed that fresh elections shall be held for the new Executive Committee of the Society by the Charity Commissioner in accordance with law within six months.