Bombay High Court
Jaisingh Choraria vs The National Sports Club Of India on 31 July, 2013
Author: S.J. Kathawalla
Bench: S. J. Kathawalla
KPP 1 NMSL 3456/2012
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION (L) NO. 3456 OF 2012
IN
SUIT NO. 2685 OF 2012
Jaisingh Choraria ... Applicant
In the matter between:
Jaisingh Choraria ... Plaintiff
v/s.
The National Sports Club of India .... Defendant
Mr. Haresh Jagtiani, Senior Advocate, instructed by Mr. Siddhesh Bhole, for the
Applicant/Plaintiff.
Mr. Narvoz Seervai, Senior Advocate, along with Mr. Akash Rebello, Mr. D.K. Kakalia,
Ms. Bhavna Singh and Mr. Paresh Patkar, instructed by M/s. Mulla & Mulla & Cragie
Blunt & Caroe, for the Defendant.
CORAM : S. J. KATHAWALLA, J.
Order
reserved on
: 26
February, 2013
th
Order pronounced on: 31 July, 2013
st
ORDER:
1. The Plaintiff, Shri Jaisingh Choraria, has filed the above Suit against the Defendant - The National Sports Club of India, challenging his expulsion as a Member of the Defendant Club, on the grounds that such expulsion is illegal, malafide, in bad faith and without allowing the Plaintiff adequate representation to defend himself.
2. The facts in the case are as follows:
3. The Plaintiff joined the Defendant Club as its Member in March, 1989. In the year 2007, the Plaintiff held the post of Joint Treasurer, Mumbai Region, in the ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 2 NMSL 3456/2012 Defendant Club. On 7th August, 2007, the Plaintiff filed a Complaint in his individual capacity against Shri B.C. Chawla (the then President of the Defendant Club), Shri Ahuja, Shri Chug, Shri Arora and Shri Makhija (hereinafter referred to as 'Shri B.C. Chawla and others'). The grounds of this Complaint were allegedly improper conduct and irregularity by Shri B.C. Chawla and others in backdating membership, thereby allegedly causing wrongful loss to the Defendant Club. On the basis of the above-mentioned Complaint, a FIR was registered against the persons, culminating in a criminal case under Sections 409, 418, 465, 467, 468 and 471 r/w 120(b) of the Indian Penal Code. The Plaintiff contends that neither the Defendant Club nor its governing bodies (Executive Committee and Central Council) initiated any action against the wrongdoers; rather, the Club reimbursed the legal expenses incurred by Shri B.C. Chawla and others in defending themselves against the said Complaint filed by the Plaintiff.
4. In October 2007, seven new members were elected to the Central Council of the Defendant Club, being part of a group called 'Action Group', which openly challenged the actions and conduct of Shri B.C. Chawla and other office bearers of the Defendant Club. Four out of the seven new members became office bearers of the Defendant Club along with Shri B.C. Chawla, having a tenure of 18 months. One of the said four Members was Shri Atul Maru, who is the signatory to the Show Cause Notice (SCN) issued to the Plaintiff, as also the letter of expulsion issued to the Plaintiff. Despite their election, the Defendant Club or the said Office-bearers from the Action Group did not initiate any action against Shri B.C. Chawla and others ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 3 NMSL 3456/2012 qua the allegations made against Shri B.C. Chawla and others by the Plaintiff, and continued to reimburse the expenses incurred by them in defending themselves against the criminal case, though, according to the Plaintiff, the new Members had openly challenged Shri B.C. Chawla with respect to the alleged frauds committed by him and Dr. Shyam T. Nichani (the present President of the Defendant Club, hereinafter referred to as "Dr. Nichani") and had also instituted a suit in this Court against Shri B.C. Chawla and others in relation to the construction of a Stadium by the Defendant Club.
5. The Regional Committee of the Defendant was reconstituted on 7 th June, 2008.
In view of this reconstitution, the Plaintiff was no longer the Jt. Treasurer of the Club and was not appointed on the reconstituted Regional Committee.
6. The Hon'ble Delhi High Court by its order dated 8 th December, 2008, stayed elections of the Defendant. On 17 th April, 2009, the Plaintiff along with Shri B.C. Chawla, Shri Ahuja and 19 other Members requisitioned a meeting of the Executive Committee to reconstitute the Regional Committee for Mumbai. On 3 rd October, 2009, the Plaintiff became the Regional Secretary, Mumbai Region of the Defendant.
Out of 12 members present, 8 voted in favour of the Plaintiff. On the same day, Dr. Nichani was suspended for six months for ridiculing the Members of the Executive Committee. The Plaintiff seconded the resolution for suspension of Dr. Nichani.
Thereafter Dr. Nichani was suspended every year upto 2012, when he became the Chairman of the Regional Committee of the Defendant. On 15 th December, 2010 and ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 4 NMSL 3456/2012 22nd June, 2011, when Dr. Nichani was suspended, the Plaintiff was the Secretary of the Defendant and thereafter on 11 th April, 2012, when Dr. Nichani was suspended, the ground for suspension against him was creating and concocting a false molestation charge against the Plaintiff.
7. The Plaintiff withdrew the criminal Complaint against Shri B.C. Chawla and others on 30th August, 2010. Since the offences stated in the FIR were not compoundable, for the purpose of such withdrawal, the Plaintiff was declared a hostile witness in the criminal proceedings. However, the reason now given by the Plaintiff is that he was not getting support from any of the other discontented members of the Defendant Club and he was expending his own money in prosecuting Shri B.C. Chawla and others. Shri B.C. Chawla and others were therefore acquitted by the Learned Magistrate vide order dated 4 th September, 2010.
8. Two years after the Plaintiff withdrew the said criminal Complaint against Shri B.C. Chawla and others i.e. after 30 th August, 2010, Dr. Nichani who was elected Chairman of the Regional Committee of the Defendant Club on 11 th April, 2012, filed a complaint against the Plaintiff, vide letter dated 10 th September, 2012, requesting the Executive Committee of the Defendant to initiate appropriate action against the Plaintiff. On the basis of the above mentioned letter, the Executive Committee issued a Show Cause Notice ('SCN') to the Plaintiff dated 24 th October, 2012.
9. The SCN alleged that the Plaintiff deliberately turned hostile during the ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 5 NMSL 3456/2012 criminal proceedings initiated against Shri B.C. Chawla and others, thereby "causing instability to the Club and its members". The SCN further alleged that the withdrawal of the criminal Complaint by the Plaintiff as well as turning hostile, confirmed that the Plaintiff's appointment as Regional Secretary was made on a quid pro quo arrangement between the Plaintiff and Shri B.C. Chawla and others. The SCN also alleged that the withdrawal of the criminal Complaint by the Plaintiff "not only resulted in misleading the Executive Committee but it also resulted in avoidable expenditure of Club's money on defense of the said case and it also resulted in miscarriage of justice as the accused persons were let off the hook". The SCN also alleged that "unfortunately, your (Plaintiff's) selfish & vested motives took unprecedented priority & preference over the interests and stability of the Club and its members". The SCN alleged that withdrawal of the criminal Complaint by the Plaintiff resulted in loss of Rs. 7.8 crores to the Defendant and hence affected the Defendant's pecuniary interest.
10. In the Plaintiff's reply to the above SCN, dated 7 th November, 2012, the Plaintiff stated that the above SCN was devoid of any merit, fallacious and deserved to be discharged. The Plaintiff also stated that the Executive Committee (of the Defendant Club) had made up its mind to illegally and wrongly expel the Plaintiff.
