Krishna Gopal Ayurved Bhawan Dharmarth Trust v. Deen Bandhu Choudhary
2014-02-10
ALOK SHARMA
body2014
DigiLaw.ai
Hon'ble SHARMA, J.—This civil miscellaneous appeal has been filed against the order dated 2-1-2014 whereby an application under Order 39 Rules 1&2 CPC filed by the applicant-plaintiff-appellant (hereinafter `the applicant') in its suit for permanent injunction seeking status quo with regard to management of the applicant Trust prevailing as on 18-92013 has been dismissed. 2. Heard learned counsel for the parties and perused the impugned order dated 2-1-2014 passed by the trial court. 3. Briefly stated the facts of the case are that Krishna Gopal Ayurved Bhawan (Dharmarth Trust) (hereinafter 'the Trust') is a public trust. A meeting of the Board of Trustees was convened by the working Chairman Mr.P.K.Jain at Jaipur. Out of 9 agenda items in the meeting one pertained to the election of Chairman to fill up the vacancy caused by the death of erstwhile Chairman Vaidya Shri Daulatram Chaturvedi. It appears that agenda items 1 to 8 were duly considered and approved. However on agenda item No.9 pertaining to filling up the vacancy to the post of Chairman for remainder tenure owing to death of Vaidya Daultaram Chaturvedi objection was raised by one of the trustees stating that owing to a pending civil suit No.258/2013 before the District Judge Ajmer it would not be proper to hold the election for appointment of a Chairman. It was suggested that decision on agenda item 9 be postponed and the working Chairman/ managing trustee be allowed to officiate as working chairman in the interregnum. Also invoked was clause 12 (8) of the Trust Deed of the trust which relates to management of the trust and provides that a person shall inter alia cease to be a member of the Board of Trustees, if he willfully acts against his duties as a trustee as laid down in the Indian Trust Act. Other grounds for postponing the election of the chairman and deferring agenda item 9 were also proferred. Thus the election of Deen Bandhu Chaudhary, a trustee proposed to be chairman, was opposed. It appears that on the objections raised 4 of the 7 trustees present at the meeting on September 18, 2013, protested. The atmosphere is stated to have then become stressed. The case of the applicant is that to prevent the atmosphere becoming worse the meeting was sought to be adjourned by the working chairman Mr. P.K.Jain. The working chairman and two other trustees thereupon left the meeting.
The atmosphere is stated to have then become stressed. The case of the applicant is that to prevent the atmosphere becoming worse the meeting was sought to be adjourned by the working chairman Mr. P.K.Jain. The working chairman and two other trustees thereupon left the meeting. 4. Subsequent to the working chairman and two other trustees leaving the meeting of September 18, 2013, the remainder four trustees Mr. Deen Bhandhu Chaudhary, Mr. S.S. Chhapparwal, Mr. Mahendra Vikram and Mr. Ratan Mishra continued with the meeting. Thereupon the name of Mr.Deenbandhu Chaudhary was proposed for the post of Chairman of the trust in terms of agenda item No.9 and he was unanimously elected as such. A news item in daily news paper Dainik Navjyoti was published the following day stating that Mr. Deenbandhu Chaudhary had been unanimously elected as Chairman of the Trust. 5. The case of the applicant trust through its erstwhile working chairman Mr.P.K.Jain is that subsequent to adjournment of the trust meeting of September 18, 2013 the election of the chairman as per agenda item No.9 was wholly illegal and of no avail. Aside of above, it was submitted that the drawing of the minutes of the meeting specially with regard to the election of the chairman purportedly under agenda item 9 of the meeting of September 18, 2013 was fraudulent. Hence the civil suit for permanent injunction as also an accompanying application under Order 39 Rules 1&2 CPC to restrain the non applicant Deenbandhu Chaudhary from acting as Chairman of the trust. It was also prayed in the application under Order 39 Rules 1&2 CPC that a temporary injunction be issued and direction be granted to maintain status quo with regard to affairs/ management of the trust as prevailing on September 18, 2013. 6. Reply to application under 39 Rules 1&2 CPC was filed by the respondent-non-applicant (hereinafter `the non applicant') inter alia stating that in the meeting of September 18, 2013 election to the post of Chairman of the trust following death of erstwhile chairman Mr. Daulatram Chaturvedi for the remainder tenure was on the agenda (No.9) and consequent election legal and valid.
