Partly allowed

Binod Bhaban Club v. Collector,Dhenkanal

Orissa HC25 Apr 2025WP(C)/11768/2004

Case brief

AI extract

What is this about?

Registered club challenged sealing of premises by Sub-Collector; a lessee running an LPG outlet on leased club land also sought protection. The Court held the 1989 amendment removing the Collector as Ex-Officio President was invalid for want of approval and notice; the sealing lacked legal authority and violated natural justice. Sealing set aside; matter remanded to Collector; lessee relegated to

What did the court decide?

Sealing of Club premises set aside; matter remanded to Collector to examine Club affairs per law and natural justice; interim orders vacated; lessee given liberty to approach civil court.

Binod Bhaban Club Vs Collector,Dhenkanal — Cooperative Societies | Orissa HC (2025)

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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W.P.(C) No. 11768 of 2004 and

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W.P. (C) 11792 of 2004

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(In the matters of applications under Articles 226 and 227 of the Constitution of India, 1950).

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(In W.P.(C) No. 11768 of 2004)

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Binod Bhaban Club, Dhenkanal …. Petitioner(s)

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-versus-

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The Collector, Dhenkanal and Anr. …. Opposite Party (s)

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Advocates appeared in the case through Hybrid Mode :

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For Petitioner(s) : Mr. Manoj Kumar Mohanty, Adv. : For Opposite Party (s) Mr. Debasish Nayak, AGA

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(In W.P.(C) No. 11792 of 2004)

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Aswini Kumar Baral …. Petitioner(s)

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-versus-

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…. State of Orissa and Ors. Opposite Party (s)

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Advocates appeared in the case through Hybrid Mode :

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For Petitioner(s) : Mr. Manoj Kumar Mohanty, Adv. : For Opposite Party (s) Mr. Debasish Nayak, AGA

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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CORAM:

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DR. JUSTICE S.K. PANIGRAHI

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DATE OF HEARING:-10.03.2025 DATE OF JUDGMENT:-25.04.2025

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Dr. S.K. Panigrahi, J.

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1. Both the Writ Petitions have been filed under Articles 226 and 227 of the Constitution of India: W.P.(C) No. 11768 of 2004 has been filed by Binod Bhavan Club, challenging the Letter No.5099 dated 13.10.2004 issued by the Sub-Collector, Dhenkanal, and the subsequent sealing of the Club premises; and W.P.(C) No.11792 of 2004 has been filed by a private individual (the petitioner-lessee), seeking to restrain the District Administration from interfering with the operation of their LPG retail shop, which is situated on land leased by the Club.

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I. FACTUAL MATRIX OF THE CASE:

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2. The brief facts of the caseare asfollows:

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(i) Binod Bhavan Club is a registered society under the Societies Registration Act, 1860, established in 1961 and registered on 06.03.1969 (Regn. No. 053-4/11 of 1968-69). It was founded by retired and serving government officials and intellectuals in Dhenkanal for promoting science, literature, physical recreation, and culture. The Club's original bye-laws named the Collector of Dhenkanal as ExOfficio President. The constitution allowed for amendments through a 2/3rd majority vote in the General Body.

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(ii) On 31.12.1989, the General Body of the Club allegedly resolved to remove the Collector as Ex-Officio President. Petitioners claim this

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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was done with the knowledge and informal consent of then Collector Shri S. Jena.

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(iii) The Opposite Parties dispute the legitimacy of the 1989 amendment to the Club’s bye-laws, asserting that no notice was served on the then Collector prior to the General Body meeting and that the amendment procedure was legally defective. They contend that the revised byelaws were neither submitted to nor did it approve by the Inspector General of Registration (IGR) as mandated by law.

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(iv) According to the petitioner, a General Body meeting held on 11.01.2004 resulted in the election of Retired Justice D.M. Pattnaik as President, Retired Engineer Ramakanta Pattnaik as Secretary-cumTreasurer, and Halamani Das, B.P. Mitra, Ramesh Chandra Mishra, Ajay Kumar Rout, and Rabindranath Das as Executive Committee Members. However, the Opposite Parties do not recognize these office bearers, citing the absence of validation from the competent Registration Authority.

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(v) On 01.01.2000, a lease agreement was executed between Binod Bhavan Club and the petitioner (a private individual) in W.P.(C) 11792 of 2004 for the construction and operation of a shop measuring 13' x 28' x 10'6" on vacant Club land (Plot Nos. 3237 and 3298/6949, total area: 0.359 decimals). The lease terms stipulated a monthly rent of ₹500 for a period of 10 years starting from 01.04.2000, with a 10% increment every three years, along with a security deposit of ₹43,332. The petitioner reportedly invested approximately ₹3 lakhs in constructing the shop, which was established as an Indane LPG distribution outlet,

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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recognized as a public utility service. The petitioner claims that there was no objection from the Club or the public regarding the shop’s operation for over four years.

