Calcutta High Court
Jai Surana vs The Calcutta Swimming Club And Ors on 24 June, 2025
Author: Arijit Banerjee
Bench: Arijit Banerjee
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IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
APOT/78/2025
WITH
CS/13/2025
IA NO: GA/1/2025, GA/2/2025
JAI SURANA
VS
THE CALCUTTA SWIMMING CLUB AND ORS.
BEFORE: The Hon'ble JUSTICE ARIJIT BANERJEE
AND
The Hon'ble JUSTICE RAI CHATTOPADHYAY
For Appellant : Mr. Ratnanko Banerji, Sr. Adv.
Mr. Jishnu Choudhury, Sr. Adv.
Mr. Rudrajit Sarkar, Adv.
Mr. Dhruv Surana, Adv.
Mr. Debangshu Dinda, Adv.
For Respondent no. 1 & 2 : Mr. Anindya Kr. Mitra, Sr. Adv.
Mr. Sarvapriya Mukherjee, Adv.
Mr. Yash Vardhan Kochar, Adv.
Mr. Souradeep Banerjee, Adv.
Ms. Shruti Pal, Adv.
Ms. Priyanka Garain, Adv.
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For Respondent no. 3 & 4 Mr. Abhrajit Mitra, Sr. Adv.
Mr. Anirban Ray, Sr. Adv.
Mr. Yash Vardhan Kochar, Adv.
Mr. Souradeep Banerjee, Adv.
Mr. B. N. Joshi, Adv.
Ms. D. Mukherji, Adv.
Respondent no.13 Mr. Sudhir Kumar Mehta, Sr. Adv.
Mr. Anuj Singh, Adv.
Mr. Anurag Bagaria, Adv.
CAV on : 18.06.2025 Judgment on : 24.06.2025 Arijit Banerjee, J. :-
1. This appeal is directed against a judgment and order dated March 20,
2025. By the order impugned, learned Single Judge refused to grant ad
interim relief to the appellant/plaintiff and directed exchange of affidavits.
2. The plaintiff essentially challenges a notice dated January 30, 2025,
issued by the respondent Club placing the plaintiff under suspension and a
notice dated February 6, 2025, whereby the appellant/plaintiff has been
called upon to nominate members of the Club to represent the appellant
before a Special Board for considering the issue of expulsion of the appellant
from membership of the Club.
3. The appellant says that he is a member of the Club for the last 30
years. He is also a past President of the Club.
4. By a WhatsApp message addressed to the members of the Club, the
appellant pointed out certain alleged financial irregularities in the annual
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accounts of the Club which were to be placed for confirmation at the Annual
General Meeting (in short ‘AGM’) scheduled to be held on September 28,
2024. The AGM was duly held. According to the appellant, the issues raised
by him in his WhatsApp message were deliberated upon and the matter
ended there.
5. However, after lapse of about 2 weeks, the appellant received an e-
mail from the Chief Executive Officer (CEO) and Secretary of the Club calling
upon the appellant to confirm whether the said WhatsApp message was
indeed circulated by him. Thereafter, there was exchange of correspondence
between the CEO of the Club and the appellant. The appellant questioned
the authority or jurisdiction of the CEO to call for such confirmation. By a
letter dated October 24, 2024, the CEO of the Club requested the appellant
to appear before the Members Relationship Committee (in short ‘MRC’) on
October 28, 2024, at 1800 hours to explain the contents of the WhatsApp
message referred to above.
6. By an e-mail dated October 27, 2024, the appellant expressed his
inability to be present before the MRC on October 28, 2024, as he would not
be in Kolkata.
7. Thereafter, a meeting was held before the MRC on November 8, 2024,
which was attended by the appellant. The entire meeting was video graphed.
Learned Senior Counsel for the appellant says that till date the Minutes of
the Meeting dated November 8, 2024, held before the MRC, have not been
made available to the appellant in spite of repeated requests and demands.
However, a copy of the video recording has been supplied to the appellant
but the same cannot be a substitute for the Minutes of the Meeting. On
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January 27, 2025, the appellant attended a meeting before the Executive
Committee of the Club as he was requested to do. By a mail dated January
30, 2025, sent to the appellant by the CEO of the Club on behalf of the
Executive Committee, the appellant was placed under suspension under
Rule 22 (b) (ii) & (iii) of the Rules and Bye-laws (Revised 2023) of the
Calcutta Swimming Club. Subsequently a notice dated February 6, 2025,
was issued by the Club asking the appellant to nominate members of the
Club who could represent the appellant before the Special Board
contemplated in the aforesaid Rule 22 for considering whether the appellant
should be expelled from the Club.
