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TMI Blog1960 (11) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 19, contended that the provisions of the Act could not apply to the Society on the ground that it was registered under the Societies Registration Act and was a Corporation and the State Legislature had no power to pass legislation purporting to govern such a society, though it was not disputed that the objects of the Society were charitable. It is not necessary for the purpose of this appeal to go into the other contentions raised on behalf of the Society in the enquiry. The aforesaid contention of the Society was, however, negatived by the Assistant Charity Commissioner, who ordered the certificate of registration to issue under the Act on 8th December 1953. This decision was upheld in appeal by the Charity Commissioner on 21st May 1954. The Society, therefore, filed an application under section 72 of the Act challenging the decision of the authorities under the Act on the ground that the society being registered under the Societies Registration Act, was a Corporation and the Sate Legislature would have not power to legislate about it by reason of entry 44, Seventh Schedule, List I Union List, of the Constitution. That application being Miscellaneous Application No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration, regulation and winding up of corporation other than those specified in List I and universities; unincorporated trading, literary scientific, religious and other societies and associations; co-operative societies." From List III- Concurrent List, the following entries were referred to:- "10. Trust and Trustees." "28. Charities and charitable institutions, charitable and religious endowments and religious institutions." I may state that the two aforesaid entries in the Concurrent List are not referred to in the judgments of Mr. Justice Mudholkar and Mr. Justice Patel, though the learned Government Pleader stated that he had relied upon those entries in support of his case. According to Mr. Amin, entries 43 and 44 of the Union List as well as entry 32 of the State List clearly define the powers of the Union and State Legislatures regarding corporations. Entry 43 refers to trading corporations, including banking, insurance and financial corporations, but does not include co-operative societies. Entry 44 refers to incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but excludes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s answer to this is that once the Court holds that the Society is a Corporation or quasi -corporation with objects which are India-wide, no other entry in the Act can come into operation except entry No. 44 which must be given a liberal and not a narrow interpretation on the decided authorities. (6) Now, the principles governing the interpretation of the entries in the three lists in the Seventh Schedule of the Constitution are well settled. A number of authorities were cited before me on this point and the following principles can indisputably be deduced from these authorities:- 1. In construing words in a constitutional enactment conferring legislative power the most liberal construction should be put upon them, so that the same may have effect in their widest amplitude. This principle would equally apply to the construction of the items in the three lists. None of the items should be read in a narrow or restricted sense and each general word should be held to extend to all ancillary or subsidiary matters which can be fairly and reasonably comprehended in it. See the United Provinces v. Atica Begum and Navinchandra Mafatlal v. Commr. Of Income-tax , . 2. When considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of the rule evolved by the Judicial Committee of the Privy Council to ascertain its "Pith and substance" or its "true nature and character" for the purpose of determining whether it is legislation with respect to matters in this list or in the list. Subrahmanyan Chettiar v. Muttuswami Goundan Prafulla Kumar Mukherjee v. Bank of Commerce, Ltd. Khulna, 1947 FCR 29 at p, 51: (AIR 1947 PC 60 at p. 65). The State of Bombay v. F. N. Balsara, (1951) SCR 682 at 694: AIR 1951 SC 318 at p. 322. This doctrine of "pith and substance" has been recently explained in the decision of the Supreme Court in A. S. Krishna v. Madras State , where Mr. Venkatarama Ayyar J., observed: ". . . . . . . .if a statute is found in substance to relate to a topic within the competence of the Legislature, it should be held to be intra vires even though it might incidentally trench on topics not within its legislative competence. The extent of the encroachment on matters beyond its competence may be an element in determining whether in the legislation is colourable, that is, whether in the guise of making a law on a matter within its competence, the legislature is in tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to say, it has perpetual succession, that it has a distinct legal entity, that it must have a name and, in the case of a corporation aggregate, as a general rule, it can only act or express its will by deed under the common seal. Under the English law, a corporation may be created by charter or by statute, and in the latter case a corporation may be created by the authority or Parliament