Karnataka High Court
N Govinda Reddy Yadhav vs S V Singre Gowda on 7 November, 2013
Author: B.S.Patil
Bench: B.S.Patil
RFA 774/2005
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 7TH DAY OF NOVEMBER, 2013
BEFORE
THE HON'BLE MR.JUSTICE B.S.PATIL
R.F.A.No.774/2005
BETWEEN
1.N GOVINDA REDDY YADHAV
S/O LATE RANGE GOWDA
AGED ABOUT 85 YEAR S
R/O NO 28/29 MADHAVANAGAR,
YAMUNABAI ROAD, BANGALORE 1
2.K VISHWANATH
S/O NOT KNOWN
AGED ABOUT 55 YEARS
R/O NO 364, 7TH MAIN
III CROSS V BLOCK
JAYANAGAR, BANGALORE 74
3.NAGAVENI K
W/O K VISHWANATH
AGED ABOUT 45 YEARS
R/O NO 364 7TH MAIN
III CROSS V BLOCK
JAYANAGAR, BANGALORE 74
4.N JAGADEESH
S/O N GOVINDAREDDY YADHAV
AGED ABOUT 55 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1
5.N BALAKRISHNA
S/O N GOVINDAREDDY YADHAV
AGED ABOUT 51 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1
RFA 774/2005
2
6.UMA JAGADISH
W/O N JAGADISH
AGED ABOUT 46 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1
7.UMA BALAKRISHNA
W/O N BALAKRISHNA
AGED ABOUT 46 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1
8.VIJAYAKRISHNA YADHAV
S/O N JAGADISH
AGED ABOUT 27 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1
9.AJAY KRISHNA YADHAV
S/O N JAGADISH
AGED ABOUT 23 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1
10.K V NIKHIL
S/O K VISHWANATH
AGED ABOUT 23 YEARS
R/O NO 364, 7TH MAIN III CROSS,
V BLOCK JAYANAGAR
BANGALORE 74
11.ADARSH
S/O N BALAKRISHNA
AGED ABOUT 23 YEARS
R/O NO 28/29
MADHAVANAGAR, YAMUNABAI ROAD
BANGALORE 1. ... APPELLANTS
(By Sri.S.K.VENKATA REDDY, ADV. FOR
Sriyuths NAGAIAH & I.S.HIREMATH, ADVS.)
RFA 774/2005
3
AND
1. S V SINGRE GOWDA
S/O S.D. VASANTHA GOWDA
AGED ABOUT 58 YEARS
MANAGING TRUSTEE CUM SECRETARY
GNANAMANDIRA EDUCATION TRUST
KANAKANAGAR J.P NAGAR POST,
BANGALORE 78
2.GNANA MANDIR EDUCATION TRUST (R)
KANAKANAGARA J.P NAGAR POST,
YELACHENAHALLI KANAKAPURA MAIN ROAD
BANGALORE 78 BY ITS MANAGING
TRUSTEE AND SECRETARY S.V. SINGREGOWDA
3.S P CHANNAPPA
TRUSTEEE, GNANAMANDIRA EDUCATION TRUST
MAJOR NO 451, III MAIN ROAD,
MATHIKERE, BANGALORE 54
4.S V NARASAPPA TRUSTEE
GNANAMANDIRA EDUCATION TRUST
MAJOR
NO 30 I A MAIN ROAD,
NANJAPPA BLOCK ADUGODI
BANGALORE 30
5.G N MALLAPPA
TRUSTEE
GNANAMANDIRA EDUCATION TRUST
MAJOR
NO 701, 4TH CROSS 5TH BLOCK
7TH MAIN JAYANAGAR
BANGALORE
6.UMA
TRUSTEE
GNANAMANDIRA EDUCATION TRUST
MAJOR
KANAKANAGAR J.P NAGAR POST,
YELACHENAHALLI
BANGALORE
7.S DHANANJAYA
TRUSTEE
GNANAMANDIRA EDUCATION TRUST
RFA 774/2005
4
MAJOR
KANAKANAGAR J.P NAGAR POST,
YELACHENAHALLI BANGALORE
8.J M NARASAMMA
TRUSTEE
GNANAMANDIRA EDUCATION TRUST
MAJOR 5TH CROSS PILLEKAMMA TEMPLE
ROAD AMRUTHAHALLI YELAHANKA HOBLI
BANGALORE 92
9.JAYAPADMA
TRUSTEE
GNANAMANDIRA EDUCATION TRUST
MAJOR
R/O NO 50, 19TH MAIN
MUNESHWARA BLOCK BANGALORE 26
10.R CHANDRASHEKAR
TRUSTEE, GNANAMANDIRA EDUCATION TRUST
MAJOR S/O LATE RAMANJINAPPA
AMRUTHAHALLI VILLAGE, YELAHANKA HOBLI
BANGALORE 92
11.STATE OF KARNATAKA
REP BY REVENUE SECRETARY
DEPARTMENT OF REVENUE
GOVERNMENT OF KARNATAKA
V FLOOR M.S. BUILDING
AMBEKDAR VEEDHI
BANGALORE 1
12.INSPECTOR GENERAL OF REGISTRATION
AND COMMISSIONER OF STAMPS
BWSSB 7TH FLOOR CAUVERY BHAVAN
BANGALORE 9
13.DISTRICT REGISTRAR OF SOCIETIES
BANGALORE URBAN DISTRICT
BANGALORE 9. ... RESPONDENTS
(By Sri.S V SINGRE GOWDA - PARTY-IN-PERSON FOR R1 & 2,
Sri R.P.SOMASHEKHARAIAH, ADV. FOR R3-10,
GOVT. ADV. FOR R11,
SMT.B.P.RADHA, HCGP FOR R12, 13 - SERVED)
RFA 774/2005
5
THIS R.F.A. FILED U/S 96 R/W O 41 R 1 CPC AGAINST
THE JUDGMENT AND DECREE DATED: 6.4.2005 PASSED IN
OS.NO. 3903/2002 ON THE FILE OF THE XVI ADDL.CITY CIVIL
& SESSIONS JUDGE, BANGALORE CITY (CCH.NO.12),
DECREEING THE SUIT FOR DECLARATION AND INJUNCTION.
THIS APPEAL COMING ON FOR DICTATING ORDERS, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
