Bahorilal vs Keshav Prasad

Shrivastava, J.—By this petition under Articles 226 and 227 of the Constitution the Petitioner challenges the election of the (sic) dents as members of the Managing Committee of the National Transport Service Co-operative Society Ltd., Jabalpur.

The following facts are not disputed. The society has 33 members. A meeting of the Society was called for 23.4.1962 to elect new members for the Managing Committee in place of those who had been functioning from 5.11.1959. The meeting was attended by 30 members. Three members Faruk Ahmad, Abdul Hamid and Mohammad Sharif were absent. The Respondents were elected members in that Committee. Respondents 1 and 2 are the sitting members of the old committee.

The Petitioner''s case is that the meeting was invalid, as notice for 15 days as required under bye-law 19 was not given. Further, three members, who had been expelled by the Managing Committee, were allowed to take part in it. Lastly, the meeting was invalid, as it was called without audit report having been received. On behalf of the Respondents, it was contended that the notice of the meeting was adequate and even if it was not so, the bye-law is only directory. It was also urged that the Petitioner, who is a member of the Managing Committee, is estopped from challenging the notice. It was admitted that the three members were given notice of expulsion by the Managing Committee but it was stated that the resolution was of no effect unless confirmed in the general meeting.

As regards audit report, it was stated that a meeting could be convened to do any other business even if the audit report had not been received.

After having heard the learned Counsel on both sides, we have come to the conclusion that there is no substance in the last two objections; but the proceedings of the meeting were invalid for want of adequate notice.

We shall consider the last two objections first. The Petitioner has filed notices Ex. P-5 and Ex. P-6 which indicate that the Managing Committee passed a resolution expelling the three members and gave intimation to them to this effect by these notices. The powers of the Managing Committee in this regard are given in item (x) of bye-law 27 which is as follows:

(x) to expel a member from the Society subject to the confirmation by the general meeting.

It is obvious that any resolution passed by the Managing Committee is subject to the confirmation by the general meeting and does not take effect without such confirmation. Shri R.K. Pandey for the Petitioner drew our attention to the meaning of "approval" as explained by Bindra in his Interpretation of Statutes (1957, 2nd Edn., page 638). The learned author points out the difference between "approval" and "permission" saying that the former expression implies that the act is valid until disapproved. This is of no help to the Petitioner in view of the express condition of confirmation imposed by the bye-law. We hold that the resolution can take effect only when confirmed by the general meeting.

For the third contention, Shri Pandey relied upon bye-law 19. The relevant part of that bye-law is as follows:

The Annual General Meeting of the society shall be held once a year on any convenient day within two months from the date on which the audit note of the society is received.

We are clear in our mind that the reference to the audit report does not restrict the calling of the meeting for any other purpose on other occasions and does not imply that there shall be only one general meeting to be called on a date falling within two months after the receipt of the audit report. The bye-law has to be interpreted liberally to enable the various types of business mentioned in bye-law 20 to be transacted. Most of the items have nothing to do with the audit report and to link the holding of the meeting with the report may prevent important matters from being considered. For instance, we may refer to bye-law 24 which requires election to elect members of the Managing Committee not later than 30 months after the election of the previous committee. This bye-law clearly contemplates the calling of the General Meeting for the purpose and such a meeting will not be related to audit report. In our opinion, though bye-law 19 makes the calling of a General Meeting within two months of the audit report compulsory, it does not take away the power to call the meeting at any other time.

Passing now to the first contention, we find that the notice for the meeting was issued by the old Managing Committee as per Ex. P-4. It is dated 7. 4. 1962. Ex. P-2 gives copies of the certificates of posting of the notice and it appears from this document that the notices were dispatched to the three absent members on 8.4.1962. The meeting was fixed for 23. 4. 1962. Bye-law 19 requires that "At least fifteen days notice of a General Meeting shall be given. Reasonable period for service of notice by post has to be allowed and as the members were local residents, the reasonable time may be reduced to one day. We find that the notice did not thus allow "at least 15" days and was contrary to the provisions of bye-law 19.

To meet this difficulty, Shri A. P. Sen for the Respondents suggested that the byelaw is not mandatory but only directory and substantial compliance with it is rough. It is true that if the bye-law is directory, it need not be complied with literally. See The Pioneer Motors (Private) Ltd. and Ors. v. The Municipal Committee Nagercoil AIR 1962 SE Shri Sen drew out attention to certain observations of the Supreme Court in The Vice-chancellor, Utkal University and Others Vs. S.K. Ghosh and Others, . Their Lordships observed in paragraph 16 as follows:

The reason for the stricter rule laid down in the cases cited before us is that though an incorporated body like an University is a legal entity it has neither a living mind nor voice. It can only express its will in a formal way by a formal resolution and so can only act in its corporate capacity by resolutions properly considered, carried and duly recorded in the manner laid down by its constitution. If its rules require such resolutions to be moved and passed in a meeting called for the purpose, then every member of the body entitled to take part in the meeting must be given notice so that he can attend and express his views. Individual assents given separately cannot be regarded as equivalent to the assent of a meeting because the incorporated body is different from the persons of which it is composed. Hence, an omission to give proper notice even to a single member ''in these circumstances'' would invalidate the meeting and that in turn would invalidate resolutions which purport to have been passed at it. But this is only when such inflexible rigidity is imposed by the incorporating constitution.

