Karnataka High Court
Tadikela Subbaiah Trust (R) vs Sri C Mahesh Kumar on 1 December, 2021
M.F.A.No.2672/2021
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF DECEMBER 2021
BEFORE
THE HON'BLE MRS JUSTICE K.S.MUDAGAL
MISCELLANEOUS FIRST APPEAL NO.2672/2021(CPC)
BETWEEN:
1. TADIKELA SUBBAIAH TRUST (R)
SUBBAIAH INSTITUTE OF MEDICAL SCIENCES
DULY REGISTERED UNDER THE INDIA TRUST ACT
NEAR SUBBAIAH HOSPITAL COMPLEX
JAIL ROAD, SHIMOGA KARNATAKA
REPRESENTED BY MANAGING TRUSTEE
SRI T SUBBARAMAIAH
2. SRI T.SUBBARAMAIAH
S/O LATE T SUBBAIAH
AGED ABOUT 80 YEARS
MANAGING TRUSTEE
3. DR.S.NAGENDRA
S/O T.SUBBARAMAIAH
AGED ABOUT 56 YEARS
TRUSTEE
4. DR.LATHA R TELANG
D/O RAMACHANDRA TELANG
AGED ABOUT 50 YEARS
TRUSTEE
5. DR.S.SRINIVAS
S/O T SUBBRAMAIAH
AGED ABOUT 54 YEARS
TRUSTEE
6. DR.C.M.VINAYA KUMARI
D/O MOHAN KUMAR
AGED ABOUT 45 YEARS
TRUSTEE
M.F.A.No.2672/2021
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A2 TO A6 ARE R/AT
3RD CROSS, GANDHINAGAR
SHIVAMOGGA ...APPELLANTS
(BY SRI JAYAKUMAR S PATIL, SENIOR COUNSEL FOR
SRI S.B.TOTAD, ADVOCATE)
AND:
SRI C.MAHESH KUMAR
S/O LATE CHIKKAIAH
AGED ABOUT 56 YEARS
(WRONGLY CLAIMED-LIFE TRUSTEE
FINANCIAL ADMINISTRATOR
TADIKELA SUBBAIAH TRUST)
R/AT NO.601, H-BLOCK
BRIGADE GATEWAY
WORLD TRADE CENTRE
BENGALURU - 560 022
AND ALSO AS STATED
IN HIS AFFIDAVIT
R/AT NO.137, "AVVANAMANE"
NEAR GANESHA TEMPLE
GANDHINAGAR, BHADRAVATHI ...RESPONDENT
(BY SRI M.S.SHYAMSUNDAR, ADVOCATE FOR C/R)
THIS MFA IS FILED UNDER ORDER XLIII RULE 1(R) OF
CPC PRAYING TO SET ASIDE THE ORDER DATED 23.04.2021
PASSED BY THE PRINCIPAL DISTRICT AND SESSIONS JUDGE,
SHIVAMOGGA IN O.S.NO.4/2021 ON IA NO.2.
THIS MFA COMING ON FOR FURTHER HEARING THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Heard.
2. Aggrieved by the interim injunction order granted against them, the defendants in O.S.No.4/2021 M.F.A.No.2672/2021 3 M on the file of the Principal District & Sessions Judge, Shivamogga have preferred the above appeal.
3. The respondent is the plaintiff and the appellants are the defendants in O.S.No.4/2021. For the purpose of convenience, the parties will be referred to henceforth according to their ranks before the trial Court.
4. Defendant No.1 in the suit is a Public Charitable Trust duly constituted under the Trust deed dated 29.08.2003. Defendant Nos.2 to 6 are the trustees of defendant No.1. The Trust was promoted with the object to render medical services and for that purpose established Medical Educational Institutions at Shivamogga.
