INSTITUTE OF COMPANY SECRETARIES OF INDIA versus BIMAN DEBNATH & ORS. on 7 November 2022

[2022] 15 S.C.R.

AINSTITUTE OF COMPANY SECRETARIES OF INDIA

v.

BIMAN DEBNATH & ORS.

(Civil Appeal No. 8039 of 2022)

BNOVEMBER 7, 2022

[M. R. SHAH AND M. M. SUNDRESH, JJ.]

Company Secretaries Regulations, 1982: rr. 92, 117 and 119– Elections for the office bearers of EIRC – Meeting was requiredto be chaired by the Chairman, EIRC, however, he was disqualifiedCto hold his office and thus, it fell vacant in terms of r117(2) – It wasrequired to be filled in for the remaining period in terms of Regn119(2) – Contesting respondent as Vice Chairman of the Institutewas allowed to chair the meeting for the limited purpose of electionto the post of Chairman for the remaining period in terms of RegnD119(2) – Respondent disrupted the meeting, and for the election ofthe chairman for the remaining period, the members appointedrespondent no. 3 to chair the said item – Elections took place andrespondent no. 3 was duly elected as Chairman for the remainingperiod – High Court quashed the election of the office bearers ofthe Regional Council on the ground that the meeting was not presidedEover by the Vice Chairman – On appeal, held: It was a case ofvacation of office of the Chairman and not mere absence – Regn119 states that in case of vacancy of the Chairman, Vice Chairman,Secretary and Treasurer, the Regional Council shall elect anotherperson from amongst its members to hold the office for the remainingFperiod of a year – Regn 92(2) shall be applicable only in a case ofabsence and not in a case where the post of Chairman and/or officebearer has fallen vacant – Thus, in case of a vacation of office asper Regn 117(2), such post fallen vacant is required to be filled inby election by electing another person from amongst its members tohold the office for the remaining period of a year – Single Judge asGwell as the Division Bench of the High Court erred in misinterpretingRegn 92(2) and Regn 117 rw Regn 119(2) – Thus, the election ofrespondent no. 3 as chairman rightly held and he rightly presidedthe meeting – High Court erred in quashing and setting aside theelection.H

Allowing the appeals, the Court

HELD: 1.1 Regulation 117 of the Company SecretariesRegulations, 1982 deals with the vacancies. As per Regulation117(2) an elected member of Regional Council who has beenfound guilty of any professional or other misconduct, shall bedeemed to have vacated office from the date of the order. In theinstant case the then Chairman, EIRC was disqualified to holdhis office on 22.12.2021. Therefore, it was a case of vacation ofoffice of the Chairman. [Para 4.2][623-G]

1.2 Regulation 119 deals with the Proceedings of theRegional Council. As per Regulation 119(2) every RegionalCouncil shall at its first meeting held after its constitution and insubsequent years at a meeting to be held in December of everyyear elect from amongst its members a Chairman, aVice-Chairman, a Secretary and a Treasurer thereof to hold officefor a period commencing from the date of its first after constitutionor from 1st January of the subsequent year as the case may betill the 31st December of that year and so often as any of thoseoffices become vacant, the Regional Council shall elect anotherperson from amongst its members to hold the office for theremaining period of a year. Thus, as the office of the Chairmanfell vacant due to its disqualification any person from amongst itsmembers was required to be elected as Chairman and/or to holdthe office of the Chairman for the remaining period. Therefore,in exercise of powers under Regulation 119(2) of the Regulations,1982, Respondent No.3-AK was elected as the Chairman for theremaining period who presided over the meeting dated27.12.2021. [Para 4.3][624-A-D]

1.3 It was the case on behalf of Respondent no.1 whichcame to be accepted by the Single Judge and the Division Benchof the High Court that being a Vice Chairman, a meeting wasrequired to be chaired/presided over by him in absence of theChairman. Heavy reliance was placed on Regulation 92(2). Onfair reading of Regulation 92(2) read with Regulation 117(2),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 casewhere the post of Chairman and/or office bearer has fallen vacant.

