Delhi District Court
Shiv Raj Gupta & Anr vs Mahendra Kumar Gupta & Ors on 23 March, 2018
Digitally signed
NEELOFER by NEELOFER
ABIDA ABIDA PERVEEN
PERVEEN Date: 2018.03.23
22:14:57 +0530
THE COURT OF MS. NEELOFER ABIDA PERVEEN,
ADDITIONAL DISTRICT JUDGE04, SOUTHEAST, SAKET
COURTS, NEW DELHI
Presiding Officer: Ms. Neelofer Abida Perveen, ADJ04
Suit No. 10082/16
In the matter of :
Shiv Raj Gupta & Anr. .....Plaintiff
Vs
Mahendra Kumar Gupta & Ors. ......Defendant
ORDER
Vide this order I shall decide the application u/s 92 of the CPC seeking leave to institute the suit for removal of the trustees, appointment of new trustees and for framing of a scheme for administration of a public Charitable Trust namely M/s Angira Hansraj Gupta Charitable Trust.
1. M/s Angira Hansraj Gupta Charitable Trust, arrayed as respondent no. 3 is a Public Charitable Trust constituted by late Smt. Angira Devi Gupta, w/o late Sh. Hansraj Gupta vide a registered trust deed dated 14.05.1990. The petitioner no: 1 Shri Shivraj Gupta is the son and Shri Jayant Gupta, the petitioner no: 2 is the grand son of the late Smt. Angira Devi Gupta, the settler / Author of the said trust. Shri Mahendra Kumar Gupta, respondent no. 1 is the Chairmancum Managing Trustee of the said Trust responsible for its daytoday administration. Shri Mahendra Kumar Gupta, is also the son of late Smt. Angira Devi Gupta, the settler/Author of the said Trust. Shri Mahendra Kumar Gupta, respondent no. 1 was appointed as a Trustee of the said Trust under the Trust Deed dated 14.5.1990 and was also named as its Managing Trustee after the demise of Angira Devi CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 1 of 26 Gupta, the settler/Author of the said Trust. Ms. Kirti Seth, respondent no. 2, is the daughter of Shri Mahendra Kumar Gupta and granddaughter of Late Smt. Angira Devi Gupta, settler/Author of the said Trust. Ms. Kirti Gupta was appointed as a cotrustee of the said Trust by the respondent no. 1 some time in the year 1995 immediately after the demise of Angira Devi Gupta. Smt Angira Devi Gupta, settler / Author of the said trust died on 23 rd March 1995. Consequent upon the demise of Smt Angira Devi Gupta, respondent no: 1 propounded a Will dated 11.09.1992 which provides that it is her desire that the said trust should continue to exist even after her demise and function for the benefit of the public at large as well as her family members, and substantial portion of her properties were bequeathed to the said trust.
2. The petitioners claiming to have real, substantial and existing interest in the said Trust, are, interalia, seeking removal of respondent no: 1 as the chairman managing trustee of the said trust as also for framing of a scheme for the administration of the trust on the ground that Shri Mahendra Kumar Gupta has converted the Public Charitable Trust, into a private and /or a personal property. That immediately upon the demise of Smt. Angira Devi Gupta, Shri Mahendra Kumar Gupta appointed his own daughter, Ms. Kirti Seth as a cotrustee of the said Trust thereby ensuring that all properties vested in the Trust can only be utilized as personal property of Shri Mahendra Kumar Gupta. That the objectives for which the said Trust was constituted have not only remain unfulfilled but the properties of CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 2 of 26 the Trust have not been put to any use by the trustees rather are being used and/or diverted for their own individual benefits. That apart from Ms. Kirti Seth, D/o Shri. Mahendra Kumar Gupta, no other member of the family of Smt. Angira Devi Gupta or descendents have been inducted as Trustee/s even though the number of the Trustees as provided in the Trust Deed is upto 7 (seven). That the rights of the Public in the said Trust created of their benefits have been violated by the Trustees. That the plaintiffs verily believe and categorically state that no substantial benefit has accrued to the public from the said Trust under the administration of the said Trust by defendant no.1 and