5. The Trust was registered in the office of the Sub-Registrar of Shivamogga. The Trust established medical college by name Subbaiah Institute of Medical Science. In course of time, the activities of the Trust were expanded by opening Dental College, Nursing College, Medical College and a Hospital with 700 beds M.F.A.No.2672/2021 4 M etc., for the benefit of the rural people in Shivamogga District.
6. Under the resolution dated 24.10.2013, the plaintiff was taken as one of the Trustees of defendant No.1 Trust. There was supplementary Trust deed to that effect. He was assigned to do certain works entrusted by the Chairman of the Trust. Before induction of the plaintiff, defendant No.1 had applied to the Government of Karnataka seeking linguistic minority status.
7. After induction of the plaintiff, the Trust filed W.P.No.31024/2013 against the Government and others for consideration of its requisition for conferring Linguistic Minority status on it. By virtue of the order passed in W.P.No.31024/2013, the institutions run by the Trust were recognized as Linguistic Minority Institutions. The intake capacity of the medical college was also increased to 150 seats.
8. The defendants issued letter dated 28.08.2014 alleging that the plaintiff misusing his position as Trustee misappropriated huge funds and extracted M.F.A.No.2672/2021 5 M money from the students, thereby cheated the Trust and the students. The complaints were filed against the plaintiff in Shivamogga police stations for the offences of criminal breach of trust, fraud, criminal conspiracy, insulting or causing annoyance to provoke breach of peace etc. The plaintiff was arrested in the said cases.
9. On 15.09.2014, the plaintiff was informed that he has failed to reply to the show cause notice dated 28.08.2014 and his tenure as trustee would expire on 24.10.2014. Under the show cause notice dated 28.09.2014 he was also called upon to remit the money collected from the students along with the related documents of 24 students of MBBS course.
10. Another show cause notice dated 22.10.2014 was issued alleging that the plaintiff fraudulently collected the cheques of the Trust promising to secure loans for the Trust. The defendants convened meeting on 23.11.2014 for taking decision in the matter for removal of the plaintiff from the Trust.
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11. The plaintiff filed O.S.No.9026/2014 before the City Civil Court, Shivamogga for permanent injunction restraining the Trust from holding the meeting. An ex-parte temporary injunction was granted in the said case. By the time, the temporary injunction was communicated the meeting had been held. In the said meeting, it was resolved to issue show cause notice to the plaintiff for his removal.
12. Eventually in another meeting dated 01.12.2014, the Trust passed resolution to remove the plaintiff from the Trust. The Supplementary Trust deeds dated 24.10.2013 and 03.06.2013 were cancelled, by another registered supplementary trust deed wherein the trust was reconstituted by removing the plaintiff as trustee. In view of such subsequent development, the plaintiff withdrew O.S.No.9026/2014 as having become infructuous.
13. On 30.04.2015, the plaintiff filed O.S.No.4127/2015 before XXX Additional City Civil & Sessions Judge, Bengaluru against the defendants M.F.A.No.2672/2021 7 M seeking declaration that the resolutions for his removal from the trust, notice of termination were null and void and not binding on him. He further sought perpetual injunction to restrain the defendants from obstructing or causing any hindrance from discharging his day-to-day affairs and duties as life trustee and financial administrator in defendant No.1 Trust.
14. In O.S.No.4127/2015, the plaintiff filed I.A.No.2 seeking temporary injunction against the defendants from obstructing him in discharging his functions as trustee. Learned XXX Additional City Civil & Sessions Judge, Bengaluru on hearing both side, allowed the said application and granted temporary injunction. Defendant No.3 challenged the said order before this Court in M.F.A.No.3746/2015. This Court on hearing both side, by order dated 24.06.2015 allowed the appeal, set aside the order of the trial Court and rejected I.A.No.2 holding that there is no prima-facie case, balance of convenience and irreparable injury lie in favour of the defendants.
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15. The plaintiff challenged the said order of this Court before the Hon'ble Supreme Court in Petition(s) for Special Leave to Appeal (C) No.23904/2015. The Hon'ble Supreme Court on hearing both side by the order dated 31.08.2015 dismissed the Special Leave Petition.
