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Code of Civil Procedure, 1908-Order 39, Rules 1 and 2-Interim injunction-Grant of-Prima facie case-Registered Society-Persons inducted as Promoter-Members into General Body allegedly by resolution of Board of Governors and subsequently approved by General Body-Society claiming that induction was null and void as resolution of Board of Governors was merely a `proposal’ and subsequent approval of General Body of Society from holding election of Governing Body authority-Interim injunction to restraint Society from holding election of Governing Body without giving them opportunity of participation-Rejected by Courts below on lack of prima facie case-Correctness of-Held-Resolution of Board of Governors merely stated that nine persons will be inducted into General Body as per Constitution of Society-As per Articles of Association of Society an amount had to be paid by a person before his admission, and that was not paid either at the time of meeting of Board of Governors or General Body meeting ; it was paid only after impugned resolution was passed and that too without informing Society-Even if there was a mistake, it was not a mutal mistake-Notice calling for explanation and opportunity of hearing was not required as controversy did not relate to expulsion of member and issue whether induction into General Body was legal, was yet to be decided-In absence of any particulars, it cannot be said that action of Society was mala fide or colourable exercise of power-Photographs, reports etc. showing that all throughout they were treated as Promoter-Members and worked as such, were immaterial, if admission in Society was illegal. Respondent is a registered Society. Its Founding Members Constituted General Body as well as Governing Council/Executive Body. It is the case of the appellants that they were inducted as Promoter-Members into the General Body of the Society by a unanimous resolution of the Board of Governors dated January 27, 2000, in exercise of their power under Clause 11(i) of the Articles of Association, and this was subsequently approved by the General Body of the respondent on March 22, 2006. They were therefore entitled to participate in the election of Board of Governors as per the Memorandum and Articles of Association. They received a caveat from the respondent stating that their claim as Promoter-Members of the society and calling for General Body Meeting was not tenable because their admission as Promoter-Members was null and void. It stated that the resolution dated January 27, 2000 was merely a `proposal’ with a condition that nine persons would be admitted as members at an appropriate time, and the resolution dated March 22, 2006 passed by the General Body of the Society admitting them as Promoter-Members was without authority and null and void. Aggrieved by the above, the appellants filed Original Petitions in the City Civil Court for a declaration that they were legally inducted members and were entitled to participate in the management and administration of the respondent. A prayer was also made for permanent injunction, along with application for interim injunction under Order 39, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908, to restrain the respondent from holding election of the Governing Body without including them and without giving them opportunity of participating in the election process. The City Civil Court dismissed the application for interim injunction inter alia observing that no prima facie case had been made out. Aggrieved by this order, the appellants preferred Revision Petitions. The High Court dismissed all Revision Petitions, and directed the trial Court to dispose of Original Petitions. This is challenged by all the appellants in the present appeals. Appellants contended that (i) neither the Memorandum of Association nor Articles of Association imposed a condition precedent for payment of Rs.1 lakh for becoming a Promoter-Member, and its non-payment cannot be made a ground to expel or remove them; even otherwise, they had never refused to pay the said amount; (ii) apart from the fact that Articles of Association prescribed no time limit within which a payment of Rs.1 lakh was to be made, even respondents were of the same opinion; it was thus a case of mutual mistake for which they cannot be blamed; (iii) the payment has already been made and that fact ought to have been considered by the Courts and relief ought to have been granted in their favour; (iv) no notice was issued by the respondent to show cause why their Membership