2. That the properties and income generated by the said Trust have systematically been diverted/or misappropriated by Shri Mahendra Kumar Gupta or are lying waste as Shri. Mahendra Kumar Gupta has not put the same to any use. That property bearing no. K912, Kavi Nagar, Ghaziabad, Uttar Pradesh, measuring 550 Sq. Yards which was vested in favour of the said Trust under the alleged will of Smt. Angira Devi Gupta has till date not been put to any public charitable purposes. That in so far as Raghuganj, situated at Chawri Bazar, Delhi is concerned, the plaintiffs verily believe the Trustees namely defendant no. 1 and 2 have put the said property on rent at price well below the market price and have taken huge amount in cash from the tenants whatsoever to put the same to use for the benefit of the public and/or secure any of the objective in which the Trust was established. That as far as share of Angira Devi Gupta in properties being "Raghu Niwas" and "Madho Bhawan" situated at Mussorie is concerned, Shri, Mahendra Kumar Gupta is in management of the properties under the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 3 of 26 name of a partnership firm, in which he with the plaintiff no. 1 and the said Trust being defendant no. 3 alongwith other children of Angira Devi Gupta are partners. That the said partnership firm is running into losses due to misappropriation of funds by the defendant no. 1. That the defendant nos. 1 and 2 have completely failed to administer the Trust properly and/or to fulfill the objectives of the said Trust. That the said Trust is being administered and managed as a personal fiefdom of Shri. Mahendra Kumar Gupta - defendant no. 1. That no information with regard to administration and/or activities of the said Trust is shared and/or made available to any of the members of the family of the settler/Author even though they were also to benefit from such administration and/or activities of the Trust. That accordingly, apart from public at large who were to benefit from the establishment of the said trust, the settler / Author of the said trust also desired that her family members should also is some way or the other benefit from the functioning of the said trust. However, even after more than twelve years, neither the petitioner nor any other member of the family of late Smt Angira Devi Gupta settler / Author of the said trust, has benefited from the said trust save and except the trustees themselves. That the rights of the public in the said trust created for their benefits have also been violated by the trustees. The petitioners state that no substantial benefit has accrued to the public from the said trust under the administration of the said trust by respondents no: 1 and 2. That the properties and income generated by the said trust have systematically been diverted and / or misappropriated by the respondent no. 1 or are lying waste as the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 4 of 26 respondent no: 1 has not put the same to any use. That the respondent no: 1 and 2 have completely failed to administer the trust property and / or to fulfill the objectives of the said trust. That the said trust is being administered and managed as a personal fiefdom of Shri Mahendra Kumar Gupta respondent no: 1. That no information with regard to the administration and / or activities of the said trust is shared and / or made available to any of the members of the family of the settler / Author even though they were also to benefit from such administration and / or activities of the said trust. That respondent no:
1 is unfit to occupy any position of trust, including, the position of a trustee of the said trust. That the respondents are using the properties of the said trust for their personal benefit and completely failing to fulfill any of the purposes for which the said trust was created, breaching the trust reposed in them by the settler / Author of the said trust. That the respondent nos: 1 and 2 have completely failed to discharge their duties as trustees and fulfill the objectives for which the said trust was established. That the said trust which was established to manage and maintain homes or institutions for the welfare and relief to the public for training suitable candidates in cottage and maintain dispensery and clinics to provide medical relief for the public and / or maintain and establish educational institutions and laboratories to provide and / or to grant scholarships have remained only on paper and the trustees, respondent no: 1 & 2 have taken no steps whatsoever in the direction as was trusted in them by the settler / Author of the said trust. That the objectives for which the said trust was constituted has only remained unfulfilled but the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 5 of 26 properties of the said trust have also not been put to any use by the trustees rather are being used / diverted for their individual benefit. That by the proposed suit, the petitioners are interalia seeking removal of respondents no: 1 and 2 from the Board of Trustees of the said trust. That the petitioners are also praying that the scheme of management of the said trust also be framed by this court so that the properties and assets of the said trust can be utilized for the purposes for which the said trust was established. That the proposed suit raises disconcerting issues of public importance.