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(vi) The Opposite Parties contend that the lease agreement is legally infirm as it remains unregistered, lacks the official seal of the Club, and was executed without any attesting witnesses. They further question its validity by alleging that the signatory President who executed the lease was not legally elected at the time, thereby casting doubt on the contractual authority. Additionally, they argue that the petitioner’s dual role as both a Club member and tenant presents a conflict of interest. In contrast, the petitioner asserts that the lease was executed in good faith under the then-operating Club administration, rent has been paid regularly without default, and no objections or disputes arose until the recent intervention by the District Administration.

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(vii) Based on public complaints, notably from Shri H.P. Singh, the Additional District Magistrate ordered an enquiry into the affairs of Binod Bhavan Club on 13.01.2004. Notices were issued to the Club Secretary, who allegedly failed to respond. Subsequently, the Registration Authority, through a letter dated 23.09.2004, requested a report regarding the possible cancellation of the Club’s registration due to alleged non-compliance with statutory legal norms.

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(viii) The Sub-Collector issued Letter No. 5099 dated 13.10.2004, directing the Binod Bhavan Club to submit its records within three days, citing alleged irregularities. In response, the Club Secretary replied on

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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30.10.2004, requesting an extension until 06.11.2004 to consult with members. However, the Club premises were forcibly sealed on 26.10.2004, and a seizure list was subsequently submitted.

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(ix) The petitioner-shopkeeper was also threatened with the sealing of their shop by 10.11.2004. The petitioners allege that the action was politically motivated, carried out without proper notice or due process, and that Club assets may have been tampered with while members were denied access to the premises.

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II. SUBMISSIONS ON BEHALF OF THE PETITIONER(S):

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3. Learned counsel for the Petitioners earnestly made the following submissions in support of his contentions:

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(i) The petitioners contend that the seizure of the Club premises and the threat to seal the petitioner’s shop were carried out arbitrarily and without legal authority. They argue that neither the Societies Registration Act, 1860, nor does any other statute provide for the Collector or Sub-Collector with unilateral power to seize the premises of a registered society or interfere in its internal affairs. The absence of any statutory provision authorizing such coercive measures renders the administrative action illegal.

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(ii) It is asserted that the action taken by the Sub-Collector, particularly the sealing of the Club and the threats to the petitioner’s livelihood, was done without issuing proper notice or affording any opportunity of hearing. Petitioners emphasize that these steps were taken behind their backs which amounts to a violation of the fundamental

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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principles of natural justice, including the right to be heard and to defend one's position before action is taken.

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(iii) The Club maintains that the amendment to its bye-laws in 1989, which removed the Collector as Ex-Officio President, was lawfully passed by the General Body and with the knowledge of the then Collector. Based on this amendment, the current office bearers, including those elected in the General Body meeting on 11.01.2004, are legally recognized by the members. Petitioners argue that the functioning of the Club has remained lawful and undisputed by any of its members, with no legal challenge filed against the said amendment or elections.

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(iv) The petitioner in W.P.(C) No.11792 of 2004 asserts that the lease agreement executed with the Club for establishing an LPG distribution outlet was valid, having been entered into with the legitimately elected President. The petitioner has complied with all lease terms, made significant financial investments in infrastructure, and operated the business peacefully for years without any complaint or violation. It is emphasized that the business serves public utility needs and has not been a source of nuisance or illegality.

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(v) The petitioners further argue that the District Administration has overstepped its jurisdiction by interfering with the functioning of a private society and attempting to nullify a valid private lease agreement. They contend that any dispute regarding the Club’s internal affairs or property arrangements falls exclusively within the domain of civil courts and not administrative authorities.

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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(vi) Both petitioners claim that the administrative actions violate their constitutional rights under Article 19(1)(c) (freedom of association), Article 19(1)(g) (right to trade and occupation), and Article 21 (right to livelihood and dignity). The Club’s right to self-governance and the shop owner’s right to conduct lawful business have, according to the petitioners, been unjustly curtailed through coercive state action.

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(vii) Finally, the petitioners contend that there is no alternative or efficacious remedy available to them in any other legal forum, justifying their recourse to the extraordinary jurisdiction of the High Court under Articles 226 and 227. They stress that the harm caused, including potential cancellation of the Club’s registration and the threat to the petitioner’s sole source of livelihood, is immediate, irreparable, and necessitates urgent judicial intervention.