Reply to application under 39 Rules 1&2 CPC was filed by the respondent-non-applicant (hereinafter `the non applicant') inter alia stating that in the meeting of September 18, 2013 election to the post of Chairman of the trust following death of erstwhile chairman Mr. Daulatram Chaturvedi for the remainder tenure was on the agenda (No.9) and consequent election legal and valid. It was submitted that the interim relief as sought by the applicant could not be granted in view of the fact that no declaration was sought in the suit as to illegality and invalidity of the election of non applicant Deenbandhu Chaudhary to the post of Chairman at the meeting of September 18, 2013 pursuant to agenda item No.9. It was submitted that election in issue could not have been adjourned by the working chairman and his group finding themselves in a minority and that subsequent to the three trustees leaving the meeting of September 18, 2012 mid-way and without good cause, the remainder four trustees continued the meeting and as per agenda item No.9 on board proposed and elected the non applicant Deenbandhu Chaudhary as chairman of the Trust. The minutes of the election were drawn by the Assistant Secretary of the trust. 7. On consideration of the matter the learned trial court dismissed the application under Order 39 Rules 1&2 CPC filed by the trust at the instance of erstwhile working chairman Mr.P.K.Jain holding that neither of the ingredients for grant of temporary injunction had been made out and that in any event of the matter the facts alleged on which the permanent injunction was sought were fundamentally disputed and could only be addressed on the evidence deduced during the course of trial. 8. Mr. S.C. Goyal, learned counsel for the applicant has submitted that agenda item No.9 as circulated for consideration of the trustees for the meeting of September 18, 2013 did not pertain to election to the post of Chairman of the trust and the agenda was only a matter of discussion by the trustees as to how and when election for the post of Chairman of the trust were to be held.
It was submitted that in any event of the matter when the working chairman of the trust at the meeting of September 18, 2013 adjourned the meeting after decision on agenda items No. 1 to 8, there was no occasion for any discussion or action upon agenda item No.9 pertaining to the election to the post of Chairman of the Trust by the other trustees. It was submitted that the fraudulent nature of the proceeding pertaining to agenda item No.9 and election of the non applicant Deenbandhu Chaudhary as chairman is also evident from the fact that minutes of the meeting in terms of agenda items under the Trust Deed are to be drawn by the Secretary of the Trust, and not by the Assistant Secretary who did so in a wholly unauthorised manner on the dictation of the defendant non applicant. It was further pointed out even the Assistant Secretary Mr. Ramgopal Sharma in his affidavit before the trial court had stated that he had drawn the minutes of the meeting of September 18, 2013 including that relating to the election of the non applicant as Chairman only on the asking of Mr. Deenbandhu Chaudhary subsequent to three trustees having left the meeting of the board after having decided other agenda items No.1 to 8. It was submitted that in the facts obtaining the purported election of Mr. Chaudhary as the chairman was wholly fraudulent, and ultra vires the Trust Deed and the learned trial court in the facts of the case erred in holding that the applicant had not made out a prima facie case and balance of convenience in its favour and would not suffer irreparable loss if the non applicant impostor chairman were not to be restrained from running the affairs of the Trust. 9. Mr. S.K. Saksena, learned counsel for the respondent non applicant has submitted that until the decision of the trustees and minutes of the meeting of September 18, 2013 particularly on agenda item No.9 are quashed and set aside there can be no question of restraining the non applicant from acting as chairman of the trust as he has been validly elected in the meeting of September 18, 2013. No such prayer has been made in the suit.
