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2001 DIGILAW 101 (HP)

ADVOCATE GENERAL v. BHARTIYA ADAM JATI SEWAK SANGH

2001-05-28

R.L.KHURANA

body2001
JUDGMENT R.L. Khurana, J.—The present suit has been filed by the Advocate General of the State under Section 92, Code of Civil Procedure, praying for the following reliefs: (i) removing defendants No. 3 to 7 and all their member or, any of them as Trustee; (ii) appointing a receiver, meantime to manage the properties and the affairs of the trust, Bhartiya Adam Jati Sewak Sangh, Salogara, the defendant No. 2; (iii) Directing defendants No. 3 to 7 to render accounts and ordering enquiry to be held against the defendants with respect to the property owned by them in Trust for the public; (iv) Providing a scheme for the public management of the trust in which persons devoted to Social work and District Government officials be appointed as Trustees; (v) Providing for representation from amongst the persons belonging to the Scheduled Castes and Scheduled Tribes i.e. Adamjati of H.R; (vi) Any other decree which this Honble Court may think fit and proper in view of the facts and circumstances of the present case may also be passed in favour of the plaintiff and against the defendants; (vii) That the cost may also be ordered to be recovered out of the funds of the Trust or from defendant No. 3. 2. Briefly, the facts enumerated in the plaint may be thus stated. Defendant No. 2, Bhartiya Adam Jati Sewak Sangh, is a society duly registered under the Societies Registration Act, 1860. It has certain affiliated bodies attached to it. One of such affiliated body is defendant No.2 Parvatiya Adam Jati Sewak Sangh, another society registered under the Societies Act, 1860. Defendants No. 3 to 7 are the members of the executive body of the defendant No. 2 and are discharging the functions and obligations, as envisaged under the objects of defendants No.1 and 2 within the State of Himachal Pradesh. They are having control of certain properties situated at Salogra in Solan District, Narengabad in Sirmaur District Garela in Chamba District and Raghi and Sangla in Kinnaur District. They are also receiving grants-in-aid from Central Government as well as State Government for the purposes of discharging their obligations as trustees of the society, defendant No. 2. The activities of defendant No.2 are in the nature of public charity since it is engaged in looking after the social and economic upliftment of the weaker section of the society. They are also receiving grants-in-aid from Central Government as well as State Government for the purposes of discharging their obligations as trustees of the society, defendant No. 2. The activities of defendant No.2 are in the nature of public charity since it is engaged in looking after the social and economic upliftment of the weaker section of the society. In order to carry out its activities, defendant No. 1 has been raising money from various sources, including the public at large. During the period 1980 to 1988 a sum of more than fifteen lacs has been given by the Welfare Department of the State Government over and above the grants received by the defendants from District Welfare Officers, Solan, Chamba and Sirmaur. This amount is in addition to the amount of grants received by defendant No. 2 from defendant No. 1 or the Central Government. 3. Defendant No. 2, which is functioning in the State of Himachal Pradesh since 1956, has been running "Ashrams", Schools, "Bal Vadies", Creches, Hostels etc. in various parts of the State. Defendant No. 2 acquired land at Salogra in District Solan. It came into possession through its then Secretary Dharam Dev Shastri. The said Shri Dharam Dev Shastri sold about four bighas of land out of the land so acquired by defendant No. 2 without any authority and necessity. The defendants No. 3 to 7 have been mismanaging the properties of the defendant No.2 as also the grants-in-aid received by them. They have also been making gifts of the properties of defendant No. 2 unauthorisedly and thus have committed breach of trust. 4. Sometime in the year 1984, defendant No. 2 faced with the problem of indebtedness to the extent of above one lac. With the some object of paying off the debt some land was sold in pursuance of the resolution of the competent authority, that is, Working (Executive) Committee of the defendant No. 2. However, the sale proceeds received by the sale of such land were never defrayed towards the payment of debt. Defendant No. 3 also maneuvered to sell different parcels of land to his friend Babu Ram and his wife. Such sales were made against pronotes and no consideration in cash was paid. Defendant No. 3 also maneuvered a gift of one bigha of land in favour of his own daughter. The defendant No. 2 presently is left with 5748 sq. Defendant No. 3 also maneuvered to sell different parcels of land to his friend Babu Ram and his wife. Such sales were made against pronotes and no consideration in cash was paid. Defendant No. 3 also maneuvered a gift of one bigha of land in favour of his own daughter. The defendant No. 2 presently is left with 5748 sq. metres of land as against 7599 sq. metres owned by it. Besides, it owns a lot of other movable properties. Alleging mismanagement of the trust and affairs of defendant No. 2, the present suit came to be filed claiming the reliefs as detailed above. 