Calcutta High Court
Jai Surana vs The Calcutta Swimming Club And Ors on 23 September, 2021
Author: Moushumi Bhattacharya
Bench: Moushumi Bhattacharya
OD-3
IA NO. GA/1/2021
IN CS/189/2021
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
JAI SURANA
VERSUS
THE CALCUTTA SWIMMING CLUB AND ORS.
BEFORE:
The Hon'ble JUSTICE MOUSHUMI BHATTACHARYA
Date : 23rd September, 2021.
[Via Video Conference] Appearance:
Mr. Jishnu Chowdhury, Adv.
Mr. Sarvapriya Mukherjee, Adv.
Mr. Soumabho Ghose, Adv.
Ms. Noelle Dey, Adv.
Mr. Aashish Choudhury, Adv.
Mr. Jishnu Saha, Sr. Adv.
Mr. Kuldip Mullick, Adv.
Mr. Ratnanko Baner, Sr. Adv.
Mr. Rudrajit Sarkar, Adv.
Mr. Debangshu Dinda, Adv.
Mr. Nikunj Barlia, Adv.
The Court: The plaintiff is a permanent member of the Calcutta Swimming Club and has also served as the President as well as a Committee Member of the Club. This is a representative action for and on behalf of the members of the Calcutta Swimming Club. The defendant no.1 is the Calcutta Swimming Club which is an unincorporated body of persons and is a social club with around 3,600 members. The other defendants are the President, Secretary and the Members of the present Committee of the Club.2
The plaintiff seeks an injunction restraining the defendants from conducting the Annual General Meeting and the election proposed in such meeting on the virtual mode, which according to the plaintiff, is contrary to the Rules and Bye-laws of the Club. The impugned notice by which the AGM has been fixed on the virtual mode is dated 10th September, 2021 and the AGM has been fixed on 25th September, 2021.
The grounds urged on behalf of the plaintiff and the other members of the Club is that holding the AGM or the election on the virtual mode would amount to infraction of the Rules and Bye-laws of the Club. Learned counsel appearing for the plaintiff submits that the Rules provide for a procedure for election of the Committee, which cannot be complied with on the virtual platform. Counsel relies on Rule No. 35(d) and (e) of the Rules and Bye-laws of The Calcutta Swimming Club in this respect. It is also submitted that holding the elections on the virtual mode would result in malpractices and a lack of transparency in the voting pattern.
The impugned objection taken by learned counsel appearing for the defendants, i.e., the existing Committee members including the President and Secretary, is the pandemic and the restrictions recommended as a consequence thereof. According to counsel, the restrictions imposed by the government are still in place and holding the AGM and the elections on the virtual mode is the only solution to the potential health risk in having a large gathering of members at the Club.3
The primary point which is to be seen is whether holding of the AGM and the elections on the virtual mode would amount to infraction of the Rules of the Club.
The relevant Rules and Bye-laws :
The Rules and Bye-laws of the Calcutta Swimming Club, established in 1887, is the base document pertaining to and including procedures to be adopted for Membership, Governing Body, General Meeting and Suspension and Expulsions of members. Rule No. 23 is the relevant Rule and states that every member would be bound by the Rules and the Bye-laws of the Club; Rule No. 30 gives the Committee the sole authority to interpret the rules and regulations; Rule Nos. 32 and 34 pertains to the Committee and the Election of the President, respectively and Rule No. 35 relates to the mode of holding elections for the Committee. Rule No. 35 (a) provides that the Committee shall be elected at the AGM and Rule No. 35 (d) sets out the procedure for facilitating the election of the Committee in the ensuing year. This Rule needs a more detailed discussion. Rule No.35 (d):
The procedure envisaged under this Rule consists of the following stages namely;
(i) issuing of election papers consisting of names of the members willing to serve on the Committee "only" at the general meeting,
(ii) to those attending members who are entitled to vote,
(iii) the above members, i.e., the attending members will be requested to return the papers at a proper time "during" the general meeting, with tick marks against the names of those members not exceeding 11 in all, 4
(iv) the Committee shall make its best endeavour to conduct the election of the President and Committee through Electronic Voting Machine in which event the members shall exercise their voting right and "punch" against the name of the member,
(v) in case of any contingency, the manual method of counting may be adopted.
Rule No.35 (e) :
(i) Under this Rule, each candidate either for the President or for the Committee shall be entitled to nominate a Scrutiniser/Observer.
