THE CHAMBER OF COMMERCE AND INDUSTRY AND ORS. Vs. Y.V. SHARMA AND ORS.
LAWS(J&K)-2020-6-2
HIGH COURT OF JAMMU AND KASHMIR
Decided on June 19,2020

The Chamber Of Commerce And Industry And Ors. Appellant
VERSUS
Y.V. Sharma And Ors. Respondents




JUDGEMENT

- (1.)This Civil Miscellaneous appeal has been preferred by the appellants against the order dated 16.03.2020 passed by learned 2nd Additional District Judge, Jammu (hereinafter referred to as "Trial Court"?) whereby the application for grant of interim relief filed by the respondent Nos. 1 & 2 in a suit titled "Y. V. Sharma and another Vs The Chamber of Commerce & Industry & Ors."? has been allowed and the operation of the decisions/resolution of the impugned Special General Meeting dated 19.12.2018 of the appellant No. 1 organized at Hotel Radisson Blu, Jammu and published in newspaper dated 13.03.2019, whereby the term of appellant Nos. 2&3 as well as respondent Nos. 3 to 6 was extended along with various amendments made in the constitution have been kept in abeyance and further the appellant Nos. 2&3 and respondent Nos. 3 to 6 have been restrained to use any financial power to deal with the accounts of appellant No.1 and also restrained from operating of bank accounts of appellant No.1 with the different banks till the disposal of the suit. However, the Respondent no: 5 has been permitted to operate one bank account for the purpose of payment of Salary of Staff/Employees, payment of Telephone Bills/ Electricity Bills and rental charges to be paid by the Appellant no:1, with further direction to him to keep the proper record of withdrawals so made and furnish monthly record before the Trial Court till further orders.
(2.)The facts necessary for the disposal of the present appeal are that a suit for declaration to the effect that a Special General Meeting of the Chamber of Commerce & Industry (Registered) Jammu (hereinafter referred to as "CCI"?) dated 19.12.2018 held at Hotel Radisson Blu, Jammu where by the tenure of the officer bearers of CCI Jammu was extended up to first week of March, 2021 and its other decisions including the so called amendment of the constitution of CCI Jammu are illegal and void- ab initio being against the provisions of the constitution, thus be declared as non-est in the eyes of law with consequential relief of permanent prohibitory injunction, restraining the appellant Nos. 2 & 3 and respondent Nos. 3 to 6 from claiming, projecting, acting, working, further continuing and holding of the office of CCI Jammu as its office bearers and further restraining them from dealing in any manner whatsoever with the moveable and immoveable properties of CCI Jammu including cash, bank account(s), deposits, membership fees, subscription fees of CCI Jammu and a further relief of mandatory injunction for appointment of election committee for conducting the fresh elections of office bearers of CCI Jammu was also sought. The said suit was filed by the respondent Nos. 1 and 2 on the ground that the Appellant No. 1 is a Society duly registered with the Registrar of Societies and having its own constitution under which the CCI Jammu works and functions. The said constitution provides for the functioning, management, membership, election, tenure of office bearers of CCI. Both the respondents claimed themselves to be the principal members of CCI. The respondent Nos. 1 and 2 further pleaded that the last election of CCI Jammu was held on 05.03.2017 for a period of two years as per the constitution of CCI and in the said election there were as many as 2361 members, who were enrolled as eligible voters entitled to cast their vote. In the said election, appellant Nos. 2 & 3 and respondent Nos. 3 to 6 were elected as office bearers for the CCI Jammu for a period of two years only, as per the mandate of Section 16 of constitution of CCI. The respondent Nos. 1 & 2 further stated that after the tenure of the office bearers expired in March, 2019, they were under constitutional obligation to announce and conduct the election of appellant No. 1 by April, 2019. However, the appellant No. 2&3 and respondent Nos. 3 to 6 are illegally holding the office of appellant No. 1. The respondent Nos. 1 & 2 further pleaded that before the expiry of their tenure, the appellant Nos. 2&3 and respondent Nos. 3 to 6 hatched a conspiracy to illegally continue as office bearers of appellant No. 1 beyond the prescribed period of two years and in pursuance to the said conspiracy, they organized a Special General Meeting dated 19.12.2018 at Hotel Radisson Blu, Jammu illegally without adhering the provisions of the constitution provided for holding such type of meeting, as no notice for convening the special general meeting was ever got published in any of the leading daily newspaper of the then State and this meeting was organized without circulating any agenda to be discussed in the said meeting. As per Section 10 of the constitution, the Special General Meeting has to be conducted once a year and that can be conducted at the instance of Executive Committee. The said Special General Meeting can also be conducted any time on the written request of 10 percent of the members of the total membership. It was submitted that for conducting a Special General Meeting on 19.12.2018 at Hotel Radisson Blu, Jammu, neither any written request was made for convening the meeting by 10 per cent of the members of the total membership nor it was summoned by the Executive Committee. It was further stated that the appellant No. 2 after having been elected as President had not even constituted the Executive Committee within one month of his election and also the same was never notified to the members of the appellant No. 1. It was also pleaded that appellant No. 2 after election never nominated a presidium as per the mandate of Section 17 of constitution