AI Structured Summary
Not yet generated for this judgment
Judgment
V. Dhanapalan, J.—This Writ Petition has been filed, praying for issuance of a writ of certiorarified, to call for the records of the first
respondent in proceeding No. 10417/E1/2004, dated 23.10.2006, and quash the same.
The facts, which led to the filing of this Writ Petition, are as under:
2.1. Petitioner is a society, registered under the Tamil Nadu Societies Registration Act 1975, bearing Registration No. l11/1982 and it was
established in the year 1982, with an object to entertain and encourage the business of the film industry by coordination and cooperation with other
similar associations established for the cine industry, particularly in respect of production, distribution and exhibition of the cinematographic film.
Similarly, it is catering to the needs of the distributors by resolving the disputes between the producers, distributors and exhibitors, thereby
protecting their interests to carry on a smooth and peaceful business. The Executive Committee of the petitioner association admits the members
who carry on business as per Clause No. 10 of the Bye-laws of the association in the prescribed application form along with the entrance fee and
the association, after a detailed verification, shall consider or reject such application submitted by the persons, who are desirous to join as
members. The Executive Committee of the association is empowered under Clause No. 54 of the Bye-laws to initiate disciplinary action and levy
fine against its members for the anti-association activities or for the violation of the rules and regulations of the association or for the misconduct
and shall remove such member from the basic membership. Similarly, Clause No. 23 empowers the Executive Committee to recommend the
removal of any members on the ground of anti-social activities or who have acted against the object of the association to the General Body, in
which case the member whose name has been recommended to the General Body for removal of membership shall have no right, obligations and
privileges as a member of the association and he shall not participate in the election of the office bearers and also shall not vote in the election.
2.2. The petitioner association has been managing and administering the business of the association as per the registered Bye-laws of the
association and well within the scope of the provisions of the Tamil Nadu Societies Registration Act, 1975. During the course of the management
and administration, the association has taken action against some of the members, namely, the respondents 2 to 12 for their anti-association
activities, by issuing show cause notice and giving due opportunity as per the Bye-laws of the association. Some of the members have challenged
the said show cause notice and the resolution passed by the association before the Civil Court and failed to obtain orders in their favour. As per
Clause 23 of the Bye-laws, some of the members have been removed from the rolls of membership. In view of the action taken against the
respondents 2 to 12 by the association, the said members are continuously acting against the interests of the association and have given complaints
after complaints to the first respondent. The petitioner association represented before the first respondent on various occasions and explained the
facts and circumstances prevailed in the said complaints in detail to various District Registrars, who were assuming the office in the relevant period.
However, those complaints were pending without passing any orders. Therefore, some of the members filed W.P. Nos. 17581,17582 and 17583
of 2005, which were disposed of by this Court, directing the first respondent to dispose of the representations, after giving opportunity to both
sides. The first respondent issued notice to the petitioner association and the petitioner association submitted all the relevant records, statement of
accounts etc., as required by the first respondent, based on which, the first respondent has passed the impugned order, dated 23.10.2006.
Aggrieved over the said order, the petitioner has filed this Writ Petition.
First respondent has filed a counter affidavit, denying the allegations made in the petition, and stating, inter alia, that as per Section 36 of The
Tamil Nadu Societies Registration Act, the Registrar may of his own motion hold an enquiry into the constitution, working and financial condition of
a registered society. Suo motu action was initiated against the petitioner as early as 02.02.2005 before the filing of the writ petition, pursuant to the
direction of the Deputy Inspector General of Registration. Therefore, the contention of the petitioner that Section 36 enquiry was not maintainable
is totally false and without any basis. Bye-laws 23 and 54 pertain to the disciplinary action against erring members but, they are contradictory to
each other, as the Bye-law 23 says that the power of cancelling membership is vested with the General Body, whereas the Bye-law 54 says that
the said power is vested with the Executive Committee. The respondent had directed the petitioner to amend certain rules of the Bye-laws, which
are against the provisions of the Act, but, so far, no amendment was approved by the respondents. In view of not having certified copies of the
amended Bye-laws, as the existing ones are invalid and any decision and action taken based upon the same are illegal, the removal of members is
improper. Even otherwise, the members were not given opportunity to place their defence in the annual meeting, which is against the principles of
natural justice. Various discrepancies were found during the inspection of the records and no amendment was registered from 2003 to till-date.
Amounts collected to the tune of Rs. 25.00 lakhs in the name of new members'' admission are not accounted properly into the account. Though
percentage is fixed for service charges that too to be collected from one side, the present office bearers have been collecting huge amounts from
both the disputing parties, which are not accounted. The rent of Rs. 3,60,000/- for association office premises shown in the accounts to have been
paid to the Trust had not been actually paid. u/s 25(2), no part of the funds of a registered society shall be divided by way of bonus or dividend or
other amounts to members, but Pongal gift of Rs. 3,000/-, gold coins, silver articles etc. more than Rs. 30,00,000/- worth were given to members.