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AThere is a distinction between the absence and the post fallenvacant. Regulation 92(2) shall be applicable in a case where theChairman and/or the office bearer though is not disqualified butis absent for some reason. Regulation 117(2) shall be applicablein a case where the elected member of the Regional Council hasbeen disqualified on he being found guilty of any professional orBother misconduct and awarded penalty of fine. Therefore, in caseof a vacation of office as per Regulation 117(2), such post fallenvacant is required to be filled in by election by electing anotherperson from amongst its members to hold the office for theremaining period of a year (Regulation 119(2)). In that view ofCthe matter both, the Single Judge as well as the Division Benchof the High Court have seriously erred in misinterpretingRegulation 92(2) and Regulation 117 read with Regulation 119(2).Both, the Single Judge as well as the Division Bench of the HighCourt have not appreciated the distinction between the vacation of office under Regulation 117(2) of the Regulation and theDabsence of an office bearer under Regulation 92. Under thecircumstances both, the Single Judge as well as the DivisionBench of the High Court have seriously erred in quashing andsetting aside the election of the office bearers of the EIRC ofICSI held in the meeting held on 27.12.2021 on the ground thatEthe meeting was not presided over by the Vice Chairman-Respondent no.1. [Para 4.4][624-D-H; 625-A-B]

1.4 As regards the submission of the respondent no.1 thateven otherwise the election was not held legally and there wasirregularity in conducting the election/meeting is concerned, atFthe outset it is required to be noted that there were disputedquestions of fact on whether the meeting and/or election wasirregularly conducted or not. As per Regulation 114(4) whetherany 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,Gto the President and the decision shall be final. Under thecircumstances, in view of Regulation 114(4) of the Regulations,the High Court ought not to have entertained the writ petitionchallenging the validity of the election. Even otherwise, even asper Regulation 114(4), the election can be challenged by theH

candidate concerned. In the instant case respondent no.1 whochallenged the election of the office bearers did not even contestthe election. Under the circumstances the High Court erred inentertaining the writ petition challenging the election at theinstance of the respondent no.1 who even did not contest theelection of the office bearers. [Para 5][625-C-E]

1.5 The impugned judgment and order passed by theDivision Bench of the High Court as well as the Single Judgequashing and setting aside the election of the office bearers ofthe EIRC of the ICSI are quashed and set aside. [Para 6][625-G-H]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8039of 2022.

From the Judgment and Order dated 13.04.2022 of the High Courtof Calcutta in MAT 213 of 2022.

With

Civil Appeal Nos. 8040-41 of 2022.

Sanjiv Sen, Ritin Rai, Sr. Advs., Srinivas Kotni, GaichangpouGangmei, Sandeep Chatterjee, Karan Sharma, Kunal Chatterji,Ms. Maitrayee Banerjee, Sirsanya Bandopadhyay, Arka Kumar Nag,Rohit Bansal, Abhay K. Das, Bankey Bihari, Advs. for the appearingparties.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 13.04.2022 passed by the High Court of Judicature atCalcutta in MAT No.213 of 2022 and MAT 219 of 2022 with CAN 1 of2022 by which the High Court has dismissed the said appeal and hasconfirmed the judgment and order passed by the learned Single Judgeby which the learned Single Judge allowed the writ petition bearingNo.WPA 1367 of 2022 by quashing and setting aside the election of theoffice bearers of the Regional Council for the year 2022 held in the 316[th]Meeting of Eastern India Regional Council of the Institute of CompanySecretaries of India, the Institute of Company Secretaries of India haspreferred the present appeal.

