Karnataka High Court
Dheerendra D Jamble And Anr vs Sri R R Diwakar & Ors on 19 April, 2013
Equivalent citations: 2013 (3) AKR 441
Author: K.Sreedhar Rao
Bench: K.Sreedhar Rao
1
IN THE HIGH COURT OF KARNATAKA, BANGALORE
®
DATED THIS THE 19TH DAY OF APRIL, 2013
PRESENT
THE HON'BLE MR. JUSTICE K.SREEDHAR RAO
AND
THE HON'BLE MR. JUSTICE B.V.PINTO
R.F.A. NO. 331 OF 1984
(I.A.Nos.I to VIII/2012)
RFA No.331/1984:-
BETWEEN:-
Dheerendra D. Jamble and others
Appellants
AND:
Sri R.R. Diwakar and others
Respondents
In I.A.No.I of 2012:-
BETWEEN:-
1. Sri Vijay Kumar, Aged about 48 years, S/o. Dhanpal Kuchanure, Occ: business, R/o. 78, Rani Channamma Nagar, First Stage First, Belgaum - 590006.
2. Sri Vasant, Aged about 44 years, S/o. Gurunath Nadjoshi, 2 Occ: Civil Engineer, R/o. # 29, 'SHRI GURU', Mayur Estate, Hubli - 580023.
3. Sri Channappa Veerasangappa Kumbargoudar, Aged about 64 years, S/o. Veerasangappa, Occ: Librarian, R/o. 1st Cross, Malapur, Near Pathan Marriage Hall, Dharwad - 580008.
4. Sri Siddaraj, Aged about 39 years, S/o. Mahabaleshwarappa Kalkoti, Occ: Agriculturist, R/o. Koradur Taluk, Haveri District.
Applicants (By Sri A. Sanath Kumar, Advocate) In I.A.Nos.II & III of 2012:-
BETWEEN:-
1. Sri Vijay Kumar, Aged about 48 years, S/o. Dhanpal Kuchanure, Occ: business, R/o. 78, Rani Channamma Nagar, First Stage First, Belgaum - 590006.
2. Sri Vasant, Aged about 44 years, S/o. Gurunath Nadjoshi, Occ: Civil Engineer, R/o. # 29, 'SHRI GURU', Mayur Estate, Hubli - 580023.3
3. Sri Channappa Veerasangappa Kumbargoudar, Aged about 64 years, S/o. Veerasangappa, Occ: Librarian, R/o. 1st Cross, Malapur, Near Pathan Marriage Hall, Dharwad - 580008.
4. Sri Siddaraj, Aged about 39 years, S/o. Mahabaleshwarappa Kalkoti, Occ: Agriculturist, R/o. Koradur Taluk, Haveri District.
Common Applicants (By Sri A. Sanath Kumar, Advocate) AND:-
1. The Loka Shikshana Trust, Hubli, Rep. by its Chairman, No.2, Residing Road, Bangalore-560025.
2. Samyukta Karnataka Employees Union, No.2, Residency Road, Bangalore-560025.
3. Sri Ashok Harnahalli, Aged about 56 years, Occ: Advocate and Chairman, Loka Shikshana Trust, No.558, 1st Main Road, Rajmahal Vilas (Dollars Colony), 2nd Phase, 3rd Block, Bangalore-560094.
4. Sri Umesh Bhat, Aged 65 years, Occ: Politician, 4 R/o. 22B, 1st Main, 1st Cross, RMV Layout, II Phase, Bangalore-560094.
5. Sri M.V. Rajasekharan, Aged 70 years, Occ: Ex. M.L.C and Trustees, R/o. 21/1, Kanakapura Road, Banasavadi, Bangalore-560001.
6. Sri Prahlad Joshi, Aged 48 years, Occ: Member of Parliament, "Kamithartha" Mayuri Extension, Hubli.
7. Sri U.B. Venkatesh, Aged 55 years, Occ: Hotel Business, R/o. No.99, Vishala Nilaya, 2nd Cross, 3rd Main, 4th Phase, Dollars Layout, J.P. Nagar, Bangalore-560078.
8. Raja Desai, S/o. late Narayan Rao Desai, Rajnagar, Hubli.
Common Respondents (By Sri Sandeep Patil & Sri C.M. Mahesh, Advocates for R1) (By Sri B.C. Seetharama Rao, Advocate for R8) In I.A.No.IV of 2012:-
BETWEEN:-
1. Shri Lingappa, S/o. Siddappa Hottin, Aged about 54 years, Occ: Advocate, R/o. Plot No.626, 3rd Main, 8th Cross, Bendre Nagar, 5 Dharwad.
2. Raheman Sab, S/o. Maktum Sab Daragad, Aged 56 years, Occ: Industrialist, R/o. Ajmeri Villa, 2nd Cross, Shivagiri, Dharwad.
Applicants (By Sri K.L. Patil, Advocate) AND:-
1. Sri Ashok Harnahalli, Aged about 56 years, Occ: Advocate and Chairman, Loka Shikshana Trust, No.558, 1st Main Road, Rajmahal Vilas (Dollars Colony) 2nd Phase, 3rd Block, Bangalore - 560094.
2. Sri Umesh Bhat, Aged about 65 years, Occ: Business, R/o. 22, 1st Cross, RMV 2nd Stage, Bangalore - 560094.
3. Sri M.V. Rajasekharan, Aged about 70 years, Occ: Ex. MLC and Trustee, R/o. 21/1, Kanakapura Road, Basavanagudi, Bangalore-560001.
4. Sri Prahlad Joshi, Aged about 48 years, Occ: Member of Parliament, 6 "Kamithartha", Mayuri Extension, Hubli.
5. Sri U.B. Venkatesh, Aged about 55 years, Occ: Hotel Business, R/o. No.99, 'Vishala Nilaya', 2nd Cross, 3rd Main, 4th Phase, Dollars Layout, J.P. Nagar, Bangalore-560078.
Respondents (By Sri Sandeep Patil & Sri C.M. Mahesh, Advocates for R1) In I.A.Nos.V and VI of 2012:-
BETWEEN:-
1. Shri Raghavendra T. Tavanappanavar, Aged about 53 years, S/o. T. Tavanappanavar, R/at No.106, Kotilinganagar, Gokul Road, Hubli - 580024.
2. Shri Vijay Kumar P. Shiraguppi, Aged about 38 years, S/o. Shri Padmaraj, R/at 'Radha Kunj', 1st Main, 1st Cross, Yalaki Shettar Colony, Vidhyagiri, Dharwad.
Applicants (By Sri Dhananjay Joshi, Adv. for Sreevatsa Assts.) AND:-
1. Shri Ashok Harnahalli, Aged about 56 years, Occ: Advocate and Chairman of the Loka Shikshana Trust, No.558, 1st Main Road, Rajmahal Vilas (Dollars Colony) 7 2nd Phase, 3rd Block, Bangalore - 560094.
