Madras High Court
D.Varadarajulu vs Smt.V.Lakshmikanthamma on 11 December, 2019
Author: M.Sundar
Bench: M.Sundar
C.S.No.536 of 2009
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 11.12.2019
CORAM
THE HON'BLE MR.JUSTICE M.SUNDAR
C.S.No.536 of 2009
1.D.Varadarajulu
2.Chakravarthi
3.R.Parthasarathy .. Plaintiffs
Vs.
1.Smt.V.Lakshmikanthamma
2.R.Mohan .. Defendants
This Civil Suit is preferred, under Section 92 of CPC read with Order VII
Rule 1 of CPC and Order IV Rule 1 O.S. Rules of the Madras High Court, praying
to
1) Remove the defendants from the office of the trustee of
Thiruneelakandar Trust
2) appoint 2nd and 3rd plaintiffs as co-trustees of Thiruneelakandar Trust
with the 1st plaintiff
3) For a declaration that the 1st plaintiff is a life trustee of
Thiruneelakandar Trust.
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4) Direct the defendants to handover possession of trust properties more
fully described in the schedule hereunder to the plaintiffs being the life
trustee and trustees of Thiruneelakandar Trust respectively.
5) Direct the defendants to account for the earnings of the trust that
have been misappropriated and pay the same to the trust.
6) and grant such further relief as this Hon'ble Court may deem fit and
proper in the facts and circumstances of the case and thus render justice.
For Plaintiffs : Ms.T.Iris Sandra
For Defendant : Set ex-parte
JUDGMENT
Instant suit was presented in this Court one decade and two years ago, to be precise, on 28.08.2007. Instant suit is inter alia under Section 92 of 'The Code of Civil Procedure, 1908' ('CPC' for brevity). As instant suit is one inter alia under Section 92 of CPC, leave was granted by a common order dated 22.02.2008.
2. Thereafter, the suit traveled through various procedural requirements. Ultimately, more than one decade and one year later, i.e., on 31.10.2019, both the defendants were set exparte and predecessor Hon'ble Judge sent the matter to Additional Master-I for recording ex-parte evidence.
Order/proceedings of Hon'ble predecessor Judge dated 31.10.2019 reads as 2/17 http://www.judis.nic.in C.S.No.536 of 2009 follows:
'Despite several opportunities being given to the defendants for filing written statement, they have not chosen to file the same. Therefore, the defendants 1 and 2 are set exparte.
2. Registry is directed to post the matter before the Additional Master I for recording exparte evidence on 11.11.2019.'
3. Ms.T.Iris Sandra, learned counsel representing the counsel on record for plaintiffs submits that ex-parte evidence was recorded before learned Additional Master-I on 25.11.2019. Adverting to the deposition and exhibits, learned counsel submits that second plaintiff T.Chakravarthi, deposed as P.W.2 his chief examination was by way of proof affidavit dated 25.11.2019 and as many as 17 exhibits i.e., Exs.P1 to P17 were marked. Central theme of instant suit is a public charitable trust, which goes by the name 'Thiruneelakandar Trust' ('said Trust' for brevity), constituted by one M.Venugopal Reddy (Son of Muthusamy Reddy), removal/appointment of trustees/co-trustees for said Trust, declaration regarding trusteeship of first plaintiff, direction for recovery of possession of corpus of said Trust, accounts and residuary relief.