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A2. Notice dated 20.12.2021 was issued for elections to be held on27.12.2021 for the Eastern India Regional Council (hereinafter referredto as ‘EIRC’) of Institute of Company Secretaries of India (hereinafterreferred to as ‘ICSI’) to take effect from 19.01.2022 for the period ofone year. The meeting of the Regional Council was required to be chairedby the Chairman, EIRC. However, before the actual date of election onB27.12.2021, the Chairman, EIRC was disqualified to hold his office on22.12.2021. Thus, the office of the Chairman fell vacant in terms ofRegulation 117(2) of the Company Secretaries Regulations, 1982(hereinafter referred to as “Regulations 1982’). As the post of Chairmanfell vacant, the same was required to be filled in for the remaining periodCin terms of Regulation 119(2). The contesting respondent no.1 herein asa Vice-Chairman was allowed to chair the meeting for the limited purposeof election to the post of Chairman for the remaining period of the currentyear ending on 18.01.2022 in terms of Regulation 119(2). It appears thatthe contesting respondent no.1 was disrupting the meeting, the remainingmembers decided to proceed with the agenda item i.e. electing theDchairman for the remaining period and for that purpose appointedrespondent no.3 – Mr. Anil Kumar Dubey to chair the said item. Thatthereafter elections took place and the respondent no.3 – Mr. Anil KumarDubey was duly elected as Chairman for the remaining period.

2.1 He was elected for the period 19.01.2022 to 18.01.2023. TheERespondent no.1 who did not participate in the election and/or contestfiled the writ petition before the learned Single Judge contending interalia that the meeting dated 27.12.2021 chaired by Respondent no.3 wasillegal. According to Respondent no.1, in absence of the Chairman, theVice-Chairman would become the Chairman and therefore the meetingFwas required to be chaired by him. However, it was the case on behalfof the Institute and the contesting original respondents that meeting wasconvened legally and the Chairman was elected for the remaining periodas per Regulation 119(2) of the Regulations, 1982. It was the specificcase 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 aGparticular period of time. The learned Single Judge allowed the writpetition and set aside the elections of the office bearers elected in themeeting held on 27.12.2021 mainly on the ground that the meeting wasnot chaired by the Vice-Chairman who in absence of the Chairman wasrequired to conduct and/or chair the meeting as Chairman. The JudgmentHand Order passed by the learned Single Judge has been confirmed by the impugned judgment and order of the Division Bench of the HighCourt. Hence, the present appeal at the instance of the ICSI.

3. We have heard Shri Sanjiv Sen, learned Senior Advocateappearing on behalf of the appellant and Shri Ritin Rai, learned SeniorAdvocate appearing on behalf of the contesting respondent no.1. Wehave gone through the impugned judgment and order passed by the learnedSingle Judge as well as the Division Bench of the High Court.

4. From the judgment and order passed by the learned SingleJudge confirmed by the Division Bench of the High Court it appears thatthe learned Single Judge quashed and set aside the election of the officebearers of the EIRC on the ground that the meeting was not presidedover by the Vice-Chairman (Respondent no.1 herein). Therefore, theshort question which is posed for consideration is as to whether themeeting i.e. 21.07.2021 was presided over by the person duly elected asChairman for the remaining period?

4.1 While considering the aforesaid issue relevant provisions ofthe Regulations 1982 are required to be referred to namely Regulations92, 117 & 119 which are as under:

“92. Chairman of the Council.- At all meetings of the Council,the President, and in his absence the Vice-President shall be theChairman; in the absence of both, the members present shall electone of the their number to be the Chairman of meeting.

Provided that, at the first meeting of any Council the President ofthe outgoing Council, or in his absence its Vice-President, shallact as the Chairman until such time a President is elected underthe provisions of sub-section (1) of section 12.

Provided further that in the absence of both the President and theVice president of the outgoing Council the members of the Councilpresent shall elect one of the members to be the Chairman of themeeting until such time a President is elected under the provisionsof sub-section (1) of section 12.”

