Delhi High Court
The Young Mens Christian Association Of ... vs National Council Ymcas Of India on 19 July, 2018
Equivalent citations: AIRONLINE 2018 DEL 664
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 12th July, 2018
Date of Decision: 19th July, 2018
+ CS (OS) 148/2018
THE YOUNG MENS CHRISTIAN ASSOCIATION OF
ERNAKULAM & ORS ..... Plaintiffs
Through: Mr. Jayant Bhushan, Senior Advocate
with Mr. P.I. Jose & Mr. Shashank
Mishra, Advocates (M-9811556966).
Versus
NATIONAL COUNCIL YMCAS OF INDIA ..... Defendant
Through: Mr. Amit Mahajan, Mr. Sunil J.
Mathews, Mr. Sabah Iqbal Siddiqui,
Mr. Usman Ghani Khan & Mr. Aashish
Bhatti, Advocates (M-9818016730).
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh, J.
I.A. 8699/2018 (for filing of additional documents)
1. The additional documents filed by the Plaintiffs are taken on record, subject to being proved in accordance with law, at the time of final disposal. I.A. is disposed of.
I.A. 4736/2018 (U/s 92 CPC)
2. This is an application moved by the Plaintiffs who are various member associations of the Defendant- `National Council of Young Men's Christian Associations of India' (hereinafter „Defendant‟). By this application, the Plaintiffs seek leave under Section 92 of the Code of Civil Procedure, 1908 (hereinafter, „CPC‟) to file the present suit.
3. The facts in brief are that the Defendant is a society registered under the Societies Registration Act, 1860 (hereinafter, „Societies Registration Act‟). It is a body which has about 756 member YMCAs located across the CS (OS) 148/2018 Page 1 of 27 country. Some of the said members are the Plaintiffs in the present suit. The member YMCAs who have filed the present Suit are the local YMCAs located in Cochin, New Delhi, Coimbatore, Puthoor - Kerala, Kollam - Kerala, Mumbai, Jabalpur - Madhya Pradesh, Perumbavoor - Kerala.
4. It is the Plaintiffs' case that the Defendant owns a large number of movable and immovable properties across India and holds in trust various properties of its member associations. According to the Plaintiffs, the statutory auditor, in the statement of audited accounts for the year ending 31st March, 2017 of the Defendant, raised various objections which reflect irregularities in the management of the said body. It is also alleged that the current incumbent member President is in the process of attempting to bring an amendment to the constitution of the Defendant to perpetuate himself in his position. According to the Plaintiffs, several amendments have also been proposed to enable the National General Secretary to seek a second term. The said proposed amendments were challenged in OMP 512/2017 where a sole Arbitrator was appointed to adjudicate upon the disputes.
5. The Plaintiffs further submit that the triennial elections for the National Executive of the Defendant are due to be held in September, 2018 and, in view of the various allegations against the current incumbent, some of the good intentioned members of the association came together to put forward the name of a reputed member to contest for the post of the National President. However, several of the member associations who expressed their disapproval in the happenings in the Defendant were suspended from their membership. The Plaintiffs therefore submit that the Defendant having been formed for a public, charitable purpose with specific objectives, as contained in its memorandum, deserves to be properly managed and supervised. It is CS (OS) 148/2018 Page 2 of 27 the case of the Plaintiffs that due to the various allegations, apprehensions have been expressed as to the running of the Defendant under the current incumbent and his team, a scheme for management of the Defendant deserves to be framed under Section 92 of the CPC. Accordingly, leave is sought under Section 92 of the CPC to institute the present suit. The reliefs sought for in the suit are;
"In the light of the above mentioned facts and circumstances, it is most respectfully prayed that this Hon‟ble Court may kindly be pleased to pass a decree for the following:
A. Restraining the Defendant Society and its office bearers permanently from dealing with any immovable property of the defendant society without obtaining permission of the court under section 92 (f) of Code of Civil Procedure, 1908.
B. A decree directing an open and independent accounts and enquiries relating to all transactions including those of immovable properties of the Defendant Society and the correctness and validity of affiliation certificates issued from the year 2008 till date under the supervision of this Hon‟ble Court and pass a declaratory decree nullifying all decisions, acts and transactions found to be illegal during the enquiry. C. A decree directing settling of a scheme under the supervision of this Hon‟ble Court based on result/outcome of the accounts and enquiries for the future management of Defendant Society including proper affiliation, finalization of the list of Good Standing YMCAs/ voter list and conduct of Triennial election under the supervision and control of an independent authority.
D. After completion of the account taking and enquiry direct appropriate legal, both civil and criminal, CS (OS) 148/2018 Page 3 of 27 actions including for recovery/restoration of defendant's interest /properties.