3. The nonapplicant / respondents appeared and filed their reply contending inter alia that the present petition is an abuse of process of law and is filed with a view to settle personal scores. That the plaintiff no. 1 is the brother of defendant no. 1 and defendant no. 2 is the son of the plaintiff no. 1 and nephew of defendant no. 1. They have filed several cases against the defendant no. 1 which are pending adjudication. Having not been able to get any relief in those proceedings and with a view to harass the defendant no. 1 they have filed the present petition making false and frivolous allegations which have no legs to stand upon. That the plaintiffs are not suing to vindicate the right of public but are seeking a declaration of their individual and personal right. As such the present petition is liable to be rejected. That the plaintiffs have no right in the trust. As such there is no question of the present petition being maintainable at their instance. The malafide on the part of the plaintiffs is also clear from a bare perusal of the proposed plaint. From a bare perusal of the plaint CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 6 of 26 it is clear that the plaintiffs are seeking to remedy the alleged infringement of their individual right and trying to vindicate their alleged right in the trust and as such the present petition is liable to be rejected. That the proposed plaint makes it clear that the plaintiffs are suing in their individual capacity and not for the benefit of the public at large. In para 29 of the plaint it is alleged that defendant no. 1 is not competent or qualified to continue as a trustee of a public charitable trust. Some alleged incidences are mentioned. A bare perusal of the same shows that the plaintiffs are alleging that the defendant no. 1 has misappropriated the property of Hansraj Gupta and company and other firms to the exclusion of the plaintiffs. For the said purpose reference has been made to suits filed by the plaintiff which are pending adjudication before this Hon'ble Court. The same establishes beyond doubt that the the present petition has been filed to settle personals scores. As such the same is liable to be rejected. That the defendant no. 3 Trust has till date spent over Rs. 50 Lacs on charitable purposes in accordance with the Trust Deed. That the trust has always acted in terms of the Deed of Trust. Dismissal of the application is prayed for.
4. The parties have filed their written submissions.
5. Adverting to the deed of trust executed on 04.05.1990 between Smt. Angira Devi, as the Author and Sh. Mahender Gupta as the Trustee the following are found enumerated as the declared purpose of the Trust;
CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 7 of 26"1. To provide funds and other facilities for public at large for their help. The manner and receipt of such help shall be decided by the Trustees in their discretion.
2. To establish, construct, advance funds, manage and maintain homes or institutions for the welfare and relief of public for training suitable candidates in cottage industries, home industries and other small scale crafts.
3. To provide medical relief and other facilities for the public and to establish, manage and maintain dispensaries and clinics for this purpose alone or in association with any person or institution or through medical practioner existing hospitals or clinics.
4. To establish educational institutions and libraries and to provide financial assistance in the form of loans on interest or without interest and other facilities for such institutions and to other existing institutions
5. To grant scholarships, refundable or nonrefundable to suitable students and scholars for studies."
6. The Author of the trust settled and conveyed upon the trustee a sum of Rs. 50,000/ vide cheque drawn in the name of Angira Hansraj Gupta Charitable Trust upon the Trust with the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 8 of 26 direction that the Trust shall hold the amount and apply the income thereof in perpetuity for the promotion and propagation of the objects as delineated above. The Author of the Trust further bequeathed the following properties in the trust vide Will dated 11.09.1992 : "........1. All the cash money whatsoever in any account, with any Bank or company or bonds, certificates or in any other form, all that money, after my demise, shall be given to the "Angira Hansraj Gupta Charitable Trust."
2. Plot bearing number K912, Kavi Nagar, Ghaziabad, Uttar Pradesh, admeasuring approx. 550 Sq. Yards shall be given to the Angira Hansraj Gupta Charitable Trust.
3. Raghuganj which is situated at Chawri Bazaar, Delhi is a renowned hall; this property shall also be given to Angira Hansraj Gupta Charitable Trust.
4. House situated at Inderwali Gali, Kucha Pati Ram shall also be given to the Angira Hansraj Gupta Charitable Trust.
The details of my remaining assets are as under :
5. There are two houses in Mussorie (Mussorie Hill Station), "Raghu Niwas" and "Madho Bhawan". I have half share each in both of these houses. I give this share to "Angira Hansraj Gupta Charitable Trust."
CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 9 of 26Shares
1. My shares in Central Distilleries be given to "Angira Hansraj Gupta Charitable Trust."
2. My shares in Rampur Engineering Company be given to "Angira Hansraj Gupta Charitable Trust."
3. My shares in "Raj Enamel Works Limited" be given to "Angira Hansraj Gupta Charitable Trust."
4. Shares in "Tilak Company" also be given to "Angira Hansraj Gupta Charitable Trust."
There is one case pending in the Delhi High Court with respect to the Will of my late husband, Lala Hansraj Gupta. Upon the decision of the said case, whatever, movable or immovable properties fall in my share, shall also be given to "Angira Hansraj Gupta Charitable Trust."........."
7. In terms of Clause 9 of the Trust Deed the Author alone was entitled to appoint such other / future trustees as she may in her discretion decide during her lifetime with the proviso that the total number of trustees shall not exceed seven. After the death of the Author, Shri Mahender Gupta, the nominated trustee was authorized to appoint trustees of his discretion preferably from out of the descendents of the Author, however, had the liberty to appoint others also who are not descendents of the Author with the similar addendum that the maximum number of the Trustees shall not exceed CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 10 of 26 seven. The Author was appointed as the Chairperson of the Board of Trustees during her lifetime. Thereafter, it was left to the discretion of Shri Mahendra Gupta to appoint more trustees with the stipulation that Shri Mahendra Gupta shall be the Chairman in case more trustees are appointed, the chairman / chairperson came to be vested with a casting vote. It is in the exercise of this discretion and power vested with the trustee that Shri Mahendra Gupta, respondent no. 1 has appointed Ms. Kirti Seth, respondent no. 2 as the cotrustee, in respondent no. 3 trust.
8. Before proceeding further, I shall reproduce the relevant statue, that is Section 92 of the CPC under which this Court is to exercise its jurisdiction in furtherance of the discussion in hand. Section 92 CPC provides as follows : "92. Public Charities - (1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or where the direction of the Court is deemed necessary for the administration of any such trust, the AdvocateGeneral, or two or more persons having an interest in the trust and having obtained the [leave of the Court] may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other Court empowered in that behalf CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 11 of 26 by the State Government within the local limits of whose jurisdiction the whole or any part of the subject matter of the trust is situate to obtain a decree
(a) removing any trustee.
(b) appointing a new trustee;
(c) vesting any property in a trustee;
(cc) directing a trustee who has been removed or a person who has ceased to be a trustee, to deliver possession of any trust property in his possession to the person entitled to the possession of such property;
(d) directing accounts and inquiries;
(e) declaring what proportion of the trust property or of the interest therein shall be allocated to any particular object of the trust;
(f) authorizing the whole or any part of the trust property to be let, sold, mortgaged or exchanged;
(g) settling a scheme; or
(h) granting such further or other relief as the nature of the case may require.
(2) Save as provided by the Religious Endowments Act, 1863 (20 of 1863), [or by any corresponding law in force in [the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 12 of 26 territories which, immediately before the 1 st November, 1956, were comprised in Part B states]], no suit claiming any of the reliefs specified in subsection (1) shall be instituted in respect of any such trust as is therein referred to except in conformity with the provisions of that subsection.
