Madras High Court
R.Ramaswamy Charitable Trust vs H.Thiagaraj Reported In
Author: V. Parthiban
Bench: V.Parthiban
Order dated 21.09.2021 in O.P.No.164 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 21.09.2021
Coram:
THE HONOURABLE MR.JUSTICE V.PARTHIBAN
O.P.No.164 of 2019
and
A.No.7301 of 2019
R.Ramaswamy Charitable Trust,
Represented by its Trustees,
Mrs.Usha Vasudevan &
Mr.D.V.Muralidharan,
Office at No.93, Old No.50,
Chamiers Road,
Chennai-600 028. .. Petitioner
Original Petition filed under Section 7 of the Charitable and Religious
Trust Act, 1920 praying to grant permission to the petitioner-Trust to sell the
schedule property to any person offering the best sale consideration for the
same and the same will be utilised for the welfare of the Trust.
Schedule of property
All that piece and parcel of land ad-measuring an extent of 5 grounds
1659 Sq.Ft. as per Patta and 5.066 grounds as per title deed comprised in
R.S.No.3922/8, Mylapore Village and situated at No.50, Old No.27/6,
Page No.1/18
https://www.mhc.tn.gov.in/judis/
Order dated 21.09.2021 in O.P.No.164 of 2019
Chamiers Road, Chennai-600 028 and bounded on the:
North by : Property in Old No.50/1 and New No.93/1,
South by : Chamiers Road
East by : Passage to property in Old No.50/1 and New No.93/1
West by : Old No.49 and New No.91
situated within the Registration Sub-District of Mylapore and Registration
District of South Chennai.
For petitioner : Mr.R.Thiagarajan
Mr.EK.Kumaresan, counsel for intending purchaser
ORDER
This petition is filed to grant permission to the petitioner-Trust to sell the schedule property to any person offering the best sale consideration for the same and the same will be utilised for the welfare of the Trust.
2. The facts as culled out from the petition, are as follows:
(a) The petitioner is a public charitable Trust, established by Philanthropist Late R.Ramaswami for the noble objects of extending medical relief to the poor through well established hospitals and nursing homes, to assist needy students and scholars in pursuit of knowledge to provide relief Page No.2/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 for poor and handicapped, to assist cultural activities and several other noteworthy causes. The Trust was created under a Deed of Declaration of Trust, dated 27.05.1987 with Sri.R.Ramaswami, his wife Smt.Sushila Ramaswami and Sri.D.V.Muralidharan, son of D.V.Vasudevan, as its first Trustees. An amendment to the Trust Deed was executed on 24.08.1987, whereunder certain clarifications were given with respect to the manner in which the funds have to be invested.
(b) With the noble objects of the Trust in mind, the said R.Ramaswami willed a very valuable property ad-measuring 5 grounds 1659 Sq.Ft. as per Patta and 5.066 grounds as per title deed comprised in R.S.No.3922/8, Mylapore village and situated at No.50, Old No.27/6, Chamiers Road, Chennai-600 028, morefully described in the schedule (for short, as schedule property) to the Trust, under his last Will, dated 24.04.1991. This Will was duly probated, by virtue of which the Trust became the sole and absolute owner of the schedule property. The Trustees of the petitioner-Trust have been given the responsibility of ensuring that the noble wishes of Late R.Ramaswami are duly fulfilled.
(c) The objects of the Trust are charitable and philanthropic in nature, Page No.3/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 which are as follows:
"3(ii):
(a) to afford medical relief through well established hospitals, nursing homes, healthy centres and the like, which are run not for the purpose of profit.
(b) to assist students and scholars to enable them to pursue their studies, to acquire knowledge, experience and proficiency;
(c) To assist cultural activities by enabling young artistes in classical music and dance to have advanced training through reputed and established institutions like Music Academy and Kalakshetra, to spread knowledge and to promote and advance the cause of education.
(d) to provide relief to the poor and handicapped.
(e) to accept and make donations, grants in cash or in kind for the purpose of the Trust, and
(f) to do all such other things that may be be conducive or necessary for the advancement and the carrying out of the above objects and purposes of the Trust."
(d) At present, the only source of income for the Trust is the fixed deposits lying in the name of the Trust, which are the donations from Late R.Ramaswami family. The fixed deposits are with Sundaram BNP Paribas and HDFC Ltd. The total amount under the fixed deposits is Rs.17,75,000/- and the interest accruing therefrom is being utilised for the Trust's charitable purposes. Apart from that, there is no other source of income for the Trust, thereby restraining the Trust from carrying on its charitable activities on a Page No.4/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 larger scale as desired by the benevolent Founder Trustee R.Ramaswami. There had been occasions when the Trustees have personally pitched in amounts in order to carry out some charitable work. This is evident from the Trust's Income Tax Returns of the years 2015-16 and 2016-17.