of CCI Jammu and it was done deliberately by the appellant No. 2, so as to avoid supervision of the functioning of the office bearers by the Presidium, as the Presidium was / is meant to ensure the strict compliance of the provisions of the constitution of CCI. It was mandatory for any member who had any grievance regarding the violation of the constitution by the office bearers to first of all bring the same to the notice of presidium and without approaching the presidium, the said aggrieved member had no right to approach the Court directly. The respondent Nos. 1 & 2 further stated that as per Section 10 of the CCI, notice for Special General Meeting was required to be published in two daily leading newspapers of the State at least seven days before the day fixed for such meeting and if possible, the members could be intimated individually also. In the instant case, no such publication was made by the appellant No. 2&3 and respondent Nos. 3 to 6 before convening the said meeting on 19.12.2018. Thus, the said meeting was illegal and the decisions of any such illegal meeting are not binding upon the appellant No. 1 and its registered members including the respondent Nos. 1 & 2 and the same was only managed show with a malafide intention to get the extension of the term of office bearers of appellant No. 1. The total members of the CCI were 2361 and there ought to have been 787 eligible members in the said Special General Meeting to form the quorum of the meeting. It was also stated that there were hardly about 400 members present in the meeting and those included 209 new members who were yet to be confirmed as eligible members of appellant No. 1. It was further pleaded that there was no agenda of the meeting for extension of tenure of appellant Nos. 2&3 and respondent Nos.
(3.)to 6 in any manner. Also, neither any proposal for extension of office bearers i.e. appellant Nos. 2&3 and respondent Nos. 3 to 6 including various amendments in the constitution were ever put forth by the appellant No. 2 nor discussed and further no decision was taken in this regard. The decision of extension of tenure of the office bearers claimed to have been taken in the Special General Meeting is in grave violations of the provisions of the constitution because the same is not provided in it. The respondent Nos. 1 & 2 further submitted that appellant Nos. 2&3 and respondent Nos. 3 to 6 played a mischief and got published the alleged decisions and resolutions of the aforesaid Special General Meeting dated 19.12.2018 in Newspaper "Dainik Jagaran"?, Jammu on 13.03.2019 i.e. 84 days after the holding of the said meeting. It was further stated that mandate of Section 21 was not followed, as such, the amendments are contrary to the provisions of the constitution of CCI. The respondent Nos. 1 & 2 lastly sated that the appellant Nos. 2&3 and respondent Nos. 3 to 6 have no right to continue as office bearers and cause the financial loss to the CCI, as they are acting not in furtherance of aims and objections of CCI but they are acting in tandem for their personal benefits in the society as well as in the political circle. The respondent Nos. 1 & 2 also filed an application for grant of interim relief and sought various interim reliefs pending the trial of the suit. The details of the decisions/Resolution of the Special General Meeting dated 19.12.2018 have not been reproduced here for the sake of brevity.
3. The appellants and respondent Nos. 3 to 6 filed their written statement and raised numerous preliminary objections disputing the maintainability of the suit on the grounds that the respondent Nos. 1 and 2 have not approached the Court with clean hands and have suppressed the material facts from the Court, as not only the Executive Committee was duly constituted as per the constitution of CCI, Jammu but the presidium has also been in place as per Section 17 of constitution of CCI. The Working Committee was duly constituted by the appellant No. 2 within the one month of his election which included all the living/ past presidents/ past Secretary Generals on 2-4-2017 and even the Working Committee was constituted on 01.04.2019. The Presidium was constituted on 02.04.2017 and also on 01.04.2019 in terms of Section. It was further stated that by pleading wrong facts before the Court regarding the non-constitution of presidium, the respondent Nos. 1 & 2 filed the suit, which is contrary to the mandate of Section 17. The appellants have placed on record the communication addressed to appellant No 2 by all the nine members of the presidium certifying that none of the ex-office bearers or any member of CCI Jammu including the respondent Nos. 1 & 2 approached them either verbally or in writing with regard to any violation of the constitution of CCI, Jammu. It was further stated that by placing wrong facts before the Court, the respondent Nos. 1 & 2 have obtained ex parte ad interim order, that has resulted into the stalling of functioning of the CCI, Jammu. The appellants and the respondent Nos. 3 to 6 further pleaded in their written statement that important provisions were incorporated in the constitution of CCI, Jammu in its Special General Meeting on 19.12.2018 at Hotel Radisson Blu, Jammu and the said amendments were carried out on the persistent demands of the members of CCI Jammu who were pressing hard for introduction of the educated/ talented lot to represent the prestigious organization of Jammu province and further motive was to bring transparency and fairness in the election process and to rule out excess spending and unfair practices in the holding of CCI elections. It was also pleaded in the written statement that the respondent No. 1 and appellant No. 2 attended a meeting of J&K Joint Chamber of Commerce and Industry (JKJCCI), a consortium of Regional Chambers of Srinagar, Jammu (J&K), Mirpur