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  • section 539 of the Civil Procedure Code
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  • section 539 of the Civil Procedure Code
Smart Summary

Factual and Procedural Background

The temple of Sri Venkateswara in Tirumalai or Tirupati is an ancient Hindu temple with an annual income of between two and three lakhs of rupees. Historically, its management was under the ruler of the country, but after British rule commenced, control passed to the East India Company and subsequently to the Board of Revenue through the district Collector under Regulation VII of 1817. In 1843, following a directive to cease government interference in native temples, management was transferred to Seva Doss, head of the Hathiramji Mutt, with a sanad providing that his successors would manage the temple.

Following Seva Doss' death in 1864, a succession of managers from the Mutt administered the temple, but the history since then has been marked by waste and embezzlement. Various managers, including Darma Doss, Bagavan Doss, Mahabir Doss, and Ramakisore Doss, were implicated in misconduct and misappropriation, with some judicial findings and criminal convictions confirming fraudulent acts. Ramakisore Doss, the defendant in two suits filed in the North Arcot District Court, was found to have received bribes. He was murdered during the pendency of the suits, leading to the present Mahant, his legal representative, assuming management.

The suits involve removal from trusteeship and the settlement of a management scheme, with appeals pending against the decree passed by the District Judge. The Mahants and byragees of the Mutt are non-natives, generally uneducated celibates unfamiliar with local affairs, and have proven inefficient and often dishonest managers. Despite decrees against them, recovery of misappropriated funds has been largely unsuccessful.

Legal Issues Presented

  1. Whether the Court has jurisdiction to sanction a scheme altering the management of the temple, including the appointment of additional trustees or a controlling committee.
  2. Whether the existing arrangement of management by the Mahant is adequate or requires modification to prevent mismanagement and embezzlement.
  3. The appropriateness and terms of a scheme for the management and application of the temple’s surplus funds under Court supervision.
  4. The extent of the Court’s power under section 539 of the Civil Procedure Code to appoint new or additional trustees beyond the original trust constitution.

Arguments of the Parties

Mahant's Arguments

  • The Mahant contended that the Court lacked jurisdiction to establish a controlling authority or appoint new trustees beyond those originally provided for in the trust.
  • It was argued that the Courts could not alter the constitution of the trust by appointing additional trustees or imposing a committee with extensive control over the Mahant.

Court's Observations on Arguments

  • The Court noted that the Mahant did not object to the sanctioning of a scheme per se, but to the machinery proposed for its execution.
  • The Court rejected the contention that section 539 of the Civil Procedure Code limits the appointment of trustees strictly to the original trust constitution, citing English precedents and Indian case law affirming broad Court powers.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
In re Burnham National Schools Power of Court of Chancery to appoint additional trustees beyond original trust constitution. Supported the Court’s power to sanction a scheme including appointment of additional trustees.
Re Browne's Hospital v. Stamford Authority of lawful bodies to vary or modify schemes governing charitable institutions. Confirmed the Court’s jurisdiction to vary management arrangements made by a lawful authority.
Chintaman Bajaji Dev v. Dhondo Ganesh Dev Recognition of District Courts’ jurisdiction akin to Court of Chancery in administration of public charities. Supported the view that District Courts possess broad powers in managing religious trusts.
Annaji v. Narayan Similar to above, affirming judicial authority over religious charitable trusts. Used to reinforce the Court’s power to regulate the temple management.
ex parte Bolton School Limits on Court’s power to alter trustee appointments under specific Acts of Parliament. Distinguished as not applicable here, since Indian law post-dates English Trustees Act and confers broad powers.

Court's Reasoning and Analysis

The Court analyzed the historical context and management failures of the temple, concluding that the existing arrangement had failed to protect the institution’s interests. It recognized the broad jurisdiction of the Indian Courts, particularly under section 539 of the Civil Procedure Code, to appoint additional trustees and sanction schemes altering the trust’s management, drawing on English and Indian precedents.

The Court rejected the proposed committee of five members as unwieldy and ineffective for ensuring efficient management. Instead, it favored appointing one additional trustee alongside the Mahant, with fixed remuneration and a defined term, to provide competent oversight. The Court emphasized the necessity of safeguards against misappropriation, including proper accounting, audits, and restrictions on transactions between the Mutt and temple.

Further, the Court endorsed the cy-près application of surplus funds towards agreed charitable objects such as establishing a college, awarding prizes for proficiency in Hindu shastras, maintaining a hospital, pilgrim accommodations, improving water supply, and road communications. The scheme also included provisions for investment of funds, sale of unnecessary assets, and judicial supervision with powers of enforcement and modification reserved to the District and High Courts.

Holding and Implications

The Court held that the existing management arrangement was inadequate and sanctioned a scheme providing for the appointment of one additional trustee with remuneration and defined powers alongside the Mahant.

