Plaintiff - Singh Sabha Canada

IN THE CIRCUIT COURT OF THE TWENTY-SECOND JUDICIAL
CIRCUIT,
McHENRY COIINTY, ILLINOIS.
Harminder Singh Khaira,
Plaintiff
vs.
Guru Nanak Sikh Mission of America, inc.,
Illinois not for profit corporation;
Daljit Singh, individually and as a
director of Guru Nanak Sikh Mission of
Americ4 Inc., et al.
an
Baba
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Defendants
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No.09CH383
C@PY
DECISION
This matter was tried to the bench over several afternoons on the plaintiff
s Second
Amended Verified Complaint For An Accounting And Other
Relief filed May 19, 2010. The
other relief plaintiff prayed for is a compelled meeting of
the board of directors in Count
either a judicial dissolution or the appointment of a custodian in
Count
III.
II
and
The court has heard
the testimony of the witnesses and has considered the exhibits
received in evidence, the
arguments of counsel and is otherwise
fully advised in the premises. The court concludes as
follows.
This court has jurisdiction of the subject matter of this case. The court
has personal
jurisdiction of the plaintiff, the corporate defendant
and of Babit Daljit Singh, Avtar Singh Deol,
Kanjalwit Singh, and Gurbachan Singh. Service of process was not
accomplished on Kashmir
Singh.
The articles of incorporation (plaintiff s Exhibit
2) were filed with the Semetary of State
March 6,1996. The articres identify five incorporators.
Daljit singh is one of them. The
plaintiff is not one of them.
on
January 9, 1998
Daljit
Singh and Jaspal K. Randhawa conveyed real
estate to the
corporation by wananty deed. The property is
commonly known as2l7 W. State Road, Island
Lake' Illinois 60042' (PlaintifPs Exhibit 5) The
congregation began worshiping at this location.
The congregation continued to do so until December
2011 when the mission building was
ordered closed by the
village of Island Lake, Illinois
as a matter of
public safety. (plaintiffs
Exhibit 61)
There are significant corporate governance issues. plaintiff
s exhibits 4, 6,7,and g were
delivered to plaintiff by Baba Daljit Singh along
with Defendant Baba Daljit Singh,s Response
To Request To Produce. (Plaintiff s Exhibit
35)
These documents are inaccurate, incomplete
and deceptive' Each corporation is required to
keep correct and complete books and records
of
account and minutes of the proceedings of its
members, board of directors and committees. See
805
ILCS
1051107
'75(a) The corporation has not complied with this obligation. This failure
to
comply is detrimental to the members because the
lack of complete and accurate records makes
corporate governance impossible, leads to frustration
of corporate purposes and makes expensive
disputes such as this one all the more likely.
Plaintifrs Exhibit 4 purports to be the minutes of the first
meeting of the incorporators
held January 7, 1998. The court notes the lapse
of twenty-two months from the filing of the
articles of incorporation to the date of Plaintiff
s Exhibit
4.
The exhibit identifies plaintiff as
being not only present at the meeting but also
,..
oS,
. . a subscriber to the Certificate
Incorporation . . .". Examination of plaintiff
s
of
exhibit 2 makes it clear plaintiff was not a
subscriber. Moreover, plaintiff credibly testified he had nothing to do with the
corporation in
1998. He testified he began worshipping at the mission
in
1999 and he then became a member
of the board of directors in March 2003. The name "Harminder Singh Khaira"
with plaintiff
address
s
first appears on the annual reports filed with the secretary of state for 2003. He was
listed as a director. See Plaintiff s Exhibit 10, page
3.
The court finds plaintiff did not attend
the January 7,1998 meeting, the minutes of that meeting are deceptive and
plaintiff
s
Exhibit 4
is a fraud.
Plaintiff s Exhibit 6 purports to be the minutes of the first membership meeting of the
corporation held May 10, 1998. The exhibit states that plaintiff was elected vice-president
of the
corporation. The exhibit also states that the by-laws were adopted. The by-laws are plaintiff
exhibit 7. ln "Article Eight
-
Offrcers" on page 16 of plaintifls exhib it 7 thereader can
s
see
plaintiffls name set opposite the office of vice-president and then struck through. plaintiff
has
credibly stated he had nothing to do with the corporation before 1999. The court again notes
the
lapse of time from the
Plaintiff
s
filing of the articles of incorporation to the first meeting of the members.
Exhibits 6 andT are frauds.
There are additional reasons to question the authenticity of plaintiff s exhibit 7, the so
called by-laws adopted by the membership May 10, 1998. In "Article Seven
-
Board
of
Directors" on page l4the document creates five director positions. The article does not provide
for either the election of directors or the expiration of their terms. Election of directors is
statutorily required. 805 ILCS 108.10(c) and (d); and see Muhammad v. MuhammadRahmah, 363 lll.App.3d407,416,g44N.E.2d 49,57,300IIl.Dec.377,3g5(l'tDist.,2006)
Additionally, page 14 does not track with page 15. The last sentence on page 14 ends with
a
period. Page 15 begins with a fragment of a sentence. The exhibit appears to have been hastily
cobbled together for purposes other than accurate record keeping.
