Research › Browse › Judgment

Supreme Court of India · body

1943 DIGILAW 48 (SC)

BILASRAI JOHARMAL v. SHIVNARAYAN SARUPCHAND

1943-12-21

LORD ATKIN, LORD PORTER, SIR GEORGE RANKIN

body1943
Judgement Appeal (No. 6 of 1943) from a decree of the High Court (March 19, 1942), reversing a decree of that court passed in its ordinary original civil jurisdiction (October 10, 1941). The following facts are taken from the judgment of the Judicial Committee The appellants, on September 2, 1939, with the sanction of the Advocate General, brought the suit out of which this appeal arose on the original side of the High Court at Bombay under s. 92 of the Code in respect of a public charity. The charity concerned was a hospital at a town in the Jaipur State called Bagar. It was established in 1926 for providing medical relief to the poor, and was called Shivnarayan Joharmal Bagar Hospital. The plaint asked that the defendants (respondents), who were five in number, should be removed from their office as trustees and that new trustees be appointed by the court. It also asked for accounts to be taken of the respondents management, on the footing that they had been guilty of misapplying the funds of the trust; but it was now plain that that allegation was wholly without substance and that the sole ground of complaint was that the respondents had without authority changed the name of the hospital to Shivnarayan Chiranjilal Rungta Hospital, and were employing that new style both in bills, papers and labels of the hospital and on the rent notes issued in respect of the property in which the funds were invested. The first respondent was Shivnarayan, and Joharmal was the name of his brother. Rungta was their family name. Bilasrai, the first appellant, was one of the two sons of Joharmal—the other, Govindram, having been given in adoption to Shivnarayan, whose only son, Chiranjilal, died in 1922. Shivnarayan and his brother were natives of Jaipur and came from Bagar. Both appellants were described in the cause title as " of Bagar." The history and nature of the charity was sufficiently disclosed by two deeds. The first was dated April 21, 1936, and recited that in or about 1926 Shivnarayan had set apart the sum of one lac for the purpose of establishing and maintaining a hospital at Bagar, and that the sum standing to the credit of the fund with the family firm had increased to Rs. 1,42,079. The first was dated April 21, 1936, and recited that in or about 1926 Shivnarayan had set apart the sum of one lac for the purpose of establishing and maintaining a hospital at Bagar, and that the sum standing to the credit of the fund with the family firm had increased to Rs. 1,42,079. It provided that Shivnarayan (the first respondent), Bilasrai Joharmal (the first appellant), Bholaram Hardatrai and Onkarmal Pannalal (respondents 3 and 4), together with one Brijlal Ramjidas, should be trustees. They were to apply the trust moneys in establishing and maintaining " a hospital or hospitals in Bagar " or elsewhere for providing free medical aid to the poor " people." The third clause was as follows " 3. The said trust " moneys, securities, investments and properties forming part " of the trusts shall be called Shivnarayan Joharmal Bagar " Hospital Trust Fund and the hospital or hospitals established " by the trustees out of the trust funds shall be called " Shivnarayan Joharmal Bagar Hospital or Hospitals. The " said trust moneys, securities, investments, etc., shall be kept " in the said Shivnarayan Joharmal Bagar Hospital account." The second deed was dated May 12, 1939. It recited that Brijlal Ramjidas and the appellant Bilasrai Joharmal had resigned from the trusteeship, that pursuant to a decree of the High Court at Bombay, dated October 15, 1937, certain immovable property in Bombay known as Chowpatty Chambers had in 1938 been acquired for the trust as an investment of its funds, and that in addition to that property the trust was possessed of Rs. 81,800 in deposit with a Calcutta firm. By the operative clauses of that deed Shivnarayan, Bholaram and Onkarmal appointed as new trustees Hariram Banarsidas and Motilal Nath (respondents 2 and 5 in the present suit). 81,800 in deposit with a Calcutta firm. By the operative clauses of that deed Shivnarayan, Bholaram and Onkarmal appointed as new trustees Hariram Banarsidas and Motilal Nath (respondents 2 and 5 in the present suit). That deed ended by providing " And whereas the whole of the " moneys subject to the trusts of the said deed poll deed " of trust were contributed by the said Shivnarayan Sarupchand " alone and the said Shivnarayan Sarupchand has requested "the continuing and the new trustees that the charities " created thereunder should henceforth be known by the name " of The Shivnarayan Chiranjilal Rungta Hospital Charities “the continuing and the new trustees hereby declare that the "name of the charities created by and subject to the trust of " the said deed poll deed of trust shall henceforth be and be " carried on in the said name of Shivnarayan Chiranjilal " Rungta Hospital Charities. " The learned trial judge, Chagla J., by his decree of October 10, 1941, removed the trustees and appointed new trustees. He directed the respondents to hand over to the new trustees the trust properties in their possession, together with all the books of account, papers, vouchers, documents, etc., relating to the hospital, but the decree contained no provision giving relief against misapplication of trust moneys and no direction for accounts. On appeal Beaumont C.J. and Somjee J. set aside that decree and dismissed the suit, and from their decree, dated March 19, 1942, this appeal was brought. 