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1954 DIGILAW 314 (MAD)

D. K. Raja v. P. S. Kumaraswami Raja

1954-08-03

GOVINDA MENON, RAMASWAMI GOUNDER

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Govinda Menon, J.-I.A. No. 275 of 1953 was an application in O.S. No. 41 of 1953 in the Court of the Subordinate Judge of Ramanathapuram at Mathurai in which the plaintiffs prayed for an injunction under Order 39, rules 1 and 2 and section 151 of the Code of Civil Procedure restraining the fifth defendant from doing anything interfering with the status quo of the Trust Committee and its constitution described in the plaint, pending disposal of the suit, subject to his right to become trustee-manager for three years by devolution. The learned Subordinate Judge held that for the purpose of preserving the status quo and for maintaining the balance of convenience, the fifth defendant should be restrained by means of an interim injunction pending disposal of the suit from interfering with the status quo of the trust committee and its constitution without prejudice to his rights to become the trustee-manager for a period of three years, consequent on the death of his father and hence this appeal. The first defendant in the suit who is since dead along with defendants 5 to 8 and the second plaintiff constituted a joint Hindu family of affluent people in Rajapalayam. The first plaintiff who now holds the position of the Governor of Orissa State is a very near relation of the parties. Defendant No. 2 is the chairman of the Municipal Council, Rajapalayam. The third defendant is the District Collector, Ramanathapuram, while the fourth defendant is a respectable gentleman of the locality in whom the members of the family have great confidence. In 1932 under Exhibit A-1 the first defendant, who was then the head and manager of the joint family constituted a trust known as the Dharma Raja Education Charity Trust, Rajapalayam, for conducting certain schools and other places of learning. For this, certain properties were set apart one of which was a shandy the collections from which have to be utilised for the maintenance of schools and other educational institutions. The document provided for a line of trustees and committee of management. This is attested by all his five sons and it was intended to be a family trust. It is not necessary to describe in detail the devolution of management and how the trust has to be carried out. The document provided for a line of trustees and committee of management. This is attested by all his five sons and it was intended to be a family trust. It is not necessary to describe in detail the devolution of management and how the trust has to be carried out. It also provided that the first defendant as the founder of the trust had power to make changes from time to time and also amendments with regard to the conduct and management of the trust by means of documents as are necessary to effectively carry out the objects and intentions of the trustees. While the matters were in that state, in 1935 there was another trust-deed, Exhibit A-2 by which certain alterations were made in Exhibit A-1 and the later document was to be read as part of the earlier one. In 1938 by Exhibit A-3 there were further changes made in the mode of conduct of the trust and the personnel of the trustees and committees. There was a family partition in 1939 by which each of the members got his share separated. In 1943 another trust-deed, Exhibit A-4, was executed by which there were further alterations in the constitution of the committee and as to how the management was to be carried on. It was provided that the first defendant should be the trustee-manager during his lifetime. After his death each of his sons in the order of seniority shall be the trustee-manager in turn for a period of three years. Provision was also made that in case any one of the sons died the grandsons should step into the place of the sons and so on and so forth. On the 6th of September, 1939, the father and the sons as already stated effected a partition of the joint family properties among themselves and under this document the sons accepted and ratified the earlier trust deeds, the result of such ratification being that any doubt which had arisen with regard to the competency of the first defendant as manager of the family to found the trust out of the joint family properties was cleared up. In that partition deed there was a clause that if it became necessary that the first defendant should at any time make any alterations in the documents relating to the founding of the schools and other educational institutions then he shall have full powers to make alterations without in any way creating inequality among his sons who have equal rights. On the 26th of July, 1943, the first defendant executed Exhibit A-4 called the supplementary trust deed making certain important changes in the mode of management of the trust properties. Under this deed the committee of management should consist of (1) A trustee manager; (2) The municipal chairman, Rajapalayam ; (3) Municipal vice-chairman, Rajapalayam; (4) One Municipal Councillor, Rajapalayam, to be nominated by the members of the committee; (5) Another member to be nominated by the members of the committee. In and by this document the affairs of the trust have to be conducted by the manager and power was given to the first defendant to nominate one of his sons as trustee-manager in his place for a specific period during his own lifetime. O.S. No. 5 of 1945 was a suit filed by the present appellant as plaintiff challenging the validity and effectiveness of Exhibit A-4 by which vital and important changes had been made in the mode of conducting the charities. The main contest