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III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:

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4. The Learned Counsel for the Opposite Parties earnestly made the following submissions in support of his contentions:

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(i) The Opposite Parties contend that the petitions are not maintainable under Article 226, as they revolve around private disputes and involve disputed questions of fact, particularly relating to the validity of the 1989 resolution, status of elected office bearers, and the lease agreement. These matters, according to the opposite parties, are best resolved through a civil suit, not a writ petition. Moreover, alternative legal remedies exist, and the petitions are termed premature, preemptive, and an abuse of process.

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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(ii) It is argued that the amendment removing the Collector as Ex-Officio President in 1989 was carried out without following the legal procedure, lacked proper notice, and was never submitted for approval to the Registration Authority (IGR). As a result, the amendment is legally ineffective, and the original bye-law recognizing the Collector remains in force. Consequently, the elections held thereafter, including those in 2004, are invalid, and the elected office bearers lack legitimacy.

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(iii) The respondents argue that the petitioners, both the Club and the shop lessee, lack locus standi as they derive their claims from a constitutionally invalid and unrecognized Club administration. The lease agreement, signed by an allegedly unauthorized President, is termed unauthenticated, unregistered, and legally void. The petitioner-lessee is characterized as a trespasser, not a legitimate tenant, and their financial or business claims do not create a legal right to occupy the Club’s property.

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(iv) According to the respondents, the Collector, being the Ex-Officio President under the unamended bye-laws, had the authority to seek Club records to verify and initiate corrective action. The seizure of records and premises by the Sub-Collector was taken in response to complaints of mismanagement, and aimed to preserve public safety and enforce legal compliance. The action was not arbitrary but a result of inquiries into improper elections and misuse of Club premises.

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(v) Letting out parts of the Club to commercial ventures, including a liquor shop and a gas agency, is said to be in violation of the Club’s

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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objectives, the terms of government lease, and poses a risk to public safety. Respondents argue that these activities are incompatible with the intended social and cultural functions of the Club and justify intervention by public authorities in the larger interest of lawful governance and public welfare.

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(vi) The Opposite Parties reject the petitioners’ invocation of financial hardship, employment dependency, or humanitarian grounds as a basis for relief under writ jurisdiction. They assert that rule of law prevails over personal hardship, and allowing occupation based on emotional arguments would legitimize unauthorized possession and undermine public interest.

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(vii) The Opposite Parties conclude that both petitions are devoid of legal merit and seek to bypass due legal channels under the guise of a constitutional remedy. They reserve their right to submit further affidavits and documentation to substantiate their actions and reiterate that the administrative intervention was motivated by legal duty, public complaints, and the restoration of lawful management of the Club.

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IV. COURT’S REASONING AND ANALYSIS:

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5. Heard Learned Counsel for the parties and perused the documents placed before this Court.

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6. At this juncture, the central and most consequential legal question that demands resolution is twofold: first, whether the Collector lawfully retains the position of Ex Officio President of Binod Bhavan

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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Club under its prevailing bye laws; and second, assuming such a position is indeed held, whether that role, by its nature or by any statutory implication, confers upon the Collector the authority to unilaterally order the sealing of the Club’s premises.

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7. Having examined the facts, submissions, and legal materials including the relevant governing documents of Binod Bhavan Club, it becomes clear that the resolution passed in 1989 to remove the Collector as the Ex-Officio President was not validly effectuated in the eyes of law due to two reasons:

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a. The amendment was not approved by the Inspector General of Registration.

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b. The failure to provide proper notice to the then Ex Officio President (the Collector) vitiated the procedural sanctity of the General Body meeting, thus rendering the amendment defective ab initio.

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8. Accordingly, in the absence of lawful validation, the original bye-laws continue to operate. These bye-laws clearly provide that the Collector of Dhenkanal shall remain the Ex Officio President of the Club. As per the Club’s governing charter:

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“The President shall preside over all meetings. He can sign, verify the club cash book, stock book and all other documents including receipt books. He shall have all powers.”

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9. This language, although broad and vaguely framed, has been accepted by both parties as the governing rule. The interpretation of this provision raises a legal conundrum: Does the phrase “ He shall

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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have all powers ” extend to administrative acts such as sealing the premises of the Club?

