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Ramader Appala Narasinga Rao Vs. Chunduru Sarada - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.A.O. No. 379 of 1973 and C.R.P. Nos. 127 and 128 of 1974
Judge
Reported inAIR1976AP220
ActsCode of Civil Procedure (CPC), 1908 - Sections 151 - Order 1, Rule 10 - Order 9, Rule 13
AppellantRamader Appala Narasinga Rao
RespondentChunduru Sarada
Appellant AdvocateR. Venugopala Reddy, Adv.
Respondent AdvocateBabul Reddy and ;K.V. Ayyappasastry, Advs.
Excerpt:
trusts and societies - preliminary decree - section 151 and order 1 rule 10 and order 9 rule 13 of code of civil procedure, 1908 - whether preliminary decree could be set aside at instance of party who has been impleaded after passing preliminary decree and particularly when he is not party to such decree - order 9 rule 13 states that in any case in which decree is passed ex parte against defendant he may apply to court for order to set it aside - trust not properly represented in suit - executive officer represents trust and is entitled to apply under order 9 rule 13 - impleadement of executive officer suit will not effect nature of suit - held, court shall implead executive officer as defendant to suit and dispose of case according to law. - - ganganna pantulu, who had been.....b.p. reddy, j.1. one chunduru venkatareddi, a philanthropic vysya gentleman executed a trust deed in respect of a major portion of his very substantial properties in 1944 called 'sri chunudri venkatareddi charities, vijayawada' with the object of promoting industrial and technological progress in the country, evidenced by a declaration of trust dated 24-4-1944. he was to be the founder-trustee during his lifetime. the plaintiff who claims to be the abhimana putrika of the said sri chunduru venkatareddi, (hereinafter referred to as the 'first defendant') and also claims to have been adopted by him later, filed the suit o.s. no. 124 of 1969 on the file of the learned subordinate judge, guntur for a declaration that the trust deed dated 24-4-1944 is a sham and nominal transaction and not.....
Judgment:

B.P. Reddy, J.

1. One Chunduru Venkatareddi, a philanthropic Vysya gentleman executed a trust deed in respect of a major portion of his very substantial properties in 1944 called 'Sri Chunudri Venkatareddi Charities, Vijayawada' with the object of promoting industrial and technological progress in the country, evidenced by a declaration of trust dated 24-4-1944. He was to be the founder-trustee during his lifetime. The plaintiff who claims to be the Abhimana Putrika of the said Sri Chunduru Venkatareddi, (hereinafter referred to as the 'first defendant') and also claims to have been adopted by him later, filed the suit O.S. No. 124 of 1969 on the file of the learned Subordinate Judge, Guntur for a declaration that the Trust deed dated 24-4-1944 is a sham and nominal transaction and not binding on the plaintiff in so far as it relates to the interest of the plaintiff in the properties, and for specific performance of the suit agreement and for possession of the plaintiff's half share with a direction to the first defendant to effect division of the said properties into two equal shares by metes and bounds and in case the first defendant fails to do so, it was prayed that the court itself shall effect the said division. The plaintiff based her claim on an agreement dated 27-12-1943 whereunder the first defendant is said to have agreed to give her the 'A' Schedule properties which, it was alleged, the first defendant subsequently placed in the trust. The said properties were to be given to the plaintiff on her attaining the age of 25 years and since she has attained the age of 25 years, she alleged, she is entitled to the specific performance of the said agreement and also for a declaration that the trust deed is sham and nominal. The other trustees were impleaded as defendants 2, 3 and 4 to the suit. The suit was pending for sometime and it was posed for trial to 27-1-1971. On that day, the defendants were not ready and hence, the suit was adjourned to the next day i.e. 28-1-1971. On this day also, the defendants were not ready and hence three witnesses were examined on behalf of the plaintiff including herself and the suit was decreed ex parte. I.A. No. 433 of 1971 was then filed by the second defendant in the suit (one of the trustees) for setting aside the ex parte decree on several grounds with which we shall deal hereinafter. Thereafter I, As. 939 and 940 of 1971 were filed by one Sri R. Ganganna Pantulu, who had been appointed as the executive officer in respect of the said charities under the 1966 Act, to implead himself as a party defendant as well as to set aside the said ex parte decree. The said three I.As. were taken up together by the learned Subordinate Judge and after receiving the oral and documentary evidence on behalf of the parties in the said I.As., all the three petitions were dismissed under the impugned judgment and order dated 19th October, 1973. C.M.A. No. 379 of 1973 is filed by the second defendant while C.R.P. Nos. 127 and 128 of 1974 are filed by the executive officer.