4. The burden of the song qua pleadings of plaintiff is that said Trust was constituted (as mentioned supra) by one M.Venugopal Reddy (Son of Muthusamy Reddy), along with his spouse and first plaintiff, vide a registered 3/17 http://www.judis.nic.in C.S.No.536 of 2009 instrument of Trust dated 06.03.1961 (Ex.P1), registered as document No.78 in the office of Sub-Registrar, Thyagaraya Nagar; said trust, which was initially constituted with a very humble corpus, was inter alia to promote education, provide scholarship, supply books and other lofty objects; that said M.Venugopal Readdy, his spouse and first defendant constituted themselves as life time trustees and authorized themselves to appoint one or more trustees with five years tenures; that said Venugopal Reddy with the intention of augmenting said corpus, which was originally constituted with a humble quantum executed a Will in respect of two immovable properties in Thyagaraya Nagar; one is in Gopal Street and other is Sivagnanam Road; that this Will is dated 09.02.1990; that this Will took effect on the demise of testator on 29.04.2004; that probate was issued for testament on 29.04.2005 by this Court in O.P.No.213 of 2005 ( Ex.P2 is Will probate copy); that first defendant joined hands with her relative by name R.Mohan, prepared several resolutions intended to keep the first plaintiff out in the functioning of the said Trust and attempted to take complete control of the assets for personal purposes; that what is described as face-off between first plaintiff and first defendant resulted in a detrimental situation qua objects of said Trust necessitating instant suit.4/17
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5. Having set out the burden of song qua pleadings in the plaint, without dilating on facts in great detail, this Court deems it appropriate to extract the entire proof affidavit of second plaintiff, who deposed as P.W.1. Proof affidavit of P.W.1 (second plaintiff) dated 25.11.2019 reads as follows:
'PROOF AFFIDAVIT FILED BY T.CHAKRAVARTHY
1.T.Chakravarthy, son of R.Thirumalai, Hindu aged about 74 years residing at No.19, Pattammal Street, Krishnapuram, Ambattur, Chennai – 600 053, do hereby solemnly affirm and sincerely state on oath as follows:-
1. I state that I am the 2nd plaintiff and the deponent herein. Since the 1st plaintiff died I am letting in evidence as as such I am well acquainted with the facts of the case.
2. I submit that Justice Krishnawamy Reddy was the President of Vivekanandha Education Society for more than 20 years under him I was paneled as Secretary and worked together in the said society and well known in the society, having considered my work I was appointed as a trustee in the present trust and I am interested in the day today activates/affairs of the trust, the properties mentioned in the schedule hereunder belong to a public Charitable Trust named Thiruneelakandar Trust. The said Trust was constituted by M.Venugopal Reddy, son of Muthusamy Reddy (since deceased) along with his wife, the first defendant herein under a registered instrument of Trust dated 06.03.1961. The Trust was started initially with a corpus of Rs.1000/- and the objects of the Trust, inter alia, are to promote education and for that purpose to provide for scholarship study, supply of school books free of cost, contribution to 5/17 http://www.judis.nic.in C.S.No.536 of 2009 library and book banks, make monetary contributions to schools, colleges, technical and other educational institutions that are run not for profit, for meeting the cost of fees tuition of deserving students particularly poor students. The other objects included general aspects of charities such as poor feeding, medical benefits for deserving charitable hospitals and to run a boarding house and residential institutions or hospital for poor students for free boarding and lodging.
3. I submit that the authors of the Trust viz., Venugopal Reddy and his wife, the first defendant constituted themselves as lifetime trustees and authorize to themselves the right to appoint one or more trustees. The tenure of such appointed trustees was limited to a period of 5 years. It had also empowered them to co-opt as Trustees of other persons in whom they have confidence in like period. The total number of trustees, the Trust provides to be 5 and apart from the mode of appointing through nomination during their lifetime, the deed provided for appointment through any testamentary document also.
The wordings of the said Clause in the trust deed are as follows:
“The maximum number of Trustees for the trust shall be five and either of the Authors of the Trust shall have the right to appoint any Trustee in the vacancy in the five trustees and they also shall have the right to appoint successors to the office held by them in any testamentary document they may execute.
