Institute of Company Secretaries of India Versus Biman Debnath & Ors.

Institute of Company Secretaries of India  Versus Biman Debnath & Ors.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8039 OF 2022
Institute of Company Secretaries of India       …Appellant 
Versus
Biman Debnath & Ors.     …Respondents
With
CIVIL APPEAL NOS. 8040­41 OF 2022
Anil Kumar Dubey          …Appellant 
Versus
Biman Debnath & Ors.     …Respondents
J U D G M E N T
M.R. SHAH, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment and order dated 13.04.2022 passed by the High Court
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of Judicature at Calcutta in MAT No.213 of 2022 and MAT 219 of
2022 with CAN 1 of 2022 by which the High Court has dismissed
the   said   appeal   and   has   confirmed   the   judgment   and   order
passed by the learned Single Judge by which the learned Single
Judge allowed the writ petition bearing No.WPA 1367 of 2022 by
quashing and setting aside the election of the office bearers of the
Regional Council for the year 2022 held in the 316th Meeting of
Eastern   India   Regional   Council   of   the   Institute   of   Company
Secretaries of India, the Institute of Company Secretaries of India
has preferred the present appeal. 
2. Notice dated 20.12.2021 was issued for elections to be held
on 27.12.2021 for the Eastern India Regional Council (hereinafter
referred to as ‘EIRC’) of Institute of Company Secretaries of India
(hereinafter referred to as ‘ICSI’) to take effect from 19.01.2022 for
the period of one year.  The meeting of the Regional Council was
required to be chaired by the Chairman, EIRC.  However, before
the actual date of election on 27.12.2021, the Chairman, EIRC
was disqualified to hold his office on 22.12.2021.  Thus, the office
of the Chairman fell vacant in terms of Regulation 117(2) of the
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Company Secretaries Regulations, 1982 (hereinafter referred to as
“Regulations 1982’).   As the post of Chairman fell vacant, the
same was required to be filled in for the remaining period in
terms of Regulation 119(2).  The contesting respondent herein as
a Vice Chairman was allowed to chair the meeting for the limited
purpose of election to the post of Chairman for the remaining
period   of   current   year   ending   on   18.01.2022   in   terms   of
Regulation 119(2).   The contesting respondent no.1 herein as a
Vice­Chairman was allowed to chair the meeting for the limited
purpose of election to the post of Chairman for the remaining
period  of  the  current  year ending  on  18.01.2022  in  terms  of
Regulation 119(2).  It appears that the contesting respondent no.1
was disrupting the meeting, the remaining members decided to
proceed with the agenda item i.e. electing the chairman for the
remaining period and for that purpose appointed respondent no.3
– Mr. Anil Kumar Dubey to chair the said item.  That thereafter
elections took place and the respondent no.3 – Mr. Anil Kumar
Dubey was duly elected as Chairman for the remaining period.
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2.1 He was elected for the period 19.01.2022 to 18.01.2023.
The   Respondent   no.1   who   did   not   participate   in   the   election
and/or contest filed the writ petition before the learned Single
Judge contending  inter alia  that the meeting dated 27.12.2021
chaired by Respondent no.3 was illegal.  According to Respondent
no.1,   in   absence   of   the   Chairman,   the   Vice­Chairman   would
become the Chairman and therefore the meeting was required to
be chaired by him.   However, it was the case on behalf of the
Institute and the contesting original respondents that meeting
was   convened   legally   and   the   Chairman   was   elected   for   the
remaining period as per Regulation 119(2) of the Regulations,
1982.  It was the specific case on behalf of the contesting original
respondents that it was a case of vacation of office and not the
absence of an office bearer for a particular period of time.  The
learned Single Judge allowed the writ petition and set aside the
elections  of   the  office bearers  elected  in  the   meeting  held  on
27.12.2021   mainly   on   the   ground   that   the   meeting   was   not
chaired by the Vice­Chairman who in absence of the Chairman
was required to conduct and/or chair the meeting as Chairman.
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The Judgment and Order passed by the learned Single Judge has
been   confirmed   by   the   impugned   judgment   and   order   of   the
Division Bench of the High Court.  Hence, the present appeal at
the instance of the ICSI.
3. We have heard Shri Sanjiv Sen, learned Senior Advocate
appearing on behalf of the appellant and Shri Ritin Rai, learned
Senior Advocate appearing on behalf of the contesting respondent
no.1.  We have gone through the impugned judgment and order
passed by the learned Single Judge as well as the Division Bench
of the High Court.
4. From the judgment and order passed by the learned Single
Judge   confirmed   by   the   Division   Bench   of   the   High   Court   it
appears that the learned Single Judge quashed and set aside the
election of the office bearers of the EIRC on the ground that the
meeting was not presided over by the Vice­Chairman (Respondent
no.1 herein).   Therefore, the short question which is posed for
consideration is as to whether the meeting i.e. 21.07.2021 was
presided over by the person duly elected as Chairman for the
remaining period?
