SWATI ULHAS KERKAR vs. SANJAY WALAVALKAR

1 REPORTABLE IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  CIVIL APPEAL NO. 412 OF 2021 (Arising out of S.L.P. (Civil) No. 8138 of 2020) Swati Ulhas Kerkar and Ors.       … Appellants versus Sanjay Walavalkar and Ors.             …Respondents J U D G M E N T A. M. KHANWILKAR, J. 1. The   central   question   in   this   appeal   is:   Whether   the invalidation   of   membership   of   appellants   and   the   impleaded 1 appellants   (and two others), solely on the ground that the then Managing   Committee   on  its   way   out  and  facing   no   confidence 2 motion before the Special General Body Meeting  demanded by the majority of existing members of the Society ought not to have hastened admission of new members, is just and proper and the Signature Not Verified appropriate direction necessary in that regard? Digitally signed by DEEPAK SINGH Date: 2021.02.10 15:57:10 IST Reason: 1     For short, “the appellants”  2     For short, “SGBM” 2 FACTUAL MATRIX 3 2. Briefly stated, Prabodhan Education Society   is a registered 4 society under the Societies Registration Act, 1860   The Society . consisted   of   32   members   –   before   induction   of   22   persons (including the appellants) as members on 17.09.2017 and their subsequent removal in terms of the impugned decision. 3. The bye­laws of the Society mandate that the elections to the Karyakari Samiti (Managing Committee) be held every three years. The elections to the Managing Committee were due in September 2013, however, there was a delay in conducting elections, which ultimately came to be held on 05.10.2014. While the Managing Committee   elected   in   2014   was   at   the   helm   of   affairs   of   the Society, it was served with a requisition dated 07.11.2016 signed by 18 of the 32 existing members of the Society, to convene a SGBM for removal of the Chairman, Secretary and Treasurer and for conducting elections therefor. The removal of the Managing Committee was sought on various grounds of abuse of power and mismanagement, resulting in loss of confidence.  In   furtherance   of   the   said   requisition,   the   Secretary   vide 4. letter   dated   22.11.2016,   scheduled   a   SGBM   on   07.12.2016. 3 For short, “the Society”. 4 For short, “the 1860 Act”. 3 However, upon objections raised by the members of the Managing Committee   to   hold   such   SGBM,   the   said   decision   came   to   be reviewed   and   the   SGBM   stood   cancelled.   That   decision   was communicated   to   the   members   of   the   general   body   vide   letter dated 03.12.2016. 5. Aggrieved by the cancellation of the SGBM by the Managing Committee, Sanjay Walavalkar (respondent No. 1 herein and one other   member   of   the   Society)   approached   the   High   Court   of 5 Bombay, Bench at Goa  vide Writ Petition No. 1195 of 2016 for the following reliefs: “(a) This Honourable Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction commanding the Respondent No.4 to convene a Special General Body Meeting to transact the agenda as requisitioned by the 18   requisitioning   members   vide   their   letter   dated 07.11.2016 addressed to the Chairman/Secretary of the said society and to hold the same under the supervision and control of the Respondent Nos.2 and/or 3 as the observers to oversee such meeting.  (b) This Honourable Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction commanding the   Respondent   Nos.   2   and/or   Respondent   No.3   to direct   the   Respondent   No.4   to   convene   a   Special General   Body   Meeting   to   transact   the   agenda   as requisitioned   by   the   18   requisitioning   members   vide their   letter   dated   07.11.2016   addressed   to   the Chairman/Secretary of the said society and to hold the same   under   the   supervision   and   control   of   the Respondent Nos.2 and/or 3 as the observers to oversee such meeting.” 5 For short, “the High Court” 4 Indisputably,   22   persons   (including   the   appellants   –   vide 6. letters   dated   12.09.2016,   19.09.2016,   22.09.2016,   18.10.2016, 12.12.2016   and   19.12.2016)   had   filed   applications   for   being enrolled as a member of the Society. The Secretary issued notice dated 29.12.2016 proposing to convene a meeting of the Managing Committee on 02.01.2017 to induct new members.  The induction was, however, deferred. The Secretary issued another notice on 16.09.2017 for convening a meeting of the Managing Committee on 17.09.2017, to consider induction of new members.   In that meeting, the Managing Committee went on to induct the aforesaid 22   persons   (including   the   appellants)   as   members,   despite objections raised by the Treasurer. In the same meeting, it was 6 decided   to   convene   an   Annual   General   Body   Meeting   on 08.10.2017 for conducting elections to constitute new Managing Committee. The relevant portion of the minutes of meeting dated 17.09.2017 is as under: th “3. It was decided that the 34  General Body Meeting be th convened on Sunday, 8  October 2017 at 10:00 AM, in the   school   premises.   Notices   be   sent   15   days   in advance. 4.   Following   new   22   (Twenty   two)   members   were inducted today as members of Prabhodhan Education Society (General Body). (Their applications were pending since   Sept/Oct   2016).   It   was   done   to   complete   the pending   work/task   of   the   present   committee   before expiry of the term. 6 For short, “AGM” 5 ... Shri   Vithal   G.P.   Parrikar,   the   Treasurer,   raised   his objection   to   induction   of   new   members.   He   said   he would not mind their induction after General Body and expressed   fear   that   this   act   may   invite   contempt   of court.” 7. Respondent No. 1, aggrieved by the said development, sought additional reliefs in the above writ petition as under: “(a) This Hon'ble Court be pleased to declare that the Notice dated 29/12/2016 addressed by the Secretary of the Respondent No.4, thereby proposing to convene the meeting of the Managing Committee inter­alia to induct new members to the General Body of the Respondent No.4 is illegal and bad in law and the same be quashed and set aside.  (b) This Hon'ble Court be pleased to declare that the holding of the Meetings of the Managing Committee of the Prabodhan Education Society on 17/09/2017 and 18/09/2017 and the decisions taken there­at (including in respect of induction of Respondent No.5 to 26) are illegal and non­est and the same be quashed and set aside and the Respondent No.5 to 26 be restrained from acting   as   members   of   the   Respondent   No.4   for   all intents and purposes.  (c) This Honourable Court be pleased to restrain the Managing   Committee   of   the   Respondent   No.4   from admitting or inducting any new members to the General Body of the Respondent No.4, pending holding of the Special General Body Meeting as requisitioned by 18 members of the Respondent No.4 vide their letter dated 07.11.2016.” 