(3) The Court may alter the original purposes of an express or constructive trust created for public purposes of a charitable or religious nature and allow the property or income of such trust or any portion thereof to be applied cypres in one or more of the following circumstances, namely
(a) where the original purposes of the trust, in whole or in part
(i) have been, as far as may be, fulfilled; or
(ii) cannot be carried out at all, or cannot be carried out according to the directions given in the instrument creating the trust or, where there is no such instrument, according to the spirit of the trust; or
(b) where the original purposes of the trust provide a use for a part only of the property available by virtue of the trust;
CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 13 of 26or
(c) where the property available by virtue of the trust and other property applicable for similar purposes can be more effectively used in conjunction with and to that end can suitably be made applicable to any other purpose, regard being had to the spirit of the trust and its applicability to common purposes; or
(d) where the original purposes, in whole or in part, were laid down by reference to an area which then was, but has since ceased to be, a unit for such purposes; or
(e) where the original purposes, in whole or in part, have, since they were laid down
(i) been adequately provided for by other means, or
(ii) ceased, as being useless or harmful to the community, or
(iii) ceased to be, in law, charitable, or
(iv) ceased in any other way to provide a suitable and effective method of using the property available by virtue of the trust, regard being had to the spirit of the trust.] CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 14 of 26
9. The petitioner alleges that the trustee is not a fit person to administer the Trust as Sh. Mohindra Kumar Gupta while holding possession of trust in other institutions and entities has committed breach of his fiduciary duties. It is alleged that in Messrs Hansraj Gupta & Company Pvt. Ltd., Shri Mahendra Kumar Gupta alongwith the plaintiffs apart from other family of Late Hansraj Gupta are shareholders. That despite being a Director and administrative officer of the said company and as such having fiduciary duties towards the said company and its shareholder, Shri Mahendra Kumar Gupta systematically diverted and/or misappropriated the assets of the said company to his personal coffers. The petitioners quotes some instances as in that the main objects of Messrs Hansraj Gupta & Company Pvt. Ltd. are manufacturing and hire out of sugar cane crushers (Kohlus) and hiring of boiling pans (Khadai). That in direct conflict with his fiduciary duty to promote the business and income of the said company, some time in the year 19891990, Shri Mahendra Gupta got incorporated another company, namely, Messrs K.G. Credit and Leasing Pvt. Ltd., whose entire beneficial ownership and control is with Shri Mahendra Kumar Gupta and his immediate family members. The said K.G. Credits carried on exactly the same business as was being carried out by the said company, namely, M/s Hansraj Gupta & Company Pvt. Ltd. entire resources as well as infrastructure of M/s Hansraj Gupta & Company Pvt. Ltd. was utilized/or diverted by Shri Mahendra Kumar Gupta for the purposes of running the said K.G. Credits. Shri Mahendra Gupta by incorporating the said K.G. Credits and by using the resources of M/s Hansraj Gupta & Company CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 15 of 26 Pvt. Ltd. and by diverting the business which rightfully belonged to the said company to his personal coffers i.e. the said KG Credits, has not only committed breach of trust and duty but also perpetrated fraud on the other share holders of the said company, who are the shareholders/descendents of Late Shri Hansraj Gupta and Smt. Angira Devi Gupta. Plaintiffs have already instituted a suit against Shri Mahendra Kumar Gupta for rendition of accounts and damages in this regard as CS(OS) No. 543/2007 which is pending adjudication. That Shri Mahendra Gupta, while being the Director and Administrative officer of the said company, without any authority and/or resolution passed in any Board Meeting and/or any General Meeting of the said company surrendered and/or sold as many as 72 godowns/branches of the said company, out of a total of 110 godown/branches which were in ownership and/or possession of the said company and were being put to use for the business of the said company, for extraneous benefits and reasons. The said unauthorized act on the part of Shri Mahendra Kumar Gupta has caused substantial loss to the said company and its shareholders. Plaintiffs have already instituted a suit against Shri Mahendra Kumar Gupta for rendition of accounts and damages in this regard, as CS(OS) No. 544/2007 which is pending adjudication. That Shri Mahendra Kumar Gupta had been allotted/or provided accommodation being premises No. 16B, Jungpura, Mathura Road, New Delhi110014 by the said company, namely, M/s Hansraj Gupta & Company Pvt. Ltd. by virtue of his being a Director and Administrative Officer of the said company. That Shri Mahendra Kumar Gupta was permitted to occupy the said premises for his CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 16 of 26 residence, of which the said company was a tenant. That Shri Mahendra Kumar Gupta ceased to be a Director and Administrative Officer of the said company on 18.11.2002. That despite of having ceased to be a Director and Administrative Officer of the said company and as such having no longer any right to occupy the said premises, Shri Mahendra Gupta continued to be in occupation of the said premises. That in addition to the illegal occupation of the said premises, Shri Mahendra Gupta also started disputing the rights of the said company in the said premises. That the plaintiffs came to know that Shri Mahendra Kumar Gupta had fraudulently and without any authority whatsoever started making payment of the rent for the said premises in his own name and thus started claiming himself to be a tenant in his own personal capacity. Plaintiffs have already instituted a suit against Shri Mahendra Kumar Gupta seeking adequate relief in this regard as CS (OS) No. 545/2007, which is pending adjudication. That Shri Mahendra Gupta has thereafter surrendered and/or handed over possession of the said premises and has personally received over Rs. 2 Crores in cash. None of the several allegations that the petitioner sets up against the trustee pertain to his capacity as the trustee of M/s Angira Hansraj Gupta Charitable Trust. The allegations do not point to a single instance of breach of trust by Sh. Mahindra Gupta as trustee of M/s Angira Hansraj Gupta Charitable Trust. The several allegations of fact as raised are irrelevant when it is to be considered as to whether Sh. Mahindra Gupta trustee has acted in breach of the terms of the settlement of the trust namely M/s Angira Hansraj Gupta Charitable Trust, and therefore not fit to continue as CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 17 of 26 trustee of M/s Angira Hansraj Gupta Charitable Trust, the conduct of Sh. Mahindra Kumar Gupta as Director of M/s Hansraj Gupta & Company Pvt. Ltd. and as a partner of M/s H.G. Gupta & Sons, a partnership firm have no bearing on his capacity and functioning as a trustee of M/s Angira Hansraj Gupta Charitable Trust. For the acts and conducts in his capacity as Director and partner in independent entities not connected with the trust, the trustee cannot be rendered liable to be removed as a trustee of the said trust.
