The argument on behalf of DDCA that as per Rule 23(b) once there is an entitlement to determine the manner in which elections can be held by the Executive Committee for the Sports Working Committee, and consequently the Executive Committee can prescribe the requirement for registration, is an argument if accepted will amount to permitting DDCA to do indirectly what cannot be done directly. As there is no restriction in the existing Memorandum and Rules of DDCA for requiring a club to be a registered club and therefore, if DDCA takes up a stand that only registered club can be an affiliated member, it would require amendment to the Memorandum and the Rules of DDCA and which amendment even assuming if it is carried out by resolution dated 1.3.2007 cannot be looked into as admittedly there is no prior sanction/approval of the Central Government to the amendment of the Memorandum and Rules of the DDCA whereby the definition of a club is introduced that only a registered club can be an affiliated club.
Now let me examine issue as to whether the order of Sh. K.S. Mohi, ADJ passed on 12.4.2007 is binding on the appellants/plaintiffs/unregistered clubs and whether it is permissible for DDCA to contend that the said order dated 12.4.2007 binds the appellants/plaintiffs/unregistered clubs. In my opinion, this argument on behalf of DDCA is clearly misconceived, inasmuch as, admittedly the appellants/plaintiffs/unregistered clubs were not parties to the litigation in which the order dated 12.4.2007 was passed. It is trite that a judgment only binds the parties to the suits and persons who claim thereunder. The judgment dated 12.4.2007 cannot be read to be a judgment in rem for obvious reasons that it is not in exercise of matrimonial, probate or admiralty etc. jurisdiction. I am informed that not a single unregistered club was a party to the litigation which resulted in passing of the order dated 12.4.2007 by Sh.K.S. Mohi, ADJ. The order of Sh. K.S.Mohi basically implements the resolution of DDCA dated 1.3.2007 and on which aspect I have already commented above that there is absolutely no resolution whatsoever dated 1.3.2007 and if even there is such a resolution, the same will be an illegal resolution because the same amounts to an amendment of the Memorandum of Association or Rules without prior sanction/approval of the Central Government as required under Section 25 of the Companies Act, 1956, the license granted to the DDCA and as duly incorporated in Clause 4(vii) of the Memorandum of Association.Therefore, the order dated 12.4.2007 cannot bind the appellants/plaintiffs either on principle of res judicata or because there is no resolution dated 1.3.2007 of DDCA on which the order was passed, or on the ground even if there is a resolution dated 1.3.2007, the said resolution would be an illegal resolution in the absence of any prior sanction or approval from the Central Government.
HIGH COURT OF DELHI AT New Delhi
20th April, 2012
1. FAO 481/2011
VINOD TIHARA & ORS
versus
DELHI & DISTRICT CRICKET ASSOCIATION
2. FAO 482/2011
ASHOKA CRICKET CLUB & ORS
Versus
DELHI & DISTRICT CRICKET ASSOCIATION
CORAM:
HON’BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes.
VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of these appeals filed under Order 43 Rule 1(r) of the Code of Civil Procedure, 1908 (CPC) is to the impugned orders of the Trial Court dated 9.11.2011 dismissing the application for interim injunction filed by the appellants/plaintiffs under order 39 Rule 1 & 2 CPC.
2. The disputes in the present case centre around the election to Sports Working Committee of the Delhi District and Cricket Association (DDCA). Sports Working Committee is a smaller body within the DDCA‟s Executive Committee.
3. DDCA is an association which is registered as a company under Section 25 of the Companies Act, 1956. DDCA is governed by its Memorandum and Articles of Association which have been approved by the Central Government. As per the license granted by the Central Government for registration of DDCA under Section 25 of the Companies Act, 1956, there cannot be any alteration of the Memorandum and Articles of Association of DDCA unless the alterations have been previously submitted to and approved by the Central Government. This is contained in para 4 (vii) of the Memorandum of Association of DDCA. I may note that the Central Government in terms of Section 25(5) is entitled to impose necessary conditions when granting permission to the Association to be registered under Section 25.