E. Set aside all the illegal executive committee decisions and letters/orders of the defendant passed in violation of law including the following: i. Letter dated 18.01.2018 issued to Puthoor, YMCA along with the National Executive decision authorizing it.
ii. Letter dated 18.01.2018 issued to Kunamkulam, YMCA along with the National Executive decision authorizing it.
iii. Letters dated 06.03.2018 issued to Ernakulam YMCA and its General Secretary along with the National Executive decision authorizing it. iv. Letters dated 06.03.2018 issued to Bombay YMCA and its General Secretary along with the National Executive decision authorizing it. Pass any other or further order(s) or direction(s) as this Hon,ble Court may deem fit and proper in the light of the above mentioned facts and circumstances of the present case."
6. The Plaintiffs thus seek reliefs in respect of protection of the immoveable property, auditing of the accounts, framing of a scheme for governing the membership, affiliation of the Defendant, framing of a scheme for future conduct of elections, setting aside of the various decisions of the Executive Committee and National Executive, suspending the membership of various Member associations etc.
7. The suit is contested by the Defendant which has taken a preliminary objection. The submission of Mr. Mahajan appearing for the Defendant is CS (OS) 148/2018 Page 4 of 27 that leave ought not to be granted as the Defendant is not a trust registered under the Indian Trusts Act, 1882 (hereinafter, „Indian Trusts Act‟) but a society registered under the Societies Registration Act. He submits that there is a clear distinction between the nature of these two bodies, and unless and until it can be proved that the Defendant can in fact be termed as a trust created for public purposes of a charitable or a religious character, leave under Section 92 of the CPC ought not to be granted. He submits that grant of leave under Section 92 of the CPC is not automatic in such cases and that out of the hundreds of member associations of the Defendant only a few members have raised doubts as to its functioning. He further submits that any attempt to grant leave being entertained in this suit would result in the election process being derailed. He urges that there exists an arbitration clause in the agreement between the member associations and the Defendant. Thus, the matter can at best be referred to arbitration.
8. He relies upon the following judgments to argue that the settled position on this issue is that if a society that is functioning in a fully democratic fashion, and there is no settler for the said society who has vested any property in the society, leave ought not to be granted:
K. Rajamanickam & Anr v. Periyar Self Respect Propaganda Institution, Tiruchirapalli AIR 2007 Mad 25 (hereinafter, „K. Rajamanickam‟);
S. Guhans v. Rukmani Devi Arundale (1987) 100 LW 182 (hereinafter, „Rukmani Devi Arundale‟); The Advocate General v. Bhartiya Adam Jati Sewak Sangh & Ors 2001 (3) ShimLC 319 (hereinafter, „Bhartiya Adam Jati Sewak Sangh‟);CS (OS) 148/2018 Page 5 of 27
'Abhaya' A Society Registered under the Travancore-Cochin Literary & Ors. v. J.A. Raheem AIR 2005 Ker 233 (hereinafter, „Abhaya‟);
Kesava Panicker v. Damodara Panicker AIR 1976 Ker 86 (hereinafter, „Kesava Panicker‟);
Swami Shivshankargiri Chella Swami v. Satya Gyan Niketan & Anr. (2017) 4 SCC 771 (hereinafter, „Satya Gyan Niketan‟)
9. Mr. Jayant Bhushan, Ld. Senior Counsel appearing for the Plaintiffs has rebutted and submitted that the mere fact that the Defendant is a registered society does not take away its true character. He submits that the Defendant is an organization which works for a public purpose and is subject to the jurisdiction of this Court under Section 92 of the CPC. The recent developments in the functioning of the Defendant are extremely disconcerting and various valuable immovable properties are being commercialised. He also submits that in order to ensure that the current incumbent gets elected again changes are being carried out in the eligibility conditions for the post of President and the election procedure thereof by diluting the existing stringent requirements. Further, it is also submitted that the list of members who are nominated is being tampered with and this would affect the free and fair election process. He too relies on the judgement of the Supreme Court in Satya Gyan Niketan (supra).
10. The first and the foremost question to be determined is whether leave should be granted to institute the present suit. A perusal of the Memorandum of Association of the Defendant sets out the purposes for which it is constituted. Some of the clauses of the said memorandum are relevant and set out herein below:
CS (OS) 148/2018 Page 6 of 27"PREAMBLE The purpose of the National Council of Young Men's Christian Associations of India, is to assist the Member Associations and promote the cause of Young Men's Christian Association work in India, as provided for in the Memorandum of Association.
The basic purpose of the National Council is to serve as an Agency through which member Associations can achieve their purposes as a National Movement by collective action in a manner which would not be possible through separate actions of Member Associations and provide for services which will enrich and strengthen Member Associations.
