Andhra Pradesh High Court - Amravati
Vignana Bharathi Educational Society, vs The State Of Andhra Pradesh, on 24 December, 2021
*HONOURBLE SRI JUSTICE D.V.S.S. SOMAYAJULU
+ WP.Nos.24656 of 2020
And
19591 and 19661 of 2021
% 24.12.2021
WP.No.24656 of 2020
# Kasturidevi Vidyalayam Committee,
Rep., by Secretary & Correspondent,
Dargamitta, Nellore
... Petitioner
Vs.
$ The State of Andhra Pradesh,
rep., by its Principal Secretary,
Velagapudi,
Amaravathi and 3 others.
... Respondents
! Counsel for the petitioner : Sri Raja Reddy Koneti
! Counsel for the Respondents : Government Pleader for Stamps
and Registration
< Gist:
> Head Note:
? Cases referred:
1 (2004) 11 SCC 247
2 2019 (1) ALD 196
2
HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU
W.P.Nos.24656 of 2020
And
19591 & 19661 of 2021
ORDER:
W.P.No.24656 of 2020 is filed by the petitioner questioning the action of the 4th respondent in refusing to receive the annual lists containing the names and addresses of the members of the Managing Committee and Officers entrusted with the affairs of the Society.
In WP.No.19591 of 2021 also the action of the 3rd respondent in not receiving the annual lists (sent through me- seva) of the names and addresses of the members of the Managing Committee and the Officers and also the action of rejecting them is questioned.
In WP.No.19661 of 2021 the action of the 3rd respondent in issuing a notice proposing to enquire into the mismanagement of funds etc., by the petitioner Society is questioned.
Counter filed in WP.No.24656 of 2020 is treated as a common counter in all the three matters. With the consent of both the learned counsels, all the three writ petitions are taken up for final hearing.
3
This Court has heard Sri Raja Reddy Koneti, learned counsel for the petitioners in all the three matters and the Government Pleader for Stamps and Registration.
The common thread that runs through all these three matters is about the power vested in the District Registrar of Assurances in the matters of Societies Registration Act.
The learned counsel for the petitioners Sri Raja Reddy Koneti argues that the District Registrar under the provisions of the Societies Registration Act does not have the power or the authority to enter into the disputed areas of fact and can at best receive the lists that are filed. Learned counsel submits that the Registrar does not have the power either to accept or to reject the list or to conduct any enquiry as contemplated into the alleged acts of mismanagement, forgery etc. This is the crux of the issue in these matters.
Sri Raja Reddy Koneti learned counsel took great pains to take this Court through the provisions of the A.P. Societies Registration Act, 2001 (Act, 35 of 2001) (for short „the Act‟). The contention of the learned counsel for the petitioners is that this is an Act which has been enacted by repealing the Societies Registration Act, 1860 (Act 21 of 1860), insofar as it applies to the State of Andhra Pradesh and it is meant to consolidate the law relating to the Registration of Societies situated in Andhra Pradesh promoting of art, fine arts, charity, crafts, religion, sports, literature, culture, science, 4 philosophy, political education or any public purpose for matters related thereto. It is his contention that this is a special Act, which provides for the consolidation/amendment of the law relating to the Registration of Societies only as can be seen from its statement of objects and reasons. He also argues that very limited powers are given to the Registrar and in certain limited circumstances to take decisions. He submits that the whole idea behind the Act is to allow societies freedom of choice and that the Act merely mandates filing of certain documents with the Registrar which can in turn be inspected by third parties. Great autonomy and freedom is given to the societies including freedom from governmental control. It is his contention that this Act does not contain any provision for framing of Rules also other than section 29 of the Act. The Governments‟ power to issue any Rules or circulars is also therefore questioned. Learned counsel submits that judgment of the Hon‟ble Supreme Court in AP Aboobaker Musaliar v. District Registrar (G), Kozhikode and others1 case is a judgment in its own facts and it does not consider the provisions of Act 35 of 2021.
