Pushpa Berry v. Shri Mahila Grih Udyog Lijjat Papad
2013-09-26
ALOK ARADHE
body2013
DigiLaw.ai
JUDGMENT Alok Aradhe, J.:- This appeal is by the plaintiff which was admitted by a Bench of this Court on the following substantial question of law:-- Whether the First Appellate Court is justified in law in upsetting and reversing the findings wherein the trial Court allowed the suit? Facts giving rise to filing of the appeal, briefly stated, are that the plaintiff filed the suit, inter alia, on the ground that Shri Mahila Grin Udyog Lijjat Pappad (hereinafter referred to as the 'Society') is a society registered under the provisions of Societies Registration Act, 1860 (for short the 1860 Act') as well as under the Bombay Public Trusts Act, 1950 (for brevity the 1950 Act'). The defendant No. 1 opened its Branch at Jabalpur on 12-2-1975 and by order dated 10-8-1976 authorized the plaintiff to function as Manager of the Branch. It was further pleaded that whole assets and liabilities of Jabalpur Branch belong to the plaintiff and the defendants have not invested any amount. However, the defendant No. 1, on the basis of charges levelled against the plaintiff, namely, that there has been deterioration in quality of 'Pappad'; plaintiff has distributed pamphlets containing defamatory material against the society; and has furnished wrong information with regard to stock, passed a resolution dated 24-2-1978 by which it was decided to close down the Jabalpur Branch. The resolution was conveyed to the plaintiff vide letter dated 26-2-1978 and thereafter notice dated 28-2-1978 was also sent by the society through its counsel. The plaintiff thereupon filed a suit seeking relief of declaration that the resolution dated 24-2-1978 passed by the Managing Committee of the Society is illegal and is inoperative. The plaintiff also sought permanent prohibitory injunction restraining the defendants from taking any action against the plaintiff or its institution. 2. The defendants filed written statement in which, inter alia, it was pleaded that defendant No. 1 is registered as a society under the 1860 Act as well as 1950 Act. It was further pleaded that trade mark, namely, "Lijjat" has been registered with the Registrar of Trade Mark on 28-4-1967 in society's name. It was further pleaded that Memorandum of Association and Articles of Association have been framed in the year 1966 and were amended in the years 1973 and 1976, respectively.
It was further pleaded that trade mark, namely, "Lijjat" has been registered with the Registrar of Trade Mark on 28-4-1967 in society's name. It was further pleaded that Memorandum of Association and Articles of Association have been framed in the year 1966 and were amended in the years 1973 and 1976, respectively. It was also pleaded that Branches of society are autonomous in all respects and assets and liabilities belong to the each of the Branch and they function independently subject to overall control and supervision of defendant No. 1. It was also pointed out that none of the members of the Jabalpur Branch has, at any point of time, applied or has been granted membership of the society. In paragraph 6 of the written statement it was stated that defendant No. 1 has not invested any amount in Jabalpur Branch and the entire assets and liabilities of Jabalpur Branch belong to the plaintiff. It was also pointed out that society has granted a gratuitous licence to Jabalpur Branch to use its trade mark which is determinable at its will and since the subject matter of the suit pertains to internal management of the society, therefore, the Court has no jurisdiction to entertain the suit. 3. The trial Court vide judgment and decree dated 30-8-2006, inter alia, held that in view of Article 1(B) of Articles of Association, if a woman starts working for the society, she becomes a member thereof. It was further held, on the basis of Exhibits-P-6 and P-20, that plaintiff and other persons working in Jabalpur Branch were invited to attend the annual general meeting held on 26-9-1977. Accordingly, it was held that the plaintiff being the member of the society and Manager of Jabalpur Branch has the right to institute the suit. The trial Court further held that there is no express agreement between Jabalpur Branch and the Society to use the trade mark. But, since the Society has recognized the Jabalpur Branch as its Branch, therefore, Jabalpur Branch is using the trade mark of the society and use of trade mark shall be governed by the Articles of Association and, therefore, it cannot be said that licence has been given by the Society to its Jabalpur Branch to use the trade mark.