10. The petitioner further alleges that the trustees are administering the trust as their personal fiefdom and are not inducting the plaintiff as a cotrustee or any other member of the family of Sh. Hansraj Gupta as a cotrustee. The registered trust deed vests absolute powers with Sh. Mahindra Gupta to induct trustees putting a limit to the number of cotrustees. Further, it lies in the discretion of Sh. Mahindra Gupta to induct a member of the family of Sh. Hansraj Gupta or a stranger, not related to the family as a cotrustee. The trustee cannot be stated to be acting in contravention and disregard of any of the terms of the registered trust deed by refusing to induct the plaintiffs as cotrustees. The plaintiffs have no vested right to be inducted as cotrustees merely by virtue of being the progenies of the Author of the Trust.
11. The petitioner alleges that the funds and properties of the trust are being diverted for personal use by the trustees. However, the plaintiff has not given any details or particulars of the diversion of the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 18 of 26 funds and properties of the trusts. A mere bald assertion does not satisfy the mandate of Section 92 CPC. Without even a singular instance of diversion of the trust fund and property for personal use, no plausible ground is made our for the Court to grant the leave as prayed for by the petitioner.
12. The petitioner further alleges that the trust funds and properties are lying waste as the trustees have not put the same to any use. The petitioners have volunteered to share certain instances of waste of trust properties alleging that the property bearing no. K912, Kavi Nagar, Ghaziabad, Uttar Pradesh, measuring 550 Sq. Yards which was vested in favour of the said Trust under the alleged Will of Smt. Angira Devi Gupta has till date not been put to any Public Charitable purposes. So far as the property described as Raghuganj, situated at Chawri Bazaar, Delhi, is concerned, the Trustees have put the said property on rent at a price well below the market price and have taken huge amount in cash from the tenants. That the share of Angira Devi Gupta in properties being "Raghu Niwas" and "Madho Bhawan" situated at Mussorie is being managed by Shri Mahendra Kumar Gupta under the name of a partnership firm, in which he with the plaintiff no. 1 and the said Trust alongwith other children of Angira Devi Gupta are partners, and the said partnership firm is running into losses due to misappropriation of funds by the defendant no. 1. The petitioners refer to another property bearing no. K912, Kavi Nagar, Ghaziabad, Uttar Pradesh. The respondent no. 2 has filed an affidavit to the effect that property bearing no. KG912, Kavi CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 19 of 26 Nagar, Ghaziabad, U.P. admeasuring 550 Sq. Yards has only one room set, and that the said property was constructed by Late Smt. Angira Devi Gupta in the year 1989 and that since there was a typographical error in the Will of Late Smt. Angira Devi Gupta inasmuch as the number was wrongly typed as K912, Kavi Nagar, Ghaziabad instead of KG2, Kavi Nagar, Ghaziabad, the authority had not been transferring the property in the name of the Trust and as such the Trust is not able to raise construction on the said land and utilize the same. In fact Trust filed a suit bearing Suit No. 491 of 1997, which was dismissed on 03.12.2002. Aggrieved by the said order Trust filed Second Appeal in the Allahabad High Court, which was also dismissed. As such the Trust is not able to utilize the said property. In respect of property at Raghuganj, Chawri Bazar, Delhi, it is solemnly affirmed that the said property had been let out to a number of tenants. Earlier in 1996 the total rent received was Rs. 52,000/ which has increased to Rs. 4,40,000/ per annum. The property is let out to a number of tenants and the rent received from the property is utilized towards charitable activities of the Trust. Properties i.e. Raghu Niwas and Madho Bhawan at Mussorie, are owned jointly by the Trust which has 50 % share and the balance 50% share is held by petitioner, respondent no. 1 and their two other brothers collectively. The properties are old in which a hotel is run with marginal profit and loss. The petitioners, however, do not clarify as to what is the status of property bearing no. K912, Kavi Nagar, Ghaziabad, Uttar Pradesh and as to whether the same is under the occupation of any person at the instance of the trustees or is