S. Nagendra vs C. Mahesh Kumar

B.S. Patil, J.—This Appeal is filed by defendant No. 3 in O.S. 4127/2015 challenging the order of temporary injunction granted restraining the defendants from obstructing the plaintiff in performing his day-to-day activities as a Life Trustee-cum-Financial Administrator of defendant No. 1 Trust and its institutions at Shivamogga and Bengaluru.

Appellant contends that Tadikela Subbaiah Trust was established on 29th August 2003 at Shivamogga and was registered as a public charitable trust with the object of establishing an Institute of Medical Sciences and other related educational institutions at Shivamogg. The Trust has established a 700 bed hospital, a dental college and a nursing college at Shivamogga. When the Trust was making efforts to obtain linguistic minority status to the institutions run by it, plaintiff came in contact with the Trust and requested the Trust and the Trustees to take him as a Trustee so that he can extend his services to the institution. The Trust passed a resolution dated 24.10.2013 to take the plaintiff as one of the Trustees.

It is urged that after the linguistic minority status was given to the institutions and the institutions were recognized with higher intake for admitting students, the plaintiff misused his position and power as a Trustee and misappropriated huge funds and began to extract money from the students. A complaint was lodged with Shivamogga police for offences under Section 409, 417, 419, 420, 465, 120B, 504 and 34 IPC, whereupon the plaintiff was arrested; because of the criminal acts and misappropriation of the funds, a letter dated 28.8.2014 was issued to the plaintiff by the Trust informing about the illegalities committed. He was informed on 15.9.2014 that he had failed to reply and his tenure as Trustee for one year would expire on 24.10.2014. He was also latter called upon to remit all the money collected from the students along with all related documents of 24 students of MBBS course vide notice dated 28.9.2014. He was alleged of fraudulently collecting cheques from the Trust promising to secure loan to the Trust. A notice was issued in this regard on 22.10.2014.

It transpires that a meeting of the Trust was scheduled to be held on 23.11.2014 for taking some decision in the matter. Plaintiff/Respondent herein filed a suit in O.S. 9026/2014 at Bengaluru to restrain the Trust from holding the meeting. An ex parte temporary injunction was obtained in that regard. By the time the order of temporary injunction was received by the defendant, the meeting had been held.

In the meeting it was resolved to issue show cause notice to the plaintiff regarding his intended removal from the Trust as a Trustee. Eventually by a resolution dated 1.12.2014, the Trust resolved to remove the plaintiff from the Trust. Supplementary Trust Deeds got registered on 24.10.2013 and 3.6.2014 were cancelled by registering another Supplementary Trust Deed thereby reconstituting the Trust by removing the plaintiff-respondent as a Trustee.

On 30.4.2015, the present suit O.S. 4127/2015 has been filed seeking the relief of declaration that the removal of the plaintiff was illegal and for a decree of permanent injunction.

The plaintiff contended that he has played vital role in securing permission to establish the college by increasing the annual intake from 125 to 150 during 2012. He urged that in the beginning when the Trust was in financial trouble, plaintiff rendered assistance in securing money through his contacts; due to his efforts the institution was secured linguistic minority status, despite the same defendants started to make hectic efforts to remove him from the Trust.

Plaintiff further alleged that despite temporary injunction granted, the Trust conducted the meeting and removed him as a Trustee. He has denied allegations of misappropriation leveled against him and has made counter allegations. He has urged that the plaintiff could not have been discharged from the Trust except by following Section 71 of the Indian Trust Act, 1882 and that court at Bengaluru and Shivamogga had jurisdiction, more so because the Trust office was located both at Bengaluru and Shivamogga.

The suit was moved on 30.4.2015. As the defendant had entered caveat, notice was ordered to the caveator and his counsel. On 2.5.2015, the matter was heard and an order of temporary injunction was granted. On the same day, I.A. filed by the plaintiff for police protection to enforce the order was granted.

The Trial Court has held that every suit filed against a public Trust need not be instituted with the leave of the court under Section 92 of CPC, and the case on hand was directed against the illegal acts of the defendants and the apprehended action of removal of the plaintiff as a Trustee and hence the suit fell outside Section 92. The court has further held that as the information office of the Trust at Rajajinagar, Bengaluru had not been closed as required in law, the court at Bengaluru had jurisdiction. It has also held that as the plaintiff had made financial investment, he would be put to irreparable injury if the illegal termination was not prevented.

In the above background, Sri M. Shivappa, learned senior counsel for the appellant and Sri Srivatsa, learned senior counsel for the respondent have addressed their arguments reiterating the respective stand taken by the parties in their pleadings. Having carefully considered their contentions, I find that there are very serious allegations of misappropriation of funds leveled against the plaintiff by the defendants Trust. The Trust has issued several notices to the plaintiff on 28.1.2014, 15.9.2014 and 28.9.2014 alleging commission of many illegalities but no explanation was offered by the plaintiff. After coming to know that a meeting of the Trust was scheduled to be held on 23.11.2014, plaintiff has filed a suit at Bengaluru and secured an exparte temporary injunction on 23.11.2014 not to hold the meeting. Before the order could be communicated, the meeting was held and it was decided to issue a show cause notice to the plaintiff. Subsequently as per another resolution of the Trust dated 1.12.2014, plaintiff has been removed from the Trust.