1. In this Regular First Appeal filed under Section 96 CPC, the appellants are challenging the judgment and decree dated 06.04.2005 passed by the XVI Addl. City Civil & Sessions Judge, Bangalore City, in O.S.No.3903/2002.
2. The appellants herein were defendants 4 to 14 before the Trial Court. Respondents 1 to 10 were the plaintiffs and respondents 11 to 13 were defendants 1 to 3 before the Trial Court.
3. Initially, the suit was filed only by the 1st respondent herein - Singre Gowda, claiming as Managing Trustee and Secretary of Gnanamandira Education Trust, Kanakanagara, Bangalore. Subsequently, the other plaintiffs were impleaded at the instance of the plaintiff - Singre Gowda, in their capacity as members of the Gnanamandira Education Trust. RFA 774/2005 6 The suit was filed seeking a declaration that the erstwhile Gnanamandira Education Society stood validly dissolved as per the resolution passed by the Special General Body in the Meeting held on 27.05.2001 and for a further declaration that the General Body Meeting held on 21.04.2002 by defendants 4 to 14 of the Society and the audited accounts and also the list of members submitted by the 4th defendant - N.Govinda Reddy Yadhav approved by the Deputy Registrar of Societies, Bangalore Urban District, Bangalore, on 30.05.2002 were null and void. A decree of permanent injunction to restrain defendants 4 to 14 from interfering with the smooth administration of the Gnanamandira Education Trust and the educational institutions run by the said Trust was also sought.
4. Plaintiff - Singre Gowda instituted the suit contending that he promoted the society and registered the same in the name and style Gnanamandira Education Society on 23.10.1986, of which he was the Secretary. The Society, it was alleged, was permitted to run educational institutions such as Gnanamandira Kannada Higher Primary School, RFA 774/2005 7 Gnanamandira High School (Kannada) and Gnanamandira Sanskrit School at Kanakanagara, Bangalore - 78. The said educational institutions were duly recognized by the Department of Education, Government of Karnataka. Plaintiff contended that in the General Body Meeting held on 12.07.1992, one N.Govinda Reddy was elected as President and his son Balakrishna was elected as Vice-President and his daughter-in-law Smt. Uma Balakrishna was elected as Treasurer and his son N.Jagadish was elected as Secretary. He further alleged that his other relatives were elected as Directors and the plaintiff was elected as one of the Directors. Plaintiff contended that he was latter continued as Secretary, until the said Society was dissolved on 27.05.2001.
5. Differences arose between the plaintiff and the 4th defendant in connection with the alleged false complaint said to have been lodged by the 4th defendant to the Registrar against the plaintiff. A Special General Body Meeting was called on 23.11.2000. The 4th defendant was issued show cause notice calling upon him to explain his conduct in RFA 774/2005 8 giving the false complaint against the plaintiff making it clear that otherwise he would be removed from the Presidentship in the Special General Meeting scheduled to be held on 23.11.2000. The 4th defendant did not give any explanation. The notice of the meeting of the Special General Body meeting was also sent to the 4th defendant and other Executive Members apart from publishing the same in the Sanjayvani Daily Newspaper on 22.11.2000.
6. In the General Body meeting held on 23.11.2000, it was unanimously decided to remove the 4th defendant from the post of President, apart from deciding to remove some of the office bearers also. One Mr. S.P.Channappa was elected as President. The removal of the 4th defendant from the post of President and appointment of new President was intimated to the 4th defendant.