For convening General Body and other meetings, expenditure is incurred lavishly, by holding such meetings outside the jurisdiction of the
association and when disputes arose with the members, proper amicable settlement was not done with the parties involved in such disputes. All the
above factors would prove that the association is not managed properly and is not functioning in the interest of its members. In addition, it could be
seen that various activities are against the provisions of the Act, as explained in detail in the order passed by the respondent, pursuant to the
enquiry.
It is also stated in the counter that the respondent has been directed by this Hon''ble Court by an order in W.P. Nos. 17581 to 17583 of 2005
to consider the representations of the respondents 2 to 12 and pass appropriate orders, after giving them an opportunity, which was properly
followed. Therefore, it is absurd on the part of the petitioner to allege that the complaints of the respondents 2 to 12 ought not to have been
considered. The respondent has jurisdiction to entertain any representations even from an outsider with regard to the functioning of the petitioner
society and to inspect the same. The petitioner neither followed the Bye-laws nor had acted as per the Act in the issue of removal of the
complainants. Being the statutory authority nominated by the Government, this respondent has powers to direct the association to set right the
wrongs committed by the association. After collecting all the particulars, records, statements and after a personal inspection of the association and
a detailed enquiry, the impugned order has been passed, a perusal of which would clearly prove that proper opportunity was given to all the
concerned, inclusive of the petitioner.
Fifth respondent has filed a counter on his behalf and also on behalf of respondents 6,9 and 10, denying the allegations made in the petition and
stating that the Writ Petition is not maintainable either in law or on facts and is liable to be dismissed. The petitioner association is not functioning as
per law and the functioning of the association is in contravention to the objects, for which it has been formed. Respondents 2 to 12 never involved
in any anti-social activities. Bye-laws 54 and 23 give different powers to different bodies for removal of the members of the association. Bye-law
54 gives power to the Executive Committee to remove the members, whereas Bye-law 23 gives power to General Body for removal of the
members. Hence, Bye-laws 54 and 23 are in clear contradiction to each other. The first respondent, after conducting a detailed enquiry and by
giving ample opportunity to the petitioner as well as to the respondents, has passed the speaking order. Further, as per Section 45 of The Tamil
Nadu Societies Registration Act, 1975, any order passed by the Registrar is appealable before the Inspector General of Registration. The
petitioner, without exhausting the appellate remedy, has come before this Hon''ble Court by way of this Writ Petition, which is, at the outset, not
maintainable. Section 36 of the Act clearly spells out that the Registrar can take any action even by his own motion and, therefore, the enquiry u/s
36 by the Registrar on the complaints filed by the respondents 2 to 12 cannot be held to be not maintainable. The suo motu action can always be
on complaints or while enquiring into the affairs of the association on routine procedure. Therefore, the action u/s 36 is well maintainable if the same
pertains to the affairs of an association. In this case, the enquiry was conducted as per the directions of this Hon''ble High Court and the petitioner
association, which has participated in the enquiry, did not raise any objection regarding maintainability of the enquiry before the District Registrar.
But, as an afterthought, it is raising the issue only now.
The counter further goes to the effect that the very complaint of the complainants is that the petitioner is acting in most illegal and improper
manner. The first respondent has clearly found out that the action against the complainants were done illegally and their removal was illegal. Being
the authority empowered under the Act, the first respondent has powers to direct the association to set right the wrongs committed by it. The order
passed by the first respondent is in consonance with the principles of natural justice and The Tamil Nadu Societies Registration Act. Affairs of the
registered society can be enquired into by the District Registrar if there is any violation of the rules, bye-laws or the provisions of the Act.
Therefore, any civil suit will not be a bar for conducting any enquiry into the affairs of the society by the District Registrar. The findings of the first
respondent are not vindictive or biased. The documents filed by the petitioner association along with the Writ Petition itself would show that the
documents have not been properly submitted and the same have been manipulated. Therefore, the order of the first respondent is not made to
satisfy some of the disgruntled individual members as alleged by the petitioner, but only to ensure the smooth functioning of the association. The
first respondent, being an authority to supervise the affairs of the association, is bound to scrutinze the account books and other affairs of the
association and streamline the same. Mere submission of amended bye-laws and the acknowledgement of the same cannot be construed as proper
until they are duly accepted and registered by the first respondent. When any society is formed, the same has to be registered with bye-laws that
are legally sustainable. Inspection, auditing and enquiring is the duty of the first respondent and terming it as interference into the internal
administration of the petitioner association is frivolous. The amounts received from third parties for settlement of disputes and kept by the
association cannot be brought under the head ''Sundry Creditors'', but should kept under ''Fixed Deposit''. The petitioner association cannot hold
General Body Meeting at any place of its choice since there are several members, who have to attend. Further, there are limits to incur expenditure
on holding of meeting.