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4.1 While considering the aforesaid issue relevant provisions of
the   Regulations   1982   are   required   to   be   referred   to   namely
Regulations 92, 117 & 119 which are as under:
“92. Chairman of the Council.­  At all meetings of the
Council,   the   President,   and   in   his   absence   the   VicePresident shall be the Chairman; in the absence of both,
the members present shall elect one of the their number
to be the Chairman of meeting. 
Provided that, at the first meeting of any Council the
President of the outgoing Council, or in his absence its
Vice­President,   shall   act   as   the   Chairman   until   such
time a President is elected under the provisions of subsection (1) of section 12. 
Provided   further   that   in   the   absence   of   both   the
President and the Vice president of the outgoing Council
the members of the Council present shall elect one of the
members to be the Chairman of the meeting until such
time a President is elected under the provisions of subsection (1) of section 12.”
***
“117.  Vacancies.­  (1) A member of a Regional Council
may at any time resign his membership by writing under
his hand  addressed to  the  Chairman  of the Regional
Council   and   the   seat   of   such   member   shall   become
vacant when such resignation is notified in the Journal
or when the Regional Council next meets, whichever is
earlier. 
(2) An elected member of a Regional Council who has
been   found   guilty   of   any   professional   or   other
misconduct   and   awarded   penalty   of   fine   or   does   not
attend   three   consecutive   meetings   of   the   Regional
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Council or Committee thereof, unless he applies for leave
of absence in writing and it is granted for each meeting,
shall be deemed to have vacated office from the date of
the   order   or   at   the   conclusion   of   the   third   meeting
unless he applies for leave of absence in writing and it is
granted for each meeting.
(3)   Any   vacancy   caused   by   the   resignation,   death   or
removal from the Register of an elected member of the
Regional Council may be fi by the Regional Council by
co­option   of   another   member   entitled   to   vote   in   and
stand   for   election   to   the   Regional   Council   with   the
approval of the President. 
(4)  If  a member  of  the  Regional   Council  [including  a
member   of   the   Council   becoming   a   member   of   the
Regional Council under clause (a) of sub­regulation (2) of
Regulation 111] changes his professional address from
the regional constituency to which he belonged to at the
time of election or co­option, as the case may be, to
another regional constituency, such member shall cease
to be member of that Regional Council from that date.
The vacancy so caused may be filled by the Regional
Council by co­option of another member in the same
manner as provided in sub­regulation (3). 
(5) In the case of a member of a Regional Council being
elected to the Council, without prejudice to his right to
be represented on the Regional Council under clause (a)
of sub­regulation (2) of Regulation 111, he shall cease to
be an elected member of the Regional Council and the
vacancy thus caused may be filled up by co­options by
the   Regional   Council   in   the   manner   set   out   in   subregulation (3). (6) A co­opted member shall hold office as
a member of the Regional Council for the duration of
office of that Regional Council.” 
***
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“119. Proceedings  of the Regional Council.­ (1) Onethird of the members of the Regional Council for the time
being shall constitute the quorum. 
(2) Every Regional Council shall at its first meeting held
after   its   constitution   and   in   subsequent   years   at   a
meeting to be held in December of every year elect from
amongst its members a Chairman, a Vice­Chairman, a
Secretary and a Treasurer thereof to hold office for a
period commencing from the date of its first meeting
after constitution or from 1st January of the subsequent
year as the case may be, till the 31st December of that
year and so often as any of those offices become vacant,
the   Regional   Council   shall   elect   another   person   from
amongst its members to hold the office for the remaining
period of a year.
Provided that the retiring office bearers shall be eligible
for   re­election   to   any   of   the   offices   of   the   Regional
Council if they continue to be members of the Regional
Council. 
(3) The first meeting of the Regional Council referred to
in sub­regulation 
(2) shall be called and held within one month from the
date of its constitution 70[* * * * * *]. 
(4) If within half an hour from the time appointed for the
said first meeting of the Regional  Council referred to
hereinbefore, a quorum as mentioned in sub­regulation
(1)   above   is   not   present,   the   said   first   meeting   shall
notwithstanding anything contained in that Regulation
stand adjourned to the same day in the next week at the
same time and place and at such adjourned meeting of
the Regional Council, the member or members present,
shall constitute the quorum and shall have power to
transact all the business which could properly have been
transacted at the original meeting.” 
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4.2 Regulation 117 deals with the vacancies.  As per Regulation
117(2)  an   elected   member  of   Regional   Council   who  has   been
found guilty of any professional or other misconduct……., shall
be deemed to have vacated office from the date of the order.  In
the present case the then Chairman, EIRC was disqualified to
hold his office on 22.12.2021.  Therefore, it was a case of vacation
of office of the Chairman.  