should not be terminated or discontinued, nor an opportunity of hearing was afforded, nor principles of natural justice were observed; (v) they were always treated as Promoter-Members which fact is proved from various photographs and reports (vi) the action of respondent was mala fide and has been taken in colourrable exercise of power with a view to deprive them from participating in election. Respondents contended that (i) Article 4(i)(b) provides clearly that an applicant who `pays’ Rs.1 lakh would become a Promoter Member; (ii) no such payment was made in March, 2006 when the so-called approval was granted by the General Body; (iii) the said amount was deposited by the appellants directly in the Bank without even informing them; (iv) it was not a case of mutual mistake; the relevant clauses of Articles of Association were unambiguous and since no payment was made as required, no right accrued in favour of the appellants and the action of the Society was legal and lawful; (v) it was not a case of removal, termination or expulsion of a Member and hence there was no question of issuing notice, calling for explanation or affording opportunity of hearing or observance of principles of natural justice or fair play. =Dismissing the appeal, the Court HELD: 1. Neither the trial Court nor the High Court had committed any illegality in refusing interim relief. [Para 18] [784-C] 2. Reading of the Minutes of 85th meeting of the Board of Governors of the Society makes it clear that nine persons were selected and as stated in the minutes, they “will be inducted” into General Body as per the Constitution of the Society. [Para 20 and 21] [786-A-B; F-G] 3.1. Prima facie, the contention of the Society is well founded that an amount ought to have been paid by a person before he is admitted as Patron Member in the light of the phraseology used in Clause 4 (b) of the Articles of the Association. [Para 22] [787-C-D] 3.2. It is not even the case of the appellants that they had paid an amount of Rs.1 lakh before or on January 27, 2000. [Para 21] [786-F-G] 3.3. Even if there was a mistake, it was not a `mutual mistake’. [Para 28] [789-B-C] 3.4. So-called payment was made only after the impugned resolution was passed and that too without informing the Society. [Para 28] [789-B-C] 3.5. It is also pertinent to note that the payment was made by the appellants on October 26, 2006 and a petition was filed in the Court on October 29, 2006 along with an application for the interim relief. But even in the application for interim relief, the factum of payment of amount after the resolution was passed, was not disclosed by the applicants. [Para 28] [789-C-D] 4. The controversy does not relate to expulsion of a member. The question is whether the appellants can be said to have been legally admitted as Promoter-Members. Once it is held that the appellants were properly inducted and had become Promoter-Members of the Society, principles of natural justice required issuance of notice, calling for explanation and affording reasonable opportunity of being heard. The case of the Society, however, is that appellants were never legally inducted as Promoter-Members and their so called induction was not in consonance with law. The said issue is yet to be decided. [Para 24] [788-A-C] Board of Control for Cricket in India and Anr. v. Netaji Cricket Club & Ors., [2005] 4 SCC 741, referred to. T.P. Daver v. Lodge Victoria, No. 363, S.C. Belgaum, [1964] 1 SCR 1, distinguished. Halsbury’s Laws of England, Fourth Edition, Vol. 19(1), p 143, para 201, referred to. 5. No particulars, much less sufficient particulars, have been placed on record to show that the action taken by the Society was mala fide or had been taken in colourable exercise of power. [Para 31] [790-D-E] 6. The plea that the appellants were all throughout treated by the Society as Promoter-Members and they had worked for all these years which is established from various photographs, reports etc., is of no consequence. If the appellants had not been legally admitted as Patron Members, they could not be treated as such and cannot get benefit on the basis of photographs, reports, functions, etc. [Para 27] [788-G-H; 789-A-B] K.K. Venugopal, Soli J Sorabjee and Ravindra Shrivastava, Dr. S.K. Verma, Kunal Verma, Ramakanth Reddy, Ranbir Singh Yadav, Arjun Garg, Ardhendunauli KR. Prasad, M. Mannam and Rajul Shrivastava for the Appellant. K. Rajendra Chowdhary, K. Swami, Prabha Swami, Rakesh K. Sharma, Bina Madhavan, S. Udaya Kumar Sagar, Venayagam and Mishi Choudhari (for M/s. Lawyers’ Knit & CO.) for the Respondents.