8. The appellant has challenged the aforesaid two notices dated January
30, 2025 and February 6, 2025, in the present suit. The appellant’s prayer
for ad interim order of injunction to restrain the respondents/defendants
from giving effect to the said two notices has been refused by the learned
Single Judge. Affidavits have been directed to be exchanged. Hence this
appeal at the instance of the plaintiff.
9. Mr. Ratnanko Banerjee, learned Senior Advocate, representing the
appellant/plaintiff vociferously argued that the plaintiff is sought to be
victimized by the Executive Committee for having brought to light about
financial irregularities in the Club and tampering with the accounts of the
Club. Mr. Banerjee took us through the correspondence exchange between
the CEO of the Club and the plaintiff, in great detail. He mainly urged the
following points:-
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(i) The suspension notice has been issued in breach of the principles of
natural justice. No show-cause notice was issued or served on the plaintiff,
prior to suspending him.
(ii) The issues raised by the plaintiff in the concerned WhatsApp message
were duly discussed at the AGM. Thereafter the plaintiff has done nothing
more which would justify suspension of the plaintiff.
(iii) Referring to Rule 46 of the Club’s Revised 2023 Rules, learned
Counsel said that all audited accounts of the Club, when passed by a
General Meeting, shall be conclusive except as regards any error discovered
therein within three months after passing. Whenever such error is
discovered within that period, the accounts shall forthwith be corrected and
thenceforth shall be conclusive. He said that having detected errors in the
Account, the plaintiff, in good faith, drew the same to the notice of the
members of the Club by circulating the concerned message through
WhatsApp.
(iv) Referring to Rule 51, Mr. Banerjee submitted that the Minutes of each
Meeting of the Committee and each General Meeting of the Club, is required
to be fairly copied in a book and signed by the Secretary and Chairman of
each Meeting. The Minutes of the Annual General Meeting shall be open to
inspection by all members for one month from the date of such Meeting. He
said that no Minutes of the Meeting before the MRC held on November 8,
2025, was ever prepared or made available to the plaintiff. Videograph
cannot be a substitute for Minutes.
(v) Referring to Rule 60 (ii) which pertains to dissolution of the Club, Mr.
Banerjee submitted that in case of liquidation or dissolution of the Club, the
6surplus asset shall be distributed among the permanent members of the
Club. Hence, the plaintiff, who is a permanent member, also has a
proprietary interest which has been adversely affected by the suspension
notice.
(vi) Learned Senior Counsel submitted that it is true that the Courts will
rarely interfere with a Club’s decision. However , the decision must be fair
and in consonance with the principles of natural justice. In this connection
learned Senior Counsel relied on the decision of the Hon’ble Supreme Court
in the case of T.P. Daver v. Lodge Victoria No. 363 S.C. Belgaum and
Ors., reported at AIR 1963 SC 1144, paragraph 8, which reads as
follows:-
“8. The following principles may be gathered from the above
discussion. (1) A member of a masonic lodge is bound to abide by
the rules of the lodge; and if the rules provide for expulsion, he
shall be expelled only in the manner provided by the rules. (2) The
lodge is bound to act strictly according to the rules, whether a
particular rule is mandatory or directory falls to be decided in each
case, having regard to the well settled rules of construction in that
regard. (3) The jurisdiction of a civil court is rather limited; it
cannot obviously sit as a court of appeal from decisions of such a
body; it can set aside the order of such a body, if the said body
acts without jurisdiction or does not act in good faith or acts in
violation of the principles of natural justice as explained in the
decisions cited supra.”
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(vii) On the point of audi alteram partem and the contents of a show-cause
notice, learned Senior Counsel referred to the decisions of the Hon’ble
Supreme Court in the cases of: UMC Technologies Private Limited v. Food
Corporation of India & Anr., reported at (2021) 2 SCC 551; Gorkha
Security Services v. Government (NCT of Delhi) & Ors., reported at
(2014) 9 SCC 105; State Bank of India & Ors. v. Rajesh Agarwal &
Ors., reported at (2023) 6 SCC 1; and Suresh G. Seth & Ors. v. National
Sports Club of India, reported at 2019 SCC OnLine Bom 6683.
