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Judgment
M. Jeyapaul, J.—Original Application No. 104 of 2009 is filed seeking to restrain the respondents from cancelling, revoking, modifying or
setting aside the joint development agreement dated 13.11.2008 and the approval accorded by the second respondent for the joint development
of the properties at Mysore, Hassan and Udupi.
Original Application No. 105 of 2009 is filed seeking to grant a temporary injunction restraining the respondents from in any way interfering with
the peaceful possession and enjoyment of the suit property and also not to deal with the same in any manner detrimental to the interest of the
applicant.
Brief contention of the applicant: All the movable and immovable properties of the Church of South India are vested with the Church of South
India Trust Association. There is a Managing Committee for the Church of South India Trust Association which manages and administers all the
properties of the Church of South India. The Diocese of Church of South India in its Executive Working Committee Meeting that was held on
29.2.2008 unanimously approved the proposal for the joint development of the property bearing door No. 15, Old No. 20, Government Guest
House Road, Nazarbad, Mohalla, Mysore with Medscape Hospitals Private Limited, the applicant herein for establishment of multi-speciality
hospital. The Mysore Area Council, in its meeting that was held on 13.3.2008 also unanimously passed a resolution according approval for the
joint development of the property in Mysore for establishing multi-speciality hospital by the applicant. The Diocesan Property Committee, in its
meeting held on 5.4.2008 also passed a resolution approving the joint development proposal of the property in Mysore. The Executive Committee
Meeting of the Diocese that was held on 17.4.2008 and subsequently on 5.5.2008 also approved the proposal of the joint development property
at Mysore with Medscape Group. The Managing Committee of the Church of South India Trust Association, the second respondent herein, in its
meeting that was held on 28.10.2008, discussed the subject of the joint development proposal of the property at Mysore with Medscape in detail
and accorded approval for the joint development of the property at Mysore, Hassan and Udupi. The joint development agreement with Church of
South India Trust Association was signed on 13.11.2008. The possession of the said property was also delivered to the applicant. As per the
terms of the agreement, a sum of Rs. 60,00,000/- was remitted to the account of the second respondent on signing the said agreement. The 5th
respondent has now called for a meeting of the Management Committee of the second respondent on 11.2.2009. They have decided to cancel the
joint development agreement dated 13.11.2008 entered into between the applicant and the second respondent and also to revoke the approval
given by the second respondent in its Management Committee Meeting that was held on 28.10.2008 for the joint development of the property at
Mysore. Though this joint development agreement was entered for the good human cause, the respondents, with a mala fide intention and ulterior
motive, are obstructing the same. Hence, the reliefs as adumbrated in the applications are sought for.
The counter version of respondents 1 to 5 reads as follows:
The property of the second respondent shall not be leased out mortgaged or sold out without prior sanction of the Working Committee of the
Church of South India Trust Association. The 6th respondent, who is the Bishop of Karnataka Southern Diocese in the Church of South India sent
an official communication on 19.5.2008 to the second respondent enclosing the relevant Minutes of the Executive Meeting of the Diocese that was
held on 5.5.2008. According to the extract of the Minutes sent by the second respondent, the Executive Committee passed a resolution accepting
the joint development of hospital at Mysore also with the applicant. Therefore, a conditional permission for the joint development of the property at
Mysore was granted by the Management Committee that was held on 28.10.2008 for the joint development of the property at Mysore also. The
second respondent came to understand that the Executive Committee of the Karnataka Southern Diocese in the Church of South India never gave
its approval for the joint development of the property by the applicant which is the subject matter of the suit. But, the 6th respondent had
concocted the documents and misled the second respondent to believe that Karnataka Southern Diocese in the Church of South India gave its
approval for the joint development of Mysore property also when there was no such approval however given by the Executive Committee. The
6th respondent acted highhandedly and entered into a joint development agreement on 13.11.2008 as the power of attorney holder of the second
respondent with the applicant. As per the Church of South India Synod Rules, the Bishop or anyone of the officers nominated by him and one of
the other officers so appointed are authorised to act jointly. The Bishop can never act by himself and any such action by the Bishop would be
contrary to the power of attorney granted. The Bishop had acted in indecent haste in entering into the joint development agreement dated
13.11.2008. Worse still is the fact that the Bishop caused the online transfer of a sum of Rs. 60,00,000/- on 10.12.2008 to the account of the
second respondent without any basis or the knowledge of second respondent. The Bishop had mischievously wrote a letter dated 11.12.2008 to
the applicant acknowledging receipt of Rs. 60,00,000/- on behalf of the second respondent and put the applicant in possession of the property
which is the subject matter of the suit. The Bishop had colluded with the applicant to bring about the said state of affairs complained of above.
Therefore, the applicant has not come out with a prima facie case. The balance of convenience is in favour of respondents 1 to 5. Irreparable loss
and hardship would be caused if injunction is granted by this court.
