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ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 238 OF 2006
IN
WRIT PETITION NO.2611 OF 2004
Shri Prakash Atmaram Atre ]
Residing at : 46, Shalaka Co-op Hsg. Soc. Ltd. ]
Behind Y.M.C.A. Boys Home, ]
D. N. Nagar, Andheri (West) ] Appellant/
Bombay 400 053 ] Ori.Petitioner
217, Raja Rammohan Roy Road, Girguam, ] Respondent/
Bombay 400 004 ] Ori.Respondent
None for the Respondent.
JUDGMENT
1. Heard Mr A.S. Rao, the learned counsel for the Appellant.
2. This Appeal takes exception to the order dated 03 November 2004 made by the learned Single Judge of this GOPAL CHANDAN Court dismissing the Appellant’s Writ Petition No.2611 of 2004.
3. The skeletal facts in which this Appeal arises are set out below: - (a) The Appellant, vide appointment letter dated 17 November 1978, was appointed as the Managing Director of the Deccan Merchants Co-op. Bank Ltd. (Co-op. Bank) on the terms and conditions set out therein. It is the Appellant’s case that his service conditions were governed under the by-laws in force till 13 December 1984, and further under the new by-laws which came into effect from 14 December 1984. (b) In certain circumstances and on certain grounds referred to in the minutes of the meeting of the Board of Directors of the Co-op. Bank held on 04 December 1985, the services of the Appellant came to be terminated.
(c) Based on the resolution passed in the above meeting of 04 December 1985, the Vice Chairperson of the Co-op. Bank by letter dated 04 December 1985 terminated the services of the Appellant, invoking Clause 9 of the appointment letter dated 17 November 1978, which reads as follows:- “Your services can be terminated by giving three calendar month’s notice or salary in lieu thereof”
(d) On 13 December 1985, the Appellant raised dispute No. CC-II/1045 of 1985 before the Co-operative Court at Bombay against the Co-op. Bank, praying for a declaration that the resolutions passed in the meeting of 04 December 1985 were illegal, null and void. The Appellant claimed reinstatement/ damages/ compensation. (e) By order dated 25 January 1989, the Co-operative Court dismissed the above dispute, holding that the same was not maintainable under Section 91 of the MCS Act. The Appellant appealed, and the Appellate Court vide order dated 21 January 1991 set aside the Co-operative Court’s order dated 25 January 1989 and remanded the matter to the Co-operative Court for the decision on merits. (f) The Co-operative Bank challenged the Appellate Court’s order dated 21 January 1991 by instituting Writ Petition No.1828 of 1991 before this Court. By consent order dated 22 September 1992, the Co-operative Court’s order dated 25 January 1989, and the Appellate Court’s order dated 21 January 1991 were set aside. The Appellant’s prayer for reinstatement, as raised by him in the dispute before the Co-operative Court, was rejected as not maintainable. However, the case was remanded for a decision on the other issues involved in the matter. The Appellant was given liberty to apply to the Co-operative Court for amendment of the dispute by restricting the claim to damages. (g) On remand, the Co-operative Court permitted the Appellant to amend the dispute application and finally partly allowed the dispute application by directing the Co-operative Bank to pay the Appellant a sum of Rs. 8108/- with interest at the rate of 12% per annum with effect from 04 December 1985 till its realisation. (h) The Co-operative Court’s order dated 03 August 2002 was challenged by the Appellant and the Cooperative Bank by filing Appeals before the Co-operative Appellate Court. By common judgment and order dated 22 August 2003, the Co-operative Appellate Court dismissed the Appellant’s Appeal and partly allowed the Co-operative Bank’s Appeal by directing payment of interest from 04 December 1985 till 10 January 1986 only.
(i) The Appellant instituted Writ Petition No.2611 of
2004 to challenge the Appellate Court’s Judgment and Order dated 22 August 2003. This was dismissed by the learned Single Judge void Order dated 03 November
2004. (j) Hence the present Appeal.
4. Mr Rao, learned Counsel for the Appellant, submitted that the resolution dated 04 December 1985 was illegal, null and void because the Appellant, though, a validly appointed Managing Director and an ex officio member of the Board was not allowed to participate in the meeting held on 04 December 1985 and vote on the resolution passed in the said meeting on the said date.
