Full Judgment Text
REPORTABLE
2023 INSC 827
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO……………………. OF 2023
(Arising out of Petition for Special Leave to Appeal
(Civil) No._____________ @ Diary No.29700 of 2019)
CHEN KHOI KUI …APPELLANT(S)
VERSUS
LIANG MIAO SHENG & ORS. …RESPONDENT(S)
J U D G M E N T
ANIRUDDHA BOSE, J.
Delay condoned.
2. Leave granted.
3. The main question which arises for adjudication in this
appeal is as to whether the Registrar of Society, empowered to
grant registration under West Bengal Societies Registration Act
1961, also has the power to cancel such registration. There is no
specific provision in the statute granting such authority the
power to review or cancel his own decision. The root of the
Signature Not Verified
Digitally signed by
SNEHA DAS
Date: 2023.10.30
17:15:59 IST
Reason:
dispute lies in what appears to be a conflict between two groups
of the chinese tannery owners in Kolkata over the control of a
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school. The school in question, as per pleadings, came into
existence in the year 1929 as ‘Pei May Chinese School’, and
operated out of a small hut in an area commonly referred to as
China Town. Subsequently, the Chinese Tannery Owners’
Association in Kolkata set up the school on a large tract of land in
a locality known as Tangra. As per the appellant, the school was
moved to this location, now carrying the street address P-1 and 2,
Iswar Mondal Lane, Kolkata-700046. The tanners of Chinese
origin at one point of time constituted an affluent and vibrant
trade group in Kolkata in the field of processing and production
of leather goods and they still have a presence in that sector. The
Chinese Tannery Owners’ Association was registered as a society
in the year 1967 under the West Bengal Societies Registration
Act, 1961. The Regulation of the Association, a copy of which has
been annexed at page 72 of the paperbook records that the said
association had been functioning since 1944 and has a school of
its own known as Pei May School. The address of the school is
also specified therein. The appellant claims to be the secretary of
the school, which according to him was operated by the Chinese
Tannery Owners’ Association.
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4. Dispute arose when the Registrar, under the aforesaid
Statute, granted certificate of Registration in the name of ‘Pei May
Chinese High School’ as an independent society on 19.02.2010 in
response to an application made by the respondents herein. The
address of this society has been shown to be P-1-2, Iswar Mondal
Lane over which the Chinese Tannery Owners’ Association claim
title. The appellant contends that the said association has no
connection whatsoever with Pei May Chinese High School. This
dispute was initially raised with the Registrar by filing a
complaint. The appellant, on 17.08.2010, had submitted to the
Registrar copies of letters by seven individuals who had been
shown as office bearers/members of the “Pei May Chinese High
School” society. Their letters were broadly to the effect that they
were never appointed in such capacity, as was shown in the
memorandum of association of the “school society”. The said
letters carried the request for cancelling the registration of Pei
May Chinese High School as a society. There were allegations of
forgery and fabrication of signatures in this set of complaints.
It appears such disputes were taken to the civil court and
5.
criminal proceeding was also instituted. A writ petition was also
filed by the appellant in which cancellation of the said registration
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was asked for. The civil suit was instituted by the Chinese
Tannery Owners’ Association in the year 2016 in the Court of
Civil Judge, Junior Division at Sealdah, registered as T.S.
No.142/2016. This was a suit for declaration and injunction and
the substantive relief of the plaintiff therein was to restrain the
respondents from interfering with the administration of Pei May
Chinese High School. It appears that in an interlocutory
proceeding taken out in connection with that suit, ad-interim
injunction was granted in favour of the appellant.
6. From the year 2011, there have been several rounds of
litigations by and between the rival parties. The order of the
Registrar, from which the present proceeding originates was
passed in pursuance of an earlier Division Bench judgment of the
Calcutta High Court in APOT No. 498 of 2015 delivered on
14.01.2016. This judgment records:-
“The entire issue in the appeal revolves round the question
whether the Registrar of Societies has power to cancel the order
passed by him on 25-1-2012. An application came to be
presented before the Registrar complaining that the application
consists of forged signature of one Chung Chis Ping. Admittedly,
a criminal case is registered and investigation is pending so far
as allegation of forgery is concerned.
In that view of the matter the observation of the Registrar that on
observation it does not appear that the signature of the other
person namely Chung Shih Ping who has signed as Chung Chih
Ping has not been forged is premature. On what basis he comes
to such finding is also not spelt out in the impugned order which
is under challenge before the learned Single Judge.