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10. In such scenario, it would be imperative to peruse the Supreme Court’s judgment in the case of Zoroastrian Cooperative Housing Society v. District Registrar¹ which establishes the primacy of a society’s registered bye-laws, provided they are not in contravention of the parent statute. In line with this, the Supreme Court further held as follows:

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“It also appears to us, that a person after becoming a member of a Cooperative Society cannot seek to get out of the obligation undertaken by him while becoming a member of such a Society by resort to the principle of public policy based on constitutional protections given to an individual as against State action. As noticed in Rodriguez vs. Speyer Bros. (1919) A.C. 59 and Fender vs. Mildmay (1938) A.C. 1, the considerations of public policy are disabling and not enabling. Observed Lord Sumner in Rodriguez (Supra)":

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“Considerations of public policy are applied to private contracts or dispositions in order to disable, not to enable. I never heard of a legal disability from which a party or a transaction could be relieved because it would be good policy to do so.”

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….”

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11. The abovementioned precedent makes it clear that bye-laws of a registered society are binding on its members and office bearers, and such bye-laws, unless contrary to a statute, must be respected in letter and spirit. However, the powers conferred under such bye-laws, particularly phrases such as “ He shall have all powers,” cannot be

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1 (2005) 5 SCC 632

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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interpreted to exceed statutory or constitutional limits.In line with that reasoning, while the Collector may wield considerable influence in Club affairs, including control over records and financial verification, nowhere do the bye-laws, explicitly or implicitly, empower the Collector to seal the premises or take coercive administrative action without due process or statutory backing.

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12. Even where the bye-laws vest “all powers” in the President, such language must be interpreted harmoniously with general principles of rule of law. It is a cardinal principle of statutory interpretation that generality of expression must yield to contextual limitation. No power, however broadly worded in a private charter, can override the foundational values of audi alteram partem , transparency, and proportionality. The office of the President, particularly where held ex-officio by a public servant such as the Collector, carries with it a fiduciary responsibility to act not in assertion of dominion, but in service of stewardship.

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13. Thus, the sealing of premises, an act inherently coercive in nature, demands a higher threshold of justification, not only in terms of statutory source but also procedural integrity. If such actions are taken merely on the strength of a phrase like “all powers,” it would amount to sanctioning a rule by fiat, antithetical to the spirit of both the Societies Registration Act and the Constitution of India.

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14. Now the next important question before this Court is in relation to the validity of the lease agreement between the Club and the petitionerlessee in W.P.(C) 11792 of 2004. The perusal of the materials and the

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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factual matrix makes it clear that this case raises issues of private contractual disputes, rather than public law grievances. The lease remains unregistered, lacks witnesses, and was executed by a President whose status is legally disputed. These deficiencies indicate that the matter requires examination of factual evidence and interpretation of private rights and obligations, a task appropriately suited for the civil courts, not writ jurisdiction under Article 226. CONCLUSION:

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15. Ordinarily this Court would be reluctant to entertain a petition rooted in disputed authority within a private society and a challenge to executive action taken under questionable claims of control. The sealing of premises without statutory backing or clear procedural safeguards would typically be contested in a civil forum or through appropriate administrative channels. However, what could have been addressed swiftly through lawful means has now lingered unresolved for years. The authority exercised remains murky, the consequences tangible, and the process lacking. In such a situation, the Court cannot remain a distant observer. While this matter may not have been strictly maintainable at the outset, the long lapse of time and the continuing impact compel the Court to take it up, not as a matter of precedent, but to ensure that power is not exercised unchecked and that justice, however delayed, is not altogether denied.

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16. In the light of the foregoing discussion and upon careful consideration of the facts, governing bye laws, and applicable legal principles, this Court concludes that the action of sealing the premises by the Sub-

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Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 05-May-2025 19:35:07

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Collector was undertaken without legal authority and in clear violation of the principles of natural justice. Accordingly, such action stands set aside.

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17. The matter is accordingly remanded to the Collector of Dhenkanal, who, as the Ex-Officio President of Binod Bhavan Club under the prevailing bye laws, shall undertake a fair, transparent, and consultative examination of the Club’s affairs. It shall be open to him/her to address any issues of governance or administration, but such exercise must be carried out strictly in accordance with law and with due regard to the principles of natural justice.

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18. As for the petitioner-lessee, whose claim arises out of a disputed lease agreement, liberty is granted to seek appropriate relief before a competent civil forum, as the issues raised are inherently contractual and fall beyond the scope of summary adjudication under writ jurisdiction.

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19. Accordingly, both the Writ Petitions are partially allowed.

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20. Interim order, if any, passed earlier,in any of the above-mentioned Writ Petitions stands vacated.

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(Dr.S.K. Panigrahi) Judge

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Orissa High Court, Cuttack, Dated the 25^th April, 2025/

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Binod Bhaban Club v. Collector,Dhenkanal

Case brief

What is this about?

What did the court decide?

Binod Bhaban Club v. Collector,Dhenkanal

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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