16. Thereafter in O.S.No.4127/2015 defendant No.3 filed I.A.No.6 under Order VII Rule 10A and 11(a) of CPC for rejection of the plaint. The said Court after hearing both side, partly allowed the said application and directed to return the plaint to present the same before the District Court at Shivamogga on the ground that it lacks territorial jurisdiction. After passing such order, the plaintiff presented the said plaint before II Additional Senior Civil Judge, Shivamogga which was registered in O.S.No.51/2019.
17. In O.S.No.51/2019 the defendants filed I.A.No.5 to return the plaint for presenting the same before District Court. The said application was allowed and the plaint was returned for presentation before the District Court, Shivamogga. On such return, the plaint M.F.A.No.2672/2021 9 M was presented in the Principal District Court, Shivamogga and registered in O.S.No.4/2021.
18. In O.S.No.4/2021, the plaintiff filed I.A.No.2 seeking injunction to restrain the defendants from changing the nature of the property or alienating or encumbering the movable or immovable properties, any assets/Multispecialty Hospitals, Nursing Homes acquired either in the name of defendant No.1 Trust or in the name of other defendants from the date of his induction as trustee until disposal of the suit, even on the count of good interest of the Trust or its institution or its subjects without express permission of the Court.
19. In the affidavit filed in support of the application, the plaintiff contended that after his induction as a trustee, he has spent an amount of Rs.42.15 crores for the development of the institution of the Trust by pooling his resources and borrowing loans. He further alleged that diverting funds of the Trust, the defendants have acquired huge assets in their individual names. The defendants denied the allegations made in the affidavit M.F.A.No.2672/2021 10 M filed in support of I.A.No.2 about embezzlement of the Trust's fund. For that the plaintiff filed rejoinder affidavit claiming that out of the income of the Trust the defendants have acquired and established Maxx Super Specialty Hospital, Maxx Angles Mother and Child Hospital, Maxx Multi Specialty Cancer Hospital, Maxx Hospital at Shivamogga.
20. The trial Court on hearing both side, by the impugned order allowed I.A.No.2 and granted temporary injunction restraining the defendants not only from alienating or encumbering the trust properties, but also the properties standing in the names of defendant Nos.2 to 6 till disposal of the suit. The trial Court further directed that the defendants are at liberty to offer bank guarantee in respect of new educational courses without creating charge over the assets of the Trust with the prior permission of the Court.
21. Sri. Jayakumar.S.Patil learned Senior Counsel appearing for Sri.S.B.Totad, learned Counsel on record for the appellant/defendant reiterating the grounds of the M.F.A.No.2672/2021 11 M appeal assails the impugned order on the following grounds:
i) The maintainability of the suit itself is doubtful. If the suit is treated as one for declaration and injunction simplicitor, then having regard to the valuation made and Section 15 of CPC the suit shall lie before the Civil Judge and not the District Judge. Indeed the allegation and the prayer made in the plaint attract Section 92 of the Civil Code of Procedure. In such case, the suit cannot be maintained without leave of the Court such suit shall be only by Advocate General or two or more persons having interest in the trust.
ii) In the plaint absolutely there was no pleading regarding the plaintiff investing Rs.42.15 crores. For the first time, after five years of institution of the suit, he introduced such case.
iii) The trial Court overlooked the judgment of this Court in MFA No.3746/2015 wherein it was already held that the plaintiff has failed to make out prima-facie case.M.F.A.No.2672/2021
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iv) Since the defendant had to furnish the Bank guarantee for commencement of new course, for disbursement of the salary to the Doctors and the other staff of several institutions, the impugned order causes hardship to the defendant.
v) Any relief for temporary injunction should be in aid of the main relief. Since there was no prayer for accounts, the application was not maintainable. The order of the trial Court is perverse and arbitrary.