It is also stated in the counter that the fifth respondent, by an agreement dated 14.06.2005, got distribution rights of the cinema ''CHINNA'' for
five years for the areas Chengalpattu, Thiruvallur and Kancheepruam Districts. Such rights of the said picture were given to all areas with condition
that T.V. rights would commence after one year from the date of release. But, the petitioner association issued a circular on 05.07.2005 that
distributors shall accept films with a clause to the effect that T.V. Rights would be for three years from the first release. Already, 15 theatres were
booked. As the petitioner threatened the theatres not to exhibit the picture, only four theatres exhibited the picture as per schedule and on request
by other theatres, the association allowed other theatre to release the picture and instructed all other distributors not to release any new picture in
the said four theatres. From three out of four theatres, the association collected amounts as fine and only then they were allowed to exhibit the
pictures. The association redlisted restraining second release in whole areas of these districts. The respondent sent a letter dated 01.08.2005 to
remove the redlisting but it was not done. However, the association sent a vague notice dated 04.08.2005 calling upon the respondent to show
cause why he should not be removed from the membership of the association and in spite of his correspondence, he was expelled. The
Koyambedu theatres, who suffered, gave police complaint. The association, instead of providing help and assistance to the members, is acting to
show power and to collect amounts in the name of fine. The respondent is an affected person, incurring a huge loss of more than Rs. 25.00 lakhs,
due to the restriction in releasing the picture ''CHINNA''. The main complaints enumerated against the petitioner are (i) the petitioner is not acting
legally and has not got the Bye-laws properly registered; (ii) the Bye-laws, which are found improper, have been directed to be amended by the
first respondent for a long time, but till-date, there is no action; (iii) the petitioner is acting as ''Panchayat'', doing only ''Katta Panchayat'' among its
members and, under threat, is collecting huge amounts, which are not actually even accounted for; (iv) the petitioner had auctioned the movie
''Thiruda Thirudi'' for about Rs. 1,10,54,000/-, for which the petitioner collected a commission of lakhs of rupees, but nothing of such collection
had been accounted for; (v) the petitioner is not following Bye-law No. 80, wherein it has been specifically stated that he would act as directed by
the first respondent from time to time; (vi) as per Bye-law, the term of the office bearers is only for one year, but the present office bearers
continue for another year and on questioning, it is informed that they had already sent the amended Bye-law that the term is enhanced to two years,
factually, no such amendment was accepted by the Registrar and (vii) a police complaint was lodged by Rohini Theatre, when they were
threatened from running the theatre unless a huge amount was paid to the association and the police have also made out an F.I.R. against the office
bearers of the association.
In the counter, it is also stated that the Registrar, in his order, has clearly pointed out that the statements given by the office bearers and others
would clearly show that the office bearers of the association have misused the funds of the association, amounting to misappropriation.
Accordingly, the respondents have prayed for dismissal of the Writ Petition.
Eighth respondent has filed a separate counter, stating that the activities of the petitioner association were always arbitrary and even without the
acceptance of the bye-laws by the first respondent, the petitioner association used to take action against the members on flimsy grounds and also
extend the term of office suo motu from one year to two years. More than 30 members have been removed during the period of the present office
bearers of the petitioner association which shows all is not well within the petitioner association and action has been taken to remove the existing
members on flimsy grounds and admit new members in order to keep themselves in office for ever. The petitioner association is not managed
properly and its functioning is not in the interest of the members. Several allegations of mismanagement, financial irregularities in maintaining the
amounts received by the petitioner association, not keeping the accounts properly, not submitting the returns to the District Registrar and several
other infirmities have been found in the enquiry conducted by the District Registrar. It is the paramount duty of the first respondent to see that all
the registered societies, which have been registered under him, function properly and he has the power to interfere and even to cancel the
registration, winding up of registration etc., which power has been conferred on the Registrar only to see the purpose and object of the society.
Any amendment of the bye-laws has to be approved by the Registrar and the Registrar has power to refuse to register if it is contrary to the
provisions of the Act. u/s 16 of the Act, it is the duty of the registered societies to keep proper books of accounts and after following the
procedure contemplated in the section, have to file an authenticated copy of such receipts, expenditure account, balance sheet, report etc. u/s 35,
the Registrar or any other person authorised by him has power to inspect the records of every registered society and u/s 36, he has power to
enquire into the constitution, working and financial condition of the registered society. In the present case, the Registrar has exercised the power
vested with him u/s 36 and passed the impugned order, which is justified and necessary in the interest of the society itself and he has given
directions under Sub-clause 9 of Section 36 and it is the duty of the society to carry out the said directions favourably.
