S.Murugan @ Poochi Murugan v. Nadigar Sangham Charitable Trust

1IN THE HIGH COURT OF JUDICATURE AT MADRAS(ORDINARY ORIGINAL CIVIL JURISDICTIONMONDAY, THE 8th DAY OF OCTOBER 2012THE HON'BLE Mr. JUSTICE K.CHANDRUA. No.2757 of 2012INC.S.D.No.15568 of 20121.S.Murugan @ Poochi Murugan,Membership No.6728,1-1, MIG Block, Foreshore Estate,Chennai-600 028.2.P.A.Kaja Mohideen,S/o.Alla Pitchai,New No.132, Old No.116/3,Dr.Beasant Road, Beasant Lane,Royapettah, Chennai-600 014. ...Applicants/Plaintiffs-VS-1.Nadigar Sangham Charitable Trust,Rep.by its Managing Trustee,Mr.R.Sarathkumar,No.1/8, Dr.Narashimman 1st Street,North Boag Road,T.Nagar, Chennai-600 017.2.R.Sarath Kumar,S/o.Late. M.Ramanathan,Managing Trustee,Nadigar Sangham Charitable TrustNo.1/8, Dr.Narashimman 1st Street,North Boag Road,T.Nagar, Chennai-600 0173.Shri Radha Ravi,S/o.Late.M.R.Radha,Trustee, Nadigar Sangham Charitable Trust,No.1/8, Dr.Narashimman 1st Street,North Boag Road,T.Nagar, Chennai-600 017.4.M/S.SPI Cinemas (P) Ltd.,No.25, Mamatha Complex,5th Floor, Whites Road,Royapettah, Chennai-600 014 .. Respondents/Defendants https://hcservices.ecourts.gov.in/hcservices/ 2This Application praying that this Hon'ble Court bepleased to grant leave to institute the above suit againstthe defendants before this Hon'ble court.This Application coming on this day before this courtfor hearing the court made the following order:The two applicants are the plaintiffs in an unnumberedcivil suit. This application is filed seeking to grantleave to institute the suit against the defendants in termsof Section 92 of C.P.C.2.When the matter came up on 05.07.2012, this courtordered notice on the said application. On notice, onbehalf of respondents 1 to 3, a counter affidavit, dated02.08.2012 has been filed. Subsequently, an application wasfiled in A.No.3519 of 2012 seeking to amend the prayer inthe unnumbered plaint in C.S(D)No.15568 of 2012. Thatapplication was ordered by this court on 11.9.2012. As perthe amended plaint, the relief claimed in the suit are asfollows:"A) To grant declaration, declare thatthe General Power of Attorney executed on 6thAugust, 2010 (Document No.487/10 of DistrictRegistrar cadre, T.Nagar) by the thirddefendant in favour of second defendant asnull and void;B) To grant declaration, declare thatthe Lease Deed executed on 6th August, 2010(Document No.1711/10) of District Registrarcadre, T.Nagar) between the second defendantand the third defendant as null and void; https://hcservices.ecourts.gov.in/hcservices/ 3C) To grant declaration, declare thatthe Lease Deed executed on 25th November, 2010(Document No.4780/11) of District Registrarcadre, T.Nagar) by the second and thirddefendants in favour of fourth defendant asnull and void;D) To direct the first defendant toproduce accounts and inquires pertainingaffairs of the first defendant trust;E) settling a scheme for administrationof the first defendant trust;F) removing the defendants 2 and 3 fromthe trusteeships;G) the Hon'ble Court may be pleased togrant further or other reliefs as the naturethis case and pass such further or otherorders as this Hon'ble Court may deem fit andproper and thus render justice."3.The case of the applicants was that the firstapplicant was the executive committee member of the SouthIndian Artist Association, which is a registered societyunder the Societies Registration Act, 1860 withregistration No.50/1952. It was established for the purposeof promotion of harmonious and brotherly relations amongthe members of the artist world and to seek ways and meansto improve their livelihood apart from promoting art andculture. The association has more than 3000 members drawnfrom various fields like film, drama and TV artists. Thefirst applicant is also a member of the sub committee forthe administration of the association for the period from2009-2012. He was also appointed as the Director for SouthIndian Artist Cooperative Housing Society. The said society https://hcservices.ecourts.gov.in/hcservices/ 4was established to provide housing site to their membersafter getting the lands allotted from the Government. Thesecond applicant is also an active member of theassociation. The association had purchased the propertymeasuring 18 grounds at New No.16, Old No.153, HabibullahRoad, T.Nagar, Chennai and it was registered in documentNo.700 of 1957 with the Sub Registrar Office, T.Nagar. Thepresent market value of the property is worked out toRs.150 crores. 