(Prayer: Civil Miscellaneous Appeal filed under Order XLIII Rule 1(r) of the Code of Civil Procdure, 1908 against the fair and decretal order dated 23.11.2015 passed in I.A.No.126 and 128 of 2014 in O.S.No.67 of 2014 on the file of the Principal District Judge, Vellore, Vellore District.)
1. These two memorandum of Civil Miscellaneous Appeals have been directed against the common order dated 23.11.2015 and made in I.A.Nos.126 and 128 of 2014 in the suit in O.S.No.67 of 2014 on the file of the learned Principal District Judge, Vellore.
2. The petitioner in both the applications is the appellant in these two appeals. The respondents therein are the respondents herein.
3. It is manifested from the records that the appellant has filed a suit in O.S.No.67 of 2014 on the file of the learned Principal District Judge, Vellore as against the respondents herein seeking the following reliefs:
a) To declare the order dated 16.07.2014, which was passed by the second defendant on the basis of the alleged meeting of respondents/defendants 2 to 8 of the first defendant Trust removing the appellant/plaintiff from the trusteeship of Vellore Institute of Technology Trust, as null and void, arbitrary, contrary to law and violation of principles and natural justice;
b) Permanent injunction restraining the respondents 2 to 8, their men, agents and subordinates or any one claiming through them from preventing the plaintiff from discharging his functions as Trustee of the first defendant; and
c) directing the respondents / defendants 2 to 8 jointly and severally to pay a compensation of Rs.10 lakhs as damages for the pain, mental agony and harassment caused to the appellant/plaintiff.
4. Along with the said suit, the appellant being the plaintiff, has filed four interlocutory applications. They are
i)I.A.No.126 of 2014 for injunction restraining the respondents/defendants from preventing him from discharging his duties as trustee of the first respondent/defendant's trust;
ii)I.A.No.127 of 2014 to stay the operation of the order of termination of the appellant/plaintiff as trustee of the first respondent/defendant trust;
iii)I.A.No.128 of 2014 for appointment of a receiver; and
iv)I.A.No.129 of 2014 for a direction to the respondents / defendants to produce the minute books of the Board of Trustees from the year 1984.
5. Those applications were strenuously contested by the respondents/defendants. The learned Principal District Judge, Vellore has consolidated the applications in I.A.No.126 of 2014 and I.A.No.128 of 2014 together and after hearing both sides, those two applications were dismissed. Insofar as the remaining two applications viz., I.A.No.127 of 2014 and I.A.No.129 of 2014 are concerned, I.A.No.127 of 2014 was dismissed and the other application in I.A.No.129 of 2014 was allowed in part directing the production of the minute books from the year 2008 and insofar as the prayer regarding the production of minute books prior to 2008 is concerned, the application was rejected. Impugning the common order passed in the interlocutory application in I.A.No.126 and 128 of 2014, the present Civil Miscellaneous Appeals, viz., C.M.A.Nos.42 and 43 of 2016 have been filed before this Court. Insofar as other two applications are concerned, two revision petitions, viz., C.R.P (PD) No.369 of 2016 and C.R.P.No.393 of 2016 were filed.
6. It is significant to note here that the present Civil Miscellaneous Appeals viz., C.M.A.Nos.42 and 43 of 2016 ought to have been clubbed along with the civil revision petitions in C.R.P (PD) No.369 of 2016 and C.R.P.No.393 of 2016 and disposed of in common. Unfortunately, these two appeals were omitted to be consolidated along with the Civil Revision Petitions in C.R.P (PD) No.369 of 2016 and C.R.P.No.393 of 2016 and those Civil Revision Petitions were already disposed of by this Court by a common order dated 11.05.2016.
7. While dismissing the Interlocutory Applications in I.A.No.126 and 128 of 2014, the learned District Judge, Vellore has observed as under:
The petitioner himself admitted that he had filed a suit before the Hon'ble High Court, Madras along with one person in C.S.No.518 of 2013 u/s.92 of C.P.C.......
8. In the above scheme petition, the petitioner has sought the following prayer:
a) to frame a scheme for the proper conduct of the affairs of the first defendant Trust;
b) to remove the defendants 3 to 11 from the post of trusteeship and appoint an administrator in the interregnum, pending framing of a scheme by this Hon'ble Court;
c) to direct the defendants to render true and proper accounts in respect of the 1st Defendant Trust including that of the 2nd Defendant from the year 2001 till date of taking of accounts; and
d) to reinstate the first plaintiff to the post of Vice President of the second defendant and allow the first plaintiff to discharge his duties as trustee of the first defendant trust.
9. At Paragraph No.14, the learned District Judge has observed that the prayer found in I.A.No.126 of 2014 and I.A.No.128 of 2014 in O.S.No.67 of 2014 pending before this Court is nothing but the prayer found in C.S.No.518 of 2013 in O.A.No.569 of 2013 and also A.No.3446 of 2013 in C.S.No.518 of 2013 on the file of the High Court, Madras.
10. In paragraph 15 of the order, the learned District Judge has observed as follows:
"15.As on today no order was passed by the Hon'ble High Court in the above application in O.A.No.569 of 2013 and A.No.3446 of 2013 and both petitions are pending for consideration to pass order before the Hon'ble High Court. Under such circumstances, being the Subordinate Court of the Hon'ble High Court, Madras my hands are tied to pass any order in I.A.No.126 of 2014 and I.A.No.128 of 2014 in O.S.No.67 of 2014 since the same subject matter is pending under consideration before the Hon'ble High Court. Hence, I am not inclined to entertain both these petitions"
11. With the above said observation, both the interlocutory applications in I.A.No.126 and 128 of 2014 were dismissed. From the operative portion of the impugned order it is thus made clear that the applications in I.A.Nos.126 and 128 of 2014 were not disposed of on merits. It is pertinent to note here that the application in I.A.No.126 of 2014 seems to have been filed under Order XXXIX Rule 1 and 2 of the Code of the Civil Procedure. The other application in I.A.No.128 of 2014 seems to have been filed under Order XL Rule 1 r/w.151 of the Code of the Civil Procedure seeking appointment of a receiver for the first respondent Trust pending the above suit.
12. Insofar as seeking the relief of interim injunction is concerned, it is elementary that grant of an interlocutory injunction during the pendency of the legal proceeding is a matter requiring the exercising the discretion of the Court. While exercise of discretion the Court normally applies the following tests;
"i) Whether the plaintiff has a prima facie case
ii) Whether the balance of convenience is in favour of the plaintiff; and
iii) Whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is not disallowed.
13. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and remain uncertain till they are established on evidence at the trial. The relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before which that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which could not be adequately compensated. The Court must weigh one need against another and determine whether the balance of convenience lies. [M/S Gujarat Pottling Co.Ltd. and Ors vs The Coca Cola Co. and Ors [ 1995 SCC (5) 545 at 574]"
14. The power to grant an injunction is tremendous and it should not be exercised hastily or without solid reasons. Insofar as the application in I.A.No.126 of 2014 as well as the application in I.A.No.128 of 2014 are concerned, the learned District Judge without assigning any valid reasons has proceeded to dismiss both the applications hastily on the ground that his hands are tied as the suit in C.S.No.518 of 2013 and other applications in O.A.No.569 of 2013 and A.No.3446 of 2013 are pending. The mere pendency of the suit in C.S.No.518 of 2013 and other connected application does not mean that the trial Court, where the connected matters are pending is prevented from proceeding further. The observation of the learned Principal District Judge would tantamount to refusal to exercise the jurisdiction vested on him.
15. The facts which are absolutely necessary for the disposal of both these appeals are as under:
i) The appellant/plaintiff is a Trustee of the first respondent/first defendant Trust. He is the son of the second respondent/second defendant. On the invitation of the second respondent/second defendant, he had joined the "North Arcot Educational and Charitable Trust" as its Secretary in the year 1991. At that time, the said Trust was running an Engineering college called Vellore Engineering College. Subsequently, the appellant/plaintiff was made as Pro-Chancellor of VIT University in the year 2004, a deemed university being run by the first respondent/first defendant Trust. His aim was that VIT University should be called as "The Stanford of the East".
ii) When the 5th respondent/5th defendant, who is one of the brothers of the appellant/plaintiff wanted to start an off-campus centre under the first respondent/first defendant Trust at Chennai, while welcoming the decision, he had cautioned the other trustees that the campus should not start functioning without appropriate approvals and notifications. The second and fifth respondents/defendants had assured him that they would not start the off- campus without proper approvals. However, they had infringed their assurance and a campus was commenced without approval. After coming to know this fact, the appellant/plaintiff had approached the second respondent/second defendant and wanted him to take immediate action to abate the travesty of justice. The second respondent/second defendant had also assured him that he would personally take steps to secure approval with retrospective effect and see to it that the ideals of the appellant/plaintiff and the reputation of the first respondent/defendant are not damaged in any manner.
iii) While the appellant was striving for academic excellence, to his utter shock and surprise, the funds belonging to the Trust had been siphoned-off by the third defendant. The third respondent/thirdd efendant, possibly under the guidance and control of the second respondent/second defendant, had indulged in these acts. Apart from that, the appellant/plaintiff came to know that on the instruction of the second respondent/second defendant, the third respondent/third defendant had recklessly transferred an amount of Rs.22 Crores to a Trust viz.,"Gian Sagar Educational and Charitable Trust" at HIG, 1441, Phase IX, Mohali, State of Punjab. This amount seemed to have been transferred when the first respondent/first defendant Trust was liable to pay several hundreds of crores of rupees to the public financial institutions.
iv. The fifth respondent/fifth defendant had also made encroachment upon the Government poromboke land and constructed buildings without approval. The appellant/plaintiff wanted the construction to be stopped till the Government legalizes the occupation and the local planning authority approves the buildings. It is stated that the encroached area would measure approximately 14.53 acres.
v) Since the appellant/plaintiff had questioned the illegal and unauthorized activities of the respondents/defendants, they became agitated and relieved him of the post by a circular dated 10.06.2013. That on 12.06.2013, the respondents 2 to 5/defendants 2 to 5 had sealed the office of the appellant with iron plates. On account of this reason, the appellant/plaintiff had filed a suit along with the then Assistant Estate Officer on the file of the High Court under Section 92 of the Code of Civil Procedure, 1908 and still the suit is pending.
vi) On 05.08.2013, during the proceedings in O.A.No.569 of 2013, the respondents/defendant had assured that the appellant/plaintiff would have access to his office. The relevant portion of the order of this Court dated 05.08.2013 reads as under:
"Mr. K.M. Vijayan, learned senior counsel appearing for the respondents 1 and 2 states that the applicants have not been removed from the post of trustees and there will be no obstruction to them for performing their duties as trustees and will have access to their office."
vii) This assurance was not at all respected. Instead, the respondents 2 to 8/defendants 2 to 8 had prevented the appellant/plaintiff from entering the VIT University, which is a Trust property. By the act of the respondents 2 to 8/defendants 2 to 8, the appellant/plaintiff has realised that respondents 2 to 8/defendants 2 to 8 are not bothered about the Trust, students and their career. The appellant/plaintiff had filed two writ petitions in W.P.No.15629 of 2014 and W.P.No.15630 of 2014 for the purpose of protecting the reputation of the institution and the High Court had also granted an order restraining the respondents/defendants from granting any degree for the students who have undergone the course at Chennai, run unauthorizedly by the respondents 2 to 8/defendants 2 to 8, for the academic years 2010-2013.
viii) In pursuance of the interim order issued by the High Court in the above said writ petitions, the respondents/defendants had suspended the appellant / plaintiff from his Trusteeship on 06.07.2014. The act of the respondents was contrary to the undertaking made before the High Court by their senior counsel Mr.K.M.Vijayan in a judicial proceedings. Along with the suspension order, the appellant was also issued with a charge memo. The allegations in the charge memo and the averments found in the affidavit filed in support of W.P.No.15630 of 2014 pending before the High Court are one and the same.
ix) After receiving the charge memo, the appellant/plaintiff had requested the respondents/defendants to give him necessary information for furnishing detailed explanations. Without giving sufficient opportunity, the respondents/defendants had proceeded to pass an illegal order. According to the appellant/plaintiff, the charges levelled in the charge memo were baseless.
x) That on 16.07.2014, the appellant/plaintiff was issued with the impugned proceedings by the second respondent. By the said order, the appellant was sought to be removed from the Trusteeship. The said order was passed without providing any opportunity to the appellant, without notice of Board meeting or without seeking the leave of the High Court. Therefore, the removal of appellant/plaintiff from the Trusteeship by the above said proceedings is illegal. There was no enquiry conducted to prove the charges framed against the appellant/plaintiff. According to the appellant/plaintiff, the respondents 2 to 8/defendants 2 to 8 have no right to remove him from the Trusteeship without even conducting any enquiry.
xi) After passing of an interim order in C.S.No.518 of 2013 dated 12.06.2013 no notice for meeting was served on him. When no notice was served, the question of failure to attend the meeting of the Trust Board will not arise. Hence, the appellant/plaintiff was constrained to file an application in I.A.No.126 of 2014 for the afforested reasons seeking the relief of interim injunction.
xii) An application in I.A.No.128 of 2014 seems to have been filed by the appellant under Order XL Rule 1 of Code of Civil Procedure for appointment of receiver for the first respondent Trust pending the suit. In this connection, the appellant/petitioner has contended that the financial malversation and mismanagement of the first respondent Trust is very clear from the manner in which the monies have been transferred and constructions were made. This is compounded by the illegal act of commencing course in the off-campus without approval. According to him, if the first respondent/first defendant Trust and its institution continues in the hands of respondents 2 to 8, it will be a disaster affecting 22,000 students. Hence, the appellant/plaintiff has come forward with this petition seeking appointment of receiver.
16. On the other hand, the second respondent/second defendant on his behalf as well as on behalf of the other respondents/other defendants has filed his counter statement resisting the petitions filed by the appellant, wherein he has contended that:
i) Notwithstanding any other ground, the averments made in the plaint were already made in a sub-judice suit in C.S.No.518 of 2013 filed under Section 92 of the Code of Civil Procedure pending on the file of this Court, in which the appellant is the plaintiff along with another person and with similar allegations, writ petitions were also filed before this Court by the appellant in W.P.15629 of 2014 and W.P.No.15630 of 2014. It is thus made clear that the conduct of the appellant is nothing but an abuse of process of Court.
ii) As a Managing Trustee and Chancellor of the VIT University, he (second respondent) wanted to extend and develop the education outside the Vellore and therefore it was decided to start the VIT University off-campus centre at Chennai. After fulfilling the conditions laid down by the University Grants Commission (UGC), they had applied for approval on 29.10.2009 to the Ministry of Human Resource Department MHRD (6 months statutory period) before starting the off-campus. The UGC gave its approval on 11.03.2013 and MHRD gave its approval on 06.06.2013. During the month of June 2013, the appellant/plaintiff was removed from the Vice President Post due to his corrupt practices, misbehaviour, cheating and other irregularities. In fact, the appellant/plaintiff only had introduced the Gian Sagar Educational and Charitable Trust to the respondents/defendants and asked to grant donation to them from the first respondent/first defendant's Trust fund. The appellant/plaintiff had acted as a bridge between VIT and the said Trust and showed personal interest for transfering of the donation to the above said Trust. Further, as Vice President of VIT University, the appellant/plaintiff himself had authorized the money transfer on 24th December 2010 to the above said address.
iii) Since the appellant/plaintiff was placed not only in-charge of Estates and, but also placed in charge of looking after the financial matters of the Trust, he was one of the sanctioning authorities to release the funds to construct buildings. One of the reasons for removing the appellant/plaintiff from Vice President Post was that he was misusing the funds of the first respondent / first defendantTrust. Besides this, the appellant/plaintiff was acting against the terms and conditions of the Trust Deed and making false allegations against the Trust and its trustees and this amounts to anti-trust activities. The actual reason for removing the appellant/plaintiff from the Vice President post was on account of his corrupt practices, misbehaviour, cheating and other irregularities committed when he was the Vice President.
iv) That on 20.05.2013, the appellant/plaintiff had threatened the Finance Officer of the VIT University in the name of Directorate of Revenue Intelligence (DRT) to provide financial details of the institution. According to the second respondent/defendant, the appellant/plaintiff along with his rowdy elements, after attacking the security staff, had illegally entered the university premises and trespassed the room of the Vice President (Administration), locked it inside, destroyed the material documents of the VIT University and dumped them in the lavatory. A complaint was also lodged with the concerned police in this connection. For the above said reasons as per the Deed of Trust, the Board of Trustees had unanimously passed resolution to remove the appellant from the Trust.
v) The second respondent/second defendant has also stated that it is the usual practice that Board Meetings of the Trust are communicated orally to the Trustees. As such, the appellant/plaintiff was informed about the Board of Trustees meeting. Though the appellant/plaintiff was informed about the Board of Trustees meeting and the he was available in local town, he had wantonly not attended the Trust meetings. It is clearly stipulated in the Deed of Trust in Clause 12 that if any of the trustees are absent for 3 consecutive Board Meetings without a prior leave of absence sanctioned by the Board, he shall be deemed to have vacated his office per se discharged form the trust.
vi) The second respondent has also maintained that before the appellant/plaintiff was removed from the Trust, he was suspended and issued with the charge memo dated 06.07.2014. He was also given sufficient opportunity to give explanation to the charges and for the reasons stated therein, he was removed from the Trust by the Trustees on 16.07.2014 and this decision was taken based on the enquiry report, which was submitted on 15.07.2014 along with the documents substantiating the charges.
vii) Now the suit in O.S.No.67 of 2014 through which the appellant/plaintiff has sought the relief of declaration to declare the order of removal dated 16.07.2014 from the Trusteeship of VIT Trust as null and void is pending in the initial stage. It is to be noted that the second respondent/second defendant had filed his written statement on his behalf as well as on behalf other respondents/defendants. The trial is yet to be commenced. Similarly, the suit in C.S.No.518 of 2013 is also pending on the file of this Court in the initial stage. Under this circumstances, the above said applications were filed before the trial Court seeking the relief of interim injunction and the appointment of a receiver as well for the first respondent Trust. Both the appellant/plaintiff as well as the respondents have been exchanging several allegations against each other.
viii) As it is seen from the averments of the affidavit, the appellant has specifically contended that the fifth respondent/defendant with the connivance of the second respondent had started an off-campus Centre under the first respondent's /defendant's Trust at Chennai without getting appropriate approval from the concerned authorities and he has also contended that the second and third respondents/defendants had transferred an amount of Rs.22 Crore to a Trust viz., "Gian Sagar Educational and Charitable Trust" at HIG, 1441, Phase IX, Mohali, State of Punjab. Thirdly, he would contend that the second respondent with the assistance of the fifth respondent had committed an error of pulling down the buildings and started the constructions, which would cause financial distress to the first respondent Trust and apart from this, they had also encroached upon the Government Poromboke land to the extent of 14.53 acres and put up unlawful construction. It is also his main grievance that he was suspended from his Trusteeship on 06.07.2014 and he was also issued with a charge memo with baseless allegations and subsequently on 16.07.2014, he was issued with the impugned proceedings by the second respondent/second defendant and thereby he was sought to be removed from the Trusteeship.
17. Heard Mr.V.Raghavachari, learned counsel appearing for the appellant, Mr.T.R.Rajagopalan, learned senior counsel appearing for respondents 1 and 2 and Ms.Chitra Sampath, learned senior counsel appearing for respondents 3, 4, 5 and 8.
18. Mr.V.Raghavachari, has drawn the attention of this Court to the undertaking given by Mr.K.M.Vijayan, learned senior counsel,(finds place at para No.14 of the plaint) before this Court during the proceedings in the original application in O.A.No.569 of 2013 in C.S.No.518 of 2013. This Court is taking the risk of reproducing the said undertaking:-
Mr.K.M.Vijayan, learned senior counsel appearing for the respondents 1 and 2 states that the applicants have not been removed from the post of trustees and there will be no obstruction to them for performing their duties as trustees and will have access to their office."
19. It is significant to note here that the appellant/plaintiff was suspended by the respondents/defendants from his Trusteeship on 06.07.2014. In this connection, Mr.V.Raghavachari, has contended that when the allegations in the charge memo were the subject matter of the affidavit filed in the writ petition in W.P.No.15630 of 2014, which was pending before this Court, the respondents/defendants had no superior right or authority either to issue a charge memo or to remove the appellant from the Tursteeship. He has further contended that on 16.07.2014, the appellant/plaintiff was issued with the impugned order of removal by the second respondent /defendant, which is not in dispute.
20. However, the second respondent in his counter statement had stated that the actual reason for removing the appellant/plaintiff from the Vice President post was due to his corrupt practices, misbehaviour, cheating and other irregularities and apart from this, it was also stated that since the appellant/plaintiff had acted against Clause 12 of the Trust Deed, the Board of Trustees had Unanimously passed the resolution to remove him from the Trust. After making the above two contentions, Mr.V.Raghavachari has further added that, the act of respondents/defendants in removing the appellant from the Trusteeship by the impugned order was in total negation of the undertaking given by Mr.K.M.Vijayan, learned senior counsel before this Court during the proceedings in the Original Application in O.A.No.569 of 2013.
21. With reference to the impugned proceedings dated 16.07.2014 through which the appellant/plaintiff was sought to be removed, Mr.V.Raghavachari has also drawn the attention of this Court to the order of suspension dated 06.07.2014. In the said order, which is issued to the appellant by the second respondent/defendant it is stated that grave charges are contemplated against him for the violation of the Code of Conduct of the trustees of the Vellore Institute of Technology Trust and it has been unanimously resolved by the Board, that it is not desirable to permit any such misconduct to continue in the interest of the Institute and that in the public interest, he should be placed under suspension pending enquiry in respect of against the grave charges alleged against him. The last paragraph of the above said Order of Suspension reads as under:
"You are hereby suspended as a Trustee, with immediate effect from Vellore Institute of Technology Trust pending enquiry"
22. Mr.V.Raghavachari, has also invited the attention of this Court to Pages 2 to 6 of the additional typed-set of papers. Page 2 contains the charge memo issued as against the appellant/plaintiff dated 06.07.2014. Clauses 22 and 23 of the charge memo are extracted as under:
"22.You filed a case against VIT on 15.06.2014, in W.P.Nos.15629 and 15630 of 2014 before the Hon'ble High Court of Judicature at Madras, challenging the functioning of the Off Campus centre at Chennai, by making false and baseless allegations only with the sole purpose of harming the reputation of VIT which is a premier institute in the country. In the process you totally suppressed the fact that you were involved in the decision making process and you were instrumental in admitting students to the off campus at Chennai thereby committing a serious misconduct.
23. You caused to publish an advertisement in the Dinamalar Daily news paper on 06.07.2014 with regard to the Writ Petition Nos.15629 and 15630 only with an intention harm the reputation of the VIT. This was done without any certified orders of the Hon'ble High Court. Again the fact that you were involved in admitting students to the Off Campus at Chennai was deliberately suppressed. And this violates the code of conduct of the Trustees."
23. As it is seen from the last paragraph of the charge memo, the appellant was requested to show-cause within a period of one week as to why he should not be terminated from the board of Trustees of Vellore Institute of Technology Trust for the above mentioned charges as contemplated under Sections 3(1) and 3(2) of the Code of conduct of Trustees as per the Trust Deed. The appellant seems to have given a reply to the charge memo on 11.07.2014. At page No.10 of the additional typed-set of papers, impugned order dated 16.07.2014 is available wherein at page 11 it is stated as under:
"It is also evident that you have not attended any Trust Board meetings since April 2008, in spite of the oral notices, Clause (12) of our Trust Deed dated 07.05.1984 states "If any of the Trustees are absence in 3 consecutive Board meetings without a prior leave of absence sanctioned by the Board, he shall be deemed to have vacated his office". Your non-attendance of more than three consecutive Board meetings held since April 2008, discharges you without any further enquiry."
24. With regard to the administrative changes, a circular seems to have been issued on 05.04.2010, which came into effect from 12th April 2010. As per the said circular, the second respondent/defendant Dr.G.Viswanathan would be the President of Vellore Institute of Technology along with four Vice Presidents viz., Mr.Sankar Viswanathan, the third defendant/third respondent, G.V.Sampath, Mr.Sekar Viswanathn, the fourth respondent/fourth defendant and G.V.Selvam, the fifth respondent/fifth defendant.
25. Clause 3(2) of amendments to Trust Deed contains the procedure for removal of trustees. It may be relevant to extract Sub-clause (b) of Clause 3(2):
3(2)(b): As under Clause 3(2)(a), the managing trustee shall issue a notice and call for explanation. Upon satisfactory explanation, the managing trustee may close the issue or if the explanation is not satisfactory the managing trustee shall conduct an enquiry and based on the majority decision of the board, the managing trustee may remove the trustee.
It is also relevant to extract Sub-clause (c) to Clause 3(2):
3(2)(c): The decision of removal of a trustee shall be valid only if the majority among the trustees vote for a removal, pursuant to the enquiry conducted above.
26. In this connection, Mr.V.Raghavachari, learned counsel for the appellant/plaintiff has contended that the managing trustee is empowered to conduct the enquiry and based on the majority decision of the Broad, the managing trustee might remove the Trustee. Mr.V.Raghavachari has also reiterated that the decision of removal of a trustee shall be valid, provided there was majority among the trustees vote for a removal pursuant to the enquiry which might be conducted by the managing trustee as stipulated under clause (b) above.
27. The learned counsel has made reference to the common order dated 11.05.2016 and made in C.R.P.Nos.369, 392 and 393 of 2016 by a learned Judge of this Court (P.R.Shivakumar.J.,), wherein in Paragraph 14, he has referred to the submissions made by the learned counsel for the appellant, which is extracted hereunder:
14. It is his further contention of Mr.V.Raghavachari that even the irregularities committed by others in the teeth of the objection raised by the plaintiff was wrongly shown to be irregularities committed by the plaintiff even though he tried to save the institution by approaching the court, UGC and other authorities and that the same shall be apparent from the contents of the Charge Memo served on the plaintiff.
28. The learned Judge has also made reference to the undertaking given by Mr.K.M.Vijayan on behalf of the respondents in the proceedings in O.A.No.597/2013, A.Nos.3559, 3560/2013, O.A.No.569/2013 and A.Nos.3444 to 3446/2013 in C.S.No.518/2013 pending on the file of this Court.
"Mr.K.M.Vijayan, learned senior counsel appearing for respondents 1 and 2 states that the applicants have not been removed from the post of trustees and there will be no obstruction to them for performing their duties as trustees and will have access to their office. The said statement is recorded."
29. The learned Judge has also observed that having given such an undertaking to the effect that there would be no obstruction for the plaintiff to perform his duties as Trustee since he had not been removed from the post of Trustee, the defendants seem to have removed him as Trustee by causing the issuance of the impugned order of the second defendant dated 16.07.2014. The statement made before the High Court in C.S.No.518/2013 was more in the nature of undertaking as projected by the learned counsel for the plaintiff, made with the aim of avoiding an order of injunction being passed against them. Still the defendants have chosen to cause the issuance of the order of suspension and the Charge Memo dated 06.07.2014 making as many as 23 charges.
30. It is manifested from the records that a Civil Revision Petition in C.R.P (PD) No.4870 of 2014 was filed before this Court and it was disposed of by this Court on 05.01.2015. The above said Civil Revision Petition was filed against the order dated 20.10.2014 and made in an unnumbered interlocutory application in I.A.SR.No.18258 of 2014 in the present suit O.S.No.67 of 2014 on the file of the District Court, Vellore. It is also manifested that the above said Civil Revision Petition was filed against the action of the trial Court in refusing to grant an opportunity of filing an application under Order VII Rule 11 CPC even to decide the question of maintainability. While disposing of the said Civil Revision Petition, a learned Judge of this Court has observed as follows:
6.De hors the objections and counter objections, the fact remains that the application under Order VII Rule 11 has not yet been numbered. Even if the Trial Court had reserved orders in the said application, its decision one way or the other in an unnumbered application may not bear fruit to any parties to the litigation. Therefore, I am of the view that the proper course of action to be taken by the trial Court is to number the said application, hear the parties and dispose it of in accordance with law within a time frame.
31. As per the direction issued by this Court in the above said Civil Revision Petition, the unnumbered application under Order VII Rule 11 CPC was numbered as I.A.No.3 of 2015 and it seems to have been disposed of on 18.03.2015. In paragraph 12 of the said order, the learned District Judge has observed as under:
12. On perusal of plaint in C.S.No.518 of 2013 on the file Hon'ble High Court of Madras, the above suit was filed under u/s.92 of CPC. Further, the main claim is to frame scheme for the proper conduct of the affairs of the Trsutee. But, the present suit was filed under Order 7 Rule 1 of CPC and seeking prayer is to declare the order dated 16.07.2014 by the second defendant as null and void.
32. What the learned District Judge has found in the above said order is that the cause of action in both the suits viz., C.S.No.518 of 2013 pending on the file of this Court and the suit in O.S.No.67 of 2014, pending on the file of the District Court are different in nature and that framing of scheme suit is totally different from the suit for declaration and even if the appellant / plaintiff succeeds in C.S.No.518 of 2013, the decision which may be taken in that suit will not set aside the impugned order dated 16.07.2014. The appellant/plaintiff has therefore come forward with the suit in O.S.No.67 of 2014 seeking the relief of declaration and that the relief of declaration cannot be granted in the suit in C.S.No.518 of 2013, which is pending before this Court. But, entirely contrary to this finding, the District Judge in the impugned order viz., the common order dated 23.11.2015 and made in the applications I.A.Nos.126 and 128 of 2014 in O.S.No.67 of 2014 has observed as under:
15.As on today, no order was passed by the Hon'ble High Court in the above O.A.No.569 of 2013 and A.No.3446 of 2013 and both petitions are pending for consideration to pass order before the Hon'ble High Court. Under such circumstances, being the Subordinate Court of the Hon'ble High Court, Madras, my hands are tied to pass any order in I.A.No.126 of 2014 and I.A.No.128 of 2014 in O.S.No.67 of 2014, since the same subject matter is pending under consideration before the Hon'ble High Court. Hence, I am not inclined to entertain both these petitions and the same is dismissed.
33. The said finding on the part of the learned District Judge is not justified and the same is contrary to his own finding given in the order dated 18.03.2015 and made in I.A.No.3 of 2015. Hence, on this ground also, the impugned order of the learned District Judge is liable to be set aside.
34. It may be relevant to note here that the appellant/plaintiff along with one R.Sadanandam in the suit in C.S.No.518 of 2013 has sought the relief of an interim injunction restraining the respondents/defendants herein, their men, agents, employees or any person claiming through or under them from in any manner preventing access to the first applicant's (Appellant herein) office at the premises of the first and second respondents and preventing him from discharging his duties as a trustee and Vice President from such premises, pending disposal of the suit.
35. Application No.3443 of 2013 seems to have been filed for appointing an Advocate Commissioner to inspect the minutes book and initial every page of the same in a manner to avoid any tampering with the same. Another application in A.No.3445 of 2013 has been filed in the above said suit before this Court to permit the applicant and another person to access the accounts along with an independent auditor to be appointed to inspect the accounts from the year 2001 and to file a report before this Court. Yet another application in A.No.3446 of 2013 also seems to have been filed in the above said suit seeking appointment of an interim administrator to oversee the functioning of the first respondent /defendant Trust and report to the Court at regular intervals from time to time pending framing of a scheme in the suit. In the above said applications, an order was passed by this Court on 30.07.2013 wherein at paragraph 3 and 4, the learned Judge has observed as under:
3.On 05.08.2013 this Court passed the following order in O.A.No.569 of 2013 and A.Nos.3444 to 3446 of 2013 "Mr.K.M.Vijayan, learned senior counsel appearing for the respondents 1 and 2 states that the applicants have not been removed from the post of trustees and there will be no obstruction to them for performing their duties as trustees and will have access to their office."
The said statement is recorded.
Post on 13.08.2013.
4. It is clarified that the above order dated 05.08.2013 will not have any bearing insofar as the second plaintiff is concerned, who admittedly is not a trustee.
36. In paragraph 5 of the above said order the learned Judge has observed that there is a request by learned counsel for both parties that the matter can be amicably resolved by mediation and conciliation and sought the court's indulgence in the matter. The said plea will be considered on the next hearing date.
37. From the above context it is clear that the learned counsels appearing for both the parties to the appeal had jointly represented before the learned Judge while passing the order on 30.07.2013 in the above said applications that the matter could be amicably resolved before the Mediation and Conciliation Centre and sought the indulgence of the Court.
38. Having made such a representation before this Court that there would be a bright chance of settlement, then this Court does not understand as to why the respondents/defendants have resisted the interlocutory applications. Further, this Court is also not in a position to understand the fact that having given such an undertaking before the Court through their learned senior counsel that the applicants had not been removed from the post of trustees, entirely contrary to their undertaking, how the respondents/defendants by the impugned order dated 16.07.2013 could have proceeded to remove the appellant/plaintiff from the trusteeship of the first respondent trust.
39. It may also be placed on record here that one Mohan appears to have filed a writ petition in W.P.No.13472 of 2011 on the file of this Court praying for the issue of a writ of mandamus to direct the first and second respondents therein viz., the Union of India, represented by the Secretary to Ministry of Human Resources Development, New Delhi and the University Grants Commission, Bhadur Shah Zafar Marg, New Delhi to take action on the third respondent viz., V.I.T.University, Vellore for violation of statutory provision of the University Grants Commission Act, 1956. In the said writ petition, the petitioner Mohan has stated that he is concerned more about the students, who have joined in the VIT College and since the VIT University Campus, Chennai is not approved by the second respondent University Grants Commissioner, he happened to file the writ petition.
40. In this writ petition, the first respondent therein viz., Union of India represented by Secretary to Ministry of Human Resource Development has filed a counter affidavit wherein in Paragraph No.7, it is stated that University Grants Commissioner gave specific direction to VIT, Vellore and asked the Vice-Chancellor of VIT vide their letter F.No.16-3/2001 (CPP-1) dated 8th July, 2010 to furnish certain details as enumerated therein. In the last paragraph, the first respondent MHRD has stated that the UGC further advised VIT, Vellore to ensure that no student should be admitted to the academic programme for the proposed Chennai campus under the enrolment of Vellore Institute of Technology, deemed to be University, till the time the proposed Chennai campus is approved by the Government of India, Ministry of Human Resource Development. Hence, the action of VIT, Vellore in starting the 'off-campus Centre at Chennai is illegal, arbitrary and unauthorized.
41. Therefore, the first respondent therein had requested this Court to issue a direction to close the VIT campus at Chennai. The second respondent therein, viz., University Grants Commission, had also filed a counter statement and in Paragraph No.10, it is stated that the Vellore Institute of Technology deemed to be University has been placed in Category B by an Expert Review Committee constituted by the Government of India, Ministry of Human Resource Development. The above said committee had pointed out certain deficiencies in the Vellore Institute of Technology, which needs to be rectified by the concerned Deemed University viz., Vellore Institute of Technology.
42. During the course of argument, Mr.V.Raghavachari, learned counsel for the appellant/plaintiff was trying to produce certain documents viz., Letter sent to Managing Trust-cum-Chancellor dated 17.05.2016, Order passed by MHRD dated 03.06.2016, Reply Letter from Managing Trustee dated 13.06.2016 and Letter to G.Viswanathan, Managing Trustee dated 15.06.2016, but the learned senior counsels, namely Mr.T.R.Rajagopalan and Mrs.Chitra Sampath have vehimently objected to produce those documents and they have also submitted that without filing a petition under Order XLI Rule 27 CPC seeking permission to produce those documents, which were not filed before the trial Court, the documents which are sought to be produced by way of typed-set of papers could not be admitted.
43. In this connection, Mr.V.Raghavachari has submitted that the documents are relating to the respondents only and the existence of those documents were known pretty well to them and hence, a separate application under Order XLI Rule 27 CPC need not be filed seeking permission of the Court because the respondents/defendants are conversant with those documents. He would further submit that even without filing an application under Order XLI Rule 27 CPC, the court could suo motu for the purpose of taking fair decision receive the documents as an additional documentary evidence.
44. In order to support his contention he has placed reliance upon a decision of this Court in N.Natarajan V. The Executive Officer, Chitlapakkam Town Panchayat reported in 2015 (2) MWN (Civil) 1. In the above cited case, a crucial question was arisen as to whether the appellate Court can receive additional evidence in the second appeal even though Trial Court had not refused to admit such evidence or party seeking to produce additional evidence has not established that despite due diligence he could not produce such evidence. In this connection, the learned Judge has observed that Sub-rule (1)(b) adumbrates that for any other substantial cause if document is required or examination of witness is required, Court may allow such evidence to be received or witness to be examined. Sub-rule 1(b) of Order 47 will have its independent existence and empowers court to receive any Additional Evidence at appellate stage. Even if conditions enumerated in sub-rules (1)(a) and (1)(aa) are not satisfied the appellate Court can suo motu require such document to be received in evidence and witness to be examined.
45. On the other hand, Mr.T.R.Rajagopalan, learned senior counsel appearing for the respondents 1 and 2 has made reference to Paragraph No.4 of the impugned order wherein the learned District Judge, Vellore has observed that in both the applications viz., I.A.Nos.126 and 128 of 2014, the petitioner had submitted separate affidavits, each consists of 1 to 38 paragraphs except the last two paragraphs i.e., 37 and 38 , pleadings consists in Paragraph 1 to 36 are one and the same.
46. The learned senior counsel Mr.T.R.Rajagopalan has argued that the conduct of the appellant/plaintiff seemed to be clear abuse of process of Court as the averments made in the plaint of the suit in O.S.No.67 of 2014 were already made in a subjudice suit under Section 92 CPC on the file of this Court in C.S.No.518 of 2013 in which the appellant / plaintiff was the plaintiff along with another person. Since similar allegations were made in the above said suits as well as in the writ petitions in W.P.No. 15629 of 2014 and W.P.No.15630 of 2014 filed before this Court, it was nothing but a clear abuse of process of Court as well as res judicata in respect of the matters which were already subjudice in the High Court.
47. The learned senior counsel, while referring to Paragraph 18 of the plaint filed by the appellant in the suit in O.S.No.67 of 2014, has submitted that in the year 2010, the appellant / plaintiff himself, as a Vice President, had given permission to run canteen to M/s.Thirumalai Caterers. When there was an allegation of sub-standard food and malpractice of the above M/s.Thirumalai Caterers, it was found that there was no person by name Thirumalai in the address made in the documents submitted to VIT and the signature appeared in those documents were forged one and it was also revealed that the appellant/plaintiff was running the said Thirumalai catering through the son of one Punniyakotti, who was running the hotel business with the appellant/plaintiff.
48. The senior counsel, with regard to the application in I.A.No.128 of 2014 filed by the appellant/plaintiff for the appointment of receiver for the first respondent/defendant Trust, has invited the attention of this Court to Paragraph No.37 of the affidavit filed in support of I.A.No.128 of 2014, wherein the appellant/plaintiff has stated that the financial malversation and mismanagement of the first respondent is very clear from the manner in which monies have been transferred and constructions were made and that this is compounded by the illegal act of commencing course in the off-campus without approval. He has also stated that if the respondent and its institution continues in the hands of respondents 2 to 8, it will be a disaster affecting 22,000 students.
49. In this connection, Mr.T.R.Rajagopalan, learned senior counsel has submitted that with regard to the allegations of financial malversation and mismanagement, no proof was filed by the appellant/plaintiff and hence, no such circumstance has arisen for the appointment of receiver for the first respondent trust.
50. Mrs.Chitra Sampath, learned senior counsel appearing for the respondents 3 to 8, with reference to the observation of the Principal District Judge, Vellore in the impugned order, has raised a question as to whether the observation made by the learned District Judge in the impugned order was justified or not? This Court is taking the risk of repetition of the observation made by the learned Principal District Judge, Vellore:
15.As on today, no order was passed by the Hon'ble High Court in the above O.A.No.569 of 2013 and A.No.3446 of 2013 and both petitions are pending for consideration to pass order before the Hon'ble High Court. Under such circumstances, being the Subordinate Court of the Hon'ble High Court, Madras, my hands are tied to pass any order in I.A.No.126 of 2014 and I.A.No.128 of 2014 in O.S.No.67 of 2014...
51. Mrs. Chitra Sampath, learned senior counsel has indicated that mainly on three grounds the allegations were made on behalf of the appellant/plaintiff. They are:
1. Off-campus institution was started at Chennai without the approval of the University Grants Commission;
2. The Government Poromboke lands were encroached and constructions were put up without approval; and
3. 22 Crores was transferred to a Trust, viz., Gian Sagar Educational and Charitable Trust" by the third respondent/defendant with the connivance of the second respondent.
52. The learned senior counsel has also produced the UGC (Institutions Deemed to be Universities) Regulations, 2007 and has also made reference to Paragraph No.17 of the plaint in O.S.No.67 of 2014 pending on the file of the District Court, Vellore which refers to the undertaking given by Mr.K.M.Vijayan, learned senior counsel in the judicial proceedings. It is also stated in the said paragraph that along with the suspension order, a charge memo was also issued on the appellant/plaintiff. The appellant/plaintiff has also stated in the above said paragraph that the allegations in the charge memo are the subject matter of the affidavit filed in support of W.P.No.15630 of 2014, which is now pending on the file of this Court.
53. The learned senior counsel has also contended that no cause of action was available in the suit O.S.No.67 of 2014 as the appellant/plaintiff was removed from the Trust as per the Deed of Trust and that the suit itself was not at all maintainable, as the appellant / plaintiff had already vacated his office as per the Deed of Trust. She would further submit that insofar as the petition in I.A.No.128 of 2014 was concerned, the question of appointment of receiver did not arise as there was no allegations regarding maladministration.
54. Mrs.Chitra Sampath, learned senior counsel has also contended that where the prayer of the suit was restricted to the order of removal, the question of appointment of receiver would not arise. She has also submitted that as per the UGC Regulation, application is to be submitted for approval by MHRD, six months prior to the starting of the institution. Accordingly, the respondents / defendants had submitted the applications for the approval of MHRD as envisaged under UGC Regulation.
55. Mrs.Chitra Sampath, has drawn the attention of this Court to Page No.149 of the additional typed-set of papers wherein a police complaint dated 08.08.2013 seems to have been lodged by the second respondent/defendant Dr.G.Viswanathan. In the said complaint lodged before the Inspector of Police, Katpadi Police Station, several criminal allegations were made against the appellant/plaintiff. It is also stated that the act of the appellant Mr.G.V.Sampath amounts to criminal liability and they were punishable under various sections of the Indian Penal Code and the second respondent/defendant had requested the Inspector of Police, Katpadi Police Station to initiate criminal action as against the appellant.
56. With reference to the arguments advanced by Mr.V.Raghavachari, learned counsel appearing for the appellant/plaintiff, Mr.T.R.Rajagopal, learned senior counsel appearing for R1 and R2 and Mrs.Chitra Sampath, learned senior counsel appearing for respondents 3, 4, 5 and 8 are concerned, they have to be discussed in detail during the course of trial with the assistance of the oral and documentary evidences, which may be adduced at the time of trial.
57. Mr.V.Raghavachari, has submitted that the suit in C.S.No.518 of 2013 was filed by the appellant for seeking the relief of framing of a scheme to run the first respondent/defendant Trust. At page No.97 of the additional typed-set of papers, the office order dated 10.06.2013 passed by the Registrar of VIT University is available in which it is stated that since Mr.G.V.Sampath has decided to start his medical college and hospital it has been decided as per the Chancellor's direction to relieve him from the post of Vice President of VIT University and also from the Board of Management with effect from 10.06.2013. In the affidavit filed in support of the writ petition in W.P.No.15629 of 2014, the appellant/plaintiff Mr.G.V.Sampath in Paragraph No.13 has stated that on 06.06.2013, the Government of India had issued a notification in which they had given a declaration that the Off-Campus Centre shall be a constituent teaching unit under the ambit of VIT prospectively subject to biennial review and subsequently after 5 years subject to usual terms and conditions as prescribed in the 2010 Regulations. It is also stated that the ambit of the order was only prospective and hence, any admissions made prior to that date would be totally illegal and in violation of the statutory provisions.
58. It also appears from paragraph No.13 of the affidavit filed in support of W.P.No.15629 of 2014 that before the issuance of the said order, three batches of students were admitted to the off-campus centre. In the said writ petition, the petitioner has sought for a direction forbearing respondents 3 to 6 from issuing any degrees or other certificates to the students who were admitted to respondents 5 and 6 Institute (Off-Campus Centre at Chennai) in the years 2010-11 to 2012-13 and to pass such further or other orders as may be deemed fit and proper. It is also brought to the notice of this Court that the order of suspension is pending enquiry.
59. This Court has carefully considered the submissions by the learned counsels appearing on behalf of the appellant as well as respondents 1 to 8.
60. As discussed in the body of the order, the appellant/plaintiff has mainly contended that his removal from the Board of Trusteeship of the first respondent/defendant Trust was illegal as it was passed without prior intimation to him and without giving proper opportunity of being heard. Secondly, he has contended that the third respondent/third defendant with the connivance of the second respondent/second defendant had encroached the Government Poromboke lands and started constructions without even getting prior approval or sanctioning of plan. It was also contended that the first respondent/first defendant fund to the extend of 22 Crores was transferred to the another Trust viz., Gian Sagar Educational and Charitable Trust" and further respondents in admitting the students in off-campus at Chennai had committed irregularities and they had started the said campus without even getting prior approval of the UGC.
61. However, the appellant has filed the above suit for granting a declaratory decree to declare the order dated 16.07.2014 passed by the second respondent/defendant on the basis of alleged meeting of remaining respondents 2 to 8 as null and void, arbitrary, contrary to law and violation of principles of natural justice. The suit is still pending and as stated in the foregoing paragraphs, the second respondent/defendant has filed the written statement on his behalf as well as on behalf of the remaining respondents.
62. This Court, on perusal of the averemnts found in the affidavit filed in support of I.A.No.126 of 2014, finds that the appellant has made a prima facie case to exercise the jurisdiction of this Court to grant interim injunction as envisaged under Order XXXIX Rule 1 and 2 CPC. Insofar as the other application in I.A.No.128 of 2014 for appointment of receiver is concerned, as argued by Ms.Chitra Sampath, learned senior counsel, no adequate grounds are made out for the appointment of receiver as contemplated under Order XL Rule 1 of the Code of Civil Procedure. Sub-Rule (1) of Rule 1 of Order XL enacts as under:
where it appears to the Court to be just and convenient, the Court may by order _
(a) appoint a receiver of any property, whether before or after decree;
(b) remove any person from the possession or custody of the property;
(c) commit the same to the possession, custody or management of the receiver; and
(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits and the execution of documents as the owner himself has, or such of those powers as the courts thinks fit.
63. The object of appointment of a receiver is to protect, preserve and manage the property. During the pendency of a suit, the power of Court to appoint a receiver under this Order is subject to the provision of Section 94 and is to be exercised for preventing the ends of justice from being defeated. The appointment of a receiver is recognised as one of the harshest remedies which the law provides for the enforcement of rights and is allowed only in extreme cases and in circumstances where the interests of the creditors is exposed to manifest peril. This Court is afraid that the case at hand does not satisfy these tests. It would be trite to say that Receiver is not to be appointed unless there is some substantial ground for such interference, such as a well founded apprehension that the property in suit will be dissipated or other irreparable mischief may be done unless the Court appoints a Receiver. [See B.D.A. Ltd. vs Central Bank Of India, And Another reported in AIR 1995 Bom 14 (DB].
64. In the light of the observations made in the above cited decision, this Court does not see any substantial ground for such an interference to appoint a receiver as no case is made out. There is no imminent danger or apprehension that the proposed property would be dissipated or other irreparable mischief might be done. In this circumstance, this Court is of the considered view that the impugned order passed by the trial Court in I.A.No.128 of 2014 does not require interference of this Court.
In the result,
i) C.M.A.No.42 of 2016 is allowed, the impugned order dated 23.11.2015 is set aside and I.A.No.126 of 2014 is allowed. Interim injunction granted is granted till the disposal of the suit.
ii) C.M.A.No.43 of 2016 is dismissed and the impugned order dated 23.11.2015 made in I.A.No.128 of 2014 is confirmed.