It is also stated in the counter that the petitioner has approached this Court without exhausting the alternative remedy of appeal u/s 45 of the
Act. Any order passed u/s Sub-clause (4) of Section 36 shall be questioned only before the Inspector General of Registration and, therefore, this
Writ Petition is liable to be dismissed on that ground as well. Many members have been removed by the Executive Committee by invoking Clause
54 of the Bye-laws. Bye-laws 23 and 54 are contradictory in nature, which should be amended and, as directed, those who have been removed
by contravening these bye-laws, should be readmitted. Further, several complaints have been given by several members against the President and
others for acting in arbitrary manner and contrary to the objects of the society and indulging in giving illegal directions by prohibiting the theatre
owners not to release the films, thereby causing losses to several lakhs. When there cannot be any dividend from the funds of the society among
the members under the guise of mementoes, gift vouchers and gold coins were given to the members. To cite one more financial irregularity, the
Madras City Changai Anna District Films Distributors Association Trust intimated the petitioner herein that the petitioner has not paid the rent in
the Trust account, whereas in the balance sheet of the petitioner association, it has been shown that the rent has been paid. Not only the present
impugned order has been passed by the first respondent but even his predecessors have passed several orders on various occasions on the basis
of the complaints given not only by the members of the petitioner association but also by the Exhibitors Association. Based on the said complaints,
enquiries were conducted and orders passed. The Bye-law 23 contemplates that only the General Body, on the recommendation of the Executive
Committee, after giving an opportunity, can remove the members. This shows that in the process of removal of members from the petitioner
society, no basic principles of natural justice have been followed and bye-laws are disobeyed. The President and others responded to the notice of
the enquiry before the first respondent and answered the questions and sufficient opportunity was given to them to participate in the enquiry
effectively. As such, there is no illegality in the order passed by the first respondent.
Mr. T.V. Ramanujam, learned Senior Counsel for the petitioner, would contend that the first respondent cannot inquire into the constitution.
working and financial condition of a registered society, unless the requirements u/s 36(1) are complied with, which are absent in this case and the
first respondent has failed to conduct a detailed enquiry by giving due opportunity to the petitioner association and recording the evidence of
witnesses. Further, the complaints were given by the individual members, some of whom had already been removed from the membership of the
petitioner association as per Clause Nos. 54 and 23 of the Bye-laws and, therefore, the aggrieved members can only agitate their rights before the
Court of Law. The complainants have failed to obtain orders in their favour from Civil Court and when the said proceedings are pending before the
Civil Court, the same matter cannot be re-agitated before the first respondent. The learned Senior Counsel also would contend that the first
respondent, without appreciating the said facts, has reopened the issue and passed the impugned order, directing the petitioner association to admit
those members, against whom the proceedings are pending before the Civil Court of Law, which is nothing but a clear interference of
administration of justice and abuse of process of Court. According to the learned Senior Counsel, Bye-laws 54 and 23 have to be read together
and the petitioner association has taken action against its members in consonance with the said Bye-laws and recommended the issue to the
General Body, which is the ultimate authority to decide any issue pertaining to the administration and management of the association and, therefore,
the same cannot be questioned or challenged by some of the individual members, who had already agitated the same issue before the Civil Court.
The Senior Counsel would strenuously argue that the first respondent passed the interim order mechanically without applying his mind properly and
without perusing the material particulars, records and statement of accounts and the registered amendment of the Bye-laws available with the first
respondent pertaining to the petitioner association. In addition, the collection of entrance fee from the new members had been properly accounted
for as per the registered amendments duly certified and approved by the first respondent on 02.03.2001 and hence the conclusion of the first
respondent that the association has received the entrance fee from the new members @ Rs. 50,000/- without any approved bye-laws is vindictive,
arbitrary and biased. The petitioner has properly submitted Form-VII and other statements as per Rule 17(2) and Section 16(3) for the years
2003-2004, 2004-2005 and 2005-2006 and for the previous years along with Annual Reports and Balance Sheets and the receipt of the same
has been acknowledged by the first respondent. Also, the petitioner had already submitted the amended bye-laws as directed by the first
respondent. Amendment of the bye-laws 82 and 84A has been accepted by the first respondent, which empowers the petitioner to convene the
election for the office bearers and committee members for a period of two years.
The learned Senior Counsel would argue with vehemence that the first respondent has to protect the interest of the majority of the members of
the registered society whereas the impugned order has been passed at the instigation of some of the individual members, which would affect the
harmony and smooth functioning of the registered society and the interest of majority of the members. Another contention of the learned Senior
Counsel is that the copy of the impugned order was not served on the petitioner, whereas the same has been served to the respondents and the
members with a view to create confusion in their minds. Besides, the first respondent has misconstrued the entry shown as Sundry Creditors as
loans received by the association, which amounts are received from various parties, which are due and payable to the distributor members for their
business transactions, settled by the association, and the same are disbursed to the members concerned, which is also reflected in the books of
accounts maintained by the association. The learned Senior Counsel also submits that the impugned order, which is under challenge, was passed
by the first respondent in pursuance of the orders passed by this Court in W.P. Nos. 17581 to 17583 of 2005 directing the first respondent to
consider the representations of the petitioner in accordance with law and pass appropriate orders and though there was no specific direction issued
by this Court, the first respondent conducted an inquiry u/s 36 of the Act, which is arbitrary.
