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High Court Of Delhi
MANISHA COMMERCIAL LIMITED - Appellant
Versus
N.R.DONGRE - Respondent
Interim Application 5961 of 1999
Decided On : 12/24/1999
Held:
Before a party is entitled to the grant of a temporary injunction it has to (a) establish the existence of a prima facie case in favor of the applicant, (b) show that the balance of convenience for the grant of the relief claimed for is in its favor and against the opposite party, and (c) that the applicant will suffer irreparable injury if the temporary injunction prayed for is not immediately passed.
This application was also filed by the Plaintiff seeking the pronouncement of the judgment and decree in terms of prayer (c) of the Plaint. This prayer was for the passing of a decree of a mandatory injunction in favor of the Plaintiff and against Defendant No. 1, directing this defendant to transfer these 10846 equity shares held by Manisha Benefit Trust in the name of Defendant No. 1 as its trustee in Defendant No. 2 Company. After considering the rival contentions raised in that application I had arrived at the conclusion that it would not be appropriate, and in the interest of justice, that a judgment should be passed forthwith, even though there was no disputes in respect of the factual matrix of the case. Since, in my opinion, complicated and vexed questions of law had arisen and were in issue between the parties, the passing of a judgment in a summary manner, as envisaged in Order XII, was not in the interest of justice. I had rejected the application, The obvious corollary of this rejection is that in my view, a prima, facie case had not been established by the Plaintiff. The reasons for this rejection would be germane also to the consideration of whether a case exists justifying the passing of the temporary injunction. The, orders passed in the application under Order XII should be read in conjunction with these orders so that prolixity can be avoided.
Keeping in perspective the fact that there has been no change in the factual matrix since the creation/inspection of the Trust, almost a decade ago, it was incumbent on the Plaintiff to establish a "overwhelmingly" obvious prima facie case if the temporary injunction was to be granted after the passage of so much time. Certainly, no such case has been made out before me which would warrant and convince me to ignore the forensic history of this case and pass orders which would totally change the rights of the parties.
Coming to the consideration of whether the balance of convenience is in favor of the grant of the temporary injunction I have not been convinced of the arguments addressed by the Learned Counsel for the Plaintiff. As has been stated above the existing practice is almost a decade old. The 11% shareholding within the trusteeship of Defendant No. 1 was created from the shareholding of the Plaintiff. Whatever be the reasons for this creation, since there is no allegation of misconduct or failure to perform the duties and obligations cast on Defendant No. 1 by the trustee, the balance of convenience is clearly against the Plaintiff. If the temporary injunction is granted the fundamental object and purposes of the trust would be irretrievably altered. The trustee, Defendant No. 1, would in effect lose control over the management of Defendant No. 2.
( 1 ) THIS application under Order XXXIX Rules 1 and 2 contained a prayer for the issuance of mandatory injunction against Defendant No. 1, directing him to vote in favour of the Resolution proposed in the notice for the A. G. M. Scheduled to be held on June, 10,1999 or any adjourned meeting thereof and/or to give a praxy in favour of he Plaintiff s representative of the A. G. M. for that date. Since this application came up for consideration before me after this date, the Plaintiff filed a subsequent application being I. A. 9803/1999. The present application has therefore, not been argued since the subsequent application was considered to be comprehensive. Without in any way prejudicing the Plaintiff s cause, and subject to all just exceptions, this Application is dismissed with no order as to costs. I. A. 9804 of 1999
( 2 ) THE facts of the present case pose little controversy. This situation has prompted the presentation of an application of the passing of a decree on admissions, under Order XII Rule 6 of the Code of Civil Procedure, 1908. Shri Shanti Bhushan, learned Senior Counsel appearing on behalf of Plaintiff has submitted that admittedly the Plaintiff is the sole beneficiary of the Manisha Benefit Trust, that Defendant No. 1 is its Sole Trustee, and that the corpus of the Trust comprises 11 per cent of the shares of Defendant No. 2 of which the remaining 49 per cent is held by the Charat Ram Group and 40 per cent by Defendant No. 1. He also conceded that it is not the Plaintiff s case that Defendant No. 1 had committed any acts that tantamount to breach of the trust reposed in him, or that Defendant No. 1 had not paid the usefuct of the Trust to the sole beneficiary.
( 3 ) THE Trust was established on 22. 11. 1991 by a Deed of that date in which the Settler had handed over a sum of Rs,. 10,000. 00 to the Trustee (Defendant No. 1 ). It is from these funds that the 11 per cent shareholding of Defendant No. 2 has been acquired for the Trust. The Deed then mentions that Defendant No. 1 shall be the Trustee and that the objects are the receipt of income, dividends, interest and donations etc. which are to be given to the beneficiary (Plaintiff ). It is significant to note that the duration of the Trust is explicitly stated to be for a period of 99 years or such earlier period as may be determined by the Trustee. He has also been empowered to nominate a Trustee in his stead, which is indeed an unusual terms. Interpreted along with the fact that the Trust was stated to be irrevocable it is prima facie clear that the intention of the Settler was that the Trust should be exclusively managed by its Trustee/defendant No. 1. The prayers contained in the plaint and in the application are therefore irreconcilably contrary to the terms of the Trust Deed.
( 4 ) DR. A. M. Singhvi, learned Senior Counsel for Defendant No. 1 has invited my attention to facts surrounding the geneses of the Trust, other than those available from a perusal of the Deed. His contention is that the Trust was formed as an acknowledgement of the services rendered by Defendant No. 1 to Lala Charat Ram. He requests that the true beneficiary of the Trust till its dissolution as envisaged in the Trust Deed is Defendant No. 1 since the corpus of the Trust (11 per cent of the shareholding of Defendant No. 2) was carved out on the earlier 19 per cent held by the Plaintiff. It is further submitted that undoubtedly no grounds for interference of the Court, on equitable considerations, has been made out, since it was not even alleged against the Trustee that he had committed any misconduct or had transgressed his fiduciary obligations in respect of the fulfilment of the duties cast upon him under the Trust Deed. It is also his submission that during the duration of the Trust it is the Trustee who is the real owner of the assets of the Trust.
( 5 ) THE question to be decided at the threshold is whether the Plaintiff is entitled to obtain a judgment beca
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