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Sunday, February 26, 2017

whether, before granting leave to institute a suit under section 92, Advocate-General, or later the Court, was required to give an opportunity to the proposed defendants to show cause why leave should not be granted. What learned counsel for the appellants urged, however, was that these decisions show that at the time when the Advocate-General or the Court is required to consider whether to grant leave to institute a suit as contemplated under section 92, it is only the averments in the plaint which have to be examined and hence, the presence of the defendant is not necessary. We may now consider the High Court decisions relied on by the learned counsel for the appellants.” After the amendment was brought to the Code of Civil Procedure in 1976, duty was cast upon the Court, instead of Advocate General, to take into account these considerations for granting leave under this section. Prior to the 1976 amendment, all these considerations were to be kept in mind by the Advocate General before granting consent to institute a suit against a public trust. - Accordingly, in this factual matrix and the law laid down by this Court and other relevant judicial precedents, we hold that the learned Single Judge erred while granting leave to the appellants. It was the statutory duty of the Court to examine that whether the plaint is so annexed with the application under Section 92 CPC or not. We have noticed that High Court has also erred in neglecting this fact. From a perusal of the compete material on record, in our opinion, the allegations put forth could only be determined by way of evidence in a special suit under Section 92 and respondent No.2 is enjoying the ownership of the disputed immovable property while acting as a trustee. Hence, for the ends of complete justice, the appellants are granted liberty to move appropriate application in accordance with law, within a period of 30 days from the date of pronouncement of this judgement. Civil Courts having jurisdiction to entertain any suit in this country are expected to carefully examine applications of such kind as discussed above.

Reportable

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO. 3166  OF 2017

                  (Arising out of SLP(C) No.34719 of 2011)

Swami Shivshankargiri Chella Swami & Anr.  …  Appellant(s)
                                  :Versus.:
Satya Gyan Niketan & Anr.               ...  Respondent(s)





                               J U D G M E N T
Pinaki Chandra Ghose, J.

Leave granted.

This appeal, by special leave, has been  filed  by  the  present  appellants
against the judgment and order dated August 1st, 2011  passed  by  the  High
Court of Uttarakhand at Nainital in Civil Revision No.69  of  2008,  whereby
the revision petition filed  by  the  respondents  herein  was  allowed  and
consequently the application filed by the appellants  under  Section  92  of
the Code of Civil Procedure (in short ‘CPC’)  for  obtaining  permission  to
institute a suit was rejected.

The question which comes up for consideration of this  Court in the  present
matter is whether the High Court, on the basis of analysis of the facts  and
circumstances of the case and findings of the Court below, while  exercising
its jurisdiction under Section 115 of CPC, was justified  in  setting  aside
the order granting permission to initiate suit.

The facts of the case succinctly stated are that in the year 1936,  one  Sri
Swami Satya Dev purchased some land  and  constructed  a  building  thereon.
Thereafter on 30.11.1940,  he  waqfed  (gifted)  the  disputed  property  to
Respondent No.2, vide registered  deed,  with  the  express  condition  that
Respondent No.2 will not have a right to mortgage or right of  sale  of  the
property. The property was waqfed for the development and publicity  of  the
‘Hindi Language’ in western India and to establish a  centre  for  publicity
of Hindi. There was also a recital in the deed to establish  a  library  and
to start a ‘Bhyakhan Mala’ etc. and the property was to be managed by a sub-
samiti constituted by respondent No.2.

It appears that objective of transferring the  property  was  to  achieve  a
specific purpose i.e., publicize and develop the  Hindi  Language.  When  it
was felt that respondent No.2 was not taking any interest in  achieving  the
purpose for which the property was  dedicated,  the  appellants  desired  to
initiate civil proceedings against the respondent. One Sri  Mukund  Ram  and
Sri Krit Ram filed Application No.23/2004 under Section 92 of  CPC  and  the
appellants herein filed Application No.07/2006  under  the  same  provision,
respectively, seeking permission to file  a  suit  against  the  respondents
herein in connection with the disputed  property.   Since  same  relief  was
sought in both the petitions, both applications were consolidated and  Misc.
Case No.23/2004 was made the leading case. The learned District  &  Sessions
Judge vide his order dated 12.11.2008 observing that the word “trust” is  to
be liberally construed, and in a sense as  favourable  as  possible  to  the
assumptions of jurisdiction by a Court under Section 92,  allowed  both  the
applications and permitted the appellants to file suit under Section  92  of
CPC. The learned District & Sessions  Judge  observed  that  the  object  of
dedication of the property shall decide the nature of it being considered  a
trust. Relevant part of the order is reproduced as follows:

“Hence perusal of the deed reveals the purpose  to  waqf  the  property  was
charitable and for the benefit of public at  large.  Hence  prima  facie  it
appears that a constructive trust was created by Swami Satya Dev by  gifting
the property to O.P. No.2, in which all the objects  of  the  waqf  and  the
management of property was given.”

In the later part of the order it was observed that:

“Having gone through the entire evidence on record, I am of  the  view  that
prima facie it appears that property in suit was waqfted to  the  O.P.  No.2
for a particular object  and  purpose  i.e.  publicity  and  development  of
Hindi. The property is to be managed by  O.P.  No.2  as  per  directions  of
Swami Satya Dev – recitals of the deed prima facie  proves  that  Sri  Satya
Dev created a constructive trust by gifting the property to  O.P.  No.2  has
not become  exclusive  owner  of  the  same,  because  it  was  gifted  with
conditions i.e. O.P. No.2 has no right to sale or mortgage the property.

So far as this fact is concerned that O.P. No.2 is  the  registered  society
under  the  Indian   Registration   Act,   1960,   does   not   affect   the
maintainability of the suit as held by the Kerala High  Court  in  1992  (2)
page 429, Sukumaran Vs. Akamala Sree Dharma Sastha.”



Being aggrieved by the order of the learned District & Sessions  Judge,  the
respondents filed civil revision under Section 115 of CPC  before  the  High
Court of Uttarakhand at Nainital, being Civil Revision No.69  of  2008,  for
quashing the order dated 12.11.2008 passed by learned  District  &  Sessions
Judge, Haridwar. The said revision petition was allowed by  the  High  Court
vide its judgment  dated  August  1st,  2011,  whereby  the  order  granting
permission under Section  92  CPC  to  institute  suit  was  set  aside  and
quashed. Hence, this appeal by special leave.

We have carefully examined the registered deed dated 30.11.1940 whereby  the
disputed property was transferred on  certain  conditions.  The  very  first
question after the perusal of the deed comes before us is  whether  a  trust
can be created by virtue of a conditional gift.

We have  heard  learned  counsel  for  the  parties  at  length.  Since  the
appellant was interested in achieving the purpose  for  which  property  was
transferred and therefore he approached the Court of learned District  Judge
for seeking permission to file a suit against the Respondents.  It  is  also
not disputed that the property was transferred (waqfed) to  Respondent  No.2
vide registered deed dated 30.11.1940.

It is submitted by the counsel of the petitioners that the  mere  fact  that
Respondent No.2 is a registered society does not affect the  maintainability
of the suit in view of the judgement given in  the  case  of  Sukumaran  Vs.
Akamala Sree Dharma Sastha, 1992 (2) 429; Sugra Bibi Vs. Haji Kummu,  [1969]
3 SCR 83; 1940 PC  (10).

Lastly, it was  a case of breach of administration of  trust  and  the  same
can be decided by way of evidence and that while granting  leave  the  Court
does not decide the right of the parties or adjudicate upon  the  merits  of
the case. The only consideration relevant at such juncture is whether  there
is a prima facie case for granting leave to file a suit and in the light  of
this submission the High Court was not justified  in  neglecting  the  prima
facie case of the appellants.

Per contra, it is argued by the counsel for Respondents that  society  Kashi
Nagari Sabha is a registered society and is also the absolute owner  of  the
property of Satya Gayan Niketan Ashram, Jwalapur and  cannot  be  considered
as a trust and the High Court  has  rightly  allowed  the  revision  of  the
respondents. However, it appears to us that  the  present  case  deals  only
with the issue of granting leave under  Section  92  of  CPC  to  interested
persons to initiate a suit.

