Karnataka High Court
M/S Mother Theresa Educaiton Society ... vs Shri Muniyappa on 11 July, 2017
Equivalent citations: 2017 (4) AKR 157, (2018) 1 KANT LJ 374
Author: B.Veerappa
Bench: B. Veerappa
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF JULY, 2017
BEFORE
THE HON'BLE MR. JUSTICE B. VEERAPPA
M.F.A. NO.1998/2017 (CPC)
C/W
M.F.A. NO.1999/2017 (CPC)
IN MFA NO.1998/2017
BETWEEN:
1. M/s Mother Theresa
Education Society (R)
No.72, 6th Main Road
Sahakaranagara
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096
Rep. by Shri M.Narayanaswamy
President
2. Shri M.Narayanaswamy
S/o Late Munivenkatappa
Aged about 62 years
President
Mother Theresa Education Society (R)
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3. Shri I.V.Badigair
S/o Late Veerabhadrappa
Aged about 67 years
Secretary
Mother Theresa Education Society (R)
4. Shri G.Basetty @ Basavaraju
S/o Gangappa
Aged about 69 years
Treasurer
Mother Theresa Education Society (R)
5. Shri N.K.Lakshman Gowda
S/o Konneri Gowda
Aged about 61 years
Executive Committee Member
Mother Theresa Education Society (R)
6. Shri M.R. Govinde Gowda
S/o Late Ramappa
Aged about 63 years
Executive Committee Member
Mother Theresa Education Society (R)
All are C/at No.72, 6th Main Road
Sahakaranagara,
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096 ...Appellants
(By Sri Viswanatha Setty V, Advocate)
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AND:
1. Shri Muniyappa
S/o Narasimhaiah
Aged about 72 years
R/at No.4, 1st main, 3rd Cross
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096
Founder Life Member &
Executive Committee Member
Of Mother Theresa Educational
Society (R)
2. Shri T.R.Ashwathanarayan
S/o Late Rangappa
Aged about 51 years
R/at No.16, 1st Main
Sreekanteshwaranagar
Nandini Layout
Bengaluru - 560 096
Life Member & Executive Committee
Member Of Mother Theresa
Educational Society (R)
3. Smt. Ashwathamma
W/o T.R.Ashwathanarayan
Aged about 47 years
R/at No.16, 1st Main
Sreekanteshwaranagar
Nandini Layout
Bengaluru - 560 096
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Life Member & Executive Committee
Member Of Mother Theresa
Educational Society (R)
4. Shri Munivenkatappa
S/o Late Sonnappa
Aged about 63 years
Executive Committee Member
Of Mother Theresa Educational
Society (R)
5. Shri S. Mayanna Gowda
S/o B.N.Siddappa
Aged about 67 years
No.4 and 5 are R/at No.72,
6th Main road, Sahakaranagara
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096
Executive Committee Member
Of Mother Theresa Educational
Society (R) ... Respondents
(By Sri M. Shivappa, Senior Advocate
for Sri Govinde Gowda K. T., Advocate for C/R1 to R3)
This Miscellaneous First Appeal is filed under
Order 43 Rule 1(r) of the Code of Civil Procedure, 1908
against the order dated 28.01.2017 passed on IA No.2
in OS No.9105/2015 on the file of the LXIII Additional
City Civil and Sessions Judge, Bengaluru, allowing IA
No.2 filed U/o 39 Rule 1 and 2 R/w Sec. 151 of CPC,
etc.