there was whether the power granted to the first defendant in the partition deed of 1939 to make alterations in the trust deed clothed him with sufficient authority and jurisdiction to create new offices contemplated in Exhibit A-4. The High Court in Appeal No. 591 of 1946 held that the document constituting the trust conferred power of introducing changes in the management, on the first defendant and therefore Exhibit A-4 was valid and effective. This judgment was pronounced by this Court on 8th February, 1950, though the decision in the Court of the Subordinate Judge was given on 21st January, 1946. Pending appeal to this Court on 5th July, 1948, the first defendant executed a further supplementary trust deed in and by which there were further changes made in the management. The consttution of the committee was as follows:(1) Trustee manager; (2) District Collector Ramanathapuram. ex-officio; (3) Municipal Chairman, Rajapalayam, ex-qfficio; (4) the present first plaintiff; and (5) any person appointed by the said four members from the village public. The consttution of the committee was as follows:(1) Trustee manager; (2) District Collector Ramanathapuram. ex-officio; (3) Municipal Chairman, Rajapalayam, ex-qfficio; (4) the present first plaintiff; and (5) any person appointed by the said four members from the village public. The trustee-manager was also given power to delegate his functions to a person nominated by him. In pursuance of this power the second plaintiff was made to deputise for his father and the educational institutions were conducted on that basis. The committee was functioning smoothly for sometime but unfortunately various disputes arose between the parties and a criminal complaint was filed against the first defendant for certain alleged misappropriation of sums belonging to the charities. A suit, O.S. No. 39 of 1953, had been filed in the Court of the Subordinate Judge, Ramanathapuram, for the removal of the first defendant from the hukdar managership of the charities and there were also other charges of misappropriation and breach of trust, etc. This resulted in serious misunderstanding between the parties and the relationship between the plaintiffs and defendants 6 to 8 on the one side and the first defendant and the fifth defendant on the other became very strained and inimical. While so, on 8th May, 1953, the first defendant executed another trust deed Exhibit B-2 modifying the conditions contained in Exhibit A-5 regarding the management and it is stated therein that the fifth defendant was to be the manager of the trust Tor a period of 15 years from the date of the latest trust deed, the other members of the committee being the Collector of Ramanathapuram, ex officio; the municipal chairman, Rajapalayam ex officio; R.S. Subbaraya Pillai retired vakil and S.S. Ramaswami Mudaliar, landlord, Srivalliputtur. Before this, the first defendant had executed another trust deed, dated 7th April, 1953 (Exhibit B-1) which was cancelled by Exhibit B-2. The reason for cancelling that deed was that the second plaintiff who had been appointed manager thereunder for a further period of ten years from 5th July, 1953, did not accept the appointment on account of the evil advice given to him by the first plaintiff and the sixth defendant who were inimically disposed towards the first defendant. After keeping the document with him for sometime he returned it without agreeing to be the trustee-manager. After keeping the document with him for sometime he returned it without agreeing to be the trustee-manager. Therefore, it is stated that the deed dated 7th April, 1953, did not take effect and it had to be cancelled under Exhibit B-2. The result of Exhibit B-2 is that the fifth defendant gets a right to manage the trust for a period of fifteen years. By this time feelings between the plaintiffs. on the one side and first defendant and the fifth defendant on the other became badly embittered on account of the civil and criminal litigations which had been pending and on 1st June, 1953, the first defendant executed a will bequeathing all his properties in favour of the fifth defendant and it is stated that within 8 days thereafter he committed suicide. Though permission had been granted for the filing of the suit by the Advocate-General on 28th April, 1954, the plaint was filed sometime in June, 1953 and the reliefs asked for are nine in number of which in view of the death of the first defendant the really important ones are prayers H and J and the interlocutory application out of which the present Civil Miscellaneous Appeal has arisen was for restraining defendants 1 and 5 by an order of injunction from interfering with or doing anything to the educational charity trust, its present constitution and working and to preserve the status quo pending disposal of the suit. As the first defendant is dead the injunction is directed against the 5th defendant. The affidavit filed in support of the application contains allegations which are practically the same as those contained in the plaint and in the counter filed on behalf of the fifth defendant all these allegations have been very strongly repudiated. The main contentions put forward on behalf of the plaintiffs are that Exhibit B-2 is void, ineffective and inoperative in law and does not thereby confer upon the fifth defendant any right to be in management of the trust properties. If that is so the earlier deed, Exhibit A-5 still continues and the rights and powers obtained by the second plaintiff have not been exhausted or set aside. If that is so the earlier deed, Exhibit A-5 still continues and the rights and powers obtained by the second plaintiff have not been exhausted or set aside. The result would be that the second plaintiff