PlaintifPs Exhibit 8 purports to be the minutes of the first meeting of the board of
directors held May 10, 1998, twenty-six months after the filing of the Articles of Incorporation
with the Secretary of State. The only corporate office filled at the meeting was that of corporate
secretary. The minutes state that plaintiff was present at the meeting. Plaintiff has credibly
testified to the contrary. Plaintiff s exhibit 8 is a fraud.
Defendant Daljit Singh insists there are 101 members of the corporation. These members
are entitled to vote unless their right to do so has been
limited or denied by either the articles of
incorporation or the by-laws. 805 ILCS 1051107.40(a) The articles of incorporation (plaintiff s
exhibit 2) are silent as to voting rights. There is no credible evidence by-laws were ever adopted.
Each
of 101 members is therefore entitled to vote. Yet the corporation has no membership
records and consequently no ability to objectively
fix the class of eligible voters. It is more
probably true than not that the parties to this case are members of the corporation, however it is
impossible to determine the identity of all the members.
The lack of membership records is perfectly consistent with the lack of elected directors,
the lack of properly adopted by-laws and the lack of complete and accurate minutes. The lack
of
elected directors coupled with the lack of properly adopted by-laws implies the lack of duly
elected, properly appointed or validly chosen corporate
officers. See 805 ILCS 108.50(a) This
corporation has not complied with any provision of the General Not For Profit Corporation Act
of
1986
following the fiting of the articles of incorporation.
There is no preponderance of evidence that plaintiff or for that matter anyone else is a
director or an officer of this corporation. There is no preponderance of evidence plaintiff
s
directorship properly commenced in 2003. He was never elected. Plaintiff was appointed to the
board by Daljit Singh who himself had never been elected.
The court finds the issues in each count in favor of the plaintiff and against all
defendantS. The dissolution of the corporation prayed for in count III would make the relief
requested in count
I and count II impractical and unnecessary.
Plaintiff cites Muhammad v. Muhammad-Rahmah, 363 Ill.App.3d 407,844 N.E.2d 49
(1't Dist., 2006) and asks the court to refrain from dissolving the corporation and to instead
appoint a custodian. The case involved the Muhammad Islamic Corporation's operation of a
mosque on real estate donated to the corporation by Jabir Muhammad, one of the three original
directors of the corporation. The appellate court was of the opinion that the trial court was
correct when it found against the plaintiff based on a lack of evidence that Jabir Muhammad had
ever been elected to the directorship he claimed. The court noted the paucity of evidence that
any of the so called directors validly held that position. Nevertheless, the appellate court
declined to merely affirm the trial court. Instead, the appellate court was of the opinion a
custodian ought to have been appointed by the trial court. The appellate court wrote,
fw]hile the circumstances of this case would normally warrant
dissolution, we believe such a remedy is uncalled for in this
situation. The parties have made it apparent that this Corporation
still serves a vital interest in the community, and we believe that its
compulsory absence would only be a detriment to the congregation
it cunently serves. Furthermore, a forced dissolution could lead to
the establishment of rival institutions by the disparate factions
represented in this case, which we feel would only lead to future
confrontations before this court. Muhammad v. MuhammadRahmah, 363 lll.App.3d at 419,844 N.E.2d at 59,300 Ill.Dec. at
387
The Muhammad Islamic Corporation differs from the Guru Nanak Sikh Mission Of
America, inc. The former operated a mosque, a place of worship. The latter no longer operates a
place of worship. The Village of Island Lake, Illinois closed the temple in December 2011 for
reasons of public safety. The corporation was unable to afford the necessary repairs. Thereafter
the corporation attempted to convey the real estate to Baba Daljit Singh and Jaspal Kaur
Randhawa by warranty deed dated October 14,2011.
(Plaintiff s Exhibit 64) BabaDaljit Singh
and Jaspal Kaur Randhawa then attempted to convey the real estate to Harpreet S. Saini, a
creditor of the corporation, by quitclaim deed dated December 16, 2011. Jaspal Kaur Randhawa
and Harpreet S. Saini are not before the
court. The validity of their titles is not an issue in this
case.
The absence of a place of worship means the corporation no longer serves a vital interest
in the community. The congregants have worshiped at other temples since December 2011. The
corporation does not currently serve a congregationat2IT W. State Road, Island Lake,Illinois.
The absence also means the
rival factions no longer have this real estate over which to battle.
There are additional reasons to dissolve the corporation rather than appoint a custodian.
The lack of accurate and reliable corporate records
will
make
it impossible for
a custodian to
identiS the members of the corporation entitled to vote. The corporation has few assets. The
corporate debts are significant. The debts are not paid as they fall
due. The corporation
has no
ability to pay a custodian.