4. It is necessary before proceeding to understand the necessary facts and the issues at hand that reference is made to certain legal provisions as also the applicable Rules of the DDCA. The legal provisions which are required to be noted are those of the Companies Act, 1956, as also the General Clauses Act, 1897. So far as the Companies Act, 1956 is concerned, the provisions which are required to be referred to are Sections 25(1), (4), (5) and (8) (a) to (d). The relevant provision of General Clauses Act, 1897 is Section 3(42) which defines a “person”. The relevant Rules of the DDCA are Clause 4(vii) and Rules 21 to 23 of the Memorandum and Articles of Association of DDCA Rules and Regulations. The aforesaid provisions of law and the Rules and Regulations of DDCA read as under: “Provisions of the Companies Act, 1956 25. Power to dispense with “Limited” in name of charitable or other company.
(1) Where it is proved to the satisfaction of the Central Government that an association—
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and (b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, The Central Government may by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word “Limited” or the words “Private Limited”. (2)……….. (3).………. (4) A firm may be a member of any association or company licensed under this section, but on the dissolution of the firm, its membership of the association or company shall cease.
(5) A licence may be granted by the Central Government under this section on such conditions and subject to such regulations as it thinks fit, and those conditions and regulations shall be binding on the body to which the licence is granted, and where the grant is under sub-section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other. (6)………. (7)………. (8) (a) A body in respect of which a licence under this section is in force shall not alter the provisions of its memorandum with respect to its objects except with the previous approval of the Central Government signified in writing. (b) The Central Government may revoke the licence of such a body if it contravenes the provisions of clause (a). (c) In according the approval referred to in clause (a), the Central Government may vary the licence by making it subject to such conditions and regulations as that Government thinks fit, in lieu of, or in addition to, the conditions and regulations, if any, to which the licence was formerly subject. (d) Where the alteration proposed in the provisions of the memorandum of a body under this sub-section is with respect to the objects of the body so far as may be required to enable it to do any of the things specified in clauses (a) to (g) of sub-section (1) of section 17, the provisions of this sub-section shall be in addition to, and not in derogation of, the provisions of that section.]” Section 3(42) of the General Clauses Act, 1897 “Person” shall include any company or association or body of individuals, whether incorporated or not; Rules 21 to 23 of the Articles of Association of DDCA Affiliated Clubs 21. Any club from the area controlled by the Association whose objects are similar to those of this Association or is forced to promote the game of Cricket, may apply for affiliation to the Executive Committee on the prescribed from giving list of its members alongwith a copy of its constitution, accompanied by affiliation fee as prescribed from time to time for the year. Any Club or Association when affiliated may become to use of Association‟s grounds and other amenities with the prior approval of the Executive Committee that may be granted to such affiliations bodies.
22. The affiliation of such a club or Association may withdraw by the Executive Committee.
23. (a) The executive committee will form a sports working committee consisting of 10 members who shall be elected by the affiliated clubs amongst the members nominated by the affiliated clubs. The term of the sports working committee will be of a minimum of one year which may be extended to a maximum of two years at a time by the Executive committee. (b) The election of the members of sports working committee as specified in clause 23(a) shall be held in such manner as may be prescribed by the Executive Committee in this behalf. Clause 4(vii) of the Memorandum and Articles of Association of DDCA 4 (vii) That no alteration shall be made to the Memorandum of Association or to the Articles of Association of the Company, which are for the time being in force, unless the alterations have been positively submitted to and approved by the Central Government.”
5. Reference to the aforesaid provisions of law and the Rules and Regulations of DDCA brings out the following salient points:-
i) The Central Government while giving license is entitled to put appropriate terms and conditions on association, which is granted and incorporated under Section 25, by virtue of sub-Section 5 of Section 25 and one of the conditions is Clause 4(vii) as contained in the Memorandum of Association of DDCA that there shall be no alterations of the Memorandum or Articles unless the alterations have been previously submitted to and approved by the Central Government.
ii) Sub-Section 4 of Section 25 permits even a firm to be a member of a company which is licensed under Section 25 meaning thereby member of a company which is incorporated under Section 25 need not be a legal entity, a partnership firm is not a legal entity. Section 3(42) of the General Clauses Act, 1897 which defines a person also does not require a person to be a legal entity, inasmuch as, a person includes an association or body of individuals whether incorporated or not.
iii) As to when a club can be a member of DDCA i.e. a club can be an affiliated club in terms of Rules 21 to 23 of the Memorandum and Articles of Association of DDCA, one can say that there is no requirement in the Memorandum/Articles of a club having to be only a registered club and nor is there a definition of a club that a club can only mean a registered club. Obviously, this position is in furtherance of the provisions of Section 25(5) of the Companies Act, 1956 and Section 3(42) of the General Clauses Act, 1897.
iv) The Sports Working Committee is elected and has a term of only one year i.e. every year a fresh Sports Working Committee is elected. At certain times it is possible that the term in a particular case may be extended to two years, however, the two years period is the maximum permissible term of the elected Sports Working committee. 6. It is common ground between the parties to this litigation that the ten candidates who fetch the maximum number of votes polled get elected, i.e. a total of first 10 persons who in seriatim get the maximum number of votes would stand elected to the Sports Working Committee out of all the candidates who contest the elections.