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IN MFA NO.1999/2017
BETWEEN:
1. M/s Mother Theresa
Education Society (R)
No.72, 6th Main Road
Sahakaranagara
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096
Rep. by Shri M.Narayanaswamy
President
2. Shri M.Narayanaswamy
S/o Late Munivenkatappa
Aged about 62 years
President
Mother Theresa Education Society (R)
3. Shri I.V.Badigair
S/o Late Veerabhadrappa
Aged about 67 years
Secretary
Mother Theresa Education Society (R)
4. Shri G.Basetty @ Basavaraju
S/o Gangappa
Aged about 69 years
Treasurer
Mother Theresa Education Society (R)
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5. Shri N.K.Lakshman Gowda
S/o Konneri Gowda
Aged about 61 years
Executive Committee Member
Mother Theresa Education Society (R)
6. Shri M.R. Govinde Gowda
S/o Late Ramappa
Aged about 63 years
Executive Committee Member
Mother Theresa Education Society (R)
All are C/at No.72, 6th Main Road
Sahakaranagara,
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096 ...Appellants
(By Sri Viswanatha Setty V, Advocate)
AND:
1. Shri Muniyappa
S/o Narasimhaiah
Aged about 72 years
R/at No.4, 1st main, 3rd Cross
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096
Founder Life Member &
Executive Committee Member
Of Mother Theresa Educational
Society (R)
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2. Shri T.R.Ashwathanarayan
S/o Late Rangappa
Aged about 51 years
R/at No.16, 1st Main
Sreekanteshwaranagar
Nandini Layout
Bengaluru - 560 096
Life Member & Executive Committee
Member Of Mother Theresa
Educational Society (R)
3. Smt. Ashwathamma
W/o T.R.Ashwathanarayan
Aged about 47 years
R/at No.16, 1st Main
Sreekanteshwaranagar
Nandini Layout
Bengaluru - 560 096
Life Member & Executive Committee
Member Of Mother Theresa
Educational Society (R)
4. Shri Munivenkatappa
S/o Late Sonnappa
Aged about 63 years
Executive Committee Member
Of Mother Theresa Educational
Society (R)
5. Shri S. Mayanna Gowda
S/o B.N.Siddappa
Aged about 67 years
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No.4 and 5 are R/at No.72,
6th Main road, Sahakaranagara
Sreekanteshwaranagara
Nandini Layout
Bengaluru - 560 096
Executive Committee Member
Of Mother Theresa Educational
Society (R) ... Respondents
(By Sri M. Shivappa, Senior Advocate
for Sri Govinde Gowda K. T., Advocate for C/R1 to R3)
This Miscellaneous First Appeal is filed under
Order 43 Rule 1(r) of the Code of Civil Procedure, 1908
against the order dated 28.01.2017 passed on IA No.1
and 2 in OS No.9105/2015 on the file of the LXIII
Additional City Civil and Sessions Judge, Bengaluru,
allowing IA No.1 and 2 filed U/o 39 Rule 1 and 2 R/w
Sec. 151 of CPC, etc.
These appeals coming on for admission this day,
the Court delivered the following:
JUDGMENT
These appeals are filed against the order dated 28.01.2017 on IA Nos.1 and 2 made in OS No.9105/2015 on the file of the LXIII Additional City Civil and Sessions Judge, Bengaluru allowing the applications filed by the plaintiffs staying the operation and execution of the resolution passed by defendant -9- Nos.2 to 6 of first defendant Society dated 29.08.2015, till disposal of the suit and also restraining defendant Nos.1 to 6 from appointing any other person as the members to the Society in the place of plaintiffs till further orders of the Court.
2. Respondent Nos.1 to 3, who are plaintiffs before the trial Court filed OS No.9105/2015 for declaration, to declare that the resolution passed by defendant Nos.2 to 6 for removing the plaintiffs, who are the Life Members from the membership of the 1st defendant-Education Society in so called General Body meeting held on 29.08.2015 is arbitrary, illegal, irregular, capricious, void, opposed to principles of natural justice and not sustainable in law and also for consequential relief of declaration, declaring that the plaintiffs are entitled to continue to function in their respective posts in the 1st defendant Society and for permanent injunction restraining defendant Nos.2 to 6
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by themselves or any person under them by appointing any other persons as members of the Society till their term of office is over in the 1st defendant-Education Society, contending that the first defendant is an Education Society formed under the name of 'Mother Theresa Educational Society', which was registered under the Karnataka Registration of Societies Act, 1960 on 28.10.1980. The first plaintiff and defendant Nos.4, 5 and 6 are the founders i.e., totally 9 members as well as Life members of the first defendant Education Society. Similarly, defendant Nos.2, 3, 7 and 8 joined the first defendant-Education Society as Life Members by initially contributing more than Rs.3,725/-, Rs.3,725/-, Rs.2,990/- and Rs.4,250/- respectively in cash or in kind of building materials.
