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2015 Supreme(Mad) 789

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
N. KIRUBAKARAN, J.
Imayam Trust, Rep. by its Chairman, Trichy District & Others – Appellant
Versus
Balakumar & Others – Respondent
C.R.P.(PD)(MD)No. 140 of 2014
Decided On : 10-02-2015

Advocate Appeared:
For the Petitioner:J. Anandhavalli, Advocate.
For the Respondents:R2, P. Renganatha Reddy, R3, C.S. Ravichandran, Advocates.

Headnote:

Income Tax Act 1961 - Section 12AA - Indian Evidence Act - Sections 57 and 74 – Civil Procedure Code - Order 11 - Rule 16 - Misappropriation of money - Got jurisdiction - Trust and maladministration of trust – Respondents plaintiffs in proposed suit approached District Court for framing a scheme stating that Trust namely first petitioner-trust is a public trust and it is mismanaged its funds are misappropriated and trustees are functioning detrimental to interest of trust namely committing act of misconduct misappropriation and misuse of funds and breach of trust contrary to trust deed - In proposed suit leave was sought and counter was filed by first petitioner herein and other defendants except fourth defendant therein and third respondent herein contending that it is a public trust there is no mismanagement misappropriation misuse of funds breach of trust and maladministration of trust as alleged in leave application - Respondents and proposed plaintiffs are strangers to trust thereby they lack - Distinct Court does not have jurisdiction to entertain proceedings and Sub-Court alone has got jurisdiction – Held, Court has necessarily a duty to protect interest of Public Trust - A Public Trust should be administered in a transparent manner - While dealing with an Application for leave under Section 92, Civil Procedure Code Court should not adopt a hyper-technical approach - In case allegations in Plaint are baseless and calculated to defame trustees and there are no materials at all to form a prima facie view of matter Court would be justified in refusing to grant leave - There cannot be a hard and fast rule in a case of this nature involving a public charity - In fact reason for obtaining leave itself is to protect Trustees from being subjected to unnecessary harassment and to avoid an unwanted litigation involving Trust - Plaintiffs in a Suit under Section 92 of Civil Procedure Code is only bringing it to attention of Court about alleged illegality committed by Trustees in office and need for removal of such trustees or to frame a comprehensive scheme for Trust - In case Court is convinced that Suit was filed for vindication of public rights technicality would not stand in way of entertaining Suit - While granting leave Court is only considering certain fundamentals which are required to be satisfied to certain a Suit under Section 92 Civil Procedure Code - This court held that Courts have a general jurisdiction over trusts of charitable and religious nature and Courts are bound to zealously guard interest of Trust since question of public interest is also involved – Therefore finding of District Court that prima facie allegations are available that second and third petitioners herein purchased lands and constructed buildings without sanction of Board of Trustees and by creating forged documents and lands are purchased at exorbitant prices and funds are swindled by petitioners herein are to be proved by respondents 1 and 2 during trial in suit and not in initial stage - Serious allegations made in plaint reveal that there is prima facie averments of breach of trust of trustees - It has to be noted that respondents 1 and 2 elaborately gave twenty five instances of misconduct mismanagement and breach of trust of petitioners 2 & 3 in administrations of first petitioner Trust - However petitioners only denied allegations and they have not produced documents which are exclusive in their possession to falsify serious allegations made and to deny leave - Non-filing of documents in their possession would make court to be satisfied satisfy with prima facie allegations made by respondents regarding mismanagement of first petitioner trust – Petition is dismissed

Judgment :-

1. This civil revision petition has been filed by the defendants in the proposed suit under Section 92 of C.P.C., for framing a scheme for the administration of the first defendant trust, called “Imayam Trust”, Kannanur, Thuraiyur Taluk, Trichy District filed by respondents herein/proposed plaintiffs against the order of granting leave to sue against the petitioners/defendants for framing a scheme in respect of the “ Imayam Trust “.

2. Facts in nut shell are as follows:

The respondents/plaintiffs in the proposed suit approached the District Court for framing a scheme stating that Imayam Trust namely, first petitioner-trust is a public trust and it is mismanaged; its funds are misappropriated and the trustees are functioning detrimental to the interest of the trust namely committing act of misconduct, misappropriation and misuse of funds and breach of trust contrary to the trust deed dated 18.10.2004. In the proposed suit, leave was sought in I.A.No.247 of 2013 and counter was filed by the first petitioner herein and other defendants except fourth defendant therein and the third respondent herein, contending that it is a public trust, there is no mismanagement, misappropriation, misuse of funds, breach of trust and maladministration of the trust as alleged in the leave application; The respondents and proposed plaintiffs are strangers to the trust thereby they lack locustandi; The District Court does not have jurisdiction to entertain the proceedings and the Sub-Court alone has got jurisdiction.

3. Based on the rival contentions, the District Court found that:

a) The first petitioner is, a public trust (Imayam Trust).

b) The respondents herein/plaintiffs have locustandi to file the suit as they have interest in the trust.

c) Prima facie allegations of mismanagement, misappropriation of money, breach of trust, and misconduct by the trustees are made out.

The said order of granting leave is challenged before this Court by the defendants in the proposed suit.

4. Heard Miss.J.Anandhavalli, learned counsel appearing for the petitioners and Mr.P.Renganatha Reddy, learned counsel for the 2nd respondent and others and perused the records.

5. It is an admitted fact that “ Imayam Trust”, first petitioner herein was created under the trust deed dated 18.10.2004 registered as document No.141/2004 on the file of Sub-Registrar, Uppiliyapuram, Trichy District for the object of up-liftment of the public, especially down trodden people to give education by starting educational institutions. Initially six persons were trustees. By virtue of supplemental deed dated 12.7.2013, subsequently one P.Sivakumar was added as one of the trustees. The second petitioner herein is the Chairman, the 7th petitioner is the Vice Chairman, the third petitioner is the Secretary,the third respondent is the Treasurer and petitioners 4 to 6 are Trustees of the first petitioner. The trust started educational institutions in the name of “Imyam College of Engineering”, “Imayam college of Information and Technology”, “Imayam Polytechnic College”, “Imayam Institute of Agriculture and Technology”, “ Imayam Arts and Science College for Women”, “Imayam and Idhayam College of Education (B.Ed.)”, “Imayam Teacher Training Institute” and “Imayam Catering College”. All these Educational institutions are said to be administered by their correspondents nominated from and among the trustees.

6. Respondents 1 and 2 alleged that the Chairman and Secretary, namely second and third petitioners herein for their personal benefits and gain, misused the powers, duties and rights conferred under the trust deed with malafide motives and crores of rupees of the trust have been misappropriated. The allegations in paragraphs 6 to 10 of the plaint are that petitioners herein mismanaged the trust, misused the trust funds for wrongful gain, committed misconduct thereby acting detrimental to the interest of the Trust. Making those allegations, the first and second respondents filed the suit and th















































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