4.Subsequently, the association had registered a Deedof Declaration of Public Charitable Trust on 30.05.1987vide document No.303 of 1987 with the Sub Registrar,T.Nagar under the name and style of "Nadigar SangamCharitable Trust", the first respondent herein. The thirdrespondent is the only surviving author of the trust. Thetrust was established with the object of helping poorartists and dramatists and persons belonging to weakersections by providing educational, medical and otherreliefs. The trust was to be administered by nine members,who will constitute the Board of Trustees. The President,Secretary and Treasurer of the association are the ex-officio members of the trust board. The President of theAssociation is the Managing Trustee. Six other trusteesshall be nominated by the executive committee of theassociation. Those nine members shall constitute the fullboard of trustees and shall be the governing body in https://hcservices.ecourts.gov.in/hcservices/ 5discharging the duties and responsibilities pursuant to theobjectives laid down in the trust deed. But the entire fullboard had not been constituted. The second respondent beingthe President and the Managing Trustee of the Trust hadmarried the sister of the third respondent. The thirdrespondent and the second respondent were functioning ontheir own without full composition of the trust. Theirintention is to hijack and to take full control of theTrust. 5.The third respondent in his capacity as the GeneralSecretary of the association had executed a general powerof attorney on 6.8.2010 and appointed the second defendantas the Principal's lawfully constituted agent to attend tovarious activities relating to the development of acommercial project on the property. On the same day, i.e.,on 6.8.2010, a lease deed was executed by the thirdrespondent in favour of the second respondent as a lesseein respect of the property for a period of 99 years andconfirmed the receipt of Rs.5 lakhs as interest freedeposit during the lease period. An annual rent ofRs.1000/- was fixed and that the lessee was given anabsolute right to sub-let and develop the property. In thelease deed, it was also stated that all rentals and incomearising from the said development and the scheduledproperty shall be to the exclusive account of the lessee.Further, a lease deed dated 25.11.2010 was executed in https://hcservices.ecourts.gov.in/hcservices/ 6favour of the fourth respondent. The lease was for a periodof 29 years and 11 months. The amount to be collected asrefundable security deposit was Rs.1 Crore and 44 lakhsonly. No competitive bids were called for. The furtherextension of lease was left to the choice of the fourthrespondent. The only purpose for which the charitable trustwas created was for the welfare of the members of theArtists Association. No prior approval of the executivecommittee or the general body of the association wasobtained. Only on 17.02.2011, in the special general bodymeeting, the issue was discussed and approval was obtainedwith reference to the lease deed dated 6.8.2010 and thegeneral power of attorney dated 6.8.2010. 6.Even the further lease deed dated 25.11.2010 wasexecuted without prior approval of the association and thatthe ratification was made on 17.2.2011. The action of thethird respondent executing the power of attorney in favourof the second respondent itself is illegal as no trusteecan delegate his duty either to a co-trustee or to astranger. The third respondent being the brother-in-law ofthe second respondent had also entered into a long termlease deed of the trust property in favour of the secondrespondent. The creation of board of trustees of ninetrustees were not done. The two trustees cannot act ontheir own by relying upon the saving clause found in thetrust deed. Under these circumstances, the applicants have https://hcservices.ecourts.gov.in/hcservices/ 7sought for leave. 7.In the counter affidavit filed by the respondents,it was stated that the ingredients of Section 92 of CPC wasnot attracted. The relief claimed is not within the scopeof Section 92. There was no prayer seeking for the schemeof the administration of the trust property. Therequirement of Section 92 of CPC has not been complied withas there is no allegation of mismanagement. 8.However, as noted already, the application foramending the suit prayer which comes very much within thescope of Section 92 CPC. The averments made by theapplicants in the plaint cannot be brushed aside especiallyin the context of the second respondent being the ManagingTrustee and brother-in-law of the third respondent and thatfull composition of the trust have not been constitutedeven though it provided for ex-officio members as well asnominated members by the executive council. Further, thefact that of the two trustees who are managing the trust,one trustee had executed a long term lease deed in favourof an another trustee itself shows that it is a grossmismanagement of the trust property. Thereafter, the solemanaging trustee had entered into a long term lease withthe fourth respondent for developing the property itselfshows that all is not well with the functioning of thetrust. Therefore, the ingredients of Section 92 is clearlyattracted for the applicants to institute a suit. It cannot https://hcservices.ecourts.gov.in/hcservices/ 8be said that they have no locus standi as they have membersof the association which constituted the trust and theirinterest is to maintain the trust property. 