Bombay High Court
Suresh G. Seth And 5 Ors vs The National Sports Club Of India on 15 February, 2019
Author: S.C. Gupte
Bench: S.C. Gupte
sg nmsl428-19.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION (L) NO.428 OF 2019
IN
SUIT (L) NO.202 OF 2019
Suresh G. Seth And 5 Ors. ....Applicants/Plaintiffs
vs
The National Sports Club of India ...Defendant
.....
Mr. Dinyar Madon, Senior Advocate, a/w. Dr. Birendra Saraf, Mr.
Pradeep Bakhru, Ms. Mitakshi Lakhani and Mr. Nikhil Apte, i/b. Wadia
Ghandy & Co., for the Plaintiffs/Applicants.
Mr. Aspi Chinoy, Senior Advocate, a/w. Mr. Sunip Sen, i/b. Ms. Sutapa
Saha, for Defendant/Respondent.
......
CORAM : S.C. GUPTE, J.
DATED: 15 FEBRUARY 2019 P.C. . Heard learned Counsel for the parties. The present notice of motion has been taken out by the Plaintiffs, who are members of the Defendant Club, seeking to challenge their suspension vide order dated 8 February 2019. The Plaintiffs' case is that the suspension is malafide; it is ordered in breach of rules and regulations of the Defendant Club; and no proper opportunity was afforded to the Plaintiffs to show cause to it. The Plaintiffs apply for ad-interim relief restraining the Defendant from acting upon the order of suspension.
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2. The Plaintiffs have been members of the Defendant Sports Club, whilst Plaintiff Nos. 1 and 2 are currently members of the Central Council of the Defendant Club. It is claimed that amongst members of the Defendant there are various groups. Majority of the present office bearers of the Defendant are in the group/front known as 'Action Team'. The Plaintiffs, on the other hand, are members of another group/front known as 'United Active Force'. It is the Plaintiffs' case that after seeking advice from friends, well-wishers and like minded persons, the Plaintiffs thought it appropriate to form a body for protection of private club members' interest generally. Accordingly, they formed an association naming the same as 'NSCI United Active Force'. The word 'NSCI' used in the name of the association was objected to by the Defendant by filing an infringement and passing off suit praying for a restraint order concerning use of the mark or domain name 'NSCI' in it. At the hearing of the ad-interim application in that suit, the Plaintiffs voluntarily undertook to delete the word 'NSCI' from the name of their association and not to use the same in any stationary, publicity material, etc. of the association and also to make the necessary application to the Trademark Registry to remove the word 'NSCI' from the name of the association. In addition to this undertaking, the Plaintiffs also submitted to a decree in the IP Suit in terms of prayer clauses (a), (b) and (c) thereof. The grievance of the Defendant Club, thus, of the Plaintiffs having inappropriately used the name NSCI in the association formed by them, was adequately addressed. It appears that the Defendant, thereafter, issued a show cause notice to the Plaintiffs on 16 January 2019 claiming that the conduct of the Plaintiffs in forming an association by the name of 'NSCI United Active Force', in particular, Pg 2 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc with the use of the word 'NSCI' in it, amounts to a mis-conduct. It was claimed that the Plaintiffs had formed a parallel club within the Defendant Club and such formation amounted to mis-conduct and/or misbehavior within the meaning of Rule 19(b)(ii) of the Rules and Regulations of the Defendant Club. The Plaintiffs, by their letter dated 22 January 2019, requested for time to file a reply and for a personal hearing to be granted in respect of the charges levelled against them. The Defendant Club, by their letter dated 23 January 2019, claimed that the Plaintiffs' requisition for time should have been addressed to the Regional Committee as it alone could consider the request for adjournment. The Regional Committee meeting to consider the misconduct of the Plaintiffs was scheduled on 25 January 2019. The Plaintiffs protested against the very short and insufficient period (of a mere 48 hours) afforded by the Defendant to the Plaintiffs to show cause. It appears that the meeting of Regional Committee nevertheless proceeded on 25 January 2019 and resolutions were passed suspending the Plaintiffs' membership for a period of six months. Being aggrieved, the Plaintiffs filed two suits, being Suit (L) No.126 of 2019 and Suit (L) No.127 of 2019, impugning the show cause notice as well as the suspension orders. At the hearing of the ad-interim application in the suits, after the matter was heard at some length, the Defendant agreed to withdraw the suspension orders and instead submit to a hearing schedule fixed by the parties by consent. Accordingly, the suits were disposed of as withdrawn, keeping all rights and contentions of the parties open. The Plaintiffs, thereafter, filed their respective replies to the show cause notices raising various contentions, which also form the subject matter of the present suit. The Plaintiffs claimed permission for Pg 3 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc legal representation at the hearing of the show cause notice. The Defendant refused to allow any legal representation to the Plaintiffs. The Plaintiffs claim that they, accordingly, attended the personal hearing in the absence of any legal representation and under protest. The Plaintiffs claim that it had been a uniform practice of the Defendant Club that whenever an enquiry of a serious nature was required to be conducted against any member of the club, an independent enquiry committee was always formed; this usual practice was deviated from in the present case. By their resolution dated 7 February 2019, the Regional Committee of the Defendant Club resolved to suspend the Plaintiffs' membership for a period of six months. Being aggrieved by this action, which they claim to be malafide, the Plaintiffs have approached this Court seeking urgent ad-interim reliefs.