7. The disputes which have arisen in the present litigation so far as the election to the Sports Working Committee for the relevant year 2011-12 are concerned, are not the disputes which have arisen for the first time. They had also arisen about 4 years or so earlier and which had resulted in litigation. Such aspects I will refer to at an appropriate stage in this judgment. The only dispute is as to whether only a registered club, i.e. a club which is registered under the Societies Registration Act, 1860 can be an affiliated club under Rules 21 to 23 of the Articles of Association. Putting it differently, DDCA contends that a club which is not a registered club cannot become an affiliated club in terms of Rules 21 to 23 of the Articles of Association and therefore cannot vote and nor its nominee can be a candidate in the elections of the Sports Working Committee.
8. The subject suits were filed by unregistered clubs, and from the impugned orders in these suits, the present appeals arise. In the subject suits the basic thrust/cause of action as also the reliefs claimed are that DDCA is wrongly disallowing unregistered clubs to participate in the elections and is not allowing the nominees of the unregistered clubs to vote or contest the elections.
9. Trial Court has dismissed the injunction application by making the following observations:- “Argument advanced on behalf of the parties on the Application of the Plaintiff under Order 39 Rule 1 & 2 read with Section 151 CPC have been heard. The Application has also been gone through. During the course of his submissions Learned Counsel for the Applicant/Plaintiffs has prayed for passing interim order against the Defendant from declaring elections amongst registered clubs only as in also clearly prayed in the Application in hand.
In the course of his submission Learned Counsel for the Defendant No.1 has submitted that the relief prayed for cannot be granted as the same has already become infractuous in view of notification dated 30.10.2011 declaring schedule of election in compliance to the directions of Hon‟ble High Court of Delhi dated 19.10.2011 in CM(M) No. 842/11. It is pertinent to note that the Suit has been Instituted by the Plaintiff on 31.10.11 seeking restraint order against the Defendants for holding election. The preliminary hearing in the matter had taken place on 31.10.11 itself and on the said date no ex-parte injunction was granted against any of the Defendant. It is only on 2.11.2011 that Sh. J.S.Bakshi Learned Counsel for Defendant appeared in this case and placed on record his vakalatnama. On the said date the matter was listed for 3.11.2011 but the said date was instantly changed to 4.11.2011 the presiding officer of the Learned Transferor Court was on leave and so the matter was kept for 5.11.2011. Vide orders dated 4.11.2011 of the Ld. District and Sessions Judge, Delhi the proceeding of the case before the Learned Transferor Court were stayed and therefore the Ld. Transferor Court adjourned to same for 11.11.2011. It is in the meantime that on than on transfer Application of defendant No.1 that this case has been transferred to the Court for today i.e 9.11.2011 for urgent hearing on the Misc. Application. It is apparent from the record of this case that even before the Institution of this case on 30.10.11 Sh. Kuldeep Singh Election Officer declared elections on 30.10.2011 giving complete schedule of the election in compliance to the order of the Hon‟ble High Court of Delhi dated 19.10.2011 in CM (M) No. 742/11. In these circumstances neither prima facie case nor likelihood of irreparable loss and injury nor the balance of convenience are in favour of the Applicants/plaintiff and therefore application in hand under Order 39 Rule 1 & 2 read with Section 151 CPC is hereby dismissed. It has virtually become infructuous.”
10. A reading of the aforesaid observations shows that the basic reason for declining of the injunction is that the election process has started and which election process should be allowed to go on and accordingly there can be no injunction against the holding of the elections.
11. A learned single Judge of this court after hearing counsel for the parties vide order dated 15.11.2011 permitted unregistered clubs to vote and participate in the election, of course subject to further orders of the Court, and the said order reads as under:
“Caveat Nos.1011-12/2011
Since there is due representation on behalf of the Respondent, notice of Caveat stands discharged.