The mainstay of the learned Senior Counsel for the petitioner is that the petitioner association is entitled to conduct its General Body in any
place as decided by the Executive Committee under Clause No. 45 of the bye-laws and, therefore, the finding given by the first respondent to the
effect that the petitioner association has spent huge amounts by convening its General Body outside the jurisdiction is unwarranted and, as such, the
order passed by the first respondent is without jurisdiction and against the principles of natural justice and the provisions of the Tamil Nadu
Societies Registration Act, 1975, and therefore the same is liable to be set aside.
In support of his contentions, the learned Senior Counsel has relied upon a Division Bench decision of this Court in The Chennai
Kancheepuram Thiruvallur Districts Film Distributors Association v. Chinthamani S. Murugesan and Ors. 2001 (3) CTC 349 : 2001 (3) L.W.
514, wherein it has been held as under:
The Executive Committee of a voluntary association cannot be put on par with a Court or a Tribunal when dealing with the disciplinary matters
concerning the membership of the Body. They have a very wide latitude in deciding as to when disciplinary action is warranted and the extent to
which the powers vested in them under the Rules or byelaws should be exercised while penalising the members for the misconduct which the
appropriate Body within the association empowered to decide that question, considers him to be guilty. The procedure to be followed by such an
association also cannot be that which is normally expected to be followed in a Court or a Tribunal. Every letter written by the Executive Committee
of an association to its member calling for an explanation is not to be judged under a lens to find out the possible defects therein for the purpose of
holding that the action that followed was not in consonance with the principles of natural justice. Even principles of natural justice are not required
to be applied with the same degree of rigour as they would be in the case of adjudication before a Court or a Tribunal.
What is required of such bodies is that they act fairly in a broad way without having to imitate the Courts and Tribunals, with regard to the rigour
and the formality of the procedures. Such bodies are, of course, expected to act in accordance with their own Rules, and stay within the limits
imposed by those Rules. If the Body vested with the power under the Rules exercises that power within the ambit of the Rule, after having afforded
an opportunity to the member concerned to have his say in the matter, the decision rendered by such Committee cannot be regarded as illegal or
violative of natural justice or as arbitrary. The Courts will not sit in appeal over the decisions of such Committees, subject to such decision being
broadly in consonance with general standard of fairness.
The learned Senior Counsel has also relied upon a Full Bench decision of this Court in C.M.S. Evangelical Suvi David Memorial Higher
Secondary School Committee Karisal Vs. The District Registrar and Others, , wherein the Full Bench has decided the question whether the
Registrar can adjudicate upon election disputes, holding that Civil Court is the competent authority to decide the validity of the election.
In reply to the above contentions, Mrs. Bhavani Subbarayan, learned Additional Government Pleader appearing for the first respondent, would
submit that Bye-laws 23 and 54 pertain to disciplinary action against the erring members; Bye-law 23 says that the power of cancelling
membership is vested with the General Body, whereas Bye-law 54 says that the said power is vested with the Executive Committee and,
therefore, the said Bye-laws are contradictory to each other. Further, the first respondent through many letters directed the petitioner to amend
certain rules of the Bye-laws, which are against the provisions of the Act, but, so far, no amendment is filed and approved by the respondent. As
such, in the absence of the amended bye-laws being certified, as the existing ones are invalid and any decision and action taken based upon the
same are illegal, the removal of members, as claimed by the petitioner, is improper and even otherwise, the members were not given opportunity to
place their side in the annual meeting, which is against the principles of natural justice. She would also submit that proper opportunity was given to
all concerned and statements have been recorded and the President of the Society Thiru T.A. Arulpathy appeared in person and gave written
deposition before the first respondent. Further, as the complaint is with regard to the illegality in removing the members, the records of the
petitioner were scrutinized, whereupon it was found that no opportunity was given to the members while taking any alleged disciplinary action
against them. Hence, the action of the petitioner has been enquired into, pursuant to which the members were directed to continue as members of
the petitioner association.
The learned Additional Government Advocate would contend that the first respondent is empowered to enquire into the affairs of the
association when the association is found to have committed grave error and illegality, unless barred by any orders of Courts. She would submit
that after passing of orders of this respondent, the petitioner made out certain amended bye-laws and alleged that the same have been duly
approved by this respondent. There is no acknowledgement for the submission of the copies of the amended by-laws. If any documents are
submitted to the respondent, the same would be acknowledged by affixing the seal for having accepted the same, but, in the bye-laws alleged to
have been amended and registered, there is no such acknowledgement duly given by the respondent besides no cash receipt was submitted in the
affidavit and it is, therefore, presumed that the society has not filed amendment in the proper manner but acted without any authority.
The learned Additional Government Pleader contends that alterations have been illegally made by the petitioner in the receipts filed along with
the writ petition, but the receipts maintained by the respondent''s office do not have any such corrections. Thus, the receipts are fraudulently
corrected to show as if the petitioner is acting bonafidely and perfectly. She submits that at the time of inspection, the entire accounts were verified
and even statements were received from the persons concerned, whereupon it was found that in case of payment of rent to a Trust, there was no
mention of any adjustment of advance, but it has been alleged that the rents were paid to the Trust by making book adjustment, which is illegal.