10. Mr. Banerjee summed up his opening submission by saying that the
suspension order falls foul of the principles of natural justice, has been
issued with the oblique motive of victimizing the appellant, attaches a social
stigma to the appellant and also affects his property right under Rule 60 (ii)
of the Revised 2023 Rules of the Club. The mala fide of the Executive
Committee of the Club would be evident from the fact that even before being
expelled, the appellant’s name has been removed from the list of members
on the website of the Club. The appellant is a member of the Club for the
last 30 years. The prima facie case made out by the plaintiff and the balance
of convenience warrant grant of interim protection as prayed for. In the
event the plaintiff’s challenge to the suspension notice fails, the Committee
of the Club can always take action against him in accordance with the Rules
and Bye-laws of the Club.
11. Appearing for the respondent nos 1 and 2, Mr. Anindya Kr. Mitra
learned Senior Advocate, submitted that the plaintiff circulated the
concerned WhatsApp message amongst the members of the Club only to
discredit or disgrace the members of the Executive Committee. The act of
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the plaintiff was mala fide . Learned Counsel submitted that in the notice of
the AGM which was issued on September 12, 2024, it was mentioned that
“to facilitate adequate replies to Member’s queries, only questions received
before 20 September will be entertained or replied to. No other questions
would be discussed.” The plaintiff wrote a letter dated September 20, 2024,
addressed to the Secretary of the Club which reads as follows:-
"The Secretary, 20.09.2024 The Calcutta Swimming Club. 1, Strand Road Kolkata Dear Sir,
I am a Member of the club and my membership No. is S 1829
In term of Rule 49 of our club Rules, I would like to raise the following
question in the ensuing Annual general Meeting fixed for 28TH September,
2024.
How much money was spent to renovate the Men’s Changing Room
and Bar No. 1?
Whether any Quotations being taken before the start of work? If yes
from how many Vendors?
Is it not prudent to inform members before spending such huge
amount on renovation?
Is it also not prudent to circulate to all the members the major heads
on which such expenses were made?
Yours truly,
Jai Surana”
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Having done so, it was wholly unnecessary for the plaintiff to circulate
the concerned message on WhatsApp on September 23, 2024, 5 days before
the AGM. He submitted that any member can of course complain of
irregularities in the management or administration of the Club affairs but
the same must be done following the Club Rules / Discipline. The plaintiff’s
letters was placed at the AGM. His queries raised in that letter were
answered. All the issues raised in the WhatsApp message were, however, not
placed by the plaintiff at the AGM. This also shows that the real object of
circulating the message on WhatsApp was to malign the members of the
Executive Committee of the Club.
12. Mr. Mitra submitted that if the plaintiff had a genuine grievance
regarding functioning of the Club or the accounts, he should have directly
approached the committee members or should have written to them. The
conduct of the plaintiff would show that he had no bona fide grievance
regarding the accounts or other affairs of the Club. His attempt was to
poison the minds of the members of the Club just before the AGM.
13. Referring to the correspondence exchanged between the CEO of the
Club and the plaintiff, Mr. Mitra submitted that it took 3 meetings for the
MRC to obtain confirmation from the plaintiff that it was he who had
circulated the concerned message on WhatsApp. If the plaintiff had any
bona fide intention, he would have straight away confirmed that it was he
who had circulated the message. The MRC repeatedly wanted to know the
basis for the allegations made by the plaintiff in the concerned WhatsApp
message. The plaintiff refused to disclose the basis or the reason. This gives
rise to a clear inference that the allegations were and are baseless.
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14. Learned Counsel further submitted that it would appear from a letter
dated November 9, 2024, written by the plaintiff to the Secretary of the Club
that the plaintiff had readily agreed to the proposal of video recording of the
meeting dated November 8, 2024, that was held before the MRC. It is not in
dispute that an unedited copy of such recording has been made available to
the plaintiff. Still, the plaintiff complains that Minutes of the Meeting dated
November 8, 2024, have not been made available to him. No Minutes have in
fact been prepared. The video recording would constitute the Minutes of the
Meeting. The letter dated November 9, 2024, has been suppressed by the
plaintiff which is a material suppression.
15. Learned Senior Counsel then submitted that the plaintiff contends
that the Executive Committee should have raised queries about the
concerned WhatsApp and not the MRC. Such stand is also mala fide. It
would appear from the transcript of the video recording of the meeting dated
November 8, 2024, that the plaintiff wanted MRC to frame the
questions/queries.
16. Mr. Mitra then submitted that there has been no breach of the
principles of natural justice. The Club Rules provide for suspension. The
principles of natural justice are inbuilt in the Club Rules. Rather than
issuing a show-cause notice, the plaintiff was asked to appear before the
Executive Committee on January 27, 2025, so that the matter could be
orally discussed between the plaintiff and the members of the Committee.