1. The name of the Society is "THE NATIONAL COUNCIL OF YOUNG MEN'S CHRISTIAN ASSOCIATIONS OF INDIA".
3. The objects for which the society is established are :
viii) To undertake and assist in development programmes and projects among the poor, needy, backward, under-privileged and handicapped, irrespective of caste, creed or colour.
x) a. To render service to armed forces in India.
b. To render service to refugees in India.
c. To render service to victims of civil disturbances and riots and also to the victims of famine, earthquake, flood, cyclone, fire, pestilence, epidemic and other natural calamities in India.
xxi) To invest moneys not immediately required in such ways as may be decided from time to time.
xxii) To borrow or to raise money with or without interest as may be decided from time to time.
xxiii) To execute or register all deeds and documents necessary for any of the purposes aforesaid and to do all such acts and other things as are incidental or conducive to the attainment of the above objects or any of them.
5. The income and property of the Society wheresoever derived shall be applied solely towards the promotion CS (OS) 148/2018 Page 7 of 27 of the objects of the Society and Young Men's Christian Associations in India, as set forth in this Memorandum of Association and no portion thereof shall be paid or transferred directly or indirectly by way of dividend, bonus or otherwise, PROVIDED that nothing herein contained shall prevent the payment in good faith of remuneration to any officers or servants of the Society or to any member thereof or other persons in return for services actually rendered to the society."
11. A perusal of the above clauses of the Defendant's Memorandum reveals that the Society is one which possesses a public character. It is working for the people who constitute its members as also for the larger interest of the community. It is common knowledge that the Defendant not only has a large number of affiliated member associations in India but is also affiliated to the international network of YMCAs. It has been clearly created for a `public purpose' and is both of a charitable and a religious nature.
12. The Defendant has two bodies which manage and administer its duties and functions. The National Board is the governing body of the Defendant and under Article III(1), the management of the society vests with it. The members of the National Board include the following:
"a) All the members of the National Executive;
b) Seven persons elected tri-annually by the Secretaries from among the National Roster of Secretaries who shall serve for a period of three years.
One of whom shall be below the age of 30 years. One delegate for every member of the Society not in default; and
c) Fifteen members co-opted in the National Executive Committee at the first meeting after the convention out of which minimum THREE shall be Youth below thirty years and THREE shall be Women besides, one member representation from every Region.
CS (OS) 148/2018 Page 8 of 27d) The Immediate Past National President.
e) Chairmen of National Standing Committees."
13. As per Article X of the rules and regulations, all the property of the society is deemed to vest in the National Board which consists of all the members of the National Executive, Secretary members, immediate past National President, and Chairmen of the National Standing Committees, etc.
14. The second body is the National Executive which is primarily an elected body and as per Article VIII, consists of the following:
a) the President;
b) the three Vice-Presidents;
c) the Treasurer;
d) the National General Secretary;
e) the President of the Association of Secretaries;
f) Chairmen of all Regions;
g) eleven members elected by the National Board at its first meeting held after the conclusion of the Ordinary General meeting out of which a minimum of one shall be a lady and one shall be below the age of 30 years as on the 1st of January of the year of election/General Meeting.
h) The Immediate Past President."
15. Article X is relevant for the present purpose and is set out herein below:
"X (1). All property of the Society, whether movable or immovable, shall be deemed to be vested in the National Board who shall have power to sell, lease, mortgage or otherwise deal with the same, and also to purchase, take on lease, accept, grants of or otherwise acquire movable or immovable property on behalf of the society, and to enter into all contracts and convenants on its behalf."CS (OS) 148/2018 Page 9 of 27
16. Article XV in respect of `Property matters' is extremely relevant and is set out below:
"1. All matters related to the use and management of properties owned and directly managed by the National Council shall be authorized by the National Board or its Executive Committee. Documents of such properties to which the seal of the society is affixed shall be signed on behalf of the society by the National General Secretary and by the President or Treasurer.
2. In respect of Property owned by the National Council and used for National Council projects, the signing authority will be the National General Secretary or his nominee as approved by the National Executive Committee and by the President of the National Council or the chairman of the project concerned as approved by the National Executive Committee.
3. In respect of the properties held in trust by the National Council on behalf of the member YMCA, for all dealings the Executive Committee may give a power of attorney on written requisition with a resolution of the Board of the member YMCA, to the President and Secretary of the member YMCA and such other representatives of the National Executive Committee if deemed necessary by the National Executive Committee.
In respect of properties mentioned in section (1) and [2] above, all sales or disposals are to be approved by the National Board."
