The Official Trustee, ... vs The Indian Cross Societym Bombay ...
2017 Latest Caselaw 3643 Bom

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                     ORDINARY ORIGINAL CIVIL JURISDICTION
                         CHAMBER SUMMONS NO.18 OF 2007
                                        IN
                           MISC. PETITION NO.48 OF 1990
The Official Trustees, Maharashtra State                                ....Petitioner
          Vs.
The Indian Red Cross Society, Bombay City Branch & Anr.    ....Respondents 
                                    ----
Mr. Kirit J. Hakani for petitioner.
Mr. Aditya Mehta i/b. M/s. Gagrats for applicant in CHS/18/2007.
Mr. D.V. Deokar for applicant in CHS/83/2007.
                                    ----
                                     CORAM  : K.R.SHRIRAM, J.

                                     DATE      : 27th JUNE, 2017
P.C.:


1                 Adams   Wylie   Memorial   Hospital,   a   charitable   trust,   was 

created by Mrs. Lilian Oimara Adams Wylie vide Indenture dated 9 th

September, 1903. Vide Indenture dated 14th August, 1933, all the trustees

resigned and the Official Trustee - Maharashtra State, petitioner herein,

was appointed as a sole trustee of the trust properties, which, inter alia,

consists of leasehold rights in the property bearing plot no.111 at Gilder

Street and a plot of land adjoining to it (hereinafter collectively referred to

as "the trust property"). It appears that petitioner was unable to manage

the trust property and the Hospital standing thereon to his satisfaction. On

an application of petitioner, by an order dated 30th January, 1952 this Court

transferred the management of Adams Wylie Memorial Hospital to Bombay

City Branch of the Indian Red Cross Society - respondent no.1 herein. In

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the month of June 1990, petitioner made a further petition bearing Misc.

Petition No.48 of 1990 to this Court narrating the circumstances under

which the scheme of management, administration and proper working of

the Adams Wylie Memorial Hospital was handed over to respondent no.1

and praying for sanction of the draft scheme of management and

administration of Adams Wylie Memorial Hospitals prepared by him. The

present respondent no.1 was joined as a party respondent to the said Misc.

Petition. On 8th November, 1993, this Court disposed of Misc. Petition

No.48 of 1990 by passing an order in terms of the minutes of order signed

by the parties and their respective advocates. Under the order, respondent

no.1 - Indian Red Cross Society was appointed as the trustee in place and

stead of petitioner.

2 The present chamber summons has been taken out by

respondent no.1 for the following reliefs :

"(a) The petitioner be directed to take all steps necessary to complete the implementation of the order of the Hon'ble Bombay High Court dated 8th November, 1993 (being Exhibit 2 hereto) and to forthwith transfer all assets, properties, investments, etc. in the name of the said Hospital to the respondents;

(b) The petitioner be restrained by an order and injunction of this Hon'ble Court from interfering in any manner with the functioning and/or day to day work in progress and or running of the said Hospital by the respondent and or through Wockhardt Hospitals Limited, constituted attorneys of the respondent and their agents, representatives and authorised persons;

(c) The petitioner be directed to forthwith withdraw all complaints made by the petitioner with the Municipal Corporation of Greater Mumbai and the police and any other authorities."

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3 It will be useful to reproduce the order dated 8 th November,

1993 passed by this Court in Misc. Petition No.48 of 1990, which reads as

under :

"The learned counsel handed in minutes of order duly signed by the parties and their respective advocates annexing thereto the scheme agreed between the parties.

I have perused the averments contained in the said petition so also gone through the said scheme annexed to the minutes of the order.

It is noticed