CASE NO.:
Andhra Pradesh Legislative Assembly

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Appeal (civil) 2197 of 2007

PETITIONER:
D. DWARAKANANTHA REDDY

RESPONDENT:
CHAITNYA BHARATHI EDUCATIONAL SOCIETY & OTHERS

DATE OF JUDGMENT: 27/04/2007

BENCH:
C.K. THAKKER & ALTAMAS KABIR

JUDGMENT:
J U D G M E N T

CIVIL APPEAL No. 2197 OF 2007
Arising out of Special Leave Petition (Civil) No. 288 OF 2007
WITH
CIVIL APPEAL No. 2198 OF 2007
Arising out of Special Leave Petition (Civil) Nos. 294 of 2007
DR. B. AVANINDRA REDDY  Appellant
Versus
CHAITNYA BHARATHI EDUCATIONAL SOCIETY & OTHERS  Respondents
WITH
CIVIL APPEAL No. 2196 OF 2007
Arising out of Special Leave Petition (Civil) Nos. 374 of 2007
DR. SRI VUNGARALA VENKATA SRIDHAR RAO  Appellant
Versus
CHAITNYA BHARATHI EDUCATIONAL SOCIETY & OTHERS  Respondents

C.K. THAKKER, J.

1. Leave granted.
2. All these appeals arise out of a common judgment 
and order passed by the High Court of Judicature, 
Andhra Pradesh at Hyderabad on January 2, 2007 in 
Civil Revision Petition Nos. 6269, 6353 and 6301 of 
2006. By the said order, all the Revision Petitions were 
dismissed by the High Court and the order passed by the 
Court of IInd Additional Chief Judge, City Civil Court, 
Hyderabad on December 1, 2006 in I.A. Nos. 4192 and 
4194 of 2006 in O.P. Nos. 20070 of 2006 and 2146 of 
2006 is confirmed.

3. Short facts giving rise to the present litigation are 
that M/s Chaitanya Bharathi Educational Society 
('Society' for short) was registered in the year 1979 under 
the Andhra Pradesh (Talengana Area) Public Societies 
Registration Act, 1350 Fasli, vide Registration No. 964 of 
1979. Its objects as specified in the Memorandum of 
Association are
(a) To establish, manage, aid and maintain 
educational and other institutions, to impart 
education and training at all stages for the 
promotion of Engineering, Medicine, 
Pharmacy, Agriculture, Commerce, Literature, 
Arts and Sciences and Management and other 
subjects and allied activities for diffusion of 
useful knowledge and training, specially to 
instill self-confidence, creative thinking and 
entrepreneurship in the students and trainees.
(b) To devise ways and means and accord facilities 
for candidates to specialize in all or any of the 
above subjects (i.e.) to develop Centres of 
excellence for research in the above subjects 
with Industrial Orientation.
(c) To act as a Trust Board to accept endowments, 
bequests, donations, subscription, grants from 
institutions, both Private and Public, 
Corporate bodies, and Government and other 
transferee of property made to the Society and 
administer them on the terms agreed to.
(d) To try to offer medical and clinical facilities to 
the needy by opening the necessary hospitals, 
aid clinical laboratories or X-Ray Institutions, 
and to run, maintain Homes, Residential 
Houses etc., for the needy either by purchasing 
the necessary equipment or by approaching 
such institutions or the Governments 
including those of other Countries, for 
donation of such equipment and the land and 
buildings necessary for locating such 
equipments and Institutions.
(e) To offer consultancy services in any area 
directly or through the Institutions owned and 
managed by the Society.
(f) To carry on activities for any other charitable 
purposes and activities of General Public 
Utility.

4. There were 13 Founding Members who then 
constituted General Body as well as Governing 
Council/Executive Body who were distinguished persons 
from various professions. The Articles of Association of 
the first respondent-society enumerate categories of 
membership in Clause 4 as (i) Patron, (ii) Promoter, (iii) 
Donor; and (iv) Member (ordinary member). Clause 5 
provides for termination of membership. Whereas 
functions of the General Body have been specified in 
Clause 7, functions of the Board of Governors have been 
dealt with in Clause 11. Sub-clause (i) thereof enacts 
that the Board of Governors 'have the power to admit 
new members of the Society on a proposal sponsored by 
at least two members of the Board of Governors'. Clause 
12 relates to meetings of the Board of Governors.
5. It is the case of the appellants that in exercise of 
power under Clause 11(i) of the Articles of Association, 
the Board of Governors on January 20, 2000 resolved to 
induct nine persons as Promoter-Members into the 
General Body of the Society. It was unanimous decision 
of the Board. It was also their case that the resolution 
was subsequently accepted and approved by the General 
Body of the first respondent-society in its meeting dated 
March 22, 2006. Thus, the appellants had become and 
continued to remain as Promoter-Members of the society. 
They are, therefore, entitled to participate in the election 
of Board of Governors as per the Memorandum and 
Articles of Association. The appellants stated that they 
received a caveat from the first respondent-society on 
October 23, 2006 stating therein that their claim as 
Promoter-Members of the society and insisting and 
calling for General Body Meeting was not tenable because 
the very admission of the appellants as Promoter-
Members was null and void. It was further stated by the 
appellants that on October 24, 2006, 118th Meeting of the 
Board of Governors of first respondent-society was 
convened. Under Item No. 4 (any other item), induction of 
admission of nine persons was questioned. It was 
resolved that the appellants could not be said to be 
legally inducted members and their induction was totally 
illegal and unlawful. The resolution dated January 27, 
2000 was merely a 'proposal' with a condition that nine 
persons would be admitted as members at an appropriate 
time. The resolution dated March 22, 2006 passed by 
the General Body of the Society admitting them as 
Promoter-Members was without authority and null and 
void. A consequential letter was written by the Secretary 
of the Society that the admission of the appellants as 
Promoter-Members was invalid and illegal and they were 
not eligible to be members of the society.