The Plaintiff also rejected the contention raised in the SCN that there was a causal connection between the Plaintiff's withdrawal of the criminal Complaint and the appointment of the Plaintiff as Regional Secretary (Mumbai Region), stating that there were enough reasons for the Plaintiff to withdraw the criminal Complaint, as ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 6 NMSL 3456/2012 he was not getting enough support from any other discontented members of the Defendant Club in order to continue prosecuting Shri. B.C. Chawla and others, as the Executive Committee/Regional Committee of the Defendant Club was allowing Club funds to be used by Shri B.C. Chawla and others to defend the criminal Complaint and the Defendant Club had not even filed proceedings to recover the loss caused to it. Further, in the said reply, the Plaintiff also stated that he was apprehensive that Dr. Nichani was behind the issuance of the SCN, to settle personal scores with the Plaintiff.
11. The Executive Committee of the Defendant Club informed the Plaintiff vide a letter dated 10th November, 2012, that a meeting would be held on 19 th November, 2012, wherein the Executive Committee would consider action to be taken against the Plaintiff in pursuance of the SCN issued to the Plaintiff, which meeting the non-
members and uninvited members would not be permitted to attend. On 19 th November, 2012, the Counsel for the Defendant was informed that the scheduled meeting for the same day would be pushed to 5 th December, 2012, and that for the said meeting, the Plaintiff would not be allowed to be accompanied by his lawyer.
12. Despite the Plaintiff's letter, dated 4 th December, 2012, addressed to the Executive Committee of the Defendant, stating reasons as to why the Plaintiff should be allowed to be accompanied by a lawyer, the Defendant Club refused to let the Plaintiff's lawyer be present for the meeting scheduled on 5th December, 2012.
::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 7 NMSL 3456/201213. Consequent to the above mentioned meeting on 5 th December, 2012, the Executive Committee of the Defendant vide its Letter of Expulsion, dated 10 th December, 2012, informed the Plaintiff that his name had been removed from the membership of the Defendant Club and that he was no longer a Member of the Defendant Club.
14. Mr. Jagtiani, the Learned Senior Advocate appearing on behalf of the Plaintiff has submitted that firstly, the SCN does not supply the jurisdictional facts essential for the Executive Committee of the Defendant Club to commence proceedings against the Plaintiff. The impugned SCN, dated 24 th October, 2012, is issued under Rule 19(b) (i) of the Memorandum of Rules and Regulations of the National Sports Club of India, which reads as follows:
"If any member shall refuse or neglect to comply with any provision of the Memorandum or of these Rules or any Bye-Law made thereunder or shall be guilty of conduct such as the Executive Committee considers likely to endanger the harmony or affect the character or stability or interests of the Club, such member shall be liable to expulsion by a resolution of the Executive Committee, provided that not less than two- third of the members present shall have voted in favor of the same and provided also that at least fourteen days before the meeting at which such resolution is passed he shall have had notice thereof and of the intended resolution for his expulsion and that he shall at such meeting and before the passing of such resolution have had an opportunity of giving orally or in writing any explanation or defence he may think fit. It shall be in the power of the Executive Committee to exclude such member from the Club till such resolution has either been passed or rejected. The Executive ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 8 NMSL 3456/2012 Committee shall give or post to him by registered post letter containing a notification of the said resolution. On the passing of such resolution the member shall forthwith cease to be a Member of the Club and shall not have any claim against the Executive Committee or the Club but any fees or subscriptions paid in advance after adjusting the same towards the dues by him shall be refunded. No appeal shall lie from the determination of the Executive Committee."
15. Relying on the decisions in (i) Wiles v. Bothwell Castle Golf Defendant1, (ii) Carona Ltd. v. Parvathy Swaminathan and Sons 2, and (iii) Shrisht Dhawan (Smt.) vs. M/s. Shaw Brothers3, Mr. Jagtiani submitted that an error of jurisdictional fact renders an order ultra vires and bad. The SCN proceeds on the footing that the Plaintiff had entered into a quid-pro-quo agreement with Shri B.C. Chawla and others, for withdrawal of the criminal Complaint filed by the Plaintiff against Shri B.C. Chawla and others, in return for supporting the Plaintiff for getting elected to the Regional Committee of the Defendant Club. The Complaint which was filed by the Plaintiff on 7th August, 2007, was withdrawn on 4 th September, 2010, which affected the harmony, stability and interest of the Defendant under Rule 19 (b) (i) of the said Rules. Mr. Jagtiani submitted that the said episode, as elaborated in the SCN, took place between 2007 and 2010 i.e. filing of the Complaint by the Plaintiff on 7th August, 2007 and its withdrawal on 4 th September, 2010. It is submitted that the Defendant has wrongly assumed jurisdiction, as the whole issue is stale i.e. two years prior to the issuance of the SCN i.e. 24 th October, 2012 and/or the said Dr. 1 (2005) S.L.T. 785 2 (2007) 8 SCC 559 3 (1992) 1 SCC 534 ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 9 NMSL 3456/2012 Nichani's complaint of 10th September, 2012, which is sufficient to establish that the said Rule does not get attracted and in fact for two years, the Defendant has functioned normally.
16. Mr. Jagtiani further submitted that the SCN is, inter alia, issued on an incorrect footing namely that withdrawal of the criminal Complaint by the Plaintiff resulted in loss of Rs. 7.8 crores to the Defendant and hence affected the Defendant's pecuniary interest. According to the Plaintiff, if the interest of the Defendant was linked with the withdrawal of the Complaint, then it had to be assumed that prior to that date, the interest of the Defendant was never affected.
Therefore, prior to the act of the withdrawal, the Defendant did not consider the pecuniary loss caused by the misdeeds of Shri B.C. Chawla and others as affecting the Defendant's interest. Further, the Defendant took no steps whatsoever in bringing to book the delinquents, despite the Defendant possessing all the evidence to prove that they were delinquents. An acquittal in a criminal case can never bar a civil court from entertaining an action for recovering monies defrauded or misappropriated by a person so acquitted. However, despite this being the legal position, the Defendant never undertook any civil action against the delinquents. In fact, it is well known that criminal prosecution cannot be used to recover any monetary loss. Finally, the Defendant reimbursed Shri B.C. Chawla and others for the expenses incurred in defending themselves in the criminal case.
17. Mr. Jagtiani submitted that the allegation of a quid pro quo agreement ::: Downloaded on - 27/08/2013 21:13:01 ::: KPP 10 NMSL 3456/2012 between the Plaintiff and Shri B.C. Chawla and others is untrue. There existed a gap of 10 months between the Plaintiff's appointment to the Regional Committee (on 3 rd October, 2009) with Shri B.C. Chawla and Shri Ahuja's purported support (plus six others) and the application to the Court for permission to withdraw, and the subsequent acquittal (on 4th September, 2010). No action was taken against Shri B.C. Chawla and Shri Ahuja for the alleged quid pro quo agreement nor were they asked for an explanation. Further, the inquiry against Shri Ahuja was farcical especially since it was being undertaken after the expulsion of the Plaintiff.
18. Further, the Defendant itself allowed the claim against Shri B.C. Chawla and others to get time barred, despite having knowledge of their alleged misdeeds since 2004. The Defendant willingly chose not to take any action against Shri B.C. Chawla and others.
19. Mr. Jagtiani submitted that the signature campaign initiated against the Plaintiff on 12th January, 2011, demanding his resignation, was initiated by Dr. Nichani and that the notarization of the said letter was with a view to creating a false impression, misleading any forum examining the document and to enable the Court to form an adverse opinion against the Plaintiff.
20. Mr. Jagtiani further submitted that denial of representation through a lawyer violates the principles of natural justice and fair play. Expulsion of the Plaintiff entailed serious civil consequences and had the Defendant Club allowed the Plaintiff ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 11 NMSL 3456/2012 to be represented through a lawyer, the Plaintiff would have been in a better position to explain the allegations and charges leveled against him, especially when such allegations were serious and complex in nature and involved legal principles.
