Delhi District Court
Ram Chander Jwala Prasad Charitable ... vs State Of Delhi on 24 August, 2009
IN THE COURT OF Dr. KAMINI LAU: ADDL.
DISTRICT JUDGE - 13: CENTRAL DISTRICT:
DELHI
CS No. 12/2009
Ram Chander Jwala Prasad Charitable Trust
4855,Ram Bazar
Cloth Market,
Delhi110006.
........ Plaintiff/ Petitioner
Versus
1. State of Delhi.
2. Shri Chiranji Lal Choudhary
S/o Shri Jwala Prasad
X10, Hauz Khas,
New Delhi110016.
3. Shri Beni Prasad
S/o Late Sh. Shubhkaran Dass
7/25, Ansari Road, Darya Ganj,
Delhi110002.
4. Shri Parmeshwar Lal
S/o Shri Jwala Prasad
110/6,Banarai Dass Street,
Timarpur, Delhi.
5. Shri Shyam Sunder
S/o Madan Lal
7/25, Ansari Road, Darya Ganj,
Delhi110002.
.........Defendants/ Respondents
1
Date of Institution: 8.10.2004
Arguments heard on: 30.7.2009
Date of Decision: 24.8.2009
: J U D G M E N T :
This petition under Section 26 of the Specific
Relief Act read with Section 92 (3) of the CPC and Section 7
(1) of the Charitable and Religious Trust Act 1920 has been
filed by the plaintiff/ petitioner for passing a decree for
rectification of Trust Deed dated 19.11.1965. Briefly the
facts relevant to the disposal are as under:
BRIEF FACTS:
Plaintiff's Case:
The petitioner is stated to be a Charitable and Religious Trust, formed on 19th November, 1965 for religious and charitable purposes by Shri Jawala Prasad S/o Late Shri Ram Chander R/o Mandasi, District, Jhunjunu (Rajasthan) and 7/25, Darya Ganj, Delhi. Shri Ajit Kumar Samal is the authorized representative of the Petitioner Trust 2 who is fully conversant with the facts of the case as per the knowledge and information received and derived from the records in the usual and ordinary course of Petitioner Trust' s activities. Shri Ajit Kumar Samal is stated to be fully authorised by the Board of Trustees vide Resolution dated 29.06.04 to file, institute and conduct the proceedings of the present suit for amendment, rectification and modification in original trust deed dated 19.11.65.
It is statement that the petitioner trust was formed for the following Charitable and Religious objectives:
(i) To start, maintain and control within the Union Territory of India, Libraries, Reading Rooms, Adult education Centres, Schools, Colleges, Hospitals, Dispensaries, Clinics, Dharamshalas, Laboratories, Pharmacies, Sale Depot, Pios, Convalescent Homes Sanatoriums, Pinjarapoles, Ambulances and other allied institutions.
(ii) To start and maintain infant children homes, welfares centres and maternity homes for general welfares. 3
(iii) To award stipends and scholarships, including scholarships for going abroad or any where in India for further studies to suitable students irrespective of caste and creed.
(iv) To maintain wells and water reservoirs in any part of the Union territory of India for the benefits of public at large and cattle.
(v) To construct, repair and maintain well, tanks, religious places or historic, archaeological or artistic importance anywhere in Union Territory of India.
(vi) To make gift or donation to persons need for any religious and social purposes.
(vii) To support and maintain and if necessary to take over any other charitable or religious institution and such as temples etc.
(viii) To make adequate arrangements for the assistance and help to widows, destitute, children and orphans.
(ix) To build Dhramshalas, Temples and any other institutions of public utility and to manage the same. 4
(x) To accept donations, gifts, subscriptions, grants presents, bequests and other offering from any source and deal with the same for the purposes and object of the Trust.
(xi) To affiliate, assist or cooperate with any other educational or industrial institutions, libraries, aushadhalayas having similar objects in such manner as the Trust may determine.
(xii) To find out ways and means and to work for the proper and basic education and physical welfare of boys and girls with a view to make themselves sufficient in various aspects of life.
(xiii) To acquire by gift or donation any movable or immovable property and in case the donor has gifted the same for any particular object, to use it for the same and in any other case to use the same according to needs, and purchases, lease hire or otherwise suitable land vacant or with building and also to acquire any other rights or privileges necessary or 5 convenient for the purposes of Trust.
