Rajendra Kumar Agarwal vs State of U.P. and Others

Rajendra Kumar Agarwal, has preferred present Special Appeal against the judgment and order dated 28.10.2015 passed in Civil Misc. Writ Petition No. 14947 of 2014 (Anand Swarup Agarwal (Manav) v. The State of U.P. and others) wherein Learned Single Judge has proceeded to disposed of the writ petition by holding the amendment of the bye laws to be invalid.

Brief facts giving rise to the instant Special Appeal are that a registered trust deed was prepared on 17.10.2001 with the name and style Ganga Ram Dharmarth Nyas, Mohalla Katra Mandi Dhanaura, district J.P. Nagar (Amroha) in which petitioner and late Brij Mohan Saran Agarwal were founder trustee. It was registered on 18.10.2001 through late Brij Mohan Saran Agarwal (since deceased). The trust has been created by the petitioner and his co-trustee late Brij Mohan Saran Agarwal by contributing sum of Rs. 51,000/- each. It has further been submitted that the petitioner being founder trustee, donated Rs. 15,00,000/- by cheque and more than Rs. 15,00,000/- by cash to the trust for establishment of college and nearly about Rs. 6,00,000/- yearly was donated to the college run and managed by society of the trust for payment of salary of the teaching and non-teaching staff. It has also been submitted that late Brij Mohan Saran Agarwal and other trustee of his group had donated Rs. 11,31,000/- to the trust. The object of the trust inter alia was to extend help to the poor and the needy persons and also provide education and health care to the poor persons and for achieving the aims and objects of the trust an educational society has been constituted in the name and style of Sri Ganga Ram Shiksha Samiti, Mandi Dhanaura, district J.P. Nagar (Amroha) by the petitioner and another founder trustee late Brij Mohan Saran Agarwal. Said society has been registered under Societies Registration Act, 1860 with the Assistant Registrar Firms Societies and Chits, Moradabad on 05.04.2002. The society in question has its own bye laws and as per the bye laws of the societies in all 13 trustees of the trust to be there and it has also been provided for the constitution of the Managing Committee of 8 members including 5 office bearers to be elected by the General Body of the Society. Under the bye laws of the society, the tenure of the Managing Committee of the society has not at all been provided for and it proceeds to take note of the fact that vacancy in question shall be filled up by the General Body of the Society by the majority of 2/3rd of its members.

Record in question reflects that election dated 15.12.2009 has been set up and papers were transmitted to the Assistant Registrar Firms Societies and Chits, Moradabad and the Assistant Registrar Firms Societies and Chits, Moradabad on receiving of the said papers in question proceeded to pass order on 27.08.2011 wherein Assistant Registrar Firms Societies and Chits, Moradabad, proceeded to exercise and invoke its authority vested under Section 25(2) of the Act, and thereafter election programme has been notified on 30.08.2011 and election has been held. Said order of the Assistant Registrar Firms Societies and Chits, Moradabad passed under Section 25(2) of the Societies Registration Act, and as well as consequential election programme dated 30.11.2011 has been subject matter of challenge in Civil Misc. Writ Petition No. 55045 of 2011 (Anand Swaroop Agarwal v. State of U.P. and others) and the said matter remained pending before the Court. Further facts that are emanating that during the pendency of the aforesaid writ petition bye laws of the society has been sought to be amended vide resolution dated 28.03.2012 and after amendment in question has been carried out same has been registered by the Assistant Registrar Firms Societies and Chits, Moradabad on 12.09.2013.