3. Mr. Madon, learned Senior Counsel for the Plaintiffs, submits that the particular rule, under which the present suspension was ordered by the club, is ultra vires. It is submitted that the club owns lands in Mumbai as well as Delhi. The lease deed in respect of its land in Delhi contains a prohibitory clause requiring the Defendant Club to seek permission of Lt. Governor of Delhi before making any amendment to its constitution, rules and regulations. It is submitted that Rule 19(b)(ii), having been added by way of an amendment without seeking such permission, is ultra vires and the action of the club in suspending the Plaintiffs' membership under this rule is illegal, null and void. Learned Counsel also submits that the action of the Defendant in suspending the Plaintiffs is a clear instance of malafides. Learned Counsel, in this behalf, inter alia refers to the following Pg 4 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc circumstances:
(i) In the first place, it is submitted that this action was in view of the elections to the Central Council of the Club scheduled to be held in Delhi and Mumbai, respectively, on 10 and 17 February 2019. It is submitted that the misconduct alleged for suspending the Plaintiffs is formation of an association called 'NSCI United Active Force'. This association has been in existence since October 2017; and yet the controversy was raked up only at the time when the elections were round the corner;
(ii) It is submitted that the show cause notice and the suspension which followed were with a view to particularly target Plaintiff Nos. 1 and 2, who are current members of the elected Central Council of the Defendant Club, and Plaintiff No.5, who had filed his nomination form for the upcoming elections of the Central Council but had to withdraw his nomination in view of the original suspension order of 28 January 2019, which was later withdrawn as recorded in the order of 4 February 2019;
(iii) It is submitted that the purported resolution of suspending the Plaintiffs' membership was with an ulterior motive of depriving the Plaintiffs and, more Pg 5 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc particularly, Plaintiff Nos. 1 and 2, from participating in elections to the executive committee of the Defendant. It is submitted that the Central Council of the Defendant is constituted of 60 elected members and presently includes Plaintiff Nos. 1 and 2. It is submitted that by suspending the membership of Plaintiff Nos.1 and 2, the group controlling the Managing Committee of the Defendant Club has effectively managed to oust two rival votes for the purpose of electing the President and other office bearers of the Defendant;
(iv) It is submitted that the Defendant club has selectively victimized only certain members of United Active force, a group of members active for long in the club (having 14 out of 16 seats in the Central Council in the last elections under its banner). The other active members, including one Kamlesh Jain, who is also a founder member of United Active Force, and who continues to be its member even as of date, are spared because of their proximity with the current President of the club;
(v) It is submitted that right to legal representation was justifiably demanded by the Plaintiffs; it was all the more necessary in the present case not only because the matter involved suspension of membership, which is a serious matter in Pg 6 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc itself, but because the Plaintiffs were cross-examined at the hearing by a member of Regional Council, who was a legal practitioner. It is submitted that in the premises, there has been denial of natural justice as a matter of substance though not necessarily in form.
4. Mr. Chinoy, learned Senior Counsel appearing for the Defendant Club, submits that Rule 19(b)(ii) has been on the rule book for more than 34 years. He submits that all members of the club have accepted the rule and have acted on it ever since. On merits, learned Counsel submits that the act of the Plaintiffs in forming an association by the name of 'NSCI United Active Force' and collecting money inter alia from members of the club for its activities was a serious mischief; it had the effect of confusing the members and agencies dealing with the club and prejudicing the conduct of the club's affairs. Learned Counsel submits that there is no case of malafides in the impugned action. Whatever may have been the date of formation of the Plaintiffs' association, Counsel submits, the knowledge of its formation was gathered by the Defendant only recently, i.e. some time in December 2018, and that immediately thereafter, proceedings were initiated first in the form of an IP Suit and, thereafter, by the present show cause notices. Learned Counsel contends that there is nothing to be grained by preventing the Plaintiffs from participating in the voting for Central Committee elections; in a club having thousands as members, a few votes do not matter. Learned Counsel submits that on these facts, the Court should not issue any protective order interfering with the club's internal management.