9.It is stated that the property of a charitableinstitution has to be jealously protected as a largesegment of the community has beneficial interest therein asheld by the Supreme Court in R. Venugopala Naidu v.Venkatarayulu Naidu Charities reported in 1989 Supp (2) SCC356 and in paragraph 13, it was observed as follows :"13.....This Court in Chenchu Rami Reddyv. Government of A.P.3 has held that theproperty of religious and charitableendowments or institutions must bejealously protected because large segmentof the community has beneficial interesttherein. Sale by private negotiations whichis not visible to the public eye and mayeven give rise to public suspicion shouldnot, therefore, be permitted unless thereare special reasons to justify the same. Ithas further been held that care must betaken to fix the reserve price afterascertaining the market value forsafeguarding the interest of theendowment."10.Further, in dealing with the ingredients of Section92 of CPC, the Supreme Court in Bishwanath v. Shri ThakurRadha Ballabhji reported in (1967) 2 SCR 618 = AIR 1967 SC1044 has held that to invoke Section 92, three conditionshave to be satisfied and in paragraph 7 of the judgment, itwas observed as follows :"7.It is settled law that to invokeSection 92 of the Code of Civil Procedure, 3 https://hcservices.ecourts.gov.in/hcservices/ 9conditions have to be satisfied, namely, (i)the trust is created for public purposes ofa charitable or religious nature; (ii) therewas a breach of trust or a direction ofcourt is necessary in the administration ofsuch a trust; and (iii) the relief claimedis one or other of the reliefs enumeratedtherein. If any of the 3 conditions is notsatisfied, the suit falls outside the scopeof the said section. ......."11.The Supreme Court also in Madappa v. M.N.Mahanthadevaru reported in (1966) 2 SCR 151 = AIR 1966 SC878 held that if there is any breach of trust or when theadministration of the trust requires improvement, the suitunder Section 92 is maintainable and in paragraph 9, it wasobserved as follows:"9.Let us now see if there is anything inSection 92(1) clause (f) which prohibits thegiving of such directions even if there is aprovision to that effect in the scheme.Section 92(1) provides for two class ofcases, namely, (i) where there is a breachof trust in a trust created for publicpurposes of a charitable or religiousnature, and (ii) where the direction of thecourt is deemed necessary for theadministration of any such trust. The mainpurpose of Section 82(1) is to giveprotection to public trusts of a charitableor religious nature from being subjected toharassment by suits being filed againstthem. That is why it provides that suitsunder that section can only be filed eitherby the Advocate-General, or two or morepersons having an interest in the trust withthe consent in writing of the Advocate-General. The object clearly is that before;the Advocate-General files a suit or giveshis consent for filing a suit under Section92, he would satisfy himself that there is aprima facie case either of the each of trustor of the necessity for obtaining directionsof the court. Tie reliefs to be sought in a https://hcservices.ecourts.gov.in/hcservices/ 10suit under Section 92(1) are indicated inthat section and include removal of anytrustee, appointment of a new trustee, westing of any property in a trustee,directing a removed trustee or person whohas ceased to be a trustee to deliverpossession of trust property in hispossession to the person entitled to thepossession of such property, directingaccounts and enquiries, declaring whatproportion of the trust-property or of theinterest therein shall be allocated to anyparticular object of the trust,authorisation of the whole or any part ofthe trust-property to be let, sold,mortgaged or exchanged, or settlement of ascheme. The nature of these reliefs willshow that a suit under Section 92 may befiled when there is a breach of trust orwhen the administration of the trustgenerally requires improvement. One of thereliefs which can be sought in such a suitis to obtain the authority of the court forletting, selling, mortgaging or exchangingthe whole or any part of the property of thetrust, as provided in clause (f) of thereliefs."12.In the light of the above, this court finds thatthere is a prima facie case made out for granting leave toinstitute the suit. Hence, this application is allowed asprayed for. No costs.Sd/-K.C.J 08.10.2012 //Certified to be a true copy//Dated this the day of 2012. R.s/30.10.2012 COURT OFFICERFrom 25.09.2008 the Registry is issuing certified copies ofthe Order/Judgment Decree in this format.