JUDGMENT
D.P. Mohapatra, C.J.
1. The subject-matter of dispute raised in al! these four cases relates to the Management of India Literacy Board, a society registered under the Societies Registration Act, 1860. Writ Petition No. 2008 (M/S) of 1997 has been filed by India Literacy Board. Kanpur Road. Lucknow, through its Secretary Sri Lalit Mohan Singh against the Registrar of Firms. Societies and Chits, U. P., the Assistant Registrar, Firms, Societies and Chits, the State of U. P. through Secretary Finance Department, Sri G. C. Chaturvedi, the Literacy House Staff Welfare Association, through its Secretary Sri K. G. Singh and the District Magistrate. Lucknow.
2. Writ Petition No. 3301 (M/B) of 1997 has been filed by the Literacy House Staff Welfare Association, through its Secretary, Sri K. G. Singh, against the Assistant Registrar, Firms, Societies and Chits, Uttar Pradesh, the State of Uttar Pradesh, through Secretary. Finance Department, Sri G. C. Chaturvedi, the India Literacy Board through its Secretary. Union of India, through the Secretary, Ministry of Human Resources Development. Department of Education. Government of India, New Delhi and Sri Rajeshwar Prasad. In both the writ petitions the main prayer of the petitioner is to quash the order of the Assistant Registrar. Firms, Societies and Chits dated 31.7.1997 (Annexure-1 to Writ Petition No. 2008 of 1997).
3. Special Appeal No. 90 (M/S) of 1998 has been filed by India Literacy Board, through its Secretary Sri Lalit Mohan Singh, challenging the order passed by a learned single Judge of this Court on 17.3.1998 in Writ Petition No. 2008 (M/S) of 1997 ; whereas Special Appeal No. 91 (M/S) of 1998 has been filed by Literacy House Staff Welfare Association through its Secretary, Sri K. G. Singh, challenging the same order passed by the learned single Judge on 17.3.1998 in Writ Petition No. 3301 (M/B) of 1997. It may be stated here that the impugned order in these appeals is interim order passed during pendency of the aforementioned writ petitions.
4. In course of hearing of the appeals, it was agreed by learned counsel for parties that it will be in the interest of the parties and also in the interest of the Institution that the writ petitions and the appeals are heard together and disposed of. Accordingly, we heard learned counsel for parties In all the four cases and they are being disposed of by this common judgment.
5. The case brings to the fore a situation where the persons in charge of management of an Institution established to render public service have become more Interested in serving their personal interests, as a result of which the interest of the Institution has suffered and the object and purpose for which the Institution was established has been defeated. Mrs. Welthy H. Fisher, an American philanthropist, who took up residence at Lucknow, established a registered society under the name and style of India Literacy Board to serve the cause of removal of illiteracy. She donated her entire estate to the Society in 1957. The Society is governed by a Memorandum of Association and a set of Rules and Regulations formulated in 1976 (hereinafter referred to as the Rules).
6. Before discussing the merits of the case, it will be convenient to notice some relevant provisions of the Memorandum of Association and the Rules. In clause 3 of the Memorandum of Association, the following are stated to be the objects of the Board :
la) To further the cause of adult literacy and non-formal education or any other form thereof and. undertake projects and programmes connected therewith.
(b) To establish, run and manage Literacy House. Lucknow and any other similar institution, and to collaborate with such other organisations.
(c) To develop and produce new instructional materials for all phases of non-formal education programmes.
(d) To undertake programmes for the development of agricultural and animal husbandry education and suitable extension work and to provide for necessary physical facilities for the same.
(e) To initiate and undertake adult education programmes relating to special welfare, family life and population education.
(f) To initiate and undertake programmes for children and youth relevant to the objective referred to in clause (e) above.
(g) To initiate, undertake and organise training, research and evaluation programmes and to undertake field services in connection with the aforesaid objects.
(h) To produce, publish, sell or disseminate necessary literature for the advancement of adult literacy and non-formal education.
(i) To own, hold and manage libraries for the purposes hereinbefore mentioned.
(j) To own, hold and manage movable and immovable properties for the objects hereinbefore mentioned, and
(k) To do all other lawful things as are connected with or incidental to the above objectives.
