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High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE R.BANUMATHI & THE HONOURABLE MR. JUSTICE M. VENUGOPAL
P.R. Pandurangan Chettiar & Others
Versus
M. Balakrishnan & Others
Appeal Suit Nos. 235 & 236 of 1994
Decided on: 19-04-2010
PILLA MUZHANGI TRUST - SUIT FOR FRAMING SCHEME - REMOVAL OF TRUSTEES - ACCOUNTS - RECORDS - POSSESSION OF TRUST PROPERTIES - TRUST DEED - OBJECTS OF TRUST - ELECTION OF OFFICE BEARERS - GENERAL BODY MEETING - MISMANAGEMENT AND MALADMINISTRATION - COMPENSATION AMOUNT - INVESTMENT - BORROWING - CHARITABLE AND EDUCATIONAL PURPOSES - LEASE IN FAVOUR OF EDUCATIONAL TRUST - RES JUDICATA - DISMISSAL OF APPEAL - EFFECT - PERVERSE FINDING - SCHEME FOR ADMINISTRATION OF TRUST.
Fact of the Case:
Pilla Muzhangi Trust was created for the welfare of Arya Vaisya Pilla Muzhangi chettis in and around Rasipuram. Certain properties were dedicated for the objects of the Trust. On 21.6.1970, Mahasabha was convened and a Trust deed dated 21.6.1970 was registered. The objects of the Trust are as under: 1. To perform Samaradhana festival, Dattatreya Homam, Vana Bojanam and Asuvattham pooja. 2. After performing poojas, if any amount is left, the same is to be spent for education and medical expenses of Pilla Muzhangi community people. Case of Plaintiffs is that Defendants 1 and 2 were not properly functioning and that the amount is not utilised for performance of poojas for the benefit of Pilla Muzhungi community people as per the objects of the Trust. Per contra, according to Defendants, in 1975, elections were not held and till such time poojas were not performed and the elections were held in 1979 and 1984 respectively and the 1st Defendant was elected as Secretary. According to the 1st Defendant, elected trustees had executed a power of attorney authorising the Secretary - 1st defendant – Panduranga Chettiar to administer the property. Further case of Defendants 1 and 2 is that only after they were elected, the lapses in the administration was rectified and Poojas were properly performed.
Finding of the Court:
1. The primary object of the Trust viz., Samaradhana was not performed by Defendants No.1 and 2. 2. The accounts were not properly written for each and every year and accounts must have been written at a stretch. 3. The resolution passed on 8.12.1985 regarding compensation amount must have been created for the purpose of the case. 4. The entries in Ex.B.46 are not contemporaneous and appears to be manipulated to make up the unauthorised withdrawal of the compensation amount. 5. Defendants 1 to 4 have not acted as an ordinarily prudent man would have acted. 6. Defendants 1 and 2 have not acted in accordance with the provisions of Section 20 of the Indian Trust Act. 7. Borrowing the amount of Rs.81,000/- each by the 2nd Defendant and his younger brother from the Trust and depositing the amount in their own names is in clear violation of Section 51 of the Act and it prejudicially affect the interest of the Trust. 8. The acts of Defendants 1 and 2 and donating amount as per their own will were not in furtherance of the object of the Trust. 9. Ex.A2 – Bhokiam and the payment of Rs.52,000/- under the said Bhokiam is not binding upon the Trust. 10. The 6th Defendant – Rasipuram Educational Trust is also liable to deliver vacant possession to the plaintiff Trust. 11. The finding of trial Court that there was mis-management and maladministration of Trust property and that Defendants 1 to 4 were not acting in furtherance of the objects of the Trust is based upon evidence and materials on record. 12. The meeting dated 23.3.1986 is valid in law and that Ramalingam Chettiar had been elected as the President as per the resolution Ex.B.74. 13. The findings in O.S.Nos.39 and 40 of 1988 is conclusive regarding the points decided between the same parties i.e., the conclusion of the trial Court upholding the election of P.K.Ramalingam as President and other office bearers in the general body meeting held on 23.3.1986 has attained finality.
Issues: 1. Whether Defendants 1 and 2 acted in furtherance of the objects of the Trust as contended by Defendants 1 and 2? 2. Whether the finding of trial Court as to mismanagement and maladministration is correct? 3. Whether the dismissal of an appeal in A.S.No.3 of 2002 arising out of O.S.No.40 of 1988 would operate as res judicata and what is the effect of dismissal of Appeal A.S.No.3 of 2002? 4. Whether the finding and the judgment of the trial Court suffers from perversity warranting interference?
