Purnendu Nath Tagore vs Academy of Fine Arts

G.K. Mitter, J.—Mr. P.N. Tagore has filed a suit against several persons including the Academy of Fine Arts, the cause of action being based on libel. The Academy is a society registered under the Societies Registration Act (XXI of 1860) and in the cause title it has been described as "the Academy of Fine Arts excluding the Plaintiff, a society registered under Act XXI of 1860 Represented by Defendant No. 2 here in below mentioned and by Maharajadhiraja Udaychand Mahtab Bahadur and Sir Birendranath Mookerjee working for gain at No. 12 Mission Row in the town of Calcutta, both of whom purport to be acting as trustees and/or to be acting as members of the Advisory Council of the said Academy". There are 4 other Defendants including Lady Ranu Mookerjee who has been sued personally and also in her capacity as the President of the Academy.

I express no opinion on the merits of the case. The present summons was taken out by Messrs. Orr Dignam and Company acting for the Academy of Fine Arts and the Defendant No. 2 Lady Mookerjee, for various orders, including (a) that the plaint be struck out for misjoinder of Defendants and Causes of action and/or embarrassing, (b) in the alternative that the name of the Academy of Fine Arts be struck out of the list of the Defendants in the cause title. The application is also for an order on the Plaintiff to furnish a very large number of particulars to be found in Ext. A to the affidavit of Ganesh Chandra Dey.

I decided to have the application heard in the first instance only as to the maintainability of the suit in its present form, i.e., whether it was open to the Plaintiff to sue the Academy of Fine Arts as he has purported to do, for, if the Academy of Fine Arts has not been sued properly a lengthy trial might be avoided.

Before the year 1860 a charitable society in our country was in no better position than a club or association of individuals for which our law made no special provision. The Act of 1860 was passed in order to improve the legal condition of societies established for the promotion of literature, science or fine arts or for the diffusion of useful knowledge. Section 1 of the Act shows how a number of persons may form themselves into a society under the Act by subscribing their names to the memorandum of association and filing the same with the Registrar of Joint Stock Companies. The nature of the contents of the memorandum will appear from Section 2 which also enjoins on the subscribers the duty of filing a copy of the rules and regulations of the society. u/s 3, the Registrar has to certify under his hand that the society is registered under the Act upon a memorandum and certified copy of the rules and regulations being filed. The Act seems to take it for granted that the society can hold property and Section 5 provides for the vesting of the property. In all cases where the property of the society is not vested in trustees it is to be deemed to be. vested for the time being in the Governing body of such society and in all proceedings, civil or criminal, such property may be described as the property of the Governing body of such society by their proper title. Section 6 of the Act lays down how such a society can sue or be sued. As the determination of the question before me turns principally on the construction of this section, it is set out below in extenso:

Every society registered under this Act may sue or be sued in the name of the President, Chairman, or Principal Secretary, or trustees, as shall be determined by the rules and regulations of the society, and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion: provided that it shall be competent for any person having a claim or demand against the society to sue the president or chairman, or principal secretary or the trustees thereof, if on application to the governing body some other officer or person be not nominated to be the Defendant.

Section 7 provides that no suit or proceeding shall abate or discontinue by reason of the person, by or against whom such suit or proceedings shall have been brought or continued, dying or ceasing to fill the character in the name whereof he shall have sued or been sued, but the same suit or proceeding shall be continued in the name of or against the successor of such person. Section 8 shows the manner in which judgment can be enforced against the society. The application for execution has to "set forth the judgment, the fact of the party against whom it shall have been recovered having sued or having been sued, as the case may be, on behalf of the society only, and shall require to have the judgment enforced against the property of the society." Section 10 provides that a member who may be in arrear of a subscription or who shall possess himself of or detain any property of the society "may be sued for such arrear or for the damage accruing from such detention, injury or destruction of property in the manner hereinbefore provided", i.e., under the provisions of Section 6 of the Act.

It will be noticed that a society registered under the Act is not a body corporate. There is no section in the Act corresponding to Section 23 of the Indian Companies Act of 1913. The society can hold property and sue and be sued in the manner laid down in Section 6 of the Act. The position of such a society may be contrasted with that of a partnership which; though not a legal entity; can be sued in the compendious firm name as if it were one only because of certain provisions of the Code of Civil Procedure.

The text of the various sections of the Societies Registration Act from Section 5 onwards have been taken from the Literary and Scientific Institutions Act, 1854 of England. According to Halsbury''s Laws of England, Second Edition, Vol. XXI, p. 10, Art. 24 "Incorporated institutions which are not entitled to sue or be sued by any corporate name and unincorporated institutions may sue or be sued in the name of the president, etc., as determined by the rules of the institution or, if the rules are silent, in the name of the person appointed for the purpose by the governing body." It will be noticed- that Section 21 of the English Act bear a close resemblance to Section 6 of the Societies Registration Act. The learned Commentators seem to be of the view that an institution registered under the Act of 1854 cannot sue or be sued by its corporate name.