7. In Clause 5 of the Memorandum of Association, the names, occupations and addresses of the then members of the Board as on 14th August. 1976 are stated. There are 16 members of the Board including Sri Bhagwan Sahai, formerly Governor of Kerala and J. & K.. as Chairman, Prof. Girijapati Mukharji, formerly Director Indian Institute of Public Administration. Indraprastha Estate. New Delhi, as Senior Vice-Chairman, Dr. T. A. Koshy, Project Director, Non-formal Education Project. Council for Social Development, New Delhi, as Treasurer and Sri D. P. Maheshwarl. Director. Literacy House. Lucknow as Ex-Officio-Member -Secretary.
8. In Article 1 (b) of the Rules, ‘Board’ is defined to mean India Literacy Board. In Article 1 (c), ‘Executive Committee’ is defined to mean the Executive Committee of the Board constituted in accordance with Article 12. In clause (1) of Article 2. five categories of members are enumerated, namely :
(a) Life member.
(b) Nominated members.
(c) Official members.
(d) Ex-officio members.
(e) Staff members.
Mrs. Welthy H. Fisher, the founder, was the sole life member of the Board. After her death, sometime in the year 1981. there is no life member of the Board.
9. In Article 4, it is stated that the Board shall have nine nominated members who shall be nominated by a Committee constituted in accordance with Article 8. It is further provided in the said Article that where any person nominated under clause (2) does not intimate his acceptance to act as a member or intimates that he does not wish to be such a member, the Board may hold its meetings with the remaining members, provided that the strength of the remaining nominated members is not less than five. In clause (4), it is laid down that the ‘Committee of Five’ shall in the circumstances mentioned in clause (3) take necessary steps to fill up the vacancy. In clause (5) of the Article it is provided that subject to the provisions of Article 28 (2), a nominated member shall be eligible for renomination.
10. In Article 5, provision is made regarding the source from which Official Members of the Board will be drawn. Article 6 provides for two Ex-offlcio members and Article 7 provides for two Staff members.
11. Article 8, which makes provision for constituting the ‘Committee of Five’ reads as follows :
“(1) There shall be a committee consisting of the following persons, namely :
(a) The Chairman of the Board ;
(b) The Vice-Chairman of the Board ;
(c) A nominee of the Ministry of Education and Social Welfare. Government of India ;
(d) The Chairman. All India Adult Education Association, New Delhi:
(e) One person to be elected by the Board from amongst its members, other than the Chairman and the Vice-Chair man.
(2) Shri Bhagwan Sahay, Chairman of the Board as on 14 August. 1976, will be the first Chairman of the Board under these Rules and Regulations and consequently, the Chairman of the Committee referred to in clause (1).
(3) The Committee may take its decision either by holding a meeting or if the Chairman so desires, by postal communication.
(4) The quorum for every meeting of the Committee shall be four members.
(5) If any member of the Committee is unable to attend any particular meeting, he may send his views by postal communication, before the date of the meeting.
(6) In the case of difference of opinion, the decision of the majority shall prevail.
(7) The said Committee may nominate members under clause (1) of Article 4 either by name or by virtue of office. Where any person is nominated as a member by virtue of his office, and such person ceases to hold such office before the expiry of his term as a nominated member, his successor-in-office shall become a member for the remainder of the term.”
12. Article 9, which deals with the terms of membership, provides, inter alia, that subject to the provisions of Articles 10 and 24, the term of office of the Chairman, Vice-Chairman and members of the Board, other than the staff members, shall be three years ; the term of office of the staff members shall be one year : and the term of membership under the Article shall be coextensive with the relevant Annual General Meeting.
13. Articles 10 and 11, which deal with Annual General Meeting and Special Meeting of the Board, are not very relevant for the present purpose.