5. The defendants while resisting the suit raised a preliminary objection as to the maintainability of the suit under Section 92, Code of Civil Procedure. It is averred that defendants No. 1 and 2 are social organisations engaged in welfare activities of Adam Jatis Scheduled Castes, Scheduled Tribes and Backward Classes, including children and women. Defendants No. 3 to 7 are office bearers of such organisations. Defendants No. 1 and 2 are the societies duly registered under the Societies Registration Act. They do not constitute a charitable trust. Nor the defendants No. 3 to 7 are the trustees of a charitable trust. 6. On the pleadings of the parties, following preliminary issue was framed on 15.5.1996: "Whether the defendants No.1 and 2 are Public Trusts and defendants No. 3 to 7 are trustees? (Onus on parties)." 7. I have heard the learned Counsel for the parties and have also gone through the record of the case. 6. On the pleadings of the parties, following preliminary issue was framed on 15.5.1996: "Whether the defendants No.1 and 2 are Public Trusts and defendants No. 3 to 7 are trustees? (Onus on parties)." 7. I have heard the learned Counsel for the parties and have also gone through the record of the case. My findings on the above preliminary issue are as under : Issue No. 1 Section 92, Code of Civil Procedure reads : "Public charities.—(1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or where the direction of the Court is deemed necessary for the administration of any such trust, the Advocate-General, or two or more persons having an interest in the trust and having obtained the leave of the Court, may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other Court empowered in that behalf by the State Government within the local limits of whose jurisdiction the whole or any part of the subject-matter of the trust is situate to obtain a decree— (a) removing any trustee; (b) appointing a new trustee; (c) vesting any property in a trustee; (cc) directing a trustee who has been removed or a person who has ceased to be a trustee, to deliver possession of any trust property in his possession to the person entitled to the possession of such property; (d) directing accounts and inquiries; (e) declaring what proportion of the trust property or of the interest therein shall be allocated to any particular object of the trust; (f) authorising the whole or any part of the trust property to be let, sold, mortgaged or exchanged; (g) settling a scheme; or (h) granting such further or other relief as the nature of the case may require. , (2) Save as provided by the Religious Endowments Act, 1863 (20 of 1863), or by any corresponding law in force in the territories which, immediately before the 1st November, 1956, were comprised in Part B States, no suit claiming any of the reliefs specified in sub-section (1) shall be instituted in respect of any such trust as is therein referred to except in conformity with the provisions of that sub-section. (3) The Court may alter the original purposes of an express or constructive trust created for public purposes of a charitable or religious nature and allow the property or income of such trust or any portion thereof to be applied cypres in one or more of the following circumstances, namely: (a) where the original purposes of the trust, in whole or in part,— (i) have been, as far as may be, fulfilled; or (ii) cannot be carried out at all, or cannot be carried out according to the directions given in the instrument creating the trust or, where there is no such instrument according to the spirit of the trust; or (b) where the original purposes of the trust provide a use for a part only of the property available by virtue of the trust; or (c) where the property available by virtue of the trust and other property applicable for similar purposes can be more effectively used in conjunction with, and to that end can suitably be made applicable to any other purpose, regard being had to the spirit of the trust and its applicability to common purposes; or (d) where the original purposes, in whole or in part, were laid down by reference to an area which then was but has since ceased to be a unit for such purposes; or (e) where the original purposes, in whole or in part, have, since they were laid down,— (i) been adequately provided for by other means, or (ii) ceased, as being useless or harmful to the community, or (iii) ceased to be, in law, charitable, or (iv) ceased in any other way to provide a suitable and effective method of using the property available by virtue of the trust, regard being had to the spirit of the trust." 