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TMI Blog2023 (7) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... by filing the present Writ Petition under Article 226 of the Constitution of India challenging the notice dated 10.06.2023, issued by the Apex Council of DDCA, for convening the Extra-Ordinary General Meeting (hereinafter referred to as 'the EGM') of the Members of the DDCA on 05.07.2023 at 09:00 AM at the registered office of the DDCA at the Arun Jaitley Stadium, Ferozshah Kotla Ground, New Delhi. 2. Shorn of unnecessary details, the facts, leading to the present Writ Petition are as under: a. DDCA is a company incorporated under Section 8 of the Companies Act, 1956 (hereinafter referred to as 'the Companies Act'). It is the governing body for cricket activities in the State of Delhi and the Delhi Cricket Team. The Apex Council of the DDCA is the principal body of the DDCA tasked with the governance of the affairs of DDCA. b. It is stated that a Notice dated 10.06.2023 was issued by the Apex Council of the DDCA for convening the EGM of the Members of the DDCA on 05.07.2023 at 09:00 AM at the registered office of the DDCA for ratifying its resolution dated 10.04.2023 by which the Apex Council had appointed Justice M M Kumar (Retd.), Former Chief Justice of High Court of Jammu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ody of the DDCA. He states that Article 10(5)(f) of the AoA provides that the Ombudsman cum Ethics Officer of the DDCA can be appointed only at the Annual General Meeting of the General Body of the Apex Council which is held annually. He then takes this Court to Article 17(2) of the AoA which deals with the composition of the Apex Council of the DDCA. He states that Article 17(2) of the AoA stipulates that the Apex Council shall consist of a total of 18 Directors including the Secretary of the DDCA. Mr. Mehra then takes this Court to Article 18(9) of the AoA to contend that only a Resolution passed by circulation to all members of the Apex Council is valid and effective, furthermore, only a Resolution by circulation to all members of the Apex Council can be ratified at the next meeting of the Apex Council. Mr. Mehra then draws the attention of this Court to Article 18(2) of the Articles of Association to contend that the Apex Council has all the powers of the General Body and has the authority and discretion to do all acts and things except such acts which are expressly directed to be done by the General Body. Exercise of such powers, authorities and discretion shall be subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany's affairs upon such terms and conditions as the NCLT feels to be just and equitable. Mr. Nayyar also takes this Court through Section 245(1) of the Companies Act to contend that the NCLT can pass orders restraining a company from committing breach of any provision of the company's memorandum or articles as well as to restrain the company and its directors from acting on such resolution which it thinks are prejudicial to the interests of the company or its members. He further submits that Section 241 of the Companies Act specifically grants power to the NCLT to appoint persons who can conduct the affairs of the company and pass orders to restrain the company from committing breach of any of the company's memorandum or articles. Mr. Nayyar, therefore, contends that in the presence of an equally efficacious alternative remedy to the Petitioner to approach NCLT, this Court must desist from exercising its jurisdiction under Article 226 of the Constitution of India. 5. Mr. Nayyar has also taken this Court through an Order dated 28.02.2020, passed by this Court in W.P.(C) No. 1878/2020, titled as Rajinderr Kumar v. UOI & Anr. in which the Petitioner therein had approached this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1964) 6 SCR 654, the Apex Court has observed as under: "7. ..... Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy......... .....Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up." 10. In CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603, the Apex Court has observed as under: "10. In the instant case, the only question which arises for our consideration and decision is whether the High Court was justified in interfering with the order passed by the assessing authority under Section 148 of the Act in exercise of its jurisdiction under Article 226 when an equally efficacious alternate remedy was available to the assessee under the Act. 11. Before discussing the fact pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (L&S) 1207 : (1995) 31 ATC 110] , Kerala SEB v. Kurien E. Kalathil [(2000) 6 SCC 293] , A. Venkatasubbiah Naidu v. S. Chellappan [(2000) 7 SCC 695] , L.L. Sudhakar Reddy v. State of A.P. [(2001) 6 SCC 634] , Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha v. State of Maharashtra [(2001) 8 SCC 509] , Pratap Singh v. State of Haryana [(2002) 7 SCC 484 : 2002 SCC (L&S) 1075] and GKN Driveshafts (India) Ltd. v. ITO [(2003) 1 SCC 72].] 13. In Nivedita Sharma v. Cellular Operators Assn. of India [(2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947], this Court has held that where hierarchy of appeals is provided by the statute, the party must exhaust the statutory remedies before resorting to writ jurisdiction for relief and observed as follows: (SCC pp. 343-45, paras 12-14) "12. In Thansingh Nathmal v. Supt. of Taxes [AIR 1964 SC 1419] this Court adverted to the rule of self-imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed: (AIR p. 1423, para 7) '7. ... The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. 