This is better than issuing a show-cause notice since there was possibility of
leakage of such notice to outsiders which would not enure to the plaintiff’s
credit.
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17. It was finally submitted that by circulating the concerned message on
WhatsApp, the plaintiff has tarnished the good reputation of the Club and
also the character and good names of the Committee Members thereby
causing annoyance to them. Hence, following Rule 22, the plaintiff has been
suspended. Whether or not he will be expelled as member of the Club will be
decided before a Special Board which would have a large number of people
as members including all Ex-Presidents of the Club who are in Kolkata.
There are presently 19 such Ex-Presidents. The proceedings before the
Special Board will be completely fair and impartial. Decision will be taken by
a majority of votes. If the majority is of the view that the conduct of the
plaintiff does not call for expulsion from the Club, his suspension would be
automatically lifted.
18. We have anxiously considered the rival contentions of the parties.
19. We are prima facie of the view that there was no good reason or
justification for the plaintiff to circulate the concerned message amongst the
members of the Club on September 23, 2024. The plaintiff had already
written a letter dated September 20, 2024, raising queries about the
accounts of the Club. Our attention was not drawn to this letter by the
plaintiff. In our opinion, this letter is very material. The issues indicated by
the plaintiff in his message circulated on September 23, 2024, could easily
have been included in his letter dated September 20, 2024. We deem it
appropriate to reproduce the message that the plaintiff circulated on
September 23, 2024. The message reads thus:-
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“TO ALL THE PERMANENT MEMBERS OF OUR CLUB
Subject: Calling members to Participate in Annual General Meeting to
address pressing issues.
Dear Members,
I do hope this letter finds you in best of your spirits and health.
We are all valued and regular member of our esteemed club, I am writing to
invite you to participate in the upcoming Annual General Meeting (AGM)
scheduled to be held on 28th September, 2024 at 11.00 Am at the club.
It has recently come to light that there have been significant financial
irregularities within the club, which require immediate attention and
collective discussion in an open forum. These irregularities raise concerns
about the financial management and transparency of our club, and it is
imperative that we address these issues together to ensure the integrity and
sustainability of our club’s financial affairs. To summarise some of them:
a. More than 8.25 Cr. has been spend on Building, Furniture and
Fixtures and Equipments in one financial year;
b. Investments coming down by 2.5 Cr.;
c. Gross irregularities in figures which were shown last year and brought
forward this year;
d. No explanation or Schedule being provided to show the applicability of
huge money spend;
e. No prior intimation or permission sought from members before
venturing to spend over 8 Cr. in a financial year.
f. Whether three Quotations were invited before allocating work to a
particular Vendor.
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During the AGM, we will try to provide a detailed overview of the financial
irregularities that have been identified, discuss their potential impact on the
club, and collectively work towards finding solutions to rectify these issues.
Your insights, input, and participation in this meeting are crucial as we
navigate through these challenges and strive to uphold the values of
transparency, accountability, and good governance within our club.
I urge you to mark your calendars and make every effort to attend the AGM
on 28th September, 2024 to contribute to this important discussion and
decision-making process.
Your active participation is vital in shaping the future of our club and
ensuring its financial health and sustainability.
Warm regards,
Yours truly,
Jai Surana”
20. Prima facie the aforesaid message imputes lack of honesty to the
persons in control and management of the affairs of the Club i.e., primarily
the Executive Committee members. Financial irregularities have been
alleged, calling in question the integrity of the persons in management of the
Club. It would have been an entirely different thing if the grievance sought
to be ventilated by the plaintiff by circulating the said message, was
ventilated in the letter dated September 20, 2024 as he was entitled to do
under the Rules of the Club. All such issues could then have been discussed
at the AGM. The tenor of the message in question tends to indicate prima
facie that the plaintiff has circulated the message to disgrace or malign the
office bearers of the Club including the members of the Committee.
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21. We are prima facie of the view that if the plaintiff had any bona fide
concern about the affairs of the Club, he should have discussed the matter
directly with the office bearers of the Club. He can still do so. After all, it is a
Social Club where the members go to relax, for entertainment and to
entertain guests. There should be camaraderie amongst the members of a
Club. Ill feeling or animosity should not have any place amongst them. If a
member like the plaintiff has genuine grievance as regards to any aspect of
the Club, he should take it up personally with the persons running the Club
or place it before the General Body of members following the Rules of the
Club. The course adopted by the plaintiff by circulating the message dated
September 23, 2024, prima facie does not meet with our approval.
22. We have also taken note of Rule no. 22 of the 2023 Revised Rules of
the Club, which reads as follows:-
“Rule No. 22 – Suspension and Expulsion.