(xiv) To erect, construct, repair, alter and to equip and maintain any of the Trust and to do all such things as may be incidental or conducive to the attainment of the objects above mentioned or any of them.
According to the petitioner the intention of the settlor for constituting the Petitioner Trust was to establish a Charitable and Religious Trust for the benefit of Public at large but later on it came out that by mistake or error the intention of the settlor to create a public charitable and religious trust was not clearly brought out in the wordings of the Trust Deed. Therefore, it was felt necessary to amend/ rectify/modify the certain clauses and words of the Trust Deed. It is stated that the Trustees of the petitioner trust for the purposes of removing the mistake in writing the Trust Deed and to bring out the real intention and further to work and run the Trust as per the wishes of the settlor rectified/ amended/ modified certain clauses/ words of the Original 6 Trust Deed vide deed of amendment dated 25.02.03. It is pleaded that Clause 15 of the Original Trust Deed also empowered the Trustees to rectify/ amend/ modify/ after any objective of the Trust Deed by passing a resolution with 3/4 majority, which was accordingly passed on 25.02.03.
The rectified/ amended clauses of the original Trust Deed are as under: a. Clause No.2 (i).
To start, maintain and control within the Union Territory of India, Libraries, Reading Rooms, Adult education Centres, Schools,Colleges, Hospitals, Dispensaries, Clinics, Dharamshalas, Laboratories, Pios, Convalescent Homes, sanatoriums, Pinjarapoles, Ambulances and other allied institutions.
b. Clause No. 2 (v) To construct, repair and maintain well, Tanks, I places of historic, archaeological or artistic importance anywhere in Union Territory of India. 7 c. Clause 2 (vi) To make gift or donation to persons need for any social purposes.
d. Clauses 2 No. ( vii).
To support and maintain and if necessary to take over any other charitable.
b. Clause No.2 (ix).
To build Dharamshalas, and any other institutions of public utility and to manage the same.
c. Clause No.8 That the any part of the capital or the income of the trust fund which may be not for the time being be immediately required for the purposes of the objects of the trust, may be invested by the turstee in the manner as allowable as per section 11 (5) of Income Tax Act, 1961.
d. Clause No.9 The trustees may deposit any money in scheduled bank or in any other places as allowed as per section 11 (5) 8 of the Income Tax Act, 1961 and withdraw the same from time to time, as the trustees may decided. The bank account can be operated by the joint signatures of any two trustees as may be decided by the trustees. e. Clause No. 11 The Trustees may in the conduct of the trust business employ persons at reasonable sum to be paid to them and to get the work done from them at their discretion, considered necessary and delegate to and confer upon them such authority and power in connection with the trust hereof as the trustees shall deem expedient or proper.
It is further pleaded that the petitioner trust also applied to the Director of Income Tax, Delhi for registration of petitioner trust under Section 12AAA of the Income Tax and for approval for exemption under Section 80 G of the Income Tax Act, 1961. The Director of Income Tax vide its letter dated 3.9.2003 raised certain queries and asked for 9 certain clarifications and also raised certain objections as regard to the certain clauses and words of the Trust Deed pursuant to which the petitioner trust filed a detailed reply on 10.9.2003. According to the petitioner, the Director of Income Tax vide its Order No. DIT/E/0304/ R504/ 03/ 1489/ 987 dated 22.9.2003 declined the request for registering the petitioner trust under Sect 12AA of the Income Tax on the ground that the rectified/ amended clauses of the Original Trust Deed are not approved by the High Court. According to the petitioner, the rectification/ amendment/ modification in the original trust deed vide deed of amendment is made for the purposes and objectives to remove the mistake and conduct the Trust activities as per the intention of its settlor. By way of the present suit the petitioner has sought a decree from this court to allow the rectification/ amendments/ modification made in Trust Deed dated 19.11.1965 vide Deed of Amendment of Trust dated 25.2.2003.
10 Respondent's Case:
The record reveals that despite service the defendant no. 1 has not appeared and had been proceeded exparte and in so far as the defendants no. 2 to 5 are concerned who are the trusties they all appeared before the court. They have filed their written statements and have also conceeded to the case of the petitioner in toto and have not opposed the rectification.