6. Being aggrieved by the above resolution, the 
appellants filed Original Petition in the Court of Chief 
Judge, City Civil Court, Hyderabad for a declaration that 
they were legally inducted members and were entitled to 
participate in the management and administration of the 
Society. A prayer was also made to grant permanent 
injunction from conducting election to the Governing 
Body without including the appellants. The appellants 
also filed application for interim injunction under Order 
39, Rules 1 and 2 read with Section 151 of the Code of 
Civil Procedure, 1908 (hereinafter referred to as 'the 
Code') restraining the first respondent from holding 
election of the Governing Body of the first respondent-
society without including Promoter-Members and without 
giving them opportunity of participating the election 
process.

7. The learned IInd Additional Chief Judge, City Civil 
Court vide an order dated December 1, 2006 dismissed 
the application inter alia observing that no prima facie 
case had been made out by the petitioners-appellants 
herein and they could not be granted interim relief as 
sought. Ad interim relief of status quo which was granted 
on October 30, 2006 was vacated.
8. Being aggrieved by the order passed by the trial 
Court, the appellants preferred Revision Petitions. The 
High Court, as observed earlier, dismissed all Revision 
Petitions holding that the trial Court was right in 
dismissing the application as no prima facie case had 
been made out. The High Court also directed the trial 
Court to dispose of Original Petitions within a period of 
three months from the date of receipt of the copy of the 
order. The above order has been challenged by all the 
appellants in this Court.

9. On January 10, 2007, this Court stayed operation 
of the impugned order passed by the High Court till 
January 19, 2007 which was the date fixed for 
admission-hearing. On January 19, 2007, notice was 
issued and parties were directed to file affidavits and 
further affidavits. On March 2, 2007, the matter was 
ordered to be placed for hearing. We have accordingly 
heard learned counsel for the parties.
10. The learned counsel for the appellants contended 
that the Board of Governors admitted the appellants as 
Promoter-Members as early as in the year 2000. In an 
Emergency Meeting of the General Body held on March 
22, 2006, the action was approved by the General Body. 
Neither the Memorandum of Association nor Articles of 
Association had imposed a condition precedent for 
payment of Rs.1 lakh for becoming a Promoter-Member. 
Non-payment of an amount of Rs.1 lakh, therefore, 
cannot be made a ground to expel or remove the 
appellants as Promoter-Members. Even otherwise, 
appellants had never refused to pay the said amount. 

11. It was also submitted that no notice was issued 
by the Society to show cause why the Membership of the 
appellants should not be terminated or discontinued, nor 
an opportunity of hearing was afforded, nor principles of 
natural justice were observed. The impugned action 
taken by the respondents on October 24, 2006 treating 
the membership of the appellants as void was non-est. 
The action was also bad in law inasmuch as the 
resolution admitting the appellants as Promoter-
Members was taken by the Board of Governors and 
accepted by the General Body. Resolution dated October 
24, 2006 was passed by the Board of Governors which is 
a body subordinate to the General Body. It, therefore, 
could not have interfered with the action of the General 
Body.

12. It was also submitted that there were 
amendments in the Articles of Association in the year 
1981 which provided induction of eminent persons as 
Promoter-Members without payment of any amount. All 
the appellants are 'eminent' in their respective fields and 
they are entitled to continue as Promoter-Members.

