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TMI Blog2012 (4) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... s additional affidavit have also been filed by the respondents no. 1&2/writ petitioners. The counsels have been heard. Written submissions have also been filed and perused. 2. The crux of the controversy is whether the appellant which is a Company incorporated under Section 25 of the Companies Act, 1956 is entitled to have two kinds of memberships as aforesaid. The only difference in the rights of the two kinds of members is that while the "Member Exporters" have a right to elect and to be elected as office bearers of the appellant, the "Registered Exporters" have no such right. 3. The respondent no. 1/writ petitioner is a Body/Association of Exporters, though members of the appellant but having neither voting rights nor right to be elected. They are hereinafter called non-voting members. Their grievance in the writ petition was that they were being deprived of occupying the position of office bearers of the appellant or of electing the office bearers of the appellant and which right was confined to only approximately 10% of the members of the appellant, who are herein after called the voting members. 4. The Learned Single Judge allowed the writ petition having the effect of rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment & Regulation) Act came into force much thereafter in the year 1992 and the Exim Policy 1997-2002 issued for the first time in the year 1997. The Government though had encouraged the formation of the appellant, was not involved in the same; b. that the doctrine of ultra vires cannot apply to the Memorandum or Articles of Association of the appellant which are only required to comply with the Companies Act; c. that there is no compulsion on the appellant to function as an EPC and the appellant is required to comply with the Exim Policy only so long as wanting to function as an EPC thereunder but not otherwise; d. that even as per the Exim Policy as amended in March, 2000, all EPCs are required to conform to the Model Bye-Laws which were prescribed and which Model Bye- Laws permit classification into voting and non-voting members and of fulfillment of minimum prescribed exports to be eligible to become a voting member of an EPC; e. that the appellant is not a monopolistic body as perceived by the Learned Single Judge as the quota regime ended in the year 2005 and the appellant no longer grants export entitlement/quotas to va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the potential of the management of the appellant vesting in the hands of those who have neither any experience nor knowledge of the garment exports industry and which is neither feasible nor could be the purport of the Government or the Exim Policy; m. that a Constitution Bench of the Supreme Court in P.V. Sivarajan v. Union of India AIR 1959 SC 556 has upheld the criteria of minimum export performance even for the right to export as a reasonable classification for deciding who are to be permitted to export a particular product; n. that the other EPCs are having the same terms; o. that the classification of members is a reasonable one having reasonable and rational nexus to the object of ensuring that EPCs provide the necessary support to the Central Government in framing and implementing the Exim Policy in their respective sectors or industries; p. that the appellant over the years has acquired huge assets including valuable immovable properties and the same cannot be vested in non-serious exporters who may, upon removal of classification of membership and which classification has been quashed, come into control thereof; q.&n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge had not relied on the amendments of the year 2000 or on the Model Bye-Laws or the amendment in its Regulations in terms thereof; v. that the Model Bye-Laws are also subject to the Exim Policy notified from time to time and which also entitles the exporters to full membership of EPC irrespective of their export performance. Reference is made to Pramod Chopra v. Apparels Export Promotion Council ILR [1984] I Delhi 717 holding such a classification to be in violation of Article 14 of the Constitution of India; vi. that the expression "Associate Member" in the Articles of Association refers to prospective exporters who have not yet started exporting and does not relate to exporters who are already exporting; vii. P.V. Sivarajan (supra) relied upon by the appellant is distinguished by contending that such a classification therein was upheld for being in pubic interest; it is contended that the classification made by the appellant is against the public interest in as much as it creates a caucus. 9. The senior counsel for the appellant in rejoinder has controverted that the amendments of the year 2000 were not argued before the Learned Single Judge. Reliance is placed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attempt is made to snatch the management and control of bodies having considerable sway over professions, industries, businesses, away from the serious practitioners thereof and in the hands of those not really interested in the betterment of the persons for whose benefits such Bodies have been created. In the present case, the appellant as also stated by the respondents/writ petitioners themselves, is not only flush with funds but also in ownership of valuable immovable properties. The danger of some persons not really interested in developing export of garments hijacking the management and control of the appellant to get hold of its funds and properties is a real one and not imaginary. The modus operandi of such hijackers is well known. They gain control of management though through democratic process of election but by securing memberships to such bodies of those only interested in voting. It is not disputed before us that even an intending exporter is eligible to become a member of the appellant. If the voting rights and the management of the appellant is open to all those who may not actually be exporting garments but may claim to be intending to export garments and/or who may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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