(a) Any Member of the Committee may temporarily suspend any Member
from the ‘Use of the Club’, for any breach of Rule or Bye-Laws, until
the next meeting of the Committee, whose decision shall then be
ascertained and made known to the Member concerned.
(b) If it shall be alleged that any Member of the Club has committed a
grave breach of any Rule or Bye-Law, or has been guilty of or
responsible of any conduct, act or omission, whether within or outside
the Club, such as to affect the character or good name of the Club, or
to cause any annoyance to other Members, or if the Committee is
satisfied that a Member or any relation of a Member enjoying the Club
15facilities under the responsibility of that Member, has given any
monies, gratuities or other inducements to any staff of the Club, the
Committee may request such Members to appear before them at such
date, time and place as may be specified, and if the Member shall then
fail to appear as requested, or on appearing, shall fail to give
explanation acceptable to the Committee for the matter alleged, the
Committee shall have the power:-
(i) To caution or reprimand such Member.
(ii) To suspend such Member from the 'Use of the Club' for any
period not exceeding three months.
(iii) Where a Member is suspended as above, to call upon such
Member to resign from the Club.
(c) If having been called upon to resign as above, the Member concerned
shall not do so within twenty-four hours thereafter, the Committee
may refer the matter to the Special Board for decision as to the
expulsion or otherwise of the Member.
(d) The Special Board in such cases shall be constituted as follows:-
Chairman- the President of the Club or in his absence the Vice
President.
Three Members of the Committee nominated by the Committee.
Three Gentlemen Permanent Members nominated by the Member
whose conduct is called in question, should the Member elect to do so.
Such Ex Presidents of the Club as may be in Kolkata.
(e) At any meeting of the Special Board, five shall constitute a quorum.
16
(f) The Chairman of the Special Board shall fix the date, time and place
of the meeting/meetings of the Special Board and he shall have the
casting vote in the event of any equality of votes on any issue.
(g) The Special Board shall enquire into the matter alleged in such
manner and by such procedure as the Special Board may determine.
Meetings of the Special Board shall be in camera, unless the Special
Board shall otherwise direct; and only the Member whose conduct is
called in question and such other persons as the Special Board may
consider necessary, shall be heard and examined.
(h) The Special Board may proceed in the absence of the Member whose
conduct is called in question, should he or she, fail to attend after
notice of any meeting of the Special Board has been given.
(i) The Special Board shall arrive at their decisions by majority vote
either by show of hand or by secret ballot, as the Chairman may
determine, and the Special Board shall have the power to confirm, set
aside, or vary the decision of the Committee under Sub-para (b) above,
or to expel from the Club the Member whose conduct has been called
in question.”
23. We therefore find that the Special Board contemplated under the said
Rule would not only have all past Presidents of the Club who are present in
Kolkata (19 in number as of now, as we are told) but also three members
nominated by the plaintiff if he so wishes. There will be three members
nominated by the Committee and also the President or the Vice President of
the Club. Even if one were to assume – and we do not see any reason for
such assumption – that the President / Vice President or the three members
17
of the Committee nominated by the Committee will not be unbiased, the
other members of the Special Board should be presumed to be impartial and
they are the majority. Therefore, the dispute between the plaintiff and the
Club will almost certainly be considered and decided by the Special Board
fairly, dispassionately and in an unbiased manner.
24. The Rules of a Social Club constitute a contract between the Club and
its members has also the members inter se. All the members are bound by
the Rules. If the Rules provides for suspension and/or expulsion, a member
may be suspended or expelled following such Rules. As observed by the
Hon’ble Supreme Court in the case of Lodge Victoria (Supra), the role of a
Civil Court in resolution of a dispute between a Club and its member or
members inter se is very limited. The Court cannot sit in an appeal over a
decision of the Executive Committee or governing body of a Club. The Court
can at the highest set aside such a decision if it has been taken in bad faith
or in violation of the principles of natural justice.
