As per case facts, members of Khar Gymkhana requisitioned the removal of Trustees. Following some resignations and interim appointments, an Annual General Meeting was held where all Trustees, including newly ...
app-92-2023.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.92 OF 2023
IN
INTERIM APPLICATION (L) NO.28477 OF 2021
IN
SUIT (L) NO.28463 OF 2021
1 Manu Seoram Dadlani ]
Age 76, of Mumbai, Indian Inhabitant, 301 ]
Exotique, 17
th
Road, Khar, Mumbai 400 052 .]
2 Kewal Kundanlal Handa ]
Age 70 of Mumbai, Indian Inhabitant, Nair]
House, 9
th
Floor, 14B Road, Khar W, ]
Mumbai 400 052. ]
3 Yogesh G. Talwar ]
Age 65 of Mumbai, Indian Inhabitant ]
Diamond Palace, Hill Road, Bandra W, ]
Mumbai 400 050. ]
4 Rajesh Anshi Gursahani ]
Age 54 of Mumbai, Indian Inhabitant ]
Flat No.1001, Link Palace, 10
th
Floor, ]
Linking Road, Santacruz W, Next to Levi’s ]
Showroom, Mumbai 400 054. ].. Appellants
(Orig. Plaintiff Nos. 3
to 6)
Versus
1 Shyam G. Shroff, individual ]
Indian Inhabitant, having his ]
address, 2/4, Citi Mall, New Link ]
Road, Andheri West, Mumbai 400 053 ]
2 Vivek Devnani, individual, Indian ]
Inhabitant, in his capacity as President ]
3 Amarjit Singh, individual, Indian ]
Inhabitant, in his capacity as Hon. ]
Treasure ]
4 Haresh Masand, individual, Indian ]
Inhabitant, in his capacity as Hon. ]
Page 1 of 38
FEBRUARY 12, 2026
S.R.JOSHI
SMITA
RAJNIKANT
JOSHI
Digitally
signed by
SMITA
RAJNIKANT
JOSHI
Date:
2026.02.12
16:29:45
+0530
app-92-2023.doc
Treasure ]
5 Gaurav Kapadia, individual, Indian ]
Inhabitant, in his capacity as Hon. General ]
Secretary ]
6 Sanjay Bachani, individual, Indian ]
Inhabitant, in his capacity as Hon. ]
General Secretary ]
7 Sarika Jain, individual, Indian Inhabitant ]
in her capacity as Committee Member ]
8 Gautam Chande, individual Indian ]
Inhabitant, in his capacity as Committee ]
Member ]
9 Shraddha Bachani, Individual Indian ]
Inhabitant, in her capacity as Committee ]
Member ]
10 Kirnay Bhatt, individual Indian Inhabitant ]
in his capacity as Committee Member ]
11 Purnima lakhiani, individual Indian ]
Inhabitant, in her capacity as Committee ]
Member ]
12 Sanjay Devnani, individual Indian ]
Inhabitant, in his capacity as Committee ]
Member ]
13 Vikas Kerkar, individual, Indian Inhabitant]
in his capacity as Committee Member ]
14 Manal Shroff, individual Indian Inhabitant ]
in his capacity as Committee Member ]
15 Dhruv Kohli, individual Indian Inhabitant ]
in his capacity as Committee Member ]
16 Vedd Rawtani, individual Indian Inhabitant]
in his capacity as Committee Member ]
17 Sahib Lamba, individual Indian Inhabitant ]
in his capacity as Committee Member ]
18Inderpal Gujral, individual Indian Inhabitant ]
in his capacity as Hon. Secretary ]
Badminton ]
19 Bela Kotwani, individual Indian Inhabitant]
in her capacity as Hon. Secretary ]
Badminton ]
20 Kaushal Ghanshani, individual Indian ]
Inhabitant, in his capacity as Hon. Secretary ]
Squash ]
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21 Jitendra Makhija, individual Indian ]
Inhabitant, in his capacity as Hon. Secretary ]
Gymnasium ]
22Deepak Mehta, individual Indian Inhabitant ]
in his capacity as Hon. Secretary Table ]
Tennis ]
23Lavin Khemani, individual Indian Inhabitant ]
in his capacity as Hon. Secretary Tennis ]
24Amit Majmudar, individual Indian Inhabitant ]
in his capacity as Committee Member ]
Cricket ]
25 Sanjay Modi, individual Indian Inhabitant ]
in his capacity as Committee Member ]
Cricket ]
26Ashish Parulekar, individual Indian Inhabitant]
in his capacity as Committee Member ]
Cricket ]
27Ashok Aswani, individual Indian Inhabitant ]
in his capacity as Hon. Secretary Cardroom]
28 Neil Thakur, individual Indian Inhabitant ]
in his capacity as Hon. Secretary Pickleball ]
29Harsh Pherwani, individual Indian Inhabitant ]
in his capacity as Hon. Secretary Billiard & ]
Snooker ]
Respondent Nos. 2 to 29 being the ]
Managing Committee of Khar Gymkhana ]
having their office address at 13
th
Road, ]
Khar (West), Mumbai 400 052. ]
30 Ashok Mohnani ]
31 Arvind Yenamaddi ]
32 Swapniel Akut ]
Respondent Nos. 30 to 32 being members ]
of Khar Gymkhana, having their office ]
address at 13
th
Road, Khar (West), ]
Mumbai 400 052. ] .. Respondents.
1 to 32/ Original Defendant
Nos. 1 to 32.
33 Khar Gymkhana, a trust having its ]
registered office at 13
th
Road, Khar (West) ]
Mumbai 400 052. ]
34 Ashok Gowariker, individual, Indian ]
Inhabitant, having his address at 1
st
Floor, ]
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Kumkum, 16
th
Road, Khar (West) ]
Mumbai 400052. ].. Respondents/
(Orig. Plaintiff Nos. 1 & 2)
Adv. Joaquim Reis, Adv. Rushabh Sheth, Adv. Sayeed Y. Mulani and
Adv. Tushar Agrawal i/b. Mulani and Co., for the Appellants.
Adv. Malolm Siganporia with Adv. Ahsan Allana i/b. J. Sagar
Associates, for Respondent Nos. 2 to 11 and 13 to 29.
