'All Members Entitled To Vote' : Kerala High Court Revokes Centre's Order Upholding Representative Voting At SNDP Yogam Elections

The Kerala High Court on Monday annulled the order issued by the Central Government in 1962 which upheld representation voting at the Sree Narayana Dharma Paripalana (SNDP) Yogam elections. 

Unlike the past 46 years, now all members will have the right to vote in the elections. This decision comes in the backdrop of the next election scheduled to take place on February 5.

While setting aside the order of the Central Government, Justice T.R. Ravi observed: 

"It is declared that clause 44 of the Articles of Association of the SNDP Yogam is ultra vires the statutory provisions contained in the Companies Act, 1956 read with the provisions of the Kerala Non-Trading Companies Act,1961. It is declared that all the members of the Yogam have a right to vote in any election to be held by the Yogam."

The SNDP Yogam was originally incorporated as a Company under the Travancore Regulations, which was the equivalent of the Indian Companies Act, 1882 to promote religious and secular education and industrious habits among the Ezhava community.

The Yogam continued to be governed by the Companies Act, 1956 till the Kerala Non-Trading Companies Act,1961 came into force in 1962. 

Clause 47 of Articles of Association of the Yogam says that in the general meeting of the Yogam the members of the Director Board, Union Presidents, Union Secretaries and 1% of the selected permanent members of the Unions, will be entitled to participate.

This stipulation was based on a resolution dated 1966 prior to which all members were entitled to participate in the General Meeting.  

However, a Division Bench in P.C.Aravindhan v. M.A.Kesavan & Ors. [1973 KLT 70] declared this clause void holding that every member of a Company was entitled to take part in its administration, that right can be exercised only in the meeting of shareholders and that such right cannot be restricted.

This decision was made on the basis that the Companies Act, 1956 governs the SNDP Yogam.

Aggrieved by the same, the Yogam approached the Centre under Section 25(6) of the Companies Act, requesting to exempt it from Section 172(2), 219 and Article 14 of Table C which says that "every member shall have one vote".

The Central Government issued an order granting exemption to the Yogam from the above provisions.

Challenging this order of the Centre, the petitioners moved the High Court. They sought to quash this order for the reason that the Central Government did not have any power to grant an exemption, since the Yogam was governed by the Kerala Act.

Even though the challenge was made after several years of the issuance of this order, the petitioners argued that the illegality should not be allowed to be perpetrated, even if the actions taken so far are to be protected to the possible extent.

Senior Advocate Joseph Kodianthara appearing for the petitioners submitted that all the members were entitled to vote at the time of formation of the Company till 1966. Advocates K. Jagadeeschandran Nair and D. Anil Kumar also advanced arguments on behalf of the petitioners. 

Advocate A.N. Rajan Babu appearing for the Yogam contended that the Memorandum and Articles of Association have a binding force and are to be treated as a statutory agreement to which all the members have subscribed to. ASGI S. Manu and Government Pleader Deepa Narayanan also appeared for the respondents in the matter. 

The crucial question to be decided was whether every member of the SNDP Yogam has a right to vote.

The Court noted that if the Yogam is a Company Limited by Shares, by operation of Section 87(1)(a) of the Companies Act, every member will have a right to vote. On the other hand, if the Yogam is a Company Limited by Guarantee, then its Articles of Association should be in one of the forms in Table C, D or E. 

According to the Yogam, Table C will apply, but Clause 14 of Table C says that "every member shall have one vote". Whether the Yogam can delete the said clause and restrict the voting right to one representative for every 200 persons was then to be decided. 

The Judge noted that the impugned order of the central government was issued on the basis of an application preferred much after 1962. Therefore, it was not issued by the competent authority and hence cannot stand the test of law.  

The SNDP Yogam had argued that owing to the passage of more than 46 years, this order should be treated as legal since many actions had been taken on the basis of the validity of the order. 

However, the Court remarked that the legal maxim referred to by the respondents only means that things which had been done over the years, by the passage of time, lends them a presumption that they were performed rightly. 

As far as official acts are concerned, the applicability of the maxim is that "everything is presumed to be rightly and duly performed until the contrary is shown". 

Therefore, it was held as follows: 

"I am hence of the opinion that Ext.P5 cannot be held to be legal solely for the reason that several years have passed after it was issued. Since the correctness of the order has been specifically challenged before the Court of law, once the court finds that the order has been issued without authority of law and by persons not competent to issue the same, as per Section 25(6) of the Companies Act, 1956, as modified by Section 3 of the Kerala Act, this Court cannot allow the illegality to be perpetrated any further."

Accordingly, the plea was allowed. 

Case Title: V. Vijayakumar & Anr v. SNDP Yogam & Ors.

Citation: 2022 LiveLaw (Ker) 38

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