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Andhra Pradesh High Court
Judges : JAGMOHAN REDDY, S.QAMAR HASSAN
Potti Swami and Brothers, a firm of merchants carrying on business - Appellant
Versus
Rao Saheb D.Govindarajulu - Respondent
Decided On : 04-07-59
SOCIETIES REGISTRATION ACT - SUIT FOR REFUND OF DONATIONS - MAINTAINABILITY - LIMITATION - DOCTRINE OF CYPRES - APPLICABILITY - RESULTING TRUST.
Fact of the Case:
The plaintiffs, donors to the Bezwada Hospital Association, filed suits for the refund of their donations on the ground that the object of the association, namely, the construction of a hospital at Bezwada, had failed. The defendants, the office-bearers of the association, contended that the suits were not maintainable, that the plaintiffs were not entitled to a refund, and that the doctrine of cyprus should be applied to utilize the donations for similar purposes.
Finding of the Court:
The court held that the suits were maintainable, that the plaintiffs were entitled to a refund of their donations, and that the doctrine of cyprus was not applicable in the present case.
Issues: 1. Whether the suits were maintainable? 2. Whether the plaintiffs were entitled to a refund of their donations? 3. Whether the doctrine of cyprus was applicable in the present case?
Ratio Decidendi: 1. The suits were maintainable because the plaintiffs had given notice to the managing committee to nominate a person or persons on its behalf for the suit to be defended, but no reply was given. 2. The plaintiffs were entitled to a refund of their donations because the object of the association had failed and there was no possibility of it being fulfilled. 3. The doctrine of cyprus was not applicable in the present case because the donors had not shown a general charitable intention and the money was collected for a specific purpose.
Final Decision: The appeals were allowed. The appellant in A. S. No. 118/54 was granted a decree for Rs. 10,000.00 together with any proportionate sum actually earned after the amount was deposited with the defendant No. 29, the Imperial Bank of India, at Vijayavada. The appellant in A. S. No. 64/54 was granted a decree for Rs. 5,000.00 together with any proportionate sum actually earned on the said sum after its deposit with the Imperial Bank of India at Vijayavada. The contesting respondents were granted only one set of costs which was to be apportioned between the appellants in accordance with the amounts decreed.
( 1 ) 1. These two first appeals are directed against the judgment and decree of the Second Additional Subordinate Judge of Vijayavada dismissing the suits, O. S. Nos. 22/1949 and 107/1950, for recovery of Rs. 11,230 (in O. S. No 22/49) being the amount of principal and interest at 6 per cent per annum from 1-1-47 and for Rs. 5,464. 00 (in O. S. 107/50) being the principal amount with interest at 3 per cent per annum. Both these suits relate to the recovery of subscriptions paid to the Bezwada Hospital Association, registered under Act XXI of 1860, of which defendants 1 to 21 constitute the General Body, due to tie non-fulfillment of the objects of that Association, namely, the building of a hospital at Bezwada. In so far as O. S. 107/50 is concerned, the defendants are Rao Saheb D. Govindarajulu the Mad-dula Narayana Sarma who are defendants 3 and 4 in O. S. 22/1949.
( 2 ) IN O. S. 22/1949 the plaintiff alleged that defendants 1 to 5 who are the Bezwada Hospital Association represented by its President Mrs. S. Kapoor, ind its office-bearers, C. Narasimham Chowdari, D. Govindarajulu, Vice-Presidents, M. Narayana Sarma, Secretary and K. Nagabhushana Rao, Joint Secretary, constitute the Managing Sub-Committee of the said Association, the main object of which was to establish and maintain a Hospital at Bezwada with public funds and donations. It is alleged that the Managing Sub-Committee approached the plaintiff and represented that they wanted to construct and maintain an up-to-date and fully equipped hospital at Bezwada and that they would manage to get a grant from the Government for at least half the amount required; but the plaintiff and other donors insisted that unless the construction was commenced before the end of 1946, they would not contribute and further insisted that their donations should be returned back if the construction was not commenced before that date. To this condition the Managing Committee agreed whereupon the plaintiff consented to pay Rs. 20. 000. 00 and immediately issued a cheque for Rs. 10. 000. 00 in the name of the 3rd defendant and promised to pay the balance within three months thereafter, A receipt was issued for this amount on 19-1-1946 embodying the condition that the amount donated by the plaintiff would he returned to him in case the construction of the building was not commenced before the end of 1946. This condition, ac-cording to the plaintiff, is a condition precedent binding on all the defendants and that time was thus the essence of the contract. It is further stated that inasmuch as the Association was unable to raise the necessary funds and the Government did not grant any sum, the whole scheme was abandoned and consequently the plaintiff is entitled to the sum of Rs. 10. 000. 00 which he paid to the Association. As the amount has not been returned in spite of several demands, the plaintiff claimed the amount of Rs. 10,000 together with interest by way of damages at the rate of 6 per cent per annum from 1-1-1947.
( 3 ) THE 1st defendant in the suit while not denying the object of the formation of the Bezwada Hospital Society, admitted having collected from several rich and generous persons a sum of Rs. 70. 000. 00. She stated that immediately thereafter her husband wag transferred and in spite of the enthusiasm of the local people the project could not be pushed through, that the amount was deposited in the Imperial Bank of India and after waiting for some time to see whether the project would reach its fruition or not, she personally considered it fair that if others were also agreeable the amount could be returned to the donors who had generously made their contributions and accordingly she issued cheques to all the donors which were received by them, but they" themselves resolved that they did not want their money back and would still like to pursue the project. It is, therefore, stated that the fault was not that of the office-bearers, that the defendant is ever ready
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