7. It was further urged by the plaintiff that as the institutions run by Gnanamandira Education Society were facing financial stringency and the managing committee of the society was not in a position to provide sufficient infrastructure, the Executive Committee in its meeting held RFA 774/2005 9 on 18.03.2001 decided to dissolve the society by calling for a Special General Body meeting. In the said meeting held on 29.04.2001, the Society decided to call for objections, if any, and decided to hold another Special General Body meeting on 27.05.2001. Again, in the Special General Body meeting held on 27.05.2011, it was unanimously decided to dissolve the Gnanamandira Education Society and to form a Trust in the name of Gnanamandira Education Trust so as to run the educational institutions. Accordingly, the Trust was registered on 04.06.2001 with the Trustees by name S.P.Channappoa as President and the 1st plaintiff - Singre Gowda and other seven Trustees. The plaintiff claims that after the Trust was registered, the affairs of the educational institutions were run by the Trust, but the 4th defendant who was removed from his post as President long back and although the educational society had been dissolved on 27.05.2001, in order to grab the educational institutions run by the Trust, created certain audited accounts and claimed to have conducted proceedings of the Gnanamandira Educational Society on 21.04.2002. The Registrar, despite objections raised by the plaintiff, unlawfully approved the RFA 774/2005 10 documents submitted by the 4th defendant regarding the proceedings of the Society and the audited accounts of the Society submitted along with the list of committee members by the 4th defendant. This made the plaintiff to approach the Civil Court to file the present suit seeking declaratory relief apart from seeking a decree of permanent injunction.
8. The 4th defendant resisted the suit denying the plaint averments contending inter alia that he was the President of the Society which was running the educational institutions at property No.305-A, Khatha No.18/19-1 situated at Kanakanagar, Bangalore-78, and also at No.426-A formed in Sy. No.20 situated at the same place. He further contended that the property in question in which the institutions were being run originally belonged to the deceased wife of the 4th defendant - Smt. Sarojamma and the building therein was also constructed by the 4th defendant. After the death of Sarojamma, the khatha in respect of the properties stood in the name of the 4th defendant. He further alleged that during the lifetime of his wife, plaintiff - Singre Gowda got her signature on some blank paper stating that the khatha in RFA 774/2005 11 respect of the property wherein the school was run had to be transferred in her name and got created an agreement of sale and also a power of attorney in respect of both these properties. He got the khatha transferred in his name during the year 1998. Having come to know of the same, the 4th defendant took steps to get the same rectified by filing W.P.No.17434/2001. As per the direction issued in the said writ petition, the khatha was transferred in the name of the 4th defendant and the khatha, thereafter continued to stand in the name of the 4th defendant.
9. He further alleged that as the plaintiff misappropriated the funds of the society, he was removed from the post of Secretary in the General Body meeting held on 18.10.2000 by appointing one N.Jagadish in his place. The 3rd defendant
- Registrar having approved the list of members of the Executive Committee of the Society which was headed by the 4th defendant for the year 2002-03, the said Committee headed by the 4th defendant was legally entitled to manage the affairs of the society. The 4th defendant strongly refuted the right of the plaintiff to dissolve the society. Reference is RFA 774/2005 12 made to the suits filed for injunction by the present plaintiff earlier in O.S.No.16405/2000 and another suit in O.S.No.4990/2001 filed by the present plaintiff against the 4th defendant herein and three others seeking specific performance by executing registered sale deed in respect of the property where the educational institutions were being run, on the basis of the agreement of sale dated 08.09.1995. It is submitted at the bar that O.S.No.16405/2000 filed by the Gnanamandira Education Society represented by the plaintiff herein against the 4th defendant and another seeking permanent injunction has been decreed on 17.01.2008. A copy of the said judgment made available for perusal discloses that the suit filed by the plaintiff has been decreed and the defendants and any other person claiming under them are restrained from interfering with the smooth functioning of the educational institutions run by the plaintiff. As regards the suit filed for specific performance based on the agreement of sale, it is stated at the bar that the said suit is still pending.
RFA 774/200513
10. The 4th defendant has contended that himself and other members of the Executive Committee who have been legally constituted as the Managing Committee are entitled to run the affairs of the institution and the plaintiff and the Trust had absolutely nothing to do with the management of the society and the educational institutions. The defendant further denied issue of notice by the society before holding the General Body Meeting dated 23.11.2000. The defendant, in fact denied the very fact of holding the meeting on 23.11.2000, so also the dissolution of the society vide resolution dated 27.05.2001. It was further alleged that even if the Trust can be said to have been created, the said Trust had absolutely nothing to do with the society which was headed by the 4th defendant and was run by the managing committee duly elected.
