WB Registration Act | Registrar Cannot Exercise Power Of Substantive Review While Cancelling Society's Registration : Supreme Court

The Supreme Court has upheld the decision of the Calcutta High Court where it was held that the Registrar of Society can only cancel registration granted to a society under the West Bengal Registration Act, 1961, by exercising a power of procedural review. The High Court was of the view that there is a vital difference between a power of substantive review and procedural review, and the former was not available to the Registrar while deciding an application for cancellation of registration.

The High Court observed that the Registrar had proceeded to exercise his power of substantive review, that too without reference to the application for registration that succeeded, while passing the cancellation order.

The bench of Justices Aniruddha Bose and Sudhanshu Dhulia thus upheld the order passed by the High Court, remanding the matter to the Registrar for a fresh decision on the application for cancellation of registration filed by the opposite party.

The top court was dealing with a dispute between two groups of Chinese tannery owners in Kolkata over the control of a school.

The Chinese Tannery Owners’ Association was registered as a society in the year 1967 under the West Bengal Societies Registration Act, 1961. The society claimed that the ‘Pei May Chinese School’, which had come into existence in the year 1929, was a sister organisation of the said Association and was being operated by the Association.

Dispute arose between the parties when the Registrar, under the 1961 Act, granted certificate of registration in the name of ‘Pei May Chinese High School’ as an independent society, in response to an application made by the respondents. It was the case of the appellant-Association that the respondents had no connection with Pei May Chinese High School.

The Association, thereafter, sent a letter to the Registrar, requesting for cancelling the registration of ‘Pei May Chinese High School’ as a society, alleging that the application for registration filed by the respondents consisted of forged signatures. The Registrar, however, was of the view that no case of forgery was made out.

Thereafter, several rounds of litigation were initiated by the two groups.

In 2016, the Division Bench of the Calcutta High Court, vide order dated January 14, 2016, noted that since a criminal case was pending qua the allegation of forgery against the respondents, the Registrar’s observation that the concerned signatures were not forged, was premature.

The Division Bench held that even though there is no substantive power of review provided in the Act of 1961, however, the power of procedural review is inherent within the authority who passes the order under the Act. Accordingly, the court upheld the order of the Single Judge who had remanded the matter to the Registrar of Societies for a fresh consideration of the application.

Thereafter, the Registrar passed an order cancelling the registration of the ‘Pei May Chinese High School’ society. The Registerer in its order observed that, as per the Memorandum of Association (MoU) of the appellant-Association, the school would run under its control. Thus, if a new society was to be registered with respect to the school, the same would require an amendment of the MoU. Since, the appellant-Association had not applied for such amendment of their MoU, the Registrar held the registration was obtained by suppression of fact and was thus, liable to be cancelled.

The Single bench of the Calcutta High Court upheld the order of the Registrar. However, there was a difference of opinion between the judges of the Division Bench, in appeal. Accordingly, the matter was referred to a third/Referee Judge.

The Referee Judge observed that the 1961 Act expressly bars registration of a society under a name which is identical with, or too nearly resembles, the name of any other society which has been previously registered. However, in the present case, the Referee Judge observed, the names of the two societies were different, although, the appellant-Association had been registered with a disclosure that the school was its sister organisation.

The Referee Judge ruled that the issue whether registration obtained by respondents in the name of Pei May Chinese High School, was the result of any fraud or was otherwise statutorily barred, was not clearly reflected in the order of cancellation passed by the Registrar. For an allegation of suppression of material fact to succeed, the court said, the party alleging it has to prove the same by reference to documents which were on record at the time the opposite party’s application for registration was being considered.

The Referee Judge concluded that the Registrar, while passing the cancellation order, did not act within the parameters of the jurisdiction laid down by the Division Bench in its order dated January 14, 2016. This was so, the court said, because the Registrar proceeded to exercise a power of substantive review, which was not available to him in terms of the Division Bench’s order, and that too without reference to the application for registration filed by the respondents, that later succeeded.

The Referee Judge further said that if at all there was suppression on the part of the respondents, it had to be shown that such suppression was akin to a fraud that had resulted in an order granting registration in violation of a statutory provision. The same, however, was not shown, the court said. Accordingly, the court ruled the Registrar had no power to cancel the registration earlier granted in the name of ‘Pei May Chinese High School’ on the ground of suppression of material facts.

The Referee judge, thus, further remanded the matter to the Registrar for taking an appropriate decision, in light of the observations made in the reference and the order dated January 14, 2016 of the Division bench.

In the appeal filed before the Supreme Court against the decision of the Referee Judge, the court said:

“We are of the view that the impugned judgment does not suffer from any legal shortcoming warranting our interference.”

Upholding the decision of the Referee Judge, the top court added:

“It has also been argued before us that Chinese Tannery Owners’ Association is the owner of the land where the subject school is located. On this point, we would add that in the event the respondents cannot demonstrate their right to run the school on the land owned by the said Association without their permission, that factor may also be taken into consideration by the Registrar and that could also be a ground for cancellation of registration. But any decision on that count shall be subject to final adjudication by the civil court if an action on that count is pending before the civil court.”

Case Title: CHEN KHOI KUI vs LIANG MIAO SHENG & ORS

Citation : 2023 LiveLaw (SC) 796

Counsel For Appellant(s): Mr. Siddhartha Mitra, Sr. Adv. Mr. Kunal Chatterji, AOR. Ms. Maitrayee Banerjee, Adv. Mr. Sumitava Chakraborty, Adv. Mr. Rohit Bansal, Adv. Ms. Kshitij Singh, Adv.

Counsel For Respondent(s): Mr. Rana Mukherjee, Sr. Adv. Ms. Daisy Hannah, AOR Ms. Oindrila Sen, Adv. Mr. Chanchal Kumar Ganguli, AOR Mr. Soumitra G.chaudhuri, Adv. Ms. Tuli Ghosh, Adv.

West Bengal Registration Act, 1961:

The Supreme Court has upheld the decision of the Calcutta High Court where it was held that the Registrar of Society can only cancel registration granted to a society under the West Bengal Registration Act, 1961, by exercising a power of procedural review. The High Court was of the view that there is a vital difference between a power of substantive review and procedural review, and the former was not available to the Registrar while deciding an application for cancellation of registration.

The High Court observed that the Registrar had proceeded to exercise his power of substantive review, that too without reference to the application for registration that succeeded, while passing the cancellation order.

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