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5. It is true that ordinarily, no action of a private club qua its members can be challenged in a court of law save and except when such action is ultra vires the constitution of the club or is in breach of principles of natural justice or is actuated by malafides or bad faith. At the same time, it is important to note that expulsion or suspension of a member entails serious civil consequences. A large part of modern day urban civic life consists of brotherhood of, and intermingling in, social clubs. Any expulsion or suspension order, in true sense, has drastic implications from the point of view not just of private rights of the persons involved as members of the club, but also their honour and reputation. These actions cause nothing less than social disgrace and acute loss of esteem, both self and public. It is also a notorious fact of club life nowadays that its elections are fought with such keenness and ferocity that the atmosphere at the club is completely vitiated, what with conspiracies abounding every now and then. Bearing all these aspects in mind, we have to assess the facts of the case and consider the relief. It must also be borne in mind that the application is presntly being considered at an ad-interim stage, i.e. at a stage even preliminary to the interim notice where the court considers prima facie merits in a fuller measure.
6. If one has regard to the facts of the present case, the present action of the club against the Plaintiffs is really in the nature of punishment. It seeks to restrain the Plaintiffs from attending the club and participating in its activities for having committed a misconduct. The circumstances of the case noted above, as part of submissions of the Pg 2 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc Plaintiffs, clearly suggest at least at this threshold prima facie stage that there is a case to be considered at the hearing of the notice of motion on the malafides of the Defendant's action in suspending the Plaintiffs. In the first place, there is no definition of 'misconduct' in the club's rules. Anything and everything, which is against the powers that be, is likely to be considered as misconduct. The misconduct complained of in the present case is formation of an association with the word 'NSCI' as part of it and collection of money from members and so-called confusion caused by its functioning. It is seriously debatable if formation of an association by itself can be considered a misconduct, even if whilst forming such association, members of the club are roped in or even, for that matter, monies are collected from them, at least so long as the activities of the association including collection of money are not conducted in the club premises. (That, in any case, is not part of the complaint of the club against the Plaintiffs.) The only grievance, if at all, can be of use of the name 'NSCI' as part of the association's name, though even here, it is debatable if the grievance can be addressed within the disciplinary rules of the club. Be that as it may, a suit filed for redressing the wrong has already resulted into a decree on admission. On the very first day, when the matter was brought before the court, the Plaintiffs agreed to discontinue the use of the name 'NSCI' and submit to a decree of perpetual injunction. There is no case that the Plaintiffs are breaching that injunction or continuing to use the 'NSCI' name. The grievance, in that sense, has been fully redressed. That directly poses some pertinent questions. Why is the Defendant still insisting on punishing the Plaintiffs. Does that really have to do with elections that are round the corner, and where, the presence, if not of Pg 3 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc the other Plaintiffs, at least of Plaintiff Nos.1 and 2, is bound to make some difference. If indeed the grievance was about the association, why no action against the others including Kamlesh Jain. And why act now, if the association was formed in 2017. The Defendant may well have answers. It may be that the Defendant came to know of it now. But it may also be that they always knew it since inception and are latching on to it now in bad faith. The Defendant will have to state its case on oath. And then all this will be debated and a prima facie view will be taken at the hearing of the Notice of Motion. As of now, all that must be noted is that the Plaintiffs have a fair case to argue at the haring the Notice of Motion. The nature of wrong alleged on the part of the Plaintiffs as well as the timing of the Defendant's action and the implications that such action may have vis-a-vis proposed elections, are all matters, which call for a fuller and more detailed prima facie consideration.
7. Once it is clear that there is a fair case to be considered at the hearing of the notice of motion, the Court's attention must immediately be engaged by considerations of balance of convenience. In the present case, the action really is a punitive measure ordered against a few members of the club for having done something more than a year back. The action, by itself, does not have any implications for prevention of any unlawful activities or any serious breach of discipline, where the club needs to act expeditiously and with a view to avert further damage. Considering the fact that suspension anyway is a matter of punishment, nothing will be lost if the motion is heard after giving both parties an adequate opportunity to set up their rival cases and, in the meantime, the club is restrained from giving effect to the Pg 4 of 11 ::: Uploaded on - 16/02/2019 ::: Downloaded on - 17/02/2019 00:16:01 ::: sg nmsl428-19.doc suspension order. If the club is right in taking the action, the suspension may well follow the hearing of the motion; the sentence on the Plaintiffs' conduct may still be executed. If on the other hand, the suspension is allowed to go through at this ad-interim stage and before the parties are heard in the notice of motion, it will amount to an irremediable execution of the sentence even before the parties are properly heard. In these circumstances, this Court is of the view that balance of convenience clearly weighs in favour of the ad-interim relief sought by the Plaintiffs.
8. Accordingly, the following order is passed:
(i) The Defendant may file its reply to the notice of motion within one week from today. Reply, if any, within one week thereafter.
(ii) The notice of motion to come up for hearing on 12 March 2019.
(iii) In the meantime, pending the hearing and final disposal of the notice of motion, the Defendant Club is restrained from giving effect to the suspension orders dated 8 February 2019 (Exhibits "P-1" to "P-6"
to the plaint) issued by the Regional Committee of the Defendant or implementing the same or taking any steps in furtherance thereof.
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