expressed either in a special statute creating a particular corporation or corporations, or in a general statue, under which any number of corporations may be created on complying with its terms. To constitute a corporation, however, it is not necessary that any particular form of words should be used in the statue; it is sufficient if the intent to incorporate be evident. Halsbury also refers to a third class of corporations, namely, quasi-corporations, which only partially fulfil the definition of a corporation. Instances of quasi-corporations sole are the Lord Chancellor, the Lord Chief Justice and the Chamberlain of London. Churchwardens and overseers formerly constituted a quasi-corporation aggregate, holding land for parochial purposes, and churchwardens continue to possess a quasi-corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the evidence in the case as well as the rules of the committee and came to the conclusion that the committee did act in a quasi corporate manner. In the case of District School Board Bijapur v. Bhagwan, 34 Bom LR 1500: (AIR 1932 Bom 651) it was held by the Division Bench of this Court that a District School Board constituted under section 3, clause 1, of the Bombay Primary Education Act, 1923, as amended by Act XV of 1927, is a corporation and is liable to be sued as such. It was observed by Mr. Justice Patkar in this case that the general scheme of the Bombay Primary Education Act was that the members of the School Boards could not act individually and had to act collectively and that the School Board has a perpetual succession and capacity to act as an individual. On that ground held that the School Board was a corporation. It has to be observed that the School Board was itself constituted under the Bombay Primary Education Act. In Krishnan v. Sundaram 43 Bom LR 562: (AIR 1941 Bom 312), Mr. Justice Kania held that the position of a society registered under the Societies Registration Act, 1860, is like that of a club or a joint stock company, and in order to redress a wro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintainable. It was on the basis of these pleadings that issue No. 2 was raised as to "Whether the society in the suit isboth the plaintiff and the defendant and whether the suit as framed is maintainable." The title in the plaint clearly showed that it was a suit against Vijayashankar, President of the Arya Samaj, and was not a suit against the society of the Arya Samaj in its own name. Mr. Justice Bhagwati, however, considered the questioln as to whether the Arya Samaj was a corporation and came to the conclusion, after exhaustive consideration of the provisions of the Societies Registration Act, that the society registered under the said Act was a legal entity, apart from the members constituting the same and therefore it could sue and be sued in its own name. On the second issue, Mr. Justice Bhagwati allowed the plaintiffs top amend the plaint by describing themselves as members of the Arya Samaj, Bombay, on behalf of themselves and all other members of the Arya Samaj, Bombay, being a society registered under the Societies Registration Act XXI of 1860, "except the defendants". Mr. Amin did not seriously dispute that in view of the description of defendant N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er S. 6, every society registered under this Act may sue or be sued in the name of the president, chairman or principal secretary, or trustees, as shall be determined by the rules and regulations of the society, and, in default of such determination in the name of such person as shall be appointed by the governing body for the occasion. Under S. 7, no suit or proceeding in any Civil Court shall abate or discontinue by reason of the person by or against whom such suit or proceedings shall have been brought or continued, dying or ceasing to till the character in the name whereof he shall have sued or been sued, but the same suit or proceedings shall be continued in the name of or against the successor of such person. Under S. 8, if a judgment shall be recovered against the person or officer named on behalf of the society, such judgment shall not be put in force against the property, moveable or immoveable, or against the body of such person or officer, but against the property of the society. Under S. 14, if upon the dissolution of any society registered under the Act there shall remain after the satisfaction of all the debts and liabilities any property what soever, the same shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ches of Lord Brampton and Lord Lindley in this case. It would be, however, clear from the observations of Lord Brampton at page 442 that as there was no provision in the Trade Union Act of 1871 authorising and directing that the trade union shall sue and be sued in any other name than that given to it by registration, Lord Brampton was of the view that the Legislature in creating a trade union intended that for all purposes the name of the trade union should be used in all legal proceedings, though under section 9 of the same Act the trustees were to hold real and personal property of the society. In the present case however, section 6 of the Societies Registration Act provides that a society registered under that Act may sue or be sued in the name of the president, chairman