A society's registration does not alter the underlying trust character of assets if established prior to registration; such trusts must be evaluated for potential breaches under Section 92 CPC.

JUDGMENT

(Dated this the 4th day of October 2023)

The appellants are the petitioners in O.P.No. 2 of 2011 on the files of the Subordinate Judge’s Court, Payyannur and the respondents are the defendants therein. O.P.No.2 of 2011 was filed under section 92 of the Code CPC for granting permission to institute the suit.

2. The case of the petitioners is as follows:

Some prominent persons in Cheruthazham formed a charitable trust committee to establish educational institutions, high schools, colleges, training schools and hospitals for the welfare of the citizens. It also had an aim of cultural and occupational activities. The trust committee formed was registered under the Societies Registration Act, 1860 with the Registrar, in the name and style as Rajeev Memorial Health and Educational Society. Amounts were collected by way of membership fees and donation from public, teaching and non teaching staff.

3. After the registration of the society, a copy of the byelaw was not given to the plaintiffs, and they were kept in dark regarding the general body meeting. The plaintiffs obtained a copy of the bylaw and on perusal, it was found that the executive committee is the supreme authority of the society. Valuable immovable property measuring one hectare, 10 Ares and 931 Sq.mtr with a high school in R.S No.197/1A of Cheruthazham village of the first respondent Trust has been made over to the 4th respondent for a paltry sum of Rs.57,00,000/-. There was no need to alienate the property; the consideration shown is very low, and the general body has not confirmed the sale. Therefore, the suit was filed challenging the deed executed in favour of the 4th respondent and sought permission under section 92 of CPC.

4. Respondent Nos.1 to 3 filed an objection contending that the 1st respondent is not a trust and is registered under the Societies Registration Act 1960, so Section 92 CPC has no application. The general public has no right, authority, or interest over the 1st respondent society. The collection of huge amounts as membership fees from the public and staff, were denied. The society purchased the property by raising funds from members and private persons. Since the society was in financial stringency, a decision was taken to entrust the schools management to a provincial administrative committee. On 5.9.2010, the General Body accepted the decision of the executive committee to sell the property. At this juncture, some persons filed O.S.No.45 of 2011 and obtained an injunction against the 1st respondent. The injunction was later vacated. Therefore, prayed that the petition be dismissed as not maintainable.

5. The 4th respondent filed a separate objection and contended that the 1st respondent is not a charitable trust, so the petition under Section 92 CPC is not maintainable. There is no averment in the plaint or in the petition regarding the creation of a trust; therefore, the petition filed under CPC is not maintainable and prayed for the dismissal of the petition.

6. The learned Sub Judge raised a point for consideration as to whether leave should be granted under section 92 CPC. The learned Sub Judge relied on the decision reported inAmrithakumari v. Ramananthan [1998(2) KLT 305] andAbhaya v. Reheem [ 2005 (3) KLT 891 ], in which it was held by this court that members of the public collecting money and establishing a school and thereafter registering it under the Societies Registration Act does not change the character of the property. It was a case in which some prominent persons of Perinjanam who wanted to do education and social work formed themselves as sponsors for registering a committee under the Societies Registration Act XXI of 1860 and applied for registration of society for doing charitable work. On the death of the founder President, a committee was held, and in the said Committee, one Sreenivasan was in the presidential chair, who was the son of President, V. K. Maman Chohan. The said Sreenivasan, along with his wife and mot