The provisions of our Act do not countenance the suggestion that such a society can sue or be sued in its registered name and no difficulty in this respect would have arisen but for the decision of Bhagwati J. then of the Bombay High Court in the case of Satyavart Sidhantalankar Vs. The Arya Samaj, . 516. His lordship quoted extensively from the judgment in The Taff Vele Railway Company v. The Amalgamated Society of Railway Servants (1901) A.C. 426 and came to the conclusion that a society like the one before his lordship could sue and be sued in its registered name. In the Bombay case the suit was filed by certain members of the Arya Samaj on behalf of themselves and all other members of the society against the first Defendant, who was the President of the society, as representing the society of the Arya Samaj, and Defendants 2, 3 and 4, members of the managing committee of the society on behalf of themselves and all the other members of the said committee for a declaration that certain resolutions passed were ultra vires and in fraud of the minority of members. Dealing with the legal status of the society his lordship observed (at page 519) as follows:

The society is an association of individuals which is neither a corporation nor a partnership nor an individual which apart from statute are the only entities known to law as capable of suing or being sued. The society is an association of individuals which comes into existence with certain aims and objects. If it is not registered as a society under the Societies Registration Act, it would have the character of a club or other association which cannot sue or be sued except in the name of all members of the association or in the name of the secretary or other members of the governing body on their own behalf and on behalf of other members of other association under the provisions of Order 1, Rule 8 of the Code of Civil Procedure. It would not be competent to a secretary or other members of the governing body of the club or association to sue or be sued alone in respect of matters in which the association is interested even though authority in that behalf has been conferred on them by all members of the association.

Again at page 581 his Lordship says:

The identity of the original members and their successors is one. The liablity or obligation once binding on the society binds the successors even though they may not be expressly named, and in this the society savours of the character of a corporation. The resignation or the death of a member does not make any difference to the legal position of the society. The increase or decrease of the members of the society similarly does not make any difference to the position. A partnership under similar circumstances would come to an end, but not the society. The society continues to exist and to function as such until the dissolution thereof under the provisions of the Act. The properties of the society continue vested in the trustees or in the governing body irrespective of the fact that the members of the society for the time being are not the same as they were before nor will be the same thereafter. Could it under these circumstances be said that the society by reason of its registration with the Registrar of the Joint Stock Companies becomes a legal entity apart from the members constituting the same? I am of opinion that by reason of the provisions of the societies Registrations Act, once the society is registered with the Registrar of Joint Stock Companies by the filing of the memorandum and certified copy of the rules and regulations there of with the Registrar, and the Registrar has certified under his hand that the society is registered under the Act, the society enjoys the status of a legal entity apart from the members constituting the same and is capable of suing or being sued.

His Lordship relied chiefly on the Taff Vale case where the House of Lords upset the decision of the Court of Appeal and restored the judgment of Farwell J. There a strike having taken place the trade union was sued in its registered name by the Appellant company for injunction and other reliefs. Delivering judgment Farwell J. (1901) A. C. 426 at page 429 observed as follows:

Although a corporation and in individual or individuals may be the only entity known to the common law who can sue or be sued, it is competent to the Legislature to give to an association of individuals which is neither a corporation nor a partnership nor an individual a capacity for owning property and acting by agents and such capacity in the absence of express enactment to the contrary involves the necessary co-relative of liability to the extent of such property for the acts and defaults of such agents. It is beside the mark to say of such an association that it is unknown to the common law. The Legislature has legalised it and it must be dealt with by the Courts according to the intention of the Legislature.

And at page 430 his Lordship observed:

The Legislature in giving a trade union the capacity to own property and the capacity to act by agents has, without incorporating it, given it two of the essential qualities of a corporation-essential, I mean, in respect of liability for tort, for a corporation can only act by its agents, and can only be made to pay by means of its property. The principle on which corporations have been held liable in respect of wrongs committed by their servants or agents in the course of their service and for the benefit of the employer-is as applicable to the case of a trade union as to that of a corporation. If the contention of the Defendant society were well founded the Legislature has authorised the creation of numerous bodies of men capable of owning great wealth and of acting by agents, with absolutely no responsibility for the wrongs that they may do to other persons by the use of that wealth and the employment of those agents.