As per Rule 8(i) of the Church of South India Trust Association Manual, the Trust property shall not be leased, mortgaged or sold away without
prior sanction of the Synod Executive/Working Committee and the Church of South India Trust Association. There is no dispute to the fact that
there is a Managing Committee under the Church of South India Trust Association. The Working Committee of the Church of South India and the
Managing Committee of the Church of south India Trust Association will have to necessarily clear the proposal for mortgaging or selling away the
property vested with the Church of South India Trust Association. As per Rule II(i) of the Church of South India Synod Rules, in all transactions
concerning immovable property of the Church of South India Trust Association, it shall be obligatory on the part of the Bishop/Commissary or one
of the other Attorneys nominated by him to be one of the signatories. The Diocesan Executive shall nominate four names including the name of the
Bishop, Diocesan Secretary, Diocesan Treasurer and one other to be appointed as Attorney by the Church of South India Trust Association. It is
not in dispute that the Church of South India executed a registered power of attorney on 17.12.2007 in favour of the Bishop and three other
officials of Karnataka Southern Diocese in the Church of South India. The said power of attorney was produced by the respondent as document
No. 1 before this Court for scrutiny. Under the said power of attorney, the sixth respondent Bishop and one of the three other attorneys named in
the power of attorney shall be the signatories for the transaction relating to the property of the second respondent. Only after obtaining permission
in writing from the second respondent, any of the immovable properties of the second respondent can be sold away, exchanged, assigned
transferred or disposed of by the power of attorneys nominated under the deed of power of attorney.
Of course, the learned Senior Counsel appearing for respondents 1 to 5 would submit that the joint venture development of the property of the
second respondent was not in contemplation of the second respondent under the deed of power of attorney. The relevant portion of the deed of
power of attorney would read that the Attorneys appointed therein, after obtaining permission in writing from the Association, can sell, exchange,
assign, transfer or dispose of by way of mortgage or hypothecation of any immovable property of the second respondent. It is far fetched to say
that the aforesaid clause does not give any authority to the Attorneys appointed under the power of attorney to enter into any agreement with a
third party for the purpose of development of the property. The aforesaid clause contemplates the power of the attorneys to dispose of or deal
with the property. When the Attorneys have the authority to extinguish the right of the second respondent vested in the immovable property, it is far
fetched to say that they have not been given authority to enter into an agreement to develop the property otherwise. The development of the
property is one way of dealing with the property for the purpose of adding value to the property. Therefore, I find that there is no merit in the
submission of the learned Senior Counsel appearing for respondents 1 to 5 that the Attorneys have not been vested with the power to deal with the
property for the purpose of development of the same with the third party under the deed of power of attorney.
Now, the court will have find whether permission was granted by the second respondent for the purpose of developing the property by the
applicant. The learned Senior Counsel appearing for the applicant would strenuously submit before the court that in the Executive Committee
Meeting that was held on 29.2.2008, the Mysore Area Council Meeting that was held on 13.3.2008 and the Mysore Area Property committee
that was held on 15.3.2008, necessary resolution was passed approving the proposal for joint development of the suit property by the applicant.
Only on the basis of the final resolution passed by the Executive Committee of the Diocese on 5.5.2008, the second respondent, on the basis of
the request made by the 6th respondent, accorded approval for the joint development of the property on 28.10.2008 and thereafter the joint
development agreement was signed by the applicant and 6th respondent on behalf of the second respondent on 13.11.2008. It is her submission
that a sum of Rs. 60,00,000/- was credited to the account of the second respondent and possession was also delivered by the 6th respondent to
the applicant. Therefore, the applicant has established a prima facie case. The applicant will face much hardship and irreparable injury if the
approval for the joint development of the suit property was withdrawn by the second respondent at a stage where the applicant has already
pumped in all its resources for the purpose of developing the property as per the joint venture agreement, it is lastly contended.
The learned Senior Counsel appearing for respondents 1 to 5 would vehemently submit that the 6th respondent has concocted the true extract
of the resolution that was passed by the Executive Committee of the Diocese on 5.5.2008 and mischievously persuaded the second respondent to
believe that there was such a resolution for joint development of the agreement in respect of Mysore property also when actually there was no such
resolution for the joint development of the Mysore property. Further, the deed of power of attorney contemplates disposal of the property of the
second respondent by two signatories with the approval of the second respondent. The 6th respondent himself has signed on behalf of the second
respondent audaciously and without authority against the letter and spirit of the deed of power of attorney. The joint development agreement
entered into by the 6th respondent alone does not bind the second respondent inasmuch as one of the other signatories contemplated under the
power of attorney did not subscribe his signature to the joint development agreement. It is his further submission that a sum of Rs. 60,00,000/- was
received by the 6th respondent and the same was passed on to the account of the second respondent without its knowledge and the said amount
was rightly returned by the second respondent.
