PANKAJ CHIMANBHAI PATEL Vs. KARNAVATI CLUB LTD.

JUDGEMENT

(1.) THE present petition is filed under section 111(4) of the Companies Act, 1956, seeking directions to the respondent -company to declare that the proceedings of the meeting of the board of directors of the club held on July 21, 2008, as non existent, illegal, invalid and not binding upon the petitioner.

(2.) THE brief facts of the case as stated in the petition are that respondent No. 1 is a company formed and registered under the Act and is governed by its provisions. It is formed for the purpose of promoting sports and providing facilities for the same and also for the entertainment as stated in its memorandum of association. Its very foundation is the utmost mutual trust and confidence by its members that those who are in its control and management will act only in its interest and the interest of its members and in such a way that the interest of the club or its members or of any one or more of them is not jeopardized in any manner whatsoever. The majority of the directors on the board of the club including its office bearers, are managing its affairs in a way injurious to the interest of the club and its members. The petitioner had, therefore, raised objections to the same from time to time but with no effect whatsoever. On the contrary the said directors and office bearers used to malign the image of the petitioner in all possible manner. The petitioner had, therefore, in the annual general meeting of the club held on June 19, 2008, raised certain questions relating to the affairs of the club and had asked for certain information and explanation pertaining to the same. The said questions were not liked by some directors and office bearers of the club who were present at the said annual general meeting and they had tried to brush them aside instead of answering the same. However, the petitioner insisted for the said information and explanations which were found to be embarrassing by the said directors and office bearers to answer. Ultimately, they were infuriated and threatened the petitioner that if he continued to persist with his request, he would be dismissed from the membership of the club on any excuse. The petitioner then received a notice dated June 20, 2008, from the secretary of the club that the board of directors in their meeting held on the very date of the said annual general meeting had taken a serious view of the conduct of the petitioner, as the petitioner had used abusive and unparliamentarily language against the office bearers and the board of directors of the club, thus endangering interest and harmony of the club and the board has decided to expel the petitioner from membership of the club in terms of the powers vested under article 21 of the articles of association of the club. Thereafter, the petitioner had contacted the president of the club and discussed the entire matter with him and satisfied him about the unjust and illegal nature of the proposed action. But to his surprise he received a letter dated July 22, 2008, from the said president of the club that the board of directors of the club had in their meeting held on July 21, 2008, resolved with majority to expel the petitioner from the primary membership of the club with immediate effect and that he should not enter in the premises of the club as a member nor as a guest of a member as well as not use the club facilities. The expulsion of the petitioner as a member of the club and omission of his name from the register of members of the club is absolutely unjust, mala fide and illegal and is motivated by personal vendetta of the majority of directors and office bearers of the club. The membership of the club is a valuable right of a person and whether or not he should be allowed to continue should be decided by the members of the club in a general meeting as a whole after considering and investigating into the question whether the conduct of such member is so serious as to deprive him of the membership of the club. The action of expelling the petitioner from the membership of the club is punitive in nature and resorted to only to see that the petitioner is kept away from the absolute and unbridled exercise of powers by the board of directors in the most arbitrary manner and no other member dares to raise any voice against the misconduct of the management, so that the management may carry out their mala fide intentions without any obstruction. The action of the respondents in expelling the petitioner from the club is illegal, unjust, incompetent, mala fide and out of personal vendetta and therefore the proceedings of the meeting of the board of directors of the club held on July 21, 2008, be declared as nonexistent, illegal, invalid and not binding upon the petitioner.

(3.) HE further submitted that by filing the present petition, the petitioner is attempting to indirectly achieve what is not directly permissible in a proceedings under section 111 (4) of the Companies Act. It is a settled law that right of membership is a civil right of a person and therefore loss/cessation of right of membership would at the best give rise to a common law civil remedy before the competent civil court. Assuming for the time, but without admitting, the contents of the petition are correct, the grievances raised by the petitioner in the petition would at best amount to violation or infringement of individual rights of the petitioner for which the appropriate remedy is to file a civil suit before a competent court and not a proceedings under section 111 (4) of the Act. In view of the facts and reasons stated above the petition is liable to be dismissed.