Sri Ramesh Moolya v. Sri.P.Manjappa

Judgment of this Court in the case of Sri G.S.Sudharshan and Others v/s Grama Seva Sangha Trust Old Corporation and Others in MFA.No.8514/2023 decided on 02.09.2024."

7.11 It is further contended that an application seeking leave is required to be presented before the trial Court, which is required to consider the allegations made therein, the documents produced in support thereof and the plaint annexed to the application, if any. Upon being satisfied that a prima facie case is made out, the trial Court shall grant leave to institute the suit and thereafter, proceed in accordance with law. According to the learned Senior Counsel, the trial Court has failed to follow the settled procedure and has erroneously dismissed the

application for grant of leave by entering into issues which ought to be considered only after the institution of the suit. Therefore, it is contended that the impugned order dismissing the petition seeking grant of leave is illegal, perverse and liable to be set aside.

¶8Per contra, Sri B.V. Krishna, learned counsel for respondent Nos.1 to 4 and 7 vehemently contends that there is no illegality, perversity or arbitrariness in the impugned order passed by the trial Court and that the same does not call for interference by this Court. It is further contended that, in the present case, the petitioners have sought to invoke their personal and private rights and to vindicate their individual interests, rather than seeking to enforce any public cause for the benefit of the Trust. Therefore, it is contended that the question of granting leave under Section 92 of CPC for the purpose of vindication of private rights in respect of a public Trust does not arise.

8.1 It is further contended that the trial Court was justified in dismissing the petition filed by the petitioners seeking grant of leave to institute the suit under Section 92 of CPC. Secondly, the learned counsel submits that there is absolutely no financial mismanagement or improper administration of the activities of respondent No.7–Trust. It is further contended that reputed Auditors have been appointed and day-to-day affairs and financial transactions of respondent No.7–Trust are being properly managed and audited.

8.2 It is further contended that the petitioners have never participated in the activities of the Trust. It is also contended that some of the other trustees did not participate in the affairs of the Trust. It is only the acting trustees who have been conducting the activities of the Trust by following the due process of law, without any violation of the terms and covenants of Trust Deed or its

objects and in compliance with all financial requirements, including the applicable banking regulations.

8.3 It is further contended that the entire allegations made by the petitioners in the application seeking grant of leave as well as in the plaint are intended to vindicate their private rights and not for the welfare and benefit of the Trust. It is further contended that when a person approaches the Court under Section 92 of CPC for vindication of his private rights, such person cannot be granted leave to institute a suit against a public Trust. Therefore, it is contended that there is no illegality or perversity in the impugned order passed by the trial Court and consequently, seeks dismissal of the appeal.

¶9I have heard learned counsel for appellants and learned counsel for respondents. The points that arises for consideration are: "1. Whether the impugned order passed by the trial Court calls for interference by this Court?

¶2If so, what order?"

¶10Apparently, there is no dispute regarding the fact that initially a registered Trust Deed came into existence on 29.10.1990, under which the petitioners along with respondent Nos.1, 2, 5, and 6 were the original trustees of the Trust. In the meanwhile, an amendment was effected on 02.02.2017 before the Sub-Registrar, Rajajinagar (Madanayakanahalli), without the consent of the petitioners. Thereafter, by virtue of the instrument of Trust dated

10.06.1999, respondent Nos.1 and have constituted another Trust and have also changed the name of the Trust to 'Soundarya Educational Trust' by deleting the word "Charitable". Under the said amended Trust Deed, the petitioners have been removed as trustees. In their place, respondent Nos.3 and 4 have been inducted as trustees, who are none other than the children of respondent Nos.1 and 2.

¶11It is also alleged that respondent Nos.1 and 2 have committed misappropriation of funds, financial

mismanagement, fraud, criminal breach of trust, cheating and falsification of accounts. It is further alleged that respondent Nos.1 and 2, by filing false documents and creating a new Trust without the consent or approval of the petitioners and the other trustees who were removed, have perpetrated a fraud upon the Trust, its beneficiaries and the public at large.

¶12It is seen that, in the application filed seeking grant of leave, the petitioners have made several allegations against the respondents. A copy of the plaint has also been annexed to the application, setting out detailed averments in support of those allegations. At this stage, what is required to be examined is whether the allegations so made by the petitioners disclose acts of breach of trust, misappropriation, mismanagement or other requirements contemplated under Section 92 of CPC, as pleaded in the application seeking grant of leave and the plaint annexed thereto.

¶13At this stage, it would be relevant to extract the provisions of Section 92 of CPC, which reads as under: "Section 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 Advocate-General, or two or more persons having an interest in the trust and having obtained the 4[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 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 territories which, immediately before the 1st November, 1956, were comprised in Part B States]], no suit claiming any of the reliefs specified in sub-section

(1) shall be instituted in respect of any such trust as is therein referred to except in conformity with the provisions of that sub-section.

(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 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; or

(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."