5. Mr Rao submitted that by-law 29(4) of the Co-operative Bank provides that the Chief Executive Officer is the ex officio member of the Board. He submitted that by-law 30 provides that the Chairperson at a meeting of the Board of Directors shall have a casting vote. He further submitted that the Appellant was not only present but also voted at the meeting held on 04 December 1985, but the Appellant’s vote was not counted despite the clear legal provisions reflected in the above-referred-by-laws. He therefore submitted that the meeting held on 04 December 1985 and the resolution passed therein were illegal, null and void.
6. Mr Rao submitted that the meeting held on 04 December 1985 was invalid for other reasons, like the Agenda not mentioning the no-confidence motion or the subject of the termination of the Appellant’s services. Besides, he submitted that the notice of the meeting was not served on the members nominated by the Government. Therefore, he submitted that the meeting and the resolution passed therein should be declared as illegal, null and void.
7. Mr Rao submitted that the Co-operative Court failed to notice that Section 74 of the MCS Act, as it prevailed in 1985, had not barred by the Managing Director from voting at the meetings of the Board of Directors. He submitted that the Cooperative Court committed an error apparent on the face of the record by referring to the amendments of 1986 to conclude that the Managing Director had no voting rights.
8. Mr Rao submitted that the amended provisions of Section 74 (3) had not been given any retrospective effect and therefore, the Co-operative Court committed an error apparent on the face of the record in applying those provisions to the meeting held on 04 December 1985. Mr Rao relied upon the decision of the learned Single Judge in the case of Pandurang Shenphadu Pawar Vs Laxman Bhagaji Bhise and Ors[1] and Gajanan Narayan Patil and others Vs Dattatraya Waman Patil and others 2 in support of his contention.
9. Mr. Rao submitted that the Board of Directors had already been ‘discarded’ by the general body through a motion of no confidence passed against them. Accordingly, he submitted that the Board of Directors who participated in the meeting of 04 December 1985 and voted on the resolution to terminate the services of the Appellant had no legal authority to do so. The meeting, as well as the impugned resolution dated 04 December 1985, were therefore illegal, null and void.
10. Mr Rao submitted that all the above contentions, though raised before the learned Single Judge, were not considered by the learned Single Judge, and Writ Petition No. 2611 of 2004 was dismissed on the ground that the Appellant’s termination was not stigmatic. He therefore submitted that the impugned order under Appeal warrants interference.
11. The Respondent was duly served in the matter but has chosen not to appear through any representative or advocate.
12. This Appeal relates to the year 2006. The same was duly notified. Therefore, we find no justification for the 1992 (1) Bom CR 651 AIR 1990 SC 1023 Respondent not to attend to this matter. Accordingly, we proceeded in the absence of the Respondents or their Advocates.
13. At the outset, we note that the learned Single Judge’s order dated 03 November 2004 which is appealed before us refers to only two contentions raised on behalf of the Appellant:- (a) that the impugned termination dated 04 December 1985 was stigmatic and therefore, contrary to the terms of the Appellant’s appointment; (b) that the Cooperative Courts should not have declined the substantial damages of over Rs. One Crore claimed by the Appellant on the alleged ground that the Appellant was employed elsewhere.
14. Apart from the above two grounds, at least the order under appeal does not refer to any other grounds or challenges to the Co-operative Court’s order dated 03 August 2002 or the Co-operative Appellate Court’s order dated 22 August 2003.
15. Mr Rao, however, submitted that the arguments or the contentions which he has now raised in this Appeal were in fact raised and pressed before the learned Single Judge, but the learned Single Judge did not consider the same. Such a contention cannot normally be accepted.
16. The order dated 03 November 2004 made by the learned Single Judge was dictated in the open Court in the presence of the learned counsel for the parties. It is well established that if any party has a grievance about what is recorded in the Court record or in an order issued by the Court, such parties must file an appropriate application before the same Court at the earliest opportunity to have the record or the order corrected or to ensure the record or the order aligns with what actually transpired in Court. Such a grievance cannot be addressed before the Appellate forum.
17. In the case of State of Maharashtra Vs Ramdas Shrinivas Nayak[3], the Hon’ble Supreme Court has held that the statements or what transpired in a Court of law cannot be permitted to be contradicted by statements at the Bar or by the Affidavits or other evidence. If a party thinks that happenings in a Court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the judges, to call the attention of the very judges who have made the record. That is the way to have the record corrected. If no such steps are taken, the matter must necessarily end there.