would continue to manage the trust as he had been doing previously subject to the right of the fifth defendant to become the trustee-manager for three years consequent on the death of his father, the first defendant. The plaintiffs averred that the second plaintiff continues to be in management of the J trust despite the fact that Exhibit B-2 has come into being. Various acts of interference and meddling by defendants 1 and 5 are enumerated in the affidavit filed in support of the application which it is unnecessary to reiterate in detail. It is urged that there is a prayer in the plant asking the fifth defendant to account for a sum of Rs. 6,000 spent by him and even though the first defendant is dead it is essential that the fifth defendant should be asked to state what has happened to that sum. The reliefs E and F still remain open and as such if the fifth defendant is allowed to function there will be a conflict of interest with duty and that a person having such a conflict of interest should no longer function in a fiduciary capacity. The fifth defendant takes his stand on the judgment of the High Court referred to above and contends that the first defendant has absolute power in the matter of introducing changes in the management at his will and, therefore, there is no question of any arrogation of power or misuse of it. The learned Subordinate Judge was of the opinion that even under Exhibit A-5 on which reliance is placed by the second plaintiff it is open to the first defendant to effect substantial constitutional changes only so far as when they are beneficial to the interests of the trust. Such being the case the first defendant’s whims and fancies or caprices cannot be brought into play in the matter of introduction of changes. Such being the case the first defendant’s whims and fancies or caprices cannot be brought into play in the matter of introduction of changes. Having laid down that foundation the learned Judge was of the view that there was hardly any justification for the first defendant to execute Exhibit B-2 by constituting a committee and by giving irrevocable powers to the fifth defendant for a period of fifteen years-There has not been any serious mismanagement or maladministration of the trust properties during the period of the committee functioning under Exhibit A-5. In fact the first defendant himself in Exhibit B-1 states that the trust has been functioning properly and he has reposed confidence which according to the Court was perfectly justified in the second plaintiff’s management. According to the lower Court because of the several civil and criminal proceedings initiated at the instance of the first plaintiff the first defendant changed his attitude and with a view to create friction in the management, he has executed Exhibit B-2. The learned Subordinate Judge has given various other reasons why it is necessary to keep the status quo ante. We do not think it necessary to express any definite opinion as regards the construction of Exhibit A-5 or the merits of the question. Prima facie it seems to us that the interests of the trust are likely to suffer if the two rival contending parties hostile to each other, try to meddle with the affairs of the trust. If we allow the management under Exhibit A-5 to continue there is certainly the implication that a case has been made out for not acting upon the provisions of Exhibit B-2. If on the other hand as contended by the fifth defendant if the committee constituted under Exhibit B-2 were allowed to function that would mean the cancellation of the mode of management contemplated under Exhibit A-5. There can be no doubt that the parties contending against each other are very influential and powerful. The first plaintiff is holding a very high position in the public life of the country and is occupying the exalted office of the Governor of a State. The fifth defendant is a member of the Madras Legislative Assembly having at the last general elections defeated the first plaintiff in his own home constituency. The members of the family themselves are arrayed against each other in this contentious dispute. The fifth defendant is a member of the Madras Legislative Assembly having at the last general elections defeated the first plaintiff in his own home constituency. The members of the family themselves are arrayed against each other in this contentious dispute. One would not, therefore, view with equanimity the educational trust being made the bone of contention between two such powerful and opposing factions. It seems to us that in the best interests of the administration of the trust, pending disposal of the suit the District Collector of Ramanathapuram who is one of the ex officio members of the committee of management both under Exhibit A-5 and under Exhibit B-2 be appointed receiver. It is urged on behalf of the appellants that the Collector is a very busy person and that he can hardly find any time to look after the management of the institutions run under the trust. This argument does not appeal to us. If the Collector can be an ex officio member of the trust committee and can take part in the management, then one fails to see why he cannot be the sole manager and function as a receiver. It is not as if the Collector has to see personally to all the details of management. He can get things done through his subordinates in the revenue and other departments and it is not certainly expected that the Collector functioning as receiver of the trust should look after the affairs of management personally. We are sure that under the management of the Collector as receiver this trust will be ably and efficiently administered. Mr. Gopalaswami Iyengar contends relying upon certain observations contained in Narayana Dossju