The trustees of the trust had given in writing that no rent was paid which would prove that the association was not administered properly. In
addition, during the inspection, the respondent was informed about the collection of Rs. 50,000/- as Entrance Fee and the same was found to be
true, which, as per the bye-laws, should not be done, in which aspect, the bye-law was directed to be amended.
The next limb of contention of the learned Additional Government Pleader is that Form-VII was not submitted in time and even the years have
been unauthorisedly corrected in the cash receipts, which is evidenced from the documents filed by the petitioner itself and the respondent has not
issued the certified copy of the amended bye-laws to the effect that the amendment was taken on record. Lastly, she would contend that the
amended bye-laws are not approved because the amendments are not filed as per the provisions of the Act and even assuming that the amended
bye-laws are received, the same have not been approved and filed as per the rules and, hence, the same cannot be acted upon, unless a certified
copy is given to that effect by the Registrar for having filed the same. Accordingly, she prayed for dismissal of the Writ Petition.
Mrs. Hema Sampath, learned Senior Counsel for respondents 2,3,4,7,11 and 12 would submit that these respondents are members of the
petitioner association, which has about 450 members. The office bearers of the association committed many malpractices, which brought about
huge loss to the association, by bypassing the mandates of The Tamil Nadu Societies Registration Act as well as the Bye-laws of the association,
to suit their convenience. The members, who questioned the illegalities, were removed from membership. Aggrieved over the same, these
respondents made representations to the first respondent. As no action was taken, they filed Writ Petitions before this Court and this Court, by an
order, dated 20.04.2006, directed the first respondent herein to dispose of the representations and, accordingly, the first respondent, after giving
an opportunity to the petitioner herein, passed the impugned order, holding that lakhs of rupees had not been deposited in the association accounts
and that the members had been illegally removed, against which order this Writ Petition has been filed by the association. She would also contend
that the petitioner has not come to the Court with clean hands, as the petitioner has come with a totally false case, committing perjury and also filing
documents which have been tampered with and forged. Further, a reading of the counter filed by the Registrar shows that a suo motu enquiry was
initiated by him u/s 36 of the Act and as the Registrar is competent to initiate a suo motu enquiry, the contention of the petitioner that the Registrar
has no jurisdiction to conduct an enquiry without satisfying the requirements u/s 36(1) cannot be sustained. In the impugned order, the Registrar
has clearly found that the entrance fee had been increased without getting approval; the collected admission amount to the tune of Rs. 21.00 lakhs
was not reflected in the account and that a huge amount had been spent on gifts and donations to politicians etc., which is against the provisions of
Section 25(2). According to her, the contention of the petitioner that some suits are pending and they would estop the Registrar from looking into
the affairs of the society are unsustainable, as the pendency of suits would not tie the hands of the Registrar, who is a statutory authority, having
ample powers to even cancel the registration of a society or to wind it up and the petitioner has illegally changed the tenure of office bearers from
one year to two years, which change was not submitted to the Registrar for ratification, as is evident from the impugned order. The Registrar has
found that bye-laws 23 and 54 are contradictory and therefore the members, who had been removed as per the said bye-laws, should be taken
back. As the amendments were not submitted to the Registrar for approval as contemplated under Rule 14, the said bye-laws could not have any
sanctity and action taken thereunder is null and void. Lastly, the learned Senior Counsel would contend that the petitioner was issued with a notice,
as seen from the enclosures to the first respondent''s typed set; the office bearers participated in the enquiry; the records were perused and
accounts scrutinized and only, thereafter, the impugned order was passed by the first respondent, which order cannot be found fault with on the
ground that opportunity was not given to the petitioner.
Mr. B.S. Gnanadesikan, learned Counsel for the eighth respondent, would contend that an enquiry was conducted by the first respondent,
namely, District Registrar, in which the President of the petitioner association appeared in person and gave a statement and records were perused
and thereupon the impugned order was passed, holding that several financial irregularities, contravention of the bye-laws, defective working and
constitution of the petitioner society were found. According to him, though it is the contention of the writ petitioner that the office bearers
distributed only tiffin, educational donation, coffee, lunch, dinner etc. not attracting Section 25(2) of the Act, as could be seen from the written
arguments and the submissions of the first respondent, it has come to light that Pongal gift of Rs. 3000/- was given in cash and gold coins and silver
articles were given amounting to Rs. 30.00 lakhs, which are definitely contrary to Section 25(2) and there are also circulars issued by the present
office bearers, which show the payment of sums to the members and, therefore, when the society acted against the mandatory prohibition of
Section 25(2) of the Act, the Registrar has power to protect the financial reserve of the society. He would also add that in the civil court cases,
which have been referred to by the petitioner, the applications filed by the members were dismissed because no cause of action had arisen and the
said members were not removed by the General Body and, hence, those judgments are not against the respondents.