The Executive Committee which met on 29.2.2008, the Mysore Area Council which met on 13.3.2008 and the Mysore Area Property
Committee and Mysore Area Working Committee that met on 15.3.2008 passed resolutions approving the proposal for the joint development of
the Mysore Property also by the second respondent with the applicant. But, on a careful perusal of the final resolution passed by the Executive
Committee of the Diocese on 5.5.2008, it is found that the Executive Committee of the Diocese cleared the proposal for the joint development of
Hassan and Udupi property of the second respondent and not the Mysore property of the second respondent as there was stiff resistance from
some of the members of the Committee on the ground that the Mysore property bore sentimental value of the Christian community of the Diocese.
But, quite unfortunately, for reasons best known, the 6th respondent, who is now adorning the covetable office of Bishopship had submitted an
untrue extract of the resolution passed by the Executive Committee of the Karnataka Southern Diocese in the Church of South India. The material
and relevant portion thereof reads as follows:
After prolong discussion it was resolved to accept the joint development of Hospital at Mysore, Hassan and Udupi with Medone/Medscape
Group with the condition that the project should be taken jointly.
The true extract of the resolution alleged to have been passed by the Executive Committee of the Diocese that was held on 5.5.2008 was
produced by the second respondent as document No. 2. Only based on the said extract of the resolution produced by the 6th respondent, the
second respondent accorded its conditional approval for joint development of the Mysore property also by the applicant.
It is demonstrated before this Court by respondents 1 to 5 that the second respondent was hoodwinked by the 6th respondent with the
concocted version of the resolution passed by the Executive Committee Meeting of the Diocese on 5.5.2008. Therefore, such an approval
accorded, having been completely misled by the 6th respondent, cannot at all be a basis for the 6th respondent to rush to clinch the joint venture
agreement with the applicant.
As already pointed out, the Bishop as well as another Attorney contemplated under the power of attorney by the second respondent have to
deal with the immovable property of the second respondent, but, quite unfortunately, the second respondent as though he alone was representing
the second respondent, throwing to wind the settled procedure to clinch a deal with respect to the immovable property of the second respondent,
signed the joint venture agreement with the applicant and chose to deliver possession of the property also to the applicants. Firstly, no property of
the second respondent can be dealt with by the Bishop alone. Unless the other Attorney, as per the deed of power of attorney executed by the
second respondent, subscribes his signature along with the Bishop or his nominee, a deal does not become complete. Secondly, the applicant,
without directing the 6th respondent who chose to subscribe his signature as a power of attorney of the second respondent to produce the power
of attorney executed by the second respondent in his favour, clinched the deal and invited a litigation. Had the applicant perused the power of
attorney given to the 6th respondent to deal with the property of the second respondent, the applicant would have insisted for the signature of the
other Attorney appointed by the second respondent to make the deal complete. The applicant cannot acquire any right under the joint venture
agreement entered into between the applicant and the 6th respondent inasmuch as the other signatory authorised by the second respondent did not
subscribe to the joint venture agreement entered into between the applicant and the 6th respondent. The applicant is not a layman to contend that
the applicant was unaware of the implication of the deal clinched by the Bishop, the 6th respondent herein. The applicant is found to be a very
reputed company having its transnational link. The very fact that the applicant wantonly chose not to verify the alleged power of attorney which
gave authority to the 6th respondent to subscribe his signature to the joint venture agreement speaks volumes of the conduct of the applicant in
clinching the deal with the 6th respondent in a hasty manner.
To top it all, the 6th respondent has received a sum of Rs. 60,00,000/- from the applicant in the aftermath of the joint venture agreement and
credited to the account of the second respondent which was rightly returned by the second respondent. Therefore, it is not as if the second
respondent has received the consideration of Rs. 60,00,000/- from the applicant for the joint venture deal. The 6th respondent has no absolute
authority to deliver possession of the property of the second respondent to the applicant. The delivery of possession of the property can be
effected by the second respondent as it has the absolute authority to deal with the suit property on signing the agreement not only by the 6th
respondent but also by one of its Attorneys appointed by it.
No resolution was passed by the final Executive Committee of the Diocese to enter into joint venture agreement with the applicant with respect
to the suit property. It has been shown that the 6th respondent has mischievously misled the second respondent to accord its approval by
producing a concocted resolution passed by the Executive Committee of the Diocese on 5.5.2008. The joint venture agreement was not entered
into by yet another Attorney appointed by the second respondent. The Bishop has no absolute authority to delivery possession to the applicant.
Even without the knowledge of the second respondent, the consideration under the joint venture agreement was credited to the account of the
second respondent and the same was rightly returned by them. The conduct of the applicant also weighs in the mind of the court.
In the above facts and circumstances, it is found that the applicant has miserably failed to establish prima facie case. If injunction is granted,
much hardship will be caused to the second respondent. The balance of convenience is also found in favour of the second respondent. In view of
the above, the order of injunction already granted in O.A. No. 104 of 2009 stands vacated. Both the Original Applications stand dismissed.