Applications stand disposed of.
CM Nos.20534-36/2011
Allowed, subject to all just exceptions.
FAO Nos.481-482/2011 and CM Nos.20533-35/2011
By way of the present two Appeals, challenge has been made by the appellants to the common order dated 9.11.2011 whereby the interim application for injunction under Order XXXIX Rules 1 and 2 filed by the appellants was dismissed. Feeling aggrieved with the same, the appellants have approached this Court.
Both these appeals have been strongly opposed by learned counsel representing the respondents through Mr. Maninder Singh and Mr. Sandeep Sethi, learned senior counsel assisted by Mr. J.S. Bakhi and Ms. Sunita Tiwari. A number of objections have been raised by the counsel – legal, factual and technical. Learned counsel have also taken the plea that the present appeals have not even been filed by all the appellants and there is no proper attorney executed by the appellants in favour of the attorney holders. Learned counsel have also taken the objection that in the interim application moved by the appellants before the learned Trial Court, no prayer was made by them to seek their participation in the election and their specific prayer was only to seek stay of the said election which were directed by the orders passed in one civil suit and then by this Court. Learned counsel have also taken an objection that these appeals are also barred on account of unexplained delay and laches on the part of the appellants as the Notification, through which the election was notified, was issued by the Election Officer on 30.10.2011, while both the injunction suits were filed by the appellants on 31.10.2011. Learned counsel have also urged that the Election Officer has duly invited the objections before finally declaring the schedule of the election and all these appellants were well aware of the fact that being unregistered clubs, they were rendered ineligible to participate in the elections to elect the Sports Working Committee of the respondent. Mr. Sandeep Sethi, learned senior counsel representing the respondent in FAO No.482/2011 has taken an objection that some of these appellants have been rejected not only because they are unregistered clubs, but because of certain other disputes and, therefore, this is not the stage to go into the said issues which were validly decided by the Election Officer.
Dr. A.M. Singhvi, Senior Counsel and Mr. Rakesh Tiku, Senior Counsel, on the other hand, have taken the plea that if the appellants are not permitted to file their nominations or participate in the election process, then they will be left remediless, making the position irreversible and irreparable. Learned counsel also submits that in any case the appellants are not seeking stay of the elections and are only claiming parity vis-?-vis two other clubs who have been permitted to participate in the election process by the learned Trial Court and also by this Court vide order dated 24.10.2011 passed in RFA 529/2011 and, therefore, the present appellants, being on an equal footing, are also entitled to participate in the election process.
Taking a prima facie view of the matter, this Court is of the view that the various pleas raised by both the parties require detailed consideration, and at this stage this Court is not inclined to take any conclusive view of the same.
Notice.
Counsel for the respondent accepts notice.Reply be filed within a period of three days from today. Rejoinder, if any, be filed by the appellants within a period of three days thereafter.
List the appeals for arguments on 13.12.2011. In the meanwhile, the appellants are permitted to participate in the election process and it is made clear that the participation of the appellants in the election process, including filing of their nominations etc., shall be subject to the final outcome of the present appeals. It is further directed that the respondents shall not declare the results till the next date and the same shall be kept in a Sealed Cover and produced in the Court for further directions.
A copy of this order be given DASTI under the signature of Court Master.”
12. An order dated 25.11.2011 was thereafter passed clarifying the position by observing as under :-
“CM No. 21385/2011
Allowed subject to all just exceptions.
CM. 21384/2011
By this application filed under Section 151 CPC the applicant/appellant seeks directions to direct the Election Officer to include its name in the voter list and after inclusion of its name, allow it to participate in the election process in terms of the order dated 15.11.2011 passed by this court.
Mr. Rakesh Tikku, learned Senior Advocate appearing for the applicant submits that the name of the applicant was not included in the voter list of the respondent. Counsel further submits that vide order dated 15.11.2011, this court directed the applicant to participate in the election process and had given him the right to file his nominations etc.
I have heard learned counsel for the parties.
This court is not concerned with the inter se rivalry of the club with regard to who is the right person to cast vote on behalf of the Lal Bahadur Shastri Club. Certainly, the rights of the appellant clubs were in lurch due to which these appeals were filed and vide order dated 15.11.2011, these clubs were given the right to participate in the election process which included the applicant as well. The order restored the rights of the clubs to vote and now due to a subsequent act by the said club, the right in any manner cannot be taken away. Therefore, let the name of the applicant be restored in the voter list of the respondent. So far the question who is the right person to cast vote on behalf of the said club is concerned, the same shall be decided by the Election Officer.