The further contention of the learned Counsel is that Bye-laws 23 and 54 are contradictory in nature, as Bye-law 23 says that the Executive
Committee is only a recommendatory body and power of removal vests only with the General Body, whereas Bye-law 54 in unmistakable terms
says that the Executive Committee can impose fine and dismiss any member from the membership of the society. In view of the contradictory and
inconsistent nature of the said Bye-laws, the direction of the District Registrar that the action taken against the members invoking these Bye-laws is
not valid and the said members must be readmitted is in order. Moreover, the action was taken even without giving any opportunity to the affected
members to represent their case and the affected members were never permitted even to enter into the General Body Meeting Hall. He also
submits that more than 35 members were removed by the petitioner within a short span of 1 = years, which clearly shows the arbitrary functioning
of the present body, to reduce the dissent in the society and to deny the democratic rights and also to make the election in future as a pause, which
could not be permitted. He further points out that the Registrar himself has categorically stated in the counter affidavit as well as in the written
arguments that bye-laws of the society are not approved and, therefore, all actions taken in pursuance of the bye-laws, which are not approved,
are not valid and cannot be looked into. When the original bye-law provides for tenure of the office bearers for one year, the present office bearers
amended the bye-law to have the term of office for two years, which is not approved by the Registrar, and, therefore, the continuance of the
present office bearers beyond one year is not valid. Hence, the Writ Petition filed by the present office bears, who have no authority to continue in
office, is to be dismissed.
In support of his contentions, the learned Counsel has cited the following citations:
(i) K. Murugan Vs. Fencing Association of India, Jabalpur and Others, ;
(ii) District Muslim Welfare and Education Society Vs. District Registar of Societies and others, ;
(iii) The Victoria Edward Hall rep. by its Secretary Dr. Ismail v. M. Samraj and Ors. 2001 (3) CTC 129;
(iv) The Chennai Kancheepuram Thiruvallur Districts Film Distributors Association v. Chinthamani S. Murugesan and Ors. 2001 (3) CTC 349;
(v) C.M.S. Evangelical Suvi David Memorial Higher Secondary School v. The District Registrar, Cheranmahadevi, Tirunelveli District, and Ors.
2005 (2) L.W. 550;
(vi) The Music Academy, rep. by its Executive Trustee v. Inspector General of Registration and Ors. 2005 (4) L.W. 67;
(vii) Board of Control For Cricket, India, and Anr. v. Netaji Cricket Club and Ors. AIR 2005 Sup 592 and
(viii) I. Nelson and Another Vs. Kallayam Pastorate and Others, .
I have heard the learned Counsel for the parties; given my thoughtful consideration to the rival submissions and also gone through the records.
The impugned order, over which the writ petitioner is aggrieved, contains two directions to the writ petitioner viz., (1) to collect the
misappropriated amount from the officials concerned and (2) to reinstate the members, who are dismissed from the society as per Bye-laws 23
and 54.
While delving into the first direction, it is necessary to extract Section 36(1) of The Tamil Nadu Societies Registration Act, 1975, which is the
only material provision for the present. The said Section reads as under:
Power of Registrar to inquire into the affairs of registered society.- (1) The Registrar may, of his own motion or on the application of a majority
of the members of the committee of a registered society or on the application of not less than one-third of the members of that registered society,
or, if so moved by the District Collector, hold or direct some person authorised by the Registrar by order in writing in this behalf to hold an inquiry
into the constitution, working and financial condition of that registered society.
A reading of the above provision makes it clear that an enquiry, as contemplated in Section 36 is to be necessarily held, if an application to that
effect is filed by the majority of the members of the governing body or of not less than 1/3 of the members of the Society. But, the Legislation, at
the same time, has vested the discretion in the Registrar to enquire into the constitution, working and financial condition of a registered society.
Such an exercise can be undertaken by the Registrar on his own motion only on the basis of some cogent materials of that purpose. Therefore, for
holding an enquiry on his own, some information must come to his possession either from the external or from the internal sources, which on an
object appraisal, may necessitate an enquiry as statutorily prescribed. Keeping in view the contention raised on behalf of the petitioner, the
question to be answered is, whether the complaints filed by the persons having knowledge about the affairs of the registered society can at all form
a basis empowering the Registrar to hold an enquiry on his own motion ? In my considered opinion, the answer is to be in the affirmative.
Any person, having dependable knowledge of the working affairs of a registered society, can bring to the notice of the Registrar the fact of the
infirmities caused in the constitution, working and financial condition of such a society. Thereafter, if the Registrar, on examining the nature of the
allegations and dependability of the information so furnished and/or relying on other materials having in his possession, can initiate an enquiry on his
own motion. It has to be further held that such initiation of an enquiry cannot be held to be without jurisdiction just because it has been founded on
certain information furnished by the persons, who have otherwise not been given a right to file an application, before the Registrar, for holding such
an enquiry. Therefore, the contention of the learned Senior Counsel for the petitioner that the Registrar cannot enquire into the constitution,
working and financial condition of a registered society unless the requirements u/s 36(1) are complied with and that the complainants are not
present members of the association falls to the ground.
