Societies and Branches

Saji Koduvath, Advocate.

1. Introduction

The nexus between the branches and its central organisation has to be settled by the bye laws. Usually the upper body holds supervisory jurisdiction over the affairs of the branches; and, if the bye laws so provide, the property acquired by the branches may remain as the property of the whole/central organisation. When the parental body exercises its supervisory jurisdiction, in matters other than the formal administrative governance, it has to obey principles applicable to a quasi-judicial authority (ie., observing principles of natural justice, etc.).

The extent of autonomy or independence in administration of a branch is determined by the bye laws. Normally, so long the branches function within its jurisdiction, in conformity with the provisions of the bye laws, they can claim freedom from interference. When they violate the provisions of the bye laws and act in an arbitrary manner, their actions will be subject to the supervisory control of the central organisation.

Referring English Electric Co. of India Ltd v. Deputy Commercial Tax Officer, (1976) 4 SCC 460, it is observed in S.N.D.P. Yogam v. G. Krishnamoorthy,  2022-4 Ker HC 168, that a registered company can have Branches under the Companies Act and they are not independent or separate entities, and that the company and its branches constitute one single entity.

2. Does a Branch Regd. with a Regd. Society Get the Status as a Regd. Society?

An (unregistered) association which is registered with a registered-society will not get the status of a registered society.[1] Same will be the position as to a branch of a registered society.  Section 4 of the Societies Registration Act provides for filing Annual List of Managing Body once in every year with the Registrar. Societies Registration Act does not envisage societies-with-branches.

In Kerala Vyapari Vyavasayi Vs. Kerala Vyapari Vyavasayi Ekopana Samithi[2] after considering the definition and character of the ‘Governing Body’ in the So. Regn. Act, so also the scheme of the Act, it is held that the committee of officers at the district level or unit level is not the ‘Governing Body’ under the Societies Registration Act.

3. Fundamental Principles and Decision of a Branch to Sever

It being not open for the majority of the members of a society to alter the fundamental principles upon which it is founded, even the unanimous decision[3] of a branch (unless such a power is specifically reserved under the bye laws)[4] cannot sever the relation with the central body.  This principle was expounded in Milligan Vs. Mitchel,[5] Atttorney General Vs. Anderson.[6] In Free Church of England Vs. Overtoun,[7] House of Lords (by a majority of 5-2) found that the minority, which adhered to the ‘principles of establishment’, was entitled to the assets of the Free Church. It was observed that when men subscribe money for a particular object, and leave it behind them for the promotion of that object, their successors have no right to change the object endowed. It was held that, by adopting new standards of doctrine (and particularly by abandoning its commitment to ‘the establishment principle’, which was held to be fundamental to the Free Church), the majority had violated the conditions on which the property of the Free Church.[8]

4. Can a Branch Dissociate?

A branch of a (central) organisation created under the provisions of bye laws, cannot (unless the Rules provide otherwise) lawfully sever its connections with its central body, as observed in John Vs. Rees [9], inasmuch as the act of severance will amount to violation of the rules or bye laws.

5. Merger of an Association with Another Association

If a voluntary association came into existence independently, and subsequently subjected itself as a branch of another association, such a ‘branch’ may have the right[10] to dissociate or disaffiliate from such association or ‘central body’; because, the ‘branch’, when came into existence, had all characteristics of an independent voluntary association with its own basic principles of foundation.  The same will be the position of a voluntary association which merged or amalgamated[11] with another association. 

If the conduct of the members of the merged association shows that their act amounted to unanimous or undisputed surrendering or abandonment of the identity of the former voluntary association, or they became an integral-whole with the association in which they merged, principles of acquiescence and estoppel will be a bar for dissociation.

6. Parallel Administration within a Church Not Allowable

In Varghese Vs. St. Peters and Pauls Syrian Orthodox Church [12] it is pointed out by our Apex Court that ‘running parallel governance’ at the cost of Church by creating factionalism within the constituent parish churches is not permissible. It is settled proposition of law that when a mode is prescribed for doing a thing, it can be done only in that manner and not otherwise.

7. Incidents of trust in Clubs and societies

See blog: Incidents of Trust in Clubs and Societies.

 

---

[1]      Kalyani Mitra Vs. Hindu Milan Mandir: ILR 1986 MP 657

[2]      2004-1 Ker LT 756, 2004 KHC 122

[3]    Long Vs. The Bishop of Cape Town: (1863) 1 Moo. P.C. (N.S.) 411; Merriman Vs. Williams: (1882) L.R.7 A.C.484

[4]      Prasanna Venkitesa Rao Vs. Srinivasa Rao: AIR 1931 Mad. 12; See also: Profulla Chorone Requitte Vs. Satya Chorone Requitte: AIR 1979 SC 1682; Inderpal Singh Vs. Avtar Singh: 2007-4 Raj LW 3547.

[5]      40 ER 852

[6]      (1888) 57 LJ Ch 543

[7]      (1904) AC 515

[8]      All these English decisions were referred to in Prasanna Venkitesa Rao Vs. Srinivasa Rao: AIR 1931 Mad. 12. See also: Inderpal Singh Vs. Avtar Singh: 2007-4 Raj LW 3547.

