Madras High Court
Unknown vs Zoroastrian Co-Operative Credit Bank ...
A.Nos.3274 and 3275 of 2010 in C.S.No.455 of 2009 VINOD K.SHARMA.J., A.No.3274 of 2010, under Section 151 of the Code of Civil Procedure, has been moved by the applicant / 2nd defendant, i.e. one of the trustees to set aside "Compromise Memorandum Judgment" and decree dated 13.07.2009, passed in C.S.No.455 of 2009 and to restore the civil suit No.455 of 2009, on record for decision on merit.
2. The plaintiff / non applicant filed a suit for declaration that the plaint 'A' schedule property is exclusively for residential purpose of the members of the plaintiff association, and that the defendants have no right to use it for commercial or any other purpose.
3. Consequential relief prayed for is to grant permanent injunction, restraining defendant nos.1 to 3 from continuing, functioning, Vedagurukulam inside the colony, conducting monthly meetings, discourses of Vathikasri, performing religioius ceremonies Avaniavattam and Ganapathy and Sudarsana Homam on commercial basis and publishing spiritual magazines such as Vathikasri or any other magazines in any other name on behalf of its customers or doing any other commercial activities in the premises bearing New No.488, Old No.176, TTK Salai, Alwarpet, Chennai.
4. Relief of mandatory injunction is prayed, for directing defendant nos. 1 to 3 to remove the unauthorized constructions listed in the schedule B of the plaint in the premises bearing New No.175, 176 and 488 Old No.176, TTK Salai, Chennai.
5. The Trust was sued through its Managing Trustee, Rajagopal Ganapadigal, whereas third defendant was represented by the Managing Trustee Tr.Rajagopal Ganapadigal.
6. During the pendency of the suit, parties entered into a compromise, which was filed in this Court. In view of the compromise entered into between the parties, this Court passed a consent decree, which reads as under:
"Today, when the matter is listed, the counsel for the plaintiff and defendants 1 and 2 filed a Joint Memo of Compromise. Paragraph No.9 of the compromise memo also prayed for deletion of dismissal of the suit as against 3rd defendant. Accordingly, the suit is dismissed as against the third defendant.
2. Since in the suit only there are plaintiff and two defendants and both the parties prayed that a decree may be passed in terms of Joint Memo of Compromise, the Suit is decreed in terms of the Joint Memo of Compromise dated 13.07.2009. The said Joint Memo of Compromise shall form part of the decree in the Suit. In the light of the Suit being disposed of in terms of the Joint Compromise Memo, the connected O.A.No.558 of 2009 has become infructuous and dismissed as unnecessary. No costs."
7. These applications have been filed by S.Subramanian, S/o.K.S.Srinivasan, claiming to be the trustee and acting on behalf of the Trust under the resolution dated 05.06.2010, authorizing him to file the present applications, on behalf of the applicant / 2nd defendant, i.e. Sri Seetharama Gurukkulam Trust.
8. In the affidavit, it pleaded that the applicant in this Court is a Trust, founded on 11.04.2008, and registered under the provisions of The Indian Trusts Act, 1882. This leaves no manner of doubt that this is the application on behalf of defendant no.2, in the original suit.
9. Learned counsel for the applicant contends that irrespective of the facts that these applications have been moved on behalf of the applicant / Trust, but reason to challenge the decree is, all the trustees were not made party, which is in violation of Order 31 Rule 2 of the CPC, therefore, having not impleaded all the trustees, compromise decree cannot be binding on the trustees, who were not party to the suit.
10. It is also the contention of the learned counsel for the applicant that Trust was wrongly represented by one trustee and that the Trust was not represented by an authorized person. The plaintiff, with collusion and for extraneous consideration, sued the applicant through its Managing Trustee, who could not have represented the Trust in view of Order 3 Rule 2 of the CPC.