Varu v. H.R.E. Board1, to which one of us was a party that in an appeal which arises out of an application filed under Order 39, rule 1 and section 151 of the Code of Civil Procedure a receiver cannot be appointed under Order 40, rule 1, Civil Procedure Code. What was held in the decision cited was that where the plaintiff seeks the assistance of the Court to restrain the defendant by an injunction from interfering with the plaintiff’s possession and enjoyment of certain properties it is not open to the Court to dispossess the admitted possession of the plaintiff by appointing a receiver without even an application being made by the defendant to that effect. The facts of the present case are entirely different from those in the case relied on by Mr. Gopalaswami Iyengar. The plaintiffs ask for an injunction restraining the fifth defendant from interfering with the status quo ante and for preserving the existing state of management at the time Exhibit B-2 came to be executed. Mr. Thyagaraja Iyer appearing for the respondents-plaintiffs, requested the Court that he might be allowed to add a prayer for the appointment of a receiver in the alternative, if the injunction prayed for by him cannot be granted in all its full implications. In view of this request by the learned counsel for the respondents we do not think it necessary to direct him to file an application in this Court for the appointment of a receiver. We take it that his oral request is as good as an alternative petition. If that be the case, then there can be no legal objection, whatever to the appointment of a receiver. It is as if the plaintiffs themselves have applied in the alternative, to the granting of an injunction, for the appointment of a receiver. We do not therefore envisage any difficulty in view of the expression of opinion in Narayana Dossju Varu v. H.R.E. Board1. Order 39, rule 1, Civil Procedure Code, allows the Court in an application under that provision to grant injunction or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the Court thinks fit. There can, therefore, be no objection to the appointment of a receiver in an application for an injunction if the plaintiffs want it in the alternative. As stated in Narayana Dossju Varu v. H.R.E. Board1, if the plaintiff does not ask for a receiver and there is no application to that effect by the defendant it is not open to the Court purporting to act under Order 39, rule 1, Civil Procedure Code, to appoint a receiver without any request from the parties. We think it, therefore, just and convenient to appoint a receiver pending disposal of the suit for the preservation of the trust properties and for its proper management. We think it, therefore, just and convenient to appoint a receiver pending disposal of the suit for the preservation of the trust properties and for its proper management. Apart from the fact that the entire subject-matter is pendente lite and as such is within the jurisdiction of the Court there are authoritative pronouncements not only of the English Courts but also Indian decisions as well which are to the effect that in the matter of the trust properties the Court has supervising power over the discretion of the trustees. In In re Hodges, Davy v. Ward2, Malins, V.C., observed as follows: “Therefore the view I have always acted upon, which I think, is the proper view, and which I shall continue to act upon is this, that where the trustee acts in the exercise of his discretion, it is incumbent upon the Court to pay every respect to that exercise, but it must consider whether it is properly done; adopting the language of Sir J. Wigram, which Mr. Bristowe cites to me, the Court must consider whether it is an honest and proper discretion.” There are similar observations in other cases for example in In re Roper’s Trusts3and also in Klug v. Klug4and Halsted v. Halsted5. A similar view has been expressed by Kania, J., as he then was in Rice v. Cama6. The result of these authorities is that where trustees have been appointed for the management of an institution which is charitable or religious in its nature, then even if the document provided for a certain mode of management, still if the interests of the trust require interference Courts have ample supervising powers over the discretion of the trustee in the management of the institution. See also Lewin on Trusts, 15th edition, page 336, where it is stated that if there are sufficient grounds Courts can interfere with the discretion of the trustee. Again in Underbill on Trusts at pages 457 and 460 there are observations to the effect that if the interests of the institution require, the Court can interfere with the discretion of the trustee. Again in Underbill on Trusts at pages 457 and 460 there are observations to the effect that if the interests of the institution require, the Court can interfere with the discretion of the trustee. In the circumstances of the present case the Collector of Ramanathapuram will be appointed receiver and he will take charge of the management of the trust immediately and thereafter function as the sole receiver for this purpose subject to the general directions of the trial Court regarding the filing of accounts and other details of management. Any other course under the present conditions would lead to friction and confusion. Therefore the order of the lower Court granting the injunction is set aside and in its stead a receiver is appointed to manage the trust properties as stated above. There will be no order as to costs in this appeal. The suit is more than a year old and it is imperative that the same should be disposed of as expeditiously as possible and we direct the Subordinate Judge to take steps necessary for its speedy disposal. R.M. ----- Order varied.