2001 (4) TMI 826 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the writ petition under Article 226.
2. Whether the Hyderabad Race Club is an instrumentality or agency of the State.
3. Validity of the election process and alleged irregularities.
4. Allegations of corrupt practices during the election.
5. Non-joinder of necessary parties.

Detailed Analysis:

1. Maintainability of the Writ Petition:
The petitioner sought a writ of mandamus to declare the election of certain members and the chairman of the Hyderabad Race Club as illegal, arbitrary, and void. The respondents raised a preliminary objection that the writ petition is not maintainable because the Club, a public limited company, was not made a party to the writ petition and is not amenable to writ jurisdiction as it is not funded or controlled by the government.

2. Instrumentality or Agency of the State:
The petitioner argued that the Club is an instrumentality of the State due to government involvement and funding. However, the court found that the Club is a limited company incorporated under the Companies Act, with no deep or pervasive control by the government. The Club's activities, including racing, are managed by a Board of Stewards, and the government does not hold shares or fund the Club. The court referred to the Supreme Court's tests in Ajay Hasia v. Khalid Mujib Sehravardi and concluded that the Club does not qualify as an instrumentality or agency of the State.

3. Validity of the Election Process:
The petitioner contended that the election process violated the Articles of Association of the Club and the Conduct of Election Rules under the Representation of People Act. Specifically, the petitioner argued that the ballot papers were improperly printed and multiple ballot boxes were used instead of one. The court found that the election was conducted as per the Articles of Association and that the Representation of People Act rules do not apply. The court held that the Articles of Association govern the internal management of the Club, and any breach thereof does not confer the right to invoke Article 226.

4. Allegations of Corrupt Practices:
The petitioner alleged that the supply of intoxicating drinks to voters amounted to corrupt practices. The court held that such allegations require evidence and cannot be decided in a summary proceeding under Article 226. The court rejected the petitioner's request to lead evidence, stating that the proper forum for such disputes is a civil suit.

5. Non-joinder of Necessary Parties:
The court accepted the respondents' contention that the writ petition is liable to be dismissed for non-joinder of necessary parties. The Club, being a legal entity entitled to manage its own affairs, was not made a party to the writ petition. Without impleading the Club, the petitioner is not entitled to any relief.

Conclusion:
The court dismissed the writ petition with exemplary costs, stating that the petitioner invoked the extraordinary jurisdiction of the court for a luxurious litigation, consuming considerable time. The petitioner was ordered to pay Rs. 5,000 to the A.P. State Legal Services Authority within four weeks, failing which appropriate action for recovery would be taken.