2. I.A. No. 433 of 1971 was filed by the Second defendant on the ground that he could not be present on 28-1-1971 inasmuch as he was not informed by his advocate about the said date of hearing. He alleged that the suit is a collusive one and that the Court has no jurisdiction and also that the Endorsements Department is a necessary and proper party to the suit. A counter has been filed by the plaintiff-respondent alleging that the petitioner had tendered his resignation which was accepted by the Board of Trustees even in September 1970 and that in any event, the Board of trustees itself had resolved on 24-1-1971 not to contest the said suit. It was further submitted that the second defendant-petitioner was personally present in the court on 28-1-1971 and that he took some money also from the plaintiff for looking into paying further amounts and having not succeeded in extracting more money, he has come forward with the said false affidavit. The second defendant examined himself as P.W. 2 and examined an Accountant in the shop where he is employed as P.W. 1. On behalf of the respondents, one Sri A.R. Chetty, a relative of the plaintiff and who is attending to this litigation on her behalf, has been examined as R.W. 1 while R.W. 2 is the scribe of the receipt whereunder the second defendant acknowledged the receipt of Rs. 100/- on 28-1-1971. R.W. 3 is the son of the second defendant who has been examined to show that the second defendant was present on 28-1-1971 at Vijayawada and in the court. Some documentary evidence was also filed on both the sides. The learned Subordinate Judge after considering the evidence on record, held that the second defendant need not have been informed of the date of hearing by the advocate inasmuch as a common advocate was engaged on behalf of all the defendants and that the said advocate was paid by the first defendant alone and that the understanding was that the advocate shall inform the first defendant only of the dates of hearing and other developments in the case. He further held, accepting the evidence led on behalf of the plaintiff, that the second defendant was present at Vijayawada on 28-1-1971 and that he received the said amount of Rs. 100/- under Ex. P. 5 and further that having failed in extracting further money from the plaintiff, he has turned round and filed the present application. It was also held by him that the second defendant ceased to be a trustee even prior to 28-1-1971 and therefore, he has no locus standi to file the said application.

3. Now coming to I.A. Nos. 939 and 940 of 1971 filed by Executive Officer, it was stated by him in his affidavit filed in support of the said petitions that he was appointed as an executive officer of the said charities under orders D/- 8-7-1970 passed by the Endowment Commissioner, Hyderabad (Ex. B. 13) and that he applied to the Deputy Commissioner, Endowments, Vijayawada on 20-1-1971 to permit him to implead himself as a defendant to the said suit which permission was granted on 23-1-1971. He then referred to the proceedings relating to his appointment as executive Officer namely that after his appointment on 8-7-1970. The first defendant then filed a Writ petition No. 247 of 1971 against the said orders and obtained an interim stay of all further proceedings on 19-1-1971 (Ex. B. 21). Subsequently, the Executive Officer applied for vacating the said stay on 2-4-1971 and this Court vacated the interim stay but directed the executive officer that he shall not take charge of the records from the writ petitioner (first defendant herein), but he shall be allowed to represent the Trust in other proceedings including O.S. No. 124 of 1969. The Executive Officer then stated that soon after the said orders of this court dated 2-4-1971, he fled the said application. He submitted that he is the proper person to represent the trust and that the defendants were acting in collusion with the plaintiff and were therefore not proper persons to represent the trust and hence he requested for impleading and for setting aside the ex parte decree with a view to avoid multiplicity of proceedings and other complications. The plaintiff opposed these applications also on the ground that once the suit has been disposed of, the lower court has no jurisdiction to implead a new party and that under Order 9 Rule 13 C.P.C only a party to the decree can apply for setting aside the ex parte decree and for that reason the said petitions are not at all maintainable. The learned Subordinate Judge dismissed these applications also mainly, on the ground that since the Endowment Department is not a party to the said suit, the judgment and decree therein is not binding on the department and it is therefore at liberty to initiate proceedings under Section 77 of the Act or to file a fresh suit or to take such other steps as are open to it in law to establish its rights. It was therefore held that it is not desirable in the interests of justice to implead the third party at that stage. He also added that R. Ganganna Pantulu wanted to implead himself as a defendant in his personal capacity and not in his capacity as the executive Officer inasmuch as he did not describe himself as the executive officer in his applications, but that the applications were made in the name of R. Ganganna Pantulu. He also held that by impleading him, the nature of the suit would be altered and in view of all these said circumstances, he thought it appropriate not to allow the suit petitions.

