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Judgment
Mishra, J.—A learned single Judge of this Court has declined to grant leave to the plaintiffs-respondents to institute the suit u/s 92 of the
Code of Civil Procedure. One of the respondents in the application, named as the defendant in the plaint, has preferred the appeal.
Claiming inter alia that the first applicant-first respondent was a life member in the defendant trust and that he was closely associated with the
management of the schools belonging to the trust as an executive member of the Parents-Teachers'' Association and the second applicant-second''
respondent too was in the Executive Committee of the Parents-Teachers'' Association of the School, the applicants filed the application praying for
leave to sue. According to them, this trust was started by the State Bank of India Officers'' Association for the advancement of the education for
the benefit of the public. When the trust was started, the subscribers to the Trust became the members of the trust by virtue of the bye-laws. The
officers of the Association also became the ex-officio, office-bearers of the trust. They were, however, serving officers in the State Bank of India.
It so happened in Writ Petition No. 9933 of 1985, the Supreme Court held that officers of the Bank should not actively work for a trust
involving collection of funds from the public, and observed as follows:
We are of the firm opinion that no employee of the nationalised bank or any other public sector corporation should engage himself in collecting
donation for any trust or other organisation from persons with whom because into contact in the course of his employment. It is not desirable. It is
likely to lead to unhealthy practices and harmful results, intended or unintended. It the world of commerce, quid pro quo and not charity is the rule.
Those in a position of advantage by reason of their office have to be very wary. Otherwise they may unsuspectingly walk into traps.
It is further stated that the Management of the State Bank of India has consequently issued a directive to the Association Officers to desist from
associating themselves with the trust or holding office in the trust and it also directed that no employee shall promote or constitute or associate
himself with the trust which directly or indirectly contains the Bank''s name or provides for collection of funds from the public including the Bank''s
clients. Alleging that the directive has in such a situation paralysed the functioning of the defendant''s trust and it became necessary to move the
court for framing a scheme to appoint new trustees in the place of the existing trustees, the applicants filed the application seeking leave to institute
the suit. It appears that besides the application for leave to institute the suit, another application was filed praying for appointment of a receiver to
administer the alleged trust pending disposal of the application for leave. A learned single Judge of this Court passed an order stating that by
consent of both parties, a retired Judge of this Court was appointed receiver to administer the State Bank of India Officers'' Association
Educational Trust pending disposal of the application for leave. Several other applications were filed in relation to the administration of the trust.
But no specific orders were passed in these applications, and by a common order, P.K. Sethuraman, J., disposed of the main application for grant
of leave to sue u/s 92 of the Code of Civil Procedure, holding inter alia that leave to sue to file the suit u/s 92 of the CPC cannot be granted in this
case. The learned single Judge has noted the facts as follows:
In the plaint also after mentioning other details about the formation of the trust and also the manner how the funds were collected, how the schools
were started in different places, how they had been managing, the circular issued by the management dated 18.2.1986 regarding the disciplinary
action to be taken for collection of funds by the Officers'' Association and also referring to the bye-laws of the trust and issue of notice by the
Management of the State Bank of India to the office-bearers of the trust it has-been prayed for framing a scheme for the management of the trust
and as earlier shown the amendment also has been suggested in paragraph 4 to the various clauses of the bye-laws in the cause of action
paragraph it has been mentioned about the statement of the management of State Bank of India objecting to the use of the name and directing
deletion of the name and also directing the office-bearers of the trust to desist themselves from the trust. Therefore, it is clear that while suit is
sought to be filed because of the objection taken by the Management of the State Bank of India for naming school as State Bank of India Officers''
Association Educational Trust and also for the Officers Associating with the Trust and collecting funds and donations from the Bank. 22. It may be
pointed out that the trust itself was established by the State Bank of India Officers Association for the various objects enumerated in the
Memorandum of Association and the Officers who subscribed to the Memorandum of Association became founder members of the Trust and they
are office bearers and members of the Secretariat of the State Bank of India Officers'' Association, Madras Circle. As per bye-law they shall
remain members so long as they held respective offices in the Association. In the event of cessation of membership the respective successors to the
office shall ipso facto become members of the Society. The president, Secretary, Associate Secretary, Treasurer among themselves shall constitute
themselves into a management committee and as to the officers, the President of the State Bank of India Officers'' Association, Madras Circle,
shall be the President of the Trust. The Treasurer of the Association shall be the Treasurer of the Trust. The General Secretary/Deputy Secretary
and/or vice President of the Association as may be determined by the Committee shall be the Secretary and Associate Secretary of the Trust
(Bye-law XIX (a). Therefore, it is clear that the President, Treasurer, General Secretary and Vice President became officers of the trust also. The
other office-bearers have not been made as parties either in the suit or in the application.