or principal secretary or trustees as s hall be determined by the rules and regulations of the society and in default of such determination in the name of such person as shall be appointed by the governing body for the occasion. Mr. Justice Bhagwati, however, relied on the observations of Lord Lindley at page 445, who held that the sue of the name of the registered trade union in legal proceedings was a more co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered name of the trade union in legal proceedings would be at least permissive. Under section 5 of the Societies Registration Act, as already indicated, property belonging to the society, if it is not vested in trustees, is to be deemed to be vested for the time being in the governing body of such society and that, in my opinion, would also indicate that the societies registered under the Societies Registration Act would not be corporations. (11) The learned Government Pleader has also appointed out that Mr. Justice Bhagwati refers at page 350 (of Bom LR). (At p. 523 of AIR) in Satayavart Sindhantalankar's case, 48 Bom LR 341: (AIR 1946 Bom 516) to the terminology said to have been adopted by Cozens-Hardy M. R. In Osborne v. Amalgamated Society of Railway Servants (1909) 1 Ch. 163, at p. 174, with reference to a registered trade union as "a species of quasi-corporation;" but in fact that was how a registered trade union was described in the arguments addressed to the learned Master of the Rolls, and the judgment of Cozens-Hardy M. F., does not clearly indicate whether he accepted the argument that a registered trade union would be a species of quasi-corporation. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and be impleaded, and answer and be answered unto, in every Court of Justice within the territories in the possession and under the government of the East India Company." Similar provisions as to incorporation is to be found in all the other Acts. The other Central Acts to which my attention was invited are the Co-operative Societies Act (II of 1912), the Red Cross Societies Act (XV of 1920), the Cantonments Act (II of 1924), the Bar Councils Act (XXXVIII of 1926), the Medical Councils Act (XXVII of 1933), the Damodar Valley Corporation Act (XIV of 1947) and the Employee's State Insurance Act (XXXIV of 1948). All these Acts have specific sections incorporating bodies created by these Acts. The Companies Act of 1913 as well as the Companies Act of 1956 expressly provide for incorporation of companies. The Bombay Co-operative Societies Act (VII of 1925) as well as the Bombay Non-trading Corporations Act (XXVI of 1959) also contain similar provisions. The learned Government Pleader, however, does not dispute that apart from express incorporation, it is possible to have a corporate body, if the Legislature in dealing with it, without expressly incorporating it, manifests an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the president, chairman or principal secretary, or trustees, as shall be determined by the rules and regulations of the society, and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion. The learned Government Pleader has also invited my attention to paragraph 2 of section 10 of the Societies Registration Act, which shows that if the defendant is successful in any suit or other proceedings brought against him at the instance of the society and shall be adjudged to recover his costs, he may elect to proceed to recover the same from the officer in whose name the suit shall be brought or from the society, and in the latter case shall have process against the property of the said society. The provisions of sections 5, 6 as well as paragraph 2 of section 10, it is contended would indicate that the Legislature was really manifesting an intention to withhold incorporation from societies registered under the Societies Registration Act rather than conferring the status of a corporation or a quasi-corporation on these societies. There is a considerable force in this argument. (13) Then it is contended that the term ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been reversed by the Supreme Court, though on another ground, in R. E. S. Corporation v. State of Andhra . (15) In my judgment, societies registered under the Societies Registration Act are neither corporations nor quasi-corporations but are unincorporated societies contemplated under the second part entry 32 of the State List. As I have already indicated, the object of the impugned Act is to regulate and to make better provision for the administration of public religious and charitable trusts in the State of Bombay. The definition of 'public trust' under section 2 (13) of the Act includes a society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act. If all the provisions of the Act are carefully examined, the Act is in the main intended to regulate the administration of public religious and charitable trusts and this subject would fall within the ambit of entries 10 and 28 of the Concurrent List. Even assuming, therefore, that societies registered under the Societies Registration Act are not unincorporated societies but fall within the scope of entry 44, I do not think that the validity of the Act can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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