11. Based on the pleadings, the following issues were framed.
(i) Whether the plaintiffs prove that the dissolution of Gnana Mandira Education Society in Special body meeting held on 27.05.2001 is valid?
RFA 774/2005 14 (ii) Whether the plaintiffs further prove that the meeting held by defendants 4 to 14 on
21.04.2002 and audited accounts and list of committee members submitted by defendants 4 and approved by defendant No.3 on 30.05.2002 is null and void?
(iii) Whether the plaintiffs prove that the Gnana Mandira Education Trust is constituted in accordance with law and the Gnana Mandira Education Trust is entitled to manage the institutions which were run by the Gnana Mandira Education Society?
(iv) Whether the plaintiffs prove that the defendants 4 to 14 are interfering with their smooth administration of Gnana Mandira Education Trust and also educational institutions run by the Gnana Mandira Education Trust?
(v) Whether the defendant No.4 proves that the suit filed by the plaintiff claiming to be the Managing Trustee cum Secretary of Gnana Mandira Education Trust is not maintainable?
(vi) Whether the defendant No.4 proves that during the tenure of the plaintiff as the Secretary of the Gnana Mandira Education Society has RFA 774/2005 15 misappropriated huge funds and committed irregularities?
(vii) Whether the plaintiff is entitled to the reliefs as sought for in the plaint?
(viii) To what reliefs the parties are entitled?
(ix) What order or decree?
12. In support of their case, the plaintiffs examined the 1st plaintiff as PW-1 and got marked Exs.P-1 to P139. On behalf of the defendants, the 4th defendant - N.Govinda Reddy Yadav has been examined as DW-1 and Exs.D-1 to D-71 are produced and marked.
13. After considering the oral and documentary evidence adduced, the Trial Court has held that the plaintiff successfully proved that as per the resolution dated 27.05.2001 the Gnanamandira Education Society was dissolved and subsequently a Trust was constituted by name Gnanamandira Education Trust to manage the educational institutions. It has also further held that the meeting of the society held by defendants 4 to 14 on 21.04.2002 and the RFA 774/2005 16 audited accounts and list of committee members submitted by the 4th defendant approved by the 3rd defendant were null and void. Plaintiff was also held entitled for permanent injunction.
14. The Trial Court has recorded a finding that defendants 4 to 14 were inducted as office bearers of the society during the year 1992 although they were not enrolled as regular members of the educational society by paying subscription towards their membership and therefore, they could not be considered as regular members of the society in terms of the bye-laws of the society.
15. Referring to Section 22 of the Karnataka Societies Registration Act, the Trial Court has held that by a resolution passed by not less than 3/4th members of the society, the society may be resolved to be dissolved, in which event, the society stands dissolved. Referring to the resolution marked at Ex.P-131 and the resolution passed on 27.05.2001, the Trial Court has recorded a finding that by a unanimous resolution passed, the society stood dissolved in accordance with Section 22 of the Karnataka Societies Registration Act. RFA 774/2005 17 It has also found that Exs.P-14 & 15 disclosed that the concerned authority of the Education Department has accorded permission for the dissolution of the education society as per Rules. The Trial Court has further found that though, admittedly, the 4th defendant learnt about their removal from the society, during the month of December 2000, they did not take any legal steps nor for that matter, the subsequent dissolution of the society and the formation of the Trust was challenged. It has further held that the dissolution of the society and the handing over the institution to the management of the Trust had been duly approved by the Department. It has also held that as the society had stood dissolved, question of the 3rd defendant approving the audited accounts of the society at the instance of the 4th defendant did not arise at all. Hence, the audited accounts and the list of members submitted by the 4th defendant approved by the 3rd defendant on 30.05.2002 have been declared as null and void.
16. Learned Counsel appearing for the appellant Mr. Venkat Reddy refers to the resolution dated 12.07.1992 RFA 774/2005 18 marked as Ex.P130 to show that defendants 4 to 14 were inducted as members of the Society. As per this resolution, no doubt the 4th defendant has been elected as President and the other persons were elected as office bearers to the other posts. His contention based on Ex.P-130 is, that the defendants were duly inducted as members of the society by virtue of this resolution. He further takes me through the bye-laws of the society which are produced at Ex.P-124, to contend that the rules pertaining to membership which has to be obtained by making necessary application addressed to the Secretary and the requirement of paying any admission fee and the subscription fee had no application to the case of the appellants-defendants, as the defendants were voluntarily inducted into the society as its office bearers due to financial constraints faced by the society and in order to overcome the financial crisis, the General Body had decided to induct the 4th defendant as President and others as office bearers of the society.
