THE HON'BLE SRI JUSTICE T.AMARNATH GOUD
CIVIL MISCELLANEOUS APPEAL NOs.236 & 237 OF 2021
COMMON JUDGMENT:
1 These two Civil Miscellaneous Appeals are filed
aggrieved by the common order dated 01.5.2021 passed in
I.A.No.2458 of 2019 in O.S.No.434 of 2019 and I.A.No.1328
of 2019 in O.S.No.245 of 2019. The parties to both the
appeals are one and the same and the point involved in
both the CMAs is also one and the same and hence both
the CMAs are disposed of by this common judgment.
2 For the sake of convenience I refer to the parties as
they are arrayed before the trial Court and also as were
arrayed in Civil Miscellaneous Appeal No.434 of 2021 filed
in this Court.
3 Mr. M.S.Vasu Varma, the plaintiff in O.S.No.434 of
2019 filed that suit styling himself as Author of MNR
Educational Trust against his father Mr. M.N.Raju and
younger brother Mr. Ravi Varma, the defendants. It is his
case that he established the Trust to promote education
and impart quality education. He appointed his father,
mother and younger brother as Trustees. The plaintiff came
to know in the last week of February 2017 that the
defendants siphoned off huge funds by deceitful methods in
order to float different companies. The defendants
fraudulently transferred the funds of the Trust to their
business concerns in flagrant violation of terms of the Trust
2
Deed as well as the applicable laws. Accounts were
manipulated in such a way by inflating and deflating the
same to suit their convenience to perpetuate the fraud. The
defendants committed breach of trust by misappropriation
of funds entrusted to them as Trustees with dishonest
intention. Despite issuance of legal notices the defendants
did not mend their minds. The defendants and their
followers started creating problems, nuisance for the
smooth running of the Trust. Hence he filed O.S.No.434 of
2019 seeking decree of perpetual injunction restraining the
defendants and their agents from interfering and causing
disturbance to the staff, students and parents and plaintiff
other than due process of law in respect of suit A and B
schedule properties.
4 Be that as it may, the defendants in O.S.No.434 of
2019, filed O.S.No.245 of 2019 against the plaintiff in
O.S.No.434 of 2019 contending that the second plaintiff,
being the Managing Trustee of the first plaintiff, originally
started his career as a school teacher in 1960. He started a
small school under the name of Indo-English High School
at Santoshnagar, Hyderabad, which grew step by step and
it reached a strength of more than 3,600 students over the
years. At that time, the age of the defendant in this suit was
five years. Over the years, the second plaintiff established
various other schools and that the first plaintiff Trust has
been doing yeomen service to the people at large.
3
5 In the year 1992 MNR Educational Trust was
established for imparting higher education by establishing
Schools, Junior Colleges, Degree Colleges etc., As on date
38 institutions at various places are being run under the
aegis of the first plaintiff Trust.
6 Since beginning, the first defendant in the present
suit was obsessed to vices and was not able to even
complete his education. He started stealing money from
the institutions by fraudulent methods and thus totally
breaching the confidence reposed in him by the plaintiffs
while permitting him to be an authorized signatory in
respect of some institutions. With a fond hope he was made
an author of the Trust but was not made a trustee of the
Trust in view of his irresponsible behavior.
7 It is pertinent to note that an Author of the Trust
unless he himself becomes a Trustee, does not have any
right either in the Trust or the affairs of the Trust, in
accordance with law. Though the first defendant is aware
of the same, he wants to proclaim as if he has the status of
a Trustee equivalent to that of a Trustee, which in fact, is
not so. The first defendant was given authorization to
represent the Trust in respect of some of the institutions.
8 The defendant No.1 was authorized in pursuance of
the resolution dated 01.4.2011 to administer some of the
institutions and operate the bank accounts. The second
4
plaintiff herein, as the Managing Trustee, issued letters to
the Banks authorizing the defendant as the signing
authority of the respective bank accounts of the
institutions. Over the years the defendant has taken
advantage of the authorization given to him and
mismanaged the affairs of the institutions and he siphoned
off the funds of the institutions by illegally opening separate
bank accounts without any information or knowledge to the
Trust by fraudulently creating resolution dated 25.10.2011
by forging the signatures of the Managing Trustee i.e.
second plaintiff herein and other trustees. In that process
the defendant waylaid more than Rs.17 crores either by
such illegal transfers or by depositing the amounts received
in fictitious accounts opened.
9 While opening the said accounts, the defendant
signed as a Trustee, whereas he was never appointed as a
Trustee of the First plaintiff Trust. The defendant has been
acting in gross violation and abuse of the spirit with which
the second plaintiff had reposed confidence in him while
permitting him to represent some of the institutions. Hence
the authorization given to the defendant has been
ultimately terminated as per the resolution of the Trust
dated 25.7.2017. Thus the defendant cannot discharge any
functions as authorized representative of the first plaintiff
Trust, leave aside as a Trustee as he has never been a
Trustee.
5
10 The defendant, having realized that the plaintiff in
the present suit have taken steps, filed O.S.No.1379 of
2019 on the file of VII Senior Civil Judge, Ranga Reddy
District at L.B.Nagar and obtained ex parte injunction. The
defendant has not challenged the resolution dated
25.7.2017
. However, taking advantage of the ex parte injunction in O.S.No.1379 of 2019, the defendant is interfering with the affairs of the management of two institutions. Hence they filed O.S.No.245 of 2019 against the defendant for perpetual injunction.