2. Shri Umesh Bhat, Aged about 65 years, R/o. 22B, 1st Main, 1st Cross, RMV Layout, II Phase, Bangalore - 560094.
3. Shri M.V. Rajasekharan, Aged about 70 years, Ex-MLC, R/o. 21/1, Kanakapura Road, Basavanagudi, Bangalore-560001.
4. Shri Prahlad Joshi, Aged about 48 years, Member of Parliament, "Kamithartha", Mayuri Extension, Hubli.
5. Shri U.B. Venkatesh, Aged about 55 years, R/o. No.99, 'Vishala Nilaya', 2nd Cross, 3rd Main, 4th Phase, Dollars Layout, J.P. Nagar, Bangalore-560078.
Respondents (By Sri Sandeep Patil & Sri C.M. Mahesh, Advocates for R1) In I.A.No.VII/2012:-
BETWEEN:-
Shri Prahlad Joshi, Applicant (By Sri Dhananjay Joshi, Adv. for Sreevatsa Assts.) 8 AND:-
Shri Ashok Harnahalli and others Respondents (By Sri Sandeep Patil & Sri C.M. Mahesh, Advocates for R1) (By Sri Manmohan P.N. for R4) In I.A.No.VIII/2012:-
BETWEEN:-
Shri Prahlad Joshi, Aged about 48 years, R/at 'Kamithartha', Mayuri Extension, Hubli.
Applicant (By Sri Dhananjay Joshi, Adv. for Sreevatsa Assts.) AND:-
1. Shri Ashok Harnahalli, Aged about 56 years, Occ: Advocate and Chairman of the Loka Shikshana Trust, No.558, 1st Main Road, Rajmahal Vilas (Dollars Colony) 2nd Phase, 3rd Block, Bangalore - 560094.
2. Shri Umesh Bhat, Aged about 65 years, R/o. 22B, 1st Main, 1st Cross, RMV Layout, II Phase, Bangalore - 560094.
3. Shri M.V. Rajasekharan, Aged about 70 years, Ex-MLC, R/o. 21/1, Kanakapura Road, Basavanagudi, Bangalore-560001.9
4. Shri U.B. Venkatesh, Aged about 55 years, R/o. No.99, 'Vishala Nilaya', 2nd Cross, 3rd Main, 4th Phase, Dollars Layout, J.P. Nagar, Bangalore-560078.
Respondents (By Sri Sandeep Patil & Sri C.M. Mahesh, Advocates for R1) (By Sri Manmohan P.N., Advocate for R4) The above I.As. are coming on for final hearing having been heard and reserved for pronouncement of orders this day, SREEDHAR RAO, J., made the following:
ORDER ON I.A.NOs.I TO VIII/2012 One Vijayakumar and others have filed I.A.No.I to III/12.
I.A.No.I/12 is filed U/s.151 of CPC to frame a fresh scheme for the management and administration of Loka Shikshana Trust by making alterations/ additions/ amendments to the existing clauses under the Scheme dated 28.02.1986.
I.A.No.II/12 is filed U/s.151 of CPC for an interim order directing the chairman and trustees of Loka Shikshana Trust from taking any fresh policy decisions relating to 10 administration, running of business and management of the trust or from purchasing any new machines or properties or selling movable or immovable properties of the Loka Shikshana Trust pending disposal of the application.
I.A.No.III/12 is filed U/s.92 r/w. Sec.151 of CPC seeking leave to file appropriate application for framing a fresh scheme for the management and administration of Loka Shikshana Trust by making alterations/ additions/ amendments to the existing clauses under the scheme dated 28.2.1986 U/s clauses under the scheme dated 28.2.1986 vide Annexure-1.
One Lingappa and another have filed I.A.No.IV U/s.92 of the CPC for framing a fresh scheme for management and administration of Loka Shikshana Trust by making alterations/additions/amendments to the existing clause under the scheme dated 28.02.1986.
One Ragavendra T. Tavanappanavar & another have filed I.A.No.V and VI/12. I.A.No.V/12 is filed U/s.151 CPC seeking modification of the scheme and for grant of 11 temporary Injunction against the respondent/trustees of Loka Shikshana Trust from taking any fresh policy decisions relating to the Trust from alienating and purchasing any movable and immovable properties of the Trust in any manner during the pendency of the application and for modification of the scheme of the Trust. I.A.No.VI/12 is filed U/s.92 CPC r/w. Clause 38 proposing the following amendments to the scheme:-
1. Replace Clause 3 of the existing Scheme with the following:
"3. Office of the Trust: The registered office of the Trust and shall be in Hubli and its address is Samyukta Karnataka Office, Koppikar Road, Hubli-580020."
2. In Clause 9 of the existing Scheme, at the end of the first paragraph, add the following:
"The Secretary shall preferably be a graduate in Law or Commerce and shall be above the age of 45 years and below the age of 60 years. The Secretary shall not hold any other post associated with the Trust activities."
3. In Clause 10 of the existing Scheme, delete the words, 'by power of attorney or otherwise', and replace the following:
"through a decision to be recorded in the Board."12
4. Replace Clause 12 of the existing Scheme with the following:
"Tenure of Trustees: The Trustees appointed under this Scheme shall hold office of the Trust for a period of five years from the date of their assumption of the charge. Only persons residing in any of the nine districts of Northern Karnataka, viz., Dharwad, Haveri, Gadag, Karwar, Belgaum, Bijapur, Gulbarga, Raichur and Bidar, shall be eligible for being appointed as Trustees of the Trust. Within a period of two months from the date of any vacancy/vacancies arising on account of expiry of tenure, death, resignation or removal, the Chairman of the Trust and/or the Secretary of the Trust, along with at least one other Trustee, shall approach the Principle District Court at Dharwad shall have the discretion to receive recommendations from members of the public of other persons for appointment as Trustees to fill up the vacancy/vacancies. The Principal District Court at Dharwad shall fill up the vacancy/vacancies from amongst the persons whose recommendations are received by the Court. Until such vacancy/vacancies are filled up by the Court, the remaining Trustees shall continue to function as the Board of Trustees."
5. Replace Clause 21 of the existing Scheme with the following:
"Accounts: The Board of Trustees shall cause to be kept proper accounts of the funds and property of the Trust as well as its various activities including its publication business. The accounts shall reflect income from property and profit/loss from business separately. The Board of Trustees shall get the accounts of the Trust 13 audited every year within four months of the end of each financial year. The audited accounts shall be published in the office of the Trust as well as in the newspaper run by the Trust, viz., Samyukta Karnataka."
One Prahlada Joshi filed I.A.No.VII and VIII/12. I.A.No. VII/12 is filed U/s.151 CPC for grant of temporary injunction against the respondents from giving effect to any appointment and any cessation of Trustee from 02.03.2012 onwards till the fresh scheme dated 28.02.1986 is modified and I.A.No.VIII/12 under clause 38 of the existing Scheme for declaration that the applicant should be declared that he continues to be the Chairman of the Loka Shikshana Trust till his death or removal.