25. Let us note the observations of the Hon’ble Supreme Court made in
the decisions cited by learned Senior Counsel for the appellant:-
(a) UMC Technologies (P) Ltd. v. Food Corpn. of India and Anr.,
(Supra):-
“13. At the outset, it must be noted that it is the first principle of
civilised jurisprudence that a person against whom any action is
sought to be taken or whose right or interests are being affected
should be given a reasonable opportunity to defend himself. The
basic principle of natural justice is that before adjudication starts,
the authority concerned should give to the affected party a notice
18of the case against him so that he can defend himself. Such notice
should be adequate and the grounds necessitating action and the
penalty/action proposed should be mentioned specifically and
unambiguously. An order travelling beyond the bounds of notice is
impermissible and without jurisdiction to that extent. This Court
in Nasir Ahmad v. Custodian General, Evacuee Property
reported at (1980) 3 SCC 1 has held that it is essential for the
notice to specify the particular grounds on the basis of which an
action is proposed to be taken so as to enable the noticee to
answer the case against him. If these conditions are not satisfied,
the person cannot be said to have been granted any reasonable
opportunity of being heard.”
(b) Gorkha Security Services v. Govt. (NCT of Delhi) and Ors.,
(Supra):-
“21. The central issue, however, pertains to the requirement of
stating the action which is proposed to be taken. The fundamental
purpose behind the serving of show-cause notice is to make the
noticee understand the precise case set up against him which he
has to meet. This would require the statement of imputations
detailing out the alleged breaches and defaults he has committed,
so that he gets an opportunity to rebut the same. Another
requirement, according to us, is the nature of action which is
proposed to be taken for such a breach. That should also be stated
so that the noticee is able to point out that proposed action is not
19warranted in the given case, even if the defaults/breaches
complained of are not satisfactorily explained. When it comes to
blacklisting, this requirement becomes all the more imperative,
having regard to the fact that it is harshest possible action.”
(c) State Bank of India and Ors. v Rajesh Agarwal and Ors.,
(Supra):-
“40. The process of forming an informed opinion under the Master
Directions on Frauds is administrative in nature. This has also
been acceded to by RBI and lender banks in their written
submissions. It is now a settled principle of law that the rule of
audi alteram partem applies to administrative actions, apart from
judicial and quasi-judicial functions. It is also a settled position in
administrative law that it is mandatory to provide for an
opportunity of being heard when an administrative action results
in civil consequences to a person or entity.
41. In State of Orissa v. Dr (Miss) Binapani Dei and Ors
reported at AIR 1967 SC 1269, a two Judge Bench of this Court
held that every authority which has the power to take punitive or
damaging action has a duty to give reasonable opportunity to be
heard. This Court further held that an administrative action which
involves civil consequences must be made consistent with the
rules of natural justice:
“9…. The rule that a party to whose prejudice an order is
intended to be passed is entitled to a hearing applies alike to
20judicial tribunals and bodies of persons invested with authority
to adjudicate upon matters involving civil consequences. It is
one of the fundamental rules of our constitutional set-up that
every citizen is protected against exercise of arbitrary authority
by the State or its officers. Duty to act judicially would therefore
arise from the very nature of the function intended to be
performed : it need not be shown to be super-added. If there is
power to decide and determine to the prejudice of a person, duty
to act judicially is implicit in the exercise of such power. If the
essentials of justice be ignored and an order to the prejudice of a
person is made, the order is a nullity. That is a basic concept of
the rule of law and importance thereof transcends the
significance of a decision in any particular case.”
42. In Maneka Gandhi v. Union of India and Anr reported at
(1978) 1 SCC 248, a seven Judge Bench of this Court held that
any person prejudicially affected by a decision of the authority
entailing civil consequences must be given an opportunity of being
heard. This has been reiterated in a catena of decisions of this
Court.
43. In view of the settled position of law, the next question that
arises before us is the scope and definition of the phrase “civil
consequences”.
44. In Mohinder Singh Gill and Anr v. Chief Election
Commissioner, New Delhi and Ors., reported at (1978) 1 SCC
405, a Constitution Bench of this Court held that “civil
21
consequences” cover infraction of not merely property or personal
rights but of civil liberties, material deprivations, and non-
pecuniary damages. In that case, the Court held that denial of a
democratic right to cast a vote inflicts civil consequences. In D.K.
Yadav v. J.M.A. Industries Ltd., reported at (1993) 3 SCC 259
: 1993 SCC (L&S) 723, a three Judge Bench of this Court
observed that “everything that affects a citizen in his civil life
inflicts a civil consequence”.
45. In Canara Bank v. V.K. Awasthy reported at (2005) 6 SCC
321 : 2005 SCC (L&S) 833 , a two Judge Bench of this Court
succinctly summarised the history, scope, and application of the
principles of natural justice to administrative actions involving civil
consequences in the following terms :
“14. Concept of natural justice has undergone a great deal of
change in recent years. Rules of natural justice are not rules
embodied always expressly in a statute or in rules framed
thereunder. They may be implied from the nature of the duty to
be performed under a statute. What particular rule of natural
justice should be implied and what its context should be in a
given case must depend to a great extent on the fact and
circumstances of that case, the framework of the statute under
which the enquiry is held. The old distinction between a judicial
act and an administrative act has withered away. Even an
administrative order which involves civil consequences must be
consistent with the rules of natural justice. The expression “civil
22consequences” encompasses infraction of not merely property or
personal rights but of civil liberties, material deprivations and
non-pecuniary damages. In its wide umbrella comes everything
that affects a citizen in his civil life.”