(ii) "and at such" AGM, the Chairman shall appoint among the names, two scrutinisers and two observers,
(iii) the Scrutinisers / Observers shall only be from the pool of permanent Members of not less than 25 years of standing,
(iv) the Scrutinisers / Observers shall scrutinise / observe the election process,
(v) the Scrutinisers shall report to the meeting the names of the elected members.
(vi) the contents of the voting papers shall not be disclosed in any other respect.
Rule No.35 (g) :
If two or more members obtain an equal number of votes, those members "present" and eligible to vote shall vote again for the election of such members. (The words underlined have been specifically used in the Rules). 5
The procedure to be followed for election of the Committee at the AGM hence contemplates physical attendance of the members who shall be present at the AGM for the voting which is to take place thereat. There is absolutely no doubt that Rule No. 35 does not envisage elections on the virtual mode. The sequence in which the election is to be conducted is premised on members who "attend" the meeting and are given the election papers at the meeting. The word "only" is used in connection to issuing of the election papers solely to those members who are physically present at the meeting. Read with Clause (e) which provides for Scrutinisers and Observers, it is clear that the Rules envisage a fair process for the elections and seeks to prevent outsiders and non-attending eligible members from taking part in the voting. Clause (g) of Rule 35 also places emphasis on ".............those members present and eligible to vote..........".
The argument put forward in support of virtual elections is only the potential health risk. This defence cannot be accepted for the following reasons. First, the Management thought it fit to amend Rule No. 50 - Special General Meetings - on 26th December, 2020 to provide that a Special General Meeting can be held on the virtual platform. There is no such amendment which was effected in respect of Rule No. 35 when the Club was already familiar with Covid protocols and had every opportunity of amending the Rules which provide for physical elections at AGMs. This was admittedly not done. Second, there is no explanation for converting a notice issued on 21st August, 2021 for filing nominations for election to the Committee including an attachment for the AGM to be held in the physical form to a subsequent notice of 5th September, 2021 for the AGM to be held on the virtual platform. The reason given for such change is Covid 6 restrictions. However, Covid restrictions were also in place when the first notice was issued for a physical AGM. Third, the current Covid protocols forming the part of the Government Circulars envisage physical presence of not more than 50% of the capacity at theatre halls, auditoriums, open-air theatres and swimming pools. Hence, all that the Club was required to do was to ensure that Covid protocols, as directed by the Government, are maintained by permitting 50% of the total capacity in the Club at a given point of time. Since the Club has approximately 3,600 members, there would be several ways of ensuring that only a limited number of persons, who are interested in voting, are physically present in the Club. Organising clusters of members of a certain number and at a given point of time at a particular place is not uncommon. The Club has sufficient space for organising an election on the physical mode without violating the recommended Covid norms.
The next question is whether holding the elections on the virtual mode would result in any unfairness. Each user would be given a user ID and a password for remote e-voting. The mode of holding e-voting of National Securities Depositories Limited as would appear from the instructions given to members for attending the AGM, is that members would be required to log-in to the e-voting website and join the link for the meeting. The procedure hence is an open-field procedure which would admit of sharing of user IDs and passwords. There is hence a distinct possibility of the e-voting being thrown open to the outsiders, non-members and even to the pubic at large who would be able to participate in the elections without being a member of the Club who is eligible to do so. The idea behind voting in a social club is a personal interest on the part of the 7 member to elect his / her chosen candidate. The object cannot be to take away the unique choice and identity of a member and replace it with unfamiliar, disinterested outsiders who are brought into the voting for the wrong reasons.
Rule No. 35 not only has proper checks and balances in place for preventing misuse of the voting option in terms of physical attendance of members and nomination of Observers but also ensures restriction of voting process only to the eligible members of the Club. Unlike a company which permits proxy voting, the Rules of Calcutta Swimming Club are altogether different where only physical voting is permitted save and except Rule No. 50 which was amended on 26th December, 2020 for permitting e-voting.
The question is not whether there is a possibility of the elections being robbed of transparency, what is more relevant is whether the Committee has compromised with the checks and balances built into the Rules by holding election on the virtual mode. Even if there is a single possibility of misuse of even a single vote, the court cannot permit that to happen.