17. In so far as Rule 6 of the bye-laws providing for removal of a member who is in arrears of subscription for RFA 774/2005 19 three months or more without satisfactorily explaining the same to the Society, he contends that there can be no such removal without giving any notice and providing opportunity to pay the subscription fee. Inviting the attention of the Court to bye-law No.12, he contends that notice of not less than seven days shall be given to all members in case of annual or special general body meeting. In the present case, the plaintiff claimed that in the special general body meeting convened on 23.11.2000, the 4th defendant and his superiors
- other defendants were removed from the membership, hence, unless it is established that seven days clear notice had been given to these defendants before convening the special general body meeting, the resolution passed cannot be termed as valid or legally sustainable. He further points out that even as per this resolution, the defendants were sought to be removed from their post as members of the committee and not as members of the society. He also contends that a member in arrears of subscription ceases to be the member of the committee and not the member of the society. In this connection, he draws the attention of the Court to bye-law No.16.
RFA 774/200520
18. Inviting the attention of the Court to bye-law No.29, he contends that provisions of Sections 22 & 23 of the Karnataka Societies Registration Act, are applicable. It is further contended by him that before the dissolution of the society as per the resolution dated 27.05.2001, no notice of seven days was given to the defendants as required under the bye-law notifying the defendants to attend the meeting.
19. He also points out that in the resolution dissolving the society, nothing is stated about the property of the society. He invites the attention of the court to the evidence of PW-1, to contend that nothing has been stated regarding the issue of notice to the defendants. He also points out that there is indeed an admission in the cross-examination of PW-1 that no notice were served on the defendants before passing the resolution dissolving the society. He also points out that even as per the Trust Deed at Ex.P-129, there is nothing to show that the properties of the society had been taken over to the Trust and that to this effect there has been an admission on the part of PW-1 in the cross-examination. He thus contends that as the Trial Court had failed to record any finding RFA 774/2005 21 regarding the validity of the meeting of the society wherein the resolution dated 23.11.2000 was passed to remove the defendants from the society the judgment was illegal. He further contends that although DW-1 in his evidence has specifically stated that no general body meeting was held on 27.05.2001 and therefore there was no dissolution of the society in accordance with law and although this version was not challenged in the cross-examination, the Trial Court has ignored the same while recording a finding to the contrary. He has summed up contending that the first relief sought by the plaintiff being a negative relief could not have been granted and the second relief had become infructuous. Therefore, the Trial Court committed a serious error in decreeing the suit.
20. Party-in-person Mr. Singre Gowda - 1st respondent and Mr. Somashekharaiah, learned Counsel for respondents 3 to 10 have strongly supported the findings recorded by the Trial Court and the judgment and decree passed. They have taken me through the evidence on record, both oral and documentary to urge that there has been due service of RFA 774/2005 22 notice on the defendants of the General Body meeting scheduled on 23.11.2000. They have contended that notice was issued on 03.06.2000 as per Ex.P-49 which was sent under certificate of posting. He further contends that before issuing the said notice, another notice dated 01.11.2000 had been issued as per Ex.P-72 which was sent under certificate of posting. He invites the attention of the Court to Ex.P-14 & P-134 to contend that notices have been duly served on the 4th defendant and other defendants. He has also taken me through the resolution dated 23.11.2000 particularly subject No.4, wherein it is resolved that the defendant should not attend the meetings as they were no longer members and that they were not eligible for appointment as executive members being not at all members of the society. He has urged that the resolution dated 18.10.2000 passed by Govinda Reddy's faction resolving to remove Singre Gowda as Secretary of the Society and appoint another person was illegal. He urges that the notice of the said meeting was not given to any of the existing members, but only members who were newly inducted were invited and the resolution was passed with their support. He also urges that the society RFA 774/2005 23 itself has been eventually dissolved on 27.05.2001 as per Ex.P-131 and the educational institutions run by the society were required to be continued in the name of the Trust. This was followed by registration of the Trust on 04.06.2001 and in the said Trust Deed, the details of the institutions are mentioned. He also invites the attention of the Court to Ex.P- 122 - order of the State Government dated 23.09.2002 approving the conversion of the society into Trust, apart from referring to the action initiated against the faction headed by Govinda Reddy by Lokayuktha which was eventually closed in view of the judgment rendered in this suit. Therefore, he submits that the judgment and decree passed by the Trial Court which is based on proper appreciation of evidence recording just conclusion does not warrant interference in this appeal.
21. In the light of the respective contentions, the following points arise for consideration:
1. Whether the plaintiffs proved that the resolution dated 23.11.2000 passed in the Special General Body Meeting of the Gnana Mandira Education Society removing the 4th defendant and his RFA 774/2005 24 supporters from the membership of the Society was preceded by due notice to the appellant/defendants?
2. Whether the resolution dated 23.11.2000 had the effect of removing defendant No.4 and his supporters only from their post as office bearers of the Society and not as members of the Society?