But, since the Society has recognized the Jabalpur Branch as its Branch, therefore, Jabalpur Branch is using the trade mark of the society and use of trade mark shall be governed by the Articles of Association and, therefore, it cannot be said that licence has been given by the Society to its Jabalpur Branch to use the trade mark. It was also held that there is material on record to show that charges levelled against the plaintiff vide Exhibits-P-7 and 7A were either enquired into or found to be proved. On the basis of Auditor's report of 1976-77 (Exhibit-P-10) the trial Court held that the accounts of Jabalpur Branch were being properly maintained. The burden to prove the fact that affairs of Jabalpur Branch were being mismanaged and it was being run contrary to the principles of the society was on defendant No. 1, which it has failed to discharge. Thus, it was held that resolution dated 24-2-1978 (Exhibit-P-11) has not been passed in accordance with Article 3(A)(e) of the Articles of Association and the Civil Court can examine the issue whether a resolution has been passed by the Society in accordance with the Articles of Association. 4. The trial Court further held that provisions of 1950 Act do not apply to the branches of the Trust which are situate outside the State of Maharashtra and Gujarat and in respect of causes of action which have arisen outside the aforesaid States. It was further held that society is also registered under 1860 Act and, therefore, in accordance with Articles of Association, the suit can be filed by or against the society by President and, therefore, it is not necessary to implead all the Trustees. Accordingly, the suit was decreed. 5. The lower Appellate Court, however, vide judgment and decree dated 27-1-2010, inter alia, held that society is a Trust and its main office is situate in Bombay and one of its branches is situate at Jabalpur and, therefore, the provisions of 1950 Act would apply. The plaintiff has neither obtained permission from the Charity Commissioner nor has impleaded the Charity Commissioner and has also not raised any objection before the Charity Commissioner, before institution of the suit and, therefore, the suit is barred under sections 50, 51 and 80 of the 1950 Act.
The plaintiff has neither obtained permission from the Charity Commissioner nor has impleaded the Charity Commissioner and has also not raised any objection before the Charity Commissioner, before institution of the suit and, therefore, the suit is barred under sections 50, 51 and 80 of the 1950 Act. It was further held that under Article 1(B) of Articles of Association, the plaintiff is the member of the society and is a Manager and, therefore, is competent to file the suit. It was also held that no permission under Order 1, Rule 8 of the Code of Civil Procedure was required to be obtained as the plaintiff alone could have filed the suit with the permission of the Charity Commissioner. It was further held that name and trade mark is the property of the society and if recognition of Jabalpur Branch is withdrawn, the Branch has no authority to use the name and trade mark. Consequently, the same was dismissed. 5-A. Learned senior counsel for the appellant has submitted that no objection was raised in the written statement that the suit is not maintainable in view of provisions of 1950 Act and, therefore, the lower appellate Court grossly erred in holding the suit to be barred in view of provisions of 1950 Act. It was further submitted that no Trust Deed was filed to show that the property of the Trust was situated in State of Madhya Pradesh. It was also urged that no amount of evidence can be looked into if a plea in this regard has not been set up in the plaint and no party can be permitted to change the case pleaded by it. Lastly, it was urged that law of that State would apply, where the property of the Trust is situate. In support of aforesaid submissions, learned senior counsel for the appellant has placed reliance on the decisions in the cases of AIR 1930 PC 57 , Mulam Chand Chhoteylal Modi vs. Kanchhendilall Bhaiyalal and others, AIR 1958 M.P. 304 , Nannu Lal vs. Radha Kishan, AIR 1956 Bhopal 16, Anant Prasad Lakshminiwas Ganeriwal vs. State of Andhra Pradesh and others, AIR 1963 SC 853 and Church of North India vs. Lavajibhai Ratanjibhai and others, AIR 2005 SC 2544. 6.
