Bombay High Court
Ravi Goenka vs Union Of India And 3 Ors on 17 December, 2020
Author: Abhay Ahuja
Bench: Ujjal Bhuyan, Abhay Ahuja
WPL-7265-20.doc.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.7265 OF 2020
Ravi Goenka ..Petitioner
Versus
Union of India & Ors. ..Respondents
Dr. Abhinav Chandrachud a/w Mr. Archit Jayakar, Ms. Monica Salian, Ms.
Bhavika Deora, Mr. Sean Ma i/by Jayakar & Partners, for the Petitioner.
Mr. Y. S. Bhate i/by Mr. Pawan Patil, Advocate for Respondent Nos.1 to 3.
Mr. Rajendra Raghuvanshi a/w Mr. Ratnesh Dubey & Mr. S. A. Bhagwat,
Advocates for Respondent No.4.
CORAM : UJJAL BHUYAN &
ABHAY AHUJA, JJ.
RESERVED ON : 15th DECEMBER, 2020 PRONOUNCED ON : 17th DECEMBER, 2020 P.C.
1. Heard Dr. Abhinav Chandrachud, learned counsel for the petitioner ; Mr. Y. S. Bhate, learned counsel for respondent Nos.1 to 3 ; and Mr. Rajendra Raghuvanshi, learned counsel for respondent No.4.
2. This is a petition under Article 226 of the Constitution of India. Initially, the Writ Petition was filed for a direction to respondent Nos.1 to 3 to take a decision on the complaint of the petitioner dated 09.11.2020 as to whether respondent No.4 can opt for e-voting and remote e-voting or not. Alternatively, prayer was made amongst others as to whether in view of the Companies (Administration and Management) BGP. 1 of 6 WPL-7265-20.doc.
Rules, 2014, as amended, e-voting can be used as a facility by respondent No.4. Related queries have been made by the petitioner seeking a direction to respondent Nos.1 to 3 for clarification. Another prayer made was for a direction to respondent No.4 not to hold the 96th annual general meeting (AGM) scheduled on 21.12.2020. After the Writ Petition was amended following the order dated 03.12.2020, three additional prayers have been made. As per the first additional prayer, petitioner seeks a declaration that Rule 20(4)(vi) of the Companies (Management and Administration) Rules, 2014 is unconstitutional being violative of Articles 14 and 19(1)(a) of the Constitution of India and on such ground should be struck down as null and void. Second additional prayer made is to disallow remote e-voting or e-voting in the AGM of respondent No.4 or allow the same on the day of the AGM. The third additional prayer made is for appointment of an independent observer to oversee the elections of respondent No.4 scheduled on 21.12.2020.
3. Petitioner claims to be a special life member of respondent No.4 which is basically a club though incorporated under section 25 of the Companies Act, 1956.
4. Though the petitioner has instituted a series of litigations against respondent No.4 on various aspects, it may not be relevant to advert to the same at this stage. Suffice it to say that on 05.11.2020 respondent No.4 put up a notice in the notice board intimating its members that its 96th AGM would be held on 21.12.2020. The annual reports and accounts for the financial year 2019-20 (96th annual report) was uploaded in the official website of respondent No.4. As per the report, members were BGP. 2 of 6 WPL-7265-20.doc.
notified that the club proposed to hold its AGM on 21.12.2020 at 2.00 p.m. through video conferencing/other audio visual means to transact various business including appointment of members to the managing committee.
5. It is in the above context that the present Writ Petition has been filed seeking the reliefs as indicated above.
6. Basic contention of Dr. Abhinav Chandrachud is that under Rule 20(4)(vi) of the Companies (Management and Administration) Rules, 2014, a company like the petitioner which provides facility to its members to exercise voting by electronic means shall comply with the procedure mandated thereunder including the facility for remote e-voting to be kept open for not less than three days and which shall close at 5.00 p.m. on the date preceding the date of the general meeting. This provision he contends is violative of Article 14 of the Constitution of India as it is manifestly arbitrary and irrational. E-voting is completed prior to the date on which AGM is to be held. In other words members of the company would have to cast their votes by remote e-voting without listening to the view points of the candidates in the AGM. This is manifestly arbitrary and unreasonable, he contends referring to the decision of the Supreme Court in Pioneer Urban Land and Infrastructure Limited Vs. Union of India, (2019) 8 SCC 416, more particularly to paragraph 49 thereof. The test to be applied as to whether a particular provision violates Article 14 or not is to see whether it is manifestly arbitrary or not i.e. whether it is excessive, disproportionate or without adequate determining principle. His further contention is that the said provision also violates Article 19(1)(a) of the Constitution inasmuch as BGP. 3 of 6 WPL-7265-20.doc.
members of respondent No.4 have a right to know the view points of the candidates contesting the elections and thereafter to exercise their franchise. Casting their votes without listening to the candidates would therefore not only be manifestly arbitrary but would also be violative of the right of the members to know or to have information about the contesting candidates. In this connection, he has referred to the decision of the Supreme Court in People's Union for Civil Liberties (PUCL) Vs. Union of India, (2003) 4 SCC 399. Referring to section 108 of the Companies Act, 2013 which says that the Central Government may prescribe the class or classes of companies and the manner in which a member may exercise his right to vote by electronic means, he submits that this provision is vitiated by complete abdication of legislative power if not for excessive delegation. He has placed reliance on Mahe Beach Trading Co. Vs. Union Territory of Pondicherry, (1996) 3 SCC 741 . Therefore, the present is a fit case where Court may examine the aforesaid provision in the context of remote e- voting provided by respondent No.4 for the 96 th AGM scheduled on 21.12.2020 and stay the process in the interregnum.
7. On the other hand, Mr. Rajendra Raghuvanshi, learned counsel for respondent No.4 has referred to the reply affidavit filed by the said respondent to oppose admission and stay and has also submitted a short list of dates. He submits that notice of AGM dated 05.11.2020 was published on 07.11.2020. Petitioner submitted his nomination on 01.12.2020. Filing of nomination was closed at 1.00 p.m. on the following date i.e. 02.12.2020. A total of twenty nominations were received. Last date for withdrawal of nomination was 04.12.2020 on which date two BGP. 4 of 6 WPL-7265-20.doc.
candidates had withdrawn their nominations. Final list of candidates was displayed in the website of respondent No.4 on 05.12.2020. There are now eighteen candidates in the fray. Remote e-voting commenced at 9.00 a.m. today (16.12.2020) and would continue till 5.00 p.m. on 20.12.2020. AGM plus e-voting is scheduled on 21.12.2020. He submits that none of the contesting candidates have been impleaded as respondents in the present proceeding. Election process has commenced and therefore Court may not intervene at this stage.
8. Submissions made have been considered.
9. While we may examine the challenge to vires of Rule 20(4)(vi) of the Companies (Management and Administration) Rules, 2014, we are not inclined to interfere with the on-going electoral process. We are of the view that once the electoral process has commenced there should be no or little interference by the Court.
10. Issue notice.
11. Since respondents are represented, issuance of formal notice stands obviated.
12. Respondents may file detailed affidavit as to the contentions made by the petitioner.
13. However, having regard to the discussions made above, prayer for interim relief is declined.
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WPL-7265-20.doc.
14. Stand over to 25.02.2021.
15. This order will be digitally signed by the Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
ABHAY AHUJA, J UJJAL BHUYAN, J
Smita Digitally signed
by Smita R.
Joshi
R. Date:
2020.12.17
Joshi 18:30:03 +0530
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