13. It was also contended that apart from the fact that 
Articles of Association prescribed no time limit within 
which a payment of Rs.1 lakh was to be made, even 
respondents were of the same opinion. It was thus a case 
of mutual mistake for which appellants cannot be 
blamed. The appellants were always treated as 
Promoter-Members which fact is proved from various 
photographs and reports. It was alleged that the action 
was mala fide and has been taken in colourable exercise 
of power with a view to deprive the appellants from 
participating in the next election. The counsel further 
stated that in any case, the payment has already been 
made by the appellants and that fact ought to have been 
considered by the Courts and relief ought to have been 
granted in their favour. On all these grounds, the appeals 
deserve to be allowed by setting aside the order passed by 
the trial Court and confirmed by the High Court by 
continuing the appellants as Promoter-Members.

14. The learned counsel for the respondents 
supported the action taken by the Society and the orders 
passed by the Courts below. It was submitted that the 
appellants were never appointed as Promoter-Members 
and the action which was taken by the Board of 
Governors in its 85th Meeting dated January 27, 2000 
was in the nature of mere proposal to induct the 
appellants as Promoter-Members. Formal decision 
admitting them as Members had never been taken. It was 
also submitted that the language of Article 4 (i)(b) is 
explicitly clear and provides that an applicant who 'pays' 
Rs.1 lakh would become a Promoter Member. It is thus 
clear that a person, before he can become Promoter-
Member, must 'pay' an amount of Rs.1 lakh. Admittedly, 
no such payment was made in 2000 nor in March, 2006 
when the so-called approval was granted by the General 
Body. Even on October 26, 2006, the amount was 
deposited by the appellants directly in the Bank without 
even informing the Society and that was done after the 
resolution was passed on October 24, 2006.

15. According to the learned counsel, it was not a 
case of removal, termination or expulsion of a Member 
and hence there was no question of issuing notice, 
calling for explanation or affording opportunity of hearing 
or observance of principles of natural justice or fair play. 
Since the appellants had never become Promoter-
Members, what was done on October 24, 2006 was to 
make it clear that their so called membership was void 
and of no effect. Reliance was placed on Hyderabad 
Karnataka education Society v. Registrar of Societies & 
Others, (2000) 1 SCC 566 : AIR 2000 SC 301 : JT 1999 
(9) SC 482.

16. According to the learned counsel, it was not a 
case of mutual mistake. The relevant clauses of Articles 
of Association were unambiguous and since no payment 
was made as required, no right accrued in favour of the 
appellants and the action of the Society was legal and 
lawful.

17. As to amendment of 1981, it was submitted that 
no such amendment was made nor it was brought into 
force. It was, therefore, submitted that the action of the 
Society was strictly in consonance with law. The main 
matter is pending before the City Civil Court and it will 
be decided on its own merits, but, taking into account 
admitted facts and documentary evidence, if the trial 
Court had not granted interim relief and the said order 
was confirmed by the High Court, it cannot be said that 
any illegality has been committed which deserves 
interference under Article 136 of the Constitution. It was, 
therefore, prayed that the appeals deserve to be 
dismissed.

18. Having heard learned counsel for the parties, in 
our opinion, neither the trial Court nor the High Court 
had committed any illegality in refusing interim relief. So 
far as the action taken by the respondent-Society is 
concerned, our attention has been invited by the counsel 
for the parties to the Memorandum of Association as also 
to the Articles of Association. We have already extracted 
the objects for which the Society has been set up. Clause 
4 of the Articles of Association provides for Membership 
of Society and reads thus:
4. MEMBERSHIP
 The Society shall consist of the 
following Classes of membership.

(i)(a) PATRON

 Any person, who pays a sum of Rs.5 
lakhs or more in one lump sum or 
Rs.3 lakhs in one instalment and the 
balance in two equal yearly 
instalments, shall be called 'Patron' of 
the Society with hereditary rights 
under the Laws of Primogeniture. Any 
person who fails to pay the 
subsequent instalments within the 
specified time, i.e., second instalment 
of Rs.one lakh before the end of first 
year, third instalment of Rs.one lakh 
before the end of second year, from 
the date of the payment of the first 
instalment of Rs.3 lakhs, they will not 
be entitled for privileges of Patron 
Member and shall be treated as a 
Promoter Member only from the date 
of default in payment.

