Skip to content

D.K. Raja Vs. P.S. Kumaraswami Raja and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 398 of 1953
Reported inAIR1955Mad360
ActsCode of Civil Procedure (CPC) , 1908 - Sections 151 - Order 40, Rule 1 - Order 39, Rule 1
AppellantD.K. Raja
RespondentP.S. Kumaraswami Raja and ors.
Appellant AdvocateR. Gopalaswami Iyengar, Adv.
Respondent AdvocateP. Thyagarajan, ;P. Satyanarayana Raju and ;K. Veeraswamy, Advs.
Cases ReferredAlice Rice v. S. N. Cama
.....within the jurisdiction of the court there are authoritative pronouncements not- only of the english courts but also indian decisions as well which are to the effect that in the matter of the trust properties the court has supervising power over the discretion of the interim injunction pending disposal of the suit from interfering with the 'status quo' of the trust committee and its constitution without prejudice to his rights to become the trustee manager for a period of three years, consequent on the death of his father and hence this appeal.2. defendant 1 in the suit who is since dead along with defendants 5 to 8 and plaintiff 2 constituted a joint hindu family of affluent people in rajapalayam. plaintiff 1 who now holds the position of the governor of the orissa state is a very near relation of the parties. defendant 2 is the chairman of the. municipal council, rajapalayam. defendant 3 isthe district collector, ramanathapuram, while defendant 4 is a respectable gentleman of the localityin whom the members of the family have.....

1. I.A. No. 275 of 1953 was an application in O. S. No. 41 of 1953 in the court of the Subordinate Judge of Ramanathapuram at Madurai in which the plaintiffs prayed for an inunction under Order 39 Rule 1 and 2 and S. 151, C. P. C., restraining the fifth defendant from doing any thing interfering with the 'status quo' of the Trust Committee and its constitution described in the plaint, pending 'disposal of the suit subject to his right to become trustee-manager for three years by devolution. The learned Subordinate Judge held that for the purpose of preserving the 'status quo' & for maintaining the balance of convenience, defendant 5 should be restrained by means of an interim injunction pending disposal of the suit from interfering with the 'status quo' of the trust committee and its constitution without prejudice to his rights to become the trustee manager for a period of three years, consequent on the death of his father and hence this appeal.

2. Defendant 1 in the suit who is since dead along with defendants 5 to 8 and plaintiff 2 constituted a joint Hindu family of affluent people in Rajapalayam. Plaintiff 1 who now holds the position of the Governor of the Orissa State is a very near relation of the parties. Defendant 2 is the chairman of the. Municipal Council, Rajapalayam. Defendant 3 isthe District Collector, Ramanathapuram, while defendant 4 is a respectable gentleman of the localityin whom the members of the family have greatconfidence.

3. In 1932 under Ex. A-I defendant 1, who was then the head and manager of the joint family constituted a trust known as the Dharma Raja Education Charity Trust, Rajapalayam for conducting certain schools and other places of learning. For this, certain properties were set apart one of which was a shandy, the collections from which have to be utilised for the maintenance of schools and other educational institutions.

4. The document provided for a line of trustees and committee of management. This is attested by all his five sons and it was intended to be a family trust. It is not necessary to describe in detail the devolution of management and how the trust has to be carried out. It also provided that defendant 1 as the founder of the trust had power to make changes from time to time and also amendments with regard to the conduct and management of the trust by means of documents as are necessary to effectively carry out the objects and intentions of the trustees. While the matters were in that state, in 1935 there was another trust deed, Ex. A-2, by which certain alterations were made in Ex. A-l and the later document was to read as part of the earlier one.

In 1938 by Ex. A-3 there were further changes made in the mode of conduct of the trust and the personnel of the trustees and committees. There was a family partition in 1939 by which each of the members got his share separated. In 1943 another trust deed, Ex. A-4 was executed by which there were further alterations in the constitution of the committee and as to how the management was to be carried on. It was provided that defendant 1 should be the trustee manager during his lifetime. After his death each of his sons in the order of seniority shall be the trustee manager in turn for a period of three years. Provision was also made that in case anyone of the sons died the grandsons should step into the place of the sons and so on and so forth.

5. On 6-9-1,939 the father and the sons as already stated effected a partition of the joint family properties among themselves and under this document the sons accepted and ratified the earlier trust deeds, the result of such ratification being that any doubt which had arisen with regard to the competency of defendant 1 as manager of the family to found the trust out of the joint family properties was cleared up. In that partition deed there was a clause that if it became necessary that defendant I should at any time make any alterations in the documents relating to the founding of the schools and other educational institutions then he shall have fall powers to make alterations without in any way creating inequality among his sons who have equal rights.