The question before the learned single Judge was whether on the aforementioned facts, a suit u/s 92 of the CPC could be filed and leave should
be granted. He has, however, stated at one place.
It will be worthwhile to mention that the two applicants are not in any way concerned with the State Bank of India Officers'' Association. While
that is so, it is not known as to how they had come to know the directive issued by the Management of the State Bank of India to the Officers''
Association as well as members of the Trust. It may also be pertinent to point out that the application and the plaint are dated 10.4.1986 and they
had been filed into Court on 11.4.1986. According to the affidavit filed by Mr. M. Balakrishnan, the applicant in A.Nos.2979, 2981 and 2982 of
1986, it has been stated that he has been declared elected General Secretary of the State Bank Officers Association on 6.4.1986 and the only
respondent/defendant shown in the application and in the plaint State Bank of India Officers'' Association Educational Trust by its Secretary Mr.
E.A.G. Moses was not the Secretary on the date of the institution of the suit, as according to the affidavit filed by Mr. Balakrishnan, Mr. Moses
contested for the office of the President of the Association and he was defeated in the election and further according to the affidavit, the said
Moses with ulterior motive and object of somehow continued to be in charge of the institution, has colluded with the plaintiffs and he had
engineered the suit and the application filed and also without any authority whatsoever consented to the appointment of a Receiver even before
permission to sue was granted by this Court. In this connection it was also submitted on behalf of the said applicant that Moses had even resigned
from the primary membership of the State Bank Officers'' Association and as such he has no locus standi whatsoever to, be the
respondent/defendant in the proceedings. It was also submitted that even in the year 1979 the formation of the trust and the proposed activities of
the trust had been informed to the Chairman, State Bank of India and he had been sent the Memorandum of Association of Trust along with the
Special brochure brought out in that regard.
It was also submitted that on 6.6.1979 the school at Madras was inaugurated by the Chairman of the State Bank of India in the presence of
dignitaries in the City of Madras. It was also further submitted that there had been a collection of more than Rs. 8,00,000 and a souvenir had also
been released and the members of the State Bank of India in Tamil Nadu, Karnataka and Pondicherry had made collections and there had been
some benefit musical programme also through which funds were raised. It was further submitted that even in the year 1980 there was issue of a
circular letter dated 24.10.1980 regarding collection of funds by the Officers Association and it was pointed out that such activity was in
contravention of conditions of service as laid down in the Rule for the Supervising Staff Service. It was also submitted that under Rule 42(3) of the
State Bank of India Supervising Staff Service Rules, it has stated that ""no employee shall, except with the previous sanction of the appropriate
authority ask for or accept contributions or otherwise associate himself with the raising of any funds or other collection in cash or in kind."" Under
the abovesaid circular the officers were advised to stop such activities mentioned above. Again there was a similar circular in the month of
November, 1980.
Besides the above, the learned Judge has taken notice of the dispute between the parties and the various rules and the bye-laws and stated as
follows:
Therefore if the Management of the State Bank of India accedes to the request of the SBIOA and if the association also makes the necessary
amendments in the byelaws with the approval of the Registrar under the Societies Registration Act, there could be no hindrance in the continued
and effective functioning of the Trust established by the SBIOA. Having regard to the steps alleged to have been taken by the new office-bearers
of the Association with the Management of State Bank of India, I feel there is absolutely no need for a suit of this nature to be entertained by this
Court and the alleged cause of action cannot at all be said to be a real one.