6. On the other hand, learned counsel for the respondents submits that the plaintiff had filed the suit in the representative capacity and since no permission under Order 1, Rule 8 of the Code of Civil Procedure obtained, therefore, the suit was liable to be dismissed on this ground alone. It was further submitted that plaint had no locus to file the suit as no suit can be filed by an employee to challenge the resolution passed by the Society and that the suit was barred in view of provisions of sections 50, 51 and 80 of the 1950 Act. It was also urged that suit was bad on account of non-joinder of necessary parties as all the trustees in the suit were not made parties. The society has the legal right to close down the Branch and the trade mark is its property. It was also pointed out that pure question of law can be raised at stage of the proceedings. In support of his submissions learned counsel has placed reliance on the decisions in (2004) 3 SCC 137 , Julien Educational Trust vs. Sourendra Kumar Roy and others, (2010) 2 SCC 287, Anant Prasad Lakshminiwas Ganeriwal vs. State of Andhra Pradesh and others, AIR 1963 SC 853 , Ramswarup Guruu Chhote Balakdas vs. Motiram Khandu Patil and others, AIR 1968 SC 422 , Charity Commissioner, Bombay vs. Administrator of the Shringeri Math and its properties, AIR 1969 SC 566 , M/s. Nibro Limited vs. National Insurance Co. Ltd. AIR 1991 Del 25 , Yusuf Ajij Shaikh and others vs. Special Land Acquisition Officer and others, AIR 1994 Bombay 327, Kalyan Singh vs. Smt. Chhoti and others, 1990 (1) SCC 266 and Khasgi Trust Shri and another vs. Mahesh Kumar Naraindas Khandelwal, 1992 JLJ 315 , Keshav Choubey vs. Sarvodaya Samiti, 1989 MPWN 14, Sitaram Kashiram Konda vs. Pigment Cakes and Chemicals Mfg.
AIR 1980 SC 16 , Commissioner of Income Tax Kerala vs. M/s. Alagappa Textile, AIR 1980 SC 235 , K.C. Thomas vs. R.L. Gadrock and another, AIR 1970 Patna 163, R.C. Cooper vs. Union of India, AIR 1970 SC 564 , United Church of Northern India Trust Association vs. Shantilal and others, 2000(1) MPLJ 380 , Kanbi Manji Abji and others vs. Kanbi Vaghji Mavji and others, AIR 1993 SC 1163 , Church of North India vs. Lavajibhai Ratanjibhai and others, AIR 2005 SC 2544, Trustees of the Port of Madras vs. M/s. Aminchand Pyarelal and others, AIR 1975 SC 1935 , Satyavrat Sidhantalankar vs. Arya Samaj Bombay, AIR 1946 Bombay 516, P.C. Bohra and others vs. National Sports Club of India, AIR 1991 NOC 78, Haji Anwar Ahmed Khan vs. The Punjab Wakf Board and others, AIR 1980 P & H 306, Chandrika Misir and another vs. Bhaiyalal, AIR 1973 SC 2391 , Yeshwant Deorao vs. Walchand Ramchand, AIR 1951 SC 16 and T. Arivandandam vs. T.V. Satyapal and another, AIR 1977 SC 2421 . 7. I have considered the respective submissions made by learned counsel for the parties and have perused the record. The 1950 Act has been enacted in exercise of powers under Entry 28 of List III of Seventh Schedule of the Constitution of India. Ordinarily there is a general presumption that legislation enacted by State Legislature will be applicable only within the territorial limits thereof as the Legislature does not intend to exceed its jurisdiction. The Constitution Bench of Supreme Court in the case of State of Bihar vs. Smt. Charusila Dasi, AIR 1959 SC 1002 while dealing with the provisions of Bihar Hindu Religious Trust Act dealt with the question whether the State Legislature has power to affect the Trust property which may be situate outside Bihar, but which pertains to the Trust situate in Bihar. The Constitution Bench in paragraph 14 has held as under:-- 14. ............The question, therefore, narrows down to this: in so legislating, has it power to affect trust property which may be outside Bihar but which appertains to the trust situate in Bihar? In our opinion, the answer to the question must be in the affirmative............ The Trust being situate in Bihar the State has legislative power over it and also over its trustees or their servant and agents who must be in Bihar to administer the trust.
