2015 (3) TMI 113 - HC - Indian Laws

Barring the Associate Members from contesting and getting elected - Regulation 114 of the Company Secretaries Regulations, 1982 read with Rule 7 of the Company Secretaries (Election to the Council) Rules, 2006 - Violative of Article 14 of the Constitution of India - Held that - The right to contest the election to the Regional Councils, being a statutory right created by the Companies Secretaries Act, 1980 and the Rules and Regulations made thereunder, it is subject to qualifications and disqualifications prescribed therein. The law in this regard is well settled. In the case of N.P. Ponnuswami 1952 (1) TMI 20 - SUPREME COURT & Jagan Nath 1954 (1) TMI 27 - SUPREME COURT held that A right to elect, fundamental though it is to democracy, is, anomalously enough, neither a fundamental right nor a common law right. It is pure and simple, a statutory right. So is the right to be elected. So is the right to dispute an election. Outside of statute, there is no right to elect, no right to be elected and no right to dispute an election. Statutory creations they are, and therefore, subject to statutory limitation. We may also refer to Supreme Court Bar Association Vs. B.D. Kaushik 2012 (9) TMI 560 - SUPREME COURT , wherein it was reiterated that the right to vote is not an absolute right and the right to vote or to contest elections is neither a fundamental right nor a common law right, but it is a purely statutory right governed by the statute, rules or regulations. It was further held by the Supreme Court in the said decision that the right to contest an election and to vote can always be restricted or abridged, if statute, rules or regulations prescribe so. In the light of the above-noticed settled principle of law, the petitioners can neither claim an absolute right to stand for election to the Regional Councils nor contend that their right to contest the election is defeated by stipulating that the Fellow Members alone are eligible to stand for election to the Regional Councils. Having regard to the admitted fact that the Fellow Members belong to a different class and that even according to the petitioners the Fellow Members are more experienced and knowledgeable, the impugned provisions in making only the Fellow Members eligible to stand for election to Regional Councils cannot be held to be discriminatory and violative of Article 14 of the Constitution of India. The writ petition is, therefore, devoid of any merit and the same is accordingly dismissed. - Decided against the appellant.

Summary

Issues Involved:
1. Challenge to Regulation 114 of the Company Secretaries Regulations, 1982.
2. Challenge to Rule 7 of the Company Secretaries (Election to the Council) Rules, 2006.
3. Alleged discrimination against Associate Members in standing for election to the Council.

Issue-wise Detailed Analysis:

1. Challenge to Regulation 114 of the Company Secretaries Regulations, 1982:
The petitioners sought to quash Regulation 114 of the Company Secretaries Regulations, 1982, arguing it was arbitrary, illegal, and discriminatory. Regulation 114(1) states that elections to the Regional Councils shall be held by the Council and the Company Secretaries (Election to the Council) Rules, 2006 shall apply to elections to the Regional Councils mutatis mutandis. The amendment dated 26.07.2010 to Regulation 114(1) made only Fellow Members eligible to stand for election to the Regional Councils, excluding Associate Members. The court found that the amendment was consistent with the legislative intent of the Company Secretaries Act, 1980, which differentiates between Associate and Fellow Members based on experience and qualifications. The court held that the classification between Fellow and Associate Members is reasonable and not violative of Article 14 of the Constitution of India.

2. Challenge to Rule 7 of the Company Secretaries (Election to the Council) Rules, 2006:
Rule 7 specifies that only a Fellow Member on the first day of April of the financial year in which an election is to take place is eligible to stand for election to the Council. The petitioners contended that this rule was discriminatory as it barred Associate Members from contesting elections. The court reiterated that the right to contest an election is a statutory right subject to qualifications and disqualifications prescribed by the statute. Citing precedents, the court emphasized that the right to vote or to contest elections is neither a fundamental right nor a common law right but a purely statutory right governed by the statute, rules, or regulations. The court upheld Rule 7, stating that it does not violate the principles of equality under Article 14, as the classification between Fellow and Associate Members is based on reasonable criteria.

3. Alleged Discrimination Against Associate Members:
The petitioners argued that the exclusion of Associate Members from contesting elections to the Regional Councils was arbitrary and violated their fundamental rights under Article 14 of the Constitution. The court noted that Associate and Fellow Members belong to two different classes, with Fellow Members being more experienced and knowledgeable. The court held that the differentiation between these two classes is reasonable and justified, given the legislative intent and the structure of the Company Secretaries Act, 1980. The court also pointed out that the Associate Members' right to contest elections is not absolute and can be restricted by statutory provisions. The court concluded that the impugned provisions do not violate the constitutional principles of equality and are not arbitrary or discriminatory.

Conclusion:
The court dismissed the writ petition, holding that the petitioners failed to establish that Regulation 114(1) and Rule 7 were unconstitutional or violative of their fundamental rights. The court upheld the amendments and the statutory provisions that differentiate between Associate and Fellow Members, affirming that such classifications are reasonable and in line with the legislative intent of the Company Secretaries Act, 1980. The petition was found to be devoid of merit and was dismissed without any order as to costs.