4. I submit that after the initial formation of the Trust Venugopal Reddy himself ensured, to augment the corpus, additional provision to the tune of about Rs.5 lakhs, prior to his death. He had executed a Will in respect of two buildings, viz., residential house at No.5 Gopal Street, and another a commercial building at No.1 Sivaganam Road, both at T.Nagar, Chennai -17. The Will was executed on 09.02.1990 and both the items of properties were made the subject of disposition in favour of the aforesaid Thiruneelakandar Trust. The Will declares that the trust shall take both 6/17 http://www.judis.nic.in C.S.No.536 of 2009 immovable properties absolutely for the purposes mentioned in the deed of Trust subject however to the condition that the first defendant shall have the right to live in the residential house during her lifetime. The Will also provide for dispositions in respect of all movable properties and makes some specific directions for religious charities, like contribution for Sri Brahannayaki Sametha Adivalliswara temple in his native Munnoor Village, Tindivanam Taluk. All the cash held in banks, rural development bonds and cash certificates and deposits were also bequeathed in favour of the Trust, subject to the direction that an amount of Rupees One lakh should be spent for the construction of Rajagopuram for the temple referred to above. The Will makes an express declaration that the residential house at No.5, Gopal Street, T.Nagar shall be run as a hospital after the lifetime of the first defendant.
4. I submit that the deceased Venugopal Reddy appointed the first plaintiff as a trustee of the Board of Trustees in exercise of his power through the registered Will dated 9th day of February 1990 and also appointed him as executor to carry on the terms of the Will. It was the last Will and testament and took effect after the death of Venugopal Reddy on 29.04.2004 and issuance of probate by the High Court in O.P.No.213 of 2005 dated 29.04.2005. The wordings of the said Will for the appointment of D.Varadarajulu Reddy the first plaintiff as life trustee are as follows: “I am one of the life trustees of the Thiruneelakantar trust and I have right to appoint successor to the office held by me in the said trust. In exercise of my said right, I hereby appoint Sri.D.Varadarajulu, S/o.Sri.A.Devarajulu as Life Trustee of the said Trust”.
5.I submit that indisputably the properties mentioned hereunder are the absolute properties of Thiruneelakandar Trust, subject to its administration by the executor of the Will i.e., the first plaintiff as per the probate granted by this Hon'ble Court. The defendants also know about the Will and it is an assured fact that the first defendant can hold possession of the properties jointly with other trustees. But the first 7/17 http://www.judis.nic.in C.S.No.536 of 2009 defendant is trying to hold the property individually under the guise of her status as a life trustee. With such intention the first defendant has gradually withdrawn and misappropriated some funds as stated hereunder. The deceased Venugopal Reddy was a philanthropist and he wanted to perpetuate his memory by endowing his valuable properties to public charities run for lofty objects. The first defendant has unfortunately not cared for the intention of the Testator and started meddling with the financial affairs of the estate of Late M.Venugopal Reddy by causing maximum problems in the way of administration of estate and passing over of assets to the trust by the first plaintiff. She has secreted the income from the trust properties as personal income. She has not furnished the details of movable properties. Rental and other incomes were collected by her by joining hands with the tenants and other parties. As a result, the first plaintiff as executor cum trustee could not collect rents and other income or funds of the estate. He could not also gather information for filing income Tax return of the estate for the assessment year 2005-2006 & 2006-2007. However, with great difficulty he could file the Income Tax return only on 01.03.2007 by requesting the department to attach rental income payable by the tenants towards income tax dues payable by the estate. The first defendant has misappropriated the funds of the trust by accounting her personal expenses amounting to Rs.1,00,000/- as though it was an expenditure of the estate of Late M.Venugopal Reddy. The first defendant has also misappropriated the cash balance of Rs.66,572/- by not handing over it to the first plaintiff while she submitted books of accounts of the estate till 30th September 2005. The acts of the 1st defendant are detrimental to the interest of the trust and result in huge loss to the trust property. Thus she has been committing several acts of maladministration of the trust. The first defendant knows that except her right of residence reserved to her under the Will in respect of the residential property in No.5, Gopal Street, T.Nagar, she has no personal right either to the cash and other outstandings or to the properties bequeathed to the Trust. Yet, 8/17 http://www.judis.nic.in C.S.No.536 of 2009 she has consciously misused and misappropriated the funds of the estate with impunity. She has been withdrawing the amounts bequeathed to the Trust for her personal expenses. To the definite knowledge of the plaintiff, the first defendant has withdrawn sums to the tune of Rs.3,33,000/- on various dates from A/c.No.918 of the Bank of Baroda, T.Nagar Branch for her personal expenses. The first defendant, through her letters dated 27 th March 2006 and 26th May 2006, has also claimed that the amounts left by the deceased with banks in either or survivor accounts belongs to her. The residential building at No.5, Gopal Street, T.Nagar has been let out to various person in respect of various portions of the building. The first defendant has been collecting the rents from the tenants without bringing cash receipts to the books of accounts of the Trust. She has collected from Purushothaman & Kanchana Harikrishnan rental advances of Rs.3,80,000/- in her name for the property bearing Door No.1, Sivagnanam Road, T.Nagar, without again bringing it to the coffers of the Trust. She is also guilty of act of conversion by transferring motor car bearing Regn.No.TN 8F8844 in her own name. She has also done acts intended to cause obstacles to the first plaintiff in his capacity to act as executor cum trustee of the Will. She has instructed the bank, tenants and others not to pay, any amount to the first plaintiff and not to accept any receipt or to render/submit any account, which would help to discharge his function as trustee cum executor of the Will.