lying CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 20 of 26 vacant. Again a bald assertion does not satisfy the conscience of the Court that the trust fund and properties are lying waste and are not being utilized / applied towards the purposes of the trust. It is merely on a belief that an allegation is raised that the rent in respect of property situated at Chawri Bazar, New Delhi is below the Market Price. What would be the market price as per the petitioners and what is the rent being received is not even indicated in the petition. It is only a half share in the two properties situated at Mussorie that constitutes trust property and the other half share in the said properties is vested with the legal heirs of Smt. Angira Devi and as per the own case of the plaintiff is being managed under the name of a partnership firm. Under such circumstances, the trustees cannot be accused of having wasted the half share of the said two properties that vests in the trust. Also merely for the reason that the partnership firm managing the properties is running into losses is no conceivable ground for removal of the trustee and framing of a scheme for administration of the trust.
The petitioners contend that neither the plaintiffs nor any other members of the family of Smt. Angira Devi have benefited from the trust except for the trustees themselves. The petitioners, however, do not demonstrate as to in what manner in terms of the trust deed the petitioners or the family members of Smt. Angira Devi Gupta besides the trustees were to benefit from the charitable purposes of the Trust. The petitioners further contend that the objectives for which the said trust was constituted have remained unfulfilled and that no substantial benefit has accrued to the public from the said trust under the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 21 of 26 administration of the respondent no. 1 and 2 trustees.
13. The petitioners contend that the respondents have completely failed to administer the trust property and to fulfill the objectives of the Trust as neither substantial benefit has accrued to the public or to any of the family members of Smt. Angira Devi besides the respondents. The petitioner gives no details of the charitable work if any, howsoever insignificant the same may be as is being carried out by the Trust as on the date of the filing of the petitions. The respondent trust and the trustees arrayed as respondent no. 1 and 2 have filed their separate replies, however, the respondents also do not volunteer any particulars of the charitable activities and objectives being pursued and fulfilled by the Trust. The respondents only assert that till date a sum of Rs. 50 Lacs has been spent on charitable activities.
14. The respondents, however, as recorded in order dated 14.02.2014, agreed to place on record a statement of account showing payments received, the manner in which the amounts have been used and by whom they have been used. Details of receipts and payments and instruments and FDR's are filed by the defendants alongwith affidavit of respondent no. 1 dated 22.07.2014. What particularly intrigues me about the receipts and payments summary for the period 01.04.2013 till 31.03.2014, filed as annexure A to the affidavit is that whereas the receipts aggregate in the amount of Rs. 39,705,686.19/, the payments are in the sum total of Rs. 4,015,615/ approximately CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 22 of 26 and there is excess of receipts accumulated in the amount of Rs. 35,690,070/ and out of the total payments, donations account for a considerably paltry Rs. 727,000/ over a period of one year. The defendants have also filed the breakup of the amount paid as donations in the form of schedule 2 and I shall reproduce the contents thereof hereunder : Donation Paid (Exempt u/s 80 G)
1. Dayawanti Punj Model School (for sponsoring of Ten Children for one 77000 year school fees) A school in village Sitamarhi, Bhadohi UP
2. Cankids Kidscan 500000 (A society for enabling children and their family faced with cancer) Vasant Vihar New Delhi
3. Shanti Naryan Memorial Trust 25000 (Charitable Trust for the benefit of the Slum Children) Pratap Bhawan BSZ Marg New Delhi
4. Amrit Centre for Special Needs 100000 (a Society for special children for two Extra Class Rooms) Coimbatore.
CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 23 of 265. Govind Shyam Trust - Varanasi 25000 (A Charitable trust for medical relief to the poor people) Varanasi - UP.