14. Article 12, in which provisions are made for constitution of the Executive Committee of the Board, reads as follows :
“Article 12 Executive Committee :
(1) There shall be an Executive Comrniltee of the Board which shall consist of the following members, namely :
a) The Chairman of the Board, who shall also be the Chairman of the Executive Committee :
(b) The Vice-Chairman of the Board, who shall also be the Vice-Chairman of the Executive Committee ;
(c) Three persons to be elected by the Board from amongst the nominated members :
(d) Two persons to be nominated by Government of India. Ministry of Education and Social Welfare from amongst the official members nominated by such Government ;
(e) The Secretary to the Government of U. P., Education Department as referred to in Article 5 ;
(f) One of the ex-officio members by rotation, the first term being held by the Vice-Chancellor of Lucknow University :
(g) One of the Staff Members to be nominated by the Chairman ;
(h) The Secretary of the Board, when he does not hold the office of the Director ;
(i) The Treasurer ;
(j) The Director, ex-officio ;
(2) If any of the members referred to in sub-clause (d), clause (e) or clause (f) of clause (1) is unable to attend any particular meeting of the Executive Committee, he may nominate any other officer subordinate to him to attend that meeting, and such nominee shall also have the right to vote.
(3) Members of the Board, residing at the place of the meeting, shall be co-opted members of the Executive Committee and shall have the right to vote.
(4) The Executive Committee may co-opt not more than two persons as co-opted members for a particular meeting. Co-opted members shall not have the right to vote.
(5) The members of the Executive Committee shall hold office for a period of three years but they shall be eligible for re-nomination or re-election as the case may be, in accordance with these Rules and Regulations.”
15. Article 13 contains provision regarding meetings of the Executive Committee.
16. Article 14 enumerates the powers and functions of Executive Committee.
17. In. Article 15, it is provided that the Chairman shall be nominated by the Committee referred to in Article 8 (Committee of Five) and he shall hold office for a period of three years from the date of his nomination and he shall be eligible for re-nomination.
18. In Article 16, the powers of the Chairman are enumerated.
19. Similarly in Article 17. it is provided that the Board shall have a Vice-Chairman who shall be nominated by the Committee referred to in Article 4 (2) ; he shall hold office for a period of three years and he shall be eligible for re-appointment. It is also provided in the said Article that if the Chairman is not available and a situation has arisen wherein immediate. action is necessary, then the Vice-Chairman may exercise any of the powers of the Chairman and that the matter shall be reported by him to the Chairman as early as possible and also at the next meeting of the Executive Committee.
20. Articles 18, 19, 20. 21. 22 and 23, which contain provisions regarding Secretary of the Board. Treasurer, Director, and the Auditor are not relevant for the purpose of adjudication of the present dispute. Articles 24. 25 and 26, which deal with casual vacancies, functions of the Board and properties after dissolution are also not relevant for the dispute raised in the case.
21. Article 27, which deals with amendments, provides, inter alia, that the Rules and Regulations may be amended, varied or altered, by a majority of the total membership of the Board and that notice of the proposed amendment, variation or alteration shall be sent to all the members under the certificate of posting at least 21 days before the date of the meeting and that if the objects of the Board are required to be amended the procedure laid down in the Act (Societies Registration Act. I860) shall be followed.
22. Article 28. which is styled as “Miscellaneous” contains the following relevant provisions in clauses [2). (3) and (4). which read as under :
“(2) No person shall hold office as a member of the Board or of the Executive Committee for more than two consecutive terms at a time :
Provided that this clause shall not apply to the members referred to in Articles 5 and 6.
(3) No act or proceeding of the Board or the Executive Committee shall be invalid merely by reason of :
(a) any vacancy or defect In the constitution thereof ; or
(b) any defect In the election, nomination or appointment of a person acting as member thereof.
(4) In case of any doubt or dispute about the interpretation of these Rules and Regulations, or with regard to any matter not covered by the same, the question shall be referred to the Chairman, whose decision shall be final.’
From the provisions of the Rules, it is manifest that the affairs of the Institution are to be managed by the three bodies, namely, the Committee of Five, the Executive Committee and the Board.