1943. Nov. 30 ; Dec. 1, 2. Sir Herbert Cunliffe K.C. and Khambatta for the appellants. The High Court had jurisdiction to entertain the suit. This trust was created in Bombay, the trust moneys were in Bombay and were invested and still remain invested in immovable property in Bombay, and were so invested pursuant to an order of the High Court made on an application by the trustees, and two of the trustees were resident in Bombay. These facts appear to have escaped the attention of the High Court in its appellate jurisdiction, except that there is a reference to the fact that the trust had some property in Bombay. The breach of trust of which the appellants complain was committed in Bombay. These facts appear to have escaped the attention of the High Court in its appellate jurisdiction, except that there is a reference to the fact that the trust had some property in Bombay. The breach of trust of which the appellants complain was committed in Bombay. It has been held that to give jurisdiction either the parties must be subject to the jurisdiction, or the property must be within it, or the trust created within it—any one is sufficient. This trust is administered in Bombay in the sense that the revenue comes from Bombay from the immovable property there. A hospital has been established out of the jurisdiction, but the trust was not only to establish and maintain hospitals outside the jurisdiction, but " in Bagar or elsewhere.” If the trustees had chosen to establish and maintain a hospital in Bombay it would have been completely within the ambit of the trust. Once it is decided that the High Court had jurisdiction there can be no question that the trust has been altered in a material way by the removal of the name it was perpetuating. The same physical hospital and buildings are there, but after the change of name it is not the same charitable trust which was established by the original trust deed. The Jaipur court could have nothing to do with the trusts of a document executed in Bombay. Jurisdiction with regard to trusts is in personam and not in rem. The only cases in which it was necessary to go outside the territorial limits of the Bombay court to effect service was in regard to respondents 3, 4 and 5. The authorities show that the only time when the court hesitates to interfere with a trust because it is doing work outside the jurisdiction is when it is asked to make an order which would prove ineffective. The Jaipur court could make no order in personam on the persons in Bombay or in respect of the property of the trust in Bombay. If any of parties, or the fund, are within the jurisdiction, or the contract has been entered into within it, then the court has jurisdiction Lewin on Trusts, 14th ed., p. 37, note (f) ; Cookney v. Anderson (( 1862) 31 Beav. 452, 462.). Any one of those circumstances is enough, and here there are all of them. If any of parties, or the fund, are within the jurisdiction, or the contract has been entered into within it, then the court has jurisdiction Lewin on Trusts, 14th ed., p. 37, note (f) ; Cookney v. Anderson (( 1862) 31 Beav. 452, 462.). Any one of those circumstances is enough, and here there are all of them. The appellants are not asking for any secific order for any specific act to be done in Jaipur, but for the removal of the trustees. If, as is submitted, the Bombay court had jurisdiction, there then comes the question whether there is an insuperable obstacle to carrying out any order that the court having jurisdiction may feel disposed to make, and where two courts have jurisdiction it may be a question of what is the balance of convenience Ewing v. Orr Ewing (( 1883) 9 App. Cas. 34, 40 ; ( 1885) 10 App. Cas. 453, 499.) ; Agnew on The Law of Trusts in British India ( 1882), pp. 26, 28. The High Court has jurisdiction and there is no insuperable obstacle shown to the carrying out of the order that has been made by the trial judge. Khambatta followed, and referred to In re Vagliano. Vagliano v. Vagliano (( 1905) 75 L. J. (Ch.) 119.) and Penn v. Lord Baltimore ((1750) 1 Ves. Sen. 443, 446.). The fact that title to land in the hospital is outside the jurisdiction would not prevent the Bombay High Court from dealing with the trust on the principle that a court of equity enforces its decrees by attachment of the person, unlike the court of common law which enforces its decrees in rem. Sir Thomas Strangman K.C. and R. J. T. Gibson for the respondents. As to the suggestion that hospitals might be put up in Bombay, what was contemplated was the establishment of a hospital or hospitals at Bagar, and in any event, we are concerned with a hospital in esse. The High Court deals with charities under cl. 19 of the Letters Patent, subject to any legislation under cl. 44. The matter can be looked at from two points of view. First, from the point of view of strict legislation ; here leave for the suit was sought for and obtained under cl. 12 of the Letters Patent on the ground that part of the cause of action had arisen in Bombay. 44. The matter can be looked at from two points of view. First, from the point of view of strict legislation ; here leave for the suit was sought for and obtained under cl. 12 of the Letters Patent on the ground that part of the cause of action had arisen in Bombay. Secondly, there is another and totally different aspect, i.e., whether a court of equity having jurisdiction under the Letters Patent should exercise that jurisdiction in this particular case. On the first point, here two of the respondents were resident in Bombay and three outside the jurisdiction, and the words of the Letters Patent are " where the defendant,” and that must mean all the defendants. As to the second point, the substantial charge is that these respondents have changed the name of the charity in Jaipur, and that as ancillary to that the names in the accounts and the rent names have been changed. Supposing it were a contract entered into in Bombay, to