Karua Taluk Ex. Tappers Association vs Ramaswami Nadar and Others

Venkatadri, J.—This appeal raised out of a suit filed by the appellant for recovery of possession of the plaint property and to call upon

defendant 1 and 2 (respondents 1 and 2) to render a true and proper account of the Karur Taluk Ex Tappers Association from 1942 till the date

of suit, directing them to pay the amount that may be found due, and also for future profits from the suit property.

The short facts that are necessary for the disposal of this appeal are as follows. The plaintiff association has been duly registered under the

Societies Registration Act, Prior to the introduction of prohibition the aforesaid association was working under the name and style of Karur Taluk

Tappers Union and it was registered under the Trade Unions Act of 1926. The Union had a membership of more than 2000 members and

respondents 1 and 2 herein. President and Treasurer respectively, were collecting subscription from the various members. In the course of the

management of the Union, the property in question was purchased in the names of the first respondent and the secretary and subsequently a

terraced building was built of it. The first respondent is occupying the main portion of this property and the second respondent is occupying another

portion. There are thatched houses in the property which are in the possession of respondents 3 to 5 who are paying a monthly rent to respondents

1 and 2. After the introduction of prohibition this Union became ineffective and there were no activities. Therefore, the members were not taking

any interest in the activities of the Union. Taking advantage of this situation the first respondent continued to be in possession of the suit property. It

was for the first time that on 6-8-1958 the members of the Karur Taluk Ex-tappers Association decide to recover the property from first

respondent and on that date under the auspices of the Karur Taluk Tappears Union a general body meeting was held wherein the Association was

renamed as Karur Taluk Ex-Tappers Association and office bearers were elected on that date. They passed a resolution authorising the Secretary

to take steps for recovering the suit property. Hence the suit by the Secretary of the above said Association.

The suit was registered by the first respondent contending that the plaintiff association is not entitled to recover the suit portion is not entitled to

recover the suit property, not can they call upon him to render a true account in respect of the income from the property which belonged only to

the Karur Taluk Tappers Union, that the Karur Taluk Tappers Union was a distinct body altogether, that there was no meeting held as alleged in

the plaint that the property was not acquired with the funds of the Union or for the benefit of the Union, that the today contractors gave donations

to him, with which he purchased the property for his own benefit, that taking advantage of the description and address of the first respondent in the

sale deed and the incorrect averments made therein the present suit was filed, that he was not responsible for the maintenance of accounts nor the

moneys of the Union, that the plaintiff has not been in possession within 12 years before the suit and that the suit was barred by limitation. The

second respondent-second defendant filed a written statement to the effect that it is true that he was the Treasurer of the Tappers Union and that

the amounts collected were deposited by the Secretary in the banks in the joint names of himself and the Secretary and that the first respondent the

President was in possession of all the accounts. In fact, he supported the case of the plaintiff Defendant 4 contends that he is a tenant and that he

has no objection to surrender possession to whomsoever the court directs, Defendants 5 and 6 contend that they have vacated the property and

they are not in possession and that they are not liable to pay any rent. On these pleadings the parties went to trial.

The first court has held that the plaintiff association has title to the property and that the plaintiff is entitled to sue. Against the decision the first

defendant preferred an appeal. But here he did not press the defence regarding the title to the suit property. He contended that the suit was not

maintainable. He further contended that Karuppanna Nadar, who styled himself as the Secretary of the Association has no locus standi to maintain

the suit. The lower appellate Court agreeing with these contentions dismissed the suit. The result is that the first defendant-first respondent has no

title to the property and the property belongs to the Tappers Union. The lower appellate court is of the opinion that the plaintiff-appellant is not a

successor-in-interest of the former Union and that the suit instituted on behalf of the appellant association to recover possession of the suit property

which belonged to the dissolved Union is incompetent. Now, the plaintiff has preferred this second appeal.

The question that arises for my consideration is whether the present suit can be filed by the Secretary of the plaintiff Association. As stated

already, Karur Taluk, Tappers Union was formed before prohibition was introduced in this State and the said Union was registered under the

Trade Unions Act of 1926. The plaint property was purchased under Ex. A. 1 dated 21-2-1946 in the name of the first respondent in his capacity

as President and in the name of Maruthamuthu Pillai the Secretary of the Union. Only subsequently buildings were put up on this vacant piece of

land. It is now in the possession of the first defendant-first respondent. Therefore, it is clear that this property originally belong to Tappers Union.

