S.N. Modi, J. - (1.) Mr. V.N. Soral, M/s. Magan Behari Lal and Co. and M/s. Premier Paper and Board Mills, each, instituted a suit against the Rajasthan Chamber of Commerce and Industry, Jaipur (hereinafter referred to as the Chamber), its office bearers, is members of the Managing Committee and its Associate Members for declaration and injunction. In each suit, the defendant appellants filed an application under Sec. 34 of the Arbitration Act, 1940 for stay of the suit proceedings. The learned Additional District Judge No. 1, Jaipur City, in whose court the suits were instituted, rejected the applications under Sec. 34 vide a single order dated October 22, 1975 in all the three suits. Dissatisfied with the said order the defendant appellants have preferred these three appeals. Since all the three appeals are based on similar facts and involve common questions of fact and law, they are being disposed of together by this judgment.
(2.) The facts narrated in the plaint filed by Mr. V.N. Soral are like this. Mr. V.N. Soral has alleged that he is an ordinary member of the Chamber which is a company duly registered and incorporated under the Companies Act, 1956. The objects of the Chamber are contained in the Memorandum of the Chamber. The Articles of Association of the Chamber deal with various subjects such as categories of membership, subscription fee, admission fee, payment of subscription, application for members hip, privileges of 'he members, termination of membership, authorised representatives of members etc. It is further alleged that the business of the Chamber is transacted by a Managing Committee constituted in the manner provided in Article 27 of the Articles of Association. Under Article 10 of the Articles of Association, Annual General Meeting of the Chamber is required to be called within six months of the end of the official year of the Chamber An electoral roll has got to be prepared by the Secretary of the Chamber for the election of the Managing Committee stating therein the names and addresses of all the patrons, Associate members, and ordinary members and to send to every members a copy thereof and four copies to every Associate Member, nearly a month prior to the holding of the Annual General Meeting The names of the members of the Managing Committee for the next year are announced in the Annual General Meeting. Under Article 25 of the Articles of Association, the office bearers of the Chambar are elected from amongst the members of the Managing Committee as per procedure laid down in the Appendix attached to the Memorandum and Articles of Association The grievance of the plaintiff Mr. V.N. Soral is that at the Annua' General Meeting of the Chamber held on June 28, 1975, be raised several objections and put certain questions to the President and the Secretary of the Chamber but none of his questions or objections was answered, On the contrary he was asked by the President not to put any question. Para 13 of the plaint contains the details of the objections and questions raised by the plaintiff at the Annual General Meeting held on June 28, 1975 Para 13 reads like this: "13 That several objections and queries were raised by the plaintiff in the Annual General Meeting with regard to the following matters: - (a) The plaintiff wanted to know the total number of new members enrolled under Various categories find the amount of subscription deceived from them retrospectively. Further the plaintiff also enquired about the utilisation of funds set apart for the Rajasthan Economic Development Council Fund. The plaintiff also made a query regarding the total amount of subscription received by the defendant No. 1 on the basis of which the roll list circulated by the Secretary had been prepared. It was also enquired by the plaintiff if the Rajasthan Economic Development Council Fund could be spent on the routine activities of the Chamber such as the publication of the Chamber Bulletin The defendant No. 2 who was presiding over the meeting gave no reply to any of the queries On the contrary, he very rudely asked the plaintiff to resume his seat. (b) That it was also printed out by the plaintiff in the Annual General Meeting that the list of the Associate Members circulated by the defendant No. 1 only showed the names of 27 members, while the names of the Members announced by the President on the Executive Committee from the Associate Members Constituency were 43. The plaintiff raised a query to ascertain as to when the additional 16 Associate Members had been enrolled after the circulation of the roll list, The plaintiff wanted to know the date of the Executive Committee Meeting which had admitted such additional Members but no reply was given. The president (Defendant No. 2) only shouted down the plaintiff telling him not to make any more queries. (c) That as soon as the names of all the members of the