46. There is a consistent pattern of judicial thought that civil
consequences entail infractions not merely of property or personal
rights, but also of civil liberties, material deprivations, and non-
pecuniary damages. Every order or proceeding which involves civil
consequences or adversely affects a citizen should be in
accordance with the principles of natural justice.
80. Audi alteram partem has several facets, including the service of
a notice to any person against whom a prejudicial order may be
passed and providing an opportunity to explain the evidence
collected. In Union of India and Anr v. Tulsiram Patel reported
at (1985) 3 SCC 398, this Court explained the wide amplitude of
audi alteram partem:
“96. The rule of natural justice with which we are concerned in
these appeals and writ petitions, namely, the audi alteram
partem rule, in its fullest amplitude means that a person against
whom an order to his prejudice may be passed should be
informed of the allegations and charges against him, be given an
opportunity of submitting his explanation thereto, have the right to
know the evidence, both oral or documentary, by which the
matter is proposed to be decided against him, and to inspect the
documents which are relied upon for the purpose of being used
23against him, to have the witnesses who are to give evidence
against him examined in his presence and have the right to cross-
examine them, and to lead his own evidence, both oral and
documentary, in his defence. The process of a fair hearing need
not, however, conform to the judicial process in a court of law,
because judicial adjudication of causes involves a number of
technical rules of procedure and evidence which are
unnecessary and not required for the purpose of a fair hearing
within the meaning of audi alteram partem rule in a quasi-
judicial or administrative inquiry.”
81.Audi alteram partem, therefore, entails that an entity against
whom evidence is collected must : (i) be provided an opportunity to
explain the evidence against it; (ii) be informed of the proposed
action, and (iii) be allowed to represent why the proposed action
should not be taken. Hence, the mere participation of the borrower
during the course of the preparation of a forensic audit report
would not fulfil the requirements of natural justice. The decision to
classify an account as fraud involves due application of mind to
the facts and law by the lender banks. The lender banks, either
individually or through a JLF, have to decide whether a borrower
has breached the terms and conditions of a loan agreement, and
based upon such determination the lender banks can seek
appropriate remedies. Therefore, principles of natural justice
demand that the borrowers must be served a notice, given an
opportunity to explain the findings in the forensic audit report,
24
and to represent before the account is classified as fraud under
the Master Directions on Frauds.
(d) Suresh G. Seth v. National Sports Club of India, (Supra):-
“5. It is true that ordinarily, no action of a private club qua its
members can be challenged in a court of law save and except when
such action is ultra vires the constitution of the club or is in
breach of principles of natural justice or is actuated by mala fide
or bad faith. At the same time, it is important to note that
expulsion or suspension of a member entails serious civil
consequences. A large part of modern day urban civic life consists
of brotherhood of, and intermingling in, social clubs. Any
expulsion or suspension order, in true sense, has drastic
implications from the point of view not just of private rights of the
persons involved as members of the club, but also their honour
and reputation. These actions cause nothing less than social
disgrace and acute loss of esteem, both self and public. It is also a
notorious fact of club life nowadays that its elections are fought
with such keenness and ferocity that the atmosphere at the club is
completely vitiated, what with conspiracies abounding every now
and then. Bearing all these aspects in mind, we have to assess the
facts of the case and consider the relief. It must also be borne in
mind that the application is presently being considered at an ad-
interim stage, i.e. at a stage even preliminary to the interim notice
where the court considers prima facie merits in a fuller measure.”
25
26. Observance of the principles of natural justice does not necessarily
mean that a written show-cause notice has to be issued to a person against
whom action is proposed to be taken. Granting an opportunity of hearing
should be enough in many cases. Prima facie we find that in the present
case, the plaintiff was given opportunity of hearing not only by the MRC but
also by the Executive Committee. Therefore, prima facie we do not find
violation of the audi alteram partem rule in this case. Therefore, prima facie
we do not find the suspension of the plaintiff to be bad or dehors the Club
Rules or in breach of the principles of natural justice. We have noted the
decisions cited on behalf of the appellant/plaintiff on the point of natural
justice. However, such decisions do not help the appellant in the facts of the
present case.