3. Whether the findings recorded by the Trial Court that Gnana Mandira Education Trust was duly constituted and the Trust was entitled to manage the educational institutions which were run by Gnana Mandira Education Society suffer from any illegality?
4. Whether the judgment and decree passed by the Trial Court is otherwise illegal warranting interference in this appeal?
5. What order?POINT NOS.1 & 2
22. The bye-laws of Gnana Mandira Education Society containing the Rules and Regulations are marked as Ex.P124. Rule 4 deals with membership. It states that any person having attained 18 years of age shall be entitled to RFA 774/2005 25 become a member of the association. To become such a member, he has to apply to the Secretary in the form prescribed by the Committee and the Committee shall have the power of admission to membership. It also states that no member shall be admitted from 1st March to the date of annual General Meeting. In case of rejection, the reasons shall be communicated to the applicant within a month from the date of receipt of the application. Rule 5 prescribes admission fee of Rs.2/- to be paid by each member and it further lays down that every member shall pay the subscription of Re.1/- per month on or before 10th of each month. Rule 6 lays down that if the subscription of a member is in arrears for 3 months or more without satisfactory explanation to the Secretary, he shall be removed and the executive committee may consider his application for readmission subject to payment of arrears including admission fee in full. Rule 11 deals with special general meeting that may be called by the committee at any time when required. Rule 12 states that a notice of not less than 7 days shall be given to all members, in case of annual or special general meeting. Rule 16 states that a member who RFA 774/2005 26 is in arrears of subscription shall cease to be the committee member from the date of default. Rule 29 states that in case of dissolution of association, provisions of Sections 22 & 23 of Karnataka Societies Registration Act, 1960 are applicable.
23. The case of the plaintiffs is that the 4th defendant and his supports were not inducted duly as members of the Committee and that in the special general body meeting called on 23.11.2000, they were removed from the Society. It is urged by them that due notice was issued before convening the special general meeting and hence their removal is, therefore, valid.
24. The main contention of the learned counsel for the appellant - defendants Sri Venkata Reddy is that the appellants have not been removed from the membership in terms of the bye-laws as they were only removed from their post as office bearers of the society. It is his further case that no notice whatsoever was issued to the appellants as required under bye-law 12 before convening the special general meeting. It is in this background, the matter is required to be examined in the light of the bye-laws and the RFA 774/2005 27 documents, particularly the resolutions passed by the Society periodically.
25. Ex.P.130 is the resolution dated 12.07.1992 passed by the Society. As per this resolution, the 4th defendant Govinda Reddy Yadav and his supporters have been inducted as office bearers of the Society. As per Ex.P.131, the Executive Committee of the Society met on 10.06.2000 and passed a resolution to the effect that the 4th defendant - Govinda Reddy Yadav who was working as President of the executive committee and certain others who were inducted as office bearers without getting themselves enrolled as members by paying the membership fee and the subscription and therefore the Auditors had raised objection regarding their continuance. Keeping in mind the Rules and Regulations particularly, bye-law Nos.6 & 16, the office bearers namely the 4th defendant and his supporters though notified having not submitted their application for membership right from 1992-93 by paying the requisite membership fee till 2000 and had failed to attend the meeting of the executive committee, action had to be taken to RFA 774/2005 28 remove them as per the Rules by convening a special general meeting.
26. It is necessary to notice here that before passing this resolution dated 10.06.2000 by the executive committee of the society, a notice dated 03.06.2000 was issued to the 4th defendant and his supporters by name Sri N.Jagadish, Smt.Nagaveni and Smt.Uma calling upon them to show- cause why they should not be removed from the membership of the society for not enrolling themselves as members of the Society by paying the requisite membership fee and the subscription as per the bye-laws. Further, they were called upon to attend the meeting of the executive committee scheduled on 10.06.2000 at 11 a.m. to submit their application for membership by paying membership fee and the subscription with effect from 1992-93, failing which they would be removed from the executive committee. In fact, there is reference to this notice in the resolution dated 10.06.2000 marked as Ex.P.131. Notice dated 03.06.2000 has been sent by Certificate of Posting.
RFA 774/200529
27. Ex.P.71 is the notice dated 10.11.2000 issued to defendant No.4 informing him about the special general body meeting dated 23.11.2000 and the proposal to remove him from the post of President of the Society. He was called upon by this notice to submit his reply with regard to the baseless allegations he had allegedly made against the Secretary within 7 days from the date of receipt of the notice. This notice is sent by way of certificate of posting which is appended to Ex.P.71. The certificate of posting which bears the postal department seal discloses the name of 4th defendant Sri N.Govinda Reddy Yadav to whom the notice is dispatched on 10.11.2000.
28. Ex.P72 is the copy of the notice dated 01.11.2000 which is addressed regarding the special general body meeting scheduled on 23.11.2000 at 11 a.m. requesting all the members to be present in the meeting. The postal receipt produced at Ex.P.114 disclosing that notices had been dispatched under certificate of posting on 02.11.2000. The notice of the special general body meeting is dated 01.11.2000.