8. As the decision of the Managing Committee dated 17.09.2017 came to be assailed before the Court, the Managing Committee deferred elections. 9. The   High   Court   vide   interim   order   dated   05.10.2017 permitted   respondent   No.   1,   to   bring   on   record   the   22   newly 6 inducted   members,   as   they   were   likely   to   be   affected   by   the outcome of the further reliefs claimed in the stated writ petition. The relevant portion of the interim order is extracted hereunder: “1. The matter is moved urgently at the instance of the Petitioner. It could not be taken up yesterday.  2. Mr Kantak, learned Senior Advocate on behalf of the 4th   Respondent,   states,   on   instructions,   that   the elections   scheduled   on   8th   October   2017   will   be deferred till 5th November 2017. 3.   However,   it   is   pointed   out   that   the   term   of   the current   Managing   Committee   and   its   office   bearers ends by 7th October 2017. In view of the statement made, the present Managing Committee will continue as a pro tem or caretaker Managing Committee till the next elections but will not take any major financial, policy or other decisions until that time. It may attend to   routine   management   and   administrative   issues alone. 4. List the Petition high on the supplementary board on 31st October 2017. 5. In the meantime, leave to amend to join the newly inducted   members.   Amendment   to   be   carried   out without   need   of   verification   by   10th   October   2017. Notice to be issued to the newly added Respondents returnable on 31st October 2017. An amendment is also permitted to add an additional prayer. Liberty to file   an   additional   affidavit   after   the   amendment   is carried out.” 10. The above writ petition was ultimately disposed of vide order dated   08.11.2017,   directing   the   Inspector   General   of 7 Societies/District Registrar   to decide the dispute on its merits as per law, in the following words: “8. ..... Since the Petitioner has already approached the Inspector   General   under   Section   20(A)   and   the Inspector General is considering the complaint and that 7 For short, “the Authority” 7 it   is   the   grievance   of   the   Petitioner   that   certain developments have taken place pending the decision of the  complaint,  even   the   subsequent   grievance  of   the Petitioner can be considered by the Inspector General on its own merits. Since the Inspector General is an authority under the Act, it will be appropriate that the matter is first looked into by the Authority under the Act, before this Court is called upon to decide the issue of internal management of the society at first instance.  ..... 10.   Accordingly,   we   dispose   of   the   Writ   Petition   by directing Respondent No.3 i.e. the Inspector General, before whom the complaint is made by the Petitioner is pending, to consider the additional grievance made by the Petitioner as well. The Inspector General will decide the matter on its own merits as per law. All contentions of   all   parties   are   kept   open,   including   the   one mentioned above. 11. The ad­interim order passed in this petition, in the form of statement recorded will continue till disposal of the complaint and two weeks thereafter.” 11. Pursuant to the aforesaid order, respondent No. 1 filed a consolidated   complaint   dated   16.11.2017   before   the   Authority. The Authority registered Case No. DRN/RDS/794/2017 wherein it adjudged three original complaints dated 13.10.2016, 04.11.2016 and 05.12.2016 along with the consolidated complaint. 12. The   Authority,   after   having   heard   the   parties   to   the complaint   as   well   as   the   newly   inducted   22   members,   vide judgment   and   order   dated   09.03.2018,   was   pleased   to   issue directions   and   also   set   aside   the   decision   of   the   Managing Committee dated 17.09.2017 giving membership to 22 persons (including the appellants) on the ground that the same was illegal 8 and arbitrary.  The operative order of the Authority is reproduced hereunder:

9

(emphasis supplied) 10 Assailing   the   said   judgment   and   order,   the   Society 13. represented   through   Secretary,   Chairman   and   Secretary   (in individual capacity) filed Writ Petition No. 373 of 2018 before the High Court, wherein, the stay granted in the previous proceedings was extended until disposal of the writ petition by an interim order dated 22.03.2018. 14. The   High   Court   vide   final   judgment   and   order   dated 28.05.2020, framed and adjudged five issues. The issues read as under: “1. Can a Society, on its own, maintain a writ petition against   an   order   passed   by   a   statutory   authority concerning   the   resolutions   its   Governing   Body   or Managing Committee passed? 2. Is the impugned order ultra vires of the Registrar? In the alternative, has the Registrar got the power to rule on the allegations of mismanagement by the Managing Committee? 3. Has the Managing Committee committed an illegality in not convening the Special General Body Meeting at the request of 18 of 32 Society members? 4.  In the  absence of  any  provision  in  the bylaws  or under the act for bringing up a no­confidence motion or to remove the office bearers, could the applicants have insisted on having a Special General Body meeting for discussing those issues? 5. Has the Managing Committee legitimately inducted 22 new members, especially, pending the writ petition and on the eve of the elections?” While addressing the fourth issue, the High Court placed reliance on   a   decision   of   this   Court   in   Vipulbhai   M.   Chaudhary   v. 11 Gujarat   Cooperative   Milk   Marketing   Federation   Limited   & 8 Ors. and held that no confidence motion can be maintained even   in   absence   of   provision   therefor   in   the   bye­laws.   The   relevant portion of the impugned judgment is reproduced below: “71.   Vipulbhai   M.   Chaudhary ,   I   reckon,   clinches   the issue. In any democratically constituted institution, the office   bearers   continue   to   hold   the   office   during   the pleasure of the members that have chosen those office bearers. Sometimes the governing rules or regulations of that institution are silent about how the governing members   must   account   for   their   misdeeds   or maladministration when their tenure is subsisting. But it is no license for them to wreak havoc in the name of administration and annihilate the institution. In other words, it is institutionally inherent that the governing members must administer the affairs of the institution faithfully, honestly, and diligently; they should always remain accountable to the members for their omissions and commissions. In the same reckoning, the members' right   to   unseat   these   governing   members   is   equally inherent in the scheme of the things, despite no express provision to that effect, say, in the byelaws.  