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“117. Vacancies.- (1) A member of a Regional Council may atany time resign his membership by writing under his hand addressedto the Chairman of the Regional Council and the seat of suchmember shall become vacant when such resignation is notified in AB

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[2022] 15 S.C.R.

the Journal or when the Regional Council next meets, whicheveris earlier.

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(2) An elected member of a Regional Council who has been foundguilty of any professional or other misconduct and awarded penaltyof fine or does not attend three consecutive meetings of theBRegional Council or Committee thereof, unless he applies for leaveof absence in writing and it is granted for each meeting, shall bedeemed to have vacated office from the date of the order or atthe conclusion of the third meeting unless he applies for leave ofabsence in writing and it is granted for each meeting.

(3) Any vacancy caused by the resignation, death or removal fromthe Register of an elected member of the Regional Council maybe fi by the Regional Council by co-option of another memberentitled to vote in and stand for election to the Regional Councilwith the approval of the President.

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(4) If a member of the Regional Council [including a member ofthe Council becoming a member of the Regional Council underclause (a) of sub-regulation (2) of Regulation 111] changes hisprofessional address from the regional constituency to which hebelonged to at the time of election or co-option, as the case maybe, to another regional constituency, such member shall cease tobe member of that Regional Council from that date. The vacancyso caused may be filled by the Regional Council by co-option ofanother member in the same manner as provided in sub-regulation(3).

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(5) In the case of a member of a Regional Council being electedFto the Council, without prejudice to his right to be represented onthe Regional Council under clause (a) of sub-regulation (2) ofRegulation 111, he shall cease to be an elected member of theRegional Council and the vacancy thus caused may be filled upby co-options by the Regional Council in the manner set out inGsub-regulation (3). (6) A co-opted member shall hold office as amember of the Regional Council for the duration of office of thatRegional Council.”

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“119. Proceedings of the Regional Council.- (1) One-third ofthe members of the Regional Council for the time being shallconstitute the quorum.

(2) Every Regional Council shall at its first meeting held after itsconstitution and in subsequent years at a meeting to be held inDecember of every year elect from amongst its members aChairman, a Vice-Chairman, a Secretary and a Treasurer thereofto hold office for a period commencing from the date of its firstmeeting after constitution or from 1st January of the subsequentyear as the case may be, till the 31st December of that year andso often as any of those offices become vacant, the RegionalCouncil shall elect another person from amongst its members tohold the office for the remaining period of a year.

Provided that the retiring office bearers shall be eligible for re-election to any of the offices of the Regional Council if theycontinue to be members of the Regional Council.

(3) The first meeting of the Regional Council referred to in sub-regulation

(2) shall be called and held within one month from the date of itsconstitution 70[* * * * * *].

(4) If within half an hour from the time appointed for the said firstmeeting of the Regional Council referred to hereinbefore, a quorumas mentioned in sub-regulation (1) above is not present, the saidfirst meeting shall notwithstanding anything contained in thatRegulation stand adjourned to the same day in the next week atthe same time and place and at such adjourned meeting of theRegional Council, the member or members present, shall constitutethe quorum and shall have power to transact all the business whichcould properly have been transacted at the original meeting.”

4.2 Regulation 117 deals with the vacancies. As per Regulation117(2) an elected member of Regional Council who has been foundguilty of any professional or other misconduct……., shall be deemed tohave vacated office from the date of the order. In the present case thethen Chairman, EIRC was disqualified to hold his office on 22.12.2021.Therefore, it was a case of vacation of office of the Chairman.