17. Thus, the Defendant has a National Board and a National Executive. The National Executive has powers which are delegated to it by the National Board. The National Executive can also delegate its power further to Committees. The National General Secretary is appointed by the National Board. The National General Secretary manages the affairs of the Defendant CS (OS) 148/2018 Page 10 of 27 on a day to day basis and reports to the National Executive and is under its supervision. Finally, the decisions of the National Executive have to be approved by the National Board. The powers of the National Board and the National Executive are contained in Articles VII and VIII of Memorandum of the Defendant. The role of the President and the National General Secretary is therefore of immense importance in the running of the Defendant. They have an impact not only in the decision making of the central body but also of the various chapters across the country. The elections to the National Executive are due to be held on 2nd September 2018 which includes the President and its various members.
18. Considering the nature and constitution of the Defendant, the question is whether it comes under the purview of the Section 92 of the CPC, it being a Registered Society under the Societies Registration Act.
19. Section 3 of the Indian Trusts Act reads as under:
"Section 3 - Interpretation clause - 'trust' - A "trust" is an obligation annexed to the ownership of property, and arising out of a confidence reposed in an accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner"
20. From a perusal of the above definition, it is clear that the elements that are required to be fulfilled for an express or constructive trust are:
i) Ownership of a property;
ii) A confidence reposed by the owner;
iii) The said confidence being accepted for the benefit of another.
If these elements are satisfied, a trust is created.
21. In this backdrop, a perusal of Section 92 of the CPC reveals that the CS (OS) 148/2018 Page 11 of 27 term "express or constructive trust" does not relate to a trust constituted under the Indian Trusts Act, but any body or entity which holds in trust any property and is created for public purposes of a charitable or religious nature. A society can also satisfy the test of express or constructive trust created for public purposes.
22. In Abhaya (supra) cited by the Defendant, the case involved a charitable Society which did not show that it held `in trust‟ any property belonging to a different organisation. The property vested in the governing body of the Society itself. Thus, the Kerala High Court held that a suit under Section 92 of the CPC would not be maintainable. This is clear from paragraph 9 of the judgement which reads as under:
"9. A reading of the various Sections of Act XII of 1955 shows that even if the object of a society formed under the provisions of Act XII of 1955 is a charitable purpose and even if it acquires property and use the same for achieving the object of the society, the property is owned by the Society and it belongs to it. The property is that of the society which is a legal person by virtue of the provisions of the statute. It cannot be said that whenever a society acquires property it declares itself as a trustee in respect of that property. The Society has a legal obligation to use the property for the purposes of the society acquired strictly in accordance with the provisions contained in the Rules and Regulations of the Memorandum of Association. By no stretch of imagination it can be considered as a declaration of trust in respect of a property acquired by the Society."
Thus, in the facts of the said case, the Court held that there was no prima facie material to show existence of a trust.
23. Even in Rukmini Devi Arundale (supra), the Court held that the CS (OS) 148/2018 Page 12 of 27 question was as to whether the property belonged to the Trust or the Society. In Bhartiya Adam Jati Sewak Sangh (supra), the High Court of Himachal Pradesh held that there was no evidence to show that any funds were collected from the general public before the Society was created. The Court observed:
"53..............This Court considers that dark days would engulf the Courts if learned Judges are to pass decrees blindfoldly without understanding the contents of pleadings and even without knowing what sort of decrees the Courts are passing. Even when a consent decree is passed, it is obligatory on the part of the court to find out the nature of the decree which ultimately comes into existence. This extreme contention is least impressive to this Court. Hence, even in a suit filed under S. 92 C.P.C. whether the properties included in the schedule to the plaint belong to the Trust or not would be a relevant aspect and when such a point is taken in the appeal, it has become obligatory on the part of the respondents to show to the Appellate Court that the properties belong to the trust, which is distinct and different from the society. For reasons already stated, they have miserably failed to place any iota of material to show that either the Trust had existed as claimed or that the properties did not belong to the Society as mentioned in the relevant sale deeds."
24. In the present case, as per Clause 3(ii) of the Preamble of the Memorandum, one of the main objectives of the Defendant was to promote the work of the Young Men's Christian Association Movement in India and to resuscitate the existing languishing YMCAs and aid in formation of new YMCAs in India. In effect, the Defendant started administering and looking after the existing YMCAs which were formed even before it came into existence as a Society. Paragraph 14 of the Plaint clearly sets out the past CS (OS) 148/2018 Page 13 of 27 YMCA movement which dates back to 1857, the fore-runner of the Defendant being formed in 1891 and thereafter the registration of the Defendant as a Society only in 1964. All these organisations came under the administration and supervision of the Defendant. As per the Rules and Regulations set out hereinabove, the Defendant holds in trust, properties on behalf of the member YMCAs. The immovable properties are located across the country. Thus, there is no doubt that the Defendant is in both `express' and `constructive' trust of the properties belonging to its members. In fact, as pointed out by counsels, the agreements in respect of immovable properties are actually signed for and on behalf of the members by the Defendant. One such example is that of the property in Vishakhapatnam. The Defendant is thus playing the role of not merely an association holding something in trust but also has the power to enter into a transaction in respect of such properties.