27. We have also noted the decision of the Bombay High Court in the case
of Suresh G. Seth (Supra). The facts of that case were completely different
and the learned Judge was of the view that placing the plaintiffs in that case
under suspension was a punitive and vindictive measure adopted by the
Club which was not justifiable in the facts of the case. In the present case,
the learned Single Judge has recorded a detailed order while refusing ad
interim relief to the plaintiff. The operative portion of the impugned order
reads as follows:-
“44. In the present case after circulation of WhatsApp message by
the plaintiff, notices were issued to the plaintiff for confirmation
whether the said Circular was sent by the plaintiff or not. To give
an opportunity to the plaintiff, the Member’s Relationship
Committee was formed. The said committee has given personal
26hearing to the plaintiff. After the said meeting, three queries were
made to the plaintiff but the plaintiff has not answered to the said
queries inspite of several opportunities. The Executive Committee
also given an opportunity to the plaintiff to explain the basis of the
allegation in its meeting on 27th January, 2025 but in the said
meeting also, the plaintiff has not explained and again asked for
the Minutes of the Meeting dated 8th November, 2024, though by
an email dated 25th November, 2024, it was informed to the
plaintiff that the meeting dated 8th November, 2024 was video
graphed with the concurrence of the plaintiff and the video
recording should be treated as the Minutes of the Meeting.
Inspite of serval opportunities, the plaintiff failed to answer the
queries, accordingly, the defendants have issued the impugned
order of suspension invoking the provisions of Rule 22(b)(ii) of the
Club.
The plaintiff is placed under suspension and also called upon to
resign from the Club as member under Rule 22(b)(iii). As per Rule
22(c) if the member concerned shall not do so within twenty four
hours thereafter, the Committee may refer the matter to the
Special Board for decision as to the expulsion or otherwise of the
Member. In terms of Rule 22(d), the plaintiff is also entitled to
nominate his three gentlemen permanent members. As per the
provisions of Rule 22(g) the Special Board shall enquire in to the
matter. The plaintiff will again get an opportunity to explain his
grievances before the Special Board. After hearing the plaintiff’s
27grievances, the Special Board of the Club will take appropriate
decision.
The cases relied by the plaintiff are connected with the black
listing and there is no quarrel on the proposition that it is
mandatory requirement to give show cause notice before
blacklisting. In the case of the plaintiff is of suspension pending
enquiry by the Special Board. The plaintiff will get an opportunity
to place his grievances before the Special Board, thus there is no
necessity to issue show cause upon the plaintiff before issuance of
order of suspension.
45. As regard to the maintainability of the suit, this Court has not
gone into at the stage of ad interim relief.
46. This Court finds that the plaintiff has not made out any prima
facie case or balance of convenience or inconvenience in his
favour. The ad interim injunction as prayed for by the plaintiff is
refused at this stage. The defendant nos. 2, 3, 4 and 13 have
already entered appearance accordingly, the plaintiff is directed to
serve notice upon other defendants immediately and the
defendants are directed to file affidavit in-opposition within two
weeks, reply, if any, within a week thereafter.”
28. The learned Single Judge has taken a view and has exercised his
discretion in a particular manner. We cannot say that the order is perverse.
In an intra Court appeal, even if the Appellate Court has a view different
from that of the learned Single Judge, unless the order appealed against is
clearly wrong or perverse, or shocks the conscience of the Appeal Court, no
28
interference with the order is warranted so long as the order reflects a
plausible view.
29. The plaintiff’s application for interim relief is pending before the
learned Single Judge. The learned Judge directed exchange of affidavits. We
are told that affidavits have not yet been exchanged.
30. The respondents will be at liberty to the affidavit in-opposition before
the learned Single Judge within a week from date. Reply thereto, if any, be
filed within a week thereafter. The parties may pray for early hearing of the
interlocutory application before the learned Single Judge. His Lordship may
consider such prayer as per His Lordship’s convenience.
31. The appeal and the connected application stand disposed of
accordingly. There will be no orders as to costs.
32. We clarify that all observations in this order are prima facie and have
been made only for the purpose of disposing of this appeal. Learned Single
Judge is requested to decide the plaintiff’s interlocutory application as well
as the suit (as and when the occasion arises) independently, in accordance
with law, without being influenced by any observation in this order.
33. Urgent Photostat certified copies of this judgment, if applied for, be
supplied to the parties on compliance of all necessary formalities.
(Arijit Banerjee, J.)
I agree.
(Rai Chattopadhyay, J.)