6. I submit that the first defendant has joined hands with her relative by name R.Mohan and has prepared several resolutions calculated to keep the first plaintiff out of the functioning of the Trust and virtually attempts to take complete control of the assets for her personal purposes. In a meeting puported to have been convened on 19.08.2005, she has attempted to curtail the tenure of the first plaintiff from life time trustee to a period of 5 years, at the request of the first defendant, the first plaintiff signed the account opening from of Bank of Baroda for the purpose of opening an account in the name of the trust. But actually the 9/17 http://www.judis.nic.in C.S.No.536 of 2009 first and second defendants misused the said form and it later transpired that they opened a joint account bearing No.26672 in their name instead of in the name of Thiruneelakantar trust.
7. I submit that the defendants have misused resources of the Trust for their own personal purposes. They have issued a cheque for Rs.30,000/- on 14.09.2005 for the education of the son of the second defendant by name M.Senthilkumar. There had been exchange of communications between the first plaintiff and first defendant relating to the mode of carrying out the objects of the Trust and to give full effect to the terms of the Will. The first defendant has challenged the testamentary power of her husband Venugopal Reddy vide her leter dated 27.03.2006 and would contend that even the authors of the Trust had only the power to nominate trustees for a period of 5 years. In one of her communications dated 04.11.2005, she has expressed that she has appointed the second defendant as trustee to function along with her. While countering the allegations of the first plaintiff regarding the application of the money belonging to the Trust to her personal use, she has stated in her letter dated 26.05.2006, that she had withdrawn only from either or survivor account which she had held along with her husband, Venugopal Reddy and that those amounts were not intended to be deposited to the crdit of the Trust. It is no doubt but true that some of the amounts held with the Bank were in either or survivor account. But the first defendant who was a survivor of some of the bank deposits did not have any title to the amounts mentioned in the deposits but can hold them only as one of the trustees for the benefit of the Trust in terms of the Will dated 09.02.1990. The said deposits/amounts were the self-earned property of the deceased Late M.Venugopal Reddy and reflected in his I.T. Retunrs. The first defendant had neither ownership nor beneficial interest in the said amounts.
8. I submit that the first defendant, by her express conduct and contentions raised in the exchange of communications, has made herself untrustworthy. I have reliable information that several movable assets of 10/17 http://www.judis.nic.in C.S.No.536 of 2009 Estate of M.Venugoal Reddy such as deposits etc., were claimed by the first defendant as her own assets in her income tax returns. The continuance of the defendants would perpetuate the continuance of themalversation of the Trust and its funds. The first plaintiff attempted to arrest the complete defiance of the objects of the Trust by the willful conduct of the first defendant, by himself seeking to appoint two persons viz., me and R.Parthasarathi the 3rd plaintiff respectively as trustees which was duly intimated to the first defendant by the first plaintiff's letter dated 24.12.2005. The third plaintiff Parthasarthi son of P.Rajagopalan is an income tax practitioner and is practising from M/s.P.Rajagopalan & Co., an auditing firm. He has more than 10 years of acquaintance with the deceased Venugopal Reddy and also knows about the affairs of the Trust.