Further, the rules and regulations of the Defendant Club did not bar the Plaintiff from being represented by a lawyer, who would have explained the criminal jurisprudence to members of the Executive Committee of the Defendant inasmuch that criminal proceedings could not be used as recovery proceedings and withdrawal of the same could not result in pecuniary loss. The Plaintiff also submits that the presence of a lawyer on the Executive Committee would result in a match of unequals, as was the case in the meeting of the Executive Committee on 24 th October, 2012, where Mr. Mahavir Prasad (a lawyer) was present when the Executive Committee decided to issue the SCN.
21. Mr. Jagtiani submitted that from the aforestated facts it is clear that apart from the fact that there existed no ground for the Defendant to invoke jurisdiction under Rule 19 (b) (i) against the Plaintiff, the entire action of the Executive Committee of the Defendant (spearheaded by Dr. Nichani) namely issuing the SCN to the Plaintiff and thereafter expelling him from the Defendant Club smacks of mala fides and is actuated by bad faith. Mr. Jagtiani further submitted that the Applications forwarded by the Plaintiff to the Defendant to accept his two daughters as members of the Defendant are rejected/returned on the ground of his purported expulsion from the Defendant Club. He therefore submitted that if the interim relief as sought for is not granted to the Plaintiff, grave and irreparable harm, loss and ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 12 NMSL 3456/2012 prejudice would be caused to the Plaintiff and his family members, whereas no such harm, loss, damage, injury and prejudice would be caused to the Defendant, if the interim relief as sought is granted. He submitted that the balance of convenience is entirely in favour of the Plaintiff and against the Defendant. He therefore submitted that the above Notice of Motion be allowed with costs.
22. Mr. N.H. Seervai, the Learned Senior Advocate appearing for the Defendant, submits that with regard to the issue of jurisdiction, the jurisdiction of this Court is limited with regard to judicial review of the decision of a domestic tribunal. Citing the decision in Daver vs. Lodge Victoria4, Mr. Seervai submits that (i) A member of a masonic lodge is bound to abide by the rules of the lodge; and if the rules provide for expulsion, he shall be expelled only in the manner provided by the rules; (ii) The lodge is bound to act strictly according to the rules, and whether a particular rule is mandatory or directory falls to be decided in each case, having regard to the well settled rules of construction in that regard; and (iii) The jurisdiction of a civil court is rather limited; it cannot obviously sit as a court of appeal from decisions of such a body; it can set aside the order of such a body, if the said body acts without jurisdiction or does not act in good faith or acts in violation of the principles of natural justice as explained in the decision cited supra. Mr. Seervai also relied on the decisions in Maclean vs. Workers Union5 and in Lennox Arthur & others vs. Leril Gittens6 which judgments are followed by a Division Bench of this Court in Royal 4 1964 (1) SCR 1 5 1929 All ER 468 6 AIR (36) 1999, Privy Council, 313 ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 13 NMSL 3456/2012 Western India Turf Club Limited vs. Vinayak J. Gaikwad and others 7, which are also to a similar effect.
23. Mr. Seervai submitted that the Plaintiff has relied on the Scottish case of Wiles vs. Bothwell Castle Golf Club8 to submit that all previous cases on Clubs should be treated with caution given the changed role and nature of a social Club in India.
This finding was however in relation to the extent to which the Courts would intervene to ensure compliance with procedural rules of domestic tribunals.
According to Mr. Seervai this case is not helpful to the Plaintiff, as there is no allegation that the strict compliance with the rules has not occurred in the instant case, and in any event the said judgment would not be applicable to India (or even in England) as it would be directly contrary to the decision in Victoria Lodge (supra).
24. Mr. Seervai states that even in cases where there are serious consequences such as expulsion, the scope of review by a Court is greatly limited. Keeping this limited jurisdiction in mind, Mr. Seervai submits that the conduct of the Plaintiff disclosed a jurisdictional fact which enabled the Defendant Club to take disciplinary action under Rule 19(b) (i). Mr. Seervai submits that the Court cannot go behind the merits of the actual decision in the guise of ascertaining the jurisdictional facts.
25. Mr. Seervai further submits that the conduct of the Plaintiff falls within the jurisdictional threshold of Rule 19(b)(i) of the Memorandum of Rules and 7 2006 (5) BCR 481 8 S.L.T. 785 ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 14 NMSL 3456/2012 Regulations of the National Sports Club of India. The act of filing the criminal case against Shri B.C. Chawla and others and the subsequent act of scuttling the case by turning hostile after being appointed Regional Secretary by Shri B.C. Chawla and Shri Ahuja, affected the image, interests, stability, character and harmony of the Club, owing to adverse publicity in the press with articles appearing in various newspapers about the same, amongst other things.
26. Mr. Seervai submitted that the Complaint against Shri B.C. Chawla and others was filed by the Plaintiff on 7 th August 2007. In October 2007, the elections were held to the Central Council and new Members were elected. Though Shri B.C. Chawla and his allies continued to remain in control of the Club, a number of new members were elected to the Central Council as an open challenge to Shri B.C. Chawla against the frauds committed by him. These Members had also initiated legal action against Shri B.C. Chawla and others in relation to the construction of a Stadium by the Club prior to the elections.
27. Mr. Seervai submitted that as happens after every new election to the Central Council, the Regional Committee of the Defendant was reconstituted on 7 th June, 2008. In this reconstitution, the Plaintiff was removed by Shri B.C. Chawla and his allies in the Central Council from his position as Joint Treasurer, Mumbai. The Plaintiff was not even appointed on the reconstituted Regional Committee. The Plaintiff suffered this loss because of which he filed the Complaint against Shri B.C. Chawla and others. Mr. Seervai further submitted that on 8 th December, 2008, the ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 15 NMSL 3456/2012 Delhi High Court stayed the elections of the Defendant because of which the composition of the Central Committee remained frozen until fresh elections could be called. Shri B.C. Chawla and his allies would therefore control the Central Council until the stay was lifted. Around six months after the freezing of Shri B.C. Chawla's control of the Central Council due to the Court order, on 17 th April, 2009, the Plaintiff along with Shri B.C. Chawla and Shri Ahuja and 19 other members of the Central Council requisitioned a meeting of the Executive Committee to reconstitute the Regional Committee for Mumbai. Pursuant to the said request, a meeting was held on 3rd October, 2009, in which the Regional Committee was reconstituted and the Plaintiff was appointed as Regional Secretary, Mumbai, inter alia with the votes of Shri B.C. Chawla and Shri R.K. Ahuja. It is submitted that this was for the first time in the history of the Club wherein the Regional Committee was reconstituted without fresh elections.
28. Thus, according to Mr. Seervai, the assumption of a quid pro quo arrangement existing between the Plaintiff and Shri B.C. Chawla and others arose from the fact that the Plaintiff was appointed Regional Secretary of the reconstituted Regional Committee of the Defendant Club, of which Shri B.C. Chawla was in control, despite having filed a criminal Complaint against the said Shri B.C. Chawla and others. Ten months after the appointment of the Plaintiff, the Plaintiff filed a letter and application for compounding the criminal Complaint filed by him, stating that the Complaint had been filed due to misunderstanding between himself and Shri B.C. Chawla and others. The Plaintiff stated that he had settled the matter and ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 16 NMSL 3456/2012 did not recall the exact nature and contents of the Complaint filed by him. Shri B.C. Chawla and others were subsequently acquitted on 4 th September, 2010. This quid pro quo arrangement between the Plaintiff and Shri B.C. Chawla and others entitled the Defendant Club to act under Rule 19(b)(i).
29. Mr. Seervai further submits that the expulsion of the Plaintiff has not resulted in any violation of natural justice and that such decision to expel the Plaintiff has been taken in good faith and not been vitiated by malafides.