The scheme outlined detailed measures for the administration of temple funds, investment, audit, and application of surplus income to charitable purposes. The Court confirmed its jurisdiction to vary the trust’s management and rejected objections limiting its power to appoint additional trustees or impose supervisory controls.

The immediate effect is the establishment of a more efficient and accountable management structure for the temple, with judicial oversight to prevent future mismanagement. No broader precedent beyond the facts of this case was explicitly established.

    Prayag Doss Ji Varu v. Tirumala Srirangacharlavaru

    The temple of Sri Venkateswara in Tirumalai or Tirupati in the North Arcot district is a very ancient Hindu temple to which worshippers resort from all parts of India, and is in receipt of an annual income of between 2 and 3 lakhs of rupees. Prior to the establishment of the British Government, the management of the institution was directly under the ruler of the country for the time being. After the advent of the British, the management passed into the hands of the East India Company, and subsequent to the enactment of Regulation VII of 1817 of the Madras Code, it was carried on under the control of the Board of Revenue through the Collector of the district. With reference to a despatch of the year 1841 from the Court of Directors ordering the immediate withdrawal from all interference on the part of the officers of Government with native temples and places of religious resort, the management of the temple was in 1843 made over to Seva Doss, the head of a Mutt called Hathiramji Mutt, situated in the town of Tirupati at the base of the bill on which the important shrine stands. In the ‘sanad’ by which this transfer of management, was effected, it was provided that Seva Doss' successors in the Mutt should be his successors as vicharauakartha or manager of the temple. Seva Doss having died in 1864, Darma Doss succeeded him, and, on Darma Doss' death in 1880, Bagavan Doss became manager and continued so still 1890. From 1890 to 1894 Mahabir Doss was manager. And from 1895 to 1900 Ramakisore Doss, the defendant in the two suits Nos. 31 of 1898 and 10 of 1899 on the file of the North A root District Court, held the management; and on his death, pending the litigation, the present Mahant as the head of the Mutt is styled, succeeded to the office of manager and was brought on the record as the legal representative of Ramakisore.

    Now, when in 1843, the management was transferred to Seva Doss, it was, no doubt, expected that the management by the Mahant would prove satisfactory, but the history of what took place subsequent to Seva Doss' death is, to put it shortly, a record of waste and embezzlement.

    Persons interested in the institution were not slow to bring the misconduct of the managers to the notice of the authorities. A suit was brought against Darma Doss, the second manager, charging him with misconduct and malversation. The charges were established and the District Court gave a decree against him. On appeal the decree was confirmed, and this Court taking a less lenient view than the District Judge, came to the conclusion that Darma Doss' misconduct was fraudulent and such as to justify his dismissal, but the dismissal was not ordered for the reason that it was apprehended that his successor might not prove a better manager. In spite of this, the third manager, Bagavan Doss' acts of mismanagement, which were many, were also made the subject of judicial proceedings. A charge of criminal misappropriation with reference to a quantity of gold coins belonging to the temple of the value of over 2 lakhs of rupees was instituted against him, and, after a prolonged trial, he was convicted by the Sessions Court of North Arcot and sentenced to 18 months' imprisonment. It was pending his incarceration under that sentence, that Mahabir, with Bagavan Doss' permission, took charge of the management of the temple. The record shows that allegations of malversation were made against him as well and proceedings taken, but owing to his death they were not prosecuted further.

    The present suits Nos. 31 of 1898 and 10 of 1899 were brought against the last holder of the office, Ramakisore, and upon the evidence adduced which is practically uncontradicted, the District Judge has found, in our opinion, rightly, that Ramakisore received bribes to the extent of fifty thousand rupees for granting leases of the landed properties of the temple or showing favour to the contractors. During the pendency of the suits lie was murdered, so that the suit for his removal from the trusteeship (10 of 1899) became infructuous, but the other suit (31 of 1898) for the settlement of a scheme was heard and decided and the decree passed by the Judge in the matter is the subject of appeals Nos. 236 of 1901 and 38 of 1902, which have now to be disposed of.

    It may here be pointed out that the Mahant as well as the byragees who form the fraternity of the Hathiramji Mutt are not natives of this Presidency, but come from the northern parts of India. The Mahants, so far as appears in the evidence in the case, have not been men of any education and are celibates supposed to have little or no concern with worldly affairs.

    The present Mahant was brought down from Northern India only after the death of his predecessor in 1900, and was then a minor under 18 years of age, unacquainted with even the vernacular of the country. With reference to the actual administration of the affairs of the temple, the Mahants are more or less dependent upon the byragees of the Mutt, and it is not surprising that they have proved altogether inefficient as managers, as also, in most instances, dishonest. Another point to be remembered is that they possess no private property from which the temple can be recouped in respect of the embezzlements committed by them. Properties to which a Mahant succeeds as the head of the Mutt are not at his disposal except for the purposes of that institution, and oven the incomes received by a Mahant during his incumbency are subject to a first charge in respect of disbursements appropriate to the Mutt. The result has been that, notwithstanding that decrees have been obtained for large sums against the Mahants concerned, the temple has not been able to recover any portion of the amounts decreed save in one instance where the decree debt was paid up, but was immediately followed by another act of embezzlement of temple funds.