72. So we cannot hear the petitioners saying that they were justified in not holding the SGBM. In this context, we may reiterate what the Registrar has held: once the majority members, especially in tune with the bylaws, required   the   Managing   Committee   to   hold   a   general body meeting for whatever purpose, it is the Managing Committee's bounden duty to abide by that demand. Let us   assume   that   the   majority   members   wanted   the general   body   meeting   to   discuss   frivolous   or unimportant   issues;   still   it   is   not   for   the   Managing Committee to sit in judgement over the tenability of the majority members' demand. Once meeting convened, it is for the entire body of the membership to examine the demands   and   decide   on   them.   This   observation,   as made   by   the   Registrar,   remains   even   more   relevant because,   here,   the   allegations   concerned   the   very Managing Committee.  ..... 8    (2015) 8 SCC 1 12 74. Nevertheless, for  the reasons mentioned above, I must   confirm   the   findings   of   the   Registrar   that   the Managing   Committee   has   acted   with   material irregularity   by   refusing   to   abide   by   the   majority members' demand for an SGBM. Now, we will examine the last issue, keeping in view our answer to this issue.” With   respect   to   the   fifth   issue,   pertaining   to   the   validity   of induction of the 22 new members, the High Court disagreed with the findings of the Authority on material aspects.  However, it held that the same was bad being taken by the Managing Committee pending no confidence requisition. The High Court adverted to the dictum in  Vipulbhai  (supra) and observed thus: “95.   Then,   what   vitiates   the   Managing   Committee’s decision to induct new members?  96.   We   have   already   held   that   the   Managing Committee’s   refusal   to   hold   the   SGBM   even   when majority members demanded is an act of illegality. Now, we should examine the induction of the new members in the context of that refusal. On the converse, if there was no demand for an SGBM by the majority and no expression of no­confidence, then the governing body may induct new members at any stage during its tenure —the beginning, the middle, or the end of the tenure making no difference.  97.   Here,   the   majority   members—18   out   of   32— demanded an SGBM; it was, among other things, to express   their   no   confidence   against   certain   office bearers,   too.   The   case   holding   of   Vipulbhai   M. Chaudhary  dispels all doubts about whether the statute or the byelaws should provide for unseating of an office bearer. No need. It is a constitutionally conferred right.  98.   Thus,   inferentially,   we   may   hold   that   once majority   members   express   no   confidence   on   the governing body or any office bearer and demand an SGBM, until the governing body proves its majority, it loses legitimacy to take policy decisions. And that legitimacy   includes   induction   of   new   members . 13 Otherwise, the moment a governing body, that is the Managing Committee, faces a no­confidence motion, the easy—and devious—way out for the governing body is put   the   SGBM   on   hold,   induct   new   members indiscriminately,   alter   the  membership   equation,  and then hold the SGBM.  It is abuse of power that upsets the   democratic   design   of   any   society   and   that should be struck at . 99.   So   the   inescapable   conclusion   is   that   the Managing Committee inducting new members in the face of no confidence and the impending SGBM is .” illegal and arbitrary (emphasis supplied) Finally, the High Court concluded by holding thus: “Under these circumstances, I refuse to interfere with the   impugned   order,   dated   9th   March   2018,   of   the District   Registrar.   As   a   result,   I   dismiss   the   writ petition. No order on costs. Interim relief, if any, stands vacated.” 15. In view of disposal of the Writ Petition No. 373 of 2018, the Civil Registrar­cum­Sub Registrar of Societies, vide letter dated 01.06.2020, directed the Secretary to convene an AGM to conduct elections   for   constituting   a   new   Managing   Committee   by 04.06.2020 (within 7 days from the date of High Court’s order dated 28.05.2020), failing which the Authority shall conduct such elections forthwith. 16. In the meantime, aggrieved by the impugned decision of the High Court, the Society, Chairman and Secretary approached this Court   vide   SLP   (Civil)   No.   7352   of   2020   on   04.06.2020. Simultaneously, the Chairman and Secretary also addressed letter 14 dated 04.06.2020 to the Authority, informing that the Managing Committee held a meeting on 03.06.2020 wherein it had decided to fix the AGM tentatively on 28.06.2020 for holding elections. Further, it informed that final date of election would be fixed at a later date, after withdrawal of Section 144 of Cr.P.C., 1973 which was in force due to lockdown ordered on account of prevailing pandemic situation (Covid­19). 17. On the other hand, since the Managing Committee failed to convene an AGM within 7 days, the Authority vide notice dated 09.06.2020   convened   an   AGM   on   25.06.2020   for   conducting elections. Be that as it may, the stated SLP filed by the Society was 18. listed before this Court on 15.06.2020, whence the same came to be disposed of in the following terms: “We decline to interfere in this Special Leave Petition at the   instance   of   the   petitioners.   The   Special   Leave Petition is dismissed accordingly. If the 22 person(s) who have been dis­membered file independent Special Leave Petition(s) to assail the decision   of  the  High  Court  at  their  instance,  the issue can be considered on its own merits. Pending applications, if any, stand disposed of.” (emphasis supplied) 19. Taking cue from the aforementioned observations made by this Court, the appellants have approached this Court, by way of 15 this appeal, to impugn the order dated 28.05.2020 passed by the High Court. With permission of this Court, 12 other persons (out of the 22 dismembered persons) similarly placed as the original appellants have been impleaded as appellants in this appeal. 20. During pendency of the present proceedings, in response to the Authority’s notice dated 09.06.2020, the Secretary addressed letter dated 22.06.2020, informing that as per the bye­laws, 15 days’  notice   is   essential   for   convening   an   AGM   and   the   same cannot be convened within 7 days as directed by the Authority. The said letter also informed that the direction vide order dated 09.03.2018 was only to start the process of elections and not to conduct elections per se.  Further, the Managing Committee had convened a meeting on 20.06.2020 to fix the AGM on 12.07.2020 for conducting elections. On the same day, the Secretary had also addressed a letter to the District Magistrate seeking permission to conduct elections on 12.07.2020. 