18. Admittedly, no application was filed before the learned Single Judge, pointing out that several other contentions were indeed raised, but they have not been considered. The mere raising of grounds in an Appeal Memo or in a Writ Petition does not lead to any presumption that such grounds or challenges must have been urged at the time of arguments. It is not uncommon that several grounds are raised in a Petition, but only a few are argued or pressed.
19. In Daman Singh And Ors. V/s. State of Punjab and Ors.4, the Constitution Bench of the Hon’ble Supreme Court rejected the arguments that several questions were raised in the Writ Petition before the High Court, but the same were not AIR 1982 SC 1249 considered. The Constitution Bench, at para 13, observed as follows: “13. The final submission of Shri Ramamurthi was that several other questions were raised in the writ petition before the High Court but they were not considered. We attach no significance to this submission. It is not unusual for parties and Counsel to raise innumerable grounds in the petitions and memoranda of appeal etc. but, later, confine themselves, in the course of argument to a few only of those grounds, obviously because the rest of the grounds are considered even by them to be untenable. No party or Counsel is thereafter entitled to make a grievance that the grounds not argued were not considered. If indeed any ground which was argued was not considered it should be open to the party aggrieved to draw the attention of the court making the order to it by filing a proper application for review or clarification. The time of the superior courts is not to be wasted in enquiring into the question whether a certain ground to which no reference is found in the judgment of the subordinate court was argued before that court or not?
20. Given the above legal position, we do not think that we are obliged to consider the grounds other than those which were raised before the learned Single Judge in this Appeal. However, despite this legal position, we propose to consider all grounds now raised by Mr. Rao in this Appeal.
21. On the aspect of the two grounds reflected in the order of the learned Single Judge, we find that the Appellant was appointed by a letter dated 17 November 1978. Clause [9] of this letter empowered the termination of the Appellant’s services by giving him three calendar months’ notice or salary in lieu of notice. The termination letter dated 04 December 1985 refers to this clause to terminate the Appellant’s services.
22. Therefore, the termination dated 04 December 1985, at least on its face, cannot be said to be stigmatic. The argument that the motive was stigmatic is neither here nor there. Based upon such an argument, no case is made out to interfere with the findings recorded by the learned Single Judge about the Appellant’s termination being stigmatic in nature.
23. The argument about damages also warrants no interference. The issue of the Appellant working elsewhere is mainly an issue of fact. No arguments were advanced before us to take a different view, other than submitting that the Appellant was unemployed after his termination. The Cooperative Court determined the damages in this case, and the quantum was not interfered with by the Co-operative Appellate Court. In the absence of any perversity in the determination of the quantum of damages, we cannot fault the appealed order declining to enhance the damages.
24. Even otherwise, Mr Rao only referred to certain calculations based upon which the Appellant had claimed damages more than Rs. 1 Crore. No evidence was shown to us to sustain such a claim. Therefore, there is no warrant to interfere with the order of the learned Single Judge on the aspect of quantum of damages.
25. Adverting to the contentions now raised by Mr Rao in this Appeal but which do not find any reflection in the learned Single Judge’s order, we note that the Appellant’s main contention relates to the invalidity of the meeting of the Board of Directors held on 04 December 1985, and the passing of the resolution for termination of the Appellant’s services therein. The Appellant also has a grievance about his not being allowed to participate in the proceedings and to vote on the resolution for the termination of his services.
26. Therefore, it would be appropriate to transcribe the minutes of the meeting dated 04 December 1985 below for the convenience of reference: “THE DECCAN MERCHANTS CO-OPERATIVE BANK LTD.
BOMBAY 4. The Minutes of the Special Meeting of the Board of Directors held on Wednesday, 4th December, 1985 at 5.30 p.m. in the registered office of the Bank.
PRESENT
01. Shri D.D. Kale Chairman
03. Shri S.R. Sukhthankar Director
04. Shri D.V. Jogalekar Director
05. Shri J.B. Mayekar Director
06. Shri S.V. Kothari Director
07. Shri G.S. Panvalkar Director
08. Shri R.D. Medhekar Director
09. Shri V.R. Tilekar Director
10. Shri A.T. Mhaske Director
11. Shri P.A. Atre Mg. Director Leave of absence was granted to Shri S.M. Dahanukar. At the outset in view of the Resolution of No Confidence tabled by some directors, Shri Kale, Chairman suggested that he does no wish to preside over the meeting and the Vice Chairmam, Shri Vaidya should take the chair and conduct the meeting, to which all the directors consented and Shri Vaidya Vice Chairman took the Chair. The Chairman of the meeting then suggested that as the subject for discussion concerns the Managing Director, he be asked to leave the Meeting. It was objected by Shri Jogalekar, Director on the grounds that the Mg. Director being Ex-officio member of the Board is entitled to sit and participate in the meeting. The Mg. Director also insisted that he is entitled to participate in the meeting. Considered the letters dated 15.11.1985 written by Shri P.A. Atre, as Mg. Director to various authorities and letters dated 22.11.85 and 23.11.85 written by Shri D.D. Kale as Chairman in respect of the proceedings of Annual General Meeting held on 8.11.85 and the alleged resolution passed therewith. In the detailed discussion on the above subject it was suggested to take vote as to whether writing such a letter amounts to indiscipline by the Managing Director. Therefore voting was taken. Voting was as under:- The following Directors voting in favour of the decision that Shri Atre committed indiscipline.
