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Ramlath Memorial Charitable Trust & Others v. Peerukannu & Others

Kerala High Court
Nov 13, 2009
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Structured Summary of the Opinion

Factual and Procedural Background

The revision challenges an order of the Additional District Judge-II, Thiruvananthapuram granting respondents 1 to 4 leave to institute a suit under Section 92 of the Code of Civil Procedure against the 1st petitioner, described as a public charitable trust. On an earlier occasion the leave previously granted by the court below had been challenged and this Court set that order aside because the contesting respondents had not been given a meaningful opportunity; the matter was remitted to the court below for disposal in accordance with law. After the remittal, the court below heard both sides, marked several documents (Exts. A1 to A13 for petitioners and Exts. B1 to B3 for counter-petitioners) and passed the impugned order. The impugned order, as recorded, relied principally on Ext. A1 (the copy of the trust deed) when deciding the question of leave.

In the original petition (O.P.), respondents 1 to 4 (petitioners in the O.P.) claimed to be well-wishers and beneficiaries of the trust and alleged mismanagement, malpractices and misappropriation of trust funds by respondents 3 to 6, who were then managing the trust. The O.P. sought multiple reliefs including a declaration that removal of two original trustees by a subsequent registered deed was illegal and violative of the trust objects, that the subsequent deeds are null and void, framing of a scheme for the trust, appointment of new trustees, and prohibitory orders to prevent alienation of trust property.

The present revision petition was filed by respondents 3 to 6 (who opposed the O.P.) challenging the maintainability of the O.P. and contending, among other things, that the petitioners in the O.P. were incompetent to seek leave under Section 92, that the proceedings were mala fide and instigated by another litigant who had earlier filed and withdrawn a suit, and that some claimed reliefs fall outside the scope of suits maintainable under Section 92.

Legal Issues Presented

  1. Whether respondents 1 to 4 (petitioners in the O.P.) have the requisite interest in the public charitable trust to obtain leave under Section 92 of the Code of Civil Procedure.
  2. Whether the leave granted by the court below was vitiated by the alleged mala fide initiation of proceedings at the instance of another litigant who previously filed a suit against the trust.
  3. Whether some of the reliefs sought in the O.P. are outside the scope of reliefs permissible under Section 92 of the CPC and if that affects the grant of leave.

Arguments of the Parties

Revision Petitioners / Respondents 3 to 6 (challengers of leave)

  • The petitioners in the O.P. are not entitled to seek the claimed reliefs and are incompetent to apply for and obtain leave under Section 92 because the petition contains only a bald allegation that they are “well wishers and beneficiaries” without any material showing a real interest in the trust.
  • The petition was filed at the instance of the 5th respondent (who had earlier filed a suit and later withdrew it), indicating that the O.P. is to vindicate private rights rather than public rights of the trust.
  • Some of the reliefs sought by the O.P. fall outside the scope of Section 92 and therefore the application for leave is not properly framed.

Respondents 1 to 4 (petitioners in the O.P.) and the 5th Respondent

  • The court below granted leave after a meticulous examination and correctly found no merit in the objections raised by respondents 3 to 6 opposing the application for leave.
  • Ext. A1 (trust deed) prima facie discloses a public charitable trust created to perpetuate the settlor's mother's memory and to establish institutions for educational and charitable purposes; subsequent deeds allegedly nullified those objects and trustees were illegally removed.
  • The petition contains specific allegations of misappropriation and mismanagement warranting the reliefs claimed and the petitioners are permanent residents of the locality and members of the minority community for whose benefit the trust was created, giving them a substantial interest in the trust.
  • The previous suit filed by the 5th respondent does not affect the right of the present petitioners nor indicate that the present petition is solely to vindicate the 5th respondent's private rights.
  • The 5th respondent supported the position that there was no infirmity in the district judge’s order granting permission to institute the suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vidvodaya Trust v. Mohan Prasad, 2008 (2) KLT 68 (SC) Principle that in considering leave under Section 92 the court must go beyond the relief sought and focus on the purpose for which the suit is filed; interest need not be a direct interest but must be real, substantial and existing. The court applied this principle to hold that a mere allegation of being 'well wishers and beneficiaries' is insufficient and that the court must examine whether petitioners' interest is real, substantial and existing and whether the suit vindicates public rights.
Narayana Pillai Gopala Pillai v. Smt. Jvothi Prakashini Devi, 1991 (2) KLT 535 Principle that whether a person has a real, substantive and existing interest in a trust so as to maintain an action under Section 92 must be determined on facts and acceptable evidence with reference to the trust. The court relied on this authority to direct that the petitioners must be given an opportunity to adduce evidence of their interest and that the question of interest must be determined by acceptable evidence and factual inquiry.