In our opinion, the answer to the question must be in the affirmative............ The Trust being situate in Bihar the State has legislative power over it and also over its trustees or their servant and agents who must be in Bihar to administer the trust. Therefore, there is really no question of the Act having extra-territorial operation............. This Court has applied the doctrine of territorial connection or nexus to income tax legislation, sales tax legislation and also to legislation imposing a tax on gambling. In Tata Iron and Steel Co. Ltd. vs. State of Bihar, AIR 1958 SC 452 at p. 461 the earlier cases were reviewed and it was pointed out that sufficiency of the territorial connection involved a consideration of two elements, namely, (a) the connection must be real and not illusory and (b) the liability sought to be imposed must be pertinent to that connection. It cannot be disputed that if the religious endowment is itself situated in Bihar and the trustees function there, the connection between the religious institution and the property appertaining thereto is real and not illusory; indeed the religious institution and the property appertaining thereto form one integrated whole and one cannot be dissociated from the order. If, therefore, any liability is imposed on the trustees, such liability must affect the trust property......... 8. Similar view was taken by another Constitution Bench of Supreme Court in the case of Anant Prasad Lakshminiwas Ganeriwal vs. State of Andhra Pradesh and others, AIR 1963 SC 853 while dealing with the provisions of Hyderabad Endowments Regulations, 1940. In the aforesaid case the Trust had properties in Hyderabad as well as in the State of Madhya Pradesh. The properties of the Trust in the State of Madhya Pradesh were governed by M.P. Public Trusts Act, 1951. The question which arose for consideration before the Supreme Court was whether the properties which are not situate within State of Andhra Pradesh would be governed by Hyderabad Endowments Regulations, 1940. In the aforesaid context, the Supreme Court held that Hyderabad Endowments Regulations, 1940 would apply to the properties of the temple and in such a case the question of extra territorial operation of the Act would not arise.
In the aforesaid context, the Supreme Court held that Hyderabad Endowments Regulations, 1940 would apply to the properties of the temple and in such a case the question of extra territorial operation of the Act would not arise. In view of aforesaid enunciation of law by two Constitution Bench decisions of the Supreme Court it is graphically clear that law enacted by the State Legislature in respect of trust situate in that State would apply to the properties of such trust, even if same are situate in another State. 9. In the light of aforesaid well settled legal position, the provisions of 1950 Act may be seen. The 1950 Act has been enacted by the State Legislature in public interest to safeguard the properties vested in the Trust as also to control the management thereof so that the Trust property may not be squandered or the object of purport for which public trust is created may not be defeated by the persons having control there over. Chapter VII of the Act deals with functioning and powers of Charity Commissioner. The relevant extract of section 50 of the 1950 Act provides for suits relating to Public Trust which reads as under:-- 1. Suit by or against or relating to public trusts or other. In any case,-- (i) where it is alleged that there is breach of a public trust, negligence, misapplication or misconduct on the part of the trustee or trustees, (ii) where a direction or decree is required to recover the possession of or to following property belonging or alleged to be belonging to a public trust or the proceeds thereof or for an account of such property or proceeds from a trustee, ex-trustee, alienee, trespasser or any other person including a person holding adversely to the public trust but not a tenant or licensee.
(iii) Where the direction of the Court is deemed necessary for the administration of any public trust, or (iv) for any declaration or injunction in favour of or against a public-trust or trustee or beneficiary thereof, the Charity Commissioner after making such enquiry as he thinks necessary or two or more persons having an interest in case the suit is under sub-clauses (i) to (iii) or one or more such persons in case the suit is under sub-clause (iv) having obtained the consent in writing of the Charity Commissioner as provided in section 51 may institute a suit whether contentious or not in the Court within the local limits of whose jurisdiction the whole or part of the subject-matter of the trust is situate, to obtain a decree for any of the following reliefs. Thus, it is apparent that the suit against the Trust can be filed in the Court within the local limits of whose jurisdiction the whole or the part of the subject-matter of the Trust is situate. In other words the suit against the Trust can be filed even outside State of Maharashtra. In order to decide the question of applicability of 1950 Act to the facts of the case, it is necessary to examine whether the property of the society is situate in the State of Madhya Pradesh. In this context, the pleadings of the parties may be seen. In paragraph 11(iii) of the plaint the plaintiff has stated that defendants have not established the Jabalpur Branch and have not invested any money in Jabalpur Branch. The defendants in paragraph 15(iii) of the written statement have stated that Society has not established the Jabalpur Branch or invested any money in Jabalpur Branch. It has also been pleaded that Society has accorded recognition to the Jabalpur Branch and has granted gratuitous licence to the Branch to use trade name and trade mark of the Society. 10. At this juncture, it is appropriate to deal with the submission made by learned counsel for the respondents that trade mark is a property of the defendants. Clause 21 of the scheme framed for better administration and management of the Trust under section 50A(1) of 1950 Act, provides that the properties of the Trust shall consist of movable and immovable properties more particularly mentioned and stand recorded in the Public Trust Registration Office, Gr. Bombay Region in Sch-I-Register.