The respondents in all the applications have raised preliminary objections regarding the maintainability of the applications for seeking modification of the scheme and seeking interim order.
The arguments on the above applications are confined only to the maintainability of the applications. With regard to 14 other aspects of misfeasance and malfeasance, the consideration of the said allegations is deferred.
The counsel for the respondent relied upon the following decisions:
(1) Swamy Paramatmanand Saraswati and another Vs. Ramji Tripathi and another reported in (1974)2 SCC 695.
(2) Vidyodaya Trust Vs. Mohan Prasad R. and others reported in (2008)4 SCC 115 (3) Raje Anandrao Vs. Shamrao and others reported in (1961)3 SCR 930 (4) Chairman Madappa Vs. M.N. Mahanthadevaru and others reported in AIR 1966 SC 878 (5) Chameli Bibi Vs. Kanhaiyalal Agarwalla and others reported in AIR 1973 Calcutta 328 (6) Srinivas R Acharya and Others Vs. Purushotham Chatubhuj and others reported in AIR 1953 Bombay 393 Per contra, counsel for the applicants also relied upon the following decisions:
(1) Chameli Bibi Vs. Kanhaiyalal Agarwalla and others reported in AIR 1973 Calcutta 328 (2) Raje Anandrao Vs. Shamrao and others reported in (1961)3 SCR 930 (3) Rai Ram Nath Bhargava Bahadur and another Vs. Sri Swami Goverdhan Rangacharia and others reported in AIR 1936 Allahabad 97 (4) Ahmad Adam Sait and others Vs. M.E. Makhri and others reported in AIR 1964 SC 107 (5) Gangaram Govind Vs. K.R.Vinchurkar reported in AIR 1948 Bom 146 15 Counsel for the respondent relied upon the decisions of the Supreme Court in (1) Swamy Paramatmanand Saraswati and another Vs. Ramji Tripathi and another reported in (1974)2 SCC 695, (2) Vidyodaya Trust Vs. Mohan Prasad R. and others reported in (2008)4 SCC 115, (3) Chairman Madappa Vs. M.N. Mahanthadevaru and others reported in AIR 1966 SC 878.
The principle laid down in the decision is to bring home the point that the suit U/s.92 in respect of religious and charitable trust is not permitted to vindicate private rights. But for protection and promotion of interests of trust, a suit could be filed.
The decision of the Calcutta High Court in Chameli Bibi Vs. Kanhaiyalal Agarwalla and others reported in AIR 1973 Calcutta 328 is relied upon. In the said decision it is held that the decree U/s.92 settling the scheme for charitable trust would operate as res judicata and that the clause giving liberty to any person applied for modification of the scheme cannot be implied in the scheme. 16
The decision of the Supreme Court in Raje Anandrao Vs. Shamrao and others reported in (1961)3 SCR 930 is relied upon to contend that the provision in the scheme giving liberty to the persons to apply for modification of the scheme is not illegal, however, in the context of the said ratio, it is argued, since the scheme does not provide such a provision for modification by application, the present applications are not maintainable and the remedy for the petitioners is only by way of suit U/s.92 CPC.
The decision of the Bombay High Court in Srinivas R. Acharya and others Vs. Purushotham Chatubhuj and others reported in AIR 1953 Bombay 393 is relied upon to contend that the scheme once settled by the court cannot be altered even by the court except only on substantial grounds. In the context of the said ratio, it is argued that where the allegations of misfeasance and malversation of funds is alleged which is a matter of fact. Unless the said allegations are established, it does not warrant alterations or modification of the scheme framed by the court. 17
The counsel for the petitioners apart from placing reliance on the above judgments cited by the respondents relied upon the decision of the Supreme Court in Ahmad Adam Sait and others Vs. M.E. Mekhri and others reported in AIR 1964 SC 107 to contend that the court has power to alter the scheme framed under exceptional circumstances. The decision of the Allahabad High Court in Rai Ram Nath Bhargava Bahadur and another Vs. Sri Swamy Goverdhan Rangacharia and others reported in AIR 1936 Allahabad 97 is relied on to contend that the court has even in the absence of clause in the scheme for modification, the court in exercise of inherent powers U/s.151 has every right to consider the case whether the existing scheme requires any modification and accordingly can pass appropriate orders.
The Supreme Court in Raje Ananda Rao's case in para 11 and 12 made the following observations:-
"11. xxxx xxxx xxxx we are not concerned with appointment or removal of trustees or any other matter enumerated in sub-section (1) of Section 92. We do not therefore propose to consider whether it would be open to appoint or remove trustees etc., on the ground of breach of trust without recourse to a suit under Section 92. We shall confine ourselves only to the question whether in a case where there is a 18 provision in the scheme for its to the question whether in a case where there is a provision in the scheme for its modification by an application to the court, it is open to the court to make modifications therein without the necessity of a suit under Section 92. So far as the scheme is concerned, Section 92(1) provides for settling a scheme and if a suit is brought for this purpose it has to comply with the requirements of Section 92(1); but where such a suit has been brought and a scheme has been settled, we see nothing in Section 92(2) which would make it illegal for the court to provide a clause in the scheme itself for its future modification. All that sub-section (1) shall be instituted in respect of a trust as is therein referred to except in conformity with the provisions of that sub- section. This sub-section therefore does not bar an application for modification of a scheme in accordance with the provisions thereof, provided such a provision can be made in the scheme itself. Under sub-section (1) the court has the power to settle a scheme. That power to our mind appears to be comprehensive enough to permit the inclusion of a provision in the scheme itself which would make it alterable by the court if and when found necessary in future to do so.
A suit under section 92 certainly comes to an end when a decree is passed therein, including the settlement of a scheme for the administration of the trust. But there is nothing in the fact that the court can settle a scheme under Section 92(1) to prevent it from making the scheme the finality of the decree; all that it provides is that where necessity arises a change may be made in the manner of administration by the modification of the scheme. We cannot agree that if the scheme is amended in pursuance of such a clause in the scheme it will amount to amending the decree. The decree stands as it was, and all that happens is that a part of the decree which provides for management under the scheme is being given effect to. It seems to us both appropriate and convenient that a scheme should contain a provision for its modification, as that 19 would provide a speedier remedy for modification of the manner of administration when circumstances arise calling for such modification than though the cumbrous procedure of a suit.