30. Mr. Seervai further submits that the conduct of the Plaintiff resulted in financial loss to the Defendant Club as it had to reimburse the legal fees of Shri B.C. Chawla and others for legal expenses incurred in defending the case to the tune of Rs. 2,17,000. This was owing to the fact that Shri B.C. Chawla and others were office bearers/employees of the Defendant Club. The relevant Rule 113 of the Memorandum of Rules and Regulations of the National Sports Club of India reads thus:
"Every member of the Central Council, Executive Committee and every Regional and Sub-Committee, Secretary, Honorary Secretary, Treasurer or Honorary Treasurer, Trustee and other officer or servant of the Club and any person employed by the Club shall be indemnified by the Club against it and it shall be the duty of the Club to pay all costs, losses and expenses which any such officer or servant may incur or become liable to by reason or a contract entered into or act or thing done by him as such officer or servant or in any way in the discharge of his duty..."::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 17 NMSL 3456/2012
Further, Mr. Seervai submits that had the Plaintiff not scuttled the prosecution and had it resulted in a conviction for Shri B.C. Chawla and others, the Defendant under the post-June 2012 management, could have recovered the reimbursements from Shri B.C. Chawla and others.
31. Mr. Seervai further submits that the criminal complaint filed by the Plaintiff was regarding the misappropriation of funds caused by Shri B.C. Chawla and others, backdating membership application forms of various persons, resulting in such persons paying lower admission fees than if their applications were properly dated.
The difference between the fees ought to be paid and actually paid was computed at Rs. 7.8 crores. The Plaintiff's conduct of withdrawing the criminal Complaint caused a loss of Rs. 7.8 crores to the Defendant Club. With the Learned Magistrate, who was hearing the criminal Complaint against Shri B.C. Chawla and others, exonerating Shri B.C. Chawla and others, the Defendant submits that it would be surprising if any other court would entertain filing of civil proceedings after such exoneration.
Also, Shri B.C. Chawla was in control of the Defendant Club from 2007 to 2012, because of which the Defendant Club was unable to take any action against him.
Therefore, the filing of the Complaint by the Plaintiff and a conviction for Shri. B.C. Chawla and others was essential for the Defendant Club to recover the loss of Rs. 7.8 crores, as it would have precipitated Shri B.C. Chawla and Shri Ahuja's resignation or forced their allies in the Defendant Club out of fear from becoming their accomplices/abetting them. Mr. Seervai submits that since more than three years have passed since unearthing of the fraud and filing of criminal Complaint, the ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 18 NMSL 3456/2012 Defendant Club cannot recover the said amount owing to the law of limitation.
32. Mr. Seervai further submits that there has been no violation of the principles of natural justice by expelling the Plaintiff from the Defendant Club, by not allowing the Plaintiff's lawyer to attend the Plaintiff's personal hearing. Citing Crescent Dyes and Chemicals Ltd. v Ram Naresh Tripathi 9 as well as Chairman and Managing Director, Hindustan Teleprinters v Ranjan Isaac 10,where it was held that where the rules are silent, there is no absolute right to be represented by a lawyer before a domestic tribunal, with the exception that if the presenting officer is a lawyer, it may be required that a person be permitted to be represented or assisted by a lawyer, Mr. Seervai submits that in the present matter, it is not the case that there was a lawyer present at the meeting of the Executive Committee on 5th December, 2012. The said Mr. Mahavir Prasad joined the meeting only after the business relating to the meeting was concluded.
33. Mr. Seervai further submits that the decision of the Defendant was in good faith and was not vitiated by mala fides. The Plaintiff's primary case of mala fides is that his expulsion was done at the behest of Dr. Nichani to settle personal scores with the Plaintiff. Citing the decisions in Ratnagiri Gas v RDS Projects and All India State Bank Officers v Union of India & Others 11, where it was held that when mala fides are alleged against a party, that party must be made a party to a suit in its 9 (1993) 2 SCC 115 10 (2005) 2 MLJ 119 11 (1997) 9 SCC 151 ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 19 NMSL 3456/2012 individual capacity, Mr. Seervai submits that in the absence of Dr. Nichani being made a party to the suit, an allegation of mala fides cannot be made against him.
Also, the Plaintiff has not demonstrated as to how mala fides vitiated the findings of the entire Executive Committee, which voted unanimously for his expulsion and therefore, such allegation of mala fides is far-fetched.
34. Mr. Seervai also submitted that the Plaintiff has not demonstrated or made good any allegation as to how mala fides vitiated the findings of the Executive Committee as a whole. Relying on the decision in All India State Bank Officers Federation and others vs. Union of India and others 12 , Mr. Seervai pointed out that the Hon'ble Supreme Court has in the said decision held that when mala fides were being alleged against a body, it had to be proved that the mala fides were attributed to all present. Mr. Seervai submitted that Dr. Nichani was not even present at the meeting of the Executive Committee which discussed the matter on 5 th December, 2012, and unanimously resolved to expel the Plaintiff. Mr. Seervai submitted that there is no allegation that any of the other members had any ulterior motives to expel the Plaintiff. Indeed the only evidence showing that all the members of the Executive Committee could be associated with each other was a campaign poster showing all the members of the Executive Committee running as part of the same group. According to Mr. Seervai, this certainly cannot provide a conclusive basis for showing that mala fides vitiated the entire Executive Committee which voted unanimously for the expulsion of the Plaintiff.
12 (1997) 9 SCC 151 ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 20 NMSL 3456/2012
35. Mr. Seervai submitted that the Petition dated 21 st January, 2011, signed by 201 members indicates that the behaviour of the Plaintiff was of concern to a large number of members of the Club. Even allowing the fact that 8 members of the Executive Committee signed the said Petition, that still leaves more than 190 other ordinary members with no alleged personal grudge against the Plaintiff.
36. Mr. Seervai submitted that the action for reimbursement was taken in accordance with a legal opinion. Relying on the judgment of the Hon'ble Supreme Court in Ratnagiri Gas and Power Pvt. Ltd. vs.RDS Projects Ltd. and others 13, Mr. Seervai submitted that such a course of action cannot be said to indicate mala fides or malice in law, even if the opinion on a considered view can be said to be wrong.
Again, the Plaintiff himself never stated that the actions for reimbursement were incorrect despite being aware that questions relating to the practice had been raised by some other members. Again, the Club at the relevant time was under the control of Shri B.C. Chawla and his faction. Though questions were raised as to the correctness of the reimbursements, a minority of members could not take any action given the control of Shri B.C. Chawla and his faction over the Defendant.
37. Mr. Seervai next submitted that at the very meetings where disciplinary action against the Plaintiff was taken up, it was also decided to take action against other parties to the quid pro quo. Indeed, a Disciplinary Committee has been 13 (2013) 1 SCC 524 ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 21 NMSL 3456/2012 constituted and Shri Ahuja has already been examined as regards the allegation of the quid pro quo as well as the misappropriation of Rs. 7.8 crore. However, two of the accused died shortly after the criminal case was initiated against them. Shri B.C. Chawla died during the course of the hearing of the matter. It is therefore submitted that the Plaintiff cannot be heard to say that he has been singled out or that action was not being instituted against other persons.
38. Mr. Seervai submitted that prior to June, 2012, the Defendant was under the complete control of Shri B.C. Chawla and his faction. The Defendant could therefore take active steps in respect of the loss and quid pro quo only after June, 2012. It was prevented from doing so earlier by Shri B.C. Chawla and his faction being continuously in power during the entire relevant period. The disciplinary action was therefore initiated against the Defendant only after June 2012. Given the situation, however, it was left to the members to advance the interests of the Defendant ( for example in respect of the misappropriations in relation to the Stadium, action was taken by other members). The actions of the Plaintiff in filing the Complaint and then securing an acquittal by turning hostile prevented other members and the Defendant (when it was finally free from Shri B.C. Chawla) from recovering the said monies.
39. Mr. Seervai therefore submitted that the Defendant had jurisdiction to initiate action under Rule 19 (b) (i); had strictly complied with the Rules; did not violate the principles of natural justice in conducting the hearing; and certainly cannot be ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 22 NMSL 3456/2012 shown on evidence to have acted in bad faith. Mr. Seervai therefore submitted that the Notice of Motion be dismissed with costs.