This much has also been reflected from the record that complaints have been made before the Assistant Registrar Firms Societies and Chits, Moradabad on 21.02.2013 and the Assistant Registrar passed order on 02.04.2013 and the said order has been subject matter of challenge in Civil Misc. Writ Petition No. 24610 of 2013(Anand Swarup Agarwal (Manav) v. State of U.P. and others) and this Court disposed of the said writ petition on 02.05.2013 asking the Assistant Registrar, to look into the matter and pursuant to the liberty accorded by this Court on 02.05.2013 the Assistant Registrar, on 12.09.2013 has proceeded to pass order wherein earlier registration of the bye laws of the society has been cancelled and the petitioner-opposite party, Anand Swarup Agarwal was asked to submit a list of members/trustees of managing committee of the society as well as amended bye laws of the society for its registration. Said order in question has been subject matter of challenge in Civil Misc. Writ Petition No. 53586 of 2013 by Rajendra Kumar Agarwal and the said writ petition was allowed by this Court on 27.09.2013 and the matter has been remanded back and thereafter pursuant to remand order the matter has been re-considered by the Assistant Registrar and order dated 15.02.2014 has been passed wherein claim set up by Anand Swarup Agarwal has not been accepted and aggrieved against the said order Anand Swarup Agarwal has preferred Civil Misc. Writ Petition No. 14947 of 2014 challenging the order dated 15.02.2014 passed by Assistant Registrar Firms Societies and Chits, Mordabad as well as amendment made in the bye laws of the society dated 28.03.2012 has been challenged. Both Civil Misc. Writ Petition Nos. 55045 of 2011 as well as 14947 of 2014 have been taken up together and thereafter record in question reflects that Civil Misc. Writ Petition No. 55045 of 2011 has been allowed in following term:

"In view of the aforesaid facts and circumstances, as the registered bye laws of the Society are completely silent with regard to the tenure of the Managing Committee and for holding periodical elections for electing the members of the Managing Committee and its office bearers, the Assistant Registrar acted wholly without jurisdiction in passing the impugned order and holding that the term of the Managing Committee to be one year only and that the Managing Committee in office has become time barred.

Since the order impugned is without jurisdiction, the consequential declaration of election programme and the holding of the elections thereafter are all bad and falls to the ground automatically.

In view of the fact that the petition succeeds on the first argument raised by counsel for the petitioner, I do not consider it necessary to dwell on the other aspect of the matter with regard to violation of principles of natural justice and the perversity of the impugned order.

The Society is directed to ensure filling up of the vacancies of the Managing Committee in accordance with its registered bye laws and it is provided that the Managing Committee of the Society henceforth shall regularly submit annual list of its members to the Registrar/Assistant Registrar as contemplated by Section 4 of the Act failing which it will be open for the Registrar/Assistant Registrar to take action for de-registration of the Society.

The impugned order dated 27.08.2011 is hereby quashed and a writ of certiorari is directed be issued accordingly.

The writ petition is allowed. No order as to costs."

Following the judgment rendered in Civil Misc. Writ Petition No. 55045 of 2011 (Anand Sawroop Agarwal v. State of U.P. and others), Learned Single Judge has proceeded to pass following order:

"In this petition a challenge has been made to the order dated 15.02.2014 passed by the Assistant Registrar (Firms, Societies and Chits), Moradabad whereby the objections of the petitioner in respect of the bye laws of the Society have been rejected. It appears that bye laws of the Society were registered along with the Society in the year 2002.

Subsequently, pursuant to the order dated 27.08.2011 passed by the Assistant Registrar under Section 25(2) of the Societies Registration Act, 1908, (hereinafter referred to as the Act), elections of the Managing Committee were held and the bye laws were amended. These amended bye laws were also registered and approved on 12.09.2012.

The petitioner contends that the bye laws initially registered were not correct the bye laws and that some other bye laws which do not bear his signature as a founder member were registered. His objection is to discard the registered bye laws and for their replacement by another set of bye laws. His further objection is that amended bye laws are also not valid and could not have been registered.

These objections and similar other objections of the petitioner have been rejected by the impugned order. The impugned order in rejecting the objections of the petitioner provide that the registration of the bye laws is subject to the decision of the High Court.

The registration of the initial bye laws in the year 2002 are not open to challenge in this petition as the matter regarding such registration of bye laws in the year 2002 had travelled upto this court and has been decided with the dismissal of writ petition against which a Special Appeal is said to be pending but without any interim order.

Therefore, it is not proper to go into the validity of the registered bye laws of Society in this writ petition and it is left open to be adjudicated if necessary in the Special Appeal alleged to be pending.