The Muhammad court noted the circumstances of that case would normally wanant
dissolution. The circumstances of the Guru Nanak Sikh Mission Of America, inc. are even more
egregious. Those in control of the corporation are acting in a manner that is oppressive and
fraudulent. The corporate assets are being misapplied and wasted. The corporation will be
dissolved. Counsel for plaintiff must prepare a judgment dissolving the corporation. The matter
will
be continued to a future date for entry of the judgment at which time the court
will
also hear
argument on the appointment of a liquidating receiver authorized by 805 ILCS 105/112.60(e).
The matter of Baba Daljit Sing's alleged contempt of Judge Meyer's September 7,2011
and September 15, 2011 orders remains pending. Judge Meyer's order of September 15,2011
recites, in part,
".
. . - the parties are not to encumber or dissipate the assets of the defendant
organization . . ." Dissipate means to destroy or waste, as to expend funds foolishly. In re
Marriage of Hasshenas,234Ill.App.3d 178, 197-198,600N.E.2d 437,45,175 lll.Dec.506,
520 (z"d.Dist., 1992)
On October 14,2011 Baba Daljit Singh signed a October 14,2011 wananty deed
as
grantor on behalf of the corporation. (PlaintifPs Exhibit 64) He was also one of the two
grantees. The other was Jaspal K. Randhawa. The corporation received nothing in exchange for
the conveyance. This is waste.
Baba Daljit Singh aftempts to excuse his behavior and claims to be entitled to the real
estate by virtue of
plaintiffls exhibit 66,"Agreement of Transfer of property to Guru Nanak Sikh
Mission"o purporting to have been made contemporaneously with the conveyance of the real
estate to the corporation,
plaintiff s exhibit
5.
The two exhibits have nothing to do with each other. Plaintiff s exhibit 5 is a warranty
deed. The words "warranty deed" are printed in bold block letters at the top of the deed. In
plaintifls exhibit
66, paragraph 8, are the words, "This agreement shall be part of the quit claim
deed signed by the grantor on the 9th day of Jan, 1998.
All the conditions, covenants
and
restrictions stated in this agreement shall become the part of the quit claim deed made by the
grantor on the 9th day of Jan, 1998." The parties to the exhibit intended the conditions to apply
to
a
transaction involving a quitclaim deed. The conditions in plaintifPs exhibit 66 became part
of a quitclaim deed. Those conditions did not become part of the warranty deed, plaintiff
s
exhibit 5.
Additionally, plaintiff
s
exhibit 66 is defectively executed. Only four of the five
incorporators signed plaintiff s exhibit 66 on behalf of the mission. Jaspal K. Randhawa, an
incorporator, did not sign on behalf of the mission. Daljit Singh signed as grantor and then again
and separately on behalf of the Guru Nanak Sikh Mission Of America.
Assuming the agreement applied to the warranty deed, Daljit Singh has not explained
which conditions of plaintiff s exhibit 66 had been breached by the corporation, thereby
justifying reversion. The corporation and Daljit Singh are aligned
evidence the corporation breached any of the conditions. Baba
the real estate by virtue of
plaintiff s exhibit
as
defendants. There is no
Daljit Singh was not entitled to
66.
Next Baba Daljit Singh participated in the conveyance of the real estate to Harpreet S.
Saini, testifuing this grantee agreed to pay the lien holders on the real estate. One of the lien
holders is Baba Daljit Singh. His lien is in the amount of $75,000.00. (Plaintiffls Exhibit 63).
The other liens are held by Gurdit Singh Saini, $140,000.00 (Plaintiff s Exhibit 62); Gurmit
Singh Bhola, $65,000.00
(Plaintiff s Exhibit 39); and the Internal Revenue Service, $7,I41.79,
(Plaintiff s Exhibit 38). Nobody has offered an opinion
real estate on either October 14,2071 or December 16,
as
to the fair cash market value of the
201I.
In reviewing the exhibits the court noted plaintifls exhibit 33, the corporation's federal
income tax return for 2007
. On page 4, line 57 a, the corporation
claims a basis in land and
buildings of $396,832.00 before depreciation. In plaintifls exhibit 66, the reverter agreement
pertaining to 217 W. State Road, Island Lake, Illinois the defendants valued the property at
$350,000.00. The court agrees with the defendants. The value of the real estate is $350,000.00.
Assuming the grantee does as Daljit Singh testified the grantee promised to do, the value
of the real estate exceeds the liens by $62,858.71 and Daljit Singh has dissipated the corporate
assets in
this amount. He will receive $75,000.00 in satisfaction of his lien for doing so.
Assuming the grantee does not do as he is said to have promised then Baba Dalji Singh's
dissipation is even greater. The court finds Baba Daljit Singh to be in contempt of court for
wasting the corporation's assets in defiance of Judge Meyer's order.
The court will conduct a sentencing hearing. Counsel for plaintiff and counsel for Baba
Daljit Singh must
be prepared to argue whether a purge is available and,
if
so, what the purge
ought to be. If no purge is available, the proper punishment is the only issue. Baba Daljit Singh
will
have the opportunity to speak at the sentencing hearing.
Joseph P. Condon, Judge