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Judgment
We have heard both Mr. Soli J. Sorabjee, learned senior counsel for the appellant and Mr. R. F. Nariman, learned senior counsel for the respondents. The appellant is a non-trading company registered under the Travancore Companies Regulations Act, 1092 ME. The affairs of the company are administered in accordance with the provision contained in its memorandum of association and Articles of association. There are also various bye-laws which govern the appellant-society.
There are locality based Nair community associations known as Karayogam throughout the State of Kerala which is a congregation of Members of the Nair community of that area. A Karayogam on application gets affiliated to the Nair Service Society. Once such affiliation is effected then the society exercises supervisory control over the Karayogam. As per the bye-laws the administration of the Karayogam and its assets can be taken over by the Registrar for the proper maintenance.
It is also further provided in the said bye-laws that in order to remove the said dead lock the Registrar may take over the administration for a limited period.
The appellant owns two aided schools, namely, Parippu High School and the Parippu Lower Primary School. The first respondent was selected as a President of the N.S.S. Karayogam Parippu in the year 1989 for a period of three years. As such President of the Karayogam from the year 1989 he became ex-officio manager of the said school. It appears that the first respondent indulged in mismanagement of the affairs of the Karayogam and the school. There were also allegations of misappropriation of funds. The three year term of the first respondent as President expired on 26-11-1991. Even though the bye-laws of the Karayogam directed elections to take place, enjoining the general body for every month but no meetings were held.
The Registrar of Karayogam who was having supervisory jurisdiction deputed an Assistant Registrar to conduct an enquiry into the allegations against the first respondent and submit a report. The Assistant Registrar as an Enquiry Officer, after giving due notice to all the parties, conducted the enquiry. He submitted a report to the Registrar in which he had stated that there was gross mismanagement of Karayogam as well as misappropriation of Karayogam funds. The first respondent was called upon to offer explanation to this report. He submitted his explanation on 28th July, 1989. During discussion which took place at the instance of Taluka Union on 25th September, 1989 the first respondent admitted his liability to the tune of ` 1,53,300/-. He agreed to pay a portion on or before 3rd October, 1989 and the remaining before July, 1990. However, even as late as 15th June, 1989 he did not keep up his promise and he wrote a letter to the Secretary, NSS Union that he will do so soon. Under these circumstances, the Registrar by his proceedings dated 20th May, 1992 appointed an ad hoc Committee comprising of five persons for the management of the affairs of the Karayogam and its assets including the school. The President NSS Union Kottayam was appointed as Chairman. The Secretary Karayogam handed over charges to this ad hoc Committee on the basis of these proceedings. Three Members of the Karayogam filed suit O.S. No. 374/92 in the learned Munsiff Court, Kottayam for an injunction. However, injunction was not granted. As per Chapter 3, Rule 4 of Kerala Education Rules, the change of management is necessary, therefore, the Director of Public Instruction by his proceedings dated 4-6-92 passed the following order :
ORDER NO. 66804/92/ET3/DPI D/- 4-6-1992 :
"The Chairman, Ad hoc Committee and School Manager Parippu H. S. and L. P. S. has requested approval to the change of Management of the School from the Parippu N.S.S. Karayogam No. 633 to the Ad hoc Committee with the President of the N.S.S. Union Kottayam as Chairman Secretary N.S.S. Union Kottayam as Convenor and 3 others, as Members. In the circumstances reported by the ad hoc Committee and in view of the decision of the Registrar of N.S.S. Karayogam the Director of Public Instruction in exercise of the powers conferred by sub-rule (2) of Rule 4 of Chapter III KER, hereby approve the change of Management of the school for a period of one year from 20-5-1992".
It appears, the Distt. Education Officer also approved this by order dated 1-12-1992. Under these circumstances, challenging the proceedings of the Director of Public Instruction. Writ Petition No. (OP No. 7305/92) was filed by the first respondent herein. By order dated 24-11-1992, the learned single Judge dismissed the writ petition. Aggrieved by the same. Writ Appeal No. 1455 of 1992 was preferred before a Division Bench. Under the impugned judgment dated 1-11-1994 the writ came to be allowed on two grounds : (1) In view of the fact, that both the schools lie in the same revenue district, the Director of Public Instruction was not the competent authority to grant the approval relating to the change of management. (2) In any event in so far as the first respondent had not been heard inasmuch as violation of the principle will affect his civil rights, it was liable to be set aside as being violative of natural justice.
Challenging the correctness of this judgment the present Civil appeal arises.
Mr. Soli J. Sorabjee, learned Senior counsel for the appellant makes the following submissions for our consideration in attacking the correctness of the Judgment.