22. Sri M.S.Shyamsundar, learned counsel for respondent/plaintiff justifies the impugned order on the following grounds:
i) The issue of the jurisdiction was not raised before the trial Court, therefore Section 21 of the Civil Code of Procedure bars raising of such issue before this Court for the first time in appeal.
ii) This Court rejected the earlier application of the plaintiff on the ground that the trial Court had no territorial jurisdiction. The injunction sought in that case M.F.A.No.2672/2021 13 M was different. Therefore the judgment in MFA No.3746/2015 has no bearing in the matter.
iii) Rs.42.15 crores was paid by the plaintiff to first defendant's loan account. Plaintiff has issued notice demanding repayment of the said amount and contemplating to file recovery suit.
iv) The plaintiff was the only outsider and all the defendants were the members of the same family.
Therefore to cause loss to the plaintiff, they are trying to raise loan creating charge on the trust properties.
v) The Criminal cases registered against the plaintiff were quashed. Section 92 of CPC does not apply to the cases between trustee and trust, but the same applies to the cases filed by the outsider against the trust.
vi) By the impugned order, the trial Court has not totally barred the defendants from raising loan, but has only put a rider that they should seek permission of the Court before raising any such loan.
vii) Since the trial Court has considered all the issues, this Court in the appellate jurisdiction cannot interfere with such discretionary order. M.F.A.No.2672/2021 14
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23. In support of his submission, he relied the following judgment:
i) Muhammed Azhar Ali V/s Abdul Razzaq
Bidri and another1;
ii) Dodda-Basti @ Guru Basti Trust vs. Public Trust created under a Will by deceased Venkayya2.
24. It is no doubt true that the order granting or rejecting the relief of temporary injunction being discretionary one, such order cannot be interfered in the appellate jurisdiction unless it is shown that the order suffers vice of perversity, arbitrariness or capriciousness. Non consideration of the documents produced before the Court and deviating from the settled legal principles amount to perversity.
25. It is settled principle of law that to seek the relief of temporary injunction, the applicant has to satisfy the following :
i) That he has a prima-facie case. Prima-facie case means prima-facie case of his legal right and injury 1 C.R.P No.200007/2018 D.D. 31.08.2021. 2
RSA No.5827/2011 D.D.28.07.2015 M.F.A.No.2672/2021 15 M to such right, that his suit is not vexatious and there is serious question to be decided on the trial.
ii) The balance of convenience lies in his favour.
iii) If temporary injunction is not granted, he will put to irreparable injury.
26. In the light of the above principles, this Court has to see whether the plaintiff made out a prima-facie case. It is settled principle of law that any interim relief by way of temporary injunction sought by the plaintiff should be in aid of the main relief sought in the suit. Such relief should relate to subject matter of the suit.
27. The suit was for declaration that the removal of the plaintiff from the trust is null and void and for injunction to restrain the defendants from obstructing or causing any hindrance from discharging his functions as life trustee and Financial Administrator. The plaintiff had valued the suit at Rs.2,000/-. In the ordinary course as per Section 15 of CPC such suit should be filed before the Civil Judge.
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28. It is claimed that the said suit is not covered under Section 92 of CPC. To advance that contention, the learned counsel for the plaintiff himself relied on the judgments of this Court referred to supra. In the judgment of Mohammed Azhar Ali's case it was held that the suit filed by the plaintiff to vindicate their personal rights i.e., to claim back their alleged positions as Trustees of the Charitable trust and for cancellation of two resolution and Supplementary Deed of Trust, Section 92 of CPC is not applicable.
29. In Dodda-Basti's case relied on by the learned counsel for defendants it was held that not every suit claiming reliefs specified in Section 92 of CPC can be brought under the said Section, but only the suits claiming the relief by individuals as representatives of the public for vindication of public rights, shall be treated as the suits under Section 92 of CPC.