CORAM: B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
RESERVED ON: JANUARY 16, 2026
PRONOUNCED ON: FEBRUARY 12, 2026.
JUDGEMENT (Per F. P. Pooniwalla, J):-
1 This Appeal challenges an Order dated 25
th
August, 2022 passed
by the Learned Single Judge in Interim Application (L) No. 28477 of 2021 in
Suit (L) No. 28463 of 2021, rejecting the said Interim Application.
FACTS
2 Before we deal with the rival submissions of the parties, it would
be appropriate to set out the brief facts in the matter:-
(a) By a Requisition letter dated 1
st
November, 2021, 180 members of the
Khar Gymkhana (Respondent No.33) called upon the existi ng
Trustees to tender their respective resignations on account of
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allegations against them, failing which, the Managing Committee was
called upon to convene a Meeting for removal of the Trustees and for
appointment of new Trustees.
(b) On 16
th
November, 2021, a notice was issued for holding the 89
th
Annual General Meeting of Khar Gymkhana on 19
th
December, 2021.
(c) On 25
th
November, 2021, one of the five existing Trustees, Mr. Bomi
Mehta, tendered his resignation.
(d) On 29
th
November, 2021, another existing Trustee, Mr. Suresh Prabhu,
tendered his resignation.
(e) By a letter dated 1
st
December, 2021, Appellant No.1, on behalf of the
Board of Trustees of Khar Gymkhana, informed Appellant No.3 that he
was appointed as a Trustee.
(f) Further, by a letter dated 2
nd
December, 2021 addressed by Appellant
No.1 on behalf of the Board of Trustees, he informed Appellant No.4
that he was appointed as a Trustee.
(g) By a letter dated 3
rd
December, 2021 addressed to Respondent No.1,
Appellant No.1 informed him about the appointment of Appellant No.3
and Appellant No.4 as Trustees.
(h) On 6
th
December, 2021, the present Suit was filed along with Interim
Application (L) No. 28477 of 2021.
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(i) On 7
th
December, 2021, another existing Trustee – Mr. Ashok
Gowariker (Respondent No.34) tendered his resignation.
(j) On 14
th
December, 2021, one Mr. Sanjay Devnani (Respondent No.12)
was appointed as a Trustee by the remaining Trustees.
(k) By an e-mail dated 16
th
December, 2021 addressed by Respondent
Nos.2 to 11, and 13 to 29’s Advocates, they called upon the Appellants’
Advocate for inspection of the Resignation letters issued by Mr. Bomi
Mehta and Mr. Suresh Prabhu as well as the Minutes of Meeting of the
Trustees accepting their resignations.
(l) By an Order dated 17
th
December, 2021 passed in the aforesaid Interim
Application, this Court permitted the Annual General Meeting to be
held, and directed that the new Trustees elected would be subject to
certain restrictions as per paragraph 17 of the said Order.
(m) Appellant No.3 addressed a letter dated 18
th
December, 2021 to
Respondent No.12, informing him that, at the Meeting of the Trustees
of Khar Gymkhana, held on 14
th
December, 2021, Respondent No.12
had been elected as a Trustee of the Khar Gymkhana.
(n) On 19
th
December, 2021, the 89
th
Annual General Meeting of Khar
Gymkhana was held. All the existing Trustees, including the newly
appointed Trustees (being Appellant No.3, Appellant No.4 and
Respondent No.12), were removed at the said Meeting. Further,
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Respondent No.3, Respondent No.24 and Respondent Nos.30 to 32
were appointed as Trustees of Khar Gymkhana.
(o) Thereafter, the Plaintiffs in the Suit sought an amendment to the
Interim Application. The amended prayers read as under:-
“(j1):-pending hearing and final disposal of the present
Suit, the effect and implementation of the purported
resolution with respect of removal of all Co-Trustees passed
in said Meeting dated 19
th
December, 2021 be stayed;
(j2) pending hearing and final disposal of the present
Suit, the effect and implementation of the purported
resolution with respect to an appointment of Defendant Nos.
3, 24 and 30 to 32 passed in the said Meeting dated 19
th
December, 2021 be stayed;
(j3) pending the hearing and final disposal of the present
Suit, the Defendant Nos. 2 to 11 and 13 to 32, their
servants, agents or any person acting on their behalf or
through them, be restrained from interfering with the
management of the Plaintiff No.1 Trust through the Plaintiff
Nos. 3, 4, 5, 6 and Defendant No.12;
(j4) pending hearing and final disposal of the present
Suit, the effect and implementation of the purported
resolutions passed in said Meeting dated 19
th
December,
2021 with respect of the extent of amendment of Rules
46(a) and 46(b), be stayed;
(j5) pending hearing and final disposal of the present
Suit, the effect and implementation of the purported
resolutions in respect of the proposed/ suggested mechanism
for appointment of New Trustees and their tenure passed in
the said Meeting dated 19
th
December, 2021, be stayed.”
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(p) At the hearing of the Interim Application, the Plaintiffs pressed for
reliefs in terms of the aforesaid amended prayers.
(q) By the impugned Order dated 25
th
August, 2022, the Learned Single
Judge rejected the Interim Application filed by the Appellants.
SUBMISSIONS OF THE APPELLANTS
3 The Appellants submitted as follows:-
(a) By the impugned Order, the Learned Single Judge has broadly held
that the Trustees could be removed by the General Body under Clause 4 of
the Trust Deed read with Rule 41 (f) of the Rules by three- fourths of the
members present and voting. The Learned Single Judge held that Clause 7 of
the Trust Deed, which requires that if the number of Trustees do not fall
below three, the vacancy could be filled by the existing Trustees alone, would
not apply in the event that all the Trustees were removed and the new
Trustees had to be appointed, as there could be no vacuum in the Trust. The
contention of the Plaintiffs that there was no notice given for removal of three
of the five Trustees, who were appointed after the date of the Requisition, and
after the date of the notice calling for the Meeting, was rejected on the
grounds that Item 6 of the Agenda dated 16
th
November, 2021 stated that the
removal of the Trustees had to be considered.