12. In Veeraraghavachariar case, the Madras High Court was cognizant of the two decisions of the Privy Council in which clauses had been inserted in the scheme providing for its modification by an application. But the learned judges were of the view that the point was never raised much less decided by the Privy Council and therefore, it could not be said that the Privy Council was of the opinion that such a clause would imply that the suit would remain pending forever. It is not necessary to hold that a suit under Section 92 in which a scheme is framed providing such a clause is pending forever. The scheme deals with the administration of the trust and for the purposes of the scheme it would not be wrong or improper of treat a suit under Section 92 as analogous to an administration suit. On that view it would in our opinion be just and convenient to provide for a clause in the scheme which is framed for the administration of the trust to allow for its modification by an application. We therefore accept the view of the Bombay, Calcutta, Allahabad and Patna High Courts in this matter and hold that it is open in a suit under Section 92 where a scheme is to be settled to provide in the scheme for modifying it as and when necessity arises, by inserting a clause to that effect. Such a suit for the settlement of a scheme is analogous to an administration suit and so long as the modification in the scheme is for the purposes of administration, such modification can be made by application under the relevant cause of the scheme, without the necessity of a suit under Section 2 of the Code of Civil Procedure. Such a procedure does not violate any provision of Section 92. The view taken by the Madras High Court that insertion of such a clause for the modification of the scheme is ultra vires is incorrect. It was therefore 20 open to the District Judge in the present case to modify the scheme."
The Calcutta High Court in Chameli Bebi Vs. Kanhaiyalal Agarwalla and others reported in AIR 1973 Calcutta 328 in para 21 has made the following observations:-
"21. I shall now examine the Supreme Court cases on this point cited to me from the bar. In the case of Raje Anandrao.V. Supreme Court held that such modification could be made by an application under the relevant clause of the scheme. In the case before the Supreme Court such a clause giving liberty to apply for modification of the scheme already existed. It was not a case where the question was whether such a clause could be inserted in the scheme at a later stage or not, as is the case before me. It is specifically made clear by their Lordships of the Supreme Court that the main question which arose before them was how far it was open to a court to amend a scheme once framed under Section 92 of the Code of Civil procedure, where as power to amend the scheme was reserved in the scheme itself. Accordingly, the question which has arisen before me has not been decided by the Supreme Court in that case. In deciding that case the Supreme Court has taken note of the fact that the Privy Council in several cases framed scheme by actually inserting such a clause giving liberty to any person interested to apply to the High Court for any modification of the scheme that might appear to be necessary or convenient without deciding whether such a clause could be legally inserted therein or not. The Supreme Court also took note of the Bombay case reported in AIR 1948 Bom 146=ILR (1947) Bom. 466 which was decided under extreme circumstances to 21 meet the ends of justice. In my opinion, this case also does not help Mr.Jain and the observations of the Supreme Court go to suggest that if such a clause would be found absent in the scheme itself then the only remedy left open is to file a suit under Section 92 o the Code of Civil Procedure and however cumbrous the procedure might be for instituting a suit under Section 92 of the Code of Civil Procedure, the same have got to be taken re-course to."
As observed by the Calcutta High Court, it is pertinent to note that in Raje Anandrao's case, the question whether in the absence of provision for modification in the scheme, whether court can permit alteration of the scheme to include such a clause and whether the court exercise any inherent powers U/s.151 can modify the scheme was not under consideration and no opinion expressed on those aspects by the Supreme Court. The said questions are res-integra. .
In the present case, the scheme does not have a clause enabling the persons to move the court through an application for modification of the scheme. In the absence of such clause, whether court gets jurisdiction to entertain such an application is a matter in issue and cost of repetition, it is to be said that this aspect is not considered and decided by the Supreme Court in Raje Anandrao's case. 22
However, the Supreme Court in Ahmad Adam Sait and others Vs. M.E. Makhri and others reported in AIR 1964 SC 107 in para 21 makes the following observations:-
"21. That takes us to the next question as to whether it would be appropriate to change the scheme in the present litigation even though the present suit may not be technically barred by res judicata, Mr. Setalvad contends that it is a well-recognized principle of law that a scheme in regard to principle of law that a scheme in regard to a public trust once framed should not be altered lightheartedly unless there are substantial reasons to do so and he has strenuously relied on the finding of the High Court that the Trustees appointed under the scheme eversince it was framed have, on the whole managed the trust properties and its affairs in a reasonable and responsible manner and that the allegations of breach of trust which had been made against them in the present suit have been held not to be proved by both the Courts below. There can be no doubt that if a scheme is framed in a suit brought under S.92, it should not be changed unless there are strong and substantial reasons to do so. This position is well established and cannot and has not been disputed before us. As observed by Halsbury when a scheme has been settled by the Charity Commissioners, the Court will not interfere with it unless the Commissioners have acted ultra vires, or the scheme contains something wrong in principle or in law, or by reason of changed circumstances, the continuance of the charity under the constitution established by the scheme has become impracticable. This principle was laid down as early as 1851 in the case of the Attorney General V. Bishop of Worcester, (1851)68 ER 530, where it was held that schemes which have been settled under the directions of the Court are not to be disturbed upon merely speculative view or in matters 23 discretion (sic) or regulation upon which Judges or Attorney General may differ in opinion, or except upon substantial grounds and clear evidence, not only that the scheme does not operate beneficially, but that it can by alteration be made to do so consistently with the object of the foundation. The same principle was reiterated in 1872 in the case of Attorney-General V. Steward, (1872)14 Eq 17.
The Allahabad High Court in Rai Ram Nath Bhargava Bahadur and another Vs. Sri Swamy Goverdhan Rangacharia and others reported in AIR 1936 Allahabad 97 at page 100 and 101 has made the following observations:-
"In so far as the present application seeks modification of the scheme, not in the exercise of the Courts power reserved by the scheme itself, but wholly apart from it, we are of opinion that the only section in the Civil Procedure Code which can justify amendment of the scheme in S.151, Civil P.C. Dr. Katju, the learned Counsel for the applicant, referred us to certain dicta in English cases in which it was held that a court settling a scheme in relation to an endowment has inherent power to modify it subsequently and in ordinary circumstances. We put it to him whether that was not equivalent to exercise by a Court in this country of its inherent power contemplated by S.151, Civil P.C. The learned Advocate agreed that the only rule of law to be found in the Civil Procedure Code under which the Court could modify the scheme in the exercise of its inherent power was S.151, Civil P.C. In our opinion the inherent power of the Court to modify a scheme prepared by itself should be exercised where it is necessary to prevent abuse of the process of the Court or where the ends of justice plainly deemed it. In 24 considering the merits of this application we shall bear in mind the comparatively narrow scope of S.151, Civil P.C., where we are called upon to modify a scheme apart from the power reserved by para 12 thereof. The result is that we repel the preliminary objection and proceed to dispose of the application on the merits."