    It is thus clear that the arrangement made in 1843 for the administration of the institution has not answered the expectations then entertained, that the Mahants have shown themselves to be utterly incompetent to discharge the duties of the office properly, and that the surplus income has been misappropriated by them partly for their own personal use and partly for the aggrandisement of the Mutt. Unless, therefore, steps are taken to impart real efficiency to the management, to provide checks against peculation and to arrange for the due application of surplus funds not required for the usual and ordinary purposes of the institution, it is impossible to safeguard the interests of the institution. We agree, therefore, with the District Judge that this is a fit case for the Court sanctioning a scheme. And it may be added that Sir V. Bhasliyam Ayyangar, who appeared for the Mabant both in the lower Court and here, did not take any objection to a scheme being sanctioned. The controversy has been as to the machinery which the District Judge considered necessary to bring into existence in the form of a committee consisting of five members who were to exercise minute and complete control over the Mabant. And it was contended both before him and before us that it was beyond the jurisdiction of the Courts to establish such a controlling authority. And it was also strongly urged that it was not competent, in cases like the present, for the Courts to appoint new or additional trustees. After a careful consideration of the authorities referred to on both sides, we are unable to accept either of the contentions urged on behalf of the Mabant. No doubt section 539 of the Civil Procedure Code with reference to which the present suit has been brought, speaks of the appointment of new trustees “under the trust.” This, however, does not, in our opinion, mean only in conformity with the original constitution of the trust or with the rules now in force in respect to it. The passages in Tudor on ‘Charities’ and particularly the observation of Jessel, Master of the Rolls, in In re Burnham National Schools(1), to which our attention was drawn on behalf of the plaintiffs, show beyond a doubt that the Court of Chancery always possessed the power to appoint additional trustees, even though such appointment involved a departure from the arrangement contemplated in the constitution of the trust. The case in In the matter of the charity called Storey's Almshouses in the town of Cambridge was a case under Lord Romiliy's Act and the language used by the Lord Chancellor there was with reference to the question whether the Court had jurisdiction to appoint additional trustees in a case brought before it on petition under that Act. That language could not be taken as intended to negative the existence of the power in the Court of Chancery to appoint additional trustees in proceedings otherwise duly taken before it. The same observation applies to Ludlow (corporation of) v. Greenhouse(2). The decision in ex parte Bolton School(3), as we understand it, proceeds on the view that, according to the fair construction of the Act of Parliament then in question, it was not open to the Court to alter the constitution laid down by that Act of Parliament in respect of the appointment of a trustee. The enactment of section 539 of the Code, as it now stands, was long after the passing of the English Trustees Act of 1850. Presumably, therefore, that section may be taken as intended to confer upon the Courts in this country the same power that the Courts in England possessed at the time of its enactment. There is no reason for thinking that the Indian Legislature meant to control the power of the Courts in this country only in this one respect as to the appointment of new and additional trustees, whilst conceding them powers as large as those possessed by the English Courts in other respects. Had that been the case the Legislature would have used language expressive of this limitation. That the Right Court and the District Courts in this country to which the jurisdiction is confined possess the same practically unlimited jurisdiction as the Court of Chancery in matters relating to the administration of public charities, religious or otherwise, was taken for granted in the cases in Chintaman Bajaji Dev v. Dhondo Ganesh Dev(4) and Annaji v. Narayan(5), cited for the plaintiffs.

    It is not, however, necessary to pursue this matter further as, upon the facts of this case, the Mahant is not a trustee deriving his power of management under the constitution originally laid down centuries ago. As already pointed out, the institution was completely under the control of the public authorities up to 1843, and when the management was transferred to the Mahant in that year, it was an arrangement made by the Hoard of Revenue in whom the control of such institutions was then vested under the Regulation of 1817. In other words, the arrangement was analogous to a scheme settled by a lawful authority and, therefore, quite liable to be varied by that or other authority, legally competent so to alter or modify it. Sir V. Bhashyam Ayyangar did not contend that a, scheme containing, among others, provisions relating to the appointment of additional trustees sanctioned by a Court was not liable to variation on good cause being shown. And if authority on the point were necessary, reference may he made to Re Browne's Hospital v. Stamford. There is, therefore, nothing to prevent a scheme being framed providing inter alia, for the appointment of an additional trustee or the creation of a controlling body such as that sanctioned by the Bombay Courts in the cases already cited.