[9]      John Vs. Rees: [1970] 1 Ch 345: [1969] 2 All ER 275.

[10]    Unless principles of estoppel and acquiescence work against.

[11]    Sec. 14A of the Karnataka Co-operative Societies Act, 1959 provides powers to the Registrar to order amalgamation of societies. See: H Puttappa Vs. State of Karnataka: AIR  1978 Kar 148.

[12]   Varghese Vs. St. Peters and Pauls Syrian Orthodox Church: (2017) 15 SCC 333.

Read in this cluster:

1. Can Courts Award Interest on Equitable Grounds?
2. Public & Private Trusts in India
3. Presumptions on Registered Documents & Collateral Purpose
4. EFFECT OF MARKING DOCUMENTS WITHOUT OBJECTION
5. PRODUCTION, ADMISSIBILITY & PROOF OF DOCUMENTS
6. Modes of Proof of Documents
7. Expert Evidence and Appreciation of Evidence
8. Substantive Documents, and Documents used for Refreshing Memory and Contradicting Witnesses
9. Jurisdiction of Civil Courts
10. OBJECTIONS TO ADMISSIBILITY & PROOF OF DOCUMENTS
11. Order II, Rule 2 CPC – Not to Vex Defendants Twice for the Same Cause of Action
12. Notary Attested Power-of-Attorney is Sufficient for Registration of a Deed
13. Sec. 91 CPC and Suits Against Wrongful Acts
14. Vesting of Property in Trusts
15. Clubs and Societies, Bye Laws Fundamental
16. The Law and Principles of Mandatory Injunction
17. Natural Justice – Not an Unruly Horse, Cannot be Placed in a Straight-Jacket & Not a Judicial Cure-all.
18. Unstamped & Unregistered Documents and Collateral Purpose
19. Pleadings Should be Specific; Why?
20. How to Contradict a Witness under Sec. 145, Evidence Act
21. Rules on Burden of Proof & Adverse Inference
22. Presumptions on Documents and Truth of its Contents
23. Best Evidence Rule in Indian Law
24. Extent of Easement (Width of Way) in Easement of Necessity, Quasi Easement and Implied Grant
25. Village Pathways and Right to Bury are not Easements.
26. Sec. 65B,  Evidence Act: Certificate for Computer Output
27. Legal Personality of Trustees and Office Bearers of Societies
28. Interrogatories: When Court Allows, When Rejects?
29. Can a Party to Suit Examine Opposite Party, as of Right?
30. ‘Additional Burden Loses Lateral Support’ – Incorrect Proposition
31. Production of Documents in Court: Order 11, Rule 14 CPC is not independent from Rule 12
32. Incidents of Trust in Clubs and Societies.
33. Management of Societies and Clubs, And Powers of General Body and Governing Body
34. How to Sue Societies, Clubs and Companies
35. Is Permission of Court Mandatory when a Power of Attorney Holder Files Suit
36. Notary-Attested Documents: Presumption, Rebuttable
37. Judicial & Legislative Activism in India: Principles and Instances
38. Maratha Backward Community Reservation Case: Supreme Court Fixed Upper Limit at 50%.
39. Separation Of Powers: Who Wins the Race – Legislature, Executive or Judiciary ?
40. Custom & Customary Easements in Indian Law
41. What is Easement? Does Right of Easement Allow to ‘Enjoy’ After Making a Construction?
42. Constructive Res Judicata and Ineffectual Res Judicata
43. Is Decree in a Representative Suit (OI R8 CPC) Enforceable Against Persons Not Eo-Nomine Parties?
44. Admissibility of Visual and Audio Evidence (Including Photographs, Cassettes, Tape-recordings, Films, CCTV Footage, CDs, e-mails, Chips, Hard-discs, Pen-drives)
45. Court Interference in Election Process
46. Significance of Scientific Evidence in Judicial Process
47. ‘Is Ban on Muslim Women to Enter Mosques, Unconstitutional’ Stands Tagged-on with Sabarimala Revision-Reference Matter
48. Is Excommunication of Parsi Women for Marrying Outside, Unconstitutional
49. Article 370: Is There Little Chance for Supreme Court Interference
50. Certificate is Required Only for ‘Computer Output’; Not for ‘Electronic Records’: Arjun Panditrao Explored.
51. M. Siddiq Vs. Mahant Suresh Das –Pragmatic Verdict on Ayodhya Disputes
52. Vesting of Property in Societies and Clubs
53. Juristic Personality of Societies and Clubs
54. Societies and Branches
55. Effect of Registration of Societies and Incorporation of Clubs
56. Clubs and Societies: General Features
57. Indian Law of Trusts Does Not Accept Salmond, as to Dual Ownership
58. Adverse Possession: An Evolving Concept
59. What is Trust in Indian Law?
60. Kesavananda Bharati Case: Effect and Outcome – Never Ending Controversy
61. CAA Challenge: Divergent Views
62. Secularism & Freedom of Religion in Indian Panorama
63. Relevancy, Admissibility and Proof of Documents
64. Forfeiture of Earnest Money and Reasonable Compensation
65. Declaration and Injunction
66. Can Legislature Overpower Court Decisions by an Enactment?