Primarily, he draws the attention of this Court to various definitions in the Act. He thereafter argues and relies upon Chapter-II of the Act and sections 3 to 9 of the Act. He points out that under section 3 of the Act, seven or more 1 (2004) 11 SCC 247 5 persons can form into a society. Under section 4 of the Act, he submits that the Registrar can entertain an application for registration of the society by receiving a memorandum of association and the bye-laws. Relying upon section 5 of the Act, he argues that the bye-laws of the society, must contain the details are mentioned in clauses 5 (i) to (v) of the Act.
Under section 6 of the Act, he points out that a society cannot be registered with certain undesirable names which are prohibited by the Emblems and Names (Act 1950). Under section 6 2(a) and (b), certain names are prohibited according to the learned counsel. Relying upon section 7, learned counsel argues that if a society has complied with the conditions in sections 3 to 6 of the Act and pays the fee stipulated under section 29 of the Act, the Registrar shall register the society and issue a certificate of registration. He also points out that under Section 7(3) of the Act, a discretion to refuse to register a society is given to the Registrar. This is evident from the fact that if the Registrar refuses to register a society, an appeal lies to the Registrar General. Learned counsel also points out that under section 8 of the Act, a provision is made for amending the memorandum of the association by a resolution. Relying upon section 8 (3) of the Act, learned counsel argues that an alteration of the memorandum which has to be registered under the Act is only valid after such an alteration is also registered. Learned counsel points out that under section 8(4) and (5) of the Act, 6 limited discretionary powers are conferred on the Registrar to reject the alteration, if it is contrary to the provisions of the Act.
Learned counsel argues that other than these two sections mentioned above namely, section 7 (3), (4) and (5) and 8 of the Act, no discretion is vested in the Registrar. Coming to Section 9 of the Act, learned counsel argues that the society is bound to file annual list with the Registrar of Societies which shall contain the names and addresses of the members of the Managing Committee and the Officers. Relying on a plain language interpretation, the learned counsel argues that there is no discretion given to the Registrar to refuse to receive the list or to enquire into the correctness of the same. He submits that from a plain language interpretation, a list that is filed with the requisite details has to be received by the Registrar. He argues that contrary to the provisions of section of 9 the Act, the Registrar is refusing to receive lists that are filed and has even rejected the same as in WP.No19591 of 2021. Learned counsel argues that this is impermissible under law.
Entering into Chapter-III, learned counsel argues that it deals with the management and administration of the society. He points out that under Section 14 (3) of the Act, a duty is cast upon the society to maintain a register showing the names, addresses and occupations of the persons who are the 7 members of the committee. A copy of this register shall be filed with the Registrar within 14 days of the election of the first committee or within 14 days from the date of such change. In addition, he submits that the bye-laws are to be delivered to each member of the society. As per Sections 16 and 20 of the Act, the minutes of all the general body meetings and the proceedings shall be recorded in a book which shall be signed by the Chairman of the meeting. These minutes have to be communicated to the members.
The register of mortgages and charges should also be kept in the registered Office of the society which are open for inspection (section 22). Section 23 of the Act, which falls in chapter-IV deals with the disputes and the disputing resolution mechanism. Chapter-IV deals with disputes, dissolution and winding up of the society. Chapter-V of the Act, as per the learned counsel, deals with miscellaneous matters. Learned counsel draws the attention of this Court to section 29 of the Act, which empowers the Government to fix fees for registration under societies for filing or recording or registering any document; for inspection of documents in the custody of the Registrar, for granting copies and for other matters necessary. Learned counsel submits that the power under section 29 of the Act is only to fix the fees payable for the various activities mentioned therein. 8
Learned counsel argues that the Registrar has very limited powers under the two sections (7 and 8) mentioned above and that he is duty bound to receive any document that is filed relating to the names, addresses of the Office bearers. He has a discretion to refuse to register a society, if it has undesirable names. He has a discretion to refuse to accept amendment to the memorandum, if it is contrary to the provisions of the Act. According to the learned counsel, he has no other powers. Contrary to the same, he points out that Registrars are entering into detailed investigations like in the present cases by asking questions about the signatures of the members, the validity of the general body meetings and attempting to conduct enquiries into alleged actions of the finance mismanagement etc. He points out that even if the annual lists are not filed or the list of office bearers is not filed in time, the Registrar does not have any power to refuse to receive the same. It is his argument that no penal provision or punishment is also provided for the delayed filing of the annual list of office bearers. In the absence of any penal provision being stipulated for delayed filing, the Registrar is bound to accept the returns filed as per the learned counsel. He also argues that the Act does not empower the Government to frame any Rules. Under section 29 of the Act, power is given to fix the fee. Beyond this, it is stipulated that there is no power vested in the State to frame any Rules, issue circulars or even to interfere with the affairs of the 9 Registrar. Therefore, learned counsel prays that all the writ petitions may be allowed.
