Case Note & Summary
The appeals before the Bombay High Court arose from two suits filed by the President and Secretary of Aryan Education Society, a public charitable trust running schools. The respondents-plaintiffs were removed from the membership of the Society by a resolution passed on 1 December 2009. The resolution invoked Clause 12(o) of the Society's Memorandum of Association, which empowered the Managing Committee to remove a member by a two-thirds majority on reasonable grounds. However, the plaintiffs contended that the resolution was passed without prior notice or inclusion of the subject in the agenda, in violation of principles of natural justice. They filed Short Cause Suit Nos. 2828 of 2009 and 2827 of 2009 in the Bombay City Civil Court and sought temporary injunctions to restrain the Society from implementing the resolution. The City Civil Court allowed the Notices of Motion, finding that the plaintiffs had established a prima facie case and that the balance of convenience lay in their favor, and granted the injunctions. The Society appealed, arguing that the trial judge erred in holding that the plaintiffs lacked adequate notice, as their conduct had been discussed in several prior meetings. The Society also raised the issue of maintainability without permission under Section 50 of the Bombay Public Trust Act, though this was not pressed. The High Court, after hearing both sides, noted that a perusal of the agendas of the earlier meetings revealed that the question of expulsion was never placed on the agenda. The first time the expulsion clause was referenced was in the impugned meeting of 1 December 2009. The Court emphasized that removal of a member is a serious matter and strict compliance with natural justice is imperative; the power under Clause 12(o) was not properly exercised when the proposal was sprung on the plaintiffs without notice. The Court further observed that while the injunction granted might effectively give final relief, it was necessary to prevent the lis from becoming infructuous, especially because elections were imminent and excluding the plaintiffs would cause irreparable loss. The High Court found no error in the trial court’s exercise of discretion and dismissed both appeals, confirming the interim injunctions.
Headnote
A) Membership Rights - Expulsion from Society - Natural Justice - Memorandum of Association Clause 12(o) - Removal of member from society without adequate notice and without placing the subject on the agenda of the meeting violates principles of natural justice. The Court held that the Society's resolution dated 1 December 2009 expelling the plaintiffs was passed in violation of natural justice as the agenda did not include the expulsion item. The Society had the power under Clause 12(o) but it was not properly exercised. Held that the trial judge correctly granted injunction restraining the Society from giving effect to the resolution. (Paras 5-6) B) Interim Injunction - Grant of Final Relief at Interim Stage - Code of Civil Procedure, 1908, Order 39 Rules 1 and 2 - When failure to grant immediate injunction would render the suit infructuous, the court may grant relief even if it substantially provides final relief at an interim stage. In this case, elections were imminent and keeping the plaintiffs out would cause irreparable loss. Held that the trial court's discretion to grant injunction was proper and did not warrant interference. (Paras 5-6)
Issue of Consideration
Whether the trial court erred in granting interim injunction restraining the Society from implementing the resolution removing the plaintiffs from membership, and whether the removal violated principles of natural justice.
Final Decision
Both appeals dismissed; the interim injunction granted by the trial court confirmed. The Court held that the expulsion resolution was in violation of natural justice, and the trial judge rightly granted injunction as plaintiffs had established prima facie case and would suffer irreparable loss.
Law Points
- expulsion from society requires compliance with natural justice
- removal of member must be on agenda
- injunction may be granted to prevent irreparable loss even if it amounts to final relief
- principles of natural justice
- balance of convenience and prima facie case for interim injunction