The case really turned on the interpretation of several sections of the Trade Unions Acts of 1871 and 1876. Sections 8 and 9 of the Act of 1871 expressly provided for actions in respect of property being brought by and against the trustees, and according to his Lordship "this express intention impliedly excludes "such trustees from being sued in tort." His lordship added:

If, therefore, I am right in concluding that the society is liable in tort, the action must be against them in their registered name. The acts complained of are the acts of the association. They are acts done by their agents in the course of the management and direction of a strike ; the undertaking of such management and direction is one of the main objects of the Defendant society and is perfectly lawful; but the society, in undertaking such management and direction, undertook also the responsibility for the manner in which the strike is carried out. The fact that no action could be brought at law or in equity to compel the society to interfere or refrain from interfering in the strike is immaterial; it is not a question of the rights of members of the society, but of the wrong done to persons outside the society. For such wrongs arising as they do from the wrongful conduct of the agents of the society in the course of managing a strike which is a lawful object of the society, the Defendant society is, in my opinion, liable.

This judgment did not find favour with the Court of Appeal consisting of A.L. Smith, M.R., Collins and Sterling, L.JJ. who held that a trade union could not be sued in its registered name. In the House of Lords Lord Halsbury L.C, was content to adopt the judgment of Farwell J. and entirely concurred with the same and added:

If the Legislature has created a thing which can own property, which can employ servants and which can inflict injury, it must be taken, I think, to have impliedly given the power to make it useable in a Court of Law for injuries purposely done by its authority and procurement.

Lord Macnaghten stated (see at page 438):

If trade unions are not above the law, the only remaining question, as it seems tome, is one of form. How are these bodies to be sued? I have no doubt whatever that a trade union, whether registered or unregistered, may be used in a representative action if the persons selected as Defendants be persons who, from their position, may be taken fairly to represent the body. * * * It is quite true that a registered trade union is not a corporation, but it has a registered name and a registered office. The registered name is nothing more than a collective name for all the members. The registered office is the place where it carries on business. A partnership firm which is not a corporation, nor, I suppose a legal entity, may now be sued in the firm''s name. And when I find that the Act of parliament actually provides for a registered trade union being sued in certain eases for penalties by its registered name, as a trade union, and does not say that the cases specified are the only cases in which it may be so sued, I can see nothing contrary to principle, or contrary to the provisions of the Trade Unions Act, in holding that a trade union may be sued by its registered name.

According to Lord Brampton:

The very omission from the statute of any provision authorising and directing that it shall sue and be sued in any other name than that given to it by its registration appears to me to lead to no other reasonable conclusion than that in so creating it, it was intended by the legislature that by that name and by no other it should be known, and that for all purposes that name should be used and applied to it in all legal proceedings unless there was any other position which militated against such a construction, as, for instance, in the case of trustees, by Section 9 of the same Act, who hold real and personal property of the society.

Lord Lindley discussed the various provisions of the Act of 1871 especially Sections 15 and 16 of the said Act and Section 15 of the Act of 1876 and observed (1901) A. C. 426 at page 444:

These sections impose duties on registered trade unions and penalties on them (and not only on their officials) for breach of those duties. The mode of enforcing these penalties is pointed out in Section 19 of the Act of 1871, but there is nothing to show that the trade union on which the duty is cast and which has to pay the penalty could not be proceeded against in its registered name.

His Lordship further observed (see at page 445):

The Act appears to me to indicate with sufficient clearness that the registered name is one which may be used to denote the union as an unincorporated society in legal proceedings as well as for business and other purposes. The use of the name in legal proceedings imposes no duties and alters no rights; it is only a more convenient mode of proceedings than that which would have to be adopted if the name could not be used. I do not say that the use of the name is compulsory, but it is at least permissive.

The true position in English law of trade unions seems to have been the matter of some controversy very recently. I will not deal with the cases reported between the years 1901 and 1954 but the point came up for elaborate discussion in the Court, of appeal in the case of Bonsor v. Musicians Union (1954) Ch. D. 479 which was an action for a declaration that the Plaintiff had been wrongfully excluded from the union and for damages for such wrongful exclusion. The Court of Appeal affirmed the judgment of Upjohn J. but was divided on the question as to whether the claim for damages would succeed. Jenkins, L.J. held that such a claim being based on tortious act of the Plaintiff''s own agent could not succeed. But Denning, L.J. held a different view and the decision of the Court of Appeal was reversed by the House of Lords (1956) A. C. 104 where the Taff Vale case was elaborately referred to. It is not necessary to deal with all the questions which were discussed there but the following extracts from the judgment of law Lords will show the opinions entertained by them on this point. According to Lord Morton (page 127) "a registered trade union, though it is not an incorporated body, "is capable of entering into contracts and of being sued as a "legal entity distinct from its individual members." According to Lord Porter a trade union in whatever way it may be described whether as an "entity, a body, a near-corporation", has by statute an existence apart from its members in certain respects and can be sued by one of its members for breach of contract. His Lordship approved of the decision of the Court of Appeal in National Union of General and Municipal Workers v. Gillian and Ors. (1946) K. B. 81, to the effect that a trade union could sue for libel upon itself. According to Lord MacDermott the effect of the relevant legislation was not to give these unions new status amounting to a legal personality distinct from their membership. His Lordship held that a trade union was not a juridical person. Lord Keith was content to say that it would not be wrong to call a registered trade union a legal entity.