4.3 Regulation 119 deals with the Proceedings of the Regional
Council.  As per Regulation 119(2) every Regional Council shall at
its first meeting held after its constitution and in subsequent
years at a meeting to be held in December of every year elect from
amongst its members a Chairman, a Vice­Chairman, a Secretary
and a Treasurer thereof to hold office for a period commencing
from the date of its first after constitution or from 1st January of
the subsequent year as the case may be till the 31st December of
that  year and so often as any of those offices become vacant, the
Regional  Council  shall elect  another person from amongst its
members to hold the office for the remaining period of a year.
Thus,   as   the   office   of   the   Chairman   fell   vacant   due   to   its
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disqualification   any   person   from   amongst   its   members   was
required to be elected as Chairman and/or to hold the office of
the Chairman for the remaining period.  Therefore, in exercise of
powers   under   Regulation   119(2)   of   the   Regulations,   1982,
Respondent   No.3   ­  Anil   Kumar   Dubey   was   elected   as   the
Chairman for the remaining period who presided over the meeting
dated 27.12.2021.
4.4 However,   it   was   the   case   on   behalf   of   Respondent   no.1
which came to be accepted by the learned Single Judge and the
Division Bench of the High Court that being a Vice Chairman, a
meeting   was   required   to   be   chaired/presided   over   by   him   in
absence   of   the   Chairman.     Heavy   reliance   was   placed   on
Regulation 92(2).  On fair reading of Regulation 92(2) read with
Regulation 117(2), we are of the opinion that Regulation 92(2)
shall not be applicable at all.  Regulation 92(2) shall be applicable
only in a case of absence and not in a case where the post of
Chairman and/or office bearer has fallen vacant.   There is a
distinction   between   the   absence   and   the   post   fallen   vacant.
Regulation   92(2)   shall   be   applicable   in   a   case   where   the
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Chairman and/or the office bearer though is not disqualified but
is absent for some reason.  Regulation 117(2) shall be applicable
in a case where the elected member of the Regional Council has
been disqualified on he being found guilty of any professional or
other misconduct and awarded penalty of fine.  Therefore, in case
of a vacation of office as per Regulation 117(2), such post fallen
vacant is required to be filled in by election by electing another
person   from   amongst   its   members   to   hold   the   office   for   the
remaining period of a year (Regulation 119(2)).  In that view of the
matter both, the learned Single Judge as well as the Division
Bench of the High Court have seriously erred in misinterpreting
Regulation 92(2) and Regulation 117 read with Regulation 119(2).
Both, the learned Single Judge as well as the Division Bench of
the High Court have not appreciated the distinction between the
vacation of office under Regulation 117(2) of the Regulation and
the absence of an office bearer under Regulation 92.  Under the
circumstances   both,   the   learned   Single   Judge   as   well   as   the
Division   Bench   of   the   High   Court   have   seriously   erred   in
quashing and setting aside the election of the office bearers of the
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EIRC of ICSI held in the meeting held on 27.12.2021 on the
ground   that   the   meeting   was   not   presided   over   by   the   Vice
Chairman (Respondent no.1 herein).
5. Now   so   far   as   the   submission   made   by   Shri  Ritin   Rai,
learned Senior Advocate appearing on behalf of the contesting
respondent no.1 that even otherwise the election was not held
legally   and   there   was   irregularity   in   conducting   the
election/meeting is concerned, at the outset it is required to be
noted that there were disputed questions of fact on whether the
meeting and/or election was irregularly conducted or not.  As per
Regulation   114(4)   whether   any   dispute   arises   regarding   any
election to a Regional Council, the matter may be referred by the
candidate   concerned   within   30   days   from   the   date   of   the
declaration of the result of the election, to the President and the
decision   shall   be   final.    Under   the  circumstances,   in  view   of
Regulation 114(4) of the Regulations, the High Court ought not to
have entertained the writ petition challenging the validity of the
election.  Even otherwise, it is required to be noted that even as
per   Regulation   114(4),   the   election   can   be   challenged   by   the
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candidate concerned.  In the present case respondent no.1 who
challenged the election of the office bearers did not even contest
the election.   Under the circumstances the High Court erred in
entertaining   the   writ   petition   challenging   the   election   at   the
instance of the respondent no.1 who even did not contest the
election of the office bearers.  
6. In view of the above and for the reason stated above present
appeals succeed.  The impugned judgment and order passed by
the Division Bench of the High Court as well as the learned Single
Judge quashing and setting aside the election of the office bearers
of the EIRC of the ICSI held on 27.12.2021 are hereby quashed
and   set   aside.     The   original   writ   petitions   stand   dismissed.
Present appeals are accordingly allowed.  No costs.
………………………………….J.
 [M.R. SHAH]
NEW DELHI; ………………………………….J.
NOVEMBER 7, 2022  [M.M. SUNDRESH]
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