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(b) The Requisition notice dated 1
st
November, 2021 was addressed to
remove five named Trustees. It was specifically addressed to these five
Trustees and made specific allegations against those individuals seeking their
removal. The Requisition is personal to the five Trustees in question, and,
therefore, the removal could have been of the five Trustees in respect of
whom the Requisition notice was issued, and for whose specific removal, the
Meeting was called for on 19
th
December, 2021. Thus, it was untenable for
the Meeting to remove the three new Trustees wo were appointed on 1
st
December, 2021, 2
nd
December, 2021 and 14
th
December, 2021 after the
aforesaid Requisition dated 1
st
November, 2021 and the notice for the
Meeting dated 16
th
November, 2021. These arguments were specifically raised
and recorded,
inter alia, in paragraph 36 of the impugned Order but had not
been dealt with by the Learned Single Judge, save and except to say that, as
Item 6 of the Agenda dated 16
th
November, 2021 allowed for removal of all
Trustees, the Trustees existing on the date of the Meeting could all be
removed. This finding entirely misses the point that the Agenda items were
also in the context of those named Trustees for whom the Requisition notice
had been issued, and therefore, at the highest, the reference to all Trustees
could only have been a reference to the five named Trustees to whom the
Requisition notice was addressed, and in respect of whom the General Body
notice was issued on 16
th
November, 2021. The three new Trustees were not
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given a notice of the intent to remove them nor were they given any
opportunity to be heard or to make a representation prior to their removal,
nor were any members of the General Body put to notice that these three
persons were also to be removed. Had notice been given, potentially, there
could be have been objections raised to the removal of these three persons,
but they were arbitrarily, and in one fell swoop, removed along with the other
Trustees who had been named in the Requisition.
(c) The requisitioned Meeting was called for under Rule 62 of the
Rules. Even the Respondents had accepted and admitted that the said
Meeting was called under Rule 62. Further, Rule 62 specifically contemplates
that a requisitioned Meeting should be held by way of a Special General Body
Meeting. The Special General Body Meeting has particular facets, including
the manner in which voting is done, and, in particular, the fact that at that
meeting there is a focused discussion only on the matters set out in the
Requisition for which the Meeting is called. The purpose of having a separate
Special General Body Meeting for discussing the subject matter of the
Requisition is so that the General Body Members are able to focus on that
particular issue alone and no resolutions are quickly passed through along
with other resolutions such as adoption of accounts and the like, as was done
in the present case.
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(d) In the present case, what was held was not a Specia l General
Body Meeting but a purported 89
th
Annual General Body Meeting. There was
no need to hold an Annual General Body Meeting merely four months after
the previous Annual General Meeting, which was held on 15
th
August, 2021.
Be that as it may, the Rules required the holding of a Special General Body
Meeting as admitted by the Respondents themselves. If the Rules require a
particular procedure to be followed, then that said procedure may be
followed or else the action taken at the Meeting is vitiated and ought to be set
aside. This argument was raised specifically and recorded in paragraphs 37
and 43 of the impugned Order and has not been dealt with by the Learned
Single Judge.
(e) The Requisition notice sought the removal of the existing five
Trustees for certain specific allegations against them. While the merits of the
allegations need not be gone into, frivolous as they may be, it is pertinent to
note that, in the Meeting, there was no finding or conclusion of the General
Body that any of those allegations were established. This clearly shows that
the removal of the five Trustees was a premeditated action taken in bad faith
at the instance of Respondent No.1 with no actual intent to arrive at a
conclusion of any misdealing or to even make a pretence of arriving at a
conclusion that any of the allegations in the Requisition were made out.
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(f) Further, the appointment of the new Trustees was even more
perverse. The newly appointed Trustees were not even named in the Agenda
notice for the Meeting issued on 16
th
November, 2021. The said notice
contemplated the purported removal of all five Trustees and the bare
minimum that was expected was that the proposed new Trustees would be
named. This is a very important procedural step as it is imperative for the
members to know who the proposed new Trustees were so as to enable them
to decide whether to attend the General Body Meeting and/or to vote in their
favour or to vote against their appointment.
(g) Under Rule 65, only the matters specified in the Agenda could be
discussed, and clearly the appointment of the new Trustees was not a matter
that was specified in the Agenda, in so far as the details of the new Trustees
were concerned. This argument was specifically raised by the Plaintiffs and
recorded in paragraphs 42 and 46 of the impugned Order but has not been
dealt with by the Learned Single Judge.
(h) Clause 7 of the Trust Deed specifies that the General Body could
only appoint the Trustees if the Trustees have not themselves filled the
vacancies within three months, or if the number of Trustees dwindles to
below two. At no point of time had the number of Trustees ever dwindled to
below two and therefore there was no occasion for the General Body to
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appoint any new Trustees. This argument was raised and recorded in
paragraph 35 of the impugned Order and has been dealt with by the Learned
Single Judge in paragraph 79, only to hold that Clause 7 will not apply to
appointment of new Trustees if all the old Trustees are removed. There is no
conceivable reason as to why Clause 7 would not apply to allow for the
Trustees to appoint new Trustees even in a situation where a Trustee has
been removed. It is entirely conceivable that, in a given situation, only one or
two Trustees may be removed by the General Body, and if the logic applied by
the Learned Single Judge is accepted, then, in the event of such a removal,
only a General Body would be entitled to appoint the new Trustees. There is
no warrant for this interpretation of Clause 7. Clause 7 speaks of removal for
any cause whatsoever and therefore it is entirely untenable for the Learned
Single Judge to hold that Clause 7 would have no application when a Trustee
was removed by the General Body.
(i) The power of the General Body to appoint the Trustees was only
to be exercised in a situation where, some unfortunate events, such as the
death of two or three Trustees in quick succession, resulted in the number
dwindling to below two, and was never to be misused to cause removal of all
Trustees and to simply reinstate the entire Board of Trustees with new
Trustees who were obviously favourable for the Managing Committee.
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(j) The Learned Single Judge failed to appreciate that the only
power for appointment under the Rules was under Clause 7 of the Trust Deed
read with Rule 43. There exists no other provision. If the Rules intended for
the General Body to remove all the Trustees, there would have been a specific
provision, similar to Rule 41, which allowed for removal by the General Body.
However, Rule 43 does not have any such wide sweeping power.