Managing Committee had been announced by the defendant No. 2, it struck to the plaintiff that there were no members from the Donors' Constituency on the newly announced Managing Committee The plaintiff immediately pointed out that the representatives from among the Donor Members had been completely omitted in the list announced. He wanted to know it there were any elections to elect representatives from among the Donors on the Managing Committee as provided under article 27 clause (g) of Articles of Association. The defendant No. 2 and 9 looked completely blank and made no reply to the query. Thereafter the defendant No. 2 started shouting whatever came to his head. The plaintiff while making the aforesaid query regarding the absence of the Donor Members on the Managing Committee also wanted to know if the clause (d) of Article 9 had not been deliberately eliminated while reproducing the said Article on the back of the prescribed printed application form for membership of the Chamber so that the Members could be kept in the dark regarding the representation of the Donor Members and their rights. (d) That the plaintiff having been associated with the activities of the Chamber from its very inception had full knowledge regarding the construction of various buildings of the Chamber & the use they were to be out to As such he wanted to know as to why and how the East Wing of she Chamber Buildings constructed so far had been rented out to different parties when a solemn promise had been given to all/ oil the donors who had very generously donated to the Building Fund of the Chamber that the said Wing would never be let out. As in the case of other queries, the defendant No. 2 abruptly declared the proceedings of the Annual General Meeting closed under loud shouts of protests from the Members assembled there."
(3.) The plaintiff further alleges that the President of the Chamber announced the names of the members of the Managing Committee for the year 1975 -76 at the Annual General Meeting held on June 28, 1975 According to the plaintiff some of the numbers of the Managing Committee constituted for the year 1975 -76 were such who had neither been enrolled as members nor were they eligible for enrolment. In para 14 of the plaint, the plaintiff pointed out two names of Associate Members namely M/s. R.K. Hotels (P) Ltd. and M/s. Sahu Minerals and Properties Ltd. which were never enrolled as such members and still they were taken on the Managing Committee for the year 1975 76, in para 17 of the plaint the plaintiff pointed out that Shri. S.K. Patney, Shri K.D. Gupta, Shri J.C. Sharma. Shri. M. Sayeed Khan and Shri Heerachand M. Choudhary were taken on the Managing Committee for the year 1976 -76 from amongst the ordinary members although they were not eligible to be enrolled as ordinary members as per clause (d) of Article 2 of the Articles of Association. In para 18 of the plaint the plaintiff pointed out the names of those Associate Members who wanted to change their nominees on the Managing Committee, for which intimation in writing with the consent of the nominees had been sent to the Chamber before the Annual General Meeting, but inspite of that the President did not announce the names of the new nominees of the Associated Members with the result that the new nominees were deprived of their right to contest election of the office bearers as well as to exercise their right to vote at the election of office bearers. In para 19 of the plaint the plaintiff summarised the grounds on which he challenged the constitution of the Managing Committee for the year 1975 76. The relevant portion of para 19 reads as under: "The constitution of the so -called Managing Committee for the year 1975 -76 is patently illegal and contrary to the provisions of the Articles and is void ab initio on the following grounds: - (a) That the constitution of the Managing Committee suffers from patent illegality and has also some inherent defects on account of inclusion or several persons on the Managing Committee for 1975 -76 from the General Constituency and the specified constituencies representing Patrons and Ordinary Members when many of them could not be enrolled as members of the Chamber As such the said Managing Committee cannot be said to be validly constituted Managing Committee. (b) That a circular No. RCC/1062/39 dated 16 -5 -1972, under the signature of defendant No. 9 was issued from the office of defendant No. 1 wherein the Associate Members were given an option to send the names of their nominees on the Managing Committee. Subsequently, another circular No. RCC/1124/42 dated May 28, 1975 was issued to all the Members informing them as under: - "Nominations from Divisional Chambers and Associate Members, as and when received in conformity with the Constitution of the Chamber, will be included in the list of the Executive Committee Members.";