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A4.3 Regulation 119 deals with the Proceedings of the RegionalCouncil. As per Regulation 119(2) every Regional Council shall at itsfirst meeting held after its constitution and in subsequent years at a meetingto be held in December of every year elect from amongst its members aChairman, a Vice-Chairman, a Secretary and a Treasurer thereof tohold office for a period commencing from the date of its first afterBconstitution or from 1[st] January of the subsequent year as the case maybe till the 31[st] December of that year and so often as any of thoseoffices become vacant, the Regional Council shall elect another personfrom amongst its members to hold the office for the remaining period ofa year. Thus, as the office of the Chairman fell vacant due to itsCdisqualification any person from amongst its members was required tobe elected as Chairman and/or to hold the office of the Chairman for theremaining period. Therefore, in exercise of powers under Regulation119(2) of the Regulations, 1982, Respondent No.3 - Anil Kumar Dubeywas elected as the Chairman for the remaining period who presidedover the meeting dated 27.12.2021.D

4.4 However, it was the case on behalf of Respondent no.1 whichcame to be accepted by the learned Single Judge and the Division Benchof the High Court that being a Vice Chairman, a meeting was requiredto be chaired/presided over by him in absence of the Chairman. Heavyreliance was placed on Regulation 92(2). On fair reading of RegulationE92(2) read with Regulation 117(2), we are of the opinion that Regulation92(2) shall not be applicable at all. Regulation 92(2) shall be applicableonly in a case of absence and not in a case where the post of Chairmanand/or office bearer has fallen vacant. There is a distinction betweenthe absence and the post fallen vacant. Regulation 92(2) shall beFapplicable in a case where the Chairman and/or the office bearer thoughis not disqualified but is absent for some reason. Regulation 117(2) shallbe applicable in a case where the elected member of the Regional Councilhas been disqualified on he being found guilty of any professional orother misconduct and awarded penalty of fine. Therefore, in case of a vacation of office as per Regulation 117(2), such post fallen vacant isGrequired to be filled in by election by electing another person from amongstits members to hold the office for the remaining period of a year(Regulation 119(2)). In that view of the matter both, the learned SingleJudge as well as the Division Bench of the High Court have seriouslyerred in misinterpreting Regulation 92(2) and Regulation 117 read withHRegulation 119(2). Both, the learned Single Judge as well as the Division Bench of the High Court have not appreciated the distinction betweenthe vacation of office under Regulation 117(2) of the Regulation and theabsence of an office bearer under Regulation 92. Under the circumstancesboth, the learned Single Judge as well as the Division Bench of the HighCourt have seriously erred in quashing and setting aside the election ofthe office bearers of the EIRC of ICSI held in the meeting held on27.12.2021 on the ground that the meeting was not presided over by theVice Chairman (Respondent no.1 herein).

5. Now so far as the submission made by Shri Ritin Rai, learnedSenior Advocate appearing on behalf of the contesting respondent no.1that even otherwise the election was not held legally and there wasirregularity in conducting the election/meeting is concerned, at the outsetit is required to be noted that there were disputed questions of fact onwhether the meeting and/or election was irregularly conducted or not.As per Regulation 114(4) whether any dispute arises regarding anyelection to a Regional Council, the matter may be referred by the candidateconcerned within 30 days from the date of the declaration of the resultof the election, to the President and the decision shall be final. Under thecircumstances, in view of Regulation 114(4) of the Regulations, the HighCourt ought not to have entertained the writ petition challenging thevalidity of the election. Even otherwise, it is required to be noted thateven as per Regulation 114(4), the election can be challenged by thecandidate concerned. In the present case respondent no.1 who challengedthe election of the office bearers did not even contest the election. Underthe circumstances the High Court erred in entertaining the writ petitionchallenging the election at the instance of the respondent no.1 who evendid not contest the election of the office bearers.

6. In view of the above and for the reason stated above presentappeals succeed. The impugned judgment and order passed by theDivision Bench of the High Court as well as the learned Single Judgequashing and setting aside the election of the office bearers of the EIRCof the ICSI held on 27.12.2021 are hereby quashed and set aside. Theoriginal writ petitions stand dismissed. Present appeals are accordinglyallowed. No costs.

Nidhi Jain

Appeals allowed.

(Assisted by : Shashwat Jain, LCRA)

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