23. During the hearing of the case. It was submitted by learned counsel for all the parties that all the aforementioned bodies of the Society have become defunct. Indeed, affairs of the Society are being managed by the receiver appointed by this Court in Special Appeal No. 40 (M/S) of 1994, Literacy House Staff Welfare Association, through its Secretary Sri K. G. Singh v. India Literacy Board through its Secretary and others, decided on 20th June, 1995, (vide judgment Annexure-3 to the Writ Petition No. 2008 of 1997. The order of this Court appointing the receiver was confirmed by the Supreme Court with certain direction by the order dated 19.2.1996 in S.L.P. No. 21978 of 1995. The relevant portion of the said order reads :
“In these circumstances, we request the High Court to take up the Writ Petition Nos. 1159 (M/S) of 1994, 4187 (M/B) of 1994 and 4242 (MB) of 1994 which are pending and dispose of the same at an early date and if possible.
within a period of three months. In the meanwhile, existing arrangements would continue but the receiver would not take any policy decision which is of permanent nature. The special leave petition is disposed of accordingly.”
24. In pursuance of the order of the Supreme Court, a Division Bench of this Court disposed of the Writ Petition Nos. 4242 (M/B) of 1994 and 4187 (M/B) of 1994 by judgment rendered on 22nd May. 1997. (Annexure-5 to the Writ Petition No. 2008 of 1997), lt the judgment, it was noted that Writ Petition No. 1159 of 1994 had already been dismissed by this Court on 6.1.1997. Therein it was ordered :
“Resultantly, the parties are relegated to the Assistant Registrar with a direction to grant the audience and pass appropriate orders in the light of the material already placed or to be placed before him by them with regard to the propagated amendment in the Rules. In case the amendment is turned down and old Rules are held to be operative, he would Identify the members who had disqualified themselves on holding the position for two consecutive terms and then proceed to take a decision for conducting fresh elections under Section 25 (1) of the Societies Registration Act. In case he sustains the amendment then, of course, he may proceed to get the dispute settled by making a reference to the Prescribed Authority under Section 25 (2) of the Act ibid.’
25. In compliance of the decision of this Court, the Assistant Registrar reconsidered the matter and disposed of the proceeding by order dated 31.7.1997 (Annexure-1 to Writ Petition No. 2008 of 1997) quashing of which has been prayed for by the petitioners in the present writ petitions. The Assistant Registrar in his order held, inter alia, that the amendment brought in Articles 4 and 28 of the Rules were invalid for the reason that the resolution making the amendments was not passed by the requisite majority of the members of the Board. Proceeding to carry out the other directions contained in the judgment of this Court, the Assistant Registrar identified 8 valid members who were entitled to continue till the month of June, 1998. He further held that the bar under Article 28 (2) of the Rules that no person shall hold office as a member of the Board or the Executive Committee for more than two consecutive terms at a time does not apply to Chairman and Vice-Chairrman of the Board since they are not members of the Board. Therefore, Sri G. C. Chaturvedi, Vice-Chairman is entitled to continue in office. It is relevant to note here that the finding of the Assistant Registrar on the validity of the amendment of Articles 4 and 28 of the Rules has not been challenged before us by the learned counsel appearing for the parties. The main thrust of the challenge of the counsel for the petitioners was against the finding of the Assistant Registrar that the provision in Article 28 (2) of the Rules has no application in the case of Chairman and Vice-Chairman. Further, in course of hearing, learned counsel for all the parties accepted the position that since all the bodies, which are in charge of management of affairs of the Society under the Rules, have become defunct, it will be in the best Interest of the Institution that a practical solution is found to meet the impasse prevailing at present so that management of the Society may be run smoothly and the alms and objects of the founder may be carried out.
26. We have heard Sri G. K. Mehrotra. learned counsel appearing for the India Literacy Board, Sri H. N. Mehrotra learned counsel appearing for India Literacy House Staff Welfare Association, Sri A. K. Tewari learned counsel appearing for Sri G. C. Chaturvedi and Sri S. Nasir learned counsel appearing for intervener Sri Satya Sagar Sharma.