ISSUES FRAMED:
On the basis of the pleadings of the parties vide order dated 14.5.2009 this court has framed the following issues:
1. Whether this court has jurisdiction (inherent/ pecuniary) to try the present suit? (OPP)
2. Whether the suit of the plaintiff is not maintainable in the present form and the plaintiff is entitled to the rectification of Trust Deed dated 19.11.1965? (OPP)
3. Relief.
11
EVIDENCE:
In order to prove their case the Authorized Representative of the petitioner trust namely Sanjay Mittal has examined himself as PW1 as their sole witness. He has in his examination in chief by way of affidavit corroborated what has been earlier stated in the main petition and has placed on record the copy of the extract of the Minutes of meeting of trustees which is Ex.PW1/1; copy of the resolution dated 29.6.2004 which is Ex.PW1/2; copy of the Trust Deed dated 19.11.1965 which is Ex.PW1/3; copy of the Resolution dated 25.2.2003 which is Ex.PW1/4; copy of the amended trust deed dated 25.2.2003 which is Ex.PW1/5; copy of the application Form for approval for exemption under Section 80 G of the Income Tax which is Ex.PW1/6; copy of the letter dated 3.9.2003 of Income Tax Department and reply of the petitioner trust which are Ex.PW1/7 & Ex.PW1/8; true copy of the order dated 22.9.2003 which is Ex.PW1/9; copy of the audited balance sheet and income and expenditure account for the years ended 31.3.2004 and 12 for year ender 31.3.2008 which are Ex.PW1/11 & Ex.PW1/12.
FINDINGS:
I have heard the arguments advanced before me and the documents placed on record. My findings in the various issues are as under:
Issue no. 1 Whether this court has jurisdiction (inherent/ pecuniary) to try the present suit?
Onus of proving this issue was upon the plaintiff. The issue involved is a pure question of law regarding the jurisdiction of this court to try the present suit. Ld. counsel for the plaintiff has vehemently argued that it is only the civil court who would have the jurisdiction to grant the relief under Section 26 of the Specific Relief Act for passing a decree of rectification and in this regard he has placed his reliance on the authorities of Jagdamba Charity Trust Vs. Commission of Income Tax reported in 1981 ITR (Delhi) 377 and in the case of Commissioner of Income Tax Vs. 13 Kamla Town Trust reported in 1996 (7) SCC 349 wherein it has been observed that the word "in strument" in Section 26 of the Specific Relief Act has a very wide meaning and includes every document by which any right or liability is or is purported to be created, transferred, limited, extended, extinguished or recorded and the Trust Deed is included within its purview and the civil courts have the jurisdiction to try the suit for rectification of the Trust Deed. It is also pleaded by the plaintiff that no limitation is prescribed and this court has the jurisdiction to try and entertain the matter and pass a decree for rectification/ amendment in the Trust Deed and therefore, the petitioner trust by this suit prays for the rectification/ amendment in the trust deed be approved.
In so far as the aspect of pecuniary jurisdiction of this court is concerned, there is no paragraph in the suit providing for valuation. There is nothing on record to show as to how and under what circumstances the present suit has been filed before the Court of District Judge who has the pecuniary jurisdiction to try the suit of value from Rs.3,00,000/ to 14 Rs.20,00,000/. No doubt the civil courts have the jurisdiction to try the suit under Section 26 of the Specific Relief Act. Ld. counsel for the plaintiff has vehemently argued that the legislature had left this option to the plaintiff and the plaintiff by choosing its option can choose the forum where he wants to file the suit. I have considered the aforesaid submissions made before me by the counsel for the plaintiff and in case if the argument of the plaintiff is accepted by this court, it was still necessary for the plaintiff to have atleast incorporated in its pleadings the basis of his valuation which he has not done.