In reply to this, learned Government Pleader argues that there are many cases where the societies are not filing their annual returns. It is his contention that within 15 days from the date of general body meeting, the society is bound to file the list of members. Many of the societies are not filing such returns for decades and years to come. There are instances where serious allegations are being made about office bearers. Questions about their competence to hold office; questions about election as office bearers and even serious questions of financial irregularities, mismanagement etc., are coming to the notice of the Government. Therefore, learned Government Pleader submits that circulars have been issued like circular dated 01.10.2010 which is filed with the counter in WP.No.24656 of 2020 to meet such contingencies. Learned Government Pleader argues that the Inspector General of Registration and Stamps who has the supervisory power has issued the instructions to verify whether the office bearers whose names are furnished have been validly nominated/elected. Therefore, he submits that the District Registrar has the power to see if a notice is properly issued, here was a proper quorum and then a proper resolution has been passed. In cases of death or resignation of a member of the committee etc., the learned Government Pleader submits that a basic requirement is to check whether the member has 10 actually died or not and in case of resignation, the Registrar has to take note if the resignation is valid; if signature is not forged etc. He submits that there are basic requirements which have to be complied before the lists are received.
Coming to the society in WP.No.25656 of 2020, the learned Government Pleader submits that after a long lapse of time, the society is filed its minutes for the year 2001. The earlier minutes were filed in 1985-1986. From 2007-2018 also there is a gap. Learned Government Pleader points out that after the said lists were filed in 2019, the District Registrar, Nellore addressed a letter to the Commissioner and Inspector General of Societies to clarify whether the lists can be taken on record. Thereafter, they have also pointed out the various defects that are noticed in the annual lists that are filed. The signatures of some members were also found to be defective. Therefore, learned Government Pleader argues that the Registrar looked into the matter, considered the documents raised relevant, cogent issues and thereafter only came to a conclusion. It is his contention that in such cases, the action of the Registrar which shows a clear application of mind cannot be questioned. Therefore, learned Government Pleader submits that there are no merits in the writ petitions and the same should therefore be dismissed.
COURT: The facts are not in dispute in these cases. Since the lead argument is advanced in WP.No.25656 of 11 2020, the same is taken up for hearing and for decision first. Section 2 (c), 2(h), 2(k) and 2(n) of the Act are as follows:
(c) 'Committee' means the executive committee appointed under Section 14 or any person or body of persons to whom the management of the affairs of a society is entrusted by its bye-laws;
(h) 'Member' means a person, individual or body corporate, who/ which, having been admitted to membership in any society has not resigned or ceased to be a member, or been removed from membership, in accordance with the bye-
laws of that society;
(k) 'Officer' includes any director, manager, treasurer, trustee, secretary, member of the Committee, or any person appointed by a society to sue and be sued on its behalf and any other person empowered under the rules or the bye-
laws to give directions in regard to the business of a society;
(n) 'Society' means a society registered or deemed to be registered under this Act;
Chapter-II contains sections 3 to 9. It deals with the registration of the societies. Section 4 deals with the documents required to be filed for the registration of the society. These are (a) memorandum of association containing the name, aims and objects, names addresses and occupations of the members of committee and (b) the bye- laws.
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Section 5 of the Act deals with the contents of the bye- laws which should include the names and addresses of the particulars of the society, the activities, membership of the society, method and manner of holding the general body meeting, appointment, election, removal of office bearers, finances, appointment of auditors and other matters relating to the settlement of disputes. Section 6 of the Act prohibits the use of certain names as the name of the society.