(b) PROMOTER

 Any person who pays a sum of Rs. 
one lakh or more but less than Rs.5 
lakhs shall be called 'Promoter' with 
hereditary rights under the Laws of 
Primogeniture.

(c) DONOR

 Any person who pays a sum of 
Rs.50,000/- or more but less than 
Rs. one lakh shall be called 'Donor' 
and their membership in the Society 
is for a period of twelve years only.

(d) MEMBER

(i) Any person who pays Rs.20,000/- or 
more but less than Rs.30,000/- shall 
be called 'Member' and is to be 
treated as Member for a period of 
twelve years. This class of 
membership shall be restricted to 
only two hundred members.

(ii) Any change in the scale of fee or 
qualification of membership made in 
these presents shall take effect only 
from the date of adoption of these 
Articles as amended and shall not 
affect the Status or scale of fee paid 
by members enrolled previously 
unless such member ceases to be the 
Member of the Society for any reason 
whatsoever.

(iii)(a) Firms, Institutions, Associations or 
Groups of Persons are also entitled 
for the membership to any of the 
classes mentioned above and shall be 
entitled to nominate one 
representative on their behalf to the 
General Body and such person once 
nominated shall represent in the 
General Body during the tenure of the 
membership of such Firm, 
Institution, Association or Group of 
Persons.

(b) Any such nomination shall be valid 
for a minimum period of three years 
in the case of a member of Body of 
Governors and in any other case for a 
minimum period of one year.

(iv) GENERAL

 The name of the Chief Patron, 
Patrons and Promoters and Donors 
will be exhibited at the appropriate 
places of the Institutions as decided 
by the Board of Governors.

19. Clause 5 relates to 'Termination of Membership'. 
Clauses 6, 7 and 8 deal with General Body, its functions 
and meetings to be convened. Clause 9 declares that 
management is vested in the Board of Governors 
constituted under Clause 10. Functions of the Board of 
Governors have been mentioned in Clause 11. Sub-
clause (i) of Clause 11 empowers the Board to admit new 
members of the Society on a proposal sponsored by at 
least two members of the Board of Governors. 

20. Reading of the Minutes of 85th meeting of the 
Board of Governors of the Society makes it clear that 
certain matters were taken up for consideration. Item 
No.2 related to proposals sponsoring Promoters-
Members. The relevant part thereof reads thus:
ITEM NO.2 The Board members gave eleven 
proposals sponsoring promoters 
to Chaitanya Bharathi 
Educational Society as per the 
clause 4 (i) (b) and 11 (i) of 
Articles of Association out of 
whom nine promoters were 
unanimously chosen as listed 
below:

(1) Dr. H. Prabhakar Reddy
(2) Dr. D. Dwarakanath Reddy
(3) Sri N. Subhash
(4) Sri B. Chandrasekhar Reddy
(5) Dr. B. Avanendra Reddy
(6) Sri D. Praveen Reddy
(7) Sri P. Chandradhar Reddy
(8) Sri V.V. Sridhar Rao
(9) Sri Konda Viswaswara Reddy

The above candidates constitute a panel of 
promoters selected and will be inducted into 
General Body as per the constitution of 
Chaitanya Bharathi Educational Society.

21. It is thus clear that nine persons were selected 
and as stated in the minutes, they "will be inducted" into 
General Body as per the Constitution of the Society. It is 
not even the case of the appellants that they had paid an 
amount of Rs.1 lakh before or on January 27, 2000. In 
fact, from the record it is clear that in 2006 when a 
meeting of the General Board was convened on March 
22, 2006 and the action of the Governing Board was 
accepted, such amount was not paid by the appellants. 
Even on October 24, 2006, when 118th meeting of the 
Board of Governors of the Society was convened, it was 
stated that the appellants had not paid an amount of 
rupees one lakh for becoming a Promoter-Member and 
hence a resolution passed by the Board of Governors of 
the Society on January 27, 2000 inducting them as 
'Promoter Members' and also a resolution, dated March 
22, 2006 passed by the General Body could not be said 
to be legal and the action was nullity. It was also 
observed that the so-called Resolution No. 3 dated 
October 3, 1981 amending the Articles of Association was 
neither passed by the Board of Governors nor approved 
by the General Body either on that day or at any later 
date. The Articles of Association of 1979, therefore, were 
in force. For the qualification for membership as 
'Promoter' of the Society, rupees one lakh had to be paid. 
Since no such payment was made by the persons 
claiming Promoter-Members, their membership was 
'void'. It was only thereafter that the appellants directly 
deposited the amount in the bank in the name of the 
Society without even informing the Society about such 
payment. 