(k) Under Rule 43, which is the only Rule which provide s for
appointment of new Trustees, the appointment had to be at a Special General
Body Meeting of the members of Khar Gymkhana. The appointment of new
Trustees could never have been made by the General Body at the Annual
General Body Meeting. It is no answer to state that the outcome may have
been the same had it been at a Special General Meeting. If such a stand is
accepted, it would mean that the provisions of the Trust Deed and the Rules
which prescribe a specific procedure, and which have consciously chosen to
provide for a Special General Meeting, are entirely meaningless, and can be
ignored at the whims and fancies of the Managing Committee. When the law
or Rules require a certain act to be done in a particular manner, it must be
done in that manner and in no other.
SUBMISSIONS OF RESPONDENT NOS. 2 TO 11 AND 13 TO 29
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4 These Respondents sought dismissal of the Appeal. In this
regard, these Respondents submitted that the impugned Order dated 25
th
August, 2022 records submissions of the Appellants which,
inter alia, are
premised on the argument that the removal of the Appellants, Respondent
No. 12 and Respondent No.34 as Trustees of the Khar Gymkhana and
consequential appointment of Respondent Nos. 3, 24, 30 to 32 is illegal
primarily on the grounds that all the Trustees removed on 19
th
December,
2021 were not named in the Requisition dated 1
st
November, 2021. These
Respondents submitted that it was also the case of the Appellants that
Clauses 4 and 7 of the Trust Deed have to be read together and that the Trust
Deed does not contemplate a situation where the General Body can remove
all 5 Trustees. It was also the case of the Appellants that the removal of the
Trustees ought to have been at the Special General Body Meeting and not at
the Annual General Meeting.
5 These Respondents submitted that the ex-Trustees devi sed a
self-serving mechanism in order to retain control and secrecy in their
operation/s qua the Khar Gymkhana, and if accepted as being legitimate,
would never allow Trustees of the Khar Gymkhana to be removed. Further,
these Respondents submitted that clauses of the Trust Deed ought to be given
the plain, literal and grammatical meaning.
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6 These Respondents submitted that, apart from exhaustive ly
recording all submissions advanced by both the parties, the impugned Order
returns findings as well as records reasons for its findings. The interpretation
of the Trust Deed and the Rules, and the actions taken thereunder, being the
core bone of contention between the parties, has been discussed and decided
by the Learned Single Judge in the impugned Order. The Learned Single
Judge eventually held that the members of the Khar Gymkhana have the
power to remove all the Trustees by a Resolution passed at a General
Meeting of the Khar Gymkhana. The impugned Order clearly records that
the present Trustees have been validly appointed at the Annual General
Meeting of the Khar Gymkhana held on 19
th
December, 2021 and that there is
no violation of either the Trust Deed or the Rules, whilst removing the said
Trustees. These Respondents submitted that the Learned Single Judge has,
in the course of passing of the impugned Order, also reviewed the manner in
which the Annual General Meeting of the Khar Gymkhana held on 19
th
December, 2021 was conducted and found that Agenda Item No.6, which
pertained to the requisition signed by 180 members of the Khar Gymkhana,
was thoroughly discussed and the Resolution was passed by an overwhelming
majority.
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7 Thus, these Respondents submitted that it is evident fr om a
perusal of the impugned Order that the Learned Single Judge had exercised
his discretion in a judicious manner. These Respondents, therefore,
submitted that no interference is warranted in the present matter. In support
of their submissions, these Respondents relied upon the decision of the
Hon’ble Supreme Court in Wander Limited v/s. Antox India Private Limited
reported in (1990) Supp SCC 727 and also to the decision of this Court in
World Crest Advisors LLP v/s. Catalyst Trusteeship Limited and Others
reported in 2022 SCC Online Bom 1409.
8 These Respondents further submitted that the Requisition dated
1
st
November, 2021 was addressed by 180 members of the Khar Gymkhana.
As per Rule 62 (i), a Special General Body Meeting may be convened at any
time on a Requisition signed by 100 members who are eligible to vote. These
Respondents submitted that, significantly, this Requisition has been
addressed to the Office of the Trustees as well as Appellant Nos.1 and 2,
Respondent No.34, Mr. Suresh Prabhu, Mr. Ashok Gowarikar and Mr. Bomi
Mehta. The Requisition has been copied to the Managing Committee. These
Respondents submitted that the Requisition is in fact the will of the members
and was caused due to non-renewal of the lease for Khar Gymkhana, notice
for payment of Rs.90 Crores, concealment of material information from
members, Appellant No.1’s claim to be a Managing Trustee and acting on
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behalf of all the Trustees and lack of due diligence while appointing Trustees.
These Respondents submitted that the Requisition clearly records that the
members had completely lost confidence and faith in the Office of the
Trustees of Khar Gymkhana as well as the Trustees.
9 These Respondents submitted that the Requisition also s tated
that the members understood that Khar Gymkhana’s declaration of Trust
allows the members to remove any Trustees by passing a Resolution by three-
fourth majority and allows the members to fill the vacancy ( if the number of
Trustees fall below 3) by appointing new Trustees by passing a Resolution at
the General Meeting.
10 These Respondents further submitted that the Annual G eneral
Meeting held on 19
th
December, 2021 had the largest voter turn out of 523
members. A statement of previous Annual General Meetings is annexed at
page 163 – Volume 1 which demonstrates that 490 members of the Khar
Gymkhana attended the Annual General Meeting of 22
nd
September, 2013.
11 These Respondents submitted that the Annual General Meeting
was conducted on the basis of the Unamended Rules of Khar Gymkhana. The
Notice of the Annual General Meeting was issued on 16
th
November, 2021 and
was allowed to be held as per the Order dated 17
th
December, 2021. Agenda
Items 6 and 7 recorded that the Meeting would consider the matter
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requisitioned by 180 members pursuant to their letter dated 1
st
November,
2021, namely, the removal of all the Trustees, and, consequently, the
appointment of new Trustees in their place and also provided for considering
any Resolutions of the Managing Committee.
12 These Respondents submitted that the Appellants’ argum ents
that Agenda Item 6 could not be raised at the said Meeting, and the same
could only have been raised at a Special General Meeting, had been
considered by the Learned Single Judge and a finding on the same had been
returned at paragraph 80 at page 84 – Volume 1. These Respondents
submitted that, this apart, the Appellants have, in the course of arguments,
suggested that the reason behind such distinction qua Item 6 would be that
the Agenda Item could be discussed with focus. These Resp ondents
submitted that Agenda Item 6 was, in fact, discussed for over 40 minutes.