40. Mr. Jagtiani, the Learned Senior Advocate appearing for the Plaintiff in rejoinder, denied and disputed all the submissions and allegations advanced on behalf of the Defendant by Mr. Seervai against the Plaintiff. He submitted that the document dated 12th January, 2011, produced in Court allegedly showing that a large body of members regarded the Plaintiff's act of withdrawing the Complaint as affecting the Defendant's interest, ought to be ignored. The same was not referred to in the SCN. The said signature campaign was again spearheaded by Dr. Nichani.
Shri K.C. Agarwal's signature appears at serial Nos. 3 and 16. The bulk of the signatures appear on continuation sheets annexed to the letter dated 12 th January, 2011 and there is no evidence to show that the so-called signatories had either read or endorsed the contents of the letter dated 12 th January, 2011. Not a single affidavit of the so-called signatories has been tendered to affirm that they have indeed signed such a campaign; and that the original letter and continuation sheets have been notarized purely with a view to create a false impression that the signatures appearing therein are genuine and have been authenticated by the Notary. It is submitted that it is now admitted by the Defendant in the course of the hearing that in fact none of the signatories have signed before the said Notary.
41. Mr. Jagtiani has further submitted on behalf of the Plaintiff that Dr. Nichani is neither a proper nor a necessary party. He submitted that all records pertaining to ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 23 NMSL 3456/2012 Dr. Nichani's suspension and involvement in the Defendant's affairs are part of the Defendant's records. No element of surprise or prejudice is caused to the Defendant in having to deal with Dr. Nichani's role in the matter of the Plaintiff's expulsion. The allegation in the plaint is that the Defendant is acting at the behest and instigation of Dr. Nichani and it is entirely for the Defendant to deal with the allegation. The reply to the SCN was addressed to all Committee members including Dr. Nichani and the Plaint is based on the reply. Dr. Nichani did not write any letter refuting allegations against him to the Executive Committee of the Defendant. Again, the affidavit-in-reply which is filed on behalf of the Defendant does not raise the objection of Dr. Nichani not being a party to the Plaint.
42. Referring to the decisions of the Hon'ble Supreme Court in Ratnagiri Gas and Power Pvt. Ltd. (supra) and All India State Bank Officers Federation (supra), Mr. Jagtiani submitted that the facts of the said judgments are completely distinct from the facts in the present case. The Hon'ble Supreme Court has held in the said judgments that the person against whom the allegations of mala fide are made should be given an opportunity to defend those allegations. In that light, the Hon'ble Supreme Court has laid down the law that the person against whom allegations are made should be impleaded as a party to the proceedings. It is stated that the present case therefore is clearly distinguishable from the ratio laid down by the Hon'ble Supreme Court in the above cited judgments.
43. Dealing with the decision of the Hon'ble Supreme Court in the case of ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 24 NMSL 3456/2012 Crescent Dyes and Chemicals Ltd. vs. Ram Naresh Tripathi 14 relied on by the Defendant, Mr. Jagtiani submitted that the facts of this judgment are different as the judgment is in pertinence to a domestic enquiry under the Labour Law and not in relation to a Sports Club. It is submitted that in the cited case, the issue before the Court was whether the delinquent should be allowed to be represented through a person of his own choice when the standing order specifically prescribed for representation to be made through a workmen, officer, staff member of the union, etc. working with the delinquent in the same department. However, at paragraph 12 of the cited case, the Hon'ble Supreme Court, after considering various English Judgments, has held that if the charge against the delinquent is of a serious and complex nature, the delinquent's request to be represented through a Counsel should be granted. It is submitted that therefore following this decision in the cited case, given the seriousness and complexity of the allegations against the Plaintiff in the present case and interpretation of various clauses of the Rules which have pure legal connotations, the Defendant ought to have allowed the Plaintiff to be represented by an Advocate in order to present his case before the Executive Committee of the Defendant. Mr. Jagtiani submitted that the ratio of the case in Chairman and Managing Director, Hindustan Teleprinters Ltd. Chennai vs. M. Rajan Isac15 also has no relevance to the present case as the allegations against the Plaintiff calling for his expulsion were serious and complex in nature and did not rest only on facts but involved legal principles and understanding of criminal jurisprudence.
Mr. Jagtiani therefore submitted that the action taken against the Plaintiff is clearly 14 (1993) 2 SCC 115 15 (2005) 2 MLJ 119 ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 25 NMSL 3456/2012 in bad faith and that the Notice of Motion therefore deserves to be allowed.
44. I have considered the submissions advanced by the learned Senior Advocates appearing for the parties and have also considered the case law cited by them. Rule 19 (b) (i) of the Memorandum and Rules and Regulations of the Defendant Club ("the said Rules") empowers the Executive Committee of the Defendant to assume jurisdiction, if a member refuses or neglects to comply with the provisions of the said Rules, or is guilty of conduct such as the Executive Committee of the Defendant Club considers likely to endanger the harmony or affect the character or stability or interest of the Defendant.
45. It is submitted on behalf of the Plaintiff that the episode as elaborated in the SCN is one that took place between 2007 and 2010 (i.e. filing of the Complaint by the Plaintiff on 7th August, 2007 against Shri B.C. Chawla and others and its withdrawal by the Plaintiff on 4th September, 2010). The SCN was issued to the Plaintiff on 24th October, 2012, and the Plaintiff was expelled from the Defendant Club on 5th December, 2012. Therefore these facts even if taken at their face value are stale and do not attract Rule 19 (b) (i) of the Rules. It is also submitted on behalf of the Plaintiff, that from the date of filing of the Complaint to the date of the withdrawal of the Complaint and thereafter till the issuance of the SCN, it is not the case of the Defendant that the stability, harmony and interest of the Defendant was compromised, disturbed or affected in any way. It is therefore submitted on behalf of the Plaintiff that the SCN taken in its totality does not supply the ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 26 NMSL 3456/2012 jurisdictional facts essential for the Executive Committee of the Defendant to commence proceedings for expulsion of the Plaintiff and in the absence of jurisdictional facts, the issuance of the SCN and the subsequent expulsion of the Plaintiff is illegal. It is also submitted on behalf of the Plaintiff that at any rate the decision of the Defendant to expel the Plaintiff is actuated by bad faith.
46. It is true that the Complaint filed by the Plaintiff against Shri B.C. Chawla and others on 7th August, 2007, was withdrawn by the Plaintiff on 4 th September, 2010. It is also true that in order to invoke Rule 19 (b) (i), the harmony, stability and interest of the Defendant Club should have been affected by the delinquent.
Apart from the fact that the allegations levelled against the Plaintiff are stale for the purpose of taking action against the Plaintiff after more than two years i.e. in October, 2012, there is nothing on record to show that the stability, harmony and interest of the Defendant Club was disturbed or affected by the said withdrawal of the Complaint. In fact, as stated hereinafter, the harmony in the Defendant Club was disturbed and affected much prior to the Plaintiff withdrawing the Complaint against Shri B.C. Chawla and others because of the continuous rivalry between Shri B.C. Chawla and his group of friends on the one hand and Dr. Nichani ( present President of the Defendant Club) and his friends on the other. However, since the Plaintiff has also submitted that at any rate the decision of the Defendant to expel the Plaintiff is actuated by bad faith, at this prima facie stage assuming that the Executive Committee had jurisdiction to take action against the Plaintiff, I would straightaway proceed to examine whether as alleged by the Plaintiff, the decision of the Defendant ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 27 NMSL 3456/2012 Club to expel the Plaintiff is actuated by bad faith.