6. On 26-7-1943 defendant 1 executed Ex. A-4 called the supplementary trust deed making certain important changes in the mode of management of the trust properties. Under this deed the committee of management should consist of (1) A trustee manager; (2) The municipal chairman, Rajapalayam, (3) Municipal Vice Chairman, Rajapalayam, (4) One Municipal Councillor, Rajapalayam to be nominated by the members of the Committee, (5) Another member to be nominated by the members of the committee. In and by this document the affairs of the trust have to be conducted by the manager and power given to defendant 1 to nominate one of, his sons as trustee-manager in his place for a specific period during his own lifetime.

7. O. S. No. 5 of 1945 was a suit filed by the present appellant as plaintiff challenging the validity and effectiveness of Ex. A-4 by which vital and important changes had been made in the mode of conducting the charities. The main contest there was whether the power granted to defendant 1 in the partition deed of 1939 to make alterations in the trust deed clothed him with sufficient authority and jurisdiction to create new offices contemplated in Ex. A-4. The High Court in App. No. 591 of 1946 held that the document constituting the trust conferred power of introducing changes in the management, on defendant 1 and therefore Ex. A-4 was valid and effective. This judgment was pronounced by this court on 8-2-1950 though the decision in the court of the Subordinate Judge was given on 21-1-1946.

Pending appeal to this court on 5-7-1948 defendant 1 executed a further supplementary trust deed in and by which there were further changes made in the management. The constitution of the committee was as follows: (1) Trustee manager, (2) District Collector, Ramanathapuram, ex officio, (3) Municipal Chairman, Rajapalayam, ex officio, (4) the present plaintiff 1, and (5) any person appointed by the said four members from the village public. The trustee manager was also given power to delegate his functions to a person nominated by him. In pursuance of this power plaintiff 2 was made to deputise for his father and the educational institutions were conducted on that basis.

The committee was functioning smoothly for sometime but unfortunately various disputes arose between the parties and a criminal complaint was filed against defendant 1 for certain alleged misappropriation of sums belonging to the charities. A suit, O. S. No. 39 of 1953, had been filed in the court of the Subordinate Judge, Ramanathapuram, for the removal of defendant 1 from the hukdar managership of the charities and there were also other charges of misappropriation and breach of trust etc. This resulted in misunderstanding between the parties and the relationship between the plaintiffs and defendants 6 to 8 on the one side and defendants 1 and 5 on the other became very strained and inimical. While so, on 8-5-1953 defendant 1 executed another trust deed, Ex. B. 2 modifying the conditions contained in Ex. A-5 regarding the management and it is stated therein that defendant 5 was to be the manager of the trust for a period of 15 years from the date of the latest trust deed, the other members of the committee being the Collector of Ramanathapuram, ex officio, the Municipal chairman, Rajapalayam, ex officio, R. S. Subbaraya Pillai retired vakil and S. S. Ramaswami Mudaliar, landlord, Srivilliputtur. Before this, defendant 1 had executed another trust deed, dated 7-4-1953, Ex. B-l, which was called by Ex. B. 2.

8. The reason for cancelling that deed Was that plaintiff 2 who had been appointed manager thereunder for a further period of ten years from 5-7-1953 did not accept the appointment on account of the evil advice given to him by plaintiff 1 and defendant 6 who were inimically disposed towards defendant 1. After keeping the document with him for sometime he returned it without agreeing to be the trustee manager. Therefore, it is stated that the deed dated 7-4-1953 did not take effect and it had to be cancelled under Ex. B-2. The result of Ex. B2 is that defendant 5 gets a right to manage the trust for a period of 15 years. By this timefeelings between the plaintiffs on the one side and defendant 1 and defendant 5 on the otter became badly embittered on account of the civil and criminal litigations which had been pending and on 1-6-1953 defendant 1 executed a will bequeathing all his properties in favour of defendant 5 and it is staled that within eight days thereafter he committed suicide.

Though permission had been granted for the filing of the suit by the Advocate General on 28-4-1954 the plaint was filed sometime' in June 1953 and the reliefs asked for are nine in number of which in view of the death of defendant 1 the really important ones are prayers H and J and the interlocutory application out of which the present civil miscellaneous appeal has arisen was for restraining defendants 1 and 5 by an order of injunction from interfering with or doing anything to the educational charity trust, its present constitution and working and to preserve the status quo pending disposal of the suit. As defendant 1 is dead the injunction is directed against defendant 5. The affidavit filed in support of the application contains allegations which are practically the same as those contained in the plaint and in the counter filed on behalf of defendant 5 all these allegations have been very strongly repudiated.