Court's Reasoning and Analysis

The district judge had granted leave to the petitioners in the O.P. after finding that the challenge—that the proceedings were initiated to vindicate personal interest—could not be accepted on the materials then before the court. The district judge relied on the trust deed (Ext. A1) and other materials and concluded, for the limited purpose of deciding leave under Section 92, that permission could be granted.

The revising court examined whether the district judge had properly considered whether the petitioners actually possessed an interest in the trust. The revising court observed that:

  • Although petitioners need not show a direct interest, their interest must be real, substantial and existing; a mere statement that they are “well wishers and beneficiaries” is insufficient.
  • The district judge did not adequately advert to the disputed question of the petitioners' interest, given respondents 3 to 6 had specifically contested it and alleged the suit was to vindicate private rights (including being instigated by a previous litigant who had failed in earlier proceedings).
  • In determining interest the court must go beyond the pleaded relief and focus on the purpose of the suit (citing Vidvodaya Trust v. Mohan Prasad), and the question of interest must be resolved on acceptable evidence with reference to the trust (citing Narayana Pillai Gopala Pillai v. Jvothi Prakashini Devi).

On this basis the revising court concluded that the district judge's order granting leave could not stand without an inquiry into whether petitioners have an existing interest in the trust. The revising court therefore revoked the leave previously granted and directed that an opportunity be afforded to the petitioners to produce evidence of their interest and to the respondents to give rebuttal evidence. The revising court instructed the trial court to re-examine the question on the materials produced and to pass appropriate orders on the question of leave.

Procedural directions were given: parties were to appear before the court below on 23.11.2009 and the enquiry on the question of leave was to be completed within three months from that date.

Holding and Implications

Holding: The order of the district judge granting permission to respondents 1 to 4 to institute a suit under Section 92 of the CPC is revoked and the matter is remitted for a fresh enquiry into whether the petitioners have an existing, real and substantial interest in the trust entitling them to seek leave to sue. The revision is disposed.

Implications:

  • Direct effect on the parties: Petitioners in the O.P. must be given an opportunity to adduce evidence substantiating their asserted interest in the trust; respondents may produce rebuttal evidence. The court below must re-examine the question of leave in light of evidentiary material and pass a fresh order within the specified time-frame.
  • No broader or novel precedent was claimed to be established by the opinion; the court proceeded by applying established principles (as cited) regarding the threshold interest required under Section 92 and the need for factual proof of such interest.
Show all summary ...

1. The revision is directed against the order passed by the learned Additional District Judge-II, Thiruvananthapuram granting leave to respondents 1 to 4 to institute a suit under Section 92 of the Code of Civil Procedure in respect of the 1st petitioner, which is stated to be a public charitable trust. On a previous occasion, the leave granted by the court below according permission to sue under Section 92 of the CPC has been challenged before this Court, and, then, noticing that meaningful opportunity had not been extended to the contesting respondents in the original petition, the order was set aside with direction to dispose the application in accordance with law. After such remission, the court below after hearing both sides, passed the impugned order, in which, some documents were also marked - Exts. A1 to A13 for the petitioners and Exts. B1 to B3 for the counter petitioners in the O.P Among the materials produced, Ext. A1 was the copy of the trust deed and that alone, as seen from the impugned order, was taken into account with reference to the facts and circumstance presented and the principles applicable in deciding the question of leave.

2. Respondents 1 to 4 are the petitioners in the original petition Claiming to be the well wishers and beneficiaries of the trust, the 1st respondent in the O.P, and imputing mismanagement, malpractices and misappropriation of the trust funds by the respondents 3 to 6, who are presently at the helm of affairs of the trust, the petition was filed seeking various reliefs viz. declaration that removal of the two original trustees by way of a subsequent registered deed is illegal and violative of the objects envisaged under the trust, that the subsequent deeds so created are null and void, preparation of a scheme for the trust, appointment of new trustee, prohibitory orders against respondents 3 to 6 from alienating the trust properties etc. The respondents 1 and 3 to 6, present revision petitioners, challenged the maintainability of the petition filing objections, in which, they contended that the petitioners in the O.P are incompetent to apply for leave to sue for the reliefs canvassed and also that the proceedings initiated are mala fide and it is at the instance of the 2nd respondent in the O.P, who had previously filed a suit against the trust challenging her removal from the board of trustees, which was later withdrawn after dismissal of the I.A moved for injunction. Some of the reliefs canvassed in the petition, it was contended, are outside the scope and ambit of a suit to be instituted with leave under Section 92 of the CPC.