With respect, we have to say that the learned Judge was not adjudicating any dispute between the parties in the suit, but was examining, whether
on the allegations in the plaint, a case had been made out for leave u/s 92 of the Act. The law on the subject is not in dispute. The Supreme Court
in Mahant Pragdasji Guru Bhagwandasji Vs. Patel Ishwarlalbhai Narsibhai and Others, has pointed out that a suit u/s 92 is a suit of a special nature
which presupposes the existence of a public trust of a religious or charitable character. The Supreme Court has said:
Such a 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 thereof, and it must pray for one or other of the reliefs that are specifically mentioned in the Section. It is only when these conditions
are fulfilled that the suit has got to be brought in conformity with the provision of Section 92, C.P.C. As was observed by the Privy Council in
Abdur Rahim v. Md. Barkat Ali 55 Ind. App. 96 (P-C), a suit for a declaration that certain property appertains to a religious trust may lie under
the general law but is outside the scope of Section 92, C.P.C. In the case before us, the prayers made in the plaint are undoubtedly appropriate to
the terms of Section 92 and the suit proceeded on footing tat the defendant, who was alleged to be the trustee in respect of a public trust was guilty
of breach of trust. The defendant denied the existence of the trust and denied further that he was guilty of misconduct of breach of trust. The denial
could not certainly oust the jurisdiction of the court, but when the courts found concurrently on the evidence adduced by the parties, that the
allegations of breach of trust were not made out, and as it was not the case of the plaintiffs, that any direction of the court was necessary for proper
administration of the trust, the very foundation of a suit u/s 92, C.P.C. became wanting and the plaintiffs had absolutely no cause of action for the
suit they instituted. In these circumstances, the finding of the High Court about the existence of a public trust was wholly inconsequential and as it
was unconnected with the grounds upon which the case was actually disposed of, it could not be made a part of the decree or the final order in the
shape of a declaratory relief in favour of the plaintiffs.
Stating further, on the objection that even if the plaintiffs failed to prove the other allegations made in the plaint, they did succeed in proving that the
properties were public and charitable trust properties, the Supreme Court observed:
The reply to this is, that in a suit framed u/s 92, C.P.C., the only reliefs which the plaintiff can claim and the court can grant are those enumerated
specifically in the different clauses of the section. A relief praying for a declaration that the properties in suit are trust properties does not come
under any of these clauses. When the defendant denies the existence of a trust, a declaration that the trust does exist might be made as ancillary to
the main relief claimed under the section if the plaintiff is held entitled to it; but when the case of the plaintiff fails for want of a cause of action, there
is no warrant for giving him a declaratory relief under the provision of Section 92, C.P.C. The finding as to the existence of a public trust in such
circumstances would be no more than an obiter dictum and the same cannot constitute the final decision in the suit.
This view has been reiterated, and no departure has been shown in any of the judgments of the Supreme Court in this behalf. Reiterating the
same view in Harendra Nath Bhattacharya and Others Vs. Kaliram Das (Dead) by his Heirs and Lrs. and Others, , it has been pointed out,
It is well settled by the decisions of this Court that a suit u/s 92 is of a special nature which pre-supposes 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 appears that the attention of the learned Judge was drawn to a judgment of this Court in Devalur Pitchayya v. Divi Venkatakrishnamacharlu
58 M.L.J. 39. In that judgment also, it has been observed:
...the object of requiring sanction of permission before such suits are instituted u/s 92 is to safeguard not only the rights of the public but also the
rights of the institution and the trustees. The suit being a representative suit it is necessary to see that the persons who come forward are persons
who have an interest in the temple and persons who can be safely entrusted with the conduct of the suit. Even though the whole public are
technically par-ties, still the plaintiffs who file the suit have the conduct of the suit and very large powers in the shaping and the conduct of the suit.
As a matter of general experience the public leave to the plaintiffs to conduct all the proceedings and to take the various steps necessary for its
successful prosecution. It is also for the benefit of the institution and of the trustees because it affords a safeguard against impecunious and
improper persons coming as plaintiffs and involving the trust in litigation and expenses and it is also a safeguard that the persons are substantial
person from whom if the suit fails, the costs can be recovered, and not merely men of straw....