22. Prima facie, we are of the view that the contention 
of the Society is well founded that such an amount ought 
to have been paid by a person before he is admitted as 
Patron Member in the light of the phraseology used in 
Clause 4 (b) of the Articles of the Association. We are, 
however, conscious of the fact that the main matter is 
pending before the trial Court. We may, therefore, 
hasten to add that we are dealing with the contention of 
the appellants and the arguments of the respondents 
only for a limited purpose of deciding the appeal which 
has been filed against an interlocutory order refusing 
interim relief. In our opinion, it cannot be said that by 
not granting interim relief, the Courts below had 
committed an error of law or of jurisdiction.
23. As to issuance of show cause notice calling for 
explanation and giving an opportunity of hearing as also 
observance of natural justice, the learned counsel drew 
our attention to a decision of this Court in T.P. Daver v. 
Lodge Victoria No.363, S.C. Belgaum, (1964) 1 SCR 1 : 
AIR 1963 SC 1144. After considering various cases, the 
Court made the following observations; 
"The following principles may be gathered 
from the above discussion. (1) A member of a 
masonic lodge is bound to abide by the rules 
of the lodge; and if the rules provide for 
expulsion, he shall be expelled only in the 
manner provided by the rules. (2) The lodge is 
bound to act strictly according to the rules, 
whether a particular rule is mandatory or 
directory falls to be decided in each case, having 
regard to the well settled rules of construction 
in that regard. (3) The jurisdiction of a civil 
court is rather limited; it cannot obviously sit as 
a court of appeal from decisions of such a body; 
it can set aside the order of such a body, if the 
said body acts without jurisdiction or does not 
act in good faith or acts in violation of the 
principles of natural justice as explained in the 
decisions cited supra".

24. We are afraid the ratio laid down in Daver does not 
apply to the facts of the case. In the instant case, the 
controversy does not relate to expulsion of a member. 
The question is whether the appellants can be said to 
have been legally admitted as Promoter-Members. Once it 
is held that the appellants were properly inducted and 
had become Promoter-Members of the Society, principles 
of natural justice required issuance of notice, calling for 
explanation and affording reasonable opportunity of 
being heard. The case of the Society, however, is that 
appellants were never legally inducted as Promoter-
Members and their so called induction was not in 
consonance with law. The said issue is yet to be decided. 
In our opinion, therefore, Daver is of no assistance to the 
appellants at this stage. [See also Board of Control for 
Cricket in India & Anr. v. Netaji Cricket Club & Ors., (2005) 
4 SCC 741 : JT 2005 (1) SC 235]

25. The learned counsel for the appellants also relied 
upon Halsbury's Laws of England, Fourth Edition, Vol. 
19(I), p 143, para 201, in which it was stated:
201. Expulsion. As a Society is 
founded on a written contract expressing 
the terms on which the members associate 
together, there is no inherent power to 
expel a member, and a member may not 
therefore be expelled unless the rules 
provide that power. Any power of expulsion 
must be exercised in good faith, for the 
benefit of the society and strictly in 
accordance with the rules. If rules give the 
committee or some other authority power 
to expel a member for some act of 
disobedience or misconduct on his part, its 
decision cannot be questioned, provided 
the decision is arrived at after the 
member's defence has been heard or he 
has been given an opportunity of being 
heard. If a member is not given the 
opportunity the decision will be null and 
void. If the rules have been strictly 
observed, and the member has had due 
notice and full opportunity of answering 
the charges made against him and the 
power of expulsion has been exercised in 
good faith and for a reason which is not 
manifestly absurd, no tribunal can 
interfere to prevent the expulsion.

26. In view of the fact that the appellants had not been 
expelled or removed from Membership, in our considered 
opinion, the observations in Halsbury's Laws of England 
have no application to the case on hand.

27. The plea that the appellants were all throughout 
treated by the Society as Promoter-Members and they 
had worked for all these years which is established from 
various photographs, reports etc., is of no consequence. 
If the appellants had not been legally admitted as Patron 
Members, they could not be treated as such and cannot 
get benefit on the basis of photographs, reports, 
functions, etc.