The Bombay High Court in Srinivas R. Acharya and others Vs. Purushotham Chatubhuj and others reported in AIR 1953 Bombay 393 in para 16 has made the following observations:-
"16. That brings me to a consideration of the proposed alternation and modifications in the scheme. It is the case of defendants 1 to 7 that the plaintiffs are only seeking modifications and alterations in the scheme with a view to benefiting themselves by an indirect attempt to go behind the decree in the previous suit. There is considerable force in this argument. Now, it is a well established principle that a scheme once settled by the court cannot be altered even by the court except only on substantial grounds. It is true that changes in times and circumstances may 'ex debito justitiae' require that alterations should be made in the scheme to carry out the objects of the endowment and to see that the scheme operates beneficially. At the same time the court has always to exercise caution in this matter and to see that what has been done by the Court is not disturbed except when there are substantial grounds for doing so and where satisfactory evidence to sustain those grounds is brought before the Court. The paramount consideration must, of course, be interest of the charity."25
In Gangaram Govind Prashankar's case, AIR 1948, Bom. 146, in para-5, the following observations are made:
"5. We have the authority of a bench of this Court to say that the Court can exercise its powers under S.151 even though another remedy may be open to the parties and we have been referred to a number of other decisions in which decrees have been altered otherwise than in accordance with S.152 or the provisions relation to review. But all these are cases where justice plainly required some alteration in the decree. On the whole we are inclined to think that the true view to take of is that its primary object is to prevent alterations being made merely because the Court which passed the decree had made a mistake. What we are being asked to do in this case is to alter a scheme and not because it was a mistaken scheme in the first instance but because circumstances have now arisen which make it miserable for it to be altered; and looking at the matter from that point of view the obstacle that seems to be presented by O. 22, R. 3, becomes muchless formidable. We think that in view of the various authorities which have held that the court has inherent power to alter its own scheme even in the absence of a clause to that effect in the scheme and of the undoubted practice in England by which in a proper case a court would always be prepared to alter its own scheme, we too ought to hold that the court has inherent power under S. 151 to alter its scheme on proper cause being shown and for the purpose mentioned in S. 151, namely doing of justice and the prevention of abuse of the process of the court. It is pointed out to us that in England the courts are slow to modify their own schemes and will never do so except with the utmost caution and upon the most substantial grounds and the clearest evidence not only that the scheme does not operate beneficially but that it can by alteration to be made to do so consistently with the object of the foundation, and incalculable 26 mischief would ensure to all charities if this rule were not strictly observed. But subject to that limitation, we think that the Courts in India have power to modify their schemes even in the absence of a clause in the scheme itself to that effect."
The following is the scheme framed by this court which is the subject matter for consideration in the applications filed by the petitioners:
THE SCHEME FOR MANAGEMENT AND ADMINISTRATION OF THE LOK SHIKSHANA TRUST
1. NAME: This Trust shall be designated as and known by the name of "Loka Shikshana Trust Hubli-Bangalore."
2. OBJECT: The object of the Trust shall be as stated in clause 2(a) to (d) of the Deed of Trust, Ex.P.1, besides opening of libraries, opening education institutions, conducting and helping by giving scholarships.
3. OFFICE OF THE TRUST: The office of the Trust shall be in Bangalore and its address is No.2, Residency Road, Bangalore-560025.
4. PROPERTIES OF THE TRUST: The properties of the Trust shall consist of both movable and immovable which belong to the Loka Shikshana Trust Hubli-Bangalore, now in the custody of the Receiver appointed by the Court.
5. VESTING OF THE TRUST PROPERTY: All the properties both movable and immovable- of the Trust now in the possession of the Receiver shall vest in the Board of Trustees appointed under this scheme and the same shall be administered and managed by the Board subject to and in conformity with the provisions of this scheme.27
6. NUMBER OF TRUSTEES OF THE BOARD: The number of Trustees shall be five including the Chairman.
7. NAMES OF THE TRUSTEES CONSTITUTING THE BOARD:
The following persons shall be the Trustees of the said Public Trust under this scheme.
1. Sri.B.D.Jatti, ...Chairman, Sadashivanagar, Bangalore
2. Sri.K.S.N.Adiga, Advocate, Kadiri, Mangalore.
3. Sri.R.A.Mundkur, Retd. (CID), D.I.G., Koramangala, Bangalore,
4. Sri.S.P.Bhat, 99, Parameshwara, 8th Cross, R.M. Extension, Bangalore
5. Sri.G.M.Patil, Advocate, Dharwar.
8. The Trustees so appointed shall form into a Board of Trustees and shall function as a Board. It shall frame its own rules and regulations and conduct of business subject to the objects of the Trust.
9. SECRETARY: The Board of Trustees shall appoint a Secretary of the Board, who will be generally responsible for the day-to-day administration of the Trust and will supervise the activities and be a link between the Board and its Units.28
His remuneration, powers and duties shall be decided by the Board of Trustees.
The Board of Trustees shall also appoint Manager or Managers, Editor or Editors and such other officers and members of the staff required for the day-to-day administration, supervision and who will be under the control and authority and discipline of the Boar of Trustees.
10. DELEGATION OF POWER:
The Board of Trustees have powers from time to time to delegate to any one or more persons, by power of Attorney or otherwise, any one or more of the following powers for the purpose of carrying on the activities of the Trust:
(a) To open one or more banking accounts, to operate the same and to deposit and withdraw money from the same;
(b) To give receipts or discharges for the moneys or property received by them or any one of them in the course of business carried on by the Trust, to buy or sell paper, ink, machines, books and materials received for the purpose of the Trust;
(c) To enter into contracts with agents, dealers and others in the course of the business of the Trust;
(d) To employ or remover subordinates and workers necessary for the work;
(e) And generally do all things necessary and expedient in carrying out business entrusted to him or to them;
(f) To represent the Trust in all the litigations now pending and that may be filed by or against it.
11. The Board of Trustees shall be authorised to deposit the moneys of the Trust in safe custody or to deposit with any Bank or Bankers as it may deem fit and to invest the 29 trust moneys and properties in any investment, authorized by law in the interest of the Trust.
12. TENURE OF TRUSTEES: The new trustees appointed under this Scheme shall hold office of the Trust from the date of their assumption of the chare. If any vacancy arises on account of death, resignation or removal, the Chairman of the Board is empowered to fill in the vacancy within a period of two months and irrespective of the vacancy, the remaining trustees of the Board shall function as the Board of Trustees.
13. The Chairman or the other trustees shall not take any remuneration for discharging his or their duties as such. But the Chairman or a Trustee shall be entitled to be paid all expenses that may be incurred by him in connection with his duties as a Chairman/Trustee including travelling and other expenses. It is open to the Board of Trustees to fix such honorarium as may be allowed to be claimed by the chairman / Trustees.
14. POWERS OF TRUSTEES: The Board of Trustees shall have full control and power over all the moneys investments and the property of the Trust and to take all steps necessary to safeguard the interests of the Trust and its properties. 14(a). The Board shall meet either at Bangalore or at Hubli atleast once in a month and shall review the accounts of the Trust for the previous month and give any directions.
15. The Board of Trustees shall have power and authority to spend and utilize the money and the property of the Trust for any of the purposes of the Trust in such manner as the board deems it proper. The Board or its nominee shall be entitled to operate all the Banking accounts of the Trust.