21. The   appellants   had   addressed   letters   to   the   Authority   on 24.06.2020 informing about the pendency of the present appeal and   requesting   to   defer   the   elections.   Despite   receiving   this intimation, the Authority proceeded to conduct the elections on 25.06.2020 and constituted the new Managing Committee.   This 16 Court upon being appraised of the said development, vide order dated 25.06.2020, clarified that any steps taken by the Authority would be subject to the outcome of this proceedings.   The order reads thus: “Permission to file Special Leave Petition is granted. Heard learned counsel for the petitioner(s). It   has   been   brought   to   our   notice   that   despite   the pendency of this Special Leave Petition and which fact was brought to the notice of the Registrar, for reasons best known to the Registrar, he hastened the election process. This factual position be placed on record by way of a formal application, to be filed by the petitioner(s) and for appropriate reliefs, as may be advised. In addition, it will be open to the left over persons who are similarly placed as the petitioner(s), to file a formal application   for   impleading   them   as   party   to   the present proceedings. Both these applications to be filed within one week from today through email/online. Issue notice to the respondents on this Special Leave Petition and proposed applications, returnable within four weeks. Dasti, in addition, is permitted. Any   steps   taken   by   the   Registrar,   including elections   allegedly   conducted   by   him   today,   i.e. 25.06.2020 will be subject to the outcome of this Special Leave Petition .” (emphasis supplied) 22. Curiously, the District Magistrate, in response to the letter dated 22.06.2020 of the Secretary, refused to grant permission to conduct   elections   on   12.07.2020   in   view   of   the   restrictions 17 imposed under Section 144 of Cr.P.C. The same was intimated by letter dated 10.07.2020. 23. Meanwhile,   the   newly   elected   Managing   Committee addressed letters dated 25.06.2020 and 11.07.2020 to the schools run by the Society intimating about the change in management of the Society as well as the schools. 24. We may now advert to the challenge before us in the present appeal. SUBMISSIONS 25. The thrust of the arguments of the appellants is that in terms of clause 1(c) of the bye­laws of the Society, a person automatically gets   inducted   as   member   of   the   Society   upon   submitting application in the prescribed form along with prescribed fees. As such,   the   appellants   were   validly   inducted   as   members   of   the Society   as   they   had   duly   submitted   their   applications   in   form prescribed under the bye­laws of the Society. Reliance was placed upon   the   dictum   of   this   Court   in   Zoroastrian   Cooperative Housing Society Ltd. & Anr. v. District Registrar, Cooperative 9 Societies   (Urban)   &   Ors.   to   contend   that   the   right   to 9 (2005) 5 SCC 632 18 membership   in   any   Society   would   have   to   be   tested   on   the touchstone of the bye­laws and nothing else.  26. It was urged that in any case 5 out of the 22 persons had submitted their applications for membership before the requisition of no confidence had been moved.  Whereas, rest of the persons had filed their applications in December 2016. It was urged that their applications for membership were eventually approved on 17.09.2017 after noting that each one of them was an eminent and well acclaimed person in educational field.   Moreover, the Managing Committee had wide discretion to induct a member and they   did   exercise   that   power   bonafide   whilst   inducting   the appellants.  Reliance was placed on the findings of the High Court to contend that the decision taken by the Managing Committee (to induct appellants) was during the subsistence of its tenure and cannot be faulted with.  It was also urged that the High Court had noted that there was no illegality in admitting the members on the eve   of   elections   or   at   the   end   of   the   tenure   of   the   Managing Committee.   Further, there was no finding by the Courts below that the appellants did not fulfil the requirements under the bye­ laws. 19 It   was   submitted   that   reliance   upon   the   decision   of   this 27. Court in  Vipulbhai   (supra)   by the High Court was misplaced as the said decision concerned a co­operative society, whereas the Society in this case is registered under the 1860 Act. Further, it th was   urged   that   the   said   decision   was   based   on   the   97 10 Amendment to the Constitution of India ,  which had been struck down by a Division Bench of Gujarat High Court in  Rajendra N. 11 Shah v. Union of India & Anr. . Reliance was then placed on the dictum of this Court in  Kusum Ingots & Alloys Ltd. v. Union 12 of India & Anr.   to contend that though an appeal had been preferred before this Court against the decision of Gujarat High Court   in   (supra), the   same   is   pending Rajendra   N.   Shah     adjudication (vide Civil Appeal Nos. 9108­9109 of 2014) and there being no order suspending the operation of the said judgment, the th 97   Amendment   is   not   currently   in   existence.   Therefore,   the decision in   (supra) was inapplicable.   The appellants Vipulbhai     also relied upon a decision of Delhi High Court in   Mukund L. Abhyankar v. Chief Executive Officer, National Federation of 10    th For short, “the 97  Amendment” 11    2013 SCC OnLine Guj 2242 12    (2004) 6 SCC 254 20 13  to urge Urban Co­op. Bank and Credit Societies Ltd. & Ors. that the fundamental basis of the decision in   Vipulbhai   (supra) th stood fully eroded without the 97  Constitutional Amendment. 28. The appellants also submitted that the Authority hastened the election despite being informed of the pendency of the present appeal.  This was done to defeat the rights of the appellants. It is contended that  mala fides  of the authorities are manifest from the fact   that   permission   to   conduct   the   election   proposed   by   the Managing Committee was refused by the District Magistrate in view of the Covid­19 protocol, while the election scheduled by the Authority during the same time was conducted in breach of the said protocols.  Further, as on the date of elections, the electoral college consisted of 52 members including 30 existing members and the 22 dismembered persons.  However, despite pendency of the present appeal  (wherein  the  rights  of  the   22  dismembered persons   are   under   consideration),   the   Authority   conducted elections with electoral of only 30 members.   This was nothing short of abuse of process of law. 29. Per contra, respondent no. 1 contended that the appellants were aware of the proceedings before the Authority yet chose not 13    (2017) 241 DLT 358 21 to challenge its judgment and order.   