¶14Upon a careful perusal of the provisions of Section 92 of CPC, it is evident that, in the event of an alleged breach of any express or constructive trust created for public purpose of a charitable or religious nature or where the direction of the Court is deemed necessary for the administration of such Trust, a suit may be instituted by two or more persons having an interest in the Trust. However, prior to amendment of 1977, such a suit could be instituted by the Advocate General or by two or more persons having interest in the Trust. After the amendment, two or more persons having interest in the Trust may institute the suit only with the leave of the Court.

¶15Even on a plain reading of Section 92 of CPC, it is evident that the provision contemplates a wide range of reliefs, wherein Clause 1(a) provides for the removal of any trustee; Clause 1(b) contemplates the appointment of a new trustee; Clause 1(c) provides for vesting any property in a trustee; Clause 1(cc) contemplates 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 thereto; Clause 1(d) provides for directing accounts and inquiries; Clause 1(g) contemplates the settlement of a scheme for the administration of the Trust; and Clause 1(h) empowers the Court to grant such further or other reliefs as the nature of the case may require.

¶16The trial Court is required to examine as to whether the allegations made in the petition satisfy the requirements contemplated under Section 92 of CPC and whether the proposed suit complies with the ingredients of

the said provision. In my considered opinion, the petitioners have made several allegations disclosing acts of breach of trust, mismanagement and misappropriation. It is also not in dispute that the original Trust was constituted under a registered Trust Deed, a fact which is not denied by the respondents. It is further not in dispute that the said Trust is a public charitable trust. It is also an admitted fact that, subsequently, another Trust Deed came to be executed, whereby the word "Charitable" was deleted from the name of the Trust and the Trust came to be renamed as 'Soundarya Educational Trust.'

¶17Be that as it may, the reliefs sought in the plaint include a declaration that the amendment to the Trust Deed is null and void; removal of respondent No.1 as the Managing Trustee of respondent No.7–Trust; removal of respondent No.2 as a Trustee of respondent No.7–Trust; a direction to respondent Nos.1 to 4 to render accounts of respondent No.7–Trust to the peittioners; grant of a

permanent injunction restraining respondents Nos.1 to 4 from interfering with the management and affairs of respondent No.7–Trust; appointment of petitioner No.1 as the Managing Trustee of respondent No.7–Trust; grant of a permanent injunction restraining defendants Nos.1 to 4 or any person claiming through or under them from acting as Chairman, Secretary, Managing Trustee, Treasurer or Trustee of respondent No.7–Trust; and such other or further reliefs as this Court deems fit in the facts and circumstances of the case.

¶18In my considered opinion, the requirements contemplated under Section 92 of CPC are prima facie borne out from the averments made in the plaint as well as the reliefs sought therein. The allegations regarding breach of Trust, mismanagement, misappropriation and other irregularities have been specifically pleaded. Whether those allegations are true or otherwise is a

matter of evidence and is yet to be established before the trial Court in the course of the suit.

¶19Under the circumstances, the trial Court is not required to examine as to whether the allegations made in the petition are true or have been proved. The scope of enquiry is confined to ascertaining whether the petition and the plaint disclose the requirements contemplated under Section 92 of CPC. Once the Court is satisfied that the statutory requirements are prima facie fulfilled, leave to institute the suit ought to be granted. In the present case, the trial Court has failed to adopt the said approach and has erroneously declined to grant leave, which is perverse.

¶20Having gone through the judgments relied upon by the learned Senior Counsel for petitioners, I am in agreement with the submissions made by the learned Senior Counsel that the impugned order passed by the trial Court requires interference, as the same is perverse,

illegal and unsustainable in law. Accordingly, the impugned order is liable to be set aside. Once the petitioners make out prima facie case satisfying the requirements of Section 92 of CPC, leave to institute the suit requires to be granted. At the stage of considering an application for grant of leave under Section 92 of CPC, the trial Court is not required to adjudicate upon the merits of the dispute or decide whether the petitioners are wrong and the respondents are right.

¶21The grant of leave merely signifies that the petitioners have made out a prima facie case to proceed with the suit. It does not amount to an adjudication on the merits of the dispute. Whether the plaintiffs ultimately succeed or fail in the suit is a matter to be decided on the basis of the pleadings, evidence and material placed on record during the course of the trial. Therefore, having considered the submissions advanced by the learned counsels for parties, perused the impugned order passed

by the trial Court and examined the judgments relied upon by the learned Senior Counsel, I am of the considered opinion that there is considerable substance in the submissions advanced by the learned Senior Counsel, warranting interference by this Court with the impugned order.

¶22Accordingly, I pass the following: ORDER i. This appeal is allowed; ii. The impugned order dated 05.08.2023 passed in Misc.No.233/2021 by the Principal City Civil and Sessions Judge, Bengaluru, is hereby set aside; iii. Leave is hereby granted to the appellants-petitioners to institute the suit; iv. The trial Court is hereby directed to register the suit and proceed further in accordance with law; v. Any observations made by this Court in this judgment are confined solely to the consideration

of the application seeking grant of leave under Section 92 of CPC; vi. It is needless mention that this Court has not expressed any opinion on the merits of the matter;