No such prayer has been made in the suit. He submitted that in the meeting of the trustees of the trust held on September 18, 2013 decisions on agenda items No.1 to 8 were admittedly taken. It was submitted that only when the working chairman Mr.P.K.Jain and other two trustees found themselves in a minority on the issue of chairman's election the meeting of September 18, 2013 was sought to be disrupted and be stalled with the three leaving mid-way. It was submitted that the duly constituted meeting of the Board of Trust could not be truncated or adjourned in respect of agenda item No.9 only on account of majority not being with the working chairman on the issue of election of the chairman of the trust as per agenda item No.9. It was submitted that the validity or invalidity of the meeting of September 18, 2013 and election of non applicant Deenbandhu Chaudhary as chairman of the trust therein will have to be addressed only in the course of trial in the applicant's suit for permanent injunction subsequent to framing of issues, pleadings of the parties and evidences thereon. And in any event of the matter it is trite that interim relief cannot partake the character of final relief as it would in the instant case, if the interim relief sought by the applicant were to be granted and the non-applicant restrained from working as chairman of the trust. In the event the non applicant were to be restrained from working as Chairman of the trust in spite of his election in the meeting of the trustees of the trust on 18.9.2013 it would occasion irreparable loss to him in spite of a strong prima facie case with him having been elected by the majority. 10. Heard. Considered. 11. The moot question before this court is as to whether the election of the non applicant at the meeting of the board of trust on September 18, 2013 is prima facie valid. It appears from the material on record that this court cannot render a finding at this stage that the election of the non applicant to post of chairman of the trust as per agenda item No.9 at the meeting of September 18, 2013 was invalid —as there are two different and competing versions of the meeting on the issue.
It appears from the material on record that this court cannot render a finding at this stage that the election of the non applicant to post of chairman of the trust as per agenda item No.9 at the meeting of September 18, 2013 was invalid —as there are two different and competing versions of the meeting on the issue. The reason for a prima facie case not being made out in favour of the applicant is that admittedly the meeting of the board of trustees was held on September 18, 2013 and admittedly decision on agenda items No.1 to 8 were taken. And agenda item No.9 clearly related to the election of the chairman, notwithstanding a valiant attempt to the contrary by the counsel for the applicant de hors the plain language of agenda item No.9 which reads as under: ^^ekuuh; v/;{k Lo- oS| Jh nkSyrjke prqosZnh th ds fu/ku ls gqbZ fjfä dh iwfrZ gsrq 'ks"k vof/k ds fy, v/;{k dk pqukoA** 12. It however seems at this stage that in respect of agenda item No.9 under which election to the post of chairman of the trust was to be held, the working chairman Mr.P.K.Jain finding himself in a minority, without any substantial cause sought to stall the election thereon and adjourn the meeting by leaving it with two others. A Division Bench of this court in the case of Deo Dutt Sharma vs. Zahoor Ahmed Zaid (1960 RLW 486) has held that once a meeting had been properly called and commenced, the chairman of the meeting can only adjourn it with the consent of the majority of the members; subject of course to the rules and regulations of the particular body in relation to which such a question might arise. It has been further held that in the absence of any rule to contrary, the common law doctrine should be held to prevail that adjournment of the meeting rests with majority of the members present and is not a matter merely of the pleasure of the chairman. A universal exception to the aforesaid rule, most sparingly exercised, however is that when disorder breaks out at a meeting, the chairman has an inherent right, even if it has not been granted by statute or the rules, to adjourn the meeting without consulting the majority. 13.