3. The learned counsel for the revision petitioners assailed the order of the court below contending that respondents 1 to 4, the petitioners in the O.P, are not entitled to seek the reliefs claimed in relation with the trust and they are incompetent to apply and obtain leave to institute the suit as contemplated under Section 92 of the CPC in respect of the trust. In the O.P other than a bald allegation that these respondents are “the well wishers and beneficiaries of the 1st counter petitioner trust”, there is nothing more to show their interest in the trust, and, in fact according to the counsel, they arc total strangers to the trust. A mere allegation that they are well wishers and beneficiaries in the petition is insufficient to show the interest of the petitioners, which is a primary requisite for grant of leave under Section 92 of the CPC, according to the counsel. Another ground of attack canvassed by the counsel is that the petition has been filed at the instance of the 5th respondent, who had previously filed a suit against the trust, but later, withdrew that case when the appeal preferred by her against the dismissal of her application for injunction had been confirmed by the appellate court. Even in her application of withdrawal of the suit, she had cited the filing of the present O.P to seek permission for such withdrawal, is the submission of the counsel to contend that respondents 1 to 4 have filed the present O.P at the instance of the 5th respondent after she had failed to get restrictive orders against the present revision petitioners/respondents 3 to 6, in the management of the 1st petitioner, the trust. The court below has not appreciated in the proper perspective the challenge raised by these petitioners (respondents 3 to 6) that the original petition has been filed to vindicate the private rights of the petitioners and also that of the 5th respondent and not for prosecution of any public rights in relation to the public trust, is the submission of the counsel to assail the permission granted by the court below to the petitioners in the O.P to institute the suit under Section 92 of the CPC in respect of the reliefs canvassed. On the other hand, the learned counsel appearing for respondents 1 to 4 submitted that the leave had been granted by the court below after meticulously examining the questions involved and finding that there is no merit in any of the objections canvassed by the revision petitioners/respondents 3 to 6 in the original petition opposing the application for leave to sue for the reliefs in respect of the public trust Ext. A1 deed disclose in unmistakable terms that a public trust had been created for to perpetuate the memory of the settler's mother for establishing educational institutions, orphanages, housing colonies to the poor and other institutions for charitable purposes. But, later, two other deeds were created so as to nullify the objects for which the trust was created and some of the trustees had been removed illegally from the management of the trust, submits the counsel. In the petition, the allegation of misappropriation, mismanagement by the present trustees and the need for framing of a scheme are also specifically stated to substantiate the permission sought for to institute a suit to seek the reliefs claimed in respect of the subject matter, the public trust. Petitioners in the O.P are permanent residents in the locality belonging to a minority community, for the benefit of the weaker sections thereof, the trust had been created, and so much so, they have substantial interest in the welfare of the trust entitling them to seek for permission to sue for the reliefs, is the submission of the counsel. Previous suit filed by the 5th respondent in respect of the trust no way affect the right of the present petitioners nor does it indicate that the permission sought by them is to vindicate the private rights of the 5th respondent is the further submission of the counsel. The learned counsel for the 5th respondent supported the contentions raised by the respondents 1 to 4 asserting that there is no infirmity in the order passed by the learned District Judge in granting permission to respondents 1 to 4.petitioners in the O.P to institute the suit for the reliefs claimed in respect of the trust.