and Muzafarrabad (PoK) from June 23, 2019 to June 25, 2019 wherein the appellant No. 2 took over as the President of JKJCCI in Tashkent. On one hand, the respondent No. 1 has leveled serious allegations against the continuation of appellant No. 2 as president of appellant No. 1 and on the other hand he accompanied the respondent No. 2 for a prestigious meeting of Joint Chambers and facilitated his election as President. The double standards of the respondent No. 1 are, as such, visible. Another objection was raised that the decision impugned sought to be declared as null and void was passed on 19.12.2018 and thereafter the activities of CCI Jammu were being carried for the betterment of its members. The respondent Nos. 1 & 2 had allowed the working of CCI Jammu without a murmur and after one year and two months, they have got up after deep slumber to file the suit. The discretionary relief of injunction cannot be given to respondent Nos. 1 & 2 as they are party to the decision by not only their conduct but also the respondent No. 2 was party to the said decision as he was personally present in the said meeting. The suit is also stated to be time barred and it is also stated that suit has been filed by only two persons in their individual capacity, whereas CCI Jammu comprises of more than 2800 members and the respondent Nos. 1&2 have filed the suit in representative capacity without permission of the Court under Order 1 Rule 8 CPC and sought the dismissal of the suit on this ground as well. The appellants and respondent Nos. 3 to 6 admitted the status of respondent Nos. 1 & 2 as principal members and reiterated that in order to make organization more effective and bring transparency the Special General Meeting was held on 19.12.2018 at Hotel Radisson Blu, Jammu and the amendments were subsequently published in leading dailies of the State i.e, Daily Excelsior and Dainik Jagaran in their issues dated 13.03.2019. It was also stated that there is no prohibition in the constitution for extension of tenure and same was approved much before the expiry of the term by the jam-packed house on 19.12.2018. The appellants and respondent Nos. 3 to 6 admitted that their term was to complete in March, 2019 in terms of Section 16 of the constitution but before the expiry of the term of the appellants and respondent Nos. 3 to 6, more than 10 percent of the members of the appellant No.1 made a representation to the appellant No. 2 to convene a Special General Meeting for discussing various issues confronting CCI Jammu with special reference to unfinished task of construction of Business Club and also to consider the continuation of appellants and respondent Nos. 3 to 6 as office bearers till the completion of project and besides the members also requested for certain amendments in the constitution and pursuant to that, Special General Meeting was convened on 19.12.2018 at Hotel Radisson Blu, Jammu, where more than 800 members were present. It was during historic / jam-packed session of the Special General Meeting held on 19.12.2018, the members of CCI, Jammu in one voice except two dissenting views expressed by Shri Arun Gupta, Ex-General Secretary, CCI, Jammu and Shri Ramesh Gupta, Ex-President, CCI, Jammu, rest all the members while approving the agenda of the meeting in one voice by raising their hands demanded and approved the continuation of the tenure of the appellants and respondent Nos. 3 to 6 up to March, 2021 solely for the reason to authorize the appellants and respondent Nos. 3 to 6 to complete the process of construction of proposed modern Club for the members of CCI, Jammu. The respondent No. 2 was personally present in the said meeting and did not raise any objections to the agenda/items approved. The respondent No. 1 though invited personally by the appellant No. 2 did not attend the meeting for the reasons best known to him. It was further stated that the agenda of the meeting was issued on 11.12.2018 and duly circulated amongst the members individually. The agenda item from 1 to 9 clearly exhibit the business to be discussed and approved. It is vehemently denied that Special General Meeting was held illegally without adhering to the provisions of the constitution and there was no requirement of getting the notice published in the newspaper. The meeting was not conducted in violation of section 10 of the constitution of CCI as the requirement of publication in two dailies of the State was with regard to the adjourned meeting. It was further pleaded that the entire minutes/proceedings of the historic general meeting had been video graphed /photographed and there were more than 800 members present in the jampacked hall of Hotel Radisson Blu, Jammu and the quorum of the meeting was complete when all the decisions were put to the house and approved but on 19th December, 2018, it was Ekadishi (Hindu holy day) and few members after the approval of the items left the hall, as they had to observe certain rituals and at the end there were around 751 members. The presence of 209 new members, who were yet to be confirmed, was denied by the appellants and respondent Nos. 3 to 6. The appellants and respondent Nos. 3 to 6 also pleaded that all the members of the Executive Committee were invited to participate in the said meeting and thus there has been no violation of the procedure prescribed under Section 21 of the constitution of CCI. The allegations of organizing unwanted functions/events are baseless so as to carve out a ground for stopping the banking operations of appellant No. 1. The appellants and respondent Nos. 3 to 6 also filed the objections to the application for grant of interim relief on similar lines, as those in written statement and prayed for dismissal of the application for grant of interim relief.

;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.