It is rightly contended that the learned Sr.Counsel Sri M. Shivappa that the interim order dated 22.11.2014 earlier granted in the previous suit did not prevent the Trust from holding further meetings or taking any decision to remove the plaintiff from the Trust. The interim order pertained only to the meeting scheduled on 23.11.2014. There is also nothing to show that the said order was communicated to the Trust before the meeting dated 23.11.2014 was concluded. It is recorded as per the extract of the minutes of the meeting of the Board of Trustees that in the two successive meetings called for discussion regarding matters that directly pertained to the credibility of the plaintiff as a Trustee, he had failed to be present. His action in informing his inability to attend the meeting by merely sending messages were regarded as acts of dodging to remit the fee collected by him to the Trust. His conduct in connection with the Trust money held by him without remitting it to the Trust was regarded as one that made him unbecoming of a Trustee of a public Trust which would result in his loosing the right to hold office of Trustee. Hence, it was resolved in the said meeting to authorize the chairman to issue a show cause notice to the plaintiff as to why he shall not be removed from the Trust.

A show cause notice dated 24.11.2014 was allegedly issued on 24.11.2014. As no reply was received on 1.12.2014, the Trust resolved to remove him as a Trustee with immediate effect. A Supplementary Deed of Trust was registered on 5.12.2014, cancelling the earlier supplementary deeds whereunder the plaintiff was inducted as a Trustee. All these facts have been stated in the objections filed to the LA. for grant of temporary injunction including the facts relating to the F.I.R. registered against the plaintiff, dismissal of the criminal petition filed by him under Section 482 of the Code of Criminal Procedure in Cr.P. No. 764/2014 by this court, closure of the information office at Rajajinagar, Bengaluru, vide resolution of the Trust dated 22.10.2014 and its publication in the news papers Vijayavani and Indian Express on 19.11.2014 and 21.11.2014 respectively. Supporting documents were also enclosed. Despite all this the court below has granted the temporary injunction virtually directing re-induction of the plaintiff as a Trustee and restraining the defendants from preventing the plaintiff to discharge his duties as a Trustee.

As is clear from the Trust Deed produced, the Trust is a public charitable Trust. It is running educational institutions including a Medical College. Any mismanagement of the Trust and its institutions will have serious repercussion on the fate of the students admitted to such institutions. When serious financial irregularities are alleged against the plaintiff and he has been removed from the position of Trustee, it will be neither legal nor justifiable to grant an interim injunction to continue him as a Trustee by restraining the Trust and the other Trustee from interfering with the discharge of duties by the plaintiff as a Trustee. What is worse is that on the same day the court has ordered police protection to the plaintiff to enforce the order of temporary injunction. This is also equally illegal.

It has to be noticed here that the registered office of the Trust is at Shivamogga. All the institutions run by the Trust are at Shivamogga. An information office that was opened at Rajajinagar, Bengaluru, was resolved to be closed and the said fact was notified to the public through paper notification. Thus the preliminary objection raised by the defendant regarding lack of jurisdiction in the court at Bengaluru, went to the root of the matter. There was, prima facie, merit in the said contention. Without examining this matter with reference to the legal provisions and the documents on record, the court below has simply over looked the same stating that the ''information office at Bengaluru had not been closed according to law.''

If the court lacks jurisdiction, then no temporary injunction can be granted because the said question forms part of the criterion to decide whether a prima facie case had been made out. Learned Sr. Counsel Sri Shivappa has rightly placed reliance on the judgment of this court in G. Channarayappa, C. Sandeep Babu, C. Chetan and C. Madhusudan Vs. Lakshmi Mallables Private Limited and The Commissioner Bangalore Development Authority, (2011) ILR (Kar) 3141 : (2011) 4 KarLJ 657 : (2011) 4 KCCR 2961 in this regard.

As regards the contention of Sri Srivatsa that no written statement has been filed within 30 days and therefore, the defense of the defendants cannot be taken note of, the suit has been filed just before the summer vacation. The court below has power to extend the time for filing written statement. Detailed objections have been filed by the plaintiff to the LA.. Hence, this contention is untenable.

In so far as the contention that the plaintiff can be removed as a Trustee only as per the provisions of Section 71 of the Indian Trust Act, as can be seen from Section 1 of the Indian Trust Act, 1882 the ''savings clause'' excludes public trusts and private charitable trusts from the purview of the Act. In any event, as the plaintiff has been already removed from the trust based on allegations of financial misdemeanors, balance of convenience does not lay in directing his continuance as a Trustee. Such a temporary injunction cannot be granted. In case the plaintiff succeeds, he could get his rights worked out. Thus looked from any angle, the court below was not justified in law to grant the order of temporary injunction.

For the above reasons, I hold that the order under challenge deserves to be set aside.

Hence, this appeal is allowed. Impugned order is set aside. I.A. filed by the plaintiff under Order 39 Rules 1 and 2 is dismissed. Observations made in this order are confined to the consideration of the LA. and shall not affect consideration of the case on merits.