11 The plaintiff in O.S.No.434 of 2019 filed I.A.No.2458 of 2019 and the plaintiffs in O.S.No.245 of 2019 filed I.A.No.1328 of 2019. Both the applications are filed seeking temporary injunctions against the other parties. The trial Court by common order dated 01.5.2021, dismissed the I.A.No.2458 of 2019 in O.S.No.434 of 2019 and allowed the I.A.No.1328 of 2019 in O.S.No.245 of 2019. Aggrieved thereby, the petitioner / plaintiff in O.S.No.434 of 2019 filed these two Civil Miscellaneous Appeals. 12 Mr. Satya Prasad, learned senior counsel requested this court to have an in camera proceedings with both parties before passing orders, to which Mr. Sunil B Ganu, advocate also consented. Both parties along with their respective counsel were accordingly called and they were present on 03.9.2021 in chambers at 2.00 PM. I spoke to 6 them. This Court felt that orders need to be passed on merits.
13 This is a case of a person who has set an example to the society. Mr.M.N.Raju's journey as an illiterate mendicant to mentor with his hard work, earned the recognition in the society. Turned into an Educational Giant as MNR Group and runs the institutions to impart education in terms of charitable institutions Act without having profit motto. There are around 32,000 students and 2,500 employees. The institutions are spread in different parts of the country and also in overseas. His sons were infants when Mr. M.N.Raju started his educational institutions.
14 Having taken note of the legal position, the interference into the management and running of the schools by the Managing Trustee on behalf of the schools including the day to day affairs of the same is allowed to be continued, the trial Court observed that it will grossly effect the interest of the innocent students studying in not only the subject institutions but also the other institutions of the Trust and since balance of convenience also lies in favour of the Trust represented by the Managing Trustee / MNR i.e. second plaintiff in O.S.No.245 of 2019 in running and managing the subject institutions.
715 The trial Court further observed that the petitioner in I.A.No.2458 of 2019 in O.S.No.434 of 2019 has not approached the Court with clean hands. The trial Court also observed that the plaintiff has not prima facie established that the respondents 1 and 2 in I.A.No.2458 of 2019 have made threats as alleged by the petitioner therein since they are not strangers to the subject schools and their entry is prima facie legal and that the first respondent MNR as managing Trustee of the Trust is in the management of the subject schools and it is authorizedly represented by the first and second respondents.
16 The trial Court also observed that from the conduct and approach of the plaintiff in O.S.No.434 of 2019 in his personal capacity and in the authority of an Author of the Trust, it is prima facie established that there is a threat to the management and running of the subject schools and also in respect of the day to day affairs of the Trust. 17 Since the suits are pending before the trial Court and if any observations are made by this court in disposal of these Civil Miscellaneous Appeals, the same may have some bearing on the disposal of the suits by the trial Court. The case of the parties to the litigation is oath against oath. In such circumstances, while granting temporary injunction, the Court has to take into consideration the paramount requirements of prima facie case, balance of convenience and irreparable loss that may be caused to the parties. 8 There is a factual dispute with regard to the authorization given in respect of the petitioner in I.A.No.2458 of 2019 in O.S.No.434 of 2019, which would only be adjudicated after full fledged trial and hence this Court cannot express any opinion on that aspect.
18 However, in view of the voluminous documentary evidence placed on record, I am of the considered opinion that the petitioners in I.A.No.1328 of 2019 in O.S.No.245 of 2019 have established their prima facie case and also balance of convenience in their favour. On the other hand, the petitioner in I.A.No.2458 of 2019 in O.S.No.434 of 2019 could not establish his prima facie case.
19 In the present case, the plaintiff in O.S.No.434 of 2019 is claiming to be an author. The role of an author is limited. He is not a trustee or managing trustee to look into the affairs of the educational institutions under the Trust. In the Trust deed the plaintiff Mr. Vasu Varma has not been delegated any powers in the Trust for seeking orders of injunction in his favour. The plaintiff has not established prima facie case, balance of convenience and irreparable loss to consider his case for granting the relief. Criminal complaints are filed before police stations by both parties against each other and are pending. This court is not inclined to go into that aspect as they are separate proceedings and for the present are not relevant in deciding these appeals.
920 I have gone through the entire record and the order impugned in these Civil Miscellaneous Appeals. The trial Court has given cogent and convincing reasons for its conclusions. I see no irregularity or illegality in the impugned order warranting interference of this Court. 21 For the sake of observations, at one point of time, Mr. Satya Prasad, learned senior counsel appearing for the appellant has drawn attention of this Court with regard to the docket proceedings of the trial Court, which this Court feels that to comment on the same is not necessary at this juncture, since the same will be diverting the main case from deciding the case on merits.
22 Having regard to the facts and circumstances of the case and also the legal position adverted to by the trial Court, I am of the considered opinion that the Civil Miscellaneous Appeals lack any merit and accordingly they are liable to be dismissed.
23 In the result, the CMA No.236 of 2021 and CMA No.237 of 2021 are dismissed. No order as to costs. The trial Court may consider disposal of the suits at the earliest keeping in mind the COVID situation. Miscellaneous petitions, if any, pending in these Civil Miscellaneous Appeals shall also stand dismissed.
__________________________ T. AMARNATH GOUD, J.
Date:07.9.2021.
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