8. Dealing with the above provision, the Honble Supreme Court in Pragdasji Guru Bhagwandasji v. Ishwarlalbhai Narsibhai and others, AIR 1952 SC 143, has held : "A suit under Section 92, C.P.C., is a suit of a special nature which presupposes the existence of a public trust of a religious or charitable character. Such suit can proceed only on the allegation that there is a breach of such trust or that directions from the court are necessary for the administration thereof, and it must pray for one or other of the reliefs that are specifically mentioned in the section. Such suit can proceed only on the allegation that there is a breach of such trust or that directions from the court are necessary for the administration thereof, and it must pray for one or other of the reliefs that are specifically mentioned in the section. It is only when these conditions are fulfilled that the suit has got to be brought in conformity with the provision of Section 92, CP.C....." 9. The above ratio was again reiterated in Swami Parmatmanand Saraswati and another v. Ramji Tripathi and another, AIR 1974 SC 2141, and in Charan Singh and another v. Darshan Singh and others, AIR 1975 SC 371. It has further been added : "It is, therefore, clear that if the allegation of breach of trust is not substantiated pr that the plaintiff had not made out a case for any direction by the Court for proper administration of the trust, the very foundation of a suit under the section would fail; and, even if all the other ingredients of a suit under Section 92 are made out, if it is clear that the plaintiffs are not suing to vindicate the right of the public but are seeking a declaration of their individual or personal rights or the individual or personal rights of any other person or persons in whom they are interested, then the suit would be outside the scope of Section 92." 10. In the present case, it is the admitted case of the plaintiff that both defendants No. 1 and 2 are "Societies" registered under the Societies Registration Act, 1860. Section 1 of the said Act provides : "Any seven or more persons associated for any literary, scientific or charitable purpose or for any such purpose as is described in Section 20 of this Act, may, by subscribing their names to a memorandum of association, and filing the same with the Registrar of Joint Stock Companies, form themselves into a society under this Act." 11. In its application to the State of Himachal Pradesh, the words "of Joint-Stock Companies" have been substituted by the words "to be appointed by the State Government, by notification in the official Gazette, for carrying out the purpose of this Act." 12. In its application to the State of Himachal Pradesh, the words "of Joint-Stock Companies" have been substituted by the words "to be appointed by the State Government, by notification in the official Gazette, for carrying out the purpose of this Act." 12. Section 20 of the Act, as is in force in the State of Himachal Pradesh, provides: "The following Societies may be registered under this Act:— Charitable Societies, the military orphan funds or societies established at the several Presidencies of India, societies established for the promotion of Khadi and village Industry, Panchayat Industry, Rural Development, Science, literature or the fine arts> for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation or maintenance of libraries or reading rooms for a general use among the members or open to the public or public museums and gallaries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs." 13. A combined reading of the provisions contained in Sections 1 and 20, quoted above, shows that the Act permits registration of societies for charitable purpose. 14. It has been held by the High Court of Bombay in AS. Krishnan v. M. Sundaram and others, AIR 1941 Bombay 312, that the position of a society registered under the Societies Registration Act, is mere that of a club or a joint stock company. 15. In G. Chikka Venkatappa v. D. Hanumanthappa, (1970) 1 Mys. LJ. 296^ it has been held that the formation of a society under the Societies Registration Act, 1860, to carry out a charitable or useful or social purpose cannot be regarded as amounting to creation of a trust for the application of Section 92, Code of Civil Procecdure. The effect of the Societies Registration Act, 1860, is not to invest properties of the society with the character of trust property. Even if the purpose for which the society was formed was charitable purpose, the property acquired for this purpose will belong to the society and there is no trust and no trust can be predicated, 16". The above ratio was approved by a Full Bench of the Kerala High Court in Kesava Panicker v. Damodara Panicker and others, AIR 1976 Kerala 86. 17. The above ratio was approved by a Full Bench of the Kerala High Court in Kesava Panicker v. Damodara Panicker and others, AIR 1976 Kerala 86. 17. At this stage, reference is required to be made to Section 5 of the Societies Registration Act, 1860, which provides : "The property, movable and immovable, belonging to a society registered under this Act, not vested in Trustees, shall be deemed to be vested, for the time being in the governing body of such society, and in all proceedings, civil and criminal may be described as the property of the governing body of such society by their proper title." (Emphasis supplied) 18. Under the above provisions the properties shall not vest in the Society, if such properties were already with the trustees. In other words, the registration of a Trust as a Society under the Societies Registration Act, 1860 would not alter the position and the properties belonging to the trust would not vest in the society but the trustees would continue to be the legal owners of such properties. 