2021 Supreme(Telangana) 367
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
T.AMARNATH GOUD, J.
M.N.R. Educational Trust – Appellant
Versus
Mr. M.N. Raju – Respondent
Civil Miscellaneous Appeal Nos.236 & 237 of 2021
Decided on : 07-09-2021
Advocate Appeared:
For the Appellant : K. INDIRA GOLDA
For the Respondent: SUNIL B GANU
Headnote:
Trust - Breach of trust by misappropriation of funds entrusted to them as Trustees with dishonest intention - Trust Deed - Decree of perpetual injunction - It is his case that he established Trust to promote education and impart quality education. He appointed his father, mother and younger brother as Trustees. Plaintiff came to know in last week of February 2017 that defendants siphoned off huge funds by deceitful methods in order to float different companies. Defendants fraudulently transferred funds of Trust to their business concerns in flagrant violation of terms of Trust Deed as well as applicable laws. Accounts were manipulated in such a way by inflating and deflating same to suit their convenience to perpetuate the fraud - Held, Court have gone through entire record and order impugned in these Civil Miscellaneous Appeals. Trial Court has given cogent and convincing reasons for its conclusions. Court see no irregularity or illegality in impugned order warranting interference of this Court - For sake of observations, at one point of time, learned senior counsel for appellant has drawn attention of this Court with regard to docket proceedings of trial Court, which this Court feels that to comment on same is not necessary at this juncture, since same will be diverting main case from deciding case on merits - Civil Miscellaneous Appeals dismissed.
JUDGMENT:
1. These two Civil Miscellaneous Appeals are filed aggrieved by the common order dated 01.5.2021 passed in I.A.No.2458 of 2019 in O.S.No.434 of 2019 and I.A.No.1328 of 2019 in O.S.No.245 of 2019. The parties to both the appeals are one and the same and the point involved in both the CMAs is also one and the same and hence both the CMAs are disposed of by this common judgment.
2. For the sake of convenience I refer to the parties as they are arrayed before the trial Court and also as were arrayed in Civil Miscellaneous Appeal No.434 of 2021 filed in this Court.
3. Mr. M.S.Vasu Varma, the plaintiff in O.S.No.434 of 2019 filed that suit styling himself as Author of MNR Educational Trust against his father Mr. M.N.Raju and younger brother Mr. Ravi Varma, the defendants. It is his case that he established the Trust to promote education and impart quality education. He appointed his father, mother and younger brother as Trustees. The plaintiff came to know in the last week of February 2017 that the defendants siphoned off huge funds by deceitful methods in order to float different companies. The defendants fraudulently transferred the funds of the Trust to their business concerns in flagrant violation of terms of the Trust Deed as well as the applicable laws. Accounts were manipulated in such a way by inflating and deflating the same to suit their convenience to perpetuate the fraud. The defendants committed breach of trust by misappropriation of funds entrusted to them as Trustees with dishonest intention. Despite issuance of legal notices the defendants did not mend their minds. The defendants and their followers started creating problems, nuisance for the smooth running of the Trust. Hence he filed O.S.No.434 of 2019 seeking decree of perpetual injunction restraining the defendants and their agents from interfering and causing disturbance to the staff, students and parents and plaintiff other than due process of law in respect of suit A and B schedule properties.
4. Be that as it may, the defendants in O.S.No.434 of 2019, filed O.S.No.245 of 2019 against the plaintiff in O.S.No.434 of 2019 contending that the second plaintiff, being the Managing Trustee of the first plaintiff, originally started his career as a school teacher in 1960. He started a small school under the name of Indo-English High School at Santoshnagar, Hyderabad, which grew step by step and it reached a strength of more than 3,600 students over the years. At that time, the age of the defendant in this suit was five years. Over the years, the second plaintiff established various other schools and that the first plaintiff Trust has been doing yeomen service to the people at large.
5. In the year 1992 MNR Educational Trust was established for imparting higher education by establishing Schools, Junior Colleges, Degree Colleges etc., As on date 38 institutions at various places are being run under the aegis of the first plaintiff Trust.
6. Since beginning, the first defendant in the present suit was obsessed to vices and was not able to even complete his education. He started stealing money from the institutions by fraudulent methods and thus totally breaching the confidence reposed in him by the plaintiffs while permitting him to be an authorized signatory in respect of some institutions. With a fond hope he was made an author of the Trust but was not made a trustee of the Trust in view of his irresponsible behavior.
7. It is pertinent to note that an Author of the Trust unless he himself becomes a Trustee, does not have any right either in the Trust or the affairs of the Trust, in accordance with law. Though the first defendant is aware of the same, he wants to proclaim as if he has the status of a Trustee equivalent to that of a Trustee, which in fact, is not so. The first defendant was given authorization to represent the Trust in respect of some of the institutions.
8. The defendant No.1 was authorized in pursuance of the resolution dated 01.4.2011 to administe