    The matter for determination therefore is, as to the actual terms of the scheme, to be sanctioned. We are clearly of opinion that the formation of a committee such as that directed by the District Judge is not calculated to secure efficient management. We think considerable difficulty will be experienced in the selection now, and from time to time hereafter, of competent men to act as honorary members of the committee. Occasional visits by persons not resident in the immediate neighbourhood of the institution would hardly afford sufficient chock. A body consisting of so many as five members without any emoluments expected to exercise a detailed control over the discharge of his duties by the Mahant by a unanimous vote in some instances and a fixed majority in others—not to refer to other restrictions prescribed by the Judge—is too cumbrous a machinery to work smoothly and effectively. It seems to us, therefore, that the best course is to appoint one additional trustee to take part in the management with the Mahant. And in order that such trustee may bring to the discharge of his duties, capacity, education and training calculated to make him a responsible co-adjutor with the Mahant, it is essential that he should receive from the funds of the institution a fitting remuneration for his onerous duties, the amount thereof to be fixed by the District Court, at a sum not lower than Rs. 400 and not exceeding Rs. 500 per mensem. The appointment of this trustee should vest in the District Court of North Arcot and the person so to be appointed should he a caste Hindu and his term of office should extend for five years, but he should be eligible for re-appointment. In the case of a difference of opinion arising between the two trustees the matter must be referred to the Pedda Jiyangar whose opinion should be followed. Either of the trustees should be liable to summary removal by the District Court on good cause shown subject to appeal to the High Court. In addition to the matter of the appointment of such new trustee the scheme should first and foremost provide for the utilization of the surplus funds coming into the hands of the trustees from time to time. The necessity for making such a provision is imperative to guard against the wasting or embezzlement of such accumulations is future which have been not only possible in the past but encouraged owing to the want of any provision for their utilization. There is no complaint that the services in the temple have not been duly performed but after all that has been done, the Mahant has found a large surplus in his hands which the accounts show he has expended upon objects more or less objectionable. The surplus income may be estimated at about a lakh or so per annum. Proceeding on the cy-pres principle the following are the objects on which both sides are agreed that the surplus funds may be appropriately spent:—

    1. The establishment of a college in Lower Tirupati for the promotion among Hindus of a knowledge of the Hindu religion and shastras, such college to be styled “The Sri Venkateswara Vidyasala” with a library attached and with suitable buildings inclusive of residential quarters for the teaching staff as well as hostel accommodation for students who may be permitted to remain in the premises of the college, the annual expenditure in the upkeep of the college not exceeding, until further orders, the sum of twenty-four thousand rupees.

    2. The distribution of prizes annually to persons possessing proficiency in the one or other of the various Hindu shastras, to an extent, until further orders, not exceeding rupees twelve thousand. Rules for the management of the college and the award of prizes shall be made by the trustees from time to time subject to the approval of the District Court.

    3. The foundation and maintenance of a hospital on the hill for the relief of the numerous pilgrims and worshippers visiting the place.

    4. The construction and maintenance of a choultry or rest-house in the same place for the use and accommodation of all classes of pilgrims visiting the shrine.

    5. The introduction of good water-supply on the hill.

    6. The improvement of the road communications to the shrine.

    The scheme should also authorize the trustees to sell unnecessary accumulations of jewels and properties and invest the sale-proceeds in Government paper until the money is required for the objects referred to above or for other purposes connected with the institution. It should be further provided that all other funds not required for immediate expenditure should be invested in the same way, provided that, with the sanction of the District Court, such funds may be invested in purchases or first mortgages of immovable properties. Leases for over five years of immovable properties vested in the temple as well as sales and mortgages thereof are not to be made without the sanction of the District Court. The trustees should provide for efficient checks against misappropriation of the offerings daily received in the shrine between the time of such receipt and that of their deposit in the usual place of custody. They should also provide for proper sets of accounts being maintained and for their inspection by persons interested in the institution, for budgets of receipts and expenditure being prepared annually, for estimates and plans of important, works being made before the execution of the works is undertaken, and for an annual audit by a competent auditor. A brief report by the trustees of their administration for the past year should be published early in the next year.

    The scheme should prohibit any transaction of a pecuniary or mercantile character between the Mutt on the one hand and the temple on the other, or the employment of any persons as common servants of the two institutions.

    Power should be reserved for application by the trustees or by persons interested being made to the District Court with reference to the carrying out of the directions of the scheme.

    The directions in the scheme may be enforced by the District Court in execution upon application by persons interested (Damodarbhat v. Bhogilal).

    Power should also be reserved for application being made to the High Court by the trustees or by persons interested for any modification of the scheme that may be found necessary.

    It should come into force on the 1st January 1906.

    Costs in these two appeals of both parties will be paid out of the funds of the temple.

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    Prayag Doss Ji Varu v. Tirumala Srirangacharlavaru
    (Feb 10, 1905)