be performed in Jaipur, and there were a breach of the contract, the cause of action would arise in Jaipur, where the contract had to be performed and the breach took place. Assuming that the High Court had jurisdiction—that there was no bar under cl. 12 of the Letters Patent—then a breach has taken place in Jaipur, in that the name of the charity has been changed, and anything that takes place in Bombay is purely ancillary to the change in Jaipur. It is difficult to see how the name could be changed except on the basis of a scheme, and see Advocate General of Bombay v. Bai Punjabai (( 1894) I. L. R 18 B. 551, 560, 569.) and Kanji v. Advocate General (( 1915) 18 Bom. L. R. 60, 63.). The appellants do not ask for any scheme, or for rectification, their real claim is removal. Sir Herbert Cunliffe K.C., in reply. With regard to jurisdiction under cl. 12 of the Letters Patent, the breach of trust of which the appellants complain originated in Bombay, because it is the changing of the name by the supplementary deed of trust which began the trouble, and that deed is registered in Bombay. So far from what was done in Bombay being ancillary to what was done in Jaipur, it is the other way about. So far from what was done in Bombay being ancillary to what was done in Jaipur, it is the other way about. For the right of the court to interfere where trustees have misbehaved, see Letterstedt v. Broers (( 1884) 9 App. Cas. 371, 385.). Here the trustees are persisting in the alteration of the name. [On the removal of trustees reference was also made to Lewin on Trusts, 14th ed., p. 431, s. 3.] Dec. 21. The judgment of their Lordships was delivered by Sir George Rankin, who stated the facts above set out and continued From the plaint (para. 4) it would appear that for some time the family name " Rungta " had been used instead of the word " Bagar " in the title. However that may be, the effect of the change proposed by the deed of 1939 was to remove the name of " Joharmal " from the title of the charity and to put in its place the name of " Chiranjilal," the deceased son of Shivnarayan. That this should give offence to Joharmal and his son Bilasrai was, perhaps, only to be expected. Shivnarayan by his written statement makes the case that when he first provided the sum of one lac to found the charity he included his brother Joharmals name in its title because Joharmal promised to contribute to its funds equally with himself. Of this allegation, however, there is no proof; but it is clear that while Joharmal is a co-owner of the site on which a hospital in Bagar has been built, Shivnarayan is the founder of the charity and has out of his own funds endowed it with large sums. A new hospital has been built and equipped at Bagar at a cost to Shivnarayan of some four lacs, and in addition thereto three lacs have been invested by him on behalf of the trust in property in Bombay. His removal from the office of trustee is therefore a drastic measure not readily to be justified in the interests of the charity or of the poor of Bagar. The learned trial judge refused to apply the principle that he ought not to interfere in the administration of a charity which is carried on within the borders of an independent State. The learned trial judge refused to apply the principle that he ought not to interfere in the administration of a charity which is carried on within the borders of an independent State. He appears to have accepted as well settled the rule that if the court is not in a position to supervise the carrying out of a charity it will not frame a scheme in respect of that charity, but will take such steps only as are necessary to safeguard such trust funds as lie within the jurisdiction. (Advocate General of Bombay v. Bai Punjabai (( 1894) I. L. R. 18 B. 551.); Kanji v. Advocate General (( 1915) 18 Bom. L. R. 60.).) But he took the view—somewhat unreasonably, as their Lordships think—that if the name was changed without proper authority the application of the hospital funds to the hospital was a misapplication of those funds and amounted to a breach of trust which required the court to safeguard them. Further, he took strong exception to the respondents conduct, in that on February 13, 1941— that is, pending suit—they had presented a petition to the Jaipur " Court of Nizamat Shekhawati " asking that the change of name might be ratified and confirmed. While acquitting them of dishonesty or moral turpitude, he suggested to their counsel that if they were prepared to resign he " might " consider the question of condoning their breach of trust,” and as this was not acceded to he removed them from office. In their Lordships view this method of dealing with the matter is open to serious criticism even on the assumption that the respondents conduct amounted to a breach of trust which the court was called upon to correct. If the learned judge had ordered the respondents to restore the original name they might or might not have obtained a stay of his order and appealed from it. If they failed to comply with it a motion to remove them, or to commit them, could have been made in due course and on proper materials. But to require them to resign, and on their refusal to direct their removal from office was to take action far in excess of anything that was called for. The respondents refusal to resign added nothing whatever to the case against them. But to require them to resign, and on their refusal to direct their removal from office was to take action far in excess of anything that was called for. The respondents refusal to resign added nothing whatever to the case against them. Their Lordships agree with the Appellate Bench in holding that the petition to the Jaipur tribunal was not an act in defiance of the High Court of Bombay ; that a charity does not change its nature