16. The Board of Trustees shall have full power to collect donations and subscriptions for the Trust and also power to acquire or buy movable or immovable property that may be required for the purpose of the Trust and to formulate and 30 execute plans and schemes consistent with and helpful for promoting the purposes of the Trust.
17. The Board of Trustees shall have power to mortgage, sell, transfer and give on lease or to otherwise deal with trust property or any portion thereof for the purpose of the Trust and to borrow moneys or raise loans for the purpose of the Trust whenever the Board deems it necessary to do so. This does not apply to the pledge of Trust properties for the purpose of carrying on publication activities or of leasing of buildings of the Trust properties.
18. The Board of Trustees shall have full power to take over, on such terms as it deems fit, such concern or concerns or undertakings as, in its opinion, are congenial or conductive to any of the purposes of the Trust.
19. The Board of Trustees shall have power to meet all the liabilities in connection with any business or concern carried on for the purposes of the Trust and to defray all expenses in connection therewith and shall have power in that behalf.
(a) To pledge the trust properties in favour of its Bankers;
(b) to take deposits from agents; and
(c) To employ servants, workmen, managers, and legal advisers, auditors and to terminate their employment from time to time as may be necessary and to fix the pay or remuneration payable to them.
20. The Board of Trustees shall have power to execute all deeds and documents necessary for the purpose of the Trust including contracts, mortgages, sale deeds and other engagements.
21. ACCOUNT BOOKS:
The Board of Trustees shall cause to be kept proper accounts of the funds and property of the Trust and shall get 31 the same audited every year, within four months of the end of each year and shall cause it to be published in the office of the Trust. For the purpose of this clause and this Trust, the year shall be deemed to have commenced on the first of August of a year and end of 31st July of the following year. The Board of Trustees shall have power, if it deems it necessary, to change the year aforesaid.
22. The Board of Trustees shall have power from time to time to make rules not inconsistent with the provisions of the Trust for the purposes of carrying out the objects of the Trust and from time to time alter or repeal the same.
23. The Board of Trustees shall verify the past and present account books, ledgers, vouchers, receipt books and shall prepare a list of genuine F.D. holders and the amounts due to each of them towards principal and interest and shall prepare a scheme for repayment of the same. If the proposal made in the scheme is not acceptable to any F.D. holder or any other person, such person may establish his claim in a court of law.
24. CHAIRMAN:
(a) The tenure of the Chairman appointed under this scheme is for a period of one year and the Board of Trustees shall elect one of them as a Chairman at the beginning of each year and the Chairman so elected will hold the office for one year thereafter until a new Chairman is elected as aforesaid.
(b) In case of death or retirement of the Chairman during the year, the vacancy shall be filled up by the Trustees by electing a new Chairman in his place upto the end of that year.
(c) The same Chairman may be elected as often as the Trustees may choose but not for more than three years in succession.
(d) The Chairman shall preside at the meeting of the Trustees.32
(e) In the absence of the Chairman at any meeting, the trustees present shall appoint one from amongst themselves to be the Chairman of that particular meeting.
25. ORDINARY AND SPECIAL MEETING The Trustees shall hold at least one meeting every month and this meeting shall be called the ordinary meeting. The Trustees may also hold additional meetings and such meetings shall be called special meetings. Such ordinary and special meetings will be held at such time and place as the Chairman may determine and shall be called by the Chairman.
26. REQUISITIONING MEETING :
The Chairman shall also call a meeting of the Trustees on a requisition made to him in writing by any three of the trustees specifying the purpose for which such meeting is desired to be held. In the event of no meeting being called and held by the Chairman within two weeks from the receipt of such requisition by him, the requisitioners may themselves call a meeting. In the event of there being no Chairman, any Trustee may at any time call a meeting. A meeting held under the provisions of this clause shall be held only at the office of the Trust and during Office hours.
27. NOTICE OF MEETING: Notice in writing of everything of the Trustees shall be delivered or sent through the post to each trustee at his address at least two clear days before the date of the meeting, provided that in the event of the Trustees framing regulations prescribing some other mode of giving notice, the notice shall be in accordance with such regulations.
28. QUORUM: There shall be a quorum when at least 1/3rd of the total strength of Trustees are present at any meeting of the Trustees. If a quorum shall not have assembled within half an hour after the time appointed for 33 the meeting, the meeting shall be adjourned. At such adjourned meeting, no quorum shall be necessary.
29. RESOLUTION BY MAJORITY: Every resolution or question submitted to a meeting (other than the appointment of a new Trustee) shall be de decided by a majority of the members present at such meeting and voting on the question. Each member shall have a vote but in the event of an equality of votes, the Chairman of such meeting shall have a second or casting vote whether or not he has previously voted on the question. Any resolution of the Trustees may be rescinded or varied or varied from time to time by 2/3rd majority of the Board of Trustees.
30. CIRCULARS: Any matter or business of a routine or formal or urgent nature may be determined by circular without meeting of the Trustees provided it is agreed unanimously by all the Trustees. In case of a difference of opinion, such question shall be dealt with at the next meeting of the Trustees.
31. MINUTE BOOK TO BE KEPT: A minute book shall be kept to record therein the following:
(1) a clear report of the proceedings of each of the meeting of the Trustees; and (2) a copy of each circular on which a decision has been arrived at The minute book shall be read over to the Trustees at the next meeting and, when confirmed, shall be signed by the Chairman, of the proceedings of the previous meeting and the minute shall be confirmed according to the scene of the majority of the Trustees present, at such previous meeting.
32. ACCOUNTS OF THE TRUST: The Trustees shall keep and maintain regular accounts of the Trust properties and income and shall get the accounts audited as per the Act.
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(The Trustees shall keep the books of accounts including (1) Rough Cash Book wherein daily balance shall be struck, (2) Fair Cash Book (3) Ledger (4) Donation book containing entries in full particulars (5) Receipt Books (6) Rent Bill Books (7) Books containing account of tenants (8) A book containing list of jewellery, ornaments, gold, silver utensils and other articles of value with full particulars with present market value (9) A book containing particulars of immovable properties (10) A book containing list of investments etc.)
33. BANK ACCOUNTS AND INVESTMENT OF TRUST FUNDS: The trust funds and the moneys shall be invested in accordance with the provisions of Section 35 of the Bombay Public Trusts Act, 1950 and the trustees shall or ordinarily keep on hand more than Rs.1,000/-. All account in the Banks shall be maintained in the name of the Trust and, if that is not possible or practicable, in the name of the publication. Such account shall be operated jointly at least by two of the trustees, one of whom shall be the Secretary.
34. LOANS: Subject to Section 36 of the Bombay Public Trusts Act, 1950, in case of urgency or legal necessity, the Board of Trustees have authority and/or are empowered to sell, mortgage, exchange or gift or any immovable property.