Hence, the appellants are bound by the findings therein.  Resultantly, it is not open to the appellants to assail the order of the High Court. Further, with the dismissal   of   SLP   (preferred   by   the   Society,   Chairman   and Secretary), the order of the High Court stands confirmed and it cannot   be   further   challenged.   In   that,   the   finding   that   the Managing Committee inducted 22 persons illegally and arbitrarily, also had attained finality.   Significantly, the appellants had no right whatsoever, much less vested right on the date of election and  ex­consequenti  no locus to file the present appeal.  30. It   was   urged   that   the   said   22   persons   were   intentionally inducted by the then office bearers of the Society, so as to alter the composition of the Society in their favour and to consolidate their control over the Society. Further, it was submitted that the SLP (filed by the Society, Chairman and Secretary) was dismissed on 15.06.2020 and on the same day, the appellants approached this Court by filing fresh appeal through the same Advocate­on­Record, which clearly  shows  collusion between them.  Furthermore,  the controversy is about the validity of induction of the appellants and not   their   removal.   As   such,   the   lis   is   inter­se   between   the Managing   Committee   and   members   and   the   appellants   being 22 outsiders had no causal connection with the Society whatsoever. Even if the appellants had any vested right, that stood defeated by the order of the Authority and of the High Court confirming the same including this Court.  31. It was then contended that the High Court had rightly held that in democratically constituted institutions, the office bearers continue to hold office during the pleasure of the members and they can be unseated despite any express provision in the bye­ laws.   Reliance was placed upon a decision of this Court in   T. 14 Varghese George v. Kora K. George & Ors.   to urge that the Managing Committee had no power to take any policy decision once a no confidence motion is moved, as that would be against their fiduciary duties towards the Society. It was submitted that any decision taken after the no confidence motion is moved ought to be tested on the touchstone of ‘legal malice’ or malice in fact, whilst relying upon the decision of this Court in  State of Punjab 15 & Anr. v. Gurdial Singh & Ors. . 32. It   was   also   urged   that   the   appellants   cannot   claim   the principle of open membership as envisaged in Section 22 of the Goa Co­operative Societies Act, 2001, to apply to them.   For, the 14   (2012) 1 SCC 369 15   (1980) 2 SCC 471 23 respondent­Society   is   not   a   co­operative   society.   At   best,   the applications of the 22 members may be considered afresh. 33. The argument set forth by the Authority is that this appeal is not maintainable as the impugned order dated 28.05.2020 has attained finality upon dismissal of the SLP (Civil) No. 7352 of 2020 (filed by the Society, Chairman and Secretary).   It is urged that upon disposal of Writ Petition No. 373 of 2018 vide order dated 28.05.2020,   the   interim   order   therein   stood   vacated   and   the elections were required to be conducted since there was no order staying the  elections.  In fact, the  High Court in its  order had observed that elections should be conducted expeditiously. It was submitted   that   the   Authority   had   to   conduct   elections   due   to inaction of the Managing Committee in that regard.  It was then urged that the Authority conducted elections on 25.06.2020, that too one month after the order dated 28.05.2020, by duly putting the members on 15 days’ notice, which cannot be termed as acting in undue haste. The learned Solicitor General, for the Authority elaborated   upon   (supra) to   contend   that   the   said Vipulbhai     judgment had rightly dealt with the democratic principles, which apply   to   cooperative   societies   and   other   societies   alike.   It   was submitted that the said judgment is binding and does not lose its 24 force as the democratic principles were in existence since a long th time and were merely given a constitutional frame by the 97 Amendment. It was further submitted that in light of the said decision, no confidence motion is maintainable even in absence of express provision in that regard in the bye­laws; and the silence in the bye­laws cannot be treated as a gap.  Finally, it was urged that in a democratically governed body, members can be inducted by the Managing Committee only when it enjoys confidence of the members.   However, once the requisition of no confidence was pending, the Managing Committee ought not to have inducted new members into the Society and more so as many as 22 in number which would inevitably change the constitution of the Society. 34. We have heard Mr. Huzefa Ahmadi, learned senior counsel and   Ms.   Anshula   Grover,   learned   counsel   for   appellants;   Mr. Tushar Mehta, learned Solicitor General, Mr. Arun R. Pedneker, learned Standing Counsel for the State of Goa and Ms. Mukti Chowdhary,   learned   counsel   for   the   Authority;   and   Mr.   Vinay Navare,   learned   senior   counsel   and   Mr.   R.P.   Gupta,   learned counsel for respondent No. 1. CONSIDERATION 25 At the outset, be it noted that the scope of present appeal is 35. limited to the question of justness of induction of the appellants as members of the Society by the then Managing Committee on its way   out   and   despite   the   pending   requisition   expressing   no confidence against it; including the correctness and sweep of the order passed by the Registrar and as upheld by the High Court vide impugned judgment,   qua   the appellants herein.   No other issue   decided   by   the   Registrar   or   the   High   Court   need   be addressed   in   the   present   appeal   at   the   instance   of   these appellants.   36. The High Court, vide impugned judgment, went on to hold against the Society due to the manner in which the requisition of no   confidence   motion   moved   by   the   majority   of   the   existing members (18 out of 32) to convene SGBM came to be delayed and frustrated   by   the   stratagem   adopted   by   the   then   Managing Committee, who had allegedly indulged in mismanagement and maladministration of the affairs of the Society.  That action of the then Managing Committee has been held to be illegal and bad in law as it was bordering on colourable exercise of power.  Having said that, the High Court then dealt with the issue of justness of induction of 22 new members (including appellants herein) by the 26 then Managing   Committee   vide   decision  dated   17.09.2017   and declared the same as illegal being consequence of illegal action of not convening the SGBM demanded by the majority of members of the Society for removal of office bearers and instead hastening the induction of new members.  