28. To us, this is not a case of mutual mistake as 
contended by the appellants. According to the appellants, 
when no period is prescribed for payment of rupees one 
lakh, such amount can be paid at any time or in any 
case, within a 'reasonable period'. Prima facie, it appears 
to us that the amount ought to be paid before or at the 
time of becoming Member. Hence, even if there was a 
mistake, it was not a 'mutual mistake' as sought to be 
argued by the appellants. So-called payment was made 
only after the impugned resolution was passed and that 
too without informing the Society. It is also pertinent to 
note that the payment was made by the appellants on 
October 26, 2006 and a petition was filed in the Court 
under Section 23 of the Act on October 29, 2006 along 
with an application for the interim relief. But even in the 
application for interim relief, the factum of payment of 
amount after the resolution was passed was not 
disclosed by the applicants.

29. Regarding amendment of 1981, the counsel 
stated that Clause 4 of Articles of Association was 
amended by Resolution No.3, dated October 3, 1981 by 
the Society. The amended Clause 4 of the Articles of the 
Association reads thus: 
4. MEMBERSHIP
 The Society shall consist of the 
following Classes of membership.

(i)(a) PATRON

Firms, Institutions, Associations or 
Groups of Persons who can 
contribute substantially for the 
objectives of the Society are entitled 
for this membership and shall be 
entitled to nominate one 
representative on their behalf to the 
General Body and such person once 
nominated shall represent in the 
General Body during the tenure of the 
membership of such Firm, 
Institution, Association or Group of 
Persons.

 (b) PROMOTER

 Any person who is eminent in any 
walk of life and who can contribute 
financially or otherwise to the 
objectives of the Society might be 
chosen by the Board of Governors as 
'Promoters'.

(iv) GENERAL

 The name of the Chief Patron, 
Patrons and Promoters and Donors 
will be exhibited at the appropriate 
places of the Institutions as decided 
by the Board of Governors. Any 
change in the scale of fee or 
qualification of membership made in 
these presents shall take effect only 
from the date of adoption of these 
Articles as amended and shall not 
affect the status or scale of fee paid 
by members enrolled previously 
unless such members ceases to be 
the member of the Society for any 
reason whatsoever.

30. No such contention had been taken by the 
appellants before High Court. But even otherwise, in our 
opinion, the learned counsel for the respondents is right 
in contending that it was the case of the respondent-
Society that no such amendment had been made and 
brought into force, which is clear from the Minutes of 
118th Meeting of the Board of Governors. 

31. In our opinion, no particulars, much less 
sufficient particulars, have been placed on record to 
show that the action taken by the Society was mala fide 
or had been taken in colourable exercise of power. A 
question of law which arises for the consideration of the 
Court is as to whether the appellants had become 
Promoter-Members. If the answer is in the affirmative, 
they are entitled to certain rights. But if the answer is in 
the negative, they cannot be treated as Promoter-
Members. Considering the facts and documentary

evidence on record, the trial Court found that no prima 
facie case has been made out. It, therefore, did not grant 
interim relief. The said order had been confirmed by the 
High Court. The High Court, in our opinion, rightly 
observed in the operative part of the order that it was a 
fit case to decide the main matter and accordingly a 
direction was issued to decide the Original Petition within 
three months. 

32. For the foregoing reasons, in our opinion, the 
orders passed by the Courts below cannot be said to be 
illegal or unlawful. The appeals deserve to be dismissed 
and are accordingly dismissed. In the facts and 
circumstances of the case, however, there shall be no 
order as to costs.

33. Before parting with the matter, we may clarify 
that we have not entered into correctness or otherwise of 
the allegations and counter-allegations made by the 
parties and have decided the controversy on a limited 
issue as to legality and sustainability of the order 
refusing interim relief in an application filed by the 
appellants under Order 39, Rules 1 and 2 read with 
Section 151 of the Code and we may not be understood 
to have expressed any opinion on the merits of the 
matter. As and when the matters will be taken up by the 
trial Court for hearing, they will be decided on their own 
merits without being influenced by the observations 
made in this judgment.34. The appeals are accordingly dismissed, however, 
with no order as to costs.

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