3. It was further contended that the plaintiffs and defendant Nos.2 to 8 were elected on 22.08.2014 and functioning now as President, Secretary, Treasurer
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and as Executive Committee Members of the first defendant-Education Society. The composition of Managing Committee of the first defendant Education Society shall consist of 9 members viz., including one President, one Vice-President, One Secretary, One Treasurer elected among them as office bearers stated above once in 4 years by rotation and some of them have even functioned for 2 to 4 terms in various capacities. When things stood thus, surprisingly, defendant Nos.2 and 3 by letters dated 05.05.2015 and 05.06.2015 respectively sought for details of accounts for the years 2009-10 from the first plaintiff, who is the treasurer and he was compelled and coerced as per the directions issued by the President has obtained the details. It is further contended that, thereafter, without notice and without following procedure, defendant Nos. 2 to 6 have removed the plaintiffs from the membership of the first defendant Society contrary to the Registered Bye-Law and the provisions of the Registration Act and
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principles of natural justice, etc. Therefore, they filed the suit for the reliefs sought for.
4. The defendants filed written statement and not denied the membership of the plaintiffs and contended that taking advantage of the Treasurer post, the first plaintiff has misappropriated the Society funds to the tune of Rs.54,00,000/-, therefore sought for dismissal of the suit and further contended that plaintiff No.2 is not a member. On the basis of the letter by plaintiff No.3, the same is treated as resignation letter, therefore, sought for dismissal of the suit.
5. The plaintiffs also filed IA No.1 U/o 39 Rules 1 and 2 of CPC, by way of temporary injunction to stay the operation of the resolution passed in the General Body Meeting dated 29.08.2015 removing the plaintiffs from the life membership and IA No.2 U/o 39 Rules 1 and 2 of CPC, for grant of temporary injunction restraining defendant Nos.2 to 6 or any person claiming
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through them from appointing any other person as members of the Society, till their term of office is over, reiterating the averments made in the plaint, defendants filed objections to the applications.
6. The trial Court considering both the IA's, by a common order, allowed the applications, granted temporary injunction staying the operation of the resolution dated 29.08.2015 till disposal of the suit and also restraining the defendants from appointing any other persons as members of the Society in the place of plaintiffs, till further orders of the said Court. Hence, present two appeals are filed.
7. I have heard the learned counsel appearing for the parties to the lis.
8. Sri Viswanatha Setty, learned counsel appearing for the appellants/defendants vehemently contended that the impugned order passed by the trial Court allowing IA Nos.1 and 2 is erroneous, contrary to
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materials and documents produced by the defendants, which clearly indicate that plaintiff No.1 has misappropriated an amount of Rs.54,00,000/-. When plaintiff No.1 has misappropriated Rs.54,00,000/- and plaintiff No.3 resigned herself from the membership, the impugned order cannot be sustained. Therefore, he sought to set aside the impugned order passed by the trial Court by allowing these appeals.
9. Per contra, Sri M.Shivappa, learned Senior counsel for Sri K.T.Govinde Gowda, learned counsel appearing for respondent Nos.1 to 3/plaintiffs sought to justify the impugned order. On instructions, learned Senior Counsel Sri M.Shivappa submits that the impugned order passed by the trial Court shall confine only to plaintiff Nos.1 and 3 and not against plaintiff No.2. Said statement is placed on record.
10. Learned Senior Counsel further submits that, before passing the resolution removing the
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plaintiffs from the life membership, defendant Nos.2 to 6, have not followed the procedure as contemplated under the bye-law or under the provisions of the Co- operative Societies Registration Act, no notice was issued and no opportunity was provided. Therefore, he sought to justify the impugned order passed by the trial Court granting injunction. Therefore, he sought to dismiss the present appeals.