(e) With the limited income, the Trust has been donating towards a wide range of charitable purposes, such as :
(i) Old age welfare homes
(ii) Tuition fees for school going children and college students;
(iii) medical treatment of children diagnosed with muscular dystrophy;
(iv) medical treatment and hospital expenses for the under-privileged;
(v) Voluntary Health Services (VHS) Hospital and Research Institute, etc. The Trust has been maintaining proper accounts of the income and expenditure of the Trust and promptly is assessed to Income Tax every year and the I.T. Returns of the Trust for the recent years are filed.
(f) The corpus fund that is available with the Trust is very meagre to carry out any substantial activity. For the last few years, the Trust has been generating very minimal income to carry out its objects and with the increase Page No.5/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 in costs all around, the available funds are totally insufficient to meet out the objects of the Trust. The valuable asset of the Trust is the schedule property and the same is in a dilapidated condition rendering it unfit for any beneficial use. The donations and subscriptions are very negligible and are weaning out by the day.
(g) The Trustees of the Trust, in order to revive the Trust and to carry out its activities in an effective and efficient manner in consonance with its objectives, decided to sell the schedule property to third party(ies) and carry out the objectives of the Trust from the sale proceeds realised therefrom. The proposed sale of the schedule property will generate the much needed income to the Trust to augment the noble and charitable objects of the Trust. As on date, the Trust is barely able to meet the expenses even towards upkeep of the schedule property. The proposed sale will give a fresh lease of life to the Trust, which has been meagre on funds for several years now. The income that is expected to be generated by the sale, will be substantial and the same will be available for carrying out the various philanthropic objects of the Trust.
(h) The petitioner had earlier entered into a Memorandum of Page No.6/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 Agreement, dated 12.07.2013 with a Developer, Kokio Spaces Pvt. Ltd., for sale of the schedule property. Under the Memorandum of Agreement, they offered to pay total agreed sale consideration of Rs.40,52,00,000/- and had paid merely an amount of Rs.10,00,000/- (Rupees ten lakhs only) as advance, for the schedule property. However, the said Company did not show any interest in paying the balance sale consideration to the Trust as agreed thereunder. Hence, the petitioner-Trust was constrained to terminate the Memorandum of Agreement, dated 12.07.2013. The said Company has neither come forward to pay the balance sale consideration, nor has it withdrawn itself from the aforesaid agreement, thereby leading it to a dispute between the parties to the Memorandum of Agreement. This Court, vide order dated 30.07.2018 in O.P.No.4 of 2018, had appointed Hon'ble Mr.Justice R.S.Ramanathan (Retired) as the sole Arbitrator to preside upon and adjudicate the dispute. A time frame of six months has been stipulated for deciding the dispute and passing an Award therein. The learned Arbitrator in his Award, dated 24.04.2021, has held that the termination of the Memorandum of Agreement by the Trust is legal and justified and the applicant-Company in the application, is not entitled for any relief.Page No.7/18
https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019
(i) As against that, Arb.O.P.No.47 of 2021 was filed before this Court. This Court, vide recent order, dated 13.09.2021, had dismissed the said O.P. The learned Judge has given reasons while concluding against the applicant- Company herein from paragraph 10, which are extracted hereunder:
"10. The main claim of the petitioner is that he is all along ready to purchase the property. Whereas, the learned arbitrator, has in fact, recorded a factual finding and come to the conclusion that the claimant is not ready and willing to perform their part of the contract. It is to be noted that the title itself has not been verified at the time of entering into the agreement. Though the suit property stood in the name of Suseela Ramasamy, her husband claimed it to be owner of the property and created a Trust, which has not been verified by the claimant. That itself clearly indicate that the intention to complete the transaction is absent from the beginning. Though the contract indicate that probate and title documents to be produced, it is not in dispute, that probate in respect of the Will of Ramasamy was obtained and thereafter, they came to know that only Suseela is the owner of the property and her Will is also probated under Ex.R.8, which has been discussed by the learned arbitrator.
11. The main contention of the claimant is that the owner's prerequisites contained in the contract has not been fulfilled, i.e., patta has not been obtained. Therefore, the remaining sale consideration not paid. The learned arbitrator has factually found that the respondents have provided Town Survey Extract, which is normally issued in Page No.8/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 City. A patta is a mere revenue document. It is not a document of title. The nomenclature of revenue documents differs from place to place. Town Survey Land Record, which is prevalent in major cities like Chennai, which is like patta, has been handed over to the claimant as per the agreement. Such being the position, the claimant sticking on to the nomenclature of the document as per the agreement, indicate that they are not intended to complete the transaction as agreed in the terms of the contract, by paying remaining sale consideration or the payment as agreed in the contract.