11. In support of the contention, that for suing the Trust, all the trustees have to be impleaded as party in the absence of stipulation in the Trust Deed to the contrary, learned counsel for the applicant, placed reliance on the judgment of the Hon'ble Bombay High Court in the case of Homi Nariman Bhiwandiwala vs Zoroastrian Co-operative Credit Bank Ltd and anr, AIR 2001 Bom 267, wherein the Hon'ble Bombay High Court, has been pleased to lay down as under:
"16. Issue No.13, 15 & 21:--- Defendant No.2 is a trust and in case of a trust which is not a legal entity, all the trustees should be joined if a legal action is initiated against a trust. This view is taken by a Division Bench of the Gujarat High Court, reported in Atmaram Ranchhodbhai v. Gulamhusein Gulam Mohiyaddin, MANU/GJ/0112/1973: AIR 1973 Guj 113. Same view is also taken by this Court in a decision reported in Venkatesh Iyer v. Bombay Hospital Trust & others, MANU/MH/0198/1998: 1998(2) Bom CR798. The suit is also not maintainable for want of under section 164 of the Maharashtra Cooperative Societies Act. The notice is mandatory which is clear from the provisions of section 164 of the M.C.S. Act. This is laid down by the Division of this Court in the judgment reported in Mohan Meakin Ltd. v. The Pravara Sahakari Sakhar Karkhana Ltd., 1987 M.L.J.503, and in head note (b) the Court has held thus:
"Held, that the defendant was a society which was carrying on the business of manufacturing Alcoholic products viz. Whisky and that being the business of the society it was clear that the provisions of section 164 of the Maharashtra Co-operative Societies Act were attracted. One of the objects of the society in addition to manufacture of sugar was the manufacture of complementary products and in that behalf to erect the necessary machinery. The alcoholic products manufactured out of molasses by the defendant co-operative society was a complementary product and the said business fairy and squarely fell within the ambit of the Bye-laws of the society. The provisions of the Maharashtra Co-operative Societies Act, and in particular section 164 of the said Act must apply and in the absence of statutory notice under section 164 the suit was not maintainable."
Head Note (C) of the above judgment also mentions the same position. Thus the suit is not maintainable in the absence of notice and notice given after filing of the suit by the plaintiff makes no difference in the situation as the suit as filed was not maintainable and the defect is not curable by giving notice on presentation of the plaint. Issues No.13, 15 & 21 are therefore answered accordingly."
12. Reliance was also placed on the judgment of the Hon'ble Bombay High Court in the case of Nagar Wachan Mandir, Pandharpur, through its Chairman vs. Akbaralli Abdulhusen and Sons and Ors., 1994 (2) Bom CR251, wherein again the Hon'ble High Court of Bombay was pleased to lay down as under:
"11. After hearing both the learned Counsels I am not inclined to accept the submission of Shri Abhyankar whereas I am inclined to accept the contentions of Shri Apte as I find that the Full Bench Decision of Gujrat reported in MANU/GJ/0112/1973: AIR 1973 Guj 113 Atmaram Ranchhodbhai v. Gulam Moyeddin (supra) is directly on the point and arises under the Rent Act. It has been held by the Full Bench of Gujrat that unless instrument of trust otherwise provides all co-trustees must join for filing a suit to recover the possession of the property from the tenant. It is nobody's case in this matter that the instrument of the Trust provides otherwise. IN fact, instrument of the Trust is not even produced on the record, and on the proper construction of section 47 and 48 of the Indian Trust Act, which are reproduced above, the contention raised by Shri Apte is correct. Section 47 clearly deprives the trustee from delegating his office in any of his duties to co-trustee or to a stranger unless conditions mentioned in the said section are complied with. It is not in dispute in this matter that the conditions referred to in section 47 are not complied with by the plaintiffs. When one reads both section 47 and section 48, it would not be difficult to record a finding that the present suit filed by the two trustees is not maintainable. The second submission with reference to section 6 of the Societies Registration Act, 1860 cannot be accepted in view of the definition of Public Trust given in section 2(13) of the Bombay Public Trust Act. Section 2(13) of Public Trust Act reads as follows:-
"Public Trust means an express or constructive trust for either public religious or charitable purpose or both and includes a temple, a Math, Wakf, Church, Synagogue, aviary or other place of public religious worship a dharmada or any other religious or charitable endorsement and the Society either for religious or charitable purpose or for both and registered under the Societies Registration Act, 1860."
Considering the said definition of the Public Trust, it is very clear that the society registered under the provisions of Societies Registration Act, 1860 is also included in the definition of the said Public Trust and hence suit filed only by two trustees will not be maintainable. Granting of a lease is a matter which cannot be delegated by a trustee and, therefore, it must follow as a necessary corollary that determination of a lease also cannot be regarded as a matter which can be delegated by a co-trustee to another co-trustee or any one else. The power and function to determine the lease is of the same nature and as the power and function to grant a lease cannot be delegated, equally other cannot be. Both the functions are effected with beneficiary's judgment. All the co-trustees are bound to exercise their judgment and no one co-trustee can delegate these functions to his co-trustee or to any other person. These observations made by the Full Bench apply to the facts of the present case and for the same reasoning I refuse to accept the contention raised by Shri Abhyankar."