Clause 21 of the scheme framed for better administration and management of the Trust under section 50A(1) of 1950 Act, provides that the properties of the Trust shall consist of movable and immovable properties more particularly mentioned and stand recorded in the Public Trust Registration Office, Gr. Bombay Region in Sch-I-Register. All these properties and new accretions thereto acquisitions, donations and offerings in cash or kind received hereafter shall be called Trust properties. It is pertinent to mention here that defendants have not produced any record in this regard. Undoubtedly, the trade mark is a property under the provisions of erstwhile Trade and Merchandise Marks Act, 1958 and registered trade mark under section 37 thereof may be assigned. However, section 2(a) of aforesaid Act provides that "assignment" means an assignment in writing by act of the parties concerned. In the instant case, there is no document on record to show that the trade mark has been assigned to Jabalpur Branch of the Society. In the written statement it has been stated that gratuitous licence has been granted to Jabalpur Branch to use the trade mark. However, the aforesaid gratuitous licence has also not been produced by the Society. No material has been placed on record on behalf of the defendant to show that any property of the society is situate within State of Madhya Pradesh. Thus, the defendants have failed to prove that any property which belongs to the Trust is situate in the State of Madhya Pradesh. In view of preceding analysis, the provisions of 1950 Act do not apply to the suit filed by the plaintiff. 11. It is well settled in law that a plea of bar to jurisdiction of a Civil Court must be considered having regard to the contentions raised in the plaint. For the said purpose, the averments disclosing cause of action and the reliefs sought for therein must be considered in their entirety. The Court may not be justified in determining the question, one way or the other, only having regard to the reliefs claimed de hors the factual averments made in the plaint. The Court has to consider what, in substance, and not merely in form, is the nature of the claim made in the suit and the underlying object in seeking the real relief therein.
The Court has to consider what, in substance, and not merely in form, is the nature of the claim made in the suit and the underlying object in seeking the real relief therein. An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply. [See: Church of North India vs. Lavajibhai Ratanjibhai and others, AIR 2005 SC 2544] 12. Article 3-A(e) of the Articles of Association of the Society provides that Bombay Managing Committee shall have power to close down any Branch if the Bombay Managing Committee is of the opinion that Branch is not working as per the principles of the Institution or the working of the Branch is harmful to the reputation of the Institution. The trial Court has held that no enquiry was held to ascertain whether the Jabalpur Branch is working as per the principles of the Institution or the work of the Branch is harmful to the reputation of the institution and, therefore, the resolution dated 24-2-1978 is not in accordance with Article 3-A(e) of Article of Association. No provision has been brought to the notice of this Court which either expressly or impliedly bars the jurisdiction of the Court to examine the validity of the resolution. Thus, the trial Court can examine whether or not resolution is passed in accordance with Articles of Association. Both the Courts have held that plaintiff being the member of the society in view of Article 1-B of the Articles of Association and as Manager of the Jabalpur Branch has the locus to file the suit. The trial Court has held that it was not necessary to implead the trustees as parties. The aforesaid findings have not been reversed by the lower appellate Court in appeal. In view of preceding analysis, the substantial question of law framed by the Court is answered in the negative and in favour of the appellant. The judgment and decree passed by the lower Appellate Court is set aside and that of the trial Court is restored. In the result, the appeal succeeds and is hereby allowed with costs.