With the aforesaid directions, the present application stands disposed of.
FAO No. 481/2011
List the matter on 13.12.2011, as already fixed.
DASTI under the signature of Court Master.”
13. Thereafter, election was held and the results of the election were kept in a sealed cover. In order to appreciate the conclusion of the election and for further orders being passed, vide order of this Court dated 13.12.2011 in FAO No.482/2011, the following order was passed:-
“CM No.20536/2011 Exemption allowed subject to just exceptions.
Application stands disposed of. + FAO No.482/2011 and C.M. No.20535/2011
1. By an interim order dated 15.11.2011, it was ordered by a learned Single Judge of this Court that the appellants are allowed to participate in the election process, however, their participation in the election process, including filing of the nomination etc, shall be subject to final outcome of the present appeal. It was also directed that respondent shall not declare the results of the election which shall be kept in a sealed cover and produced in the Court for further directions.
2. The disputes in the present case pertain to elections of the Sports Working Committee of the respondent/Delhi & District Cricket Association. The disputes pertain to rights of various clubs, including unregistered clubs, to participate in the election process.
3. In any election process, it is necessary to know the final voting pattern and the results in order to decide the necessity of continuing with the election disputes. This I say so because the voting pattern may render the rights which are claimed by some members of the stated Electoral College, either valid or unnecessary to be determined. Aspects as to whether the voting of clubs in question can affect the result and finality of election, can only be known from the voting pattern, the difference/margin of victory and other related aspects. Therefore there is no need of keeping such results in a sealed cover or secret, but in fact such results must be known to the parties for knowing the futility or any further requirement of continuing of the disputes with respect to election process. The purpose of a suit and appeal such as the present would be considerably served if the results are declared, but the same are not implemented.
4. Accordingly, I direct the Election Officer to declare the election‟s results of the Sports Working Committee of the respondent which was held on 27.11.2011. The results so declared will be made public and be informed by means of pasting on the notice board of respondent. The election results will contain detailed results including with respect to votes which are polled by each candidate and the margin of victory of the candidate.
5. This election report besides being pasted on the notice board of respondent be filed in this Court. The Election Officer, if it is so available, will not declare as to which voter has voted for which candidate, however, this aspect will be filed in this Court in a sealed cover so that the Court can peruse the same in order to decide the requirement of continuing with the present litigation.
6. I am informed that counting of votes has yet to take place. The Election Officer will follow the due process as required and carry into effect the exercise of counting of votes and declaring the results. The Election Officer can commence the process of counting the votes and declaring of results on 7.1.2012 at 11.00 A.M. The process with respect to counting of votes and declaring of results can go on any subsequent date, if so required. It is once again clarified that the results when declared would not be implemented without permission of the Court.
7. It is agreed by the counsel for the parties that during counting of votes and the process with respect to declaration of results of the election, all the candidates and/or two representatives of each of such candidates, if they so want, will be allowed to be present. It is directed that none of the parties will cause, in any manner, obstruction to the counting of the votes and declaration of the results, and if the Election Officer reports any such wrongdoing of any of the parties, the same would be viewed extremely seriously by this Court.
8. Counsel for the parties also agree that this matter can be listed in the last week of January, 2012 for further consideration. Counsel for the respective parties are directed to file a short synopsis not exceeding four pages giving the broad heads of their arguments. Obviously, these synopsis will be prepared keeping in view the results as declared by the Election Officer. It is agreed between the parties that if the results of the election do not warrant filing of the written synopsis inasmuch as disputes may have been taken to have been settled or rendered inconsequential, then, no such synopsis need to be filed, however, a note can be filed as to why the case need not be decided on merits as the same would be infructuous/inconsequential/unnecessary. The present order is without prejudice to the respective rights and contentions of the parties.
9. List for further directions on 27th January, 2012.
10. A copy of this order be given dasti to the counsel for the parties for being served upon the Election Officer. C.M. No.21834/2011 At request, adjourned to 27th January, 2012.”
14. Therefore, in terms of the order dated 13.12.2011 the results of the election were to be announced, but they were not to be implemented. The results of the election were accordingly announced and which show the following position of voting qua the contesting candidates:-
