Tribunal nullifies unauthorized memberships, orders removal, and rectification

The Tribunal declared the enrollment of Respondent Nos. 2 to 20 as null and void due to lack of authorization from a General Meeting, violating the Articles of Association. It was found that the Director Board lacked authority to enroll new members without General Meeting sanction. The Tribunal recognized the Appellant's valid membership status and highlighted irregularities in granting loans to new members. The appeal's limitation and maintainability were questioned but not considered due to late submission. The Tribunal ordered the removal of the unauthorized members and directed rectification of the Register of Members within one month.

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Issues Involved:
1. Legality of the resolutions passed by the superseded Director Board enlisting new members.
2. Compliance with the Articles of Association (AOA) in the enrolment of new members.
3. Authority of the Director Board to enroll new members without the sanction of the General Meeting.
4. The validity of the Appellant's membership status.
5. Loans granted to new members and their compliance with the AOA.
6. Limitation and maintainability of the appeal.

Issue-wise Detailed Analysis:

1. Legality of the Resolutions Passed by the Superseded Director Board Enlisting New Members:
The Appellant argued that the enrolment of Respondent Nos. 2 to 20 as new members was illegal and violated the Articles of Association (AOA) of the Company. The Tribunal found that the resolutions passed to enroll these new members did not indicate any authorization from a General Meeting, which is a mandatory requirement under the AOA. The Tribunal declared the enrolment of Respondent Nos. 2 to 20 as null and void.

2. Compliance with the Articles of Association (AOA) in the Enrolment of New Members:
The Tribunal examined Articles 1 to 5 of the AOA, which outline the conditions for the enrolment of new members. Article 2 specifically states that the General Meeting must find it necessary to enlist more members and authorize the Director Board to do so. The Tribunal found no evidence that any General Meeting had authorized the enrolment of Respondent Nos. 2 to 20, thus violating the AOA.

3. Authority of the Director Board to Enroll New Members Without the Sanction of the General Meeting:
The Tribunal agreed with the Appellant and the Administrator that the Director Board had no authority to enroll new members without the sanction of the General Meeting. This was supported by the absence of any General Meeting minutes authorizing such enrolment and the order of the Munsiff Court, which stated that policy decisions, including the enrolment of new members, should be taken only with the approval of the General Body.

4. The Validity of the Appellant's Membership Status:
The Tribunal noted that the Appellant had been a member of the Company since 1986 and had served in various capacities. Despite receiving a notice of removal from membership, the NCLT had previously declared this removal as null and void. Thus, the Tribunal recognized the Appellant as a valid member of the Company, qualified to file the application.

5. Loans Granted to New Members and Their Compliance with the AOA:
The Tribunal found that several Respondents had received loans from the Company without any application, security, or agreements, which violated the AOA. The AOA did not provide any provision for the Director Board to sanction loans to members, further highlighting the irregularities committed by the superseded Director Board.

6. Limitation and Maintainability of the Appeal:
During the course of arguments, the Respondents raised an issue regarding the limitation and maintainability of the appeal. However, the Tribunal noted that this issue was not part of the original pleadings or counter filed by the Respondents and therefore could not be considered at this late stage without giving the opposite party an opportunity to counter the same.

Conclusion:
After thorough examination and consideration of the arguments and records, the Tribunal concluded that the enrolment of Respondent Nos. 2 to 20 was done in clear violation of the Articles of Association of the Company. The Tribunal ordered the removal of these Respondents from the Register of Members and directed the Company to rectify the Register of Members accordingly and file the necessary documents with the Registrar of Companies, Kerala, within one month from the date of the order.

Dated this the 21st day of December 2021.

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