The present Section 92 of the CPC corresponds to  Section  539  of  the  old
code of 1883 and has been borrowed in part from  52  Geo  3  c  101,  called
Romilly’s Act of the United Kingdom. A bare  perusal  of  the  said  section
would show that a suit can be instituted in respect of  a  public  trust  by
the advocate general or two or more persons having an interest in the  trust
after obtaining leave of the Court in the principal civil Court of  original
jurisdiction. An analysis  of  these  provisions  would  show  that  it  was
considered desirable to prevent a public trust from being  harassed  or  put
to legal expenses by reckless or frivolous suits being brought  against  the
trustees and hence a provision was made for leave of the Court having to  be
obtained before the suit is instituted.

After considering the  deed  executed  in  the  favour  of  respondent  No.2
(Prachaarini Sabha), which is not in  dispute,  we  have  noticed  that  the
purpose of transferring ownership of the property  was  subject  to  certain
conditions and purposes which cast  duties  on  respondent  No.2,  including
development of the Hindi Language and opening a library. Hence, the  purpose
is rendering the nature of Prachaarini Sabha to be a trust.

In the present facts and circumstances, it can be easily inferred  from  the
perusal of the application made that plea  was  sought  to  seek  permission
only to institute a suit alleging the Sabha to be acting as  a  trust.  This
Court in Additional Commissioner  of  Income  Tax,  Gujarat,  Ahmedabad  Vs.
Surat Art Silk Cloth Manufacturers’ Association, Surat, (1980) 2 SCC 31,  in
paragraph 17, observed:

“…Every  trust  or  institution  must  have  a  purpose  for  which  it   is
established and every  purpose  must  for  its  accomplishment  involve  the
carrying on of an activity.”



Further, this Court in M/s. Shanti Vijay and Co. & Ors. Vs. Princess  Fatima
Fouzia & Ors., (1979) 4 SCC 602, observed:

“The law governing the execution of trusts is well settled. In the  case  of
a private trust, where there are more trustees than one, all  must  join  in
the execution of the trust. The concurrence of all is in  general  necessary
in transaction affecting the trust property, and a majority cannot bind  the
trust estate. In order to bind the trust estate, the act must be the act  of
all. They constitute one body in the eye of law, and all must act  together.
This is, of course, subject to any express direction given by the settlor.”



This Court while discussing the scope and applicability  of  Section  92  of
CPC in the case of Harendra Nath Bhattacharya & Ors. Vs. Kaliram Das  (dead)
by his Heirs and Lrs. & Ors., (1972) 1 SCC 115, observed in para 13:

“It is well settled by the  decisions  of  this  Court  that  a  suit  under
Section 92 is of a special nature  which  presupposes  the  existence  of  a
public trust of a religious or charitable character. Such suit  can  proceed
only on the allegation that  there  is  a  breach  of  such  trust  or  that
directions from the Court  are  necessary  for  the  administration  of  the
trust. In the suit, however, there must be a prayer for one or other of  the
reliefs that are specifically mentioned in the section. Only then  the  suit
has to be filed in conformity with the provisions of Section 92 of the  Code
of Civil Procedure. It is quite clear that none of the  reliefs  claimed  by
the plaintiffs fell within the section. The declarations which  were  sought
could not possibly attract the applicability of  Section  92  of  the  Civil
Procedure Code. The High Court was, therefore, right in  holding  that  non-
compliance with that section did  not  affect  the  maintainability  of  the
suit.”



Further, in the case of  Swami  Parmatmanand  Saraswati  &  Anr.  Vs.  Ramji
Tripathi & Anr., (1974) 2 SCC  695,  while  precluding  the  application  of
Section 92 of CPC on suits to vindicate personal or individual rights,  this
Court pointed out as under:

“10. A  suit  under  Section  92  is  a  suit  of  a  special  nature  which
presupposes the existence of a public Trust of  a  religious  or  charitable
character. Such a suit can proceed only on the allegation that there  was  a
breach of such trust or that the direction of the  Court  is  necessary  for
the administration of the trust and the plaintiff must pray for one or  more
of the reliefs that are mentioned in the section. It  is,  therefore,  clear
that if the allegation of breach of trust is not substantiated or  that  the
plaintiff had not made out a case for any direction by the Court for  proper
administration of the trust,  the  very  foundation  of  a  suit  under  the
section would fail; and, even if all the other ingredients of a  suit  under
Section 92 are made out, if it is clear that the plaintiffs  are  not  suing
to vindicate the right of the public but are seeking a declaration of  their
individual or personal rights or the individual or personal  rights  of  any
other person or persons in whom they are interested, then the suit would  be
outside the scope of Section 92. A suit whose primary object or  purpose  is
to remedy the infringement of an individual right or to vindicate a  private
right does not fall under the section. It is not  every  suit  claiming  the
reliefs specified in the section that can be brought under the  section  but
only the suits which, besides claiming any of the  reliefs  are  brought  by
individuals as representatives of  the  public  for  vindication  of  public
right, and in deciding whether a suit falls within  Section  92,  the  Court
must go beyond the reliefs and have regard to  the  capacity  in  which  the
plaintiffs are suing and to the purpose for  which  the  suit  was  brought.
This is the reason why trustees of public trust of a  religious  nature  are
precluded from suing under the section  to  vindicate  their  individual  or
personal rights. It is  quite  immaterial  whether  the  trustees  pray  for
declaration of their personal rights or deny the personal rights of  one  or
more defendants. When the right to the office of a trustee  is  asserted  or
denied and relief asked for on that basis, the suit  falls  outside  Section
92.”



Moreover, while discussing the giving of notice to the  proposed  defendants
in any matter before the granting of leave under Section  92  of  CPC,  this
Court in R.M. Narayana Chettiar & Anr. Vs. N. Lakshmanan  Chetfiar  &  Ors.,
(1991) 1 SCC 48, noted in para 17 that –

“A plain reading of Section 92 of the  Code  indicates  that  leave  of  the
court is a pre-condition or a condition precedent for the institution  of  a
suit against a public trust for the reliefs set out  in  the  said  section:
unless all the beneficiaries join in instituting the suit, if  such  a  suit
is instituted without leave, it would not be maintainable at all. Having  in
mind the objectives underlying section  92  and  the  language  thereof,  it
appears to us that, as a rule caution, the court should normally, unless  it
is impracticable or inconvenient to do so, give a  notice  to  the  proposed
defendants before granting leave under Section 92 to institute a  suit.  The
defendants could bring to the notice of the  court  for  instance  that  the
allegations made in the plaint are frivolous or reckless. Apart  from  this,
they could, in a given case, point out that the  persons  who  are  applying
for leave under Section 92 are doing so merely with a  view  to  harass  the
trust or have such antecedents that it would be undesirable to  grant  leave
to such persons.  The  desirability  of  such  notice  being  given  to  the
defendants, however, cannot be regarded as a  statutory  requirement  to  be
complied with before leave under Section 92 can be  granted  as  that  would
lead to unnecessary delay and, in a given case, cause considerable  loss  to
the public trust. Such a construction of the provisions  of  Section  92  of
the Code would render it difficult for the beneficiaries of a  public  trust
to  obtain  urgent  interim  orders  from  the   court   even   though   the
circumstances might warrant such  relief  being  granted.  Keeping  in  mind
these considerations, in our opinion, although, as a rule of caution,  court
should normally give notice to the defendants before  granting  leave  under
the said section to institute a suit, the court' is not bound to do  so.  If
a suit is instituted on the basis of such leave, granted without  notice  to
the defendants, the suit would not thereby be rendered bad in  law  or  non-
maintainable. The grant of leave cannot be regarded  as  defeating  or  even
seriously prejudicing any right of the proposed  defendants  because  it  is
always open to them to file an  application  for  revocation  of  the  leave
which can be considered on merits and according to law.”