4. Mr. R. Venugopala Reddy, the learned counsel appearing both in the C.M.A. as well as Civil Revision Petitions submitted that the trust was not at all property represented in the suit and that there was collusion between the Parliament and the first defendant and that the admitted non-intimation of the date of hearing by the advocate to the second defendant constitutes a valid and sufficient ground for setting aside the ex parte decree. He submitted that there is no reason to doubt the evidence of the second defendant regarding the circumstances of his absence on the date of hearing and that his evidence is corroborated by P.W. 1 and that the evidence of R.W. 3 should be discarded because of the ill-feelings existing between the second defendant and him. He also termed the evidence of R.Ws. 1 and 2 as untrue and unacceptable. He then contended that even if for any reason this Court does not accept the second defendant's explanation for his absence, there is no reason for not allowing the applications filed on behalf of the executive officer. He says that there is no delay or laches on the part of the executive officer in acting in the matter and that he could not implead himself in the suit because of the various stay orders obtained by the first defendant from Government and the High Court and that soon after the High Court vacated the stay on 2-4-1971, the present applications were filed on 6-4-1971. He relied upon the decision in Pramatha Nath v. Pradhyumna Kumar, (AIR 1925 PC 139 at . 145) to stress the general rule that the deity or the trust should be represented by a disinterested party. Regarding the objection that the executive officer is not a party to the decree and hence, he cannot apply for setting aside the said decree under Order 9 Rule 13 C.P.C. the learned counsel submitted that his applications were made not only under Order 9, Rule 13 but also under Section 151 C.P.C. and that the Court is entitled to invoke its inherent powers in cases where the express provisions under the Code are inapplicable. He relied upon several decisions in that behalf which we shall refer to later. He further submitted that the suit was not over with the passing of the decree on 28-1-1971 but that so long as the final decree is not passed, the suit must be deemed to be pending. He referred to I.A. No. 2368 of 1973 filed by the plaintiff herself for passing a final decree and to the fact that the final decree was actually passed after the order under Appeal and Revisions was passed by the learned Subordinate Judge. He submitted with reference to certain decisions that in such cases, the court can implead fresh parties and can also set aside the preliminary decree at their instance in appropriate cases. He submitted that when the collusion and fraud between the plaintiff and the first defendant and other trustees is evident, the court ought to have allowed the applications of the executive Officer since they pertain to the rights of the public in a public charity and when the public charity was not being properly represented in the suit. It is however contended by Mr. P. Babul Reddy, the learned counsel appearing for the plaintiff-respondent, that the application of the second defendant is absolutely untenable and is in effect a black-mailing action. He supported the findings of the learned Subordinate Judge in that behalf. With respect to the Civil Revision Petitions, he submitted that the decree passed on 28-1-1971 was not a preliminary decree but a final decree and that the suit was concluded on that day. He submitted that the application made by the plaintiff later for passing final decree was under a misapprehension of law and that it was really an application for execution of the said decree. He, therefore, submitted that once the suit was finally concluded with the court passing the decree on 28-1-1971, there was no further power or any occasion to implead a fresh party and to reopen the suit at the instance of such a party. He submitted further that the inherent powers are not available to implead a fresh party or to set aside ex parte decree apart from the situations provided for by Order 1, Rule 10 and Order 9, Rule 13 C.P.C. and finally submitted that in any event in all the facts and the circumstances of the case, (and also because the final decree has since been passed), this is not an appropriate case where the inherent power of the court ought to be invoked to grant the said petitions. He referred to the limitations on the power of this Court under Section 115 C.P.C. to show that since the impugned order was one within the discretion of the learned Subordinate Judge, this court would not interfere with the same in revision unless it is shown that any question of jurisdiction as contemplated by Section 115 C.P.C. is involved.