This passage indicates that the provision about notice of meetings is normally mandatory and cannot be waived. However, Shri Sen contended that the rule is not inflexible and for this he relied on bye-law 21 which provides that "Non-receipt of a notice of the general meeting by a member shall not invalidate the proceedings of the meeting". It appears to us that these words imply nothing more than the fact that a notice despatched or delivered in the manner indicated earlier in the bye-law is sufficient. That does not mean that the notice can be posted at any time before the meeting without allowing the necessary fifteen days mentioned in bye-law 19. The two rules must be read together and thus read all that they mean is that if the posting of notice is in sufficient time to give a notice of fifteen days, then the complaint about non-receipt of notice is not valid.

The question about the mandatory nature of a notice was considered Rambharoselal v. State of M. P. 1955 NLJ 124, and it was held that the provision in Section 18-A of the C. P. and Berar Municipalities Act providing that a notice of no-confidence must be given ten days before moving it was mandatory. It was urged by Shri Sen that the notice was waived, as no objection was raised by the Petitioner in the meeting. It was also said that the Petitioner as member of the Managing Committee, which issued the notice, was estopped. These objections are answered sufficiently in the following passage from Rambharoselal''s case (supra):

But the notice is not to the president alone; it is also to the members. "It was the duty of the member who gave the notice (if the president fixed the meeting too early) to ask for the postponement of the meeting to a date ten clear days ahead of the notice before the resolution was moved. No waiver, estopped or acquiescence could make the motion proper if it was not in compliance with the rules framed. In our opinion, the rules do require that ten clear days should elapse between the notice of a resolution of no-confidence and the motion of no-confidence. The rule of ten days which is framed is in the interest of municipal administration and also of the electors whose representative the president is. The section, which enables a vote of no-confidence to be moved, enables the members of the committee to get rid of a president with whom they cannot work. But in the clash of principles, the legislature has thought it wise to put in a provision about ten clear days. We cannot regard that provision, in the Circumstances, as merely directory. In our judgment, that provision has to be complied with and the State Government was perfectly correct when it declined to accept the resignation based on a vote of no-confidence moved improperly.

We hold that bye-law 19 in the instant case is mandatory as regards period of notice and the Petitioner is not estopped from challenging the validity of the meeting.

Lastly, Shri Sen urged that we should not exercise our discretion in granting a writ in favour of the Petitioner, pointing out that the Petitioner is a member of the old managing Committee and wants to continue in office even after expiry of thirty months which is the maximum period for the members under byelaw 24 and have themselves left a loophole in the late issue of notice to reserve a ground of attack in case they fail in the elevation. All this may be true; but since there has been a violation of a mandatory rule, the proceedings become invalid.

In Vice-Chancaller v. S.K. Ghosh (supra), their Lordships refused to exercise discretion with the following observations:

The substance is more important than the form and if there is substantial compliance with the spirit and substance of the law, we are not prepared to let an unessential defect in form defect what is otherwise a proper and valid resolution. We, however, confine our remarks to the facts of this case where there was actual appearance without objection at meetings properly convened and where there was complete unanimity on both occasions. Whether it would be proper to reach the same conclusion where there is a dissentient voice we are not prepared to say. In our opinion, the High Court was wrong in holding that the two resolutions were invalid. Whatever may be thought about each taken separately, the defects, if any, are, in our judgment, cured when the two are read together and regarded as a whole.

It was held under the facts of that case that substantial compliance was good enough. There, all the members had attended one or the other of the two meetings and had unanimously decided the question. In the instant case, three members were absent and the elections were contested. We do not agree that we can refuse relief to the Petitioner.

As regards the difficulty pointed out by Shri Sen that after 4. 5. 1962 when thirty months expire, the Society will be without a Managing Committee. This is not necessarily so. Although the spirit of the by-law 24 is that there should be new elections within 30 months, the old committee can continue till the next elections are completed. We were told by both sides that the Registrar was taking action to convene a meeting under his powers but stopped, as this petition had been filed before us. The Registrar can proceed quickly in the matter and have the elections held in a short time. There will not be any difficulty in his doing so and new Managing Committee will thus be constituted without loss of much time.

In the result, the petition is allowed. The election of the Respondents held in the meeting, dated 23.4.1962, is quashed. However, in view of the fact that the Petitioner had raised no objection on the ground of inadequate notice when the meeting was held, we order that the parties shall bear their own costs as incurred. The outstanding amount of the security deposit shall be refunded to the Petitioner.