The result of this and other English decisions appears to me to be that a registered trade union is a legal entity capable of holding property and acting through agents although there is a diversity of opinion as to whether it stands separate and apart from the individuals of which it is composed. The position of a society registered under the Societies Registration Act ought on a parity of reasoning to be held to be the same as that of a registered trade union in England because trade unions in England have to be registered in very much the same way as societies under the Societies Registration Act in India. But there is a great difference between the English Trade Unions Act and the Societies Registration Act as regards the frame of the suit. The English Act contains no provision for cases where suits have to be filed on causes of action not concerning the property of the Union. The sections which provide for legal proceedings in respect of their property and recovery of penalties impliedly suggest that proceedings can be had in the name of the union and the union can be made to pay a penalty for breaches of the act. The Societies Registration Act, however, makes no distinction between causes of actions relating to the property of the society and other causes of action. It contains in Section 6 a complete code as to the manner in which suits may be filed by and against the society. If the rules of the society be silent on the point, an application must be made by a person desiring to file a suit, to find out who is to be sued. If there is no response to the application, a suit can be filed in the manner indicated but not against the society in its registered name. All this would, in my opinion, go to show that the legislature did not intend that suits against a society should be filed in its registered name. Section 6 of the Act was put on the Statute Book to dispel all doubts as to who were to be the proper parties to proceedings. It applies to all demands and claims. The rules of the society are primarily to be the guide as to the person through whom it can be sued. One reason for this rule suggests itself to me, viz., that there should be no uncertainty about the persons who are to conduct litigation on behalf of the society, and no one other than an officer nominated by the society, or in the absence of such nomination, a president or secretary, ought to be allowed to contest the claim.

It would, therefore, be wrong, in my opinion, to follow a decision under the English Trade Unions Acts and to hold that as a trade union can be sued in its registered name, society registered under the Societies Registration Act may be sued likewise. If it was the intention of the legislature that a society should be permitted to sue or be sued in its registered name there was no necessity for the elaborate provisions contained in Section 6 of the Act. All the sections, to which I have referred above, show that no legal proceeding is to be taken against the society in its registered name but that such proceedings should always be had in the name of its chairman, president or principal secretary even when a decree is sought to be enforced against it. With regret I find myself unable to accept the view of Bhagwati J., and I hold that a suit cannot be filed against a society registered under the Societies Registration Act in its registered name.

Mr. Ginwalla, for the applicant, pointed out two other defects in the cause title of the plaint. If the society, contended Mr. Grinwalla, was a legal entity, apart from its members, it could not be sued as has been done by the Plaintiff in this case, viz., it could not be described as excluding the Plaintiff. Mr. Ginwalla also drew my attention to Rules 37 and 51 of the Rules of the Academy of Fine Articles. Under Rule 37, all the funds and property of the Academy, whether immovable or moveable, are to be deemed to be vested in the Advisory Council of the Academy, and under Rule 51 the Academy may sue or be sued in the names of the members of the Advisory Council for the time being. The names of the members of the Advisory Council are also to be found at the foot of Rule 38, viz., Maharajadhiraja Sir Udaychand Mahatab, Maharaja P.N. Tagore, Sir Biren Mookerjee and Mr. B.M. Birla. Out of the four, two persons are not on the record in this suit.

Mr. Ginwalla further contended that a suit for libel does not lie against the society as such. But in view of the opinion which I have formed on the question of the frame of the suit, this question really does not arise. In deference to the arguments of Learned Counsel I shall indicate my views on this point. Mr. Grinwalla drew my attention to certain passages appearing at pages 427 and 428 of Gatley on Libel and Slander, 4th Edition, and specially to the following passage:

An action for libel will not lie against an unincorporated association or body of persons (e.g., an unregistered Trade Union) in its collective name, for as an entity it can neither publish nor authorise the publication of a libel.

I very much doubt whether the above applies to a trade union registered under the English Trade Unions Act. The problem now seems to be set at rest inasmuch as a registered trade union has been held to be a legal entity capable of holding property and acting through agents, and according to Lord Halsbury "an "entity which can hold property and act through agents ought to "be liable for the default of such agents, i.e., for their wrongful "conduct." I have already mentioned that in England a registered trade union has been held entitled to sue for libel (see National Union of General and Municipal Workers v. Gillian and Ors., (Supra).

In view of the above, the application succeeds so far as the prayer (b) of the summons is concerned and I shall make an order that the name of the Academy of Fine Arts be struck out from the list of the Defendants in the Cause Title of the plaint. The applicant will have the costs of this application. Certified for counsel.