It is also pertinent to mention the case of  B.S.  Adityan  &  Ors.  Vs.  B.
Ramachandran Adityan & Ors., (2004) 9 SCC 720, wherein this Court opined:

“5. In the normal course if an appeal is filed  against  an  order  granting
permission to a party to file a suit as falling under Section 92 CPC, we  do
not normally interfere with an order made by the High Court nor do we  think
of entertaining a proceeding  of  this  nature  under  Article  136  of  the
Constitution because the  order  made  thereunder  will  not  determine  the
rights of the parties, but only enable a party to initiate a proceeding.”

Later in para 7 it was held:

“7. The learned counsel for the appellants urged that  the  order  that  was
passed under Section 92 CPC granting permission to file a  suit  is  whether
administrative in character or otherwise; that  this  does  arise  when  the
objections of the defendants  are  considered;  that  as  to  scope  of  the
meaning of the expression “order, judgment,  decree  and  adjudication”.  He
drew our attention to decision in Pitchayya v. Venkatakrishnamacharlu,  (AIR
1930 Mad. 129) to the effect that  the  object  of  Section  92  CPC  is  to
safeguard the rights of the public and of institutions  under  trustees.  In
this regard, he specifically drew our attention to  National  Sewing  Thread
Co. Ltd. v. James Chadwick & Bros. Ltd., (1953 SCR 1028).  He also  adverted
to decision in R.M.A.R.A. Adaikappa Chettiar  v.  R.  Chandrasekhara  Thevar
(AIR 1948 PC 12) to contend that where a legal right is in dispute  and  the
ordinary courts of the country are seized of such dispute,  the  courts  are
governed by ordinary rules of procedure applicable  thereto  and  an  appeal
lies if authorised by such  rules,  notwithstanding  that  the  legal  right
claimed arises under a special stature which does  not  in  terms  confer  a
right of appeal. In R.M. Narayana Chettiar v. N. Lakshmanan Chettiar  (1991)
1 SCC 48, this Court has examined in detail the scope of Section 92 CPC  and
explained the object underlying therein in granting  permission  to  file  a
suit. In this case, this Court held that court should normally  give  notice
to the defendants before granting leave as a rule of caution  but  court  is
not bound to do so in all circumstances and  non-issuance  of  notice  would
not render the suit bad or non-maintainable and the defendants  can  at  any
time apply  for  revocation  of  the  leave,  and  provision  under  Section
104(1)(ffa) for appeal against refusal of grant of leave does not lead to  a
different conclusion. In the light of this decision, we do not  consider  it
necessary to advert to other decisions cited by the  learned  counsel.  More
so, the matter was considered by the Law Commission in its report  submitted
in April  1992  on  this  aspect  of  the  matter.  After  noticing  various
decisions of different courts and the decision  in  R.M.  Narayana  Chettiar
case the Law Commission recommended  that  to  expect  the  court  to  issue
notice and then to try the several points of detail  before  granting  leave
in the light of the objections  put  forth  by  the  respective  defendants,
would mean that there will be a trial before trial and  this  would  not  be
desirable. The recommendation of  the  Law  Commission  was,  therefore,  to
insert an explanation below Section 92 CPC to the effect that the court  may
grant leave under this section without issuing notice to any  other  person,
but this does not, of course, mean that the court  will  grant  leave  as  a
matter of course. Particular emphasis is made and heavy reliance  is  placed
on the decision of this Court in Shankarlal Aggarwala v.  Shankarlal  Poddar
(1964) 1 SCR  717,  to  emphasise  distinction  between  administrative  and
judicial orders. It is urged that order from which the appeal was  preferred
was not a judgment within the meaning of clause 15  of  the  Letters  Patent
and so no appeal lies to the  Division  Bench.  Reference  is  made  to  the
decision of this Court in Institute of Chartered  Accountants  of  India  v.
L.K.  Ratna  (1986)  4  SCC  537,   to   bring   out   distinction   between
administrative and judicial order. Scope of Section 92 CPC was  examined  in
Charan Singh v. Darshan Singh (1975) 1 SCC 298, where the whole case  turned
on the facts arising in that particular case.”