The finding of the High Court that the decision   of   the   then   Managing   Committee   dated   17.09.2017 hastening the admission of 22 new members whilst no confidence motion was pending, is illegal and bad in law has become final with the dismissal of SLP filed by the Society vide order dated 15.06.2020. 37. Before we dwell upon the core issue involved in this appeal, it is   apposite   to   examine   the   preliminary   objection   raised   by respondent No. 1 regarding maintainability of the appeal at the instance of these appellants.  According to respondent No. 1, the question whether the appellants have been legally and properly admitted as members or not is a  lis  between the existing members and the Managing Committee, to which the appellants herein are strangers and have no locus in that regard.  This argument, in our opinion,   is   tenuous   and   cannot   be   sustained.     For,   the   real question posed at the instance of these appellants is whether they had a right to be considered for being admitted as members of the 27 Society and further whether the order of the Registrar results in dismembering   them   despite   they   being   validly   admitted   as members at the relevant point of time vide decision of the then Managing Committee dated 17.09.2017.  Indeed, it is open to the existing members to object to any new person being admitted as member of the Society by the outgoing Managing Committee and that would be a  lis  between the existing members and the outgoing Managing   Committee.     That,   however,   does   not   denude   the appellants   of   cause   of   action,   who   desired   to   be   admitted   as members   of   the   Society   being   eligible   in   all   respects,   to   be considered for such admission.   Similarly, if a person has been dismembered   by   the   Society   including   on   account   of   direction issued   by   the   competent   authority,   such   a   person   will   have independent   remedy   to   assail   that   decision.     In   either   case, therefore, being affected by such non­consideration or by virtue of dismembering,   the   aggrieved   person   would   be   competent   to pursue remedy before the concerned forum for redressal of his grievance and for enforcement of his legal rights.   38. In the present case, the appellants were admitted by the then Managing Committee to be members of the Society, but they have been subsequently dismembered only because of the order passed 28 by the Registrar having become final.   Further, they were made party to the proceedings before the Registrar, who had set aside the decisions of the then Managing Committee, dated 17.09.2017. Thus   understood,   the   objection   regarding   maintainability   of challenge to the decision of the Registrar and of the High Court by such affected persons (appellants herein) cannot be countenanced. It is then urged by respondent no.1 that these appellants had 39. not   challenged   the   decision   of   the   Registrar   dated   09.03.2018 before   the   High   Court   and   thus   had   acquiesced   of   the   same. Resultantly, they were not entitled to maintain this appeal.  It is true that the appellants did not file separate writ petition before the   High   Court   despite   the   unambiguous   order   passed   by  the Registrar on 09.03.2018 directly affecting them in declaring the decision of the then Managing Committee dated 17.09.2017 to admit them as members of the Society, as illegal, arbitrary and to set it aside on that count.  However, undisputedly, that part of the order of the Registrar was assailed by the Society before the High Court by way of Writ Petition No. 373 of 2018.  The reliefs claimed in the stated writ petition by the Society were, to also espouse the cause of the appellants herein.  For, the appellants were admitted by the then Managing Committee as members of the Society.  They 29 came to be dismembered subsequently only because of the order of the Registrar of setting aside the decision of the then Managing Committee dated 17.09.2017 attaining finality.   Indubitably, the Society is competent to espouse the cause of its members and more so to justify its actions in the form of decision of the then Managing   Committee   in   office.     So   understood,   the   appellants herein cannot be faulted for having directly assailed the decision of the High Court confirming the declaration and subject order of the   Registrar   resulting   in   their   being   dismembered   from   the membership of the Society.  As a matter of fact, this Court while dismissing SLP (Civil) No. 7352 of 2020 filed by the Society, vide order dated 15.06.2020, had made it amply clear that if the 22 persons, who have been dismembered, were to file independent special leave petition(s) questioning the correctness of the order of the Registrar in setting aside the decision of the then Managing Committee dated 17.09.2017 resulting in their being dismembered from the Society and of the High Court confirming that part of the Registrar’s order, that challenge could be considered on its own merits.   To put it differently, the limited issue involved in this appeal is expressly kept open by this Court for being agitated by the appellants.  Indeed, this observation came to be made by this 30 Court whilst rejecting the challenge of the Society and the office bearers of the then Managing Committee to the decision of the Registrar   and   of   the   High   Court   vide   impugned   judgment. Nevertheless,  as aforesaid,  the  rejection of  earlier  special leave petition filed by the Society and the office bearers of the then Managing Committee will not come in the way of the appellants herein to espouse their cause in their own rights. Reverting to the merits of the issue involved in this appeal, 40. we must hasten to add that the appellants cannot be denuded of their right to assail the order of the Registrar and of the High Court denying them of their core right of being considered to be admitted as member of the Society, being eligible in all respects. They   claim   to   possess   the   requisite   qualification   and   had expressed intention to abide by the bye­laws of the Society.  Their right   to   be   considered   for   being   admitted   as   members   of   the Society cannot be linked to the acts of commission and omission of the office bearers of the then Managing Committee.  Neither the Registrar nor the High Court has dismembered the appellants on the ground of being ineligible in any manner or because it has been established that they were the henchmen of the office bearers of the then Managing Committee.  Notably, even the no confidence 31 motion   does   not   mention   that   the   then   Managing   Committee wanted   to   intentionally   change   the   constitution   of   the   Society (membership pattern) by admitting new members.  In that sense, until contrary is proved the appellants (and two others) must be regarded as bonafide applicants.   