11. Having heard the learned counsel for the parties to the lis, it is undisputed fact that, plaintiff Nos.1 to 3 filed the suit for declaration, to declare that the resolution passed by defendant Nos.2 to 6 removing the plaintiffs from Life Membership of the first defendant-Education Society on 29.08.2015 as illegal, arbitrary and also for permanent injunction restraining the defendant Nos.2 to 6 from appointing any other persons in the place of plaintiffs contending that they are the life members and removal is without any basis
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and no procedure is followed. The same is denied by the defendants by filing written statement reiterating that the first plaintiff has misappropriated Rs.54,00,000/- (Fifty-four Lakhs) and the removal is in accordance with law.
12. The trial Court considering the entire material on record, recorded a finding that, on going through the records before the Court it is very clear that plaintiffs were the members of first defendant-Society. The allegation of first defendant-Society and defendant Nos.2 to 6 is that, plaintiff No.1, who was treasurer of the Society made misuse of funds for his personal use and it is not accounted. Admittedly from 2009 to 2015-16 accounts of defendant No.1 Society was audited by auditor and report is submitted to the Registrar of Societies. The said report is signed by Secretary of the Society. If at all there is any misappropriation of funds in the Society as contended by defendant Nos.2 to 6, then
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why it was not reported in the audit report is not made known. Submission of audit report prima-facie disclose that accounts of the Society are correct. As such, entire allegations and counter allegation made against each other requires detailed investigation by way of evidence. Admittedly, there is no any enquiry conducted against plaintiff No.1 for misusing of funds. Admittedly, first defendant-Society has not issued any notice as required under law calling explanation of plaintiff No.1 for the alleged misappropriation. In the records filed before the Court by defendant Nos.1 to 6, nowhere it is stated that what was the amount of misappropriation. Why Society has not conducted any enquiry against plaintiff No.1 is not made known. It appears that the principles of natural justice is not followed before passing resolution against the plaintiffs. As such, it is very difficult to accept the contention of defendant Nos.1 to 6 that removal of plaintiff No.1 from membership of the first defendant-Society is in accordance with law.
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13. The trial Court further recorded the finding that, on going through the alleged resignation letter of plaintiff No.3 dated 31.01.2015, it is clear that there is no any word in the letter that plaintiff No.3 is submitting her resignation. She only expressed her inability to attend the meeting and requested Society to permit her husband, plaintiff No.2 to attend the meeting. As such, the contentions of defendant Nos.2 to 6 that as per the resignation letter submitted by plaintiff No.3, her resignation is accepted and resolution is passed in the meeting cannot be acceptable one at the stage of the proceedings. Therefore, the trial Court proceeded to pass the impugned order allowing the applications filed by the plaintiffs.
14. In the absence of any contrary material produced by the present appellants either before this Court or before the trial Court, it is not possible to deviate the orders passed by the trial Court granting
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injunction as prayed for. The appellants have not made out any ground to interfere with the impugned order passed by the trial Court exercising the powers of this Court as appellate jurisdiction under Order LXIII Rule 1(r) of the Code of Civil Procedure. Accordingly, these MFAs are disposed of.
15. While disposing of the present appeals, it is made clear that, since Sri M.Shivappa, learned Senior Counsel for Sri K.T.Govinde Gowda, learned counsel appearing for respondent Nos.1 to 3/plaintiffs submits that the impugned order passed by the trial Court confines only against plaintiff Nos.1 and 3. In so far as the order passed against the plaintiff No.2, set-aside and modified to the extent stated supra.
16. However, it is made clear that any observations made by the learned trial Judge while passing the impugned order on IA Nos.1 and 2 shall not come in the way of either of the parties to establish their
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case independently based on the oral and documentary evidence to be adduced and to be produced. The trial Court shall decide the suit strictly in accordance with law.
SD/-
JUDGE KMV*