After this, comes section 7.
7(1) and 7(3) are as follows:
7. Registration of Societies:- (1) Where a society has complied with the provisions of the Act as to registration and on payment of such fees as may be notified under Section 29, the Registrar shall issue to that society a certificate of registration and such certificate shall be conclusive evidence that the society therein mentioned is duly registered.
(3) If the Registrar refuses to register a society, an appeal shall lie to the Registrar General within sixty days from the date of communication of the order of the Registrar refusing to register the society. Every such appeal shall be accompanied by a fee as may be notified by the Government from time to time.
This shows that a discretion is vested with the registrar to refuse to register a society and it also provides for an appeal for redressal.
13
Section 8 of the Act states that by a special resolution, the memorandum of the society can be altered. Section 8(3) and 8(4) are reproduced hereunder:
8(3) Any alteration of the memorandum of the society shall not be valid unless such alteration is registered under this Act.
(4) If any alteration of the memorandum is filed with the Registrar and if they are not contrary to the provisions of this Act, he shall register the same and shall certify the registration of such alteration under his hand and seal within thirty days from the date of receipt of the resolution. The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the certification thereof have been complied with and henceforth the memorandum as so altered shall be the memorandum of the society. (emphasis supplied) It is clear therefore that alteration is only valid after it is registered and any alteration can be rejected if it is not contrary to the provisions of the Act.
Section 8(4) of the Act states that certificates so issued under this section are conclusive proof that the requirements of the Act have been complied with for the alteration.
Section 8(5) of the Act is as under:
8 (5): Every alteration in the bye-laws of the society should be sent to the Registrar and he shall take it on record if it is not contrary to the provisions of this Act.14
As per the above sub-section, the Registrar can refuse to take the alteration in the bye-laws on the record if it is contrary to the provisions of the Act only.
This Court has to therefore agree with the submissions of the learned counsel for the petitioners that the Act provides for the minimal role/minimal supervision and or interference by the Registrar. Discretion is conferred at the stage of registration and at the time alteration of the memorandum etc., by the above mentioned two sections only and under those limited circumstances only.
Section 9 which is the bone of contention is reproduced hereunder:
9.Filing of annual list:- Every year the society shall, within fifteen days from the date on which the General Body meeting was held, furnish a list to the Registrar of Societies which shall contain the names and addresses of the members of the Managing Committee and Officers entrusted with the management of the affairs of the Society.
A plain language interpretation of this section (which is the primary method of statutory interpretation) shows that a duty is cast upon the society to file a list of the names and addresses of the Managing Committee and Officers entrusted with the Management within 15 days of the general body meeting. The duty is only cast upon the Society. There is no "default" clause giving upon the power to the Registrar to 15 refuse to receive or to reject the list if it is filed after the 15th day. There is no provision for initiating action against the Committee members either for delay or for the failure to file the list. What are required to be filed are the list with the clear details of the members of the Managing Committee and the Officers.
Chapter-III deals with management and administration. One of the grounds raised by the learned Government Pleader is that some of the societies are not filing their returns for years together. In some societies, there are also serious allegations about mismanagement, wrongful inclusion of members, variations in signatures etc., which led the State to take action by issuing circulars etc. Chapter-III dealing with management and administration of the society contains 12 sections from sections 10 to 22. None of these sections support the version advanced by the learned Government Pleader of the need to look into these issues. It is only necessary for the society to keep a register of members showing the details mentioned in section 11 of the Act. Under section 12 of the Act, the society is bound to keep at its Office the accounts, records and documents mentioned therein. This register of members should be kept open for inspection. Section 14 of the Act deals with the committee of society. The names of members of the committee should be entered in a register which should be filed with the Registrar (Section 14(3)). This register should contain the names and 16 addresses and occupations of the members. Sections 16 and 17 of the Act talk of delivery of the bye-laws and accounts of the members of the society. The minutes book which are required to be maintained under section 20 of the Act should also be communicated to the members. The register of mortgages and charges is also required to be kept at the Office of the society. Thus, it can be seen from a reading of all the sections in Chapter-III, namely from sections 20 to 22 of the Act that there is no power given to the Registrar to enquire into the manner and method in which the meetings were conducted, the manner/method in which members were elected etc., or to demand information of the activities of the society. Even after section 14 (3) of the Act which deals with the necessity of filing the register of members, no penal provision or disqualification clause is provided. It merely states that the society shall file with the Registrar the copy of the register.