A universal exception to the aforesaid rule, most sparingly exercised, however is that when disorder breaks out at a meeting, the chairman has an inherent right, even if it has not been granted by statute or the rules, to adjourn the meeting without consulting the majority. 13. In the instant case, it is on record that there was some disagreement, may be even loud, with regard to the election to the post of Chairman of the Trust in terms of agenda item No.9 circulated. Such disagreement, to my mind however would not bring it within the scope of “disorder'”, allowing the chairman to invoke his inherent power to overrule the general principle under common law that a meeting properly called could only be adjourned with the consent of majority. That being the legal position, in my considered opinion, there is no warrant to prima facie hold in favour of the applicant that the meeting was adjourned by the working chairman. It is trite that an exception to a general rule has to be strictly construed and until a disorder is well defined and delineated by the chairman while adjourning the meeting making the meeting impossible, the chairman (or a working chairman) of the meeting can not adjourn the meeting unilaterally and truncate the agenda consideration. No specifics of the “disorder” which prompted the chairman to purportedly adjourn the meeting qua agenda item No.9 is on record. In the circumstances of the case appearing at the inter locutory stage, the chairman cannot be said to have made a valid adjournment as propagated. The meeting therefore continued in the facts presently obtaining—and a decision on agenda No.9 by the majority (unanimous) of four remaining trustees would be valid and legal decision. The discretion lends to a case being prima facie found for the non applicant in the order 39 rules 1&2 CPC application. 14. Aside of aforesaid it is also quite evident that no declaration with regard to invalidity of the meeting of September 18, 2013 has been sought by the applicant in the suit and the only prayer of the applicant is for permanent injunction. In these circumstances, in my considered opinion, the relief for temporary injunction sought by the applicant could not have been granted—as an election was indeed held and so recorded by the Assistant Secretary in the minutes register.
In these circumstances, in my considered opinion, the relief for temporary injunction sought by the applicant could not have been granted—as an election was indeed held and so recorded by the Assistant Secretary in the minutes register. Further the election of chairman amongst trustees of board is a matter of the will of the majority prevailing. There is nothing on record to show at the present stage that the non applicant was disqualified to be elected as chairman of the trust either under any rule of law or even in the terms of the trust deed. I am also in agreement with the trial court that the issue of validity of decision on agenda item No.9 at the meeting of September 18, 2013 would be more appropriately and finally addressed in the course of trial after issues are framed, and evidence laid thereon. Last not least, the interim injunction as sought against the non applicant would in the facts obtaining operate as final relief for the applicant to the gross detriment of the non applicant in the facts and circumstances of the case. 15. It is also trite that the appellate court in the exercise of its power does not interfere with the discretion of the lower court exercised on an application under Order 39 Rules 1&2 CPC, unless the same is exfacie erroneous, palpably vitiated by unsoundness of reasons or results in manifest injustice. None of the aforesaid ground is made out in the facts obtaining in the present miscellaneous appeal to warrant interference with the impugned order dated 2-12014. 16. Consequently, I find no force in the miscellaneous appeal and the same is dismissed. 17. However, Mr. Saksena, learned counsel for the non applicant has himself submitted that the plaintiff's suit for permanent injunction itself be directed to be decided within a specified period and the non applicant would not ordinarily seek adjournments. Consequently, the trial court is directed to decide the underlying suit expeditiously and in any event not later than six months from the date of receipt of certified copy of this order. Application for amendment if any sought in the suit to include a challenge to the election of September 18, 2013 shall be decided in accordance with law. Adjournments if any whenever sought shall be entertained only on an application in writing and allowed for good reason recorded by the trial court.
Application for amendment if any sought in the suit to include a challenge to the election of September 18, 2013 shall be decided in accordance with law. Adjournments if any whenever sought shall be entertained only on an application in writing and allowed for good reason recorded by the trial court. The trial court shall abide by the decision of the Hon'ble Apex Court on the issue of adjournments as detailed in the case of Shiv Cotex vs. Tirgun Auto Plast (P) Ltd. ( (2011) 9 SCC 678 ), where the Hon'ble Supreme Court has held that adjournment should be ordinarily limited to three/ four times in the life of a suit.