5. We shall first take up the C.M.A. filed by the second defendant. We have been taken through the oral and the documentary evidence adduced by the parties in this behalf and we have no hesitation in confirming the findings of the learned Subordinate Judge that the reasons assigned by the second defendant for setting aside the ex parte decree are not true and that the said defendant-appellant is not a proper and desirable person to act as a trustee. We see no reasons to disbelieve the evidence of R.W. 3 his own son and R.W. 2. We, therefore, accept the plaintiff's evidence and hold that the second defendant was present on 28-1-1971, received a sum of Rs. 100/- from the plaintiff under Ex. P-5 and then tried to black-mail them and having failed to extract more money from the plaintiff, turned round and filed the present application. We also agree with the learned Subordinate Judge that by virtue of tendering his resignation and its acceptance by the Board of Trustees on 9-9-1970, the second defendant was no longer a trustee either on the date of hearing namely 28-1-1971 or on the date when he filed the application for setting aside the ex parte decree. The advocate for the defendants was pad by the first defendant and all the correspondence was addressed only to the first defendant by the advocate. The second defendant was merely sailing with the first defendant and cannot complain of the lack of intimation of the said date of hearing, from the advocate. It may be that the first defendant is acting in collusion with the plaintiff, but that, in our opinion, does not in any manner advance the second defendant's case and since he has come to the court with a deliberately false case, the Court could not have acted at his instance. The C.M.A. is therefore dismissed with costs.

6. We will now take up the Civil Revision Petitions fled by the Executive Officer. The Executive Officer was appointed by the Commissioner under the orders dated 8-7-1970 (Ex. B. 13). But before the executive office could act, the first defendant filed a revision before the Government and obtained stay of the said orders on 8-8-1970. The said stay was vacated only on 20-11-1970 by the Government under Ex. B 18. Meanwhile, the first defendant approached the High Court and obtained an interim stay on 10-1-1971 which was vacated only on 2-4-1971. Under the said order dated 2-4-1971 this court observed that the executive officer is entitled to represent the trust in O.S. No. 124 of 1969 also. Obviously, none of the parties brought to the notice of the court that the said suit was decreed even earlier. Whatever the case may be, the Executive Officer filed the present application for impleading and for setting aside the ex parte decree soon after on 6-4-1971. Mr. P. Babul Reddy, however stressed the fact that between 20-11-1970 (on which date the Government vacated its stay) and on 10-1-1971 (when this court granted interim stay), there was an interval of two months during the whole of which period the Executive Officer remained inactive. It is pointed out that he applied to the Deputy Commissioner for Endowments to permit him to apply to get himself impleaded in the said suit only on 20-1-1971 and that the permission was immediately granted on 23-1-1971, by which date this Court had already granted an interim stay. These dates are stressed to point out that had the executive officer been really diligent, he could have obtained the permission from the Deputy Commissioner soon after the Government vacated its stay and could have applied for impleading himself as a party to the suit even before the suit was decreed ex parte on 28-1-1971. But we are of the opinion that the so called inaction is not of such a nature as to hold the executive officer guilty of laches or to warrant the throwing out his application on that ground alone. We do not know when the orders of the Government vacating the stay were communicated (if at all they were communicated) to the executive officer. Naturally it must have taken sometime for the said orders to reach him and he applied for permission to the Deputy Commissioner thereafter. We are of the opinion that in view of the appointment of the executive officer, he is entitled to represent the trust in the said proceedings. No doubt, the proviso to sub-clause (iii) of Clause (b) of sub-section (4) of Section 27 of the Andhra Pradesh Charitable and Hindu Religious and Endowments Act, 1966 provides that the appointment of an executive officer shall not affect the right of the trustees to act on behalf of the institution in pending proceedings, yet in the particular circumstances of this case, when the trustees were obviously not properly representing the interests of the trust and had in fact passed a resolution not to contest the suit whereunder a substantial portion of the trust properties were being given away to the plaintiff, the executive officer alone could have properly represented the trust in such proceedings. Though the executive officer was the proper person to represent the trust in the said suit, the fact, however, remains that he was not impleaded as such by the plaintiff nor could he apply for impleading himself prior to the passing of the decree on 28-1-1971. The questions, therefore, which we have to answer are two-fold--(1) Whether the court had the power to implead a party even after its decree of 28-1-1971 for the reasons contended for the revision petitioner and (2) whether the ex parte decree can be set aside at the instance of such impleaded party under Section 151 C.P.C. inasmuch as Order 9 Rule 13 C.P.C. is said to be inapplicable.