In accordance with the Budget, the Board may borrow moneys from any of its Banker by pledge of Trust properties or otherwise for the purpose of carrying on day-to-day publication activity of the Trust. If loans are necessary for any other purpose, the Board shall take a decision thereon.
35. CUSTODY OF DOCUMENTS: The title deeds of the immovable properties of the Trust shall be kept by the trustees in the safe at the Trust premises or at some safe deposit vault of repute.
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36. CUSTODY OF ARTICLES OF VALUE: The Board of Trustees shall make arrangement for the safe custody of all articles of value which are not in daily use but are used on special occasions. The Board of Trustees will maintain a list of such articles of value with all additions and substitutions from time to time. Every year, as far as possible, articles of value will be checked with the list maintained in respect thereof in the presence of any two trustees as may be appointed for this purpose by the Board of Trustees.
37. FAMING OF RULES: The Trustees have power from time to time to make such rules and regulations as they may think fit and proper for the administration and carrying into effect of the provisions of this scheme and to provide for the management of the charity and the trust properties and also from time to time alter any such rules and regulations or to repeal any of them and substitute others in their place:
Provided always that no such rules or regulations framed or subsequently amended shall in any manner be inconsistent with any of this scheme or the Bombay Public Trusts Act, 1950 or the rules made thereunder.
38. REFERENCE TO COURT IN CASE OF DISPUTE: If any dispute arises about the interpretation or construction of any of the clauses or provisions of this scheme, the matter will be referred to the Court whose decision shall be final and conclusive.
Sd/- Sd/-
Judge Judge
It is the contention of the petitioners that there is serious breach is committed by the Chairman and trustees 36 from time to time with regard to Cl.-12, Cl.14(a), Cl.14, Cl.17, Cl.24, Cl.28, Cl.29, Cl.32, Cl.34, Cl.37 and Cl.38.
The counsel for the respondents furnished the list of trustees appointed and their tenure from time to time from its inception till date:
LOKA SHIKSHANA TRUST Trustees Appointed from the inception of the Trust till the date
1. Sri B.D. Jatti from 14.3.86 to 27.3.1999
2. Sri R.A. Mundakoor from 14.3.86 to Nov.1989
3. Sri S.P. Bhat from 14.3.86 to Feb.2000
4. Sri G.M. Patil from 14.3.86 to Jan 2009
5. Sri K.S.N. Adiga from 14.3.86 to April 1989
6. Sri A.R. Badarinarayana from 26.6.1989 to 8.12.1998 (Resigned)
7. Sri Nittoor Srinivasa Rao from 9.6.1990 to Aug 2003 (Resigned)
8. Sri Haranahalli Ramaswamy from 1.1.1999 to March 2009 (Expired)
9. Sri K.B. Desai from 17.4.1999 to March 2011 (Expired)
10. Sri Anirudha Desai from 10.4.2000 (Removed) 37
11. Smt. Saritha Kusumakar Desai from 14.12.2002 for 3 years
12. Sri R.V. Deshpande from 25.8.2003 for 3 years
13. Sri U.B. Venkatesh from 1.1.2006 for three years
14. Sri Umesh Bhat from 6.9.2006 for three years
15. Sri M.V. Rajashekharan from 2.1.2009
16. Sri Prahalad Joshi from 2.3.2009 for three years
17. Sri Ashok Haranahalli from 6.4.2009
18. Sri U.B. Venkatesh for 3 years from 16.9.2009 IInd term
19. Sri Umesh Bhat for three years from 19.5.2011 IInd term
20. Sri Ramachandra (Raja Desai) for three years from 8.3.2012 The following are the list of Chairman appointed from time to time and their tenure from its inception till date:
LOKA SHIKSHANA TRUST TRUSTEES WHO SERVED AS CHAIRMAN
1. Sri B.D. Jatti from 14.3.86 to 10.3.1990
2. Sri A.R. Badarinarayana From March 1990 to April 1993
3. Sri B.D. Jatti From April 1993 to August 1996 IInd term
4. Sri G.M. Patil From August 1996 to Sept. 1998 38
5. Sri Nittur Srinivasa Rao From Sept 1998 to Oct 1999
6. Sri S.P. Bhat From Oct 1999 to Feb 2000
7. Sri Haranahalli Ramaswamy From Feb 2000 to April 2003
8. Sri Nitturu Srinivasa Rao From April 2003 to Aug 2003
9. Sri G.M. Patil From Aug 2003 to April 2004
10. Sri Haranahalli Ramaswamy From April 2004 to Feb 2007
11. Sri U.B. Venkatesh From 2007 to March 2007
12. Sri Haranahalli Ramaswamy From April 2007 to 2009 (Expired During the Tenure)
13. Sri M.V. Rajashekaran From April 2009 to May 2009
14. Sri Ashok Haranahalli From May 2009 to May 2012
15. Sri U.B. Venkatesh From May 2012 to till date It is the contention of the applicants that Cl.12 of the Scheme envisages that a trustee is to be appointed for a life.
The vacancy for appoint of a trustee once appointed, arises only on account of death, resignation or removal; otherwise, a trustee once appointed would hold office for the life. The trustees appointed during the chairmanship of Harnahalli Ramasswamy viz., Smt. Saritha Kusumakar 39 Desai, R.V.Deshpande, U.B. Venkatesh, Umesh Bhat and Prahalad Joshi have been appointed for a limited tenure of three years. Similarly, during the chairmanship of Ashok Harnahalli, U.B. Venkatesh and Umesh Bhat are appointed for a period of three years, which is contrary to cl.12 of the scheme. Such appointments are made by arbitrary exercise of power by the Chairman. Whereas, Sri. M.V. Rajashekaran and Sri. Ashok Harnahalli are appointed as Trustees for life,. There appears to be no rational basis for such discriminatory appointments.
The power given exclusively to the Chairman to fill up the vacancy is totally misused, nepotism and personal considerations have prevailed over the interests of the Trust in appointing the trustees by the former Chairmen viz., late Harnahalli Ramaswamy and his son Sri. Ashok Harnahalli.
Cl. 24 provides for election of a Chairman by the Board of Trustees at the beginning of each year. The Chairman so elected will hold office for one year, thereafter until new Chairman is elected. The clause further provides that nobody can be elected as a Chairman for more than three 40 years in succession. However, the tenure of some of the Chairmen if seen, it shows there is a flagrant violation of the terms of cl.24. Sri. Harnahalli Ramaswamy and Sri. Ashok Harnahalli, with manipulated artificial break continues to function as a Chairman more than for a period of three years in succession.
The election of Chairman and appointment of Trustees for a limited period shows the manipulative tactics adopted by some of the Chairmen who have violated the spirit of the scheme to run a Public Trust as their personal and private trust.
Cl.28 of the Trust states that the quorum for the meeting shall be 1/3 of the total strength of the Trustees. The total number of Trustees is only 5. Therefore, only 2 members can constitute a quorum and it would be highly anomalous to empower only two of the Trustees to decide the policy and financial matters of the Trust.