9. The main contentions put forward on behalfof the plaintiffs are that Ex. B-2 is void, ineffectiveand inoperative in law and does not thereby conferupon defendant 5 any right to be in managementof the trust properties. If that is so the earlierdeed, Ex. A-5, still continues and the rights andpowers obtained by plaintiff 2 have not been exhausted or set aside. The result would be thatplaintiff 2 would continue to manage the trust ashe had been doing previously subject to the rightof defendant 5 to become the trustee manager forthree years consequent on the death of his father,defendant 1.

The plaintiffs averred that plaintiff 2 continues to be in management of the trust despite the fact that Ex. B-2 has come into being. Various acts of interference and meddling by defendants 1 and 5 are enumerated in the affidavit filed in support of the application which it is unnecessary to reiterate in detail. It is urged that there is a prayer in the plaint asking defendant 5 to account for a sum of Rs. 6000 spent by him and even though defendant 1 is dead it is essential that defendant 5 should be asked to state what has happened to that sum. The reliefs E and F still remain open and as such it defendant 5 is allowed to function there will be a conflict of interest with duty and that a person having such a conflict of interests should no longer function in a fiduciary capacity.

10. Defendant 5 takes his stand on the judgment of the High Court referred to above and contends that defendant 5 had absolute power in the matter of introducing changes in the management at his will and, therefore, there is no question of any arrogation of power or misuse of it. The learned Subordinate Judge was of the opinion that even under Ex. A-5 on which reliance is placed by plaintiff 2 it is open to defendant 1 to effect substantial constitutional changes only so far as when they are beneficial to the interests of the trust. Such being the case defendant 1's whims and fancies or caprices cannot be brought into play in the matter of introduction of changes. Having laid down that foundation the learned Judge was 5 the view that there was hardly any justification for defendant 1 to execute Ex. B-2 by constituting a committee and by giving irrevocable powers to defendant 5 for a period of 15 years. There has not been any serious mismanagement or misadministration of the trust properties during the period of the committee functioning under Ex. A-5. In fact defendant 1 himself in Ex. B-l states that the trust has been functioning properly, and he has reposed confidence which according to the court was perfectly justified in plaintiff 2's management.

According to the lower court because of the several civil and criminal proceedings initiated at the instance of plaintiff 1 defendant 1 changed his attitude and with a view to create friction in the management, he has executed Ex. B-2. The learned Subordinate Judge has given various other reasons why it is necessary to keep the 'status quo ante'. We do not think it necessary to express any definite opinion as regards the construction of Ex. A-5 or the merits of the question. 'Prima facie', it seems to us that the interests of the trust are likely to suffer if the two rival contending parties hostile to each other, try to meddle with the affairs of the trust. If we allow the management under Ex. A-5 to continue there is certainly the implication that a case has been made out for not acting upon the provisions of Ex. B-2.

If on the other hand as contended by defendant 5 if the committee constituted under Ex. B-2 were allowed to function that would mean the cancellation of the mode o management contemplated under Ex. A-5. There can be no doubt that the parties contending against each other are very influential and powerful. Plaintiff 1 is holding a very high position in the public life of the country and is occupying the exalted office of the Governor of a State. Defendant 5 is a member of the Madras Legislative Assembly having at the last general elections defeated plaintiff 1 in his own home constituency. The members of the family themselves are arrayed against each other in this contentious dispute. One would not, therefore, view with equanimity in the educational trust being made the bone of contention between two such powerful and opposing factions. It seems to us that in the best interests of the administration of the trust, pending disposal of the suit the District Collector of Ramanathapuram who is one of the ex officio members of the committee of management both under Ex. A-5 and under Ex. B-2 be appointed receiver.

It is urged on behalf of the appellants that the Collector is a very busy person and that he can hardly find any time to look after the management of the institutions run under the trust. This argument does not appeal to us. If the collector can be an ex officio member of the trust committee and can take part in the management, then one fails to see why he cannot be the sole manager and function as a receiver. It is not as if the Collector has to see personally to all the details of management. He can get things done through his subordinates in the revenue and other departments and it is not certainly expected that the Collector functioning as receiver of the trust should look after the affairs of management personally. We are sure that under the management of the Collector as receiver this trust will be ably and efficiently administered.