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So far as the question of power of review, apparently there is no
substantive power of review provided in the Act in question. So
far as the procedural review, it is inherent within the authority
who passes the order. In that view of the matter, learned Judge
was justified in remanding the matter to the Registrar of
Societies.
Coming to the argument of learned Senior Counsel Mr.
Bandopadhyay with regard to sections 25 and 26 of the
Societies Registration Act, 1961, we are of the opinion, it has no
application since they operate altogether under a different
circumstance. It is left to the wisdom of the Registrar in the above
circumstances to proceed with the matter keeping in mind the
pendency of the criminal investigation as regards allegation of
forgery of the signature, as mentioned above.
With these observations, the appeal and application are
disposed of.”
7. The Registrar had passed an order for cancelling the
registration on 19.04.2016 and it was, inter-alia, held in this
order:-
“Hence, the matter is taken up for compliance of the Hon'ble
Court's order and to avoid further prolixity, I have decided to
pass a reasoned order. I have gone through the writ applications,
Mandamus Appeal, the applications for stay file thereon,
arguments put forward by the parties in dispute and their
learned Advocates and the solemn orders passed by the Hon'ble
Court and the provisions of law which were referred by the
Hon'ble Court as well as the contesting parties. It is evident from
Clause- I (a) of the Memorandum of Association of the Chinese
Tannery Owners' Association, that the school in question (Pei
May School) at 1 & 2, Iswar Mondal Lane, Kolkata - 700046
shall run under the auspices of the Chinese Tannery owners'
Association registered under West Bengal Societies Registration
Act, 1961 having its registration umber S/8546 of 1967-68.
If a new society (Pei May Chinese High School) is emerged with a
separate entity at the same address of Pei May School which is a
part of Chinese Tannery Owners' Association and wish to
register under West Bengal Societies Registration Act, 1961 then
the Memorandum of Association of Chinese Tannery Owners'
Association is to be amended to that effect and to be approved
from the Registrar of Societies. But I have not found any of such
documents in the records wherein the Chinese Tannery owners'
Association applied for such amendment of their Memorandum
of Association.
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I have not gone through the merits of the criminal proceedings
pending in this issue on which the decision to be taken by the
competent authority concerned but emphasis is only given on the
matter of justification of issuance of certificate to Pei May
Chinese High School. In my opinion, the application for
registration of Pei May Chinese High School under the separate
ambit of a registered society i.e. Chinese Tannery Owners
Association, in violation of the provision of the Act and the
registration so obtained by suppressing the fact, is liable to be
cancelled.
Hence, being empowered by Section 22 of the Bengal General
Clauses Act, 1899 mentioned in the order of the Hon'ble Justice
Arijit Banerjee dated 16,07.2015, I am passing this order of
cancellation of the registration granted under West Bengal
Societies Registration Act, 1961 dated in respect of Pei May
Chinese High School bearing registration number S/ lL/68216 of
2009-10.
Hence forth the very society cannot function as a society
registered under West Bengal Societies Registration Act, 1961.
This is further to note that this order cannot be cited as
precedent case unless it is specifically directed by the Court of
law.”
8. The order of the Registrar passed on 19.04.2016 was
unsuccessfully assailed before a Single Judge of the High Court in
Writ Petition No.391 of 2016 and Writ Petition No.518 of 2016.
There was difference of opinion between the learned Judges of the
Division Bench of the Calcutta High Court, in a Letters Patent
Appeal filed by the respondent no.1 and others against the
decision of the learned Single Judge sustaining the cancellation
order. The presiding Judge opined that the Registrar’s decision
was correct whereas the companion Judge held that such an
issue could not be dealt with by the Registrar as it was not in the
nature of procedural review. The companion Judge in her
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differing view observed that since the issue of fraud and forging
signatures is already pending before the “Court below,” possibly
implying pendency of the civil suit and the criminal proceeding,
the decisions in such cases would provide complete relief to the
parties. In case the court arrived at a finding that the signatures
appended to the Memorandum of Association were forged then
the Registrar in exercise of his procedural power to review his own
registration order would be free to take a decision to deregister
the society as fraud vitiates everything, and in case the court
opines that the complaint does not have any merits then the
certificate of registration will not be open for scrutiny.
9. In terms of the Clause 36 of the Letters Patent Act, 1865 of
the Calcutta High Court, the matter was referred to a third Judge
and the Referee Judge formulated the following two questions for
answering the reference:-
“ 1. Whether the Registrar of Firms, Societies and Non-trading
Corporations, West Bengal, the respondent no.2 in the writ
petition (hereafter the Registrar), did have the power to cancel
the registration earlier granted in the name of "Pei May
Chinese High School" on the ground that such registration was
obtained by the appellants/writ petitioners (hereafter the
appellants) by suppression of material facts?
2. If the first question were answered in the affirmative,
whether the Registrar prior to passing the impugned order of
cancellation extended due and reasonable opportunity to the
appellants in consonance with the principles of natural justice
to defend the allegation levelled against them by the
respondent no.4, Mr. Chen Khoi Kui. (hereafter the objector)?”
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10. Analysing the distinction between procedural review and
substantiative review, the Referee Judge answered above
questions in the following terms:-
“36. What the 1961 Act expressly bars is registration of a society
under a name which is identical with, or too nearly resembles,
the name of any other society which has been previously
registered. In the present case, it is not in doubt that the names
of the two societies are different, although it is true that the
Chinese Tannery Owners' Association has been registered under
the 1961 Act, with a disclosure that Pei May Chinese High
School is a sister organisation of such association. However,
whether registration obtained by the appellants in the name of
Pei May Chinese High School is the result of any fraud or is
otherwise statutorily barred, is not too clearly reflected in the
order of cancellation passed by the Registrar. In order to ensure
that an allegation of suppression of a material fact succeeds, it is
incumbent on the party alleging to prove it by reference to
documents on record at the time the application for registration of
the appellants was being considered. The 1961 Act requires that
registration be applied for with particulars to be disclosed in a
memorandum together with the rules and regulations of the
proposed registered society. No form of memorandum has been
statutorily prescribed. In the absence of such form, one is left to
wonder what are the queries that are required to be answered
for registration to ensue. The memorandum submitted by the
appellants has not been shown to be on the records of the writ
appeal. The memorandum or its contents not being on record and
the Registrar too not having referred to it in his impugned order,
the degree of suppression and also whether it is of a material
fact which, if disclosed, could have had the effect of summary
rejection of the application for rejection cannot be ascertained
and it is difficult in the exercise of the present jurisdiction to
return a finding one way or the other.
37. In Shri Krishnan v. Kurukshetra University, (1976) 1SCC311,
the Supreme Court while considering the claim of a law student
to take an examination which the respondent university had
refused, observed in paragraph 7 that:
" It is well settled that where a person on whom fraud is*
committed is in a position to discover the truth by due diligence,
fraud is not proved. It was neither a case of suggestio falsi, or
suppressio veri. " *
(italics in original)
38. In my view, because of ignorance or otherwise, the Registrar
did not act within the parameters of the jurisdiction laid down by
the Hon'ble Division Bench in its order dated January 14, 2016,
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which is apparent on the face of the record. He proceeded to
exercise a power of substantive review, which was not available
to him in terms of such order and that too without reference to
the application for registration of the appellants that succeeded.
The vital difference between a power of substantive review and a
power of procedural review, evidently, was not present in the
mind of the Registrar. If at all there was suppression on the part
of the appellants, it had to be shown that such suppression was
akin to a fraud that had resulted in an order granting registration
in violation of a statutory provision. That has not been shown. It
is for this reason that, on facts and in the circumstances, I
answer the first point of difference noted above in the negative.
39. In view of such answer, question of answering the second
point does not arise.
40. Thus, though I agree with the learned Judge who proposed
that the order of the learned Judge dated May 18, 2017 should
be set aside and the appeal allowed, I am also of the view that
leaving the parties to battle it out before the civil court may not
be appropriate in the circumstances. There being an allegation of
fraud levelled by one party against the other and bearing in
mind the law relating to fraud noticed above, coupled with
observance of the order of the Hon'ble Division Bench dated
January 14, 2016 in the breach by the Registrar, much to the
detriment and prejudice of both the parties, it would only be fit
and proper to set aside the order impugned in the writ petition
and the judgment and order under appeal, and to order a further
remand of the matter to the Registrar for taking an appropriate
decision not only by adhering to the said order of January 14,
2016 but also in the light of the observations made hereinabove.