The argument of the health risk due to the pandemic would also be belied by the various physical entertainment programmes which are regularly being held at the Club premises and are also scheduled to be held in the coming months.
The argument that the plaintiff and the applicants in G.A.2 of 2021 who have been added as co-plaintiffs are the only ones interested in stalling the AGM is also to be rejected since even a single member is entitled to raise the pertinent issue of infraction of the Rules of the Club. The point taken on behalf of the defendants with regard to Rule No. 30 as to the Committee being the sole 8 authority for interpretation of the Rules and the Bye-laws and the finality of the decision of the Committee is not relevant since under the said Rule, the question of interpretation would arise only where the answer is not provided for in the Rules. In the present case, the question pertaining to holding of elections and AGM has been clearly enunciated in Rule No. 35 and hence there is no requirement for any interpretation thereof by the Committee.
In any event, the Committee cannot give any interpretation to any Rule which is contrary to the Rules and Bye-laws of the Club. The lack of preparedness on the part of the Committee would also be evident from the e- mails of 5th September, 2021 which inform the members that the AGM will be held on the virtual platform and seeks the member to vote through their e-mail id. The Club obviously disregards the fact that many members who do not have an e-mail id would not receive the mail of 5th September, 2021 in the first place.
That the Rules of an association or a club bind the members and are sacrosanct and the Court can step in to ensure strict compliance thereof has been reiterated in various decisions from Enderby Town Football Club Ltd. vs. Football Association Ltd. [1971] 1 Ch. 591, T. P. Daver vs Lodge Victoria AIR 1963 SC 1144 to BCCI vs Netaji Cricket Club (2005) 4 SCC 741. In Paltu Mukherjee and East Bengal Club 2010 SCC Online Cal 2307, this Court leaned in favour of intervention by a court upon a justifiable apprehension that elections may not be conducted in a free and fair manner. The Delhi High Court in Sai Sewa Dal vs Union of India 2007 (98) DRJ 679 conferred power on the Observer to ensure conducting of elections in proper manner. The aforesaid decisions assist the plaintiff in the case for intervention by the Court.9
In view of the above discussion, this court is inclined to accept the rationale of holding the AGM and the elections in the physical mode. There is no possible method by which the Club can ensure that virtual elections will be fair and transparent without any outsiders, non-members or ineligible members participating in the e-voting contrary to the mandate of Rule No. 35. In the absence of such checks and balances in place and in the absence of the Club coming forward with a viable plan for holding physical elections with health protocols, there shall be an order in terms of prayer (a) of the Notice of Motion. The defendants are restrained from conducting the Annual General Meeting or the election on the virtual mode or giving effect to the notice dated 10th September, 2021 calling for AGM on the virtual mode.
The Club shall however ensure that the AGM and the elections are held in the physical format in accordance with the Rules and Bylaws with the following guidelines:
(i) The elections shall, however, be held in 8 or more designated places in the club precincts, each place being at a reasonable distance from each other and preferably located in the outdoor area.
(ii) There shall be no more than 20 persons in each of these designated places at a given point of time.
(iii) The time for casting votes shall be divided into hourly brackets with a gap of 30 minutes between each hourly window so that entry and exit of attendee-members can be regulated.
(iv) The Club shall devise a system of queues with physical-distancing and waiting areas with adequate seating. At no point of time should there be more 10 than 20 people in a single queue or cluster whether in a sitting or standing position.
(v) Any form of social interaction exceeding 20 persons shall be discouraged.
(vi) Outlets for food and beverages should not permit more than 20 persons at any given point of time.
(vi) Designated persons should be posted at all strategic points to regulate the number of persons and prevent unnecessary gatherings.
(vii) Physical distancing, adequate ventilation wherever possible, wearing of masks and use of sanitizers shall be compulsorily enforced.
(viii) Members attending the AGM shall be made aware of the protocols which are to be maintained for the elections.
After dictation of the order, learned Counsel appearing for the defendants submits, though not on instructions, that given the guidelines recommended by the Court, the AGM and the elections may be held by 31st December, 2021 on the physical format. Counsel gives examples of other social clubs where elections have been postponed under similar circumstances.
The defendants shall be at liberty to convene the AGM and elections at the time deemed suitable taking into account the Rules and Bye-laws and the recommended safety protections.
GA No.1 of 2021 is allowed and disposed of in terms of this order.
(MOUSHUMI BHATTACHARYA, J.) sp