RFA 774/200530
29. A careful perusal of these notices along with postal receipt issued by the postal department would go to show that these notices have been sent under certificate of posting to the address of defendant No.4 and other office bearers of the society. The contents of the show-cause notice discloses that 4th defendant was called upon to give his explanation by showing cause regarding his conduct in lodging the alleged baseless complaint against the Secretary of the society Sri Singregowda. Prior to this notice, the notice of the special general body meeting dated 23.11.2000 was dispatched on 01.11.2000. While the plaintiffs have produced these documents to show that notice had been indeed dispatched to the address of the 4th defendant and his supporters, there is no contra evidence adduced by the defendants by way of any other correspondence with the Secretary or by way of any complaint made to the authorities including the District Registrar of Societies bringing to his notice about the alleged illegal meeting convened without issuing notice to them. Therefore, the contention advanced by the learned counsel for the defendants - appellants herein that no notice of the RFA 774/2005 31 special general body meeting was issued to the 4th defendant and his supporters cannot be accepted. In addition, it has to be stated that as per the bye-laws, bye-law No.4 extracted above which deals with membership, a person desirous of becoming a member of the society shall apply to the society in the prescribed form seeking admission to the membership. Bye-law 5 prescribes admission fee of Rs.2 to be paid by each member and every member shall pay subscription of Re.1 per month on or before 10th of each month.
30. The resolution of the committee dated 10.06.2000 produced at Ex.P.131 alleges that the 4th defendant and his supporters had not become the members of the society and had failed to pay the membership fee and the subscription periodically and that they had not replied to the notice issued on 03.06.2000 in this regard calling upon them to comply with the bye-law by paying the membership fee and the subscription and by submitting necessary application. It is in this background the resolution dated 23.11.2000 came to be passed to remove them from the executive committee. This resolution is part of the resolution book marked as RFA 774/2005 32 Ex.P.131. In this resolution, reference is made to the notice issued to the defendants - appellants herein and the omission on their part to send any reply and also of the factum of the intimation sent to them regarding convening of the meeting dated 23.11.2000 asking them to participate in the meeting, by certificate of posting, apart from publishing the notice in the 'Sanjay Vani', Kannada daily newspaper dated 22.11.2000.
31. PW-1, in his evidence, has stated that the society had served prior notices to the members including the 4th defendant, 21 days prior to the Special General Meeting. It is specifically stated in the further cross-examination by PW-1 that the society had issued prior notice to the 4th defendant on 01.11.2000 regarding the general body meeting dated 23.11.2000. He has also stated that the notices with regard to convening of general body meeting on 27.05.2001 (for dissolution of the society and constitution of the Trust) were served in person to the existing 24 members and as defendants 4 & 5 and other members had been removed from the membership of the society on 23.11.2000, no notices RFA 774/2005 33 were served on them. It is, therefore, clear that the evidence of PW-1 and the documents produced in the form of notices issued supported by the postal receipts for having sent notices under certificate of posting clearly disclose that the general body meeting dated 23.11.2000 was preceded by due notice to the defendant-appellants.
32. The contention urged by the counsel for the appellants that the resolution has the effect of only removing the appellant - Govinda Reddy Yadav and his supporters from the post of office bearers of the society and not from the membership of the society is again untenable in the background of the resolution regarding agenda No.4 passed in the said special general body meeting convened on 23.11.2000. The said resolution states that Sri Govinda Reddy Yadav and his supporters - defendants/appellants herein had failed to take the membership of the society and as they had failed to attend three consecutive meetings, they stood removed from the post of office bearers of the executive committee and that they shall not be invited to the meeting of the society henceforth as they had not taken the RFA 774/2005 34 membership of the society. It is thus clear that the resolution dated 23.11.2000 expressly removed the 4th defendant and his supporters from the post of office bearers making it clear that they had not become the members of the society by paying the membership fee and the subscription and were, therefore, not entitled to participate in the meeting of the society to be convened thenceforth. The contention, therefore, that they continued to be the members of the society and the removal was only as office bearers of the society is wholly misconceived and untenable.
33. In the result, answer to point Nos.1 & 2 framed above is that the plaintiffs proved that the resolution dated 23.11.2000 was passed after due notice to the appellants - defendants by which they were removed from the post of office bearers making it clear that they had not become the members of the society by paying the membership fee and the subscription.