merely by a change of name ; and that on any view the change of name was not such a serious breach of trust as to justify the removal of the trustees. The learned Chief Justice further observed " Now, this charity, as appears " from the plaint, is a foreign charity. It conducts a hospital " in Jaipur State, and it is a well established principle that the " administration of a charity depends on the law, and is " controlled by the court, of the country where the charity is " conducted. In my opinion, there is no jurisdiction in this " court to remove trustees of a charity functioning in Jaipur " State, and to appoint new trustees of that charity.” The correctness of this view of the law has been challenged in argument by Sir Herbert Cunliffe on behalf of the appellants, who has insisted on the facts that the trust was originally created in Bombay with moneys then lying in Bombay ; that these were invested in Bombay property pursuant to an order of the High Court of Bombay ; and that the breaches of trust complained of had been to some extent committed in Bombay in connexion with the rent notes and other papers. He pointed also to the words " hospital or hospitals in Bagar or " elsewhere " which appear in the first clause of the deed of April 21, 1936. It does not appear that any objection was taken at the trial to the jurisdiction under cl. 12 of the High Courts Letters Patent, and their Lordships are satisfied that there was no defect of jurisdiction in that sense. As a court of equity acts in personam it may, and sometimes does, exercise its jurisdiction over trustees and others in respect of foreign land and otherwise in connexion with rights to property situated abroad. 12 of the High Courts Letters Patent, and their Lordships are satisfied that there was no defect of jurisdiction in that sense. As a court of equity acts in personam it may, and sometimes does, exercise its jurisdiction over trustees and others in respect of foreign land and otherwise in connexion with rights to property situated abroad. The question here, however, is as to the principles which the court will observe in taking upon itself to interfere with the administration of a charity when that charity has to be conducted in a foreign country and the court is for that reason in no position to supervise its administration effectively. That the court will protect and preserve the funds of the charity by the exercise of its jurisdiction over the trustees or other persons is very certain. But the proper conduct of the charity and the giving of any necessary directions for that purpose are another matter. In this case the court was asked to make an order which affected the administration of the charity at every point—namely, an order for the removal of the persons who were conducting the management of the hospital and for the transfer to other persons of the land and buildings at Bagar as well as of the immovables in Bombay in which the money of the charity was invested. The words "or elsewhere" in the deed of 1936 do not seem to be important for the present purpose, seeing that the only hospital belonging to the trust was at Bagar and that no other charity was being conducted by the trustees. Once it is admitted that part of the cause of action arose within the jurisdiction so as to satisfy the requirements of cl. 12 of the Letters Patent, no great importance attaches to the place where the trust was created or its money invested, if there is no question of preserving or recovering its property and if the only question is as to the country whose courts should supervise the conduct of the charity and the application of its funds. The jurisdiction of the court to remove trustees, as Lord Blackburn said in Letterstedt v. Broers (9 App. Cas. The jurisdiction of the court to remove trustees, as Lord Blackburn said in Letterstedt v. Broers (9 App. Cas. 371, 386-7.), " is merely ancillary to its principal " duty, to see that the trusts are properly executed.” And he added that " in exercising so delicate a jurisdiction as that " of removing trustees, their Lordships do not venture to lay " down any general rule beyond the very broad principle .... " that their main guide must be the welfare of the beneficiaries." The learned Chief Justice has pointed out that no evidence was given on the question whether the law of the Jaipur State permitted trustees to alter the name of a charity such as this without the order of a court ; and that if any court can sanction such a change or condone the action of the trustees in making it, the proper court for the purpose must be that of the Jaipur State. The case is not one of founding a charity abroad, or settling a scheme for a charity to be conducted abroad, nor of preserving the property of a foreign charity, nor of assisting a foreign charity or a foreign court to collect or administer funds within the jurisdiction. Their Lordships cannot doubt that on settled principles it was a correct exercise of discretion by the High Court of Bombay that it should leave the plaintiffs to their remedy from the courts of the country in which this hospital is carried on and whose poor are the beneficiaries of the charity. It would be plainly inconvenient, if not intolerable, that the courts of a foreign country should interpose their authority on particular questions arising in the course of administering such a trust— acting intermittently according as they may be invoked by particular complainants in preference to the courts of the country in which the charity was meant to operate, and enforcing their orders by removing the trustees and entrusting to others the management of all the charity and its affairs. Their Lordships will humbly advise His Majesty that this appeal should be dismissed. The appellants must pay the costs of the respondents 1, 3, 4 and 5.