27. From, the arguments advanced by learned counsel for parties, it appears to us that the tussle is between Sri G. C. Chaturvedi, stating himself to be the Vice-Chairman of the Board. Sri K. G. SIngh. Secretary of the Literacy Board Welfare Association and Sri Lallt Mohan, who Is stated to be the Secretary of the Literacy Board. It is the case of Sri G. C. Chaturvedi that
as Vice-Chairman of the Board, he should be placed in sole charge of the affairs of the Board till the Board and its Executive Committee are reconstituted and the receiver Sri G. B. Singh should be removed. On the other hand, the case of Lalit Mohan Singh and Sri K. G. Singh is that Sri G. C. Chaturvedi having completed two consecutive terms as Vice-Chairman of the Board is not entitled to continue in office and, therefore, the receiver should remain in charge of the management of the affairs of the Society till the Board and its Executive Committee are reconstituted and become functional. At the cost of repetition, we may state that the Society, which was established by the noble lady to serve the people of Uttar Pradesh by removal of illiteracy by propagating adult literacy and non-formal education and to educate people in agriculture and veterinary science has unfortunately been mired in litigations for several years- The activities of the Society have suffered to a great extent on account of infightings amongst the persons who are at the helm of its affairs.
28. Considering the submissions of the learned counsel for the parties that a practical solution should be found to end the impasse prevailing In the Society and put it on the rails again, we have approached the problem with that end in view. On perusal of the provisions of clause 5 of the Memorandum of Association and of Articles 8, 9 and 12 of the Rules, it )s our considered view that the Assistant Registrar was in error In holding that the Chairman and Vice-Chairman are not members of the Board and the Executive Committee and, therefore, the bar to hold office provided in Article 28 (2) does not apply to them. In clause 5 of the Memorandum of Association, while enumerating the names, occupations and addresses of the then members of the Board, the Chairman and Senior Vice-Chairman are placed at items 1 and 2 amongst the members. In the Rules, there Is no specific provision regarding the total membership of the Board and its constitution, but from the provisions of Articles 2, 4, 5, 6 and 7, it is clear that the total number of nominated members, official members, ex-officio members and staff members comes to 18. From clause 5 of the Memorandum of Association, it is clear that the members of the Board as on 14.8.1976 were 16 including Chairman and Senior Vice-Chairman. The preamble of the Rules reads as under :
“These Rules and Regulations which replace the constitution of the India Literacy Board (as passed on February 13, 1966, as amended from time to time) were adopted by the India Literacy Board at its Special Meeting held at Literacy House, Lucknow oh August 14. 1976.”
The Board’s constitution on this crucial date has been indicated as aforementioned. Therefore, it is clear to us that intention of the framers of the Memorandum of Association and the Rules was to include the Chairman and Vice-Chairman as members of the Board. From the Rules, it is clear that they are included in different bodies like the Committee of Five and the Executive Committee, which are set up to supervise the management of the Society. No doubt, by virtue of their office, the Chairman and Vice-Chairman occupy a position different from other members of the Board and their duties and responsibilities are different from other members. The powers and functions as enumerated in Articles 16 and 17 show that they discharge duties different from other members of the Board. It is provided in the Rules that the Chairman is to preside in a meeting of the Board and in the absence of the Chairman, the Vice-Chairman is to exercise any of the powers of the Chairman.
29. On perusal of the provisions of Article 12, it is clear that the Chairman and Vice-Chairman of the Board are members of the Executive Committee along with other members as provided in the said Article. This position becomes further clear from the proviso to clause (2) of Article 28 in which it is laid down that no person shall hold office as a member of the Board or of the Executive Committee for more than two consecutive terms at a
time shall not apply to members referred to In Articles 5 and 6. Articles 5 and 6 contain provisions regarding official members and ex-officio members. If the intention was that Chairman and Vice-Chairman are to be excluded from the purview of the bar under the Rule, then there would have been no difficulty in including them in the proviso. We are also of the view that this Interpretation is in the interest of the Society Inasmuch as it will avoid a situation of an individual developing vested interests in the affairs of the Society on account of his long tenure as Chairman or Vice-Chairman of the Board. Another provision, which lends support to the view, is Article 8 (1) (e) in which It is laid down that one person to be elected by the Board from amongst its members, other than the Chairman and the Vice-Chairman. This provision, as we read It, shows that the Chairman and the Vice-Chairman are also members of the Board and since it Is Intended to have a member other than Chairman and Vice-Chair man on the Committee of Five, the exclusory/explanatory provision has been made. If the Chairman and the Vice-Chairman are not members of the Board, then this provision is redundant. On the foregoing discussions, we have no hesitation to hold that the Assistant Registrar committed an error in holding that the bar under Article 28 (2) does not apply to Chairman and Vice-Chairman of the Board.