13 Further, these Respondents submitted that, after the passing of
the Order dated 17
th
December, 2021 and after the Annual General Meeting
was held, the Appellants attempted to modify the Order through a
‘speaking
to the minutes’
application on 23
rd
December, 2021. These Respondents
submitted that the sole significance of this submission is that even after the
Annual General Meeting results were declared and the Trustees were
removed from the Office of the Trustees of Khar Gymkhana, an attempt was
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made to record that the members are to vote on the removal of Trustees
pursuant to the Requisition letter dated 1
st
November, 2021 - only to be able
to further canvas the point in an argument that the
‘named’ Trustees could
be the only Trustees who could have been removed at the Annual General
Meeting of 19
th
December, 2021.
14 These Respondents further submitted that it is very evident that
the members of Khar Gymkhana have acted in good faith and taken steps to
remove the Trustees. The same does not in any manner fall foul of the settled
principles in law. The Office of the Trustees has engaged the New Trustees
since 19
th
December, 2021. The present Appeal was filed only on 10
th
October,
2022 and, thereafter, moved to condone the 16 days delay in filing the same
in January, 2023. These Respondents submitted that it has been over two
years since the Office of the Trustees is operating through the New Trustees.
Apart from the fact that the entire premise of the Appellants’ submissions are
fallacious and incorrect, irreparable harm would be caused by setting aside
the impugned Order. These Respondents submitted that the balance of
convenience continues to lie in favour of the Respondents and against these
Appellants.
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ANALYSIS AND FINDINGS
15 Before we embark upon the journey to examine whether the
order of the learned Single Judge requires interference, especially since the
present Appeal arises from the dismissal of the Interim Application, it would
be apposite to understand our powers to interfere with an Order of a learned
Single Judge who has exercised his discretion in a particular manner. In this
regard, the Hon’ble Supreme Court in the case of Wander Ltd. (supra) has
laid down when the Appellate Court ought to interfere with the discretion
exercised by the learned Single Judge. In paragraph 14 of Wander Ltd.
(supra) , the Hon’ble Supreme Court has held as under:-
“14:- The appeals before the Division Bench were
against the exercise of discretion by the Single Judge.
In such appeals, the appellate court will not interfere
with the exercise of discretion of the court of first
instance and substitute its own discretion except
where the discretion has been shown to have been
exercised arbitrarily, or capriciously or perversely or
where the court had ignored the settled principles of
law regulating grant or refusal of interlocutory
injunctions. An appeal against exercise of discretion is
said to be an appeal on principle. Appellate court will
not reassess the material and seek to reach a
conclusion different from the one reached by the court
below if the one reached by that court was reasonably
possible on the material. The appellate court would
normally not be justified in interfering with the
exercise of discretion under appeal solely on the
ground that if it had considered the matter at the trial
stage it would have come to a contrary conclusion. If
the discretion has been exercised by the trial court
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reasonably and in a judicial manner the fact that the
appellate court would have taken a different view may
not justify interference with the trial court's exercise
of discretion. After referring to these principles
Gajendragadkar, J. in Printers (Mysore) Private Ltd.
v. Pothan Joseph: (SCR 721)
"... These principles are well established, but as
has been observed by Viscount Simon in Charles
Osenton & Co. v. Jhanaton
‘...the law as to the reversal by a court of appeal
of an order made by a judge below in the exercise of
his discretion is well established, and any difficulty
that arises is due only to the application of well settled
principles in an individual case’.”
The appellate judgment does not seem to defer to this
principle.”
(emphasis supplied)
16 Further, in paragraph 6 of the Judgement of this Court in
World
Crest Advisors LLP (supra), this Court has held as under:-
“6:- We have noted this at the forefront for two
reasons. First, we believe the principle enunciated in
these two cases constrains to a considerable extent,
although perhaps not entirely, the extent of our ability to
interfere with an impugned order such as this one.
Should we find that the impugned order is a plausible
view, one that is not arbitrary, capricious or, in the legal
understanding of the term, ‘perverse', then in appeal we
should not - indeed cannot – interfere. In those
circumstances, we cannot substitute an alternative view
or order for that of the learned Single Judge. The second
aspect affects the Plaintiff in appeal before us,
represented by Mr. Seervai. Before the learned Single
Judge, he would undoubtedly have had to show that all
three well-established ingredients or components for ad-
interim relief were met a strong prima facie case, that the
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balance of convenience favours the Plaintiff, and
demonstrating irretrievable prejudice if relief was denied.
Once that discretion was exercised at the ad-interim stage
by the learned single Judge, in appeal, the burden on Mr.
Seervai is much heavier following the Wander v. Antox
principle. For Mr. Seervai must now show that, despite
that long-understanding principle of law, we must
exercise our discretion and must grant the ad-interim
relief refused by the learned Single Judge. This requires
Mr. Seervai to now make out an overwhelming prima
facie case. It is not enough for him to merely demonstrate
that a view and conclusion different from that of the
learned Single Judge is possible, but to show that the
relief he seeks is the only possible view, that the
impugned order is not even remotely plausible, and
therefore the learned single Judge fell into error. As we
shall presently see, and for the reasons that follow,
despite a day-long hearing, we are not persuaded at the
end of all this that the Plaintiff has succeeded in
discharging this obligation.”
(emphasis supplied)
17 In our view, since the present Appeal is from an Order passed in
an Interim Application, the principles laid down by the aforesaid Judgements
would apply. In this context, the test would be whether the exercise of
discretion by the first Court has been shown to have been exercised
arbitrarily or capriciously or perversely or whether the first Court had
ignored the settled principles of law regulating grant or refusal of
interlocutory injunctions. It is only in these circumstances that the Appellate
Court would interfere with the exercise of discretion. The Appellate Court will
not re-assess the material and seek to reach a conclusion different from the
one reached by the Court below, if one reached by that Court was reasonably
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possible on the material. The Appellate Court would normally not be justified
in interfering with the exercise of discretion under Appeal solely on the
ground that if it had to consider the material at the trial stage, it would have
come to a contrary conclusion. If the discretion has been exercised by the
Trial Court reasonably and in a judicious manner, the fact that the Appellate
Court would have taken a different view, would not justify interference with
the Trial Court’s exercise of discretion.