25. In the present case, various apprehensions have been raised in respect of commercialisation of the property, movable and immovable, belonging to the members which, by itself, at this stage, is sufficient for this Court to grant leave under Section 92 of the CPC.
26. In K. Rajamanickam (supra), the Madras High Court held as under:
"9. In order to maintain the suit under Section 92 CPC the petitioners/plaintiffs should show the existence of a Trust and the alleged breach of the terms of the Trust;
besides which the interestedness of the petitioner/plaintiffs in the running the Trust shall also be made known."
27. This judgment is relied upon by the Defendant to argue that if the property is vested in a society under the Societies Registration Act and not CS (OS) 148/2018 Page 14 of 27 with a trust, then a suit under Section 92 of the CPC is not maintainable. However, in Satya Gyan Niketan (supra), the Supreme Court while dealing with a religious trust held:
"4. .......The learned District and Sessions Judge vide his order dated 12-11-2008 observing that the word "trust" is to be liberally construed, and in a sense as favourable as possible to the assumptions of jurisdiction by a Court under Section 92, allowed both the applications and permitted the appellants to file suit under Section 92 of CPC. The learned District and Sessions Judge observed that the object of dedication of the property shall decide the nature of it being considered a trust. Relevant part of the order is reproduced as follows:
"Hence perusal of the deed reveals the purpose to waqf the property was charitable and for the benefit of public at large. Hence prima facie it appears that a constructive trust was created by Swami Satya Dev by gifting the property to OP 2, in which all the objects of the waqf and the management of property was given."
In the later part of the order it was observed that:
"Having gone through the entire evidence on record, I am of the view that prima facie it appears that property in suit was waqfted to the OP 2 for a particular object and purpose i.e. publicity and development of Hindi. The property is to be managed by OP 2 as per directions of Swami Satya Dev - recitals of the deed prima facie proves that Sri Satya Dev created a constructive trust by gifting the property to OP 2 has not become exclusive owner of the same, because it was gifted with conditions i.e. OP 2 has no right to sale or mortgage the property.
....................
11. The present Section 92 CPC corresponds to Section 539 of the old Code of 1883 and has been borrowed in part from 52 Geo. 3, c. 101, called Romilly‟s Act of the United Kingdom. A bare perusal of CS (OS) 148/2018 Page 15 of 27 the said section would show that a suit can be instituted in respect of a public trust by the Advocate General or two or more persons having an interest in the trust after obtaining leave of the Court in the Principal Civil Court of Original Jurisdiction. An analysis of these provisions would show that it was considered desirable to prevent a public trust from being harassed or put to legal expenses by reckless or frivolous suits being brought against the trustees and hence a provision was made for leave of the Court having to be obtained before the suit is instituted.
15. This Court while discussing the scope and applicability of Section 92 CPC in the case of Harendra Nath Bhattacharya v. Kaliram Das, observed in para 13: (SCC p. 120) "13. ... It is well settled by the decisions of this Court that a suit under Section 92 is of a special nature which presupposes the existence of a public trust of a religious or charitable character. Such suit can proceed only on the allegation that there is a breach of such trust or that directions from the Court are necessary for the administration of the trust. In the suit, however, there must be a prayer for one or other of the reliefs that are specifically mentioned in the section. Only then the suit has to be filed in conformity with the provisions of Section 92 of the Code of Civil Procedure.... It is quite clear that none of the reliefs claimed by the plaintiffs fell within the section. The declarations which were sought could not possibly attract the applicability of Section 92 of the Civil Procedure Code. The High Court was, therefore, right in holding that non- compliance with that section did not affect the maintainability of the suit."
19. We have noticed that the trust deed was executed in favour of the respondents. But it appears in view of the facts and circumstances of this case and the submissions made on behalf of the respondents, that it was waqfed/gifted for a lawful purpose i.e. a "trust" is CS (OS) 148/2018 Page 16 of 27 an obligation annexed to the ownership of the property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another owner, (Act 2 of 1882 Trusts, Section 3). Accordingly, in our opinion, the application filed by the appellants was falling within the required ambit of Section 92 of CPC and the learned District Judge had rightly permitted the appellants to institute a suit. We are of the considered opinion that the High Court has erred in setting aside the well- reasoned order of the learned Judge and grossly erred in not diligently examining the facts and circumstances in the light of the registered deed dated 30-11-1940."