The first and foremost, the Division Bench had overlooked that the Director for Public Instructions had passed the order which came to be approved later even by the District Educational Officer. Therefore, that requirement has been complied with. Besides, what is the right of the first respondent that had been interfered with? He had ceased to be the President on expiry of his three year term and thereafter, there was no question of his continuing as President. And that be so, he had no right to remain in management of the school. Even though bye-law says that till new President is elected, the erstwhile President could continue in view of the order of the Registrar appointing an ad hoc Committee, no right was available to the first respondent.
As a matter of fact, there was an enquiry into the affairs of the Karayagum. The Registrar had found, the first respondent has grossly mismanaged the Karayogam and misappropriated the funds. Admittedly, he agreed to deposit the amount which till date has not been done.
This Court in an unreported Judgment (1969) 1 P. 340 at p. 342 has held that the observance of principle of natural justice cannot be insisted upon under all circumstances. Therefore the order is liable to be set aside.
In opposing the stand of the appellant, Mr. Nariman, would urge that having regard to Rule 4 Chapter II of Kerala Education Rules the Director of Public Instruction had not exercised original jurisdiction with reference to the approval of the change of management. It is only the District Educational Officer who could approve the change of management since both the schools admittedly are within one revenue district. If he had passed the order, an appeal could have been preferred by the first respondent. Such right of appeal has been denied to him. Therefore, on this ground alone the impugned Judgment could (sic) be upheld even though not on the ground of violation of natural justice.
We have carefully considered the above instruction. We find great difficulty in upholding the impugned Judgment. As we have set out in the narration of facts that the first respondent was elected as President in the year 1989 for the period of three years. On the expiry of that period, he ceased to be the President. No doubt, the bye-laws enable him to continue till the new election takes place, unfortunately, such an election could not take place. However, the matter did not rest there. The Registrar of Karayogam deputed the Assistant Registrar to conduct an enquiry. The Enquiry Officer concluded that there was a gross mismanagement of the Karayogam as well as misappropriation of Karayogam funds. Therefore, he issued notices and called upon the first respondent to submit explanation. The first respondent admittedly agreed to deposit ` 1,53,000/- which as rightly urged by Mr. Soli J. Sorabjee, had not been paid till today. It was under these circumstances, the Registrar as per the bye-laws, issued proceedings dated 20th May, 1992 and appointed an ad hoc committee of five persons. The President of NSS Union Kottayam was appointed as Chairman. Therefore, on and from 20th May, 1992 the first respondent had no right whatsoever concerning the two schools. 13. An unsuccessful attempt was made by filing civil suit DAS 92 to get an injunction to prevent the ad hoc committee taking over the charge the charge admittedly taken over as per order dated 20th May, 1992. At this stage, the change of management comes up for approval. In our considered view, this is a mere formality in the circumstances of the case. We may hasten to add that our observation in this regard should not be understood as though in all cases falling under Rule 4, Chapter III of Kerala Education Rules it would be a formality. If only the Division Bench has approached the matter from this point of view, the question as to whether Director of Public Instructions could exercise original jurisdiction in granting the approval of management or not, would not have much (sic) even otherwise after the order of Director of Public Instruction has given approval on 4-6-1992, the District Education Officer also has given approval on 1-12-1992, the District Education Officer also has given approval on 1-12-1992. The point relating to exercise of original jurisdiction by Director of Public Instruction disappears.
Turning to violation of natural justice we do not know after the first respondent ceased to be the President by the impugned order how he is visited with civil consequences. As the High Court has observed after all observations of natural justice is not an empty formality nor could it be confined to a strait-jacket formula. We may also refer to the rule relied upon by Mr. Soli J. Sorabjee as p. 343 :
"The case was a simple one whether the measurement book had been properly checked or not. It was found to be not properly checked. The pleas about rain and floods were utterly useless and the Chief Engineer elucidated reples were not against the appellant. In these circumstances a fetish of the principles of natural justice is not necessary to be made. We do not think that a case is made out that the principles of natural justice are violated. The appeal must fail and is accordingly dismissed".
No doubt, Mr. F. S. Nariman, learned Senior counsel would urge that the reason of the Director of Public Instruction passing the order his effective right of appeal is denied but that will only begin the question.
Thus, the order cannot be supported at all in view of the above said facts.
More than this we also find there is a clear admission on the part of the first respondent to pay in relation to misappropriation aggregating to pay ` 1,53,300/- which as his letter dated 15-1-1992 itself disclosed had not been paid. Therefore, the principle relating to violation of natural justice cannot be invoked by the first respondent.
We are also clearly of the view that in the interest of justice we should direct him to deposit the said amount of ` 1,53,300/- on or before 28th February, 1995 in the account of N.S.S. Karayogam Parippu No. 633. A/c. No. 8477, Syndicate Bank, Kottayam Branch, Kerala.
The Civil Appeal will stand allowed. No costs.