18 Keeping in mind these principles laid down not only by the
Hon’ble Supreme Court, but also this Court, we will have to consider the
arguments of the Appellants in the present Appeal.
19 The first argument of the Appellants is that the Re quisition
notice dated 1
st
November, 2021 was addressed to five named Trustees, and
therefore, removal could only have been of the said five Trustees in respect
of whom the Requisition notice was issued, and for whose removal, the
Meeting was called for on 19
th
December, 2021. The Appellants submitted
that these arguments were specifically raised and recorded,
inter alia, in
paragraph 36 of the impugned Order, but have not been dealt with by the
Learned Single Judge, save and except to say that as Item 6 of the Agenda
dated 16
th
November, 2021 allowed for removal of all Trustees, the Trustees
existing on the date of the Meeting could all be removed. The Appellants
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submitted that this finding entirely misses the point as the said Agenda item
was also in the context of those named Trustees for whom the Requisition
notice had been issued, and, therefore at the highest, the reference to all
Trustees could only have been a reference to the five named Trustees who
were Trustees to whom the Requisition notice was addressed, and in respect
of whom the General Body notice was issued on 16
th
November, 2021. The
Appellants submitted that the three new Trustees were neither given any
notice of the intent to remove them, nor were they given any opportunity to
be heard nor to make a representation prior to their removal, nor were any
members of the General Body put to notice that these three persons were also
to be removed.
20 We find that in paragraphs 81 to 84 of the impugned Order, the
Learned Single Judge has dealt with these arguments. Paragraphs 81 to 84
read as under:-
“81. It is necessary to note that reliance has been placed by
Mr. Vashi on the Resolution proposed in the Notice setting out the
Agenda of the said Requisitioned Meeting which had been issued
on 16
th
November, 2021. The Resolution therein had named the
erstwhile Co-Trustees which included Suresh Prabhu and Bomi
Mehta. However, it is necessary to note Agenda Item No.6 which
reads as under:-
6. To consider the matter requisitioned by 180
members pursuant to their letter dated 1st
November, 2021, namely, the removal of all Co-
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Trustees, and consequently, the appointment of new
Co-Trustees in their place.
82. The Agenda Item No.6 clearly envisaged the removal
of all Co-Trustees and appointment of new Co-Trustees in their
place. At the said Meeting held on 19th December, 2021, there
were 523 members present. Item Nos.1 to 4 of the Agenda were
read out and the members of the Gymkhana spoke on these
resolutions and thereafter the resolutions were passed. Resolution
No.1 was for confirming the minutes of the Meeting held on 15
th
August, 2021 which was unanimously passed. It is further
necessary to note that Agenda item No.5 had not been read out
before reading out Agenda Item No.6 and upon realizing this,
Defendant No.5 read out Agenda item No.5 which pertained to
routine business of appointing auditors and fixing their
remuneration which was passed. Agenda Item No.6 which has
been extracted above was thereafter read out and the President of
Khar Gymkhana invited the first signatory to the Resolution to
speak and thereafter various members of the Khar Gymkhana
including Plaintiff No.4 addressed the members.
83. I have had the opportunity of viewing the video
recording of the proceedings at the said Meeting held on 19
th
December, 2021. It does appear that the Agenda Item No.6 was
thoroughly discussed and during the discussion there had been
some disruptions at the said Meeting by certain persons, who were
present and who are stated by Mr. Seervai to be the Plaintiff's
relatives/friends including Defendant No.12 and Plaintiff No.6. It
is relevant to note that prior to voting it appears that the Plaintiff
No.6 had approached the dais and claimed that the Agenda Item
No.6 is different from the proposed Resolution and stated that all
the then Trustees have been named in the Resolution including 3
of them who have thereafter resigned. There was some confusion
and accordingly the President of the Khar Gymkhana put the
resolution to vote and asked the members who are against the
resolution for removal of the five Trustees to raise their hands. A
count was first taken of the members against the Resolution for
removal of the five Trustees and approximately 30 Members were
against the resolution. Then the President of the Gymkhana asked
the members who are in favour of the removal of all Co-Trustees
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to raise their hands. A count was taken and there was
overwhelming majority and the President accordingly announced
that the Resolution had been passed by more than 75% majority.
Subsequently the Defendant No.5 suggested the names of five new
Trustees and called a show of hands for their appointment. This
was also passed by overwhelming majority.
84. There is some controversy regarding the proposed
Resolution for removal of named Co-Trustees and / or whether it
was considered. Agenda Item No.7 was to consider any Resolution
of the Managing Committee. When it was taken up; Defendant
No.5 informed the members of the Khar Gymkhana that the
Resolution for removal of all Co-Trustees and appointment of new
Co-Trustees in their place had already been passed and that the
Resolution is as per the Requisition of the members, passed in
terms of Agenda Item No.6. This is apparent from the minutes of
the said Meeting which recorded that "... this resolution has been
dealt with. The actual Requisition was for removal of all Co-
Trustees and it has also been decided by that house. We are not
taking this up. The exact resolution is of which we have gone by
the Requisition of members" In any event, it is well settled that
there is limited scope for judicial scrutiny, interference and
intervention in the internal workings of a club qua its members.
Thus, this Court is not delving into this controversy at the said
Meeting held on 19th December, 2021 and/or the factors which
weighed with the members of the Khar Gymkhana in their
removal of all the Co-Trustees and appointment of new Co-
Trustees in their place. Suffice it to say that by the Requisition
signed by the 180 members of the Khar Gymkhana grievance was
expressed against the existing Co-Trustees which include issues
such as non renewal of lease, Notice of payment over Rs.90
Crores, concealment of material information from members.
Plaintiff No.3 claiming to be acting as "Managing Committee" and
acting on behalf of all Trustees and lack of due diligence while
appointment of the Trustees. The Requisition shows total lack of
confidence and faith in the erstwhile Trustees of Khar Gymkhana.
Thus, their removal was Requisitioned and accordingly in my
prima facie view validly passed at the said Meeting held on 19th
December, 2021.”