30. If such contention is accepted and the suit is treated as the one other than the suit under Section 92 of CPC, then there was no relief sought in the suit seeking M.F.A.No.2672/2021 17 M rendition of the accounts or seeking permanent injunction to restrain the defendants from managing affairs of trust in any manner. Under such circumstance the relief sought under IA No.2 was beyond the purview of the suit and the said relief was not in aid of the main relief sought in the suit. The Trust properties or the private properties of defendant Nos.2 to 6 regarding which injunction was sought were not the subject matter of the suit.
31. The allegations in the affidavit were that the trustees are mismanaging the affairs of the trust. In other words, have committed breach of the trust. Even the order of the learned District Judge dated 01.02.2021 shows that he entertained the suit saying that disputes relates to the trust, therefore the suit is cognizable by the District Court. That indicates that the District Court assumed the jurisdiction under Section 92 of CPC. If that is the case, as rightly pointed out by Sri Jayakumar S.Patil, the learned senior counsel, the suit itself is not maintainable as the same was without the leave of the Court and not in a representative capacity. M.F.A.No.2672/2021 18
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32. The claim of the plaintiff was that he is the life trustee and the defendants had no right or power to remove him from the post of trustee. He also contended that his removal from the trust is contrary to the order of temporary injunction granted in the earlier suit. When the matter was pending before the City Civil Judge, the plaintiff on the same ground sought temporary injunction to restrain the defendants from obstructing him or causing hindrance from discharging duties as life trustee or financial administrator. The trial Court had granted temporary injunction.
33. That order was challenged before this Court in MFA No.3746/2015. This Court observed that there was serious allegation of mismanagement and misconduct against the plaintiff and the temporary injunction order granted in the earlier suit was not communicated to the defendants. It was further held that the interim order confined only to the meeting scheduled on 23.11.2014 which was not communicated and the holding of M.F.A.No.2672/2021 19 M subsequent meetings or removal was not barred under the said order.
34. This Court further held that when serious financial irregularities were alleged against the plaintiff, it will be neither legal nor justifiable to grant of interim injunction to continue him as a trustee by the temporary injunction order. Thus it was held that no prima-facie case was made out. The doubt about the jurisdiction was one of the grounds to arrive at such conclusion and not the sole ground.
35. So far as balance of convenience and irreparable injury also, the said points were held in favour of the defendants. The trial Court overlooked the order of this Court passed in M.F.A.No.3746/2015 and the order of the Hon'ble Supreme Court confirming the same.
36. The plaintiff sought injunction against borrowing loan by creating the charge on the ground that he has invested Rs.42.15 crores to bring the trust out of its financial crisis. Such pleadings were conspicuously M.F.A.No.2672/2021 20 M absent in the plaint. The trial Court did not consider that fact which amounts to perversity.
37. Apart from that the trial Court not only granted injunction against alienation of the trust properties, but also restrained the defendants from raising loan by creating charge on their own properties. Except the bald allegation in the affidavit of the plaintiff, absolutely there was no material to show that defendant Nos.2 to 6 have established the other hospitals diverting the funds of the trust. Still the trial Court held that there is a prima facie case. Nevertheless the trial Court did not even refer to the judgment of this Court where under earlier application of the plaintiff was rejected on the ground of his failure to make out the prima facie case which was upheld by the Hon'ble Supreme Court. The above facts and circumstances clearly show that the impugned order is perverse, arbitrary and capricious. In granting injunction in respect of private properties of the defendants, the trial Court has exceeded its jurisdiction. M.F.A.No.2672/2021 21
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The impugned order dated 23.04.2021 passed on IA No.II in O.S.No.4/2021 is hereby set aside. IA No.II filed by the plaintiff under Order 39 Rules 1 and 2 of CPC is hereby dismissed.
At this stage, learned counsel for the plaintiff/respondent submits that the parties be given liberty to urge the point of jurisdiction before the trial Court. The trial Court shall decide the maintainability of the suit before it in the context of Sections 15 and 92 of CPC uninfluenced by any of the observations made in the course of this order.
Sd/-
JUDGE KSR/AKC