The registered bye laws of the Society were amended and got registered by the Managing Committee elected pursuant to the order dated 27.08.2012 passed by the Assistant Registrar under Section 25(2) of the Act which has been quashed by a separate order passed by me today in Writ Petition No. 55045 of 2011. In view of the said order the amendment made to the bye laws is not by a valid Managing Committee.

Accordingly, this writ petition is disposed of holding the amendment of the bye laws to be invalid and leaving the matter of registration of the original bye laws to the decision of the Special Appeal said to be pending."

Respondent-appellant, at this juncture is before this Court assailing the validity of the order dated 28.10.2015 and as far as order dated 28.10.2015 passed in Civil Misc. Writ Petition No. 55045 of 2011 is concerned validity of the said order has not been challenged before us, however statement has been made that the proposal is there to challenge the same, as such in the facts of the case we are confined to the arguments in question only in regard to the order dated 28.10.2015 passed in Civil Misc. Writ Petition No. 14947 of 2014(Anand Swarup Agarwal (Manav) v. The State of U.P. and others).

Sri Gajendra Pratap, Senior Advocate appearing with Sri Hemendra Kumar, Advocate submitted before us that there are total 13 members of the General Body of the society and once majority of members have taken a call to amend the bye laws of the society then bye laws in question could not have been done away with as has been done by Learned Single Judge as the amendment in question was to ensure periodical election of the Managing Committee of the society, as holding of election on regular interval is one of essential basic features of democracy, and learned Single Judge ought to have examined the validity of the amendment from the said perspective and point of view in stead of doing away with the same on the premises that same has been passed by Managing Committee whereas said amendment in question was fully protected by de facto doctrine as such Special Appeal be allowed.

Sri Manish Goyal, Advocate appearing for petitioner-opposite party on the other hand contended that this is a glaring case of manipulation made, election has been set up in designed manner wherein, petitioner-opposite party has been sought to be ousted and the General Body has been sought to be manipulated, and the amendment in question which was introduced has the impact of altering the basic structure of the society in question itself and in view of this, once there is large scale manipulation and maneuvering then rightful order has been passed and accordingly no interference be made.

After respective arguments have been advanced, factual situation on which there is no dispute that under the bye-laws of the society, tenure of the Managing Committee of the society has not at all been provided for and same has been completely silent. In view of Section 4(1) of the Societies Registration Act, 1860 the list of members has to be submitted annually and it appears that authority under Section 25(2) of the Societies Registration Act, 1860 has been exercised by passing the order dated 27.08.2011 and by getting election held based on the notification dated 30.08.2011. Said actions have been subject matter of challenge in Civil Misc. Writ Petition No. 55045 of 2011 and the said writ petition has been allowed on 28.10.2015 wherein categorical observation has been made that Assistant Registrar Firms Societies and Chits Moradabad has erred in law in passing order dated 27.08.2011 and getting the election held vide election programme dated 30.08.2011 and both the action have been disapproved and Society has been directed to fill up the vacancies of the Managing Committee in accordance with its registered bye laws. Said order dated 28.10.2015 passed in Civil Misc. Writ Petition No. 55045 of 2011 is not at all subject matter of challenge before us as such we are proceeding on assumption and presumption that the said order is final vis-�-vis issues raised in present Special Appeal.

In the present case, what we find from the order dated 28.10.2015, that the learned Single Judge has proceeded to make a mention that registered bye laws of the society was amended and got registered by the Managing Committee elected pursuant to the order dated 27.08.2011 and as the election of the Managing Committee has been set aside, in view of this amendment made in the bye laws is not by a valid Managing Committee, accordingly, amendment will also have to go.

Much emphasis has been laid before us that Learned Single Judge has misread the records when mention has been made that Managing Committee has proceeded to amend bye laws whereas record in question substantiates this fact the amendment in question has been carried by the General Body of the Society by majority decision then ipso facto amendment could not have been set at naught, as it has been done in the present case.

Under the bye laws of the society, amendment in question can be carried out by 2/3rd members of General Body and proceeding in question on its face value does reflect that resolution has been passed by the General Body of the society and it appears that due to inadvertence and over sight in the order impugned Managing Committee has been mentioned and there is an apparent reason for the same as the meeting of the General Body has been convened by the Managing Committee elected pursuant to order dated 27.08.2011. We accordingly proceed to deal with the matter by presuming that proceedings for amendment has been undertaken by the General Body.