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21 We are not inclined to interfere with these findings o f the
Learned Single Judge. The Learned Single Judge has exercised his discretion
in a manner which is not arbitrary, or capricious or perverse. The Learned
Single Judge has not ignored the settled principles of law regarding grant or
refusal of interim injunctions. Therefore, on the basis of the principles laid
down by the Hon’ble Supreme Court in Wander Ltd. (supra), we are not
inclined to interfere with the said findings of the Learned Single Judge.
22 Further, the Requisition dated 1
st
November, 2021 was addressed
to the Office of the Trustees. The said Requisition states that the members
have completely lost their confidence and faith in the Office of the Trustees of
Khar Gymkhana as well as the co-Trustees and, on that basis, have sought
the removal of Trustees and appointment of new Trustees in their place.
Thus, the Requisition was for removal of all Trustees and appointment of new
Trustees in their place.
23 Further, Agenda Item No. 6 reads as under:-
“6. To consider the matter requisitioned by 180 members
pursuant to their letter dated 1st November, 2021, namely, the
removal of all Co-Trustees, and consequently, the appointment of
new Co-Trustees in their place.”
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24 Thus, it is clear from Agenda Item No.6 that what was sought
was removal all Trustees, and, consequently, the appointment of new
Trustees in their place.
25 Further, the findings of the Learned Single Judge in paragraph
83 of the impugned Order show that the Learned Single Judge had an
opportunity of viewing the video recording of the proceedings at the said
Meeting held on 19
th
December, 2021, and the same showed that knowing full
well that all the Trustees were sought to be removed, 30 members voted
against the resolution, and an overwhelming majority out of the 523
members present, voted in favour of the Resolution for removal of the
Trustees. Hence, the removal of all Trustees was not in contravention of the
principles of natural justice.
26 The second argument of the Appellants is that the Requisitioned
Meeting was called for under Rule 62 of the Rules. The Appellants submitted
that even the Respondents had accepted and admitted that the Meeting was
called for under Rule 62. The Appellants submitted that Rule 62 specifically
contemplates that the requisitioned Meeting such as the present one would
be by way of a Special General Body Meeting. The Special General Body
Meeting has particular facets, including the manner in which voting is done,
and, in particular, the fact that, at that Meeting, there is a focused discussion
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only on the matters set out in the requisition and for which the Meeting is
called. The Appellants submitted that, in the present case, what was held was
not a Special General Body Meeting but the purported 89
th
Annual General
Body Meeting. The Appellants also submitted that there was no need to hold
an Annual General Body Meeting merely four months after the previous
Annual General Body Meeting which was held on 15
th
August, 2021.
27 Further, the Appellants submitted that if the Rules req uire a
particular procedure to be followed, then that procedure must be followed or
else the action taken at the Meeting is vitiated and ought to be set aside.
28 The Appellants submitted that this argument was specifi cally
recorded and raised in paragraphs 37 and 43 of the impugned Order but has
not been dealt with by the Learned Single Judge.
29 Rule 62 of the Rules does provide that a Special Gen eral Body
Meeting may be conveyed at any time on the orders of the President or on a
resolution of the Managing Committee or on a Requisition signed by 100
members eligible to vote.
Rule 62 reads as under:-
“ Rule 62 (i) A Special General Body Meeting may be
convened at any time on the orders of the President or on
a resolution of the Managing Committee or on a
requisition signed by 100 members eligible to vote.
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(ii)Such a requisition shall state the object of the
Meeting proposed to be called and shall be deposited
with the Hon. General Secretaries.”
30 However, Clause 4 of the Trust Deed also provides for removal of
Trustees by a Resolution passed at the General Body Meeting of the Khar
Gymkhana by a three-fourth majority of votes, and reads as under:-
“ The Trustees shall hold office for life or until
resignation or unless removed from office by a
Resolution passed by the Khar Gymkhana at a General
Meeting of the Gymkhana by a three fourths majority of
votes.”
31 Therefore, as per the provisions of Clause 4, the Trustees can be
removed by a Resolution passed by the Khar Gymkhana at a General Body
Meeting of the Khar Gymkhana by a three-fourth majority of votes.
32 Even if we accept that the Resolution Notice dated 1
st
November,2021 was issued pursuant to Rule 62 of the Rules, Clause 4 of the
Trust Deed is very clear and provides for removal of the Trustees by a
Resolution passed by the Khar Gymkhana at the General Body Meeting of the
Khar Gymkhana by a three-fourth majority of votes. In the present case, the
Resolution for removal of Trustees is as per Clause 4 of the Trust Deed, and
therefore, cannot be termed as
“ illegal”. It is perfectly valid and legal. In the
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present case, it cannot be said that the members of Khar Gymkhana have not
acted in good faith.
33 Further, as submitted by the Respondents, the Agenda Item 6,
for removal of Trustees, was discussed for 40 minutes, and after that a
decision was taken to remove the Trustees and appoint new Trustees. Thus, it
can be seen that the members of the Khar Gymkhana had not only followed
the principles of natural justice but also acted in a good faith.
34 For these reasons, we are unable to accept the arguments of the
Appellants based on Rule 62 of the Rules.
35 The third argument of the Appellants was regarding the
appointment of new Trustees. The Appellants submitted that the newly
appointed Trustees were not even named in the Agenda Notice in the
Meeting held on 16
th
November, 2021. The said notice contemplated the
purported removal of all five Trustees and the bare minimum that was
expected was that the proposed new Trustees would be named. The Appellant
submitted that this is not merely a formality but a right of the members to
know who is to be selected as the Trustees, which right was simply taken
away by arbitrarily putting up the names of the new Trustees at the Meeting
itself and pushing through their appointments.
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36 Further, in this regard, the Appellants submitted that Clause 7 of
the Trust Deed specifies that the General Body Meeting can only appoint the
Trustees if the Trustees have not themselves filled the vacancies within three
months or if the number of Trustees dwindles to below two. The Appellants
submitted that, at no point of time, had the number of Trustees ever
dwindled to below two, and, therefore, there was no occasion for the General
Body to appoint any new Trustees. The Appellant submitted that this
argument having been raised and recorded in paragraph 35 of the impugned
Order, had been dealt with by the Learned Single Judge in paragraph 79, only
to hold that Clause 7 will not apply to the appointment of new Trustees if all
the old Trustees are removed. The Appellants submitted that there is no
conceivable reason as to why clause 7 would not apply to allow for the
Trustees to appoint new Trustees even in a situation where a Trustee has
been removed.