The authority giving the sanction must consider the various aspects before giving the sanction and one important consideration should be as regards
the status and position of those who come forward to represent the community....
It would be more desirable before giving the sanction that notice should be given to the institution or the trustees although it is not obligatory.
Sub-section (1) of Section 92, Code of Civil Procedure, states:
92.(1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or
where the direction of the court is deemed necessary for the administration of any such trust, the Advocate General or two or more persons having
an interest in the trust and having obtained the leave of the Court may institute a suit, whether contentious or not, in the principal civil court of
original jurisdiction or in any other court empowered in that behalf by the State Government within the local limits of whose jurisdiction the whole
or any part of the subject-matter of the trust is situate, to obtain a decree
(a) removing any trustee;
(b) appointing a new trustee;
(c) vesting any property in a trustee;
(cc) directing a trustee who has been removed or a person who has ceased to be a trustee, to deliver possession of any trust property in his
possession to the person entitled to the possession of such property;
(d) directing accounts and inquiries;
(e) declaring what proportion of the trust-property or of the interest therein shall be allotted to any particular object of the trust;
(f) authorising the whole or any part of the trust property to be let, sold, mortgaged or exchanged;
(g) settling a scheme; or
(h) granting such further or other relief as the nature of the case may require.
Sub-section (3) of Section 92 gives power to the Court to alter the original purposes of an express or constructive trust created for public
purposes of a charitable or religious nature and allow the property or income of such trust or any portion thereof to be applied cy pres in one or
more circumstances enumerated therein. We can see, however, the plaint allegation is that there is a charitable trust and that there are
circumstances requiring settlement of the scheme for the proper administration of the trust.
Learned Counsel for the respondent-trust, however, contended that the instant appeal is not filed by the applicants, but one of the respondents
has chosen to move the appeal. Grounds of appeal show that his grievance is primarily on the basis that in the impugned order, a direction has
been given to the receiver to handover possession of the properties of the trust to the newly elected office bearers. According to him since
possession of the trust properties had been taken from him in the event of refusal of relief, the property could have been delivered to him. He has,
on this basis, tried to contend that the appeal is not maintainable as it is not in fact against the refusal of relief. It is, however, not possible to view
such a limited character of the appeal. All that was necessary for the appellant to satisfy he is a person aggrieved and that he is in a position that in
the event of the appeal being allowed, he either gets the benefits for himself or for the causes for which the applicants applied to the Court for the
grant of relief. It is not possible on the facts of this case to say that the appellant is not one such person. He, it is not in dispute, has been associated
with the trust. Today, he may not be one of the elected office-bearers. Nonetheless, his interest pro bona publico is not in doubt. Learned Counsel
for the appellant, however, has contended that it has been found that the properties of the trust are in the hands of a society registered under the
Societies Registration Act. He has drawn our attention to the specific finding in this behalf recorded by the learned single Judge on the basis of a
judgment in C. Chikka Venkatappa v. D. Hanumanthappa (1970) 1 Mys. L.J. 296, that Section 92 of the CPC is not attracted in a case of a
society registered under the Societies Registration Act. We, however, do not propose to say anything finally in this behalf, for what is found in the
plaint is that members of the Society have constituted a trust and that the officer-bearers of the society have become office-bearers of the trust.
Whether the two are separate legal entities and whether the trust exists independently are questions that have to be answered only on such issues
of fact that may be pertinent on the pleadings of the parties. Since this will be an issue beyond the application for leave to sue in our opinion, it is
not the appropriate stage to examine it.
It is a fit case, in our opinion, in which this Court should leave any contest open, as to whether there is a charitable trust attracting Section 92 of
the Code of Civil Procedure, and whether on the facts of this case a scheme should be ordered, or any alternative relief should be granted to the
appellant in the event of the leave granted and the suit contested. We, however, see, that on the allegations in the plaint, it is clear that the
ingredients of Section 92 of the CPC are attracted. Refusal of leave to sue on such facts does not appear to be legal.
The appeal is allowed. The impugned order is set aside. Leave prayed for is granted. The suit shall accordingly be registered and proceeded in
accordance with law. There shall, however, be no order as to costs.