47. Before I proceed further, I cannot help but make a mention of the fact that in present times the elections for appointment of office-bearers in Clubs are being contested on the lines of elections contested by political parties. It is seen that for this purpose, the members indulge in groupism not because they pursue a common ideal which is in the best interest of the Club, but because they share a common agenda which is unfortunately not always directed towards the welfare of the Club, its members or addressing the genuine grievances of its members. No stone is left unturned in levelling allegations and resorting to mud-slinging against the opponents. Even after the elections are concluded, the enmity incurred at the time of the elections continues and each group tries to belittle and run down the member of the other group irrespective of whether the same is justified or not. Thus the two warring factions continue to exist in Clubs even after the elections, for one does not want the other to steal a march over them, with the result that the interest of the Club and its members is completely ignored and/or overlooked.
48. Despite the aforestated happenings in Clubs during elections and thereafter, the Court is also conscious of the fact that the Court is required to follow the principles applicable to the review of decisions of the Executive Committee of a Club as laid down in a number of decisions including T.P. Daver vs. Lodge Victoria (supra) viz. that the jurisdiction of a Civil Court is rather limited; it cannot sit as a Court of appeal from decisions of such a body; it can set aside the order of such a body, if it ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 28 NMSL 3456/2012 is shown that the said body has acted without jurisdiction or has not acted in good faith or its acts are in violation of the principles of natural justice.
49. In the present case, the Plaintiff became the member of the Defendant Club in the year 1989. The Plaintiff since the year 2000 was appointed as a Committee Member and has performed various functions as a Committee Member. In the year 2007, the Plaintiff was appointed as the Joint Treasurer of Mumbai Region of the Defendant Club. According to the Plaintiff, Shri B.C. Chawla and others had during the period 2001 to 2004 committed various irregularities in inducting individuals as members of the Club. On 7 th August, 2007, the Plaintiff filed a criminal Complaint against Shri B.C. Chawla and others invoking Sections 120B, 409, 418, 465, 468 and 471 of the Indian Penal Code. The basis of the said Complaint was interalia improper induction of persons as members of the Defendant, thereby causing wrongful loss to the Defendant. Upon investigation, a charge-sheet was filed against Shri B.C. Chawla and others. Shortly after filing of the Complaint, two of the accused, Shri Arora and Shri Makhija expired in the years 2008 and 2009 respectively.
50. The Defendant Club, its governing bodies and the persons opposing Shri B.C. Chawla and others in the Club affairs/management were well aware that the Complaint filed by the Plaintiff against Shri B.C. Chawla and others was a Complaint filed by him in his individual capacity and was neither filed as an office bearer of the Club nor upon instructions from the Club.
::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 29 NMSL 3456/201251. The two main warring groups/factions in the Defendant Club at the relevant time were, the group led by Shri B.C. Chawla and the group led by Dr. Nichani (Action Group). When the Plaintiff filed the Complaint in August 2007 against Shri B.C. Chawla and others, Shri B.C. Chawla and his supporters were in the majority on the Executive Committee of the Defendant Club. However, within a period of two months from the date of the filing of the said Complaint i.e. in October, 2007, 7 new members were elected to the Central Council of the Defendant Club being part of a group called "Action Group" which openly challenged the actions and conduct of Shri B.C. Chawla and the other office-bearers of the Defendant Club. 4 out of the 7 new members became office-bearers of the Defendant Club along with Shri B.C. Chawla having a tenure of 18 months. One of the four members is a signatory to both the SCN and the letter of expulsion issued to the Plaintiff. Despite their election, the said Members did not make any move to initiate any action against Shri B.C. Chawla and others qua the allegations against Shri B.C. Chawla and others by the Plaintiff.
They instead continued to reimburse the legal expenses incurred by Shri B.C. Chawla and others in defending themselves against the criminal case filed by the Plaintiff.
Mr. Seervai has repeatedly submitted on behalf of the Defendant Club that the members of the Action Group or Dr. Nichani, the present President of the Defendant Club were unable to take any action because Shri B.C. Chawla and his group of members were in complete charge and control of the Club. This submission cannot be accepted since the new members elected to the Central Council in October, 2007 had not only openly challenged Shri B.C. Chawla on the alleged frauds committed by ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 30 NMSL 3456/2012 him, but Dr. Nichani had also instituted a suit in this Court against Shri B.C. Chawla and the others alleging misappropriation of funds in relation to the construction of a stadium by the Defendant Club in which the Hon'ble Mr. Justice B.P. Singh (Retired Judge, Supreme Court of India), was appointed as a Special Administrator for completion of the construction of the stadium under his supervision.
52. Dr. Nichani and his supporters including the seven members of the 'Action Group' who were elected on the Central Council and of which four were the office-
bearers of the Defendant Club, were well aware that the Complaint filed by the Plaintiff was dated 7th August, 2007. Therefore the allegations made against Shri B.C. Chawla and others in the Complaint pertained to the period prior to 7 th August, 2007. For monetary claims if any against Shri B.C. Chawla and others, a civil suit was required to be filed before the same would get barred under the Law of Limitation. Though the Complaint was withdrawn three years after its filing, neither Dr. Nichani nor any of his supporters took any steps during this entire period to file proceedings against Shri B.C. Chawla and the others to recover the amount allegedly misappropriated by Shri B.C. Chawla and the others. In the show cause notice dated 24th October, 2012, it is alleged that the Plaintiff has by withdrawing the Complaint caused a loss of Rs. 7.80 crores to the Defendant Club. Apart from the fact that it is a well settled position that criminal prosecution cannot be used to recover any loss, the monetary claim if any against Shri B.C. Chawla and others appears to have been barred by limitation much before the withdrawal of the Complaint by the Plaintiff on 4th September, 2010. Even otherwise an acquittal, especially for lack of evidence ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 31 NMSL 3456/2012 can never bar a Civil Court from entertaining an action for recovering monies defrauded or misappropriated by a person so acquitted.
53. The allegation advanced by the Plaintiff against Shri B.C. Chawla and others was, that since the year 2004, they backdated the membership application forms of various persons and admitted them as members of the Defendant Club out of turn and the fees shown to have been paid by the said members is less than the fees payable if their applications had been dated correctly. The loss to the club was therefore the difference between the fees that these members ought to have paid and that which they actually paid. Though the members of the Action Group got elected in October, 2007 to the Central Council of the Defendant Club and though four of the said seven were office-bearers of the Defendant they did not make any move to initiate action against Shri B.C. Chawla and others or the members who were admitted out of turn by backdating their forms, under Rule 18 of the said Rules which allows the Defendant (Regional Committee members) to recover shortfall in the payment by any member and upon failure by the member to pay the same, to cancel their membership. Instead, the fees of the Advocates representing Shri B.C. Chawla and others for defending them in the said Complaint was agreed to be paid by the Defendant Club which included members of the Action Group as well.
Though one of the members questioned such payment and suggested that the fees of the lawyers should be reimbursed only after the accused are acquitted, he was not supported by any of the member of the said Action Group who are now alleging that Shri B.C. Chawla and others were in fact guilty of misappropriation. Despite Rule ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 32 NMSL 3456/2012 113 of the said Rules, the member of the Action Group could surely have at the relevant time at least expressed their views on misappropriation of Club dues/funds by Shri B.C. Chawla and others and supported the lone member who opposed reimbursement of legal expenses to Shri B.C. Chawla and others. Instead the members of the 'Action Group' at that time meekly submitted to reimburse the legal expenses incurred by Shri B.C. Chawla and others without a murmur, and are today making a grievance that the Plaintiff has by withdrawing the Complaint caused monetary loss of Rs. 7.80 crores misappropriated by Shri B.C. Chawla and others.
