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2023 Supreme(Mad) 2492
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.N. MANJULA, J.
M/s. Mahalaxmi Educational Trust, M/s. Cambridge Matriculation Higher Secondary School, Chennai & Others – Appellants
Versus
R.V. Narasimha Rao & Another – Respondents
Application No. 3752 of 2022 in C.S.No. 133 of 2022
Decided On : 18-08-2023
For the Applicants:M/s. E.J. Ayyappan, Advocate. For the Respondents:M/s. V. Balasubramanian & Associates, Advocates.
The main legal point established in the judgment is that the court cannot reject a plaint if it discloses a cause of action, and the presence of contentious issues warrants a trial.
Headnote:
Order to Reject Plaint - Trust Dispute - Sec. 92 CPC, Order VII Rule 11 CPC - The court discussed the application filed under Order XIV Rule 8 of O.S. Rules read with Order VII Rule 11 of CPC, seeking an order to reject the plaint in C.S.No.133 of 2022. The court analyzed the provisions of Sec. 92 CPC and Order VII Rule 11 CPC and their applicability to the dispute over the trust. The court highlighted the legal principles related to rejection of plaint and cause of action as per the Supreme Court's decision in Kuldeep Singh Pathania vs Bikram Singh Jaryal (2017) 5 SCC 345.
Fact of the Case:
The dispute arose from an application seeking an order to reject the plaint in a trust dispute. The defendants argued that the plaintiff had no locus standi to file the suit under Sec. 92 CPC, and the suit itself was not maintainable. The plaintiffs, on the other hand, claimed mismanagement and abuse of power by the defendants, seeking a scheme to be framed along with other reliefs.
Finding of the Court:
The court found that the application to reject the plaint was without merit as the plaint disclosed a cause of action and did not meet the criteria for rejection under Order VII Rule 11 CPC. The court emphasized that the presence of contentious issues raised in the plaint warranted a trial and that the court could not dwell into the merits of those contentions at the threshold stage itself without offering a fair opportunity for trial.
Issues: The main issues revolved around the locus standi of the plaintiff to file the suit under Sec. 92 CPC, the allegations of mismanagement and abuse of power, and the maintainability of the plaint under Order VII Rule 11 CPC.
Ratio Decidendi: The court's decision was based on the finding that the plaint disclosed a cause of action and did not meet the criteria for rejection under Order VII Rule 11 CPC. The court also emphasized the need for a fair opportunity for trial to address the contentious issues raised in the plaint.
Final Decision: The court dismissed the application to reject the plaint, allowing the dispute to proceed to trial.
JUDGMENT
(Prayer: Application filed under Order XIV Rule 8 of O.S. Rules read with Order VII Rule 11 of CPC, praying to grant an order to reject the plaint in C.S.No.133 of 2022.)
This application has been filed by the applicants/ defendants 1 to 7 seeking an order to reject the plaint in C.S.No.133 of 2022.
2. Heard the arguments made by either side learned counsels and perused the materials available on record.
3. The averments of the petition in brief:
The applicants are the defendants. The defendants 3, 4, and 5 are not connected with the Trust-s activities, and they were appointed as members of the Disciplinary Committee to conduct domestic enquiry against the 1st respondent. The petitioners 6 and 7 are the other two active Trustees of the M/s.Mahalaxmi Educations Trust, which is presently managing the Trust. The 1st respondent had been removed from the trusteeship in view of the findings given by the Disciplinary Committee dated 12.09.2021 and vide the letter of the Trust dated 15.09.2021. The 1st respondent has filed this suit as though he continues to be the Trustee of the said Trust.
3.1. The 1st petitioner-s Trust is not a public charitable Trust, or a religious Trust and hence, the 1st respondent has no locus standi to file this suit under Sec. 92 C.P.C. There is absolutely no allegation of breach of any Trust or conditions stipulated under the Trust deed for the purpose of seeking a Scheme for the administration of the Trust. In fact, there is no relief sought for proper Administration of the Trust and all that needed was to run the School by the name and style of -M/s Cambridge Matriculation Higher Secondary School-. The 1st respondent was removed from the Trusteeship for misappropriating several lakhs of the Trust-s funds. Just in order to settle his personal vengeance, the suit has been filed.
3.2. The said school is a tenant paying monthly rent, and it does not own any immovable property. The deed of Trust dated 29.09.1991 would show that the corpus of the Trust is a sum of Rs.1001/- and that no other immovable property was endowed to the 1st petitioner-s Trust on that date or any subsequent date. The 1st petitioner-s Trust is functioning with three trustees; there is no proposal to either close down the school or sell the school run by the Trust. Neither the school nor the 1st petitioner-s trust owns or possess any immovable property in their names, and the suit schedule property over which the school exists is the 2nd petitioner-s private property.
3.3. However, the 1st respondent did not assist her and he was always interested in his own personal welfare. After the 2nd petitioner/ plaintiff was appointed as a Managing trustee, the 1st respondent never co-operated and he always acted unilaterally. Hence the 2nd petitioner /plaintiff was forced to induct new trustees to continue the activities of the Trust. Since the 1st respondent had personally involved in handling the books of accounts of the Trust, he is well aware of the financial position of the school; but he did not exercise proper care in maintaining the trust funds. The Trust is functioning in a democratic manner to fulfill its objectives. The ousted trustee is attempting to disturb the tempo of the Trust by filing the suit without making any ground or citing any reason for seeking a scheme. The 1st petitioner is not a public Trust and hence there is no locus standi for the 1st respondent to file any petition under Sec.92 C.P.C. Hence, this suit itself is not maintainable. 4. The brief facts of the counter affidavit filed by the respondents:
The first respondent /1st plaintiff and Founder Trustee of the 1st petitioner Trust and the 2nd respondent is a local resident who is in public service. The school was famous institute in their area before 2015 and thereafter its strength was going down due to the ineffective management and malpractice committed by the people at the helm of the affairs. M/s.Mahalaxmi