19. In Kesava Panickcrs case (supra), a suit was filed under Section 92, Code of Civil Procedure, by the plaintiffs therein with the leave of the Advocate General to the effect that the school, the buildings, the land on which the school buildings took as well as the playgrounds and all appurtenances and equipments and furniture, and all the belongings of the school formed a public trust for a public purpose of a charitable nature, that is educational purpose. It was also averred that the properties of the school which have been managed by the society registered under the Societies Registration Act, I860, formed a trust of such a public nature. The contesting defendant, who had become the President of the Society by the time the suit was filed, contended that the school, its grounds, furniture etc. did not belong to the Society and that the same were his private properties. He also contended that the property on which the school building stood was obtained by him tinder a registered lease from the owner in 1936 for the purpose of constructing buildings for Higher Elementary School. One of the questions involved in the suit was whether the suit was maintainable under Section 92, Code of Civil Procedure. He also contended that the property on which the school building stood was obtained by him tinder a registered lease from the owner in 1936 for the purpose of constructing buildings for Higher Elementary School. One of the questions involved in the suit was whether the suit was maintainable under Section 92, Code of Civil Procedure. There was evidence in the case that long before the registration of the society, funds were collected from the public towards share money. There have been contributions as well. On the basis of such evidence, it was held that there has been a clear intention to form a Trust and that a trust fund was created, which was utilised for construction of the school building and for the ancillary purposes for establishing and maintaining the work of the school. 20. It was further held that if there was a trust created by public for a public charitable purpose, namely, establishing, maintaining and running a school, the fact of the registration of a society could not change the character of the properties which had already been constituted as trust properties and impressed with the trust and any addition to those properties must also have the same character. 21. In the present case, there are neither pleadings nor evidence to show that any funds were collected from the general public before the defendants No. 1 and 2 came to be registered as Societies under the Societies Registration Act, 1860. Therefore there was no trust as such and vide Section 20 of the Societies Registration Act, 1860, all moneys received by the Defendants No. 1 and 2 either by way of grants-in-aid or in the form of contributions from the public would vest in the societies, that is, defendants No. 1 and 2. 22. The ratio laid down in Municipal Corporation of Delhi v. Children Book Trust, AIR 1992 SC 1456, reliance on which has sought to be placed by the learned Counsel for the plaintiff has no application to the present case. The Honble Supreme Court was not considering the applicability of Section 92, Code of Civil Procedure, but was considering the question whether an institution imparting education would fall within the meaning of an institution established for a charitable purpose so as to claim exemption from taxes under the Delhi Municipal Corporation Act, 1957. 23. The Honble Supreme Court was not considering the applicability of Section 92, Code of Civil Procedure, but was considering the question whether an institution imparting education would fall within the meaning of an institution established for a charitable purpose so as to claim exemption from taxes under the Delhi Municipal Corporation Act, 1957. 23. For the applicability of Section 92, Code of Civil Procedure, the following four conditions must be satisfied, namely:— (i) The existence of a trust for a public purpose of a charitable or religious nature; (ii) the plaint must allege a breach of trust or seek courts directions for administration of trust; (iii) the suit must be not only in the interest of the plaintiff individually but in the interest of the public or the trust itself; and (iv) the relief sought must be one of the reliefs mentioned in Section 92, Code of Civil Procedure. 24. In the present case, the very first condition is lacking. As stated above, it is the admitted case of the plaintiff that defendants No. 1 and 2 are "societies" registered under the Societies Registration Act, 1860. There is no averment and/or evidence that any trust was expressly or impliedly created. Even if defendants No. 1 and 2 are carrying on charitable purpose, the same by itself would not attract the provisions of Section 92, Code of Civil Procedure. 25. On the facts and circumstances of the case neither the defendants No.1 and 2 are public trusts nor the defendants No. 3 to 7 are the trustees. The issue is decided against the plaintiff. Relief : 26. As a result of the findings recorded under issue No. 1 above, the present suit under Section 92, Code of Civil Procedure, is not maintainable and the same is accordingly dismissed. No orders as to costs. Suit dismissed.