Be that as the case may be a defect in the pleadings cannot be the basis for rejection of the suit more so as the clarification in this regard has been issued in the affidavit of evidence of PW1. I have gone through the affidavit of evidence of one Sanjay Mittal who has in his evidence specifically deposed that this court has the pecuniary and territorial jurisdiction to try and entertain the present petition and also because the Trust had been 15 executed and signed at Delhi and the trust is also having its office at Delhi, the cause of action also accrued at Delhi for which this court would have the territorial jurisdiction. The aforesaid aspect have not gone unrebutted since the defendants are all exparte. Therefore in view of the aforesaid I hold that the defendants are deemed to have acquiescenced and there is a deemed waiver of the objection with regard to the pecuniary jurisdiction which has not been proved by any of the defendants. Issue is decided in favour of the plaintiff and against the defendant no. 1. Issue no. 2: Whether the suit of the plaintiff is not maintainable in the present form and the plaintiff is entitled tot he rectification of Trust Deed dated 19.11.1965?
Onus of proving the issue was upon the plaintiff. It is evident from the record that all the defendants have conceeded to the case of the plaintiff and have proceeded exparte. Sanjay Mittal who is the authorized representative of the petitioner Trust has examined himself on behalf of the petitioner as PW1. He has placed on record the minutes of 16 the meetings authorizing him to represent the petitioner trust and to conduct the proceedings which is Ex.PW1/1. He has identified the signatures of the earlier Authorized Representative Ajit Kumar Samal who had signed the present plaint in view of the earlier resolution dated 29.6.2004 which is Ex.PW1/2. According to PW1 the petitioner is a Charitable and Religious Trust formed on 19.11.1965 for religious and charitable purposes by Shri Jwala Prasad S/o Late Shri Ram Chander R/o Mandasi, District - Jhunjunu, Rajasthan and 7/25, Darya Ganj, Delhi, the copy of the trust deed dated 19.11.1965 which is Ex.PW1/3. PW1 has deposed that the petitioner trust was formed for the following Charitable and Religious objectives:
(i) To start, maintain and control within the Union Territory of India, Libraries, Reading Rooms, Adult education Centres, Schools, Colleges, Hospitals, Dispensaries, Clinics, Dharamshalas, Laboratories, Pharmacies, Sale Depot, Pios, Convalescent Homes 17 Sanatoriums, Pinjarapoles, Ambulances and other allied institutions.
(ii) To start and maintain infant children homes, welfares centres and maternity homes for general welfares.
(iii) To award stipends and scholarships, including scholarships for going abroad or any where in India for further studies to suitable students irrespective of caste and creed.
(iv) To maintain well and water reservoirs in any part of the Union territory of India for the benefits of public at large and cattle.
(v) To construct, repair and maintain well, tanks, religious places or historic, archaeological or artistic importance anywhere in Union Territory of India.
(vi) To make gift or donation to persons need for any religious and social purposes.
(vii) To support and maintain and if necessary to take over any other charitable or religious institution and such as temples etc. 18
(viii) To make adequate arrangements for the assistance and help to widows, destitute, children and orphans.
(ix) To build dhramshalas, Temples and any other institutions of public utility and to manage the same.
(x) To accept donations, gifts, subscriptions, grants presents, bequests and other offering from any source and deal with the same for the purposes and object of the Trust.
(xi) To affiliate, assist or cooperate with any other educational or industrial institutions, libraries, aushadhalayas having similar objects in such manner as the Trust may determine.
(xii) To find out ways and means and to work for the proper and basic education and physical welfare of boys and girls with a view to make themselves sufficient in various aspects of life.
(xiii) To acquire by gift or donation any moveable or immovable property and in case the donor has gifted the same for any particular object, to use it for the 19 same and in any other case to use the same according to needs, and purchases, lease hire or otherwise suitable land vacant or with building and also to acquire any other rights or privileges necessary or convenient for the purposes of Trust.
(xiv) To erect, construct, repair, alter and to equip and maintain any of the Trust and to do all such things as may be incidental or conducive to the attainment of the objects abovementioned or any of them.
According to PW1 the intention of the settler to constitute the petitioner trust was to establish a Charitable and Religious Trust for the benefit of public at large but it later on transpired that by mistake or error the intention of the Settlor to create a public charitable and religious trust was not clearly brought out in the wordings of the Trust Deed and as per the provisions of Clause 15 of the Trust Deed the petitioner passed a resolution on 25.2.2003 for making necessary amendments in the original trust deed dated 19.11.1965 which resolution which is Ex.PW1/4 and 20 accordingly certain Clauses of the Original Trust Deed dated 19.11.1965 were amended/ modified/ altered by executing a Deed of amendment of Trust Deed which Deed of Amendment was executed on 25.2.2003 copy of which is Ex.PW1/5. By way of the aforesaid the Petitioner Trust amended/ rectified the clause no. 29i), 2(v), 2(vi), 2(vii), 2
(ix), clause 8, 9, 11 and 12 of the Original Trust dated 19.11.1965 which amendments are as under:
a. Clause No.2 (i).