28. In the above case, the Supreme Court held that a suit under Section 92 of the CPC can proceed if there is a breach of terms of the trust or if directions are required for the administration of a trust. The Supreme Court further observed that since there was a property which was gifted for a lawful purpose, i.e. a trust which has an obligation annexed to an ownership of property, leave was liable to be granted. The observations of the District Court that Section 92 of the CPC is to be liberally construed, and that too in a manner which is favourable to assuming jurisdiction, was upheld by the Supreme Court so long as the purpose was charitable and for the benefit of public at large and property was being held in trust.
29. In Kesava Panicker (supra), it was held if a trust was created for a public/charitable purpose, the fact that it is registered as a society would not change the character of the properties. The Kerala High Court observes as under:
"10...........If there was a trust created by the public for a public charitable purpose namely establishing, CS (OS) 148/2018 Page 17 of 27 maintaining and running a school the fact of the registration of a society could not change the character of the properties which had already been constituted as trust properties and impressed with the trust and any addition to those properties must also have the same character. We have therefore no hesitation in reaching the conclusion that a trust has been created and the High School buildings, the land, all appurtenances, furniture, equipment and all other properties are trust properties."
30. The Plaintiffs submit that this court ought to frame a scheme for the management of the property owned and controlled by the Defendant Society. The Plaintiffs submit that even earlier in 2008-09, this court had intervened in and had appointed a retired Judge of this court in O.M.P. 437/2008 for managing the affairs of the Defendant. Plaintiffs have contended that the current incumbent is proposing to change the rules and permit repeated terms for the President and the National General Secretary. Steps are being taken to suspend such member YMCA associations who raise their voice against the Defendant. The list of members of `good standing' has not been finalized or is being tweaked in a manner so as to suit the interest of the present incumbent.
31. The properties of the member associations are being commercialised by entering into a lease deed for running banquet and restaurants, for example the Vishakhapatnam property. Auditors have raised objections in their annual audits. List of members is being tinkered with to create a favourable electoral list.
32. The Defendant on the other hand submits that the allegations are baseless. The powers are being exercised by the Defendant within the four CS (OS) 148/2018 Page 18 of 27 corners of the Memorandum and the Rules & Regulations.
33. It is the settled position that at this stage of granting leave, the court merely takes a prima facie view of the case in order to exercise jurisdiction, so long as the court is satisfied that the proceeding which has been brought before it is not for a collateral purpose.
34. The Plaintiffs who have approached the court in the present case are members of the Defendant. They have taken the court through various documents to show prima facie that all is not well in the administration and management of the Defendant. The following allegations deserve deeper examination:
Commercialization of member YMCAs' properties; Various amendments proposed to the Memorandum, Rules & Regulations, seeking to prolong tenure of the current incumbents; Conduct of elections, and finalisation of the nominations; Changes in membership list and requirements thereof; Suspension of member YMCAs;
Suspension of members from the National Executive; Change in the prescribed ballot forms for the current elections; Auditor's report showing irregularities in management of the Defendant;
Modifications made in the list of 'good standing' YMCAs, which results in consequential nomination of delegates who would be participating in the forthcoming elections;
35. The Court is not commenting, at this stage, on the merits of the various allegations, and counter allegations, as the same require to be seen CS (OS) 148/2018 Page 19 of 27 after completion of pleadings. It is settled that the court definitely ought not to be over enthusiastic in interfering in such bodies, however, the facts brought before this court show that this is a fit case for grant of leave.
36. Accordingly, I.A. is allowed, and leave under Section 92 to sue is granted and the Suit is directed to be registered.
I.A. 7669/2018 (for appointment of an independent election officer)
37. The Plaintiff prays for appointment of an Election Officer for conduct of the elections. The application seeks the following prayers:
"A. To act as an election officer and decide on all requirements including the proper venue under the rules for the conduct of the Triennial election of the Defendant Society to be conducted on 1st to 3rd September, 2018.
B. Direct the officers of the Defendant Society to provide all records and logistics to the observer as and when directed by him/her.
C. Include YMCA Puthoor and Kunnamkulam or any other YMCAs found suitable in the list of good standing YMCAs as on 31.12.2017 after giving all affiliated member YMCAs two weeks notice to resubmit annual Affiliation fees/fair share and other documents. D. To conduct the Triennial election of the Defendant Society at an appropriate venue to be chosen from among any YMCA premises after considering the convenience of all the members.
E. Direct verification of the validity of affiliation of Good Standing YMCAs in the list of 31.12.2017."
38. The submission of the Plaintiff is that there is an apprehension that the list of members is being tinkered with and the elections may not be free and fair and thus an independent Election Officer should be appointed to ensure that the elections which are to be conducted are conducted fairly and CS (OS) 148/2018 Page 20 of 27 unbiasedly.