Apart from that section 23 of the Act deals with the dispute resolution. It is reproduced hereunder:
23.Dispute regarding management:- In the event of any dispute arising among the Committee or the members of the society, in respect of any matter relating to the affairs of the society, any member of the society may proceed with the dispute under the provisions of the Arbitration and Conciliation Act, 1996, (Central Act 26 of 1996) or may file an application in the District Court 17 concerned and the said Court shall after necessary inquiry pass such order as it may deem fit.
A reading of this section makes it clear that any dispute arising among the committee or the members of the society in respect of any matter relating to the affairs of the society can be resolved either by arbitration under the 1996 Arbitration Act or by an appropriate application in the District Court concerned.
The clause "in respect of any matter relating to the affairs of the society" is a clause of very vide amplitude which will cover within its scope every conceivable dispute. Therefore, this Court has to hold that it is for the affected members of the committee or the members of the society to raise a dispute in case of delayed filing of minutes, in cases of apprehension of mismanagement of funds, in cases of forged signatures etc. All of these are issues which can be raised by the affected party if he can sustain the cause of action before the arbitrator or the Court concerned. A third party always has access to the Courts under the general law of the land including the criminal law. The Registrar either by himself or through the circulars issued does not have the jurisdiction to enter into these disputed areas. He cannot issue a notice to the members of the society to appear before him for conducting an enquiry or to decide a question. The only clause/section dealing with the resolution of any dispute is 18 found under section 23 of the Act. The other provisions which provide a modicum of discretion are in section 7(3) and 8(4) (5). Section 7(3) of the Act provides for an "appeal" to the Registrar General against the Registrars‟ "refusal" to register a society. If the alteration of the bye-laws is refused by the Registrar under sections 8 (4) or 8(5) of the Act, it is for the society or the member concerned to pursue his/their remedies as per the general law of the land.
This Court also has to agree with the submission made by the learned counsel for the petitioners that the Act 35 of 2001 has been enacted in view of the difficulties found in the working of the Central Act, 21 of 1860. In order to have a comprehensive law, the 2001 Act was brought into existence. The 1860 Act was initially amended in 1984. Thereafter, the current Act was brought into existence. Even then, when the Act was brought into existence, the legislature in its wisdom did not enact any provision for framing of the Rules. The only power given to the Government to frame Rules is under Section 29 of the Act which is under Chapter-V. Section 29(1) of the Act clearly states that the Government shall from time to time prepare a schedule of fees payable for the activities described in section 29(a) to (d) of the Act. Section 29 (e) of the Act also gives the power to the Government in the opinion of this Court, to fix fees for other matters necessary to give effect for the purpose of the Act. Section 29(2) of the Act also makes the purpose of the section clear and it deals only 19 with the table of fees to be notified/published in the Gazette. No other section of this Act deals with the rule making power. The definition of "Rule" as per the general clauses Act (section 3 (51) is as follows:
3 (51) "rule" shall mean a rule made in exercise of a power conferred by any enactment, and shall include a Regulation made as a rule under any enactment;
It is thus clear that a rule can only be made in exercise of a power conferred by an enactment. In the absence of a power; no rule can be framed.
Section 31 of the Act gives the power to the Government for a period of five years from 2001 to give orders to make provisions which are necessary for removing of defects. Even this is a transitory provision for a period of five years only and it is for removal of difficulties in giving effect to the Act only. No rules/directions were issued in the five year window provided.