12. The learned Arbitrator had considered the entire oral evidence and the learned arbitrator has put a question to C.W.1, for which the claimant has stated that only if the patta is given they are ready to complete the transaction and not otherwise. When the entire evidence was analysed, it is found that the claimant was not ready and willing to perform their part of the contract and they have no sufficient money available in their account at any part of the time to pay the remaining sale consideration or the remaining advance as agreed in the contract. Pursuant to entering into the contract, they cannot take advantage of a particular clause in the agreement for insisting the patta for ever. In other words such insistence is just like creating permanent encumbrance over the property under the pretext of the agreement. The learned arbitrator has in fact considered the entire aspects and rejected the claim.
13. The arbitrator being the final Judge of facts, this Court cannot reappreciate the entire evidence, as an appellate Court. When the learned arbitrator has appreciated the entire facts placed before him and recorded a finding based on the Page No.9/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 facts, the same cannot be interfered by the Court under Section 34 of the Arbitration and Conciliation Act on the ground that the terms of the contract has not been interpreted by the learned arbitrator. The entire dispute is in the nature of specific performance of the contract. The learned arbitrator has considered the entire evidence and weighed both sides evidence and found that the claimant is not ready and willing to perform his part of the contract. The facts also show that TSLR patta already given. Therefore, when the learned arbitrator has taken a plausible view by taking into consideration all relevant materials and passed the award, this Court is of the view that such an award cannot be interfered.
14. In this regard, the Division of the this Court in Executive Director [TN&P] Indian Oil Corporation Limited Vs. H.Thiagaraj reported in 2021 SCC OnLine 2864 has held as follows:
"7. "It is elementary that the arbitral tribunal is the best judge of the quality and the quantity of the evidence before it on the basis of which it allows a head of claim. The arbitral tribunal may not have been satisfied with the material that was produced, but reckoned that "rough and ready figure' would be appropriate for 11 employees. Apart from the fact that the matter was within the exclusive domain of the arbitral tribunal and cannot be regarded as an error of jurisdiction, the award of the quantum does not shock the conscience of the Court nor does it appear to be opposed to any public Policy.
8. The challenge on such count Page No.10/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 received that due attention of the Court of the first instance as the judgment and order impugned refers to the Hodgkinson's principle and the acceptance thereof, inter alia, in the judgment of Associate Builders [ 2015 [3] SCC 49].
Therefore, when the award has been passed considering the relevant materials, such an award cannot be interfered unless there is patent illegality and the award is opposed to public policy of India. Therefore, merely because some findings recorded by the arbitrator in some of the paragraphs, as pointed out by the learned Senior Counsel, there may be other views also possible, that cannot be at any stretch of imagination falls within the ambit of patent illegality, which goes to the root of the matter. In other words, the entire dispute revolve around the performance of the obligation on both sides. Having entered into a contract for purchase of a property in the year 2013 and paying just Rs.one lakhs as advance, without exhibiting any readiness or willingness, one cannot take advantage of the contract for years together. Therefore, this Court do not find any of the grounds made out under section 34 of the Arbitration and Conciliation Act to interfere with the well reasoned award of the arbitrator.
15. Accordingly, this Original Petition is dismissed."Page No.11/18
https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019
3. Be that as it may. As far as the present O.P. is concerned, one of the Trustees of the petitioner-Trust was examined as P.W.1 and Exs.P-1 to P-20 were marked. Ex.P-1 is the original authorisation letter authorising P.W.1 to tender evidence on behalf of the Trust and other allied activities. Ex.P-2 is the photocopy of the Deed of Indenture, dated 04.01.1972. Ex.P-3 is the photocopy of the extract from the permanent land register dated 20.11.1972. Ex.P-4 is the photocopy of the Rectification Deed, dated 23.10.1976. Ex.P-5 is the photocopy of the Deed of Declaration of Trust, dated 27.05.1987. Ex.P-6 is the photocopy of the Deed of Amendment to the Deed of Trust Deed executed on 27.05.1987, dated 24.08.1987. Ex.P-7 is the photocopy of the Memorandum of Agreement, dated 12.07.2013. Ex.P-8 is the photocopy of the certificate of probate dated 18.11.2013 along with a copy of the Will, dated 24.04.1991 executed by R.Ramaswami. Ex.P-9 is the certified copy of Doc.No.3795 of 2014, which is a judgment and decree,. dated 15.09.2014 in O.S.No.2497 of 2014 rendered by the City Civil Court, Chennai. Ex.P-10 is the photocopy of the Certificate of Letters of Administration of the Will, dated 19.06.2015 along with a photocopy of the Will, dated 24.05.2010 executed by Sushila Ramaswami. Ex.P-11 is the Page No.12/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 original Valuation Report, dated 18.02.2020. Ex.P-12 (series) are the computer generated Income Tax Returns along with photocopies of the Balance Sheets for the Assessment Years 2013-14 to 2018-19. Ex.P-13 (series) are the photocopies of receipts and letters showing donations made by the petitioner-Trust. Ex.P-14 is the original statement, dated 27.07.2021 in respect of the Account No.047901000012016 maintained by the petitioner- Trust with Indian Overseas Bank, Sriram Nagar Branch. Ex.P-15 is the online Encumbrance Certificate, dated 28.03.2019. Ex.P-16 is the photocopy of the Arbitral Award, dated 24.04.2021. Ex.P-17 is the original letter, dated 15.07.2021 along with sketch. Ex.P-18 is the Certificate filed under Section 65-B of the Indian Evidence Act. Ex.P-19 is the affidavit of Ms.S.Malarvizhi, 3rd party, along with the original letter, dated 15.07.2021 and a sketch. Ex.P-20 is the Certificate of extract from the Town Survey Land Register, dated 11.12.2013.