Ratio Decidendi: 1. The primary object of the Trust viz., Samaradhana was not performed by Defendants No.1 and 2. 2. The accounts were not properly written for each and every year and accounts must have been written at a stretch. 3. The resolution passed on 8.12.1985 regarding compensation amount must have been created for the purpose of the case. 4. The entries in Ex.B.46 are not contemporaneous and appears to be manipulated to make up the unauthorised withdrawal of the compensation amount. 5. Defendants 1 to 4 have not acted as an ordinarily prudent man would have acted. 6. Defendants 1 and 2 have not acted in accordance with the provisions of Section 20 of the Indian Trust Act. 7. Borrowing the amount of Rs.81,000/- each by the 2nd Defendant and his younger brother from the Trust and depositing the amount in their own names is in clear violation of Section 51 of the Act and it prejudicially affect the interest of the Trust. 8. The acts of Defendants 1 and 2 and donating amount as per their own will were not in furtherance of the object of the Trust. 9. Ex.A2 – Bhokiam and the payment of Rs.52,000/- under the said Bhokiam is not binding upon the Trust. 10. The 6th Defendant – Rasipuram Educational Trust is also liable to deliver vacant possession to the plaintiff Trust. 11. The finding of trial Court that there was mis-management and maladministration of Trust property and that Defendants 1 to 4 were not acting in furtherance of the objects of the Trust is based upon evidence and materials on record. 12. The meeting dated 23.3.1986 is valid in law and that Ramalingam Chettiar had been elected as the President as per the resolution Ex.B.74. 13. The findings in O.S.Nos.39 and 40 of 1988 is conclusive regarding the points decided between the same parties i.e., the conclusion of the trial Court upholding the election of P.K.Ramalingam as President and other office bearers in the general body meeting held on 23.3.1986 has attained finality.
Final Decision: The common judgment and decrees in O.S.Nos.310 and 1986 and 93 of 1986 on the file of Subordinate Judge, Namakkal are confirmed and the Appeals are dismissed.
R.BANUMATHI,J.
1. A.S.No.235 of 1994 is directed against the judgment in O.S.No.310 of 1996 decreeing the suit filed by the plaintiffs for framing scheme for Pilla Muzhangi Trust and to remove respondents 1 and 2 from trusteeship and direct them to render accounts for trust funds and also to hand over Trust records and to deliver possession of the trust properties. A.S.No.236 of 1994 arises out of dismissal of suit in O.S.No.93 of 1986. Since both the appeals arise out of common judgment, and points for consideration are one and the same, both the appeals were taken up together and disposed of by this Common Judgment. For convenience, the parties are referred to as per their array in O.S.No.310 of 1986.
2. The family of Pilla Muzhangi Trust chettis formed a Trust and dedicated certain properties for purpose of certain poojas and the benefit of Pilla Muzhangi community people. On 21.6.1970, Mahasabha/ General Body Meeting was convened and a Trust was created and Ex.A.1 – trust deed was registered on the same day i.e., 21.6.1970. Trust deed imposes certain obligations on the trustees to perform certain poojas – Dattatreya Homam, Vana Bojanam, Vinayagar Pooja and Utsavams. From out of 2.44 acres in Survey No.286 belonging to the Trust, an extent of 2.10 acres was acquired for Telephone Department for which an amount of Rs.3,31,634.55ps was awarded as compensation.
3. Defendants 1 and 2 have been in management of the Trust. The first Defendant was the Secretary of the Trust. 2nd Defendant was the Executive Committee member and Defendants No.3 and 4 were the members. The case of Plaintiffs is that Defendants No.1 and 2 have not acted as per the obligations cast upon them in the trust deed. Defendants No.1 and 2 have not performed the poojas nor convened the General Body meeting. The defendants have not acted for the benefit of Pilla Muzhangi community people. Compensation amount of Rs.3,31,634.55 paid for acquiring the lands for Telephone Department was received by the 1st Defendant. The Trust is having the account in Salem Central Cooperative Bank in Rasipuram. Instead of depositing the amount in the said Bank, the 1st Defendant has deposited the amount in Lakshmi Vilas Bank and the 1st Defendant is operating the account. The 1st Defendant has not shown the account to the other community people.
4. Further case of Plaintiff is that after acquiring the land for Telephone Department, from out of the remaining 34 cents, 29 cents was let off to the 6th Defendant for running a School. For giving the property on such long term lease, no permission of the Court was obtained nor it was brought to the notice of the General Body Meeting. In respect of 9 cents in S.No.274/29, Defendants 1 to 4 have executed a Bhokiam – usufructuary mortgage in favour the 7th Defendant. For creating such Bhokiam in favour of 7th Defendant, no permission of the Court was obtained. Defendants 1 and 2 are acting against the objects of the Trust and they have not convened Mahasabha meeting alleging mismanagement and maladministration. Plaintiffs have filed O.S.No.310 of 1986 for removal of Defendants 1 and 2 from trusteeship and also from forming a scheme regarding the management of Pilla Muzhangi Trust also to direct Defendants No.1 and 2 to render accounts and deposit the amount and records in the Court.
5. Defendants resisted the suit contending that even after creation of Trust and registration of Trust deed in 1970, the Trust was not functioning properly and elections were not conducted till the year 1975. According to the contesting defendants – 1 and 2, elections were conducted in the year 1979 and 1984 and the 1st Defendant was elected as the Secretary and reforms were brought in the administration of the Trust only after the Defendants No.1 and 2 took over the charge. There was no mismanagement or maladministration as alleged by the Plaintiffs and the suit is highly motivated. According to Defendants 1 and 2, compensation amount is properly inv
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