Out of gross receipts, the funds appropriated on account of charitable activities or for public purposes is extremely skewed and disproportionate resulting in a whopping over Rs. 35, 690, 070/ in excess over the entire outgoings. This amount in excess is not being utilized for the charitable public purpose that are the objectives of the Trust. No explanation is forthcoming justifying the lying idle of such considerable funds at the disposal of the Trust. Further, the only charitable activity that the Trust is currently engaged in is by doling out donations.
15. The trust is established with the mandate of providing funds and other facilities for public at large, to establish homes or institutions for the welfare of the public, for establishing, managing dispensaries and clinics to provide medical relief to the public, to establish educational institutions, libraries, grant scholarships besides other reliefs. The entire funds and properties at the disposal of the trust need necessarily to be applied towards the fulfillment of the Charitable purposes for which the Trust is established after meeting for the expenses, administrative and otherwise. What remains unexplained is that on what account are an amount of Rs. 35,690,070/ not being applied towards the attaining of any of the CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 24 of 26 Charitable purposes of the trust and are lying idle in the coffers of the Trust. Prima facie it comes to be reflected from the statement filed by the defendant trust that the funds and properties of the trust are not been applied to its full potential to the attainment of the charitable purposes of the trust and the trustees are in breach of trust, to this extent.
16. A petition u/s 92 is maintainable only at the behest of two or more persons having an interest in the trust. Both the petitioners are the legal heirs of the author of the trust. In the will propounded by the trustees whereunder the Author of the Trust has bequeathed considerable movable and immovable properties to vest in the trust, the author of the trust desires that the trust would work for the welfare of the public and for the benefit of her family. The petitioners allege that neither the family members of the author of the trust nor the public at large have benefit in any substantial manner by the activities carried on by the trust. From the above discussion I have come to a conclusion prima facie that substantial portion of the fund and properties of the trust are not being applied towards the fulfillment of the objectives and purpose of the Trust, the plaintiffs as members of the family of the Author and of the public at large, to be benefited from the objectives of the trust, are in these facts and circumstances persons interested in the trust. Merely for the reason that the petitioner no. 1 daughter was refused scholarship / financial assistance for studies abroad is in itself in light of the facts and circumstances as discussed above not ground sufficient enough to hold that the suit is CS No.10082/16 Shiv Raj Gupta & Anr. Vs Mahendra Kumar Gupta & Ors. Page 25 of 26 not a representative suit on behalf of the public or is not filed bonafide but is merely for vindication of personal interest.
17. The defendants have relied upon the judgment rendered by Hon'ble the High Court of Delhi in Vinay Rai vs. Ram Krishan & Sons, pronounced on 20.11.2009. The judicial pronouncement relied upon is not applicable to the facts and circumstances as have emerged through the course of the discussion above as the breach of trust alleged was a misapplication of the assets of the trust i.e. the Ram Krishan & Sons Charitable in R.K.K.R Charitable Trust, whereas in the case at hand it emerges that there is nonapplication of substantial portion of the trust fund towards attainment of any of the charitable purposes of the trust for no obvious reason apparent from the record. It is on this ground that the petition seeking leave for institution of the suit in respect of the management and administration of M/s Angira Hansraj Gupta Charitable Trust is allowed and leave as prayed for is granted in favour of the applicant / plaintiff. Issue summons to the defendant by all the three modes i.e. ordinary process, registered ADspeed post and approved courier returnable on 24.05.2018, subject to filing of PF, RC/AD deposit of necessary charges within seven working days. Put up on 24.05.2018 for service of defendant.
Pronounced in the open Court (Neelofer Abida Perveen) on this 23rd of March, 2018. Addl. District Judge04, SouthEast, Saket Court, New Delhi.
The order contains 26 pages all checked and signed by me.
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