Issue is that once the existence of Managing Committee itself has been held to be illegal and the order dated 27.08.2011 it self has been set at naught then ipso facto entire action taken by the Managing Committee would be held to be bad or same would be saved by application of de facto doctrine.

De facto doctrine has been dealt with in extenso by the Apex Court in the case of Goraraju Rangaraju v. State of Andhra Pradesh reported in 1981 Law Suit (SC) 253 by providing that even if appointment or election has been subsequently set aside the action taken will stand protected. De facto doctrine saves "the act of officers de facto performed by them within the scope of their assumed official authority, in the interest of public or third persons and not for their own benefit, as valid and binding, as if they were the acts of officers dejure.

De facto doctrine saves only such acts that are performed in the interest of public or third persons and not for their own benefit. No one is under obligation to recognize or respect the act of an intruder as for all legal purposes they are absolutely void, but for the sake of order and regularity, and to prevent confusion in the conduct of public business and in security of private rights, acts, in reference of public and third parties are protected except for the situation when there is a direct challenge to the same, and some one is claiming office dejure.

Here there has been direct challenge to the usurpation of office, said challenge has been entertained and allowed and accordingly amendment that has been made has been set at naught.

Once warring groups are fighting with each other trying to take the control of the society by all means fair and foul then the said amendment can not be saved by de facto doctrine. This Court in the case of Committee of Management v. Joint Director of Education , 2003 (3) UPLBEC 2175 has already taken the view that democracy is the signature tune of our Constitution and once origin of Managing Committee elected was illegal/void, then there subsequent continuance cannot be approved of as a tress passer cannot be permitted to run the affairs of institution/society.

In the present case Managing Committee has arrived on the scene based on the action taken in exercise of authority vested under Section 25(2) of the Societies Registration Act, 1860 and thereafter it is reflected from the record that attempt has been made to amend the bye laws in question.

Though before us it was sought to be mentioned that it was only to provide tenure of the Managing Committee of the Society but amendments in question on its face value shows that major amendments have been made, same are as follows:

Once there has been serious issue qua the continuance of Managing Committee and as to who are the valid members of General Body of society and on the strength of the order passed under Section 25(2) of the Act the new Managing Committee came into existence and said existence has been subject matter of challenge before this Court and during this interregnum period once amendments have been carried out, drastically as major amendments have been made as is reflected from the resolution dated 28.03.2012, that was far away from the original bye laws of the society and therein Umesh Chandra Garg has been shown as President, Rajendra Kumar Agarwal has been shown as Secretary/Manager and four members were shown absent namely Rajat Agarwal, Anand Swarup Agarwal, Radhey Mohan Agarwal and Ved Prakash Agarwal and even Principal of the institution has also been shown absent. Such drastic amendment made in the bye-laws of the society, on the face of it is not at all with the endeavour/intention to fulfill public interest or the interest of third parties rather the interest is more for personal benefit i.e. for consolidating control over the society. Such an exercise cannot be subscribed as same would tantamount to manipulating the democratic process by undemocratic means i.e. by back door method.

Apex Court in the case of Allahabad High School Society v. State of U.P. , 2011 (6) SCC 118 has not at all approved the amendments made in the bye-laws of the society wherein amendments have been made of Rules/Constitution/Bye-laws of society, arbitrarily, unlawfully without following the democratic process and in contravention of Act and Rules of Society, principally to perpetuate membership of certain members in society.

Amendments are not saved by de facto doctrine, once there has been serious dispute on going, and records are speaking for itself that there has been deliberate attempt to take over the society in question and with the said object and aim amendments in question have been carried out, in view of this, once the very existence of Managing Committee has been done away with and same was the foundation and basis of coming in control and then introducing amendment in a designed manner to take over the society, as is amply demonstrated from the amendments then there is no infirmity in the view taken by learned Single Judge.

In view of this, present Special Appeal is dismissed.