11. Mr. Gopalaswami Aiyangar contends relying upon certain observations contained in -- 'Narayana Dossju Varu v. H. R. E. Board', : AIR1951Mad706 (A), to which one of us was a party that in an appeal which arises out of an application filed under O 39, Rule 1 and Section 151, C. P. C. a receiver cannot be appointed under Order 40, Rule 1, C. P. C. What was held in the decision cited was that where the plaintiff seeks the assistance of the court to restrain the defendant by an injunction from interfering with the plaintiff's possession and enjoyment of certain properties it is not open to the court to dispossess the admitted possession of the plaintiff by appointing a receiver without even an application being made by the defendant to that effect. The facts of the present case are entirely different from those in the case relied on by Mr. Gopalaswami Iyengar. The plaintiffs ask for an injunction restraining defendant 5 from interfering with the 'status quo ante' and for preserving the existing state of management at the time Ex. B-2 came to be executed. Mr. Thyagaraja Aiyar appearing for the respondents, plaintiffs, requested the court that he might be allowed to add a prayer for the appointment of a receiver in the alternative, if the injunction prayed for by him cannot be granted in all its full implications.

12. In view of this request by the learned counsel for the respondents we do not think it necessary to direct him to file an application in this court for the appointment of a receiver. We take it that his oral request is as -good as an alternative petition. If that be the case, then there can be no legal objection, whatever to the appointment of a receiver. It is as if the plaintiffs themselves have applied in the alternative, to the granting of an injunction, 'for the appointment of a receiver. We do not therefore envisage any difficulty in view of the expression of opinion in : AIR1951Mad706 (A).

13. Order 39, Rule 1, C. P. C. allows the courtin an application under that provision to grant injunction or make such other order for the purposeof staying and preventing the wasting, damaging,alienation, sale, removal or disposition of the property as the court thinks fit. There can, therefore, be no objection to the appointment of a receiver in an application for an injunction if theplaintiffs want it in the alternative. As stated in : AIR1951Mad706 (A), if the plaintiff does notask for a receiver and there is no application tothat effect by the defendant it is not open to thecourt purporting to act under Order 39, Rule 1, C. P. appoint a receiver without any request from theparties. We think it, therefore, just arid convenientto appoint a receiver pending disposal of the suitfor the preservation of the trust properties and forits proper management.

Apart from the fact that the entire subject-matter is 'pendente lite' and as such is within the jurisdiction of the court there are authoritative pronouncements not- only of the English courts but also Indian decisions as well which are to the effect that in the matter of the trust properties the court has supervising power over the discretion of the trustees. 'In re, Hodges; Davey v. Ward', (1878) 7 Ch D 754 (B), at page 762 Malins v. C. observed as follows:

Therefore the view I have always acted upon, which I think, is the proper view, and which I shall continue to act upon is this, that where the trustee acts in the exercise of his discretion, it is incumbent upon the court to pay every respect to that exercise, but it must consider whether it is properly done; adopting the language of Sir J. Wigram, which Mr. Bristowe cites to me, the court must consider whether it is art honest and proper discretion.'

14. There are similar observations in other cases for example in 'In re, Roper's Trusts', (1879) 11 Ch D 272 (G), and also in--'Klug v. Klug', (1918) 2 Ch 67 (D) and -- 'Halsted v. Halsted', 1937 2 All ER 570 (E). A similar view has been expressed by Kania J. as he then was in -- 'Alice Rice v. S. N. Cama : AIR1933Bom404 (F).

15. The result of these authorities is that where trustees have been appointed for the management of an institution which is charitable or religious in its nature, then even if the document provided for a certain mode of management, still if the interests of the trust require interference courts have ample supervising powers over the discretion of the trustee in the management of the institution. See also 'Lewin on Trusts, 15th Edn., p. 336', where it is stated that if there are sufficient grounds courts can interfere with the discretion of the trustee.

16. Again in Underhill on Trusts at pp. 457 and 460 there are observations to the effect that if the interests of the institution require, the court can interfere with the discretion of the trustee.

17. In the circumstances of the present case theCollector of Ramanathapuram will be appointedreceiver and he will take charge of the management of the trust immediately and thereafter function as the sole receiver for this purpose subjectto the general directions of the trial court regardingthe filing of accounts and other details of management. Any other course under the present conditions would lead to friction and confusion. Therefore the order of the lower court granting the injunction is set aside and in its stead a receiveris appointed to manage the trust properties as stated above. There will be no order as to costs in thisappeal.

18. The suit is more than a year old and it isimperative that the same should be dispossed of asexpeditiously as possible and we direct the Subordinate Judge to take steps necessary for itsspeedy disposal.

Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //