Karur Taluk Ex. Tappers Association vs Ramaswami Nadar and Others

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

defendants 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. This Union had a membership of more than 2,000 members and

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

management of the union, the property in question was purchased in the names of the 1st respondent and the Secretary and subsequently a

terraced building was built on it. The 1st respondent is occupying the main portion of this property and 2nd 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 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 1st respondent continued to be in possession of the suit property. It was

for the first time that on 6th July, 1958, the Members of the Karur Taluk Ex-Tappers Association decided to recover the property from the first

respondent and on that date tinder the auspices of the Karur Taluk Tappers Union a general body meeting was held wherein the association was

re-named 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 abovesaid Association.

The suit was resisted by the 1st respondent contending that the plaintiff association is not entitled to recover the suit property, nor 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 an 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 toddy 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 1st 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 for the monies of the Union, that

the plaintiff had not been, in possession within 12 years before 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 1st 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 1st 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 Union Act of 1926. The plaint property was purchased under Exhibit A-1 dated 21st February, 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 1st defendant-1st respondent. Therefore, it is clear that this property originally belonged 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 1st respondent, a reference may be made to Sub-section (2) of Section 27 of the Indian Trade Union Act,

1926, which runs thus:

Where 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 Registrar 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 Toppers 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 movable properties but also to the immovable properties especially when these immovable properties were

purchased from and out of the funds collected from the members of the Toppers Union. In any event the members of the original Toppers 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 1st respondent. Now the present Union, i.e., the plaintiff, is a legal entity entitled to take proceedings in order to recover the

property from the 1st 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 1st respondent. It is also true the resolution

was passed on 6th July, 1958, and the Association was registered on 8th July, 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 formed 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 advanced only for the purpose of squatting on the property.

When once it is found that the property does not belong to the 1st defendant-1st respondent, he cannot be allowed to contended 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 file the present suit and take proceedings to

recover the property from the 1st 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 suing in

its corporate capacity. The registration of the Association conferred on the plaintiff association a legal personality to take proceedings against the

1st 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 1st 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 which has got a legal personality to recover the property from the 1st

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 1st 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 1st 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 be 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-Tappers Association wants to protect the property he is entitled to do so by instituting proper proceedings against the present Association, but

the 1st 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 1st defendants is in unlawful possession of the same And that the

plaintiff is entitled to recover the property from the 1st defendant.

In the result, the appeal is allowed. The 1st defendant will pay Court-fee due to the Government and the 1st defendant will pay the costs of the

plaintiff throughout. No leave.