POINT NO.3 RFA 774/2005 35
34. On 22.07.2001, another special general body meeting of the society was convened for the purpose of discussing the subject regarding dissolution of the society and establishing an Educational Trust in its place. In fact, if one carefully peruses this resolution, the purpose behind convening this meeting to dissolve the society and rename it as a Trust could be clearly seen. In the body of the resolution, it is made clear that after getting the Trust registered, the Managing Trustee has to write to the Department of Education requesting them to continue the educational institutions run by the society as institutions run by the Trust and accord approval in that regard. Pursuant to the resolution, a Trust Deed came to be registered on 04.06.2001 as per Ex.P.129. By a subsequent amendment to this Trust Deed made on 26.06.2008 duly registered before the Sub- Registrar, Kengeri, in the Column pertaining to properties and establishment, mention is made about the three institutions viz., Kannada Higher Primary School, Kannada High School and Sanskrit School and of all the movable and immovable assets of the said institution, though in the RFA 774/2005 36 original Trust Deed, it is only stated in the column pertaining to properties and establishment as under:
"running the educational institutions from pre-primary to post-graduate course established or to be established by the Trust".
If this is viewed in the context of establishing the Trust by dissolving the Society and re-naming it, with the purpose of running the educational institutions 'established or to be established', it would unmistakably show that the properties held by the Society or institutions run by the society were to be possessed and run by the Trust after dissolution of the society. There is no other way of understanding the instrument viz., the Trust Deed executed on 04.06.2001 vide Ex.P.129. The subsequent events that have taken place, such as approval of the State Government for the dissolution of the society and also for constitution of the trust as is evident from Ex.P.119 - communication dated 18.10.2002 addressed by the Deputy Director, Department of Public Instructions, Bangalore South District, Bangalore, followed by Form No.9 issued by the Block Education Officer, Bangalore South Zone, Jayanagar, Bangalore, vide Ex.P-120 RFA 774/2005 37 renewing the recognition to the Kannada Higher Primary School as one run by the newly constituted Educational Trust upon the dissolution of the Society and similar, Form No.9 issued by the Deputy Director of Public Instructions on 07.11.2002 vide Ex.P.121 regarding the Gnanamandira Kannada School as one run by the Trust make it further clear that the Department of Public Instructions, recognized the educational institutions as institutions run by the Trust. Indeed, Ex.P.119 refers to Appeal No.95/2001 filed by the Trust represented by Singre Gowda - Secretary, Gnanamandira Education Trust disposed of on 23.09.2002 by the Principal Secretary, Department of Education, approving the proceedings of the District Registrar dated 09.11.2001, whereunder the resolution dissolving the Society and constituting the Trust was passed. The appellants herein have not challenged the dissolution of the Society and the establishment of the Trust. There is nothing to show that they had challenged the action of the State and its authorities in according approval for treating the educational institutions as institutions run by the Trust by granting approval in Form No.9. On the other hand, the attempt made RFA 774/2005 38 by the 4th defendant and the other office bearers of the Society who had been removed from the Society to remove Singre Gowda as Secretary and to appoint another person by name Jagadish as a Secretary in his place by re-constituting the committee in terms of the resolution dated 18.10.2000 passed as per Ex.D.71 is not shown to have been validly done after issuing due notice to all the members including the plaintiffs.
35. At any rate, once the dissolution of the society and the establishment of a trust is held valid, the resolution passed by Govinda Reddy and his supporters will have no legal sanctity. It cannot be said that the society continued to exist with the 4th defendant as its President and the other defendants as office bearers, once it is established that he had been removed on 23.11.2000 from the membership of the society by convening a valid general body meeting and also because subsequently the society itself was dissolved constituting it into a Trust. Hence, point No.3 raised for consideration is answered holding that the Trust was duly constituted and it was entitled to manage the educational RFA 774/2005 39 institutions which were run by the Society. The findings recorded by the Trial Court in this regard do not suffer from any illegality. However, it is made clear that with regard to the immovable properties which are the subject matter of the suit O.S.No.4990/2001 now pending, the findings recorded either by the Trial Court of by this Court shall not have any bearing as the same has to be decided in the suit. POINTS 4 AND 5:
36. In the light of the findings on points 1 to 3 above and as the Trial Court has examined all aspects of the matter appreciating the voluminous evidence on record, both oral and documentary, and as the conclusion reached by the Trial Court is just and legal, I do not find any need to interfere with the judgment and decree passed by the Trial Court. Hence, this appeal being devoid of merits is dismissed. Parties to bear their respective costs.
37. As rightly submitted by the learned counsel for the appellant, the Administrator, who was appointed by this Court to look after the affairs of the Educational Institutions run by the erstwhile Gnana Mandira Education Trust, has to RFA 774/2005 40 now hand over the management of the affairs of the educational institutions in favour of the Trust represented by its Managing Trustee - Singregowda. He has to hand over all the relevant documents connected therewith by drawing a mahazar. It is made clear that the interim order appointing the Administrator for the educational institutions stands vacated.
Parties to bear their respective costs.
Sd/-
JUDGE KK/PKS