37 The Appellants further submitted that it is entirely conceivable
that, in a given situation, only one or two Trustees may be removed by the
General Body, and if the logic applied by the Learned Single Judge is
accepted, then in the event of such a removal only the General Body would
be entitled to appoint the new Trustees. The Appellants submitted that there
is no warrant for this interpretation of Clause 7.
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38 Further, the Appellants submitted that it was never
contemplated by the Trust Deed or the Constitution that any such mala fide
action would be taken causing all the Trustees to be removed. The power of
the General Body to appoint Trustees was only to be exercised in a situation
where, some unfortunate events, such as the death of two or three Trustees in
quick succession, resulted in the number dwindling to below two, and was
never to be misused to cause removal of all Trustees and to simply reinstate
the entire board of Trustees with new Trustees who were obviously
favourable for the then Managing Committee.
39 The Appellants submitted that the learned Single Judge has
failed to appreciate that the only power for appointment under the Rules was
under Clause 7 read with Rule 43. If the Rules intended for the General Body
to remove all Trustees and to appoint all new Trustees, there would have
been a specific provision similar to Rule 41, which allowed for removal by the
General Body. However, Rule 43 does not have any such wide sweeping
power.
40 The Appellants further submitted that under Rule 43, which is
the only Rule which provides for appointment of new Trustees, the
appointment had to be at a Special General Body Meeting of the members of
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Khar Gymkhana. The Appellant submitted that, admittedly, in the present
case, what was held was an Annual General Body Meeting. The appointment
of new Trustees could never have been made by the General Body at an
Annual General Meeting. The Appellants reiterated that when the law or
rules require certain acts to be done in a particular manner, it must be done
in that manner and in no other.
41 As regards the issue of appointment of new Trustees, the learned
Single Judge has given his findings in paragraphs 79 and 80 of the impugned
Order, which read as under:-
“
79:-Clause 7 of the Trust Deed and Rule 43 cannot be
conflated with Clause 4 and Rule 41(f) as in my prima facie
view neither concern themselves with the removal of the
Trustee which is clearly provided for in Clause 4 and Rule
41(f). Clause 7 of the Trust Deed and Rule 43 of the said
Rules both provide for any vacancies amongst Trustees
arising by death, resignation, insolvency or any other
disability or cause shall be filled up by continuing or
surviving Trustees provided the number of surviving
Trustees have not dwindled down to two or less. This, in my
prima facie view, cannot be read to include the word
removal of a Trustee. Such interpretation of Clause 7 by Mr.
Vashi is in my prima facie view on a misreading and
misinterpretation of the said Clause 7 as well as the said
Rule. There is no merit in the argument on behalf of the
Plaintiffs that the Clauses 4 and 7 of the Trust Deed are one
and the same as they relate to removal of the Trustees. The
words "or cause" which has been interpreted by Mr. Vashi
to include removal is an incorrect reading of this clause as
removal is expressly dealt with in Clause 4 and would result
in clause 4 being rendered nugatory. It is evident that the
words in Clause 7 are required to be read ejusdem generis
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and grants the power to appoint Trustees by the Gymkhana
as there can never be a scenario where there is a complete
void i.e. no Trustees due to their removal. The Trust Deed
itself does not provide for its dissolution. In my prima facie
view by the removal of all Co-Trustees at the said Meeting
held on 19th December, 2021, by the 3/4th of the members
present at that Meeting, there could not have been a
vacuum and hence the new Co-Trustees were appointed on
the same date under Rule 62 of the said Rules which is in
terms of the Trust Deed and said Rules. In this context it
would be necessary to reproduce Rules 62 and 63 which
read thus:-
"62 (1) A Special General Body Meeting may be
convened at any time on the orders of the
President or on a resolution of the Managing
Committee or on a requisition signed by 100
members eligible to vote.
(ii) Such a requisition shall state the object of
the Meeting proposed to be called and shall be
deposited with the Hon. General Secretaries.
63: On receipt of the requisition under Rule 62,
the Managing Committee shall convene a
Special General Body Meeting. If the Managing
Committee does not convene the Special
General Body Meeting within 21 days from the
date of the requisition being deposited, the
requisitionists or any 12 of them may
themselves convene the Special General Body
Meeting by giving notice to the members and
displaying it on the Notice Board of the
Gymkhana.
80. Rule 62 provides for Requisition of Special Body
General Meeting by 100 members who are eligible to vote.
As per Rule 41(f) the members have the power to remove a
Trustee or all Trustees at such Meeting and in view of my
finding that there cannot be a vacuum and / or no Trustees
due to their removal, the new Co-Trustees have been validly
appointed on the same day at the said Meeting Requisition
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by the members under Rule 62 of the said Rules. Thus in my
prima facie view, there is no violation of either the Trust
Deed or the Rules in the removal of the Co-Trustees and
appointment of new Co-Trustees.”
42 A perusal of the findings of the Learned Single Jud ge in
paragraphs 79 and 80 shows that the Learned Single Judge has exercised his
discretion, which is not arbitrary or capriciously or perverse. As stated
earlier, relying upon the Judgement of the Hon’ble Supreme Court in
Wander
Limited (supra), the Appellate Court will not re-assess the material and seek
to reach a conclusion different from the one reached by the learned Single
Judge, if the one reached by the Learned Single Judge is reasonably possible.
We would not be justified in interfering with the exercise of discretion by the
Learned Single Judge solely on the ground that, if we had considered the
material at the trial stage, we would have come to a contrary conclusion.
Since discretion has been exercised by the Learned Single Judge reasonably
and in a judicial manner, the fact that the Appellate Court could have taken a
different view, would not justify interference with the Trial Court’s exercise of
discretion. For these reasons, we were unable to accept the arguments of the
Appellant regarding the new Trustees.
43 For all the aforesaid reasons, the following Order is passed:-
(i) Appeal is dismissed;
(ii) There shall be no order as to costs.
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44 This order will be digitally signed by the Private Secr etary/
Personal Assistant of this Court. All concerned will act on production by fax
or email of a digitally signed copy of this order.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]
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