To start, maintain and control within the Union Territory of India, Libraries, Reading Rooms, Adult education Centres, Schools, Colleges, Hospitals, Dispensaries, Clinics, Dharamshalas, Laboratories, Pios, Convalescent Homes, sanatoriums, Pinjarapoles, Ambulances and other allied institutions.
b. Clause No. 2 (v) To construct, repair and maintain well, Tanks, I places of historic, archaeological or artistic 21 importance anywhere in Union Territory of India.
c. Clause 2 (vi) To make gift or donation to persons need for any social purposes.
d. Clauses 2 No. ( vii).
To support and maintain and if necessary to take over any other charitable.
e. Clause No.2 (ix).
To build Dharamshalas, and any other institutions of public utility and to manage the same.
e. Clause No.8 That the any part of the capital or the income of the trust fund which may be not for the time being be immediately required for the purposes of the objects of the trust, may be invested by the trustee in the manner as allowable as per section 11 (5) of Income Tax Act, 1961.
22 f. Clause No.9 The trustees may deposit any money in scheduled bank or in any other places as allowed as per section 11 (5) of the Income Tax Act, 1961 and withdraw the same from time to time, as the trustees may decided. The bank account can be operated by the joint signatures of any two trustees as may be decided by the trustees.
g. Clause No. 11 The Trustees may in the conduct of the trust business employ persons at reasonable sum to be paid to them and to get the work done from them at their discretion, considered necessary and delegate to and confer upon them such authority and power in connection with the trust hereof as the trustees shall deem expedient or proper. h. Clause 12 Stand deleted.
23
According to the witness the amendments are necessary in the original Trust Deed dated 19.11.1965 for the purposes to bring out the real intention of the settlor to make the petitioner Trust a Public Charitable and Religious Trust and further to remove the mistake/ errors and defects in writing the original trust deed. It is also testified that the petitioner trust had applied for registration under Section 12 AA of the Income Tax Act and for approval of exemption under Section 80 G of the Income Tax Act vide application dated 25.2.2003 which is Ex.PW1/6 but vide its letter dated 3.9.2003 the Director of Income Tax raised certain objections and queries were made to which reply had been filed by the petitioner trust on 10.3.2003 which are Ex.PW1/7 and Ex.PW1/8 respectively. Thereafter, the Director Income Tax vide its Order No. DIT/E/0304/R504/ 03/ 1489/987 dated 22.9.2003 declined the request for registering the petitioner trust under Section 12AA of the Income Tax Act on the ground that the rectified/ amended clauses of the Original Trust Deed were not approved by the 24 High Court. Copy of the said letter dated 22.9.2003 which is Ex.PW1/9 and therefore the petitioner have come to the court.
The defendant no. 1 is exparte and has not appeared to controvert and oppose the case of the plaintiff. In so far as the other respondents are concerned they are the trustees of the petitioner and have conceeded to the case of the plaintiff. I have considered the arguments on behalf of the plaintiff and also gone through the various authorities placed on record which are as under:
1. Laxminarain Lath Trust Vs. Commissioner of Income Tax reported in 1988 ITR Vol. 170 P 575.
2. Melur Panchayat Union & Ors. Vs. Sundararajan & Ors. reported in AIR 1982 Madras 278.
3. Gerela Kalita & Ors. Vs. Dharmeswar Saikia reported in AIR 1961 Assam 14 (V 4S C5).
No doubt this court has the jurisdiction to allow the amendment of the Trust Deed yet the rectification cannot be granted by the court on mere asking. It is necessary to 25 firstly ascertain there has been a material mistake committed by the parties i.e. between the settler on the one hand and the Trustees on the other hand as alleged by the plaintiff. Secondly the real intention of the settler is required to be gathered from the bare reading of the original trust deed for which rectification is sought.