Sd/- (PRADEEP SINGH YERUR) JUDGE

CPN List No.: 1 Sl No.: 27

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR MISCELLANEOUS FIRST APPEAL NO. 6631 OF 2023 (CPC) BETWEEN: 1. SRI RAMESH MOOLYA S/O. GURUVAPPA AGED ABOUT 59 YEARS R/AT NO.1000, CHAITRA HESARAGHATTA MAIN ROAD HAVNNUR LAYOUT NAGASANDRA POST BANGALORE - 560 073. 2. SMT. DEVIKA W/O. RAMESH MOOLYA AGED ABOUT 55 YEARS R/AT NO.1000, CHAITRA HESSARAGHATTA MAIN ROAD HAVNNUR LAYOUT NAGASANDRA POST BANGALORE - 560 073. …APPELLANTS (BY SRI ASHOK HARANAHALLI, SENIOR COUNSEL ALONG WITH SRI ANOOP HARANAHALLI, ADVOCATE FOR SRI YESHU BABA R. MISHRA, ADVOCATE) AND: 1. SRI P. MANJAPPA S/O. LATE POOVAPPA AGED ABOUT 62 YEARS. 2. SMT. SUNITHA M. W/O. P. MANJAPPA AGED ABOUT 49 YEARS. by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA ((((((((((((HC-KAR, NC:(2026:KHC:36778( MFA(No.(6631(of(2023( ( ,,,,,,,,,, , CNR:(KAHC010504952023( ( ( 3., SRI,KEETHAN,KUMAR,M., S/O.,SRI,P.,MANJAPPA, AGED,ABOUT,28,YEARS., , 4., SRI,VARUN,KUMAR,M., S/O.,SRI,P.,MANJAPPA, AGED,ABOUT,25,YEARS., , RESPONDENT,NO.1,TO,4,ARE, RESIDING,AT,SOUNDARYA, SOUNDARYANAGAR,,SIDEDAHALLI, BAGALUKUNTE,,NAGASANDRA,POST, BANGALORE,-,560,073., , 5., NARAYANA,SALYAN, C/O.,P.,MANJAPPA, AGED,ABOUT,52,YEARS, NO.206,,'SOUNDARYA', BEHIND,DAGA,ESTATES, NAGASANDRA,POST, BAGALAGUNTA,VILLAGE, YESHWANTHAPURA, BANGALORE,-,560,073., , 6., VASUDEVA,BHATTA,M, S/O.,VITTALA,BHATTA, AGED,ABOUT,62,YEARS, RESIDING,AT,NO.283, TH TH7 ,MAIN,,15 ,CROSS, WILSON,GARDEN, BANGALORE,-,560,030., , 7., SOUNDARYA,EDUCATIONAL,AND,, CHARITABLE,TRUST, PRESENTLY,AMENDED,AS,, SOUNDARYA,EDUCATION,TRUST, A,REGISTERED,PUBLIC,, CHARITABLE,TRUST, HAVING,ITS,OFFICE,AT,NO.206, SOUNDARY,BEHIND,DAGA,ESTAE, NAGASANDRA POST BAGALUKUNTE VILLAGE YESHWANTHPUR HOBLI BANGALORE - 560 073. …RESPONDENTS (BY SRI B.V. KRISHNA, ADVOCATE AND SRI PRASHANTH CHANDRA S.N., ADVOCATE FOR R1 TO R4 AND R7; R5 AND R6 SERVED - UNREPRESENTED) THIS MFA IS FILED UNDER SECTION 104(1) OF CPC, PRAYING TO SET ASIDE THE ORDER DATED 05.08.2023 PASSED IN MISC.NO.233/2021 BY THE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, DISMISSING THE PETITION FILED UNDER SECTION 92 OF CPC. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR ORAL JUDGMENT This appeal is preferred by the appellants, who are the petitioners before the trial Court, challenging the order dated 05.08.2023 passed in Misc.No.233/2021 by the Principal City Civil and Sessions Judge, Bengaluru (for short, 'trial Court'). 2. Parties shall be referred to as petitioners and respondents as in miscellaneous petition, for the sake of brevity. 3. The petitioners instituted a petition under Section 92 of the Code of Civil Procedure, 1908 (for short, 'CPC') seeking leave of the trial Court to institute a suit on behalf of and for the benefit of all persons interested in respondent No.7–Trust. In the said petition, respondents Nos.1 to 6 were arrayed as the trustees of respondent No.7–Trust. 4. Brief facts of the case are as under: The petitioners along with respondent Nos.1, 2, 5 and 6 are the authors of respondent No.7–Trust, which was constituted under a registered Trust Deed dated 29.10.1990. It is stated that respondent No.2 is the wife of respondent No.1 and respondent Nos.3 and 4 are their children. According to the petitioners, respondent Nos.3 and 4 were subsequently inducted as trustees by respondent Nos.1 and 2 and thereafter, the petitioners were removed from the trusteeship of respondent No.7– Trust. Therefore, the petitioners instituted the present petition under Section 92 of CPC seeking leave of the Court to institute the annexed suit. Along with the miscellaneous petition, they have also produced the plaint proposed to be instituted, wherein they have sought for the following reliefs: "A. Declaring that the amendment to the Deed of trust dated 29-10-1990 registered in the office of Sub-Registrar, Rajajinag