39. The Defendant on the other hand submits that the elections are being conducted under the supervision of the Nomination Committee. The said Committee has already been appointed. It is submitted on behalf of the Defendant that Nomination Committee was appointed on 2nd March, 2018 which held its meeting in Chennai. The extract of the said minutes is set out herein after:
"Minute No.122/2015-18:
XXXVth National Triennial Convention It was informed by the NGS that several requests received from YMCAs and regions to host the XXXVth Triennial Convention. Taking review of these requests, the National Executive Committee resolved to hold the XXXVth National Triennial Convention 2018 during September, 1-3, 2018 at Marthoma Youth Centre, Adoor, Kerala, hosted by the South-West India Region of YMCAs. The theme for the Convention will be decided upon in due course by the National Officers from among a set of options provided to them. The Registration Fee was fixed at Rs.1,000/- with a special concessional rate of Rs. 750/- for youth and women participants. In this context, it was also resolved to constitute a Nomination Committee comprising the following;
a) Adv. A.C. Eapen, YMCA Pandalam, SWIR - Convener
b) Mr. Bennet Soans, YMCA Mangalore, SCIR - Member
c) Mr. Jeya Nesakumar, YMCA Karikki, SIR - Member
d) Mr. M. John Israel, Kovvur YMCA, SEIR - Member
e) Prof. Joy. C. George, YMCA Kozhenchery, SWIR-
Member As per the Constitution the Nomination Committee is hereby requested and authorized to go ahead in finalizing the first circular to the local YMCAs (good standing as on December 31, 2017), nomination form, election schedule etc."
40. Thus, the Defendants submit that the Nomination Committee is an CS (OS) 148/2018 Page 21 of 27 independent body which is already functioning in a free and fair manner. The Defendant further submits that the current President is not interfering in the functions of the Nomination Committee. The schedule for the elections is:
Appointment of Article 6(1) March2, 2018 Nomination Committee 6 (a&b) months prior to the Triennial Convention and Election Inviting Nominations Article 6(1) March 27, 2018 from Member Society (c) not in default Nomination Committee Article 2 (b) May 19, 2018 will scrutinize all Nominations and draw up a list of candidates, who are in its opinion best suited for respective offices Circulating the proposed Article 3 (b) July 3, 2018 list of Nomination Committee to all Member Society not in default Provision for Counter Article 4 (a) August 1, 2018 Nomination Scrutiny of Counter Article 4 (b) August 2, 2018 Nomination Circulation of valid Article 4 (b) August 9, 2018 Counter Nominations Received with Nomination Committee Panel Elections and Article 6(6) September2, 2018 announcement of Result (a, b & c) 41. The venue of the elections is Adoor, Kerala and this is also being
objected to by the Plaintiffs on the ground that the said location is CS (OS) 148/2018 Page 22 of 27 extremely inconvenient as it is not connected well by both air and rail transport.
42. The Defendant further submits that the nominations are finalized by the Nomination Committee and have been circulated to member societies who are not in default. There is, however, a provision for counter nomination by 1st August, 2018.
43. Further to the reasons set out above, considering that the elections to the Defendant are due shortly and the process has already started, a perusal of the ballot forms relating to the present elections show that some important requirements have been deleted from the same. The lists of members are also drastically different in respect of some of the member organizations. One such example is the list from YMCA Repalle in Kerala which shows that the list of 76 members for 2014-15 is completely different from the list of members for 2016. It is also not clear as to how many members have been held to be in default and hence not permitted to participate in the election process. The apprehension expressed by the Plaintiffs is that changes are being made at the membership level in order to ensure that a favourable final result is obtained. On the other hand, the Defendant submits that the elections are being conducted as per the rules, and the issues raised by the Plaintiff are totally baseless.
44. One important feature which has been deleted is for the requirement of "copy of a receipt issued by the Registrars‟ office on filing of accounts and list of Directors". This, according to the Plaintiffs, means that only such persons whose names were approved and filed with the Registrar of societies under the Societies Registration Act were permitted to vote in the elections which were conducted in 2013. However, in the current regime, the said CS (OS) 148/2018 Page 23 of 27 requirement has been done away with completely. It is also submitted that the list of full members which was required in a prescribed format has also been done away with, as per the e-mail dated 11th June, 2018.
45. It is possible that the Nomination Committee or the Defendant organization may have various justifiable reasons for these changes that have been brought about in the membership list and the requirements in respect thereof. However, considering the nature of the Defendant body, which is holding in trust large quantum of immovable and movable properties across the country of its 756 members YMCAs, there can be no doubt that the elections ought to be conducted smoothly, fairly and as per the memorandum and rules of the organization. It is sufficient to say at this stage that the apprehensions raised by the Plaintiffs do not lack basis. Any changes in the list of members will have an impact on the final electoral result. Further if several member associations have been suspended or not allowed to participate in the elections, the results are likely to be skewed. Thus, it is deemed appropriate to appoint an independent observer to supervise and conduct the elections already scheduled for the elected posts in the National Executive on 2nd September, 2018.
