Members Defaulting on Membership Fees Automatically Disqualified from Society; Voting Rights and Notice Entitlement Denied : Supreme Court
The Hon’ble Supreme Court in the matter of ADV BABASAHEB WASADE & ORS v. MANOHAR GANGADHAR MUDDESHWAR & ORS., interpreted Section 15 of the Societies Registration Act, 1860. This section stipulates that disqualified members, who lack the right to vote or be considered as members, are not entitled to any notice. The relevant provision clarifies that individuals with subscription fees in arrears for more than three months cannot participate in voting or be recognized as members during proceedings under the Act.
The case at hand involved a society “Shikshan Prasarak Mandal, Mul”. The death of the President due to his poor health, prompted the Executive Body to pass a resolution appointing Advocate Babasaheb Wasade as the Working President. Tasked with overseeing the day-to-day affairs and management of the society, Wasade assumed the role due to the absence of elected officials, including the President, Vice-President, and Secretary. In response to a written request from 16 members, he summoned an extraordinary meeting to conduct elections.
Subsequently, elections were held, leading to the formation of a new Executive Committee with Appellant No.1 as the President and Appellant No.2 as the Secretary. A Change Report reflecting these changes was submitted to the Assistant Charity Commissioner, Chandrapur. However, objections were raised by seven individuals who claimed to be members, asserting that they hadn't received notice and that Wasade lacked the authority to summon an election meeting.
The Court, taking note of the default in membership fees by the objectors, deemed them as suspended members. Consequently, the Court concluded that there was no obligation to issue notice to these objectors, and the absence of such notice did not invalidate the proceedings of the special meeting.
Utilizing the Doctrine of Necessity, the Court justified the Working President's role in convening the election meeting, citing the resolution passed due to the ill health of the then President. The Court emphasized the necessity of convening the meeting, asserting that failing to do so would have left the election of the executive body in a state of uncertainty for an unreasonable duration. Citing precedent cases, including Election Commission of India v. Dr Subramaniam Swamy, the Court underscored the doctrine's application, which allows certain actions as a matter of necessity, even if not conventionally acceptable on the grounds of judicial propriety.
Examining the society's bylaws, the Court noted that the 'Working President' was obligated to act on the directions of the President, Executive Body, and General Body. With no replacement elections held for the deceased President and Secretary, as well as the Vice-President and Joint-Secretary, Wasade, as the Working President, was deemed the only person managing the society's affairs. The Court, therefore, affirmed the necessity of calling the general body meeting under these circumstances, allowing the appeal and endorsing the acceptance of the Change Report.
The Court also addressed the issue of Members 4 to 7, who, post-retirement, continued paying their subscriptions, thereby maintaining their membership. Categorizing them as employee members, the Court ruled that their membership could not persist upon retirement. Consequently, the Court directed the initiation of fresh elections for the new Executive Committee, specifying that the elections should be conducted within six months.