It is ordered accordingly. To support such course of action, which
is different from those directed by the differing Judges of the
Hon'ble Division Bench, I may refer to the decisions of referee
Judges of this Court in the decisions reported in 2014 (4) CHN
(CAL) 242 (Shivani Properties Private Limited vs. Bank of India)
and 2015 (2) CLJ (CAL) 141 (Tapas Paul vs. State of West Bengal
& Ors.), and the unreported decision dated January 31, 2019 in
APO 508 of 2017 (Sri Ami yo Bhusan Das vs. United Bank of
India & Ors.) rendered by me.
41. The objector and the appellants shall be heard within four
weeks from date of receipt of a copy of this judgment and order.
The Registrar shall, immediately after hearing is closed, proceed
to consider the contentious issues and render his decision within
a further period of a month thereafter. Needless to observe, the
Registrar ought to decide in the light of the observations made in
this order and whatever decision is taken by him must have the
support of reasons.
42. The reference is answered accordingly and the writ appeal
stands disposed of, without costs.”
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11. On the point of power of the Registrar to cancel his own
order, the Referee Judge, whose judgment is under appeal, has
cited the provisions of Section 22 of the Bengal General Clauses
Act, 1899 which stipulates:-
“
22. Power to issue to include power to add to, amend,
Where, by any Bengal Act or
vary or rescind orders etc.—
West Bengal Act, a power to issue orders, rules, bye-laws, or
notifications is conferred, then, that power includes a power,
exercisable in the like manner and subject to the like sanction
and conditions (if any), to add to, amend, vary or rescind any
orders, rules, bye-laws or notifications so issued.”
12. Citing the judgments of this Court in the cases of Grindlays
Bank Ltd. -vs- Central Government Industrial Tribunal and
Others [1980 (Supp) SCC 420] and Kapra Mazdoor Ekta Union
-vs- Birla Cotton Spinning and Weaving Mills Ltd. and Another
[(2005) 13 SCC 777], and also a decision of the same High Court
in the case of Rina Mukherjee and Another -vs- New India
Assurance Co. Ltd. and Another [ ( 2008) ACJ 1248], the Referee
Judge opined that the Registrar had proceeded to exercise his
power of substantive review and that too without reference to the
application for registration that succeeded. This has been
recorded in paragraph 38 of the judgment impugned, which we
have reproduced above.
13. One of the points raised on behalf of the appellant before us
is that the judgment of the Division Bench delivered on
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14.01.2016 not having been appealed against, has attained
finality and it was not permissible for the Division Bench, and
subsequently by the Referee Judge to re-examine the question as
to the manner in which the Registrar had exercised his power.
But we find that the Referee Judge has not addressed any issue
already covered by the decision of the Division Bench delivered on
14.01.2016. The Division Bench has explained the position of law
on the aspect of power of substantive review and procedural
review. The Referee Judge has only applied the same principle to
test the order of the Registrar. Thus, we do not think the
principle of constructive res judicata applied against the
respondents so far as this point is concerned. Moreover, before
the Referee Judge, the dispute centred around the decision taken
by the Registrar after the Division Bench had delivered the
judgment on 14.01.2016 and it formed a fresh cause of action.
14. On behalf of the respondents, it has been submitted that the
FIR No.673/2010 dated 19.10.2010 in which the same allegation
of forged signatures was made stood closed with submission of
final report by the Investigating Officer before the concerned
court. It has been submitted before us that the person accused in
the criminal case (respondent no.14) has been discharged by the
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ACJM, Sealdah by an order passed on 07.04.2021. But this fact,
in our opinion, does not conclude the dispute and in any event
closure report cannot result in final determination of the dispute
between two sets of parties on the adjudication of allegations of
filing false and fabricated documents before the Registrar of
Societies. Otherwise, the respondents have defended the
judgment which is under appeal before us.
15. We are of the view that the impugned judgment does not
suffer from any legal shortcoming warranting our interference.
16. It has also been argued before us that Chinese Tannery
Owners’ Association is the owner of the land where the subject
school is located. On this point, we would add that in the event
the respondents cannot demonstrate their right to run the school
on the land owned by the said Association without their
permission, that factor may also be taken into consideration by
the Registrar and that could also be a ground for cancellation of
registration. But any decision on that count shall be subject to
final adjudication by the civil court if an action on that count is
pending before the civil court.
17. The present appeal shall stand disposed of in the above
terms.
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18. Pending application(s), if any, shall stand disposed of.
19. There shall be no order as to costs.
.................................J.
(ANIRUDDHA BOSE)
...............................J.
(SUDHANSHU DHULIA)
NEW DELHI;
SEPTEMBER 13, 2023
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