30. Now we come to the crucial question as to what can be a practical solution, in the present situation to bring the Society to normalcy and restore Its proper functioning. As noted earlier, all the important bodies of the Society, that is, the Board, the Executive Committee and the Committee of Five, have all become non-functional/defunct. In the Committee of Five, only two, members as specified in Article 8 (1) (c) and (d) are available while the quorum for every meeting of the Committee is four members. Regarding the Executive Committee, the membership of which is specified in Article 12, only four members as described in Article 12 (1) (d), (e) and (f) may be available. The quorum for any meeting of the Executive Committee is five as provided in Article 13 (2). Coming to the constitution of the Board, it is evident from Articles 4 and 7 that the Board, which Is to have 20 members, may have at present 7 official and ex-officio members as provided In Articles 5 and 6. For functioning of the Board, a strength of nominated members, not less than five, is required as provided in clause (3) of Article 4, while at present no nominated member is available. It was not disputed before us that no annual general meeting of the Board has been held for several years (since 1993). In such circumstances, in our considered view, it will be in the interest of the Society that all the aforementioned bodies are reconstituted strictly in accordance with the provisions of the Rules.
31. The next question is, who is to undertake this task? We have given our anxious consideration to the matter. In our view, a temporary Committee of Five should be constituted and that Committee will take steps for constitution/ reconstitution of the Board and the Executive Committee in accordance with the Rules. We feel impelled to take the step to constitute/ reconstitute the Committee of Five in the extraordinary circumstances prevailing in the Society and in such a situation, the first and foremost purpose to be achieved is to bring the Society on rails and to ensure proper management of its affairs so that the object for which the Society was established may be achieved. The Committee of Five is constituted as follows :
1. Mr. Justice R. B. Misra, Former Judge of Supreme Court of India-Chairman.
2. Mr. Justice A. N. Verma. Former Judge, Allahabad High Court-Vice-chairman.
3. A nominee of the Ministry of Education and Social Welfare, Government of India.
4. The Chairman, All India Adult Education Association, New Delhi.
5. One person to be elected by the Board from amongst its members, other than the Chairman and the Vice-Chairman.
The Chairman and the Vice-Chairman will take steps to contact the Chairman of All India Adult Education, New Delhi and the concerned authority of the Ministry of Education and Social Welfare, Government of India or its successor Ministry and convene meeting of the Committee as early as possible. This Committee of Five with the nominated Chairman and Vice-Chairman will function for six months or till Board and the Executive Committee are constituted/reconstituted and elected Chairman and Vice-Chairman assume office, whichever is earlier. The receiver, who has been appointed by this Court, will make over charge to an officer/official of the Society as directed by the Chairman and the officer/official nominated by the Chairman will take over charge from the receiver within one week of receipt of the order of the Chairman. The Chairman and Vice-Chairman of the Committee will receive Rs. 5,000 and 4,000 per month respectively as honorarium ; in addition they will be entitled to draw travelling allowance. They may engage such personal staff as they consider necessary and such staff will be paid their emoluments by the Society. We are conscious that the amount is not very substantial ; but we hope that keeping in view the cause for which the Society is established and the present state of things in its management, the Chairman and Vice-Chairman will accept the amount.
32. Before parting with the judgment, we are constrained to observe and not without a degree of concern that the office-bearers of the Staff Associations have not been taking proper interest for smooth management of the affairs of the Society. They appear to have been more Interested in fighting litigations regarding the constitution of different bodies of the Association and have even taken sides in the tussle between the then Vice-Chairman and the receiver. When representatives of the employees are invited to participate in management of the Society, it is with a view to set a healthy example of employees’ participation in management and to benefit the Society by their experience. The offer is not meant to permit indulgence in the constitution of the Committees and the Board and in the matter who should be the officebearers of the Society.
33. On the discussions, findings and directions in the foregoing paragraphs, the two writ petitions and the appeals are disposed of on the terms noted above. The interim orders are vacated.