1. Shri Kale
2. Shri Sukhthankar
3. Shri Vaidya
4. Shri madhekar
5. Shri Mhaske. The following directors voted against the said decision.
1. Shri Jogalekar
2. Shri Panvalkar
3. Shri Kothari
4. Shri Mayekar
5. Shri Tilekar The Managing Director also voted against the said decision. As the discussions was concerning the Managing Director, the Chairman of the meeting disallowed his vote. As there was equal voting, the vice Chairman Shri Vaidya who was presiding over the meeting casted his vote in favour of the decision. The Board therefore was of the view by majority of 6 against 5 that Shri Atre committed indiscipline in writing a letter dated 15.11.1985 without consulting the Board or informing the Board even at the Board Meeting held on 18.11.85. In view of the said majority decision Shri Mhaske proposed a Resolution of loss of confidence against Shri Atre, as per the copy annexed hereto. Shri Sukhthankar seconded the said Resolution. Shri Jogalekar said that as there was no notice of such Resolution, it could not be considered. The Chairman gave a ruling that said resolution arises out of the above said decision and is therefore in order. The said resolution was then put to vote. The following Directors voted in favour.
1. Shri Kale
2. Shri Sukhthankar
3. Shri Vaidya
4. Shri Medhekar
5. Shri Mhaske The Following directors voted against
1. Shri Jogalekar
2. Shri Panvalkar
3. Shri Tilekar
4. Shri Kothari
5. Shri Mayekar As there was equality of votes, The Chairman of the Meeting casted his vote in favour of the Resolution. The resolution was passed by majority of 6 against 5. The Chairman then informed he board about the service of order of Injunction passed by the Co-operative court No.Il in the dispute filed by the Shri D.D. Kale challenging the resolution of the no confidence passed against him in the Board meeting held on 29.11.1985. The Chairman also read the opinion given by Shri Rizvi Advocate to Shri Joglekar. Director in respect of authority of the Board to bring such Resolution. The meeting then terminated with a vote of Thanks to the Chair. Sd/- (S.R. Sukhthankar) Chairman”
27. There is no dispute that the Appellant was not an elected member of the Board of Directors. Vide appointment letter dated 01 November 1978, the Appellant was only appointed as the Managing Director, subject to terms and conditions set out in the appointment letter. The appointment of the Appellant was neither statutory nor can it be said that any statutory provision governed the same.
28. Mr. Rao submitted that the Appellant, as the Managing Director, was the Chief Executive Officer of the Co-operative Bank. He submitted that as a Chief Executive Officer, the Appellant was an ex officio member of the Board of Directors. He submitted that no provision under the Act or by-laws barred any member of the board, including an ex officio member, from either participating or voting in the meeting of the Board of Directors. Therefore, Mr Rao submitted that the Appellant should have been allowed to effectively participate in the meeting held on 04 December 1985 and vote on the resolution of his removal from service.
29. As noted earlier, the Appellant was not an elected member of the Board of Directors, as admitted. No clear or positive provision was shown to us entitling such a nonelected Managing Director or a Chief Executive Officer to have any right to vote in the meeting of the Board of Directors. The circumstance that in 1986, the law was amended by introducing Section 74(3) and providing specifically that the Chief Executive Officer shall have no right to vote, and the meeting of the committee cannot lead to the unqualified inference that prior to this date non-elected Chief Executive Officer had some unqualified right to vote at the meetings of the committee.
