1. The two applicants are the plaintiffs in an unnumbered civil suit. This application is filed seeking to grant leave to institute the suit against the defendants in terms of Section 92 of C.P.C.
2. When the matter came up on 05.07.2012, this court ordered notice on the said application. On notice, on behalf of respondents 1 to 3, a counter affidavit, dated 02.08.2012 has been filed. Subsequently, an application was filed in A.No.3519 of 2012 seeking to amend the prayer in the unnumbered plaint in C.S(D)No.15568 of 2012. That application was ordered by this court on 11.9.2012. As per the amended plaint, the relief claimed in the suit are as follows:
"A) To grant declaration, declare that the General Power of Attorney executed on 6th August, 2010 (Document No.487/10 of District Registrar cadre, T.Nagar) by the third defendant in favour of second defendant as null and void;
B) To grant declaration, declare that the Lease Deed executed on 6th August, 2010 (Document No.1711/10) of District Registrar cadre, T.Nagar) between the second defendant and the third defendant as null and void;
C) To grant declaration, declare that the Lease Deed executed on 25th November, 2010 (Document No.4780/11) of District Registrar cadre, T.Nagar) by the second and third defendants in favour of fourth defendant as null and void;
D) To direct the first defendant to produce accounts and inquires pertaining affairs of the first defendant trust;
E) settling a scheme for administration of the first defendant trust;
F) removing the defendants 2 and 3 from the trusteeships;
G) the Hon'ble Court may be pleased to grant further or other reliefs as the nature this case and pass such further or other orders as this Hon'ble Court may deem fit and proper and thus render justice."
3. The case of the applicants was that the first applicant was the executive committee member of the South Indian Artist Association, which is a registered society under the Societies Registration Act, 1860 with registration No.50/1952. It was established for the purpose of promotion of harmonious and brotherly relations among the members of the artist world and to seek ways and means to improve their livelihood apart from promoting art and culture. The association has more than 3000 members drawn from various fields like film, drama and TV artists. The first applicant is also a member of the sub committee for the administration of the association for the period from 2009-2012. He was also appointed as the Director for South Indian Artist Cooperative Housing Society. The said society was established to provide housing site to their members after getting the lands allotted from the Government. The second applicant is also an active member of the association. The association had purchased the property measuring 18 grounds at New No.16, Old No.153, Habibullah Road, T.Nagar, Chennai and it was registered in document No.700 of 1957 with the Sub Registrar Office, T.Nagar. The present market value of the property is worked out to Rs.150 crores.
4. Subsequently, the association had registered a Deed of Declaration of Public Charitable Trust on 30.05.1987 vide document No.303 of 1987 with the Sub Registrar, T.Nagar under the name and style of "Nadigar Sangam Charitable Trust", the first respondent herein. The third respondent is the only surviving author of the trust. The trust was established with the object of helping poor artists and dramatists and persons belonging to weaker sections by providing educational, medical and other reliefs. The trust was to be administered by nine members, who will constitute the Board of Trustees. The President, Secretary and Treasurer of the association are the ex-officio members of the trust board. The President of the Association is the Managing Trustee. Six other trustees shall be nominated by the executive committee of the association. Those nine members shall constitute the full board of trustees and shall be the governing body in discharging the duties and responsibilities pursuant to the objectives laid down in the trust deed. But the entire full board had not been constituted. The second respondent being the President and the Managing Trustee of the Trust had married the sister of the third respondent. The third respondent and the second respondent were functioning on their own without full composition of the trust. Their intention is to hijack and to take full control of the Trust.
5. The third respondent in his capacity as the General Secretary of the association had executed a general power of attorney on 6.8.2010 and appointed the second defendant as the Principal's lawfully constituted agent to attend to various activities relating to the development of a commercial project on the property. On the same day, i.e., on 6.8.2010, a lease deed was executed by the third respondent in favour of the second respondent as a lessee in respect of the property for a period of 99 years and confirmed the receipt of Rs.5 lakhs as interest free deposit during the lease period. An annual rent of Rs.1000/- was fixed and that the lessee was given an absolute right to sub-let and develop the property. In the lease deed, it was also stated that all rentals and income arising from the said development and the scheduled property shall be to the exclusive account of the lessee. Further, a lease deed dated 25.11.2010 was executed in favour of the fourth respondent. The lease was for a period of 29 years and 11 months. The amount to be collected as refundable security deposit was Rs.1 Crore and 44 lakhs only. No competitive bids were called for. The further extension of lease was left to the choice of the fourth respondent. The only purpose for which the charitable trust was created was for the welfare of the members of the Artists Association. No prior approval of the executive committee or the general body of the association was obtained. Only on 17.02.2011, in the special general body meeting, the issue was discussed and approval was obtained with reference to the lease deed dated 6.8.2010 and the general power of attorney dated 6.8.2010.
6. Even the further lease deed dated 25.11.2010 was executed without prior approval of the association and that the ratification was made on 17.2.2011. The action of the third respondent executing the power of attorney in favour of the second respondent itself is illegal as no trustee can delegate his duty either to a co-trustee or to a stranger. The third respondent being the brother-in-law of the second respondent had also entered into a long term lease deed of the trust property in favour of the second respondent. The creation of board of trustees of nine trustees were not done. The two trustees cannot act on their own by relying upon the saving clause found in the trust deed. Under these circumstances, the applicants have sought for leave.
7. In the counter affidavit filed by the respondents, it was stated that the ingredients of Section 92 of CPC was not attracted. The relief claimed is not within the scope of Section 92. There was no prayer seeking for the scheme of the administration of the trust property. The requirement of Section 92 of CPC has not been complied with as there is no allegation of mismanagement.
8. However, as noted already, the application for amending the suit prayer which comes very much within the scope of Section 92 CPC. The averments made by the applicants in the plaint cannot be brushed aside especially in the context of the second respondent being the Managing Trustee and brother-in-law of the third respondent and that full composition of the trust have not been constituted even though it provided for ex-officio members as well as nominated members by the executive council. Further, the fact that of the two trustees who are managing the trust, one trustee had executed a long term lease deed in favour of an another trustee itself shows that it is a gross mismanagement of the trust property. Thereafter, the sole managing trustee had entered into a long term lease with the fourth respondent for developing the property itself shows that all is not well with the functioning of the trust. Therefore, the ingredients of Section 92 is clearly attracted for the applicants to institute a suit. It cannot be said that they have no locus standi as they have members of the association which constituted the trust and their interest is to maintain the trust property.
9. It is stated that the property of a charitable institution has to be jealously protected as a large segment of the community has beneficial interest therein as held by the Supreme Court in R. Venugopala Naidu v. Venkatarayulu Naidu Charities reported in 1989 Supp (2) SCC 356 and in paragraph 13, it was observed as follows :
"13.....This Court in Chenchu Rami Reddy v. Government of A.P.3 has held that the property of religious and charitable endowments or institutions must be jealously protected because large segment of the community has beneficial interest therein. Sale by private negotiations which is not visible to the public eye and may even give rise to public suspicion should not, therefore, be permitted unless there are special reasons to justify the same. It has further been held that care must be taken to fix the reserve price after ascertaining the market value for safeguarding the interest of the endowment."
10. Further, in dealing with the ingredients of Section 92 of CPC, the Supreme Court in Bishwanath v. Shri Thakur Radha Ballabhji reported in (1967) 2 SCR 618 = AIR 1967 SC 1044 has held that to invoke Section 92, three conditions have to be satisfied and in paragraph 7 of the judgment, it was observed as follows :
"7.) It is settled law that to invoke Section 92 of the Code of Civil Procedure, 3 conditions have to be satisfied, namely, (i) the trust is created for public purposes of a charitable or religious nature; (ii) there was a breach of trust or a direction of court is necessary in the administration of such a trust; and (iii) the relief claimed is one or other of the reliefs enumerated therein. If any of the 3 conditions is not satisfied, the suit falls outside the scope of the said section. ......."
11. The Supreme Court also in Madappa v. M.N. Mahanthadevaru reported in (1966) 2 SCR 151 = AIR 1966 SC 878 held that if there is any breach of trust or when the administration of the trust requires improvement, the suit under Section 92 is maintainable and in paragraph 9, it was observed as follows:
"9.) Let us now see if there is anything in Section 92(1) clause (f) which prohibits the giving of such directions even if there is a provision to that effect in the scheme. Section 92(1) provides for two class of cases, namely, (i) where there is a breach of trust in a trust created for public purposes of a charitable or religious nature, and (ii) where the direction of the court is deemed necessary for the administration of any such trust. The main purpose of Section 82(1) is to give protection to public trusts of a charitable or religious nature from being subjected to harassment by suits being filed against them. That is why it provides that suits under that section can only be filed either by the Advocate-General, or two or more persons having an interest in the trust with the consent in writing of the Advocate-General. The object clearly is that before; the Advocate-General files a suit or gives his consent for filing a suit under Section 92, he would satisfy himself that there is a prima facie case either of the each of trust or of the necessity for obtaining directions of the court. Tie reliefs to be sought in a suit under Section 92(1) are indicated in that section and include removal of any trustee, appointment of a new trustee, we sting of any property in a trustee, directing a removed trustee or person who has ceased to be a trustee to deliver possession of trust property in his possession to the person entitled to the possession of such property, directing accounts and enquiries, declaring what proportion of the trust-property or of the interest therein shall be allocated to any particular object of the trust, authorisation of the whole or any part of the trust-property to be let, sold, mortgaged or exchanged, or settlement of a scheme. The nature of these reliefs will show that a suit under Section 92 may be filed when there is a breach of trust or when the administration of the trust generally requires improvement. One of the reliefs which can be sought in such a suit is to obtain the authority of the court for letting, selling, mortgaging or exchanging the whole or any part of the property of the trust, as provided in clause (f) of the reliefs."
12. In the light of the above, this court finds that there is a prima facie case made out for granting leave to institute the suit. Hence, this application is allowed as prayed for. No costs.