Thus, a reading of the entire Act makes it clear that it is meant to essentially allow societies to have a free hand in their administration and affairs with minimal interference by the Government. The areas in which the Registrar can interfere/has a discretion to interfere or decide are clearly mentioned in the Act only. There is no other provision in the entire Act in the State to issue circulars or executive instructions. In its own wisdom the legislature decided to 20 frame the Act in its current form to give the societies their own liberty/freedom to operate. The issues that are felt necessary or felt needed for Government regulation/control are spelt out in the Act. If the Act intended for the Registrar or the State to interfere only in very limited aspects, circulars or instructions which are now issued by the State cannot be supported since they are inconsistent with the Act. Through these circulars/instructions greater power cannot also be conferred on the Registrar than what is envisaged under the Act itself.
Even as per the settled law, if the Rules are already framed and they are silent on any aspect, the Government can supplement the Rules or issue instructions which are not inconsistent with the statutory provisions. But in the case on hand, this Court finds that there is no provision under the Act as it exists for framing of Rules. The power to supplement and not supplant a Rule, if it is not inconsistent with the Act is accepted by the Courts. In the case on hand, the circulars are conferring powers which are not given by the parent Act itself. Therefore, the instructions that are issued either in the form of circulars or guidelines cannot be said to be binding on the societies or its members. The law is also settled and circulars that are so issued are not binding on the Court and cannot be treated as "law".
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The statement of objects and reasons of the 2001 Act clearly states that it is enacted as a single and comprehensive Act and is being enacted as the earlier Acts were not exhaustive in certain material aspects. This is a useful guide to understand the Act. Despite the noticed shortcomings etc., the legislature did not expand the powers of the Registrar or give him an adjudicatory role. For this reason also, this Court holds that by issuing circulars/instructors etc., the powers/role of the Registrar cannot be increased/expanded. These instructions/circulars are clearly contrary to the statutory provisions.
As far as Aboobaker Musaliar's case (1 supra) is concerned, this Court is of the opinion that it is a decision on its own peculiar facts. The scheme of the 2001 Act which is discussed above is also a distinguishing feature. Aboobaker Musaliar‟s (1 supra) case was considering provisions of the 1860 Act which has been both consolidated and amended by the 2001 Act.
Therefore, for all these reasons and as per the existing law (2001 Act), this Court holds that the Registrar is bound to receive and file the annual list of members that are filed by the society. He has to keep them on his record. He cannot either accept or reject the same. Such a power of adjudication is not conferred on the Registrar. As per the Division Bench judgment reported in Mokkapati Chandra 22 Sekhara Rao v. Pragathi Educational Society, Guntur District and others2 by the combined high Court of State of A.P., the Registrar can only receive and keep the lists on his file. Any member or person dissatisfied with the same has to seek legal recourse only. But the Registrar cannot for any reason enter into enquiries or decide on the validity etc., of the list. He cannot look into issues like quorum of the meeting etc. Even on issues like forgery of signatures etc., or mismatch of signatures etc., the Courts themselves are very circumspect in taking a decision on these issues and often look for expert evidence on such matters. The Registrar in the opinion of this Court cannot also enter into these areas of enquiry as he does not have either the legal competence or the expertise to decide on matters of differences in signatures etc. W.P.No.24656 of 2020 is therefore allowed. A Mandamus is issued declaring the action of the 4th respondent is incorrect. He is directed to receive, file and upload the annual lists of the managing committee filed by the petitioner.
WP.No.19591 of 2021 is also allowed. The action of the 3rd respondent in rejecting the lists that are filed by his proceedings dated 06.08.2021 and 11.06.2021 are set aside. He does not have the power to reject the applications. He is 2 2019 (1) ALD 196 23 therefore directed to receive the applications and keep them on their file.
In WP.No.19661 of 2021 the notice dated 26.08.2021 is set aside and it is held that the District Registrar-respondent No.4 does not have the power or competence to enter into to hold enquiry into these disputed areas. The writ petition is therefore allowed. No order as to costs.
As a sequel, the miscellaneous applications, if any pending, shall stand closed.
________________________ D.V.S.S.SOMAYAJULU,J Date : 24.12.2021 Note: L.R. copy be marked.
KLP