And lastly, it was opined by this Court in para No.9:

“…Although as a rule of caution, court should normally give  notice  to  the
defendants before granting leave under  the  said  section  to  institute  a
suit, the court is not bound to do so. If a suit is instituted on the  basis
of such leave, granted without notice to the defendants, the suit would  not
thereby be rendered bad in law or non-maintainable. Grant  of  leave  cannot
be regarded as defeating or even seriously  prejudicing  any  right  of  the
proposed  defendants  because  it  is  always  open  to  them  to  file   an
application for revocation of the leave which can be  considered  on  merits
and according to law or even in the course of suit which may be  established
that the suit does not fall within the scope of  Section  92  CPC.  In  that
view of the matter, we  do  not  think,  there  is  any  reason  for  us  to
interfere with the order made by the High Court”.


We have  noticed  that  the  trust  deed  was  executed  in  favour  of  the
respondents. But it appears in view of the facts and circumstances  of  this
case and the submissions made on behalf of  the  respondents,  that  it  was
waqfed/gifted for a lawful purpose i.e.  a “trust” is an obligation  annexed
to the ownership of the property, and arising out of  a  confidence  reposed
in and accepted by the owner, or declared  and  accepted  by  him,  for  the
benefit of another, or of another owner, (Act II  of  1882  Trusts,  Section
3]. Accordingly, in our opinion, the application  filed  by  the  appellants
was falling within the required ambit of Section 92 of CPC and  the  learned
District Judge had rightly permitted the appellants to institute a suit.  We
are of the considered opinion that High Court has  erred  in  setting  aside
the well reasoned order of the  learned  Judge  and  grossly  erred  in  not
diligently examining the  facts  and  circumstances  in  the  light  of  the
registered deed dated 30.11.1940.

Apart from the above discussion, we have also taken notice of the fact  that
plaint was not annexed with the application filed under Section  92  of  the
CPC which is pre-requisite for filing the application for leave  to  file  a
suit. Based on the averments in the plaint only, it  can  be  inferred  that
whether an application under Section 92 is maintainable or not.  This  Court
in the case of R.M. Narayana Chettiar (supra)  at para No.10 observed:

“Neither of the aforesaid decisions of this Court deal with the question  as
to whether, before granting leave to institute  a  suit  under  section  92,
Advocate-General, or later the Court, was required to  give  an  opportunity
to the proposed defendants to show cause why leave should  not  be  granted.
What learned counsel for the  appellants  urged,  however,  was  that  these
decisions show that at the time when the Advocate-General or  the  Court  is
required to  consider  whether  to  grant  leave  to  institute  a  suit  as
contemplated under section 92, it is only the averments in the plaint  which
have to be  examined  and  hence, the  presence  of  the  defendant  is  not
necessary. We may now consider the High Court decisions  relied  on  by  the
learned counsel for the appellants.”



After the amendment was brought to the Code  of  Civil  Procedure  in  1976,
duty was cast upon the Court, instead of  Advocate  General,  to  take  into
account these considerations for granting leave under  this  section.  Prior
to the 1976 amendment, all these considerations were to be kept in  mind  by
the Advocate General before granting consent to institute a suit  against  a
public trust.

Accordingly, in this factual matrix and the law laid down by this Court  and
other relevant judicial precedents, we hold that the  learned  Single  Judge
erred while granting leave to the appellants. It was the statutory  duty  of
the Court to examine  that  whether  the  plaint  is  so  annexed  with  the
application under Section 92 CPC or not. We have  noticed  that  High  Court
has also erred in neglecting this fact.

From a perusal of the compete  material  on  record,  in  our  opinion,  the
allegations put forth could only be determined  by  way  of  evidence  in  a
special suit under Section 92 and respondent No.2 is enjoying the  ownership
of the disputed immovable property while acting as  a  trustee.  Hence,  for
the ends of complete justice, the appellants are  granted  liberty  to  move
appropriate application in accordance with law, within a period of  30  days
from the date of  pronouncement  of  this  judgement.  Civil  Courts  having
jurisdiction  to  entertain  any  suit  in  this  country  are  expected  to
carefully  examine  applications  of   such   kind   as   discussed   above.


     This appeal is disposed of in above-noted terms.



……………………………….. J
(Pinaki Chandra Ghose)



……………………………….. J
 (Ashok Bhushan)

      New Delhi;

February 23, 2017.

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