MOA Could Not Be Rendered So By Effecting Amendment At Own Sweet Will Of Governors: Calcutta HC Sets Aside Decision To Dissolve Board Of Trustees

The Calcutta High Court has set aside the decision taken in a meeting of the Board of Governors (BOG) of the Indian Institute of Social Welfare and Business Management whereby the President had opined that the Board of Trustees (BOT) would be dissolved and the BOG would continue.

The Single Judge Bench of Justice Sabyasachi Bhattacharyya observed that the “decision of the BOG, having been confirmed and ratified by the majority subsequently, now operates as a time-bomb, which may explode at any point of time at the sweet will of the BOG. There is no safety net between the impugned decision and its implementation within the contemplation of the Memorandum itself. As per the statutory requirement, the resolution merely has to be intimated to the appropriate authority for the purpose of giving the same the sanctity of law”.

Senior Advocate Tilak Kumar Bose appeared for the Petitioner, whereas Senior Advocate Lakshmi Kumar Gupta appeared for the Respondent.

In this case, the petitioner argued that the said resolution was patently contradictory to the Memorandum of Association of the Institute and, if accepted, would render the functioning of the Institute lop-sided by concentrating the entire power in the BOG, which was never the intention of the founders.

After considering the submission, the Bench stated that the BOG could not arrogate to itself the entire trove of powers in respect of the Institute, in the teeth of Clauses 38, 39, 42 and 44, which were cardinal features of the Memorandum of Associations of the Institute.

“The said provisions could very well be termed as the ‘basic structure’ of the Memorandum of Association and contained the implicit balancing factors contemplated in the functioning of the Institute, of which the memorandum could not be denuded. Such an amendment, if permitted, would demolish the very concept of functioning of the Institute and its autonomy, all the more so since several members of the BOG were functionaries of the State, who were ex-officio members of the BOG. Hence it was stated that the defence of delay taken by the respondents could not be paid heed to”, added the Bench.

The High Court stated that upon perusal of the relevant clauses of the Memorandum of Association of the Institute, it undoubtedly indicated that the BOT had an essential role to play within the scheme.

The High Court, therefore, clarified that in the scheme of things and to maintain proper checks and balances, the existence of the BOT was undoubtedly an essential feature of the Institute and its Memorandum of Association.

The Bench was of the view that a comprehensive perusal of the provisions of the Memorandum, clearly indicated that the BOG, although having primacy in certain aspects, “was not the be-all and end-all of the Institute and could not be rendered so by effecting an amendment at the own sweet will of the governors.”

The Bench highlighted that the argument of the first respondent that the amendments or alterations to the Memorandum or Rules and Regulations of the Institute had to be mandatorily placed before the AGM did not find a place in the provisions of the Memorandum itself.

Rather, the Bench stated that Clause 57 indicated that two-thirds of the members of the BOG could, by voting at their meeting after notice of the proposed amendment of not less than one month, may have such amendment or alteration which would then be binding on all existing members.

Thus, even without going into the merits of the allegation that the challenge could not be taken out before the removal of the second respondent from his office as the Minister of Higher Education, Government of West Bengal, the High Court stated that the cause of action based on apprehension of the petitioner was still alive and was a continuing cause of action since the impugned decision could be implemented by the BOG at any point of time at its option.

While navigating through the issue of locus standi of the petitioner, the High Court stated that he was a part of the meeting confirming the impugned decision and was the sole objector to the impugned amendment.

“The very fact of the petitioner being recognized as a part of the said meeting indicates that he had the locus standi to be a part of the meeting, prima facie as a member of the BOT. If the respondents were to challenge his membership of the BOT, it was for the respondents to plead and prove the same as per law, which, having not been done, it does not lie in the mouth of the respondents to deny the locus standi of the petitioner, even as an integral part of the functioning of the Institute, to prefer a challenge to the paradigm alteration of the Memorandum of Association of the Institute”, added the Court.

Cause Title: Shri Dipendra Kumar Sanyal v. The Director and Member Secretary Board of Governors

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