Left with no convincing answer/argument it is submitted on behalf of the Defendant that since there was a legal opinion obtained on this issue, the question of opposing reimbursement of legal expenses did not arise. The members of the 'Action Group' were well aware that the purported legal opinion was produced by none other but by the Executive Committee headed by Shri B.C. Chawla. The members of the Action Group were also well aware that Dr. Nichani had, despite Shri B.C. Chawla being in the majority on the Executive Committee of the Defendants, already filed a Suit before this Court against Shri B.C. Chawla alleging misappropriation of funds in connection with the construction of the Stadium by Shri B.C. Chawla. It is therefore unacceptable that even the members of the 'Action Group' who were on the Executive Committee of the Defendant accepted the suggestion of reimbursement of legal expenses by the Defendant Club, since Shri B.C. Chawla had a majority on the Executive Committee or because of the purported favourable legal opinion by the Executive Committee, the majority members of which owed allegiance to Shri B.C. Chawla, despite them being of the view that Shri B.C. Chawla was guilty of ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 33 NMSL 3456/2012 backdating membership and causing loss to the Defendant Club aggregating to Rs.
7.8 crores. Interestingly the purported legal opinion is also not placed before this Court. The Defendant Club also submitted that the Plaintiff too, has not opposed reimbursement of legal charges to Shri B.C. Chawla and others. The Plaintiff was admittedly not present at the meeting in which reimbursement of legal fees was discussed. Again, if the Plaintiff would have tried to join an issue at the time of confirmation of the minutes of the meeting in which the decision to reimburse the legal fees was discussed, he would have been charged as being vindictive.
54. On 7th June, 2008, the Regional Committee of the Defendant was reconstituted. In view of this reconstitution, the Plaintiff was no longer the Joint Treasurer of the Club and not appointed on the reconstituted Regional Committee.
55. The Hon'ble Delhi High Court by its order dated 8 th December, 2008, stayed the elections of the Defendant Club. On 17 th April, 2009, the Plaintiff along with Shri B.C. Chawla and Shri Ahuja and 19 other members requisitioned a meeting of the Executive Committee to reconstitute the Regional Committee for Mumbai, which meeting was held on 3rd October, 2009. At the said meeting, several allegations were made against Dr. Nichani and others by Shri B.C. Chawla and others. One of the members proposed the following resolution:
"Considering the attitude and behaviour of Dr. Nichani and to maintain peace and harmony of the Club, he should be suspended for six months from the membership of the Club."::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 34 NMSL 3456/2012
The said Resolution was seconded by the Plaintiff. Shri Rakesh Malhotra, Shri Ravindra Agarwal, Shri R.K. Mehra and Shri Kamlesh Talreja (Members of 'Action Group' and supporters of Dr. Nichani) opposed the said Resolution. The said Resolution suspending Dr. Nichani for a period of six months was thereafter carried through. At the said meeting, Shri Hari Ahuja, the Hon. Regional Secretary informed the members that :
"the Chairman and the Hony. Regional Secretary are overruling orders of each other which is creating administrative problems for the managers of the Club. He further pointed out that one calls other 'drunkard' and other calls him 'gambler' in front of staff who are laughing to glory. No Regional Committee meetings are being called and sanction taken. It is requested that office-bearers of the Club and Regional Committee of Mumbai Region is reconstituted."
Thereafter, out of the 12 members of the Executive Committee from Mumbai Region who were present, 8 members desired to reconstitute the Regional Committee and 4 members (Members of 'Action Group' and supporters of Dr. Nichani) opposed the same. However, the Regional Committee was reconstituted. In the reconstituted Regional Committee, the Plaintiff was elected as the Hon. Regional Secretary. The minutes of the Executive Committee meeting held on 3 rd October, 2009, are annexed and marked as Exhibit-K to the Plaint which shows the extent to which the two warring groups (the Shri B.C. Chawla Group which was in the majority on the Executive Committee and the supporters of Dr. Nichani who were then in minority) were at loggerheads, disturbing the peace and harmony of the Club.
::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 35 NMSL 3456/201256. On 4th March, 2010, Shri Ravindra Agarwal wrote a letter to the General Secretary of the Defendant Club at New Delhi recording that at the meeting held on 3rd October, 2009 he had taken strong objection to the proposal to appoint the Plaintiff as Hon. Secretary of Mumbai Region who had filed a criminal case against Shri B.C. Chawla and others for misappropriation of funds. However, his protest is not recorded in the minutes of the meeting dated 3rd October, 2009. Interestingly, though it is argued before the Court on behalf of the Defendant i.e. through the Executive Committee headed by Dr. Nichani, that the said reconstitution was unprecedented and absolutely illegal, however, at the relevant time, none of the 4 members from Dr. Nichani's group took any action to challenge the said reconstitution of the Regional Committee on 3rd October, 2009.
57. It is well known that in politics none are friends or foes forever. Dr. Nichani as well his supporters were now i.e. on and from 3 rd October, 2009, well aware that the Plaintiff and the Shri B.C. Chawla group have made amends and buried their hatchet. It was therefore expected that the Plaintiff may not pursue the Complaint filed by him against Shri B.C. Chawla and others with the vigour with which it was filed. However, the said Dr. Nichani and/or his supporters did not take any action before the Civil Court or before the Criminal Court to ensure that Shri B.C. Chawla and others are nailed for their alleged misdeeds and to ensure that they be made to bring back the amounts which the Defendant Club has lost out in view of their alleged conduct. The Plaintiff in September, 2010, informed the Magistrate that he was not wanting to pursue the complaint filed by him against Shri B.C. Chawla and ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 36 NMSL 3456/2012 others. The Plaintiff was therefore declared as a hostile witness and on 4 th September,2010, the learned Magistrate acquitted the surviving accused which included Shri B.C. Chawla , Shri Ahuja and Shri Chug. It is now alleged that Shri B.C. Chawla and the Plaintiff indulged in a quid pro quo viz. Shri B.C. Chawla got the Plaintiff elected on the reconstituted Executive Committee on 3 rd October, 2009, and 10 months thereafter the Plaintiff withdrew the criminal Complaint against Shri B.C. Chawla and others. As already set out hereinabove, the Plaintiff had filed a Complaint against Shri Chawla and others and it was not difficult to rule out that in future the Plaintiff may not pursue the said Complaint. If Dr. Nichani and his supporters were certain about the veracity of the allegations made against Shri B.C. Chawla and others in the Complaint filed by the Plaintiff, they too could have independently taken action against Shri Chawla and his supporters which they did not choose to do. Despite Dr. Nichani and his supporters having realised on 3 rd October, 2009 that Shri B.C. Chawla and the Plaintiff have joined hands, they again did not take any steps to take out their own independent proceedings against Shri Chawla and others. This Court therefore enquired from Mr. Seervai as to what steps were taken after the withdrawal of the Complaint by the Plaintiff against Shri B.C. Chawla and others to which Mr. Seervai submitted that 5 months thereafter i.e. in February, 2011, about 200 members had sent a written representation to the Secretary General of the Defendant seeking resignation of the Plaintiff, Shri B.C. Chawla and Shri Ahuja. When this Court again enquired from Mr. Seervai as to why the said representation in which the first signatory again is Dr. Nichani was not mentioned in the SCN or in the expulsion order or was not referred to in any of the ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 37 NMSL 3456/2012 meetings where the decision to issue SCN to the Plaintiff was taken, Mr. Seervai had no answer to the same. In fact, the original of the said letter was admittedly not on the records of the Defendant Club, but was at the residence of an office-bearer. The original document is notarized, though Mr. Seervai admits that the signatories have not signed the said document in the presence of the Notary. In view thereof, at least at this interim stage, I have decided not to take cognizance of this document.
58. This takes me to the written complaint addressed by Dr. Nichani to the Executive Committee (of which he is the President) dated 10 th September, 2012, against the Plaintiff, withdrawing the Complaint in September, 2010 against Shri B.C. Chawla and others (i.e. two years after the withdrawal of the complaint in September, 2010), pursuant to which the Executive Committee of the Defendants issued a show cause notice to the Plaintiff on 24 th October, 2012 and expelled him.