Only the decision of the then Managing   Committee  dated  17.09.2017,  stands   vitiated   for the reason   noted   by   the   High   Court.   Admittedly,   at   least   five appellants had submitted their applications for being admitted as members of the Society even before the no confidence motion was moved   on   07.11.2016.     It   is   a   different   matter   that   upon consideration of request for admitting as members of the Society, the newly elected Managing Committee may accept or reject the same on merits.   Depending upon that outcome, the appellants may even resort to further remedies permissible in law. For   elaborating   this   grievance   of   the   appellants,   we   must 41. advert to the bye­laws of the Society under which the appellants had submitted application(s) for being admitted as member of the respondent­Society.     Bye­law   1(a)   postulates   that   any   person irrespective of his race, caste, religion and sex, shall be entitled to be considered for being admitted as member upon complying with 32 the conditions specified therein.  The other relevant clause in the bye­laws is clause 1(c), which reads thus: “1) MEMBERSHIP: (c) Members shall be admitted by the Karyakari Samiti   only   on   an   application   made   in   the prescribed   form   and   on   payment   of   the prescribed fees. Such application form shall be considered   only   when   it   is   proposed   by   a member of the Karyakari Samiti. The Karyakari Samiti   is   competent   to   reject   any   application without assigning any reason therefor.” 42.  For the present, it is not necessary for us to dwell upon the wider   question   of   whether   the   membership   in   the   respondent­ Society is one of open membership concept or otherwise.  Suffice it to note that 22 persons (including appellants herein) had applied for being admitted as member of the respondent­Society between 12.09.2016   to   19.12.2016.     Notably,   5   appellants   (out   of   22 persons) had already submitted their application until 18.10.2016 before the stated requisition was moved by 18 out 32 existing members of the Society on 07.11.2016 expressing no confidence in the then Managing Committee.  Indisputably, requisition/notice of no confidence makes no reference to the apprehension about any attempt being made by the office bearers of the then Managing Committee to change the constitution (membership pattern) of the Society.     The   membership   applications   were   placed   for 33 consideration of the Managing Committee, in its meeting convened on 02.01.2017 for that purpose but the decision was deferred. 43. Be it noted that as per clause 1(c) of the bye­laws, it is the prerogative   of   the   Managing   Committee   to   admit   a   person   as member   of   the   Society   or   to   reject   his   application   without assigning any reason therefor.  The eligibility for being enrolled as a member of the Society is spelt out in clause 1(a).   The further condition in clause 1(c) is of being proposed by the member of the Managing Committee and submitting application in the prescribed form and payment of prescribed fee. 44. The   problem   in   the   present   case   is   the   manner   of consideration of stated applications of appellants (and two others) by   the   outgoing   Managing   Committee   including   by   unjustly protracting   the   requisition   for   convening   SGBM   demanded   by majority   of   existing   members.     For,   upon   receipt   of   such requisition,   it   was   the   bounden   duty   of   the   Secretary   of   the Society, in terms of clause 3(v), to immediately issue notice to convene   SGBM   within   15   days   from   the   date   of   receipt   of requisition   and   to   issue   15   days’   notice   to   all   the   members intimating about date of such meeting.  The Secretary had issued such   notice   on   22.11.2016   scheduling   SGBM   for   07.12.2016. 34 But, before the date of meeting, the Managing Committee deferred the SGBM on some specious objection.   That meeting was not held.  Instead, the then Managing Committee hastened to take a decision about admitting 22 new members in its meeting held on 17.09.2017 by giving a short notice of only one day.  This action did not find favour with the Registrar for the reasons recorded in his   decision   dated   09.03.2018   including   for   setting   aside   the minutes of Managing Committee meeting dated 17.09.2017, some of which commended to the High Court as is discerned from the impugned judgment.   45. The High Court had adverted to each of the findings of the Registrar regarding factual aspects.  It is unnecessary to analyse the same in the present appeal, considering the cause propounded by the appellants. What is relevant is the view taken by the High Court that the then Managing Committee was amiss in admitting the 22 new members.  The High Court agreed with the view of the Registrar that only after the outgoing Managing Committee had secured the trust vote and confidence of the majority of SGBM, it could have proceeded to admit new members.  For, with the issue of no confidence requisition by the majority (18 out of 32), it had lost   legitimacy   to   take   any   policy   decision   regarding   the 35 management and administration of the Society, which included induction of new members.  The High Court expounded about the danger of resorting to such stratagem — as it was likely to upset the constitution (membership pattern) of the Society and inevitably strengthen   the   hands   of   the   office   bearers   of   the   outgoing Managing   Committee   and   enable   them   to   clung   to   the   power, despite being under a cloud due to expression of no confidence against them by majority of members vide letter dated 07.11.2016. 46. The   view   so   taken   by   the   High   Court   in   the   impugned judgment has been assailed by the appellants.  According to them, at   least   5   appellants   had   submitted   applications   for   being inducted as member of the Society, much before the majority of existing   members   (18   out   of   32)   had   moved   requisition   on 07.11.2016.     Even   the   remaining   applicants   (17   out   of   22 including   appellant   herein)   had   submitted   applications   in December 2016 itself, which were placed for consideration before the   then   Managing   Committee   on   02.01.2017   and   finally   on 17.09.2017.  Until that date, there was no restrictive order issued by   any   Court   or   competent   forum   against   the   then   Managing Committee prohibiting it from admitting new members.  Further, no case has been made out that the appellants were ineligible to 36 become member of the Society or that they had not submitted the prescribed   form   or   failed   to   pay   prescribed   fees   therefor. Furthermore, there is no finding by the Registrar or in particular by the High Court that the appellants were the henchmen of the office bearers of the then Managing Committee.  