607, para 77) '77. ... So far as the jurisdiction of the High Court under Article 226-or for that matter, the jurisdiction of this Court under Article 32-is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment.'" (See G. Veerappa Pillai v. Raman & Raman Ltd. [(1952) 1 SCC 334 : AIR 1952 SC 192] , CCE v. Dunlop India Ltd. [(1985) 1 SCC 260 : 1985 SCC (Tax) 75], Ramendra Kishore Biswas v. State of Tripura [(1999) 1 SCC 472 : 1999 SCC (L&S) 295], Shivgonda Anna Patil v. State of Maharashtra [(1999) 3 SCC 5] , C.A. Abraham v. ITO [AIR 1961 SC 609 : (1961) 2 SCR 765], Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131], Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath and Sons [1992 Supp (2) SCC 312] , Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is largely a matter of discretion. We find that there are dicta which has held that on the basis of an alternate remedy, a writ petition is not maintainable. We would understand that the position to be that a constitutional remedy cannot be barred or excluded as when the High Court exercises its power under Article 226, it cannot be a case of lack of inherent jurisdiction. No doubt, when High Courts stray outside the limits with reference to certain principles as have been laid down in the decision which we have referred to, it can be corrected. Another factor which is to be borne in mind is that in a case where the High Court has entertained a matter and the matter comes for hearing in this Court in the jurisdiction under Article 136, our woes are compounded by the long passage of time as is demonstrated by the facts of this case. The judgment of the High Court was rendered in the year 2011. This Court is hearing the matter after more than a decade. It is nearly two decades after the filing of the writ petitions that this Court is hearing the matter." (emphasis supplied) 12. The Apex Court in its latest judgment in South Indian Bank Ltd. and Others v. Naveen Mathew Philip and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field". (emphasis supplied) 26. Following the dictum of this Court in Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1], in Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107], this Court noted that : (Harbanslal Sahnia case, SCC p. 110, para 7) "7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion. 27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with."" (emphasis supplied) 13. It is well settled that availability of alternative remedy does not operate as an absolute bar to the maintainability of the writ petition and that the rule which requires a party to pursue the alternative remedy provided by the statute is a rule of policy for convenience and discretion rather than a rule of law. Undoubtedly, entertainability and maintainability of the writ petition are two distinct concepts. If the objection to maintainability is sustained then the Courts are rendered incapable of receiving the lis for adjudication. However, on the other hand, the question of entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers or in a manner prejudicial to the interests of the company; or (b) the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company's shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to its interests or its members or any class of members, may apply to the Tribunal, provided such member has a right to apply under section 244, for an order under this Chapter. (2) The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this Chapter" 16. Section 242 of the Companies Act provides that if NCLT is of the opinion that the company's affairs have been or are being conducted in a manner prejudicial or oppressive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference; (h) removal of the managing director, manager or any of the directors of the company; (i) recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or repayment to identifiable victims; (j) the manner in which the managing director or manager of the company may be appointed subsequent to an order removing the existing managing director or manager of the company made under clause (h); (k) appointment of such number of persons as directors, who may be required by the Tribunal to report to the Tribunal on such matters as the Tribunal may direct; (l) imposition of costs as may be deemed fit by the Tribunal; (m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made. (3) A certified copy of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital of the company, subject to the condition that the applicant or applicants has or have paid all calls and other sums due on his or their shares; (b) in the case of a company not having a share capital, not less than one-fifth of the total number of its members: Provided that the Tribunal may, on an application made to it in this behalf, waive all or any of the requirements specified in clause (a) or clause (b) so as to enable the members to apply under section 241. Explanation.--For the purposes of this sub-section, where any share or shares are held by two or more persons jointly, they shall be counted only as one member. (2) Where any members of a company are entitled to make an application under subsection (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them." (emphasis supplied) 18. Section 245 of the Companies Act gives the power to the NCLT to restrain a company from committing an act which is ultra vires the articles or memorandum of the company. It also restrains the company from committing breach of any provision of the company's memorandum or articles and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id that if this Court does not exercise its jurisdiction under Article 226 of the Constitution of India an irreversible damage would be caused to the DDCA and the same cannot be rectified by the Courts or that the DDCA will be subjected to an irreparable loss which needs urgent restraint orders. 21. Article 41 of the AoA of DDCA deals with Ombudsman and the same reads as under: "41. THE OMBUDSMAN 1. The Company shall appoint an Ombudsman at the Annual General Meeting for the purpose of providing an independent dispute resolution mechanism. The Ombudsman shall be a retired Judge of the Supreme Court or a retired Chief Justice of a High Court so appointed by the Company after obtaining his/her consent and on such terms as determined by the Company in keeping with the dignity and stature of the office. The term of the Ombudsman shall be one year, subject to a maximum of 3 terms in office. 2. If found expedient, the Ombudsman may also act as the Ethics Officer. 3. The Apex council shall, in consultation with the CEO frame Regulations regarding the discipline and conduct of the Players, Match Officials, Team Officials, Administrators, Committee Members and others associated w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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