He is truly interested in fulfilling the wishes of the Testator, Venugopal Reddy. The trustees, have, in the meeting held on 07.01.2006, 15.04.2006 and 29.07.2006 conducted the proceedings to protect the properties/interest of the trust and none of the meetings were attended by the first defendant even after due notice. On a proper legal advice and careful review, the first plaintiff felt that the appointment of meand 3rd plaintiff needs to be substantiated by a legal sanction through appropriate means, if required with fresh appointment by this Honourable Court or ratification of the appointment already made. I submit that I am a person of high standing being the Hon. Secretary to Vivekanada Educational Society which runs more than 13 school in and around the City owing properties worth more than Rs.50 Crores. I am driven by a passion for social service and I am interested in the affairs of the Trust.
9. I submit that we do not want to let things run a muck without obtaining complete legitimacy to the office of all the trustees and ensure that the objects of the Trust are fully carried out. It is the further desire of us that the lofty wishes of the deceased, Venugopal Reddy obtain full fruition at the earliest without delaying it beyond the lifetime of the first plaintiff.
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10. I submit that unfortunately the defendants have allowed the actual ownership of Venugopal Reddy to cloud the perception that the modest resources of the Trust could be put to use only by their acts of discretion and if only they did not have any need for their own personal use. The first defendant has not cooperated with the plaintiff even to fulfill statutory obligations of the trust. She had not furnished details of movable properties even to file inventory or assets of Late M.Venugopal Reddy before this Hon'ble Court vide 1st plaintiffs letters dated 21.09.2005, 10.10.2005 & 20.10.2005. In spite of several reminders she did not furnish the details of financial transactions of the trust. The first plaintiff, without any alternative prepared the accounts of trust based on available information and filed IT return of the Trust on 31.07.2006 in respect of the financial year ended 31.03.2006. He has also applied for 80G exemption certificate in February 2006. Under the circumstances it has become necessary that the first defendant who is named as the lifetime trustee and the second defendant who is said to have been nominated as trustee are removed from the office of trusteeship.
11. I submit that we seek for a declaration that since the first plaintiff who was a life trustee appointment made by the deceased Venugopal Reddy by means of a Will, and we also seeks to confirm out appointment as trustee of the trust and I being the second plaintiff herein and R.Parthasarathy the third plaintiff as trustees of the trust jointly to exercise the powers of trustees. To bring some rectitude into the scales of functioning of the Trusts, the first plaintiff has instituted O.S.No.2279 of 2007 on the file of the City Civil Court, Chennai against the first defendant, describing himself as the executor to the estate of Venugopal Reddy and seeking for a decree for Rs.6,82,094/- representing the amount mis-spent by the first defendant from and out of the funds of the Trust for the personal use of the first defendant and land rent payable by the 1st defendant to the trust and also seeking relief for recovery of rents collected by the first defendant for which no accounting has been made.
12/17http://www.judis.nic.in C.S.No.536 of 2009 The need for reliefs claimed in the said suit have a bearing to the misdeeds of the first defendant They do not address the essential issue relating to the fulfillment of the objects of the trust by a duly constituted trust deed. The said suit got dismissed and appeal has been preferred and pending.
12. I submit that the face-off between the first plaintiff and the first defendant for which the first defendant herself is responsible has caused enormous detriment to the objects of the trust. There is systematic diversion of the objects of the Trust and the user of all the rents received by cash for the personal expenditure of the defendants. Sums to the tune of over Rs.53 lakhs by way of fixed deposits, savings bank accounts and Govt. bonds are in the process of misuse. The first plaintiff has not been able to secure from the defendants all the details of the deposits. The plaintiffs however have furnished such details as they are aware of.