30. However, even if we assume that the Appellant had some right to participate or vote in the meetings of the Board of Directors or the managing committee, the question is whether the Appellant was entitled to participate or vote on a resolution concerning his removal from service. The Cooperative Courts have relied upon certain by-laws, including Bye Law 57, which suggests that members cannot participate or vote on matters relating to contracts in which they have a direct or indirect interest. As noted earlier, the Appellant’s appointment was merely a contract on terms reflected in the appointment letter. Therefore, on the issue of termination of such a contract, it is clear that the Appellant could not have participated or voted because he would have a direct interest in the matter.
31. Normally, in case of conflict between interest and duty, even elected members are expected to refrain from participating or voting. Here, the Appellant was an unelected member appointed under a contract. Considering that the Board of Directors was debating the termination of this very contract, it is difficult to accept that the Appellant should have been given a right to vote on the resolution leading to the termination of such a contract of employment.
32. The by-laws 29 and 30 relied upon by Mr Rao only provide that the Chief Executive Officer is an ex officio member of the board and that the Chairperson at a meeting shall have a casting vote. There is nothing in these by-laws to suggest that the Appellant was given any right to vote, and in any event, had an unqualified right to vote even in situations where there was a patent conflict between interest and duty.
33. The Appellant was admittedly not the Chairperson of the Board of Directors, so the issue of ‘casting vote’ is not particularly relevant. There is no evidence to suggest that the Chairperson was aggrieved by any actions taken at the meeting of 04 December 1985. In any case, the Chairperson has not challenged the meeting dated 04 December 1985, or the resolutions passed at that meeting by initiating any independent proceedings. Therefore, on these grounds, we cannot deem the meeting of 04 December 1985 to be illegal, null, or void.
34. The arguments about some alleged shortcomings in the agenda or that the notice of the meeting was not allegedly served upon the nominees of the Government have neither been established nor based upon such grounds; it is possible to hold that the meeting was illegal, null and void.
35. The arguments regarding prospective amendment to Section 74 have already been considered above. Even if the provisions of Section 74(3), which entered force in 1986, were not on the statute book when the meeting dated 04 December 1985 was held, under the provisions of by-law 57, the Appellant was disentitled to vote on the resolution in which he had a direct interest. Therefore, even by excluding the amended provisions, we cannot hold that the meeting dated 04 December 1985 was illegal, null and void only because the Appellant was not permitted to cast his vote on the resolution in which he had a direct interest.
36. The argument that the meeting of 4 December 1985 itself was illegal, null, and void was made but never elaborated upon. The orders of the so-called “discarding” of the Board of Directors were never shown to us. No details regarding the so-called no-confidence motion were also provided. In the absence of any particulars, the argument about the meeting being illegal, null, and void cannot be accepted.
37. The decisions in the case of Pandurang Pawar (supra) and Gajanan Patil (supra) were in the context of notice to members of the committee of management, who were entitled to sit and vote at any meeting. The Courts held that even though co-opted nominees or non-elected members may not have any right to vote at a no-confidence motion, service of notice upon them was necessary, given the wording employed in the statutory provisions. That is not the issue involved in this matter. The Appellant does not complain that no notice was issued to him. The Appellant’s only complaint is that he was not allowed to vote on the resolution. Given the provisions of the by-laws referred to by the including by-law 57, the Appellant was correctly not allowed to vote on a subject matter over which he had a direct and rather conflicting interest.
38. Even otherwise, a Writ Court is not bound to interfere merely upon some legal point being made out. The jurisdiction under Article 226 is both extraordinary and discretionary. Such jurisdiction is to be exercised to promote substantial justice. Therefore, even assuming that there was some legal point involved, no case is made out to hold that the meeting of 04 December 1985 was illegal, null and void, only because the Appellant was not allowed to vote on the resolution directly concerning the termination of his contract of service. Such interference would lend credence to a position which would be plainly opposed to the principles of natural justice and the principle that members having a conflict between their interest and their duties must generally not vote on such resolutions.
39. In this case, there was some contradiction between the contentions raised on behalf of the Appellant. On the one hand, it was asserted that the Appellant in fact participated and voted at the meeting held on 04 December 1985. In the same breath, it is alleged that the meeting dated 04 December 1985 was itself illegal, null and void. Thus, if the Appellant’s vote were to have been counted, the Appellant would not have any grievance about the meeting of 04 December 1985. Merely because his vote had not been counted, the Appellant attacks the meeting as being illegal, null and void. Such contradictory pleas cannot normally be encouraged.
40. For all the above reasons, we find no merit in this Appeal and consequently dismiss the same without any order for costs. (Advait M. Sethna, J) (M.S. Sonak, J)