4. The learned District Judge granted leave to the petitioners in the O.P to sue for the reliefs claimed holding that the challenge raised that the proceedings had been initiated to vindicate the personal interest of the petitioners cannot be accepted. That finding, in the given facts of the case, on the basis of the materials tendered, which no doubt, was formed for the limited purpose as to whether permission can be granted to sue for the reliefs canvassed under Section 92 of the CPC in respect of a public trust, cannot be found fault with solely for the reason that the 5th respondent had instituted a previous suit impeaching her removal as a trustee from the management of the trust. Ext. A1 trust deed prima facie indicate that a public charitable trust had been constituted by that setder for the objecte ??? the upliftment of the weaker sections of minority communities in and around Puthukurichy and Kazhakuttom, by establishing educational institutions, orphanages, housing colonies etc. By way of subsequent deeds, there has been blatant failure of the objects of the trust and there is also misappropriation and mismanagement by the present trustees, is the case projected by the petitioners in the original petition to seek for the relief to sue for the reliefs in respect of the trust. The first relief canvassed in the petition is outside the scope of a suit under Section 92 of the CPC, in respect of which only the reliefs covered under ‘a’ to ‘h1 of that Section are permissible, by itself is not a sufficient ground to decline permission where some of the other reliefs canvassed fall under that section. But the larger question remains whether the petitioners have any interest in the trust. True, they need not show ‘a direct interest’, but, their interest in the trust should be real, substantial and existing. Petitioners are members of the minority community residing at the places in which the trust carries its objectives or envisages of putting up institutions for the upliftment of the weaker sections of that community, is not sufficient to show that they have an interest in the trust in the petition As rightly contended by the learned counsel for the respondents 3 to 6, nothing more is stated in the petition other than that they are ‘well wishers and beneficiaries’ of the trust. The learned District Judge has not adverted to the question whether the petitioners have any interest in the trust though it was disputed by respondents 3 to 6. The finding entered that the suit has not been filed at the instance of the 5th respondent, refuting the contentions of the respondents 3 to 6 in the original petition that permission is sought to vindicate the personal interest of the petitioners in the O.P, cannot be considered as a finding that the petitioners have, satisfied the requirement that they have ‘an interest in the trust’. Interest claimed by the petitioners in the trust, which is disputed by the respondents 3 to 6 must be shown to be an existing interest and not a mere contingency. Petitioners are members of the minority community and are residents at the places in which the trust property is situated or its institutions are established and a mere statement that they are beneficiaries and well wishers of the trust in the petition, is not sufficient to show that they are persons having an interest in the trust. In order to ascertain the real interest of the petitioners in the public trust, it may be necessary to examine whether they have sought permission to sue to vindicate the right of the public to seek a declaration of their individual or personal rights or the individual or personal rights of any other person or persons in whom they are interested. The interest of the petitioners seeking permission should be one for vindicating a public right in the trust, and so much so, in examining the interest of the petitioners, the court has to go beyond the relief and to focus on the purpose for which the suit is filed. That has been so held by the apex court in Vidvodaya Trust v. Mohan Prasad (2008 (2) KLT 68 (SC). As already indicated that a mere statement that the petitioners are well wishers and beneficiaries of the trust without any thing more, is not sufficient to show that they have any interest in the trust to obtain leave for instituting a suit for the relief under Section 92 of the CPC. In Narayana Pillai Gopala Pillai v. Smt. Jvothi Prakashini Devi (1991 (2) KLT 535) it has been held by this Court that the question whether a person has a real, substantive and existing interest in a particular trust so as to maintain an action under Section 92 of the CPC has to be determined factually on acceptable evidence and also with reference to the trust in relation to which the suit is instituted. In case, the assertion of the petitioners that they are beneficiaries and well wishers of the trust as averred in their petition is taken as sufficient to show their interest in the trust to seek permission to sue, then, needless to point out, any one in the locality where the trust operates, who are members of the minority community, can come forward and seek permission to institute suits against the trust. Such a situation is wholly undesirable. Object of Section 92 of the CPC is to prevent people from interfering with the administration of the public trust of a charitable or religious nature by instituting frivolous suits. Whether petitioners in the original petition has genuine, substantial and existing interest in the trust entitling them to seek permission to sue to protect the interest of the trust deserve to be examined before they are permitted to institute the suit for the reliefs under Section 92 of the CPC especially when the trustees, respondents 3 to 6 have disputed their interest contending that the suit has been filed to vindicate the personal rights and also that of the 5th respondent, who had previously failed in her attempts to challenge her removal from the Board of trustees. The order passed by tha leaiiieu District Judge granting permission to the petitioners to sue under Section 92 of the CPC is revoked directing that court to extent an opportunity to the petitioners to produce evidence showing interest substantiating their existing interest in the trust to sue for the reliefs claimed in respect of the trust. The respondents in the original petition shall also be given an opportunity to give rebuttal evidence in the enquiry on the limited question involved. The court below, on the materials produced, shall examine the question afresh and pass appropriate orders on the question of leave applied for by the petitioners in the original petition. Parties shall appear before the court below on 23.11.2009, and the court below is directed to complete the enquiry on the question of leave within a period of three months from the date of appearance of the parties as indicated above. Revision is accordingly disposed.