7. The decree passed by the Court on 28-1-1971 and the application filed by the plaintiff herself for passing a final decree (I.A. No. 2368/73) and the final decree passed by the court on 14th November, 1973 clearly in our opinion, establish the fact that the decree passed on 28-1-1971 was only a preliminary decree. We cannot accept Mr. Babul Reddy's contention that the said decree finally concluded the suit and that the application I.A. No. 2368/73 filed by the plaintiff was only in the nature of an execution petition. The plaintiff had prayed for and the decree dated 28-1-1971 expressly provided that 'the first defendant do execute a proper deed and deliver possession of the plaintiff's half share in the plaint A, B and C schedule properties after effecting division of the same into two equal shares by metes and bounds.' Claue 3 of the said decree then provided that 'if the first defendant fails to do so as stated in Clause 2, the plaintiff will be at liberty to have the same done through court.' It is in terms of the said Clauses 2 and 3 that the plaintiff filed I.A. No. 2368 of 1973 for passing a final decree in terms of the settlement and the oral partition effected between her and the defendants to the said decree. In terms of the said settlement, the final decree was actually passed on 14th November 1973. It is argued by Mr. Babul Reddy that inasmuch as the parties themselves had mutually effected the partition as per clause (2) of the decree, there was no occasion or necessity of passing a final decree by the court. We cannot however agree with this submission. The properties falling to the share of the plaintiff were not specified in the decree dated 28-1-1971, which merely declared her right to a half-share claimed by her. A final decree specifying the properties falling to her share (and the share of the first defendant) had yet to be passed. We are of the opinion that since the plaintiff asked for an individual half share and since the preliminary decree directed such a partition, the mere fact that the parties effected the division by mutual settlement does not mean that the preliminary decree passed on 28-1-1971 itself becomes a final decree. In any event, the parties themselves and the court, all acted on the footing that it was only a preliminary decree and actually a final decree was applied for and passed later. On these facts, it must be held that on 6-4-1971 when the executive officer filed the said applications, the suit was still pending. The suit will be disposed off only with the passing of the final decree which was not done by that date and hence a petition under Order 1 Rule 10 C.P.C. was maintainable. There is ample authority for the said proposition vide Krishna Aiyar v. Subrahmania Aiyar (AIR 1924 Mad 648), Rameswar v. Thakur Jeban (AIR 1937 Pat 49) Syed Mohiddin v. Abdul Rahim : AIR1964AP260 Dinanath Kumar v. Nishikanta Kumar : AIR1952Cal102 Shagum Chand v. Data Ram (AIR 1927 All 465) and Ollus Bank v. L.F. Bank (AIR 1954 Trav Co. 599).