4. Heard the learned counsel for the petitioner and perused the materials available on record. Considering the averments made in the petition and on a perusal of the oral and documentary evidence adduced before this Page No.13/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 Court, this Court is of the opinion that the petitioner is entitled for grant of relief as sought by the petitioner in this petition.
5. Agreeing to purchase the subject property for a total sale consideration of Rs.29 crores, the intending purchaser, namely Mrs.S.Malarvizhi, D/o Mr.V.Shanmugam and VLB Trust, represented by its General Manager, had filed an affidavit dated 26.07.2021 and the relevant portion of the same reads as follows:
"3. I state that Petitioner Trust had offered the property situated at No.50, Old No.27/6, Chamiers Road, Raja Annamalaipuram, Chennai- 600 028 for sale and accordingly I had inspected and visited the premises in June 2021 and by my letter dated 15.07.2021 I have offered to purchase the said property along with VLB Trust, for a total sale consideration of Rs.29,00,00,000/- (Rupees Twenty Nine Crores only). I stated that I am ready and willing to make the said amount within such time as may be granted by this Hon'ble Court and shall abide by the terms and conditions stipulated for the due completion and execution of the sale deed in our favour. I state that the price offered by us is a true and fair price and as such taking into consideration the lay of the property of the fact that it has certain vastu issues and that the property is road kutthu property, we have offered Rs.29 crores. It would be relevant to state that as and when we Page No.14/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 develop the property and put up a construction thereon there would be considerable waste of land area on account of the property being in an irregular shape and there is a vastu complaint. As per our offer letter dated 15.07.2021 we have agreed to pay the said amount within one month or within such time as may be fixed by the Hon'ble High Court."
6. The learned counsel representing the intending purchaser appeared today and submitted that the above said affidavit filed by the intending purchaser shall be complied with in its letter and spirit and the sale may be executed and she would comply with whatever direction this Court may pass towards completion of the sale of the subject property.
7. In the result, this Original Petition is ordered, with the following directions:
(i) Permission is granted to sell the Trust property (schedule mentioned property) in favour of Mrs.S.Malarvizhi and VLB Trust.
(ii) The amount of sale proceeds shall be transferred through RTGS within a period of two weeks from today.Page No.15/18
https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019
(iii) The sale deed shall be executed within one month thereafter.
(iv) A copy of the sale deed executed shall be filed into this Court to the credit of this O.P. as proof of compliance of the order of this Court.
(v) The sale proceeds shall be utilised for the welfare of the Trust.
8. An impleading application in A.No.7301 of 2019 in O.P.No.164 of 2019 is filed by M/s.Kokio Spaces Private Limited, stating that they are necessary and proper party in the present O.P. proceedings. According to the applicant in the impleading application, an agreement of sale was entered into between the petitioner-Trust and the applicant in the impleading application in the form of Memorandum of Agreement, dated 12.07.2013 for sale of the subject property to them. This Court finds that there was no representation for the last few hearings for the applicant in the impleading application. In view of the above said development, the impleading application is absolutely without any substance and merits. Further, this Court finds that the impleading application is not maintainable, as the impleading party/Company is neither necessary nor proper party and it can only be described as an obstructionist in the present proceedings filed on behalf of the petitioner- Page No.16/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 Trust. In the said circumstances, the impleading application is dismissed.
21.09.2021 Speaking Order: Yes cs Office to note: Issue order copy by 23.09.2021 V. PARTHIBAN, J cs Page No.17/18 https://www.mhc.tn.gov.in/judis/ Order dated 21.09.2021 in O.P.No.164 of 2019 O.P.No.164 of 2019 21.09.2021 Page No.18/18 https://www.mhc.tn.gov.in/judis/