With regard to the contention that the impugned order has not been served on the petitioner, it is seen from the impugned order, that, at the
end, a copy has been marked to the petitioner as well. So, the said contention also fails. For one more contention that the impugned order was
passed by the first respondent in pursuance of the order passed by this Court in W.P. Nos. 17581 to 17583 of 2005 which was to the effect of
disposing of representations and though there was no specific direction issued by this Court the first respondent conducted an enquiry and the
same is arbitrary, it is to be stated, that, u/s 36(1), the Registrar has got ample suo motu powers to cause enquiry into the constitution, working and
financial condition of a registered society and, hence, the Registrar is not precluded from doing so. As regards the contention that the petitioner
was not given an opportunity before passing the impugned order, it is seen that Thiru T.A. Arulpathy, who is the President of the Society,
appeared in person and gave a written deposition before the first respondent. Therefore, the said contention also collapses. Though the learned
Senior Counsel contends that the collection of entrance fee of Rs. 50,000/- from the new members, which, according to the respondents is against
the provisions of the Bye-laws, had been properly accounted for as per the registered amendments duly certified and approved by the first
respondent on 02.03.2001, he has not produced any document to that effect. It is further seen that Ponal gift of Rs. 3,000/- was given in cash and
gold coins and silver articles amounting to Rs. 30.00 lakhs were given to the members, which is contrary to the provisions of Section 25(2). When
the society had acted against the mandatory prohibition of Section 25(2) of the Act, the Registrar has every power to protect the financial reserve
of the society. Further, the affairs of a registered society can very well be enquired into by the District Registrar if there is any violation of the rules,
bye-laws or the provisions of the Act. The first respondent, being an authority to supervise the affairs of the association, is empowered to scrutinze
the account books and other affairs of the association and streamline the same. Therefore, any civil suit will not be a bar for conducting any enquiry
into the affairs of the society by the District Registrar. Hence, this Court does not find any infirmity or perversity in the order passed by the
Registrar on this aspect.
With regard to the second direction contained in the impugned order, directing the writ petitioner to reinstate the removed members, it is seen
that the respondent individuals have already moved the Civil Court in C.S. Nos. 330 and 331 of 2005, praying for a declaration declaring that the
notifications, dated 19.02.2005 and 21.02.2005 issued by the writ petitioner are null and void and for permanent injunction, restraining the writ
petitioner from interfering with the rights of the individuals as the primary members of the writ petitioner association including the right to vote and
contest in the writ petitioner association''s election. It is also to be noted that pending the said Civil Suits, the individuals filed Application Nos.
1778 and 1779 of 2005 and O.A. No. 397 of 2005 in C.S. No. 330 of 2005 for appointment of an Advocate Commissioner to conduct the
election to the office of the writ petitioner association; to grant interim stay of the operation of the notification, dated 21.02.2005, issued by the writ
petitioner recommending removal of the individuals from primary membership of the association and interim suspension of the individuals till the
approval by the General Body of the writ petitioner association pending disposal of the suit and for interim injunction restraining the writ petitioner
association from interfering with the rights of the individuals as primary members of the association, including the right of participating and
contesting in the election of the writ petitioner association respectively. In addition, A. No. 1780 of 2005 and O.A. No. 398 of 2005 were also
filed in C.S. No. 331 of 2005, for similar reliefs and the said interim applications came to be dismissed. Therefore, when the matter is seized of by
the Civil Court and when such position has been pleaded and agitated before the Registrar questioning the Bye-laws 23 and 54 of the petitioner
association, the Registrar cannot go further to the extent of issuing such a direction. In view of the pendency of the Civil Suits for the similar relief,
the order passed by the Registrar vide the second direction cannot be sustained and, hence, the same is hereby interfered with and quashed. It is
made clear that quashing of the order with regard to the second direction will not disentitle the respondent individuals from pursuing their remedy
before the Civil Court. The said direction of the Registrar is set aside, for the only reason that he proceeded to pass the said direction, when the
very same issue was already pending before the Civil Court. Therefore, it is open for the parties to pursue their remedy before the Civil Court, by
putting forth all the contentions, which are raised before this Court.
The decisions cited by the learned Senior Counsel for the petitioner pertain to the second direction and, therefore, they are not of any avail to
the petitioner before this Court.
To sum up, the Writ Petition is dismissed in so far as it is filed against the first direction contained in the impugned order. As regards the second
direction, the Writ Petition stands allowed, directing the parties to pursue their remedy before the Civil Court. No costs. Consequently, the
connected M.P. Nos. 2 and 3 of 2006 are closed.
Writ Petition is disposed of accordingly.