8. The next question is whether the preliminary decree could be set aside at the instance of a party who has been impleaded after passing a preliminary decree and particularly when he is not a party to such a decree. Order 9 Rule 13 C.P.C. states that 'in any case in which a decree is passed ex parte against a defendant, he may apply to the court ............. for an order to set it aside.' It is contended by Mr. P. Babul Reddy that the ex parte decree was not passed against the Executive Officer and hence he, not being a party thereto, cannot apply for setting it aside. We will assume that it is so though we do not wish to express any final opinion on this aspect: Mr. R. Venugopala Reddy sought to contend that since the trust was not properly and effectively represented in the suit, it must be held that there was no representation at all on behalf of the trust and since the executive officer only represents the trust, he must be held entitled to apply even under Order 9 Rule 13 C.P.C. In any event, in the view we are taking on this question, it is not necessary to deal with this aspect. Still the inherent powers of the court recognised by Section 151 C.P.C. are wide enough in our opinion, to set aside the said preliminary decree. It has been held by the Supreme Court in Manohar Lal v. Hiralal : AIR1962SC527 that the provisions of the Code do not control the inherent power by limiting or otherwise affecting it and that the court has an inherent power by virtue of its duty to do justice to the party before it and therefore even in cases not expressly provided for by Order 39 C.P.C. or other Rules in the Code the Court has an inherent jurisdiction to issue temporary injunctions in the circumstances not provided by the provisions of Order 39 C.P.C. On the basis of the said decision and also with reference to the decision in U.E. Maung v. P.A.R.P. Chettayar Firm (AIR 1928 Rangoon 273), it is contended by Mr. R. Venugopal Reddy that the court can and should exercise its inherent powers with a view to do effective justice between the parties and having regard to the particular circumstances of this case, we are inclined to agree with the learned counsel. Extensive and valuable properties belonging to a public trust are involved in the suit. It is obvious that there was collusion between the plaintiff and the trustees. In fact, the Board of trustees had passed a resolution not to contest the suit. The executive officer was appointed even in August 1970 but he could not act earlier on account of the stay orders obtained by the first defendant from the Government and the court. The interests of justice would therefore require that for a proper and complete adjudication of all the matters in controversy in the suit, it is just and appropriate that the executive officer is impleaded and he allowed to contest the claims of the plaintiff on merits which can be done only by setting aside the preliminary decree. The mere fact that after passing the impugned order, the learned subordinate Judge passed the final decree cannot stand in the way of our allowing the petitions of the executive officer. The several decisions referred to by us above are cases where the petition for impleading was allowed even after the decree was passed so long as the application itself was made prior to the disposal of the suit.

9. Before concluding we may deal with the reasons given by the learned Subordinate Judge for dismissing the petitions of the executive officer. The main reason given by him namely that the Endowment Department is not bound by the said decree and therefore it can take such proceedings as are open to it in law, both by way of a suit as well as under the provisions of the 1966 Act cannot be a valid reason particularly in the circumstances of this case, to refuse to allow the said applications. Similarly, the objection that the executive officer has applied not as the executive officer, but in his own name as 'R. Ganganna Pantulu' cannot be either a relevant or a tenable ground. The Executive Officer had clearly stated in his affidavit that he has been appointed as the Executive Officer and was also permitted by the Deputy Commissioner to get impleaded in the suit and hence he was making those applications. In these circumstances, the said reason given in para 35 of the judgment of the learned Subordinate Judge is totally untenable. We also cannot accept the reasoning of the lower court that by impleading the executive officer, the nature of the suit will be altered. It is no doubt true that the impleading was a matter within the discretion is liable to court, but yet the said discretion is liable to be interfered with if in exercising the said discretion, the court takes either irrelevant circumstances into consideration or does not take into consideration valid and relevant circumstances and the policy and object of Order 1 Rule 10 C.P.C. For this reason also, we are not able to agree with the submission of Mr. P. Babul Reddy that this Court cannot interfere with the impugned order in its revisional jurisdiction. Failure to take into consideration the policy behind Order 1 Rule 10 C.P.C. and the assumption made by the Trial Court that the suit was disposed of on 28-1-1971 itself, and the failure to advert to the fraud and collusion between the parties to the suit, are all circumstances which vitiated the exercise of discretion and touch upon the jurisdiction of the lower court in the limited sense in which the word 'jurisdiction' in Section 115 C.P.C. is used; vide the decision of the Supreme Court in Razia Begum v. Anwar Begum : [1959]1SCR1111 wherein the general principles relating to the power of the court to implead parties as well as the scope of Section 115 C.P.C. are discussed.

10. The result therefore is that Civil Revision Petitions Nos. 127 and 128 of 1974 are allowed but in the circumstances without costs. As a necessary consequence, both the preliminary decree dated 18-1-1971 and the final decree dated 14-11-1973 are set aside. The lower court shall implead the executive officer as a defendant to the suit and dispose of the same on merits according to law.

11. Order accordingly.


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