The Registrar as well as the High Court have proceeded on the basis of surmise and hypothesis   that   the   appellants   were   being   inducted   as   new members to strengthen the hands of office bearers of the then Managing Committee and to defuse the threat of removal from the office due to the pending no confidence motion against them.   47. We find force in the argument of the appellants that for some acts of commission or omission of the then Managing Committee, the   appellants   who   are   otherwise   eligible   to   be   enrolled   as members of the Society in their own rights need not be denied of the same.  They have a right to be considered for being admitted as   members   of   the   Society   by   the   newly   elected   Managing Committee. 48. Be that as it may, we now proceed to examine the argument of the appellants that at least the case of 5 appellants, who had applied for grant of membership before the majority of the existing members   had   moved   no   confidence   motion   on   07.11.2016   be 37 treated differently.   After cogitating over all facets, we are of the considered   opinion   that   it   would   be   unwise   to   accede   to   this submission.  We say so because as noted earlier, at the instance of these appellants it is not permissible to reopen the findings and conclusion   reached   by   the   High   Court,   as   regards   illegality committed   by   the   then   Managing   Committee   in   deferring   the SGBM despite the mandate in that regard in terms of clause 3(v) of the bye­laws and instead hastening the process of admitting 22 new members thereby changing the constitution of the Society of only   32   existing   members.     That   finding   and   conclusion   has become final with the rejection of the SLP filed by the Society and the office bearers of the then Managing Committee on 15.06.2020. Resultantly, it must follow that the decision of the then Managing Committee dated 17.09.2017 admitting 22 new members has been rendered   non­est.     This   logic   uniformly   applies   to   all   the   22 persons   enrolled   as   new   members   of   the   respondent­Society. There is no legal basis to segregate the claim of 5 appellants on the basis of date of (prior) applications.  Indubitably, merely upon making an application it does not follow that he/she would stand admitted as a member of the Society.   The applicant must fulfil other   eligibility   and   procedural   conditions   and   eventually,   the 38 Managing Committee must find the candidature fit and deserving for being admitted as a member of the Society.  In other words, the decision of the then Managing Committee dated 17.09.2017, “as a whole”,   suffers   from   the   vice   of   unseemly   haste,   and   thus colourable exercise of power and   non­est   in the eyes of law.   It cannot be viewed differently for 5 appellants just because of prior date of application. 49. This is precisely the effect of the decision of the Registrar in his operative order [paragraph (A)] as applicable to the appellants and similarly placed two other persons, who are not before us. The High Court has rightly upheld that conclusion of the Registrar vide   impugned   judgment   dismissing   the   writ   petition   of   the Society.   50. In our opinion, however, the Registrar as well as the High Court, after so observing, ought to have clarified the position that the parties (appellants and Society) are relegated to the situation as it obtained prior to 17.09.2017.  That would have been a just and   proper   order.     That   means   the   applications   filed   by   the appellants   and   similarly   placed   two   other   persons   between September   2016   to   December   2016,   ought   to   be   regarded   as pending   for   scrutiny   and   for   being   processed   by   the   newly 39 constituted Managing Committee after conducting elections, which were   due   since   October   2016.     To   this   limited   extent,   the appellants ought to succeed in the present appeal.   We say so because the Registrar as well as the High Court has not given any finding regarding ineligibility of the appellants to be member of the Society.  In any case, that would be a matter to be considered by the newly constituted Managing Committee in the first instance, on case­to­case basis, on its own merits in accordance with law uninfluenced by any observation made by the Registrar, the High Court   or   for   that   matter   in   this   judgment.     If   the   decision   is adverse   to   any   applicant,   he   would   be   free   to   pursue   further remedies as may be permissible in law. 51. To conclude, we uphold the view taken by the High Court that the decision of the Managing Committee dated 17.09.2017 suffers from the vice of colourable exercise of power and thus, illegal and bad in law.   The same is   non­est   in the eyes of law. However, the parties (appellants and Society) need to be relegated to the stage before 17.09.2017, meaning thereby the applications submitted   by   the   appellants   and   two   other   similarly   placed persons for grant of membership, be regarded as pending and/or deemed to be revived in terms of this judgment.  Their applications 40 for grant of membership be considered by the newly constituted Managing Committee on its own merits in accordance with law. All contentions available to the parties in that regard are left open. 52. While   parting   and   for   the   completion   of   record,   we   may advert to the challenge of the appellants to the continuation of election process and having been taken forward to constitute the newly   elected   Managing   Committee   despite   pendency   of   this appeal.   In light of our above analysis, this grievance cannot be maintained at the instance of these appellants ­ as the status of these   appellants   is   merely   that   of   the   applicants   for   grant   of membership.  Until they are admitted as members of the Society, they would have no right whatsoever to participate in the election process culminated in June 2020. 53. Accordingly,   this   appeal   partly   succeeds   to   the   extent   of clarifying/modifying the order passed by the Registrar (paragraph (A) of his operative order) as affirmed by the High Court, to mean that the applications made by the appellants and similarly placed two other persons for grant of membership of the Society, are deemed to be pending and/or revived and be considered by the newly   constituted   Managing   Committee   on   its   own   merits   in 41 accordance with law, keeping in mind the observations made in this judgment. 54. The   appeal   is   disposed   of   in   the   above   terms.   Pending applications, if any, also stand disposed of. No order as to costs. ..................................J.     (A.M. Khanwilkar)       ...................................J.     (S. Ravindra Bhat)    New Delhi; February 10, 2021.