Therefore, it is prayed that this Hon'ble Court may be pleased to pass a decree and judgment as prayed for with cost and grant such further relief as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case and thus render justice.
Solemnly affirmed at Chennai (sd/-)
th
On this the 25 day of November 2019 Before Me 2019, signed his
name in my presence (sd/-)
ADVOCATE: CHENNAI
6. 17 exhibits marked through P.W.1 are as follows:
Ex. Date Description of Documents Nature of
Document
Nos.
Ex.P1 06.03.1981 Trust Deed Photo Copy
Ex.P2 09.02.1990 Will Probate Copy True Copy
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Ex. Date Description of Documents Nature of
Document
Nos.
Ex.P3 19.08.2005 Resolution of Bard of trustees Photo Copy purported to have been convened Ex.P4 21.09.2005 First Plaintiffs letter requesting the first defendant to furnish bank accounts & financial details of the estate of M.Venugopal with postal acknowledgment (original) Ex.P5 10.10.2005 First plaintiffs letter requesting the Office first defendant to furnish bank Copy accounts & financial details of the estate of M.Venugopal with postal acknowledgment card original Ex.P6 29.10.2005 Letter to V.Lakshmikantham Original requesting for details of Movables with postal acknowledgment card (Original) Ex.P7 04.11.2005 Alleged appointment of second Original defendant as trustee Ex.P8 23.11.2005 First Plaintiffs letter to the first Office copy defendant acknowledging receipt of account books relating to the estate of M.Venugopal Reddy with original postal acknowledgment card.
Ex.P9 20.12.2005 Auditors report relating to Estate Original accounts submitted by V.Lakshmikantham Ex.P10 24.12.2005 First plaintiffs letter for breach of Office copy trust committed by V.Lakshmikantham for appointment of Chakravarthi & R.Parthasarathi as trustees with acknowledgment card Ex.P11 09.03.2006 First Plaintiffs letter calling for the Office financial records of the trust with Copy original postal acknowledgment card Ex.P12 22.03.2006 D.Varadarajuly letter to Office 14/17 http://www.judis.nic.in C.S.No.536 of 2009 Ex. Date Description of Documents Nature of Document Nos.
V.Lakshmikantham regarding Copy misappropriation of trust funds (Acknowledgment filled in the City Civil Court, Under O.S.No.2279 of 2007) Ex.P13 27.03.2006 First defendants letter challenging Photo Copy first plaintiffs appointment as life trustee. Claims right over bank balances Ex.P14 26.05.2006 First defendants claims individual Original right over trust funds Ex.P15 01.06.2006 First plaintiffs letter calling for Office records and accounts of the trust Copy with original postal acknowledgment card Ex.P16 11.08.2006 First plaintiffs advocate notice to Photo Copy V.Lakshmikantham with postal acknowledgment card Ex.P17 28.03.2007 Suit filed by the first plaintiff as Photo Copy executor of the estate of M.Venugopal Reddy suit filed by the first plaintiff against the first defendant to recover the trust funds misappropriated by her
7. Keeping in view the noble objective underlying 92 CPC, before decreeing the suit, it is made clear that plaintiffs shall ensure that the original purposes of said Trust as contained in Ex.P1, shall be honored in letter and spirit and in every sense of each covenant.
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8. A perusal of deposition of P.W.1 and 17 exhibits, leaves this Court with the considered view that the evidence is cogent and it is synchronized with the pleadings in the plaint. The exhibits buttress the pleadings and the prayer. In other words, plaintiffs have proved their case and are entitled to a decree as prayed for, albeit, without costs.
9. Suit is decreed as prayed for without costs, albeit, giving three months from the date of receipt of a copy of the judgment and decree by the plaintiffs as time for the defendants to handover possession with regard to limb 4 of the prayer.
10. Suit is decreed on above terms. There shall be no order as to costs.
11.12..2019 Speaking/Non-Speaking order Index : Yes/No Internet: Yes/No vsm 16/17 http://www.judis.nic.in C.S.No.536 of 2009 M.SUNDAR, J.
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