Now the question arises whether the plaintiff Association which was formed subsequently can recover this property. The members of the former

Union, in order to recover the plaint property, formed themselves into another Association and registered it under the Societies Registration Act

and authorised the present secretary to take steps for recovering the property. For deciding the question whether the plaintiff can recover the suit

property from the first respondent, a reference may be made to sub-section (2) of Section 27 of the Indian Trade Unions Act 1926, which runs

thus:

Whether the dissolution of a registered Trade Union has been registered and the rules of the Trade Union do not provide for the distribution of

funds of the Trade Union on dissolution, the Registrar shall divide the funds amongst the members in such manner as may be prescribed.

The principle to be followed as regards the distribution of funds by the Registered is laid down in Regulation No. 11 of the Central Trade Union

Regulations 1938, which provides:

Where it is necessary for the Registrar u/s 27(2) to distribute the funds of a trade union which has been dissolved, he shall divide the funds in

proportion to the amounts contributed by the members by way of subscription during their membership.

The learned District Judge is of opinion that this Regulation would not apply to the facts of the present case and that the Act does not deal with the

immovable property that might have been acquired by the dissolved Union. I am not able to agree with this decision rendered by the learned

District Judge. Even assuming that this original Union was dissolved, still the property does not cease to be the property of the Union. Whatever it

may be, the property is in the nature of a trust. The first defendant-first respondent was aware that the property did not belong to him. The same

was purchased from and out of the funds collected from the members of the tappers Union. He cannot contend that the original Union was

dissolved and that therefore the present plaintiff cannot recover it. Even according to the provisions of the Trade Unions Act, this property should

have been sold and the Registrar should have divided the proceeds to the members of the Union. I am of the opinion that the principle u/s 27(2) of

the Act would apply not only to moveable properties especially when these immovable properties were purchased from and out of the funds

collected from the members of the Tappers Union. In any event, the members of the original Tappers Union formed themselves into another

Association and registered it under the Societies Registration Act, with the main object of recovering the property in question from the first

respondent. Now the present Union i.e., the plaintiff, is a legal entity to take proceedings in order to recover the property from the first respondent.

It is true that before the Association was registered the members convened a general body meeting for forming another Association and passed a

resolution authorising the Secretary to take proceedings against the first respondent. It is also true the resolution was passed on 6-7-1958 and the

Association was registered on 8-7-1958. One of the contentions of the learned counsel for the respondents is that the resolution was ultra vires

and not binding on them since it was passed before the Association was registered. But by the time the Association was registered Articles of

Association and other things were framed and submitted to the Registrar. Still learned counsel for the respondents contends before me that even

the present rule does not provide that the Secretary can file the suit. I am of the opinion that all these contentions urged by the learned counsel for

the respondents are too technical and advance only for the purpose of squatting on the property. When once it is found that the property does not

belong to the first defendant-first respondent he cannot be allowed to contend that the plaintiff has no locus standi to institute the suit Though at the

time of the passing of the resolution the Society was not registered, when the suit was filed the Association was registered under the Societies

Registration Act and the Secretary is competent to the file the present suit and take proceedings to recover the property from the first defendant.

u/s 5 of the Societies Registration Act, the suit property should be deemed to be vested in the governing body of the said society and the property

may be described as the property of the governing body of such society by their proper title, in all proceedings. When once the Association was

registered under the Societies Registration Act, the body has got a legal entity capable of sunning in its corporate capacity. The registration of the

Association conferred on the plaintiff association a legal personality to take proceeding against the first defendant. The present association is a

collection of the members of the original Tappers Union and they have formed this Association with the object of recovering the property from the

first defendant. This is not a suit filed by some members of the original Union against the other members of the Union. This is a suit instituted by a

newly formed association who has got a legal personality to recover the property from the first defendant, who is not a member of the new

Association. After the dissolution, of the Tappers Union, the property which is now in the possession of the first defendant, is a trust property and

the members of the plaintiff association are entitled to trace the trust property and recover it from the person who is in unlawful possession of the

same. As far as the first defendant is concerned, he has no right to question whether the new Association has got title to the suit property or not.

When once it is clear that he has no title to the suit property and he himself concedes that he has no title to the property, it is his duty to hand over

possession to a legally formed Association i.e., the plaintiff. If any one of the members of the Ex-trappers Association wants to protect the

property, he is entitled to do so by instituting proper proceedings against the present association, but the first defendant has no locus standi to

contend that the suit is not maintainable. I am of the opinion that the conclusion arrived at by the first court is correct. Therefore, I hold that the suit

property is a trust property, that the first defendant is in unlawful possession of the same and that the plaintiff is entitled to recover the property

from the first defendant.

In the result, the appeal is allowed. The first defendant will pay court-fee due to the Government and the first defendant will pay the costs of the

plaintiff throughout. No leave.