13. In support of the contention that compromise decree can be challenged by the affected party by invoking the provisions of Section 151 of CPC, reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Banwari Lal vs. Chando Devi, AIR 1993 SC 1139, wherein the Hon'ble Supreme Court was pleased to lay down as under:
"13. When the amending Act introduced a proviso along with an explanation to Rule 3 of Order 23 saying that where it is alleged by one party and denied by other that an adjustment or satisfaction has been arrived at, "the Court shall decide the question", the Court before which a petition of compromise is filed and which has recorded such compromise, has to decide the question whether an adjustment or satisfaction had been arrived at on basis of any lawful agreement. To make the enquiry in respect of validity of the agreement or the compromise more comprehensive, the explanation to the proviso says that an agreement or compromise "which is void or voidable under the Indian Contract Act..." shall not be deemed to be lawful within the meaning of the said Rule. In view of the proviso read with the explanation, a Court which had entertained the petition of Compromise has to examine whether the compromise was void or voidable under the Indian Contract Act. Even Rule 1(m) of Order 43 has been deleted under which an appeal was maintainable against an order recording a compromise. As such a party challenging a compromise can file a petition under proviso to Rule 3 of Order 23, or an appeal under Section 96(1) of the Code, in which he can now question the validity of the compromise in view of Rule 1A of Order 43 of the Code.
14. The application for exercise of power under proviso to Rule 3 of Order 23 can be labeled under Section 151 of the Code but when by the amending Act specifically such power has been vested in the Court before which the petition of compromise had been filed, the power in appropriate cases has to be exercised under the said proviso to Rule 3. It has been held by different High Courts that even after a compromise has been recorded, the Court concerned can entertain an application under Section 151 of the Code, questioning the legality or validity of the compromise. Reference in this connection may be made to the cases Smt. Tarn Bai v. V.S. Krishnaswamy Rao AIR 1985 Karnataka 270, S.G. Thimmappa v. T. Anantha , Bindeshwari Pd. Chaudhary v. Debendra Pd. Singh , Mangal Mahton v. Behari Mahton and Sri Sri Iswar Gopal Jew v. Bhagwandas Shaw, where it has been held that application under Section 151 of the Code is maintainable. The Court before which it is alleged by one of the parties to the alleged compromise that no such compromise had been entered between the parties that Court has to decide whether the agreement or compromise in question was lawful and not void or voidable under the Indian Contract Act. If the agreement or the compromise itself is fraudulent then it shall be deemed to be void within the meaning of the explanation to the proviso to Rule 3 and as such not lawful. The learned Subordinate Judge was perfectly justified in entertaining the application filed on behalf of the appellant and considering the question as to whether there had been a lawful agreement or compromise on the basis of which the Court could have recorded such agreement or compromise on 27.2.1991. Having come to the conclusion on the material produced that the compromise was not lawful within the meaning of Rule 3, there was no option left except to recall that order."
14. The contentions raised by the learned counsel for the defendant no.2 / applicant are not disputed by the learned counsel for the non applicant. The contention of the learned counsel for the plaintiff / non applicant is that injunction was claimed against defendant no.1, who is the owner in possession of the property, restraining defendant no.1 from using residential premise for any other purpose, therefore, Trust cannot be said to be a party aggrieved, to maintain the present applications.
15. It is also contention of the learned counsel for the plaintiff / non applicant that decree has been given effect to, therefore, no case is made out to exercise inherent jurisdiction under Section 151 CPC to set aside the consent decree.
16. On consideration I find force in the contention raised by the learned counsel for the applicant / defendant no.2. It was the plaintiff to implead or not to implead defendant no.2. But once the plaintiff chose to implead defendant no.2, it had to be impleaded as per provisions of Order 31 Rule 2 of CPC. In absence, the suit framed was not maintainable by or against Trust. The applicant, therefore, has a right to challenge the consent decree, specially when allegations have been levelled against the Managing Trustee of collusion with the plaintiff.
17. In view of settled proposition of law, that for suing the Trust, in absence of any clause to the contrary, Trust / all the Trustees are to be made party. The impugned decree, therefore, cannot be sustained in law.
18. Consequently, this application is allowed and the consent decree is set aside. The civil suit No. 455 of 2009 is restored to its original number to be proceeded further in accordance with law. No costs.
19. A.No.3275 of 2010 is also closed.
30.11.2011 Index: Yes Internet: Yes ar VINOD K.SHARMA.J., ar A.Nos.3274 and 3275 of 2010 in C.S.No.455 of 2009 30.11.2011