46. It is deemed fit to appoint Justice Mr. Anil Dev Singh (Retd) as the Election Officer for conducting the elections, as per the Schedule announced by the Defendant. The Election officer would be empowered to:
a) To draw up/finalise the list of 'good standing' member YMCAs that would be entitled to send their delegates/nominees for voting in the forthcoming elections;
b) Review the list of member organisations, who have been either suspended or not allowed to participate in the elections and afford CS (OS) 148/2018 Page 24 of 27 them an opportunity to rectify the shortcomings and enable their participation in the elections, as per the Rules;
c) Verify the lists of delegates being nominated by the various YMCAs organizations;
d) Call for any information that may be required to establish their genuinity as members of the said local organizations;
e) Draw up a final list of voters who would be entitled to vote on behalf of their various member organizations;
f) Scrutinise the eligibility of the persons nominated by the Nomination committee;
g) Scrutinise the counter nominations that may be filed;
h) Interact with the member organizations in respect of the venue for the elections and if required, change the venue;
i) Conduct the elections in a free and fair manner and if required by secret ballot;
j) Announce the final results.
47. Further the Puthoor YMCA, Kunnamkulam YMCA, Ernakulam YMCA, and Bombay YMCA are permitted to approach the Election officer for enabling their participation in the elections, subject to such conditions as the Election officer may impose.
48. The Nomination committee shall extend complete cooperation to the Election Officer and work with him for the smooth conduct of elections. In case of disagreement, the opinion of the Election Officer shall be final and binding.
49. The fees of the Election Officer is fixed at a lumpsum of Rs. 5 lakhs, at this stage. The expenses for travelling, boarding and lodging as also CS (OS) 148/2018 Page 25 of 27 arrangements therefore shall be made by the National General Secretary of the Defendant who shall also extend all cooperation to the Election Officer.
I.A. is accordingly, disposed of.
I.A. 4738/2018 (U/o XXXIX Rule 1 and 2 CPC)
50. By this application, an injunction has been prayed for maintenance of status quo by the Defendant in respect of immovable properties of its member YMCAs. The Plaintiffs have pointed out an illustrative example of a property in Vishakhapatnam belonging to a local YMCA being leased out for a period of 60 years for running a Banquet, fine dining restaurant, food court, eatable food, take away and special food centres. A perusal of the lease deed reveals that the previous utilization of the space was for YMCA International Tourist 1 Lodge/ Hotel-cum- Social Complex Building at Vishakhapatnam. The circumstances in which such a lease was entered into and whether the same is in the best interest of the organization is not being gone into currently, as the same appears to have been entered into in the year 2014, prior to the current President took office.
51. However, until the elections take place, the Defendant ought not be permitted to deal with any of the immovable properties which it holds in trust. Accordingly, the Defendant is directed to maintain status quo with respect to all the immovable properties which are under its management/administration and no third party interest shall be created in the same.
52. Reply be filed within two weeks. Rejoinder within two weeks thereafter.
I.A. 8403/2018 (U/s 8 of the Arbitration and Conciliation Act)
53. This is an application under Section 8 of the Arbitration and CS (OS) 148/2018 Page 26 of 27 Conciliation Act, 1996 to refer the parties to arbitration in terms of clause (1) of Article XIII of the memorandum. The nature of the dispute is beyond the arbitration clause which is set out herein below:
"XIII (1). All disputes arising out of, or in relation to, any proceedings or decision of the National Council, the National Board or the National Executive, or any action taken pursuant to any proceedings or decision of any one of these three bodies, including disputes, if any, regarding election of persons to any post or office in any one of the said three bodies, shall be decided by arbitration by a Board of Arbitrators consisting of three members in accordance with the provisions hereinafter provided."
54. The relief sought for in the present suit is the power exercised by the court which relates to framing of a scheme and looking into the overall administration of a trust which is created for a public purpose both of charitable and a religious nature. Thus, the same is not an arbitrable dispute which is purely between a member organization and the Defendant. The court, in a Section 92 suit, safeguards the interest of the public and the large number of members who belong to these organizations across the country. They are administering a large number of immovable properties and movable assets. The court is not merely acting at the behest of the Plaintiffs but the powers of the court are much wider in nature. Thus, the dispute is not arbitrable.
55. Further, for the reasons stated in I.A.4376/2018 wherein this court has granted leave for entertaining the present suit under Section 92 of the CPC, this application is not liable to be entertained. I.A. is dismissed.
PRATHIBA M. SINGH JUDGE JULY 19, 2018/Rahul CS (OS) 148/2018 Page 27 of 27