IN THE HIGH COURT OF KARNATAKA
R. Nataraj, J.
Adarsha Sugama Sangeetha Academy & Ors. - Appellants
Versus
Smt. Vrinda S. Rao & Ors. - Respondents
Writ Petition No. 33264 of 2016 (GM-CPC)
Decided On : 01-08-2022
Section 92 of the CPC - Public Charitable Trust - 12A of the Income Tax Act, 1961 - [Section 92 of the CPC] - The court discussed the application of Section 92 of the CPC, which provides for securing the interest of the general public in public charitable or religious trusts or institutions. The court emphasized the need to establish the existence of a public charitable or religious trust and a clear breach of its terms, as well as the interest of the petitioners in the affairs of the trust. The court found that the trial court had not properly applied its mind to these crucial questions, leading to the setting aside of the order and a direction for expedited consideration of the petition.
Fact of the Case:
The petitioners sought permission to file a suit under Section 92(1) of the CPC to frame a scheme for the management of a public charitable trust, alleging irregularities and misappropriation of funds by the trustees.
Finding of the Court:
The court found that the trial court had not properly considered whether the trust was charitable or religious and whether the petitioners were genuinely interested in the affairs of the trust, leading to the setting aside of the order and a direction for expedited consideration of the petition.
Issues: The main issues were whether the trust was a public charitable trust, whether the petitioners were genuinely interested in the affairs of the trust, and whether there was a clear breach of the trust's terms.
Ratio Decidendi: The court emphasized the need to establish the existence of a public charitable or religious trust, a clear breach of its terms, and the interest of the petitioners in the affairs of the trust to maintain a suit under Section 92 of the CPC.
Final Decision: The writ petition was allowed, the order of the trial court was set aside, and the trial court was directed to expedite the consideration of the petition filed under Section 92 of the CPC.
ORDER
1. Respondent Nos.1 and 2 in Misc. No.548/2013 on the file of the Principal City Civil and Sessions Judge, Bengaluru, have filed this writ petition challenging the Order dated 06.02.2016 passed under Section 92 of the Code of Civil Procedure, 1908 (for short 'the CPC') granting leave to the petitioners therein/respondent Nos.1 and 2 herein to file a suit against them.
2. The parties shall henceforth be referred to as they were arrayed before the Trial Court.
3. A proceeding under Section 92(1) of the CPC was initiated by the petitioners seeking leave of the Trial Court to present a suit against the respondents in Misc. No.548/2013. The petitioner No.1 claimed to be a Trustee of the respondent No.1 while the petitioner No.2 claimed to be a music aficionado and interested in the activities of the Trust. The petitioners asserted that the respondent No.1 was a public charitable Trust of which the petitioner No.1 and respondent Nos.2 to 5 are the Trustees. The petitioners alleged that the meetings of the Trust were not conducted regularly and that not even a single Annual General Body meeting of the Trust was held. They alleged that one of the Trustees, Sri G.Y. Bhagwan died long back and his place was not filled up. They also alleged that they noticed irregularities and misappropriation of funds and suggested to the respondent No.2 to induce democracy in the functioning of the Trust. They alleged that the respondent No.2 kept petitioner No.1 away from the activities of the Trust. They further alleged that the respondent No.2 was conducting the activities of the Trust as if it was a proprietary concern and spending the funds of the Trust at his will. The respondent No.2 was accused of organizing music concerts in the name of the Trust in foreign countries, proceeds of which were never accounted for. With these and various other allegations, the petitioners sought for permission to file a suit to frame a scheme for management of the Trust. Along with the petition under Section 92(1) of the CPC., the petitioners also placed on record a proposed plaint.
4. Notice of the petition was issued to the respondents and respondent No.2 who filed his objections to the petition under Section 92(1) of the CPC., contended largely (a) that the respondent No.1 was not a public charitable Trust and therefore, the provisions of Section 92 of the CPC., were not applicable to the respondent No.1; (b) that the petitioner No.2 was not interested in the affairs of the Trust and therefore, the petition was not filed by two or more persons having an interest in the Trust. He denied the allegations of misapplication and mismanagement of the funds of the Trust, but stated that the Trustees worked hard to secure publicity, name and earned goodwill amongst music lovers. He also claimed that the petitioner No.1 has laid low for more than 16 years and has thereafter hurled allegations against the respondents.
5. The Trial Court after hearing the parties, relied upon the judgment of the Hon'ble Apex Court in R.M. Narayana Chettiar and another v. N. Lakshmanan Chettiar and another [1991 (1) SCC 48] and cursorily passed an order dated 06.02.2016 allowing the petition filed under Section 92(1) of the CPC.
6. Feeling aggrieved by the said Order, the present writ petition is filed.
7. The learned counsel for the respondent Nos.1 and 2 / petitioners herein submitted that the respondent No.1 was not a public charitable Trust and the petitioner No.2 was not a person interested in the affairs of the Trust and therefore, the Trial Court without considering the case of the petitioners on the anvil of the above, allowed the petition by relying upon a judgment of the Hon'ble Apex Court in the case cited above. He submitted that a perusal of the Trust deed does not disclose any charitable activities of the respondent No.1 and that therefore, the respondent No.1 does not qualify to be a public charitable Trust and hence, the Trial Court cannot be clothed with the jurisdiction to
R.M. Narayana Chettiar and another v. N. Lakshmanan Chettiar and another 1991 (1) SCC 48
AI
The main legal point established in the judgment is the requirement to establish the existence of a public charitable or religious trust, a clear breach of its terms, and the interest of the petition....
A Trust can seek relief under Section 92 CPC when it is a party to the proceedings alongside interested individuals, especially in cases of alleged mismanagement.
Suit filed by the trust against a third party as done in this case, in Court considered opinion would not come within the purview of Section 92 of CPC.
The court established that for a suit under Section 92 of the CPC, it is essential to demonstrate a public charitable trust, a breach of trust, and appropriate relief sought, emphasizing the protecti....
Section 92 CPC suits against public trusts require three conditions: public charitable/religious purpose, breach or need for court direction, specified relief. Trial courts must analyze averments and....
A suit under Section 92 of CPC must serve public interest and establish breach of trust; claims of personal grievances cannot sustain such suits.
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