The Trust was earlier governed by the provisions of Bombay Public Trust Act (for short 'BPT' Act), at that time, the Trust was under the supervisory control of the Charity 41 Commissioner, with regard to administrative and financial affairs. After repeal of the BPT Act, there is no control and supervision over the administrative and financial affairs of the Trust by any statutory or public authority. There is no auditing of the accounts. The financial affairs of the Trust are kept solely at the whim and discretion of the Trustees without any sort of accountability, which is detrimental to the interests of the Trust.
The Rules whatever framed by the Trustees vide Cl.37 are highly inconsistent with the Scheme framed by this Court.
Cl.38 of the Scheme only provides for seeking clarification of the terms of the Scheme in case of any doubt regarding interpretation or construction of any of the clauses or provisions of the Scheme. The said clause, however, is not adequate enough to deal with the misfeasance and malfeasance committed by the Chairman and Trustees.
The counsel for the appellants in the light of the above submissions submitted that there is a prima facie material in the terms of the Scheme and in the context of 42 functioning of the Trust that some of the terms of the Scheme relating to appointment of trustees, tenure of trustees, election of Chairman, the number of Trustees, the regional representation which requires to be given in the Trust Committee, keeping in view the historical back-ground of the Trust, the auditing and accounting of the Financial affairs requires to be altered and modified, lest the Trust in the present condition would virtually be devoured by the present Trustees for their personal ends by denuding the spirit of Public Trust.
The petitioners apart from the lacunaes and legal draw-backs in the Scheme have made serious allegations of misfeasance, malfeasance and malversation of funds by the Trustees, which according to them is required to be probed to hold the Trustees responsible for such mischief.
The counsel for the respondents strenuously denied the contentions raised by the petitioners. It is submitted that Trust has been functioning smoothly since its inception. There has been a constant increase in the business and income of the Trust. The allegation of misappropriation and 43 misconduct are unfounded. There has been no nepotism or favoritism in appointing the Trustees. The persons who are appointed are all men of high eminence and holding high social positions sans any slur on their integrity.
The counsel for the respondents strenuously submitted that the Scheme once framed constitutes a decree not amenable to alteration and amendment, unless there is a clause in the scheme itself which permits alteration or amendment by way of application. Otherwise, in the context of the factual allegations of mis-conduct and malversation of the funds, the petitioners only have to file a suit u/s 92 of CPC. The present applications are not maintainable, in view of the decisions cited on behalf of the respondents.
Upon thorough consideration of the rival contentions and submissions made at the Bar, it is apparent that the decision of the Supreme Court in Raje Anand Rao's case has not dealt and decided the question whether in the absence of clause in the scheme for alteration and amendment, can the court under its inherent power or under implied powers of the Scheme could effect amendment and alteration to the 44 Scheme. However, the Supreme Court in Ahamed Adam Sait, AIR 1964, SC, 107, has held that for substantial reasons and in exceptional circumstances alterations can be made inconsistent with the object and purport of the scheme and for its beneficial governance. The Allahabad High Court in Rai Ramanath Bhargav Bahadur' case, AIR 1936, Allahabad, 97 and the Bombay High Court in Srinivas R Acharya AIR 1953, Bom. 393 and Gangaram Govind, AIR 1948, Bom. 146, have taken a view that even in the absence of the provision in the Scheme for alteration and amendment, the court has power to do so only on substantial grounds. The changes in the time and circumstances may 'Ex debito justitiae' warrant alterations in the Scheme to carry out the objects of the endowment and to see that the scheme operates beneficially. The Court shall exercise that power when there are substantial grounds for doing so and where satisfactory evidence to sustain those grounds if brought before the court.
The Bombay High Court in Ganga Ram Govind, AIR 1948, Bom. 146, has held that the Court has inherent power 45 U/s.151 of CPC to alter the Scheme even in the absence of a scheme giving liberty to apply, if such circumstances subsequently arisen which make it desirable for it to be altered to meet the ends of justice.
The scheme framed U/s.92 of CPC, although a judgment and decree, it is a judgment and decree in rem and not in personam. The interests of all the parties interested in the trust is deemed to have been considered and decided by legal fiction, although all the parties may not have participated in the proceedings, the judgment and decree binds everyone interested in the subject matter. The judgment in rem, unlike the judgment in personam, cannot be strictly construed that the decree once granted shall not be alterable. In the case of changed circumstances and upon proof of substantial grounds, the alteration of the judgment and decree in rem can be altered to serve the public interest. In that context, the judgments of the Supreme Court in Ahmed's case and the decision of the Bombay High Court and Allahabad High Court, laid down the ratio that even in the absence of a provision in the scheme for alteration or 46 amendment, if the changed circumstances warrant, the Court shall deemed to have the power to alter or amend the Scheme. However, the said amendment to be done only after giving proper opportunity to the parties with regard to the nature of amendment or alteration that is required to be incorporated.
In the instant case, the functioning of the Trust with regard to appointment of Trustees and Chairman, there appears to be serious breach of the provisions committed by some of the Chairmen. The terms regarding the appointment and tenure of the Trustees, the number of trustees to be appointed, the question of regional representation, the power of the chairman to appoint the trustees, the quorum for meeting and the financial audit etc., are some of the matters, which prima facie appears to require the desirability of revision of some of the clauses of the scheme. The contention of the petitioners for alteration and modification does not seem to be untenable and unfounded. Therefore, we are of the view that the applications are maintainable and the petitioners have locus to maintain their applications. 47
It is strenuously contended by the respondents that the applications or the suit for alteration or amendment has to be made U/s.92 CPC before the District Court and not directly before this Court. This contention appears to be untenable, because in the first instance, the suit came to be dismissed; it is the High Court in its Appellate jurisdiction has framed the Scheme. It is not a case where the Scheme is framed by the District Court and is approved in appeal by the High court. When the Scheme is framed by the High Court, it would be highly illogical and impermissible to allow the District Court to effect amendment to the Scheme framed by the High Court. A Scheme framed by the High Court has to be necessarily amended by the High Court and this power cannot be relegated to the District Court. It is understandable, if it is a case of giving effect to the clauses of the Scheme like removal of a trustees and enquiry into the mis-use and mis-management of financial affairs, the District court can exercise its jurisdiction to decide such applications. But when it pertains to the validity or efficacy of the terms of the scheme, and its modification, it shall have 48 to be done only by the High Court. Therefore, the contention that the applications have to be filed before the District or that the suit to be filed before the District Court is untenable.
In view of the aforesaid reasons, we hold that the applications are maintainable and further hearing in the matter is required. Accordingly, the objection of the respondents with regard to the maintainability is over-ruled.
For further hearing of IA No.I/12 to IA VIII/12 call after vacation.
Sd/-
JUDGE Sd/-
JUDGE psg*