Applying the settled principles of law to the facts of the present case firstly it is not disputed that the Trust Deed had been executed on 19.11.1965. Secondly for the first time the rectification of the same has been sought in the year 2003 i.e. after almost a period of 37 years. Thirdly the parties applied for rectification are not the original settlers and the trustees but only the successors there of. Fourthly it is evident from the bare perusal of Ex.PW1/3 that the Trust was created for charitable and Religious purposes. Lastly by way of amendment/ rectification dated 25.2.2003 the applicants want to exclude the words "Pharma cies, Sale Depot" from Clause 2(i). Similarly in Clause 2(v), 2(vi) & 2
(vii) the plaintiff wants to delete the words " religious places, 26 religious institutions and such as temples etc." . Further, in clause 2 (ix) they want to delete the word "templ e" and in Clause 8 they wants to substitute the words "may be invested by the Trustees, until so required, in such manner as the Trustee at their discretion shall decide" with the words "may be invested by the trustee in the manner as allowable as per Section 11 (5) of Income Tax Act, 1961." Similarly in Clause 9 the want to substitute the words "Tru stees may deposit any money in scheduled bank or in any other places as allowed as per Section 11(5) of Income Tax Act, 1961 and withdraw the same from time to time, as the trustees may decided." In Clause No. 11 they want to substitute the words "The trustees may in the conduct of the trust business employ persons at reasonable sum to be paid to them and to get the work from them at their discretion....." . They also want to delete the entire Clause 12 i.e. "In the aforesaid execution of the Trust and powers hereof no Trustee shall be liable for any loss to the Trust 27 property arising by reason of any proper risk made in good faith or for the negligence or fraud of any agent employed by him or any other Trustee hereof although the employment of such agent was not strictly necessary or expedient or by reason of any mistake or omission made in good faith by any Trustee hereof or by reason of any other matter or thing except willful and individual fraud or wrong doing on the part of the Trustee who is said to the made liable.
Neither the settlor of the Trust nor any of the trustees have appeared to depose before this court. The intention of the settlor as gathered from the original trust deed, is very clear which has been executed for charitable and religious purposes but it include certain clauses which were of commercial nature and it was for this reason that in the year 2003 the trustees applied for registration with Income Tax authorities when an objection had been raised with regard to the aforesaid clauses no. 2(i), 2(v), 2(vii) and 2(ix). It is evident that the intention of the settlor was to 28 allow certain amount on religious and commercial activities and it appears that only to over reach the objection raised by the Income Tax authorities that such a rectification has been sought in the present suit. Law permits the rectification of a mutual mistake. The term 'M utual Mistake' would necessarily include the mistake which has been committed mutually between two parties. Now after 37 years when the settlor and the original trustees are not available, the onus of proving that there has been a mutual mistake between the settlor and trustees as alleged was upon the plaintiff. The only person who has appeared to depose is the Authorized Representative on behalf of the original trustees. The proposed rectification has an effect of changing the nature of the Trust by taking away the commercial and religious character for which it was initially created and in the absence of the original settlor and trustees I hereby hold that the plaintiff has failed to prove that there had been a mutual mistake committed while drawing out the trust deed and the intention of the settlor was not clearly brought out in the 29 wording of the Trust Deed. The object and intent of the rectification is clearly to over reach the objections raised by the Income Tax authorities and to secure an exemption. I, therefore, hold that the plaintiff is not entitled to the rectification of Trust Deed dated 19.11.1965. Issue is disposed off accordingly.
Relief:
In view of my findings with regard to the various issues, I hereby hold that the plaintiff is not entitled to the rectification of Trust Deed dated 19.11.1965. The suit of the plaintiff is hereby dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly. File be consigned to Record Room.
Announced in the open court (Dr. KAMINI LAU) Dated: 24.8.2009 Addl. District Judge: Delhi 30 Ram Chander Jawla Prashad Vs. State 24.8.2009 Present: Sh. Sanjay Mittal, AR for the plaintiff.
Defendants are exparte.
Vide my separate detailed order dictated and announced in the open court but not yet typed, the suit of the plaintiff is hereby dismissed. Parties to bear their own costs. Decree sheet be prepared accordingly. File be consigned to Record Room.
(Dr. Kamini Lau) ADJ: DELHI/ 24.8.2009 31