Again action was taken only against the Plaintiff and not simultaneously also against Shri B.C. Chawla and others. In fact, Shri B.C. Chawla expired when the matter was being heard by this Court. Some enquiry proceedings now instituted against Shri Ahuja, on the face of it appears to be a farce.
59. It is an admitted fact that on 3rd October, 2009, Dr. Nichani was suspended for six months for his misbehaviour with the members of the Executive Committee. The Plaintiff had seconded the Resolution for suspension of Dr. Nichani. On 15 th December, 2010, Dr. Nichani was suspended for 7 days by the Regional Committee, Mumbai Region, for misbehaviour. The Plaintiff was the Secretary of the Defendant ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 38 NMSL 3456/2012 at the relevant time. On 22 nd June, 2011, Dr. Nichani was suspended for 4 days for making serious charges against the Plaintiff who was the Secretary of the Defendant.
On 11th April, 2012, Dr. Nichani was suspended for creating and concocting false molestation charges against the Plaintiff. In May, 2012, Dr. Nichani and other members of the Defendant Club admittedly contested elections of the Executive Committee of the Defendant by presenting themselves as the 'Action Group'. They defeated the group of Shri B.C. Chawla and came into power and started managing the affairs of the Defendant Club. Thus Dr. Nichani and none of his supporters had since August 2007 when the Plaintiff had filed a Complaint against Shri B.C. Chawla and others, taken any interest in the allegations made by the Plaintiff against Shri B.C. Chawla and others. The members of the 'Action Group' contested the elections to the Regional Committee and 7 members of the Action Group were elected to the Central Council of the Defendant Club in October, 2007, 4 of which became office-bearers of the Defendant Club along with Shri B.C. Chawla having a tenure of 18 months. As set out hereinabove, they not only did not lend any support to the Plaintiff, but also did not make even a murmur qua the charges levelled by the Plaintiff against Shri B.C. Chawla and others. They also did not oppose Shri B.C. Chawla and others being reimbursed qua the legal expenses incurred by them to defend themselves in the Complaint filed by the Plaintiff. As stated hereinabove, on 3rd October, 2009, Dr. Nichani was suspended for six months by the Executive Committee and the Resolution pertaining to his suspension was seconded by the Plaintiff. Though Dr. Nichani and the members of the 'Action Group' were aware on 3rd October, 2009, that the Plaintiff and Shri B.C. Chawla have joined hands, they ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 39 NMSL 3456/2012 were not bothered about the Complaint filed by the Plaintiff against Shri B.C. Chawla and they did not take any steps to ensure that the said Complaint is pursued by the Plaintiff in the manner it ought to have, and despite knowing that the Complaint is filed by the Plaintiff in his individual capacity, also did not take any steps to file their independent proceedings against Shri B.C. Chawla qua the charges levelled by the Plaintiff against Shri B.C. Chawla and others. Again, on 15 th December, 2010, Dr. Nichani was suspended when the Plaintiff was the Secretary of the Defendant Club. It appears that Dr. Nichani therefore, in order to settle scores against the Plaintiff, made serious allegations of molestation of a lady against the Plaintiff and got the Plaintiff suspended . Since in the inquiry conducted against the Plaintiff the charge was not established, the suspension of the Plaintiff was revoked.
On 22nd June, 2011, Dr. Nichani was again suspended for 4 days for making serious allegations against the Plaintiff who was the Secretary of the Defendant Club.
However, on 11th April, 2012, it was established that the said charge of molestation against the Plaintiff was engineered by Dr. Nichani and therefore Dr. Nichani was suspended from the Defendant Club. It is therefore more than prima facie established that Dr. Nichani and the Plaintiff had crossed swords against each other since 3rd October, 2009. In May 2012, Dr. Nichani and the other members who had contested the elections of the Executive Committee of the Defendant Club as Action Group succeeded in the elections, and their first victim was the Plaintiff, with whom Dr. Nichani had a long drawn rivalry. Dr. Nichani, who was the President of the Executive Committee of the Defendant Club since May 2012, wrote a complaint against the Plaintiff dated 10 th September, 2012 for withdrawing his Complaint ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 40 NMSL 3456/2012 against B.C. Chawla and others in September 2010, pursuant to which the Executive Committee issued a show cause notice to the Plaintiff on 4 th October, 2012 and expelled him on 5th December, 2012. These facts clearly establish that the entire action taken against the Plaintiff is in bad faith. The contention of the Defendant that Dr. Nichani did not attend the meeting in which the Plaintiff was expelled is of no consequence since I am prima facie satisfied that Dr. Nichani has engineered the removal of the Plaintiff from the Club in order to settle scores against the Plaintiff by using the other members of the Executive Committee, who were all members of the Action Group led by Dr. Nichani, and have come to power in the Defendant Club in May, 2012. I have no doubt that the Executive Committee has treated the Plaintiff as a common enemy of the 'Action Group' and as a show of solidarity taken action against him maliciously and in bad faith, on the ground that he had withdrawn his Complaint filed against B. C. Chawla and others about two years back.
60. In response to the submission of the Defendant that Dr. Nichani ought to have been joined as a party defendant to the Suit in view of the serious allegations made against him, the submission made on behalf of the Plaintiff that the allegation made in the Complaint is that the Defendant is acting at the behest and instigation of Dr. Nichani and it is entirely for the Defendant to deal with this allegation, is in my prima facie view correct. Dr. Nichani is the Chairman of the Regional Committee and is well aware of the entire proceedings in this case and being closely associated with the Defendant's affairs, he could well have filed the affidavit on behalf of the Defendant dealing with the Plaintiff's case. The reply to the SCN was addressed to ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 41 NMSL 3456/2012 all committee Members including Dr. Nichani and the Plaint is based on the Plaintiff's reply. Once again there is no element of surprise to the Defendant or Dr. Nichani. Dr. Nichani has not written any letter refuting allegations against him to the Executive Committee of the Defendant. The affidavit in reply filed on behalf of the Defendant does not raise the objection of Dr. Nichani not being a party to the Plaint. The decision therefore relied on by the Defendant in Ratnagiri Gas v RDS Projects and All India State Bank Officers v Union of India & Others (supra) does not apply to the present case.
61. I am also of the view that denial to the Plaintiff of representation through a lawyer at the meeting of 5 th December, 2012, is also an important factor which supports the case of bad faith on the part of the Defendant. The expulsion of a member from a Club entails serious civil consequences. The Rules and Regulations of the Defendant do not bar the Plaintiff from being represented through a lawyer and therefore the Plaintiff ought to have been allowed such representation through a lawyer. The decisions relied on by the Defendant as regards legal representation, lend no assistance to the Defendant, since given the seriousness and complexity of the allegations against the Plaintiff in the present case and interpretation of various clauses of the Rules which have pure legal connotations, legal representation should have been granted to the Plaintiff.
62. I am therefore, for the reasons set out hereinabove, more than prima facie satisfied that the action of permanently expelling the Plaintiff from the Defendant ::: Downloaded on - 27/08/2013 21:13:02 ::: KPP 42 NMSL 3456/2012 Club smacks of mala fides and is in bad faith. By expelling the Plaintiff permanently from the Defendant Club, both his daughters who have applied for membership of the Club have also been deprived of such membership. The balance of convenience is therefore also in favour of the Plaintiff and against the Defendant.
63. In the circumstances, the decision of the Defendant to expel the Plaintiff from the membership of the Club is stayed. The Notice of Motion is accordingly disposed of. The hearing of the Suit is expedited. The Defendant is directed to file their written statement within a period of four weeks from today. Place the Suit for framing of issues on 12th September, 2013. The Learned Advocate for the Defendant seeks stay of the order for a period of four weeks. In view thereof, the Plaintiff shall not insist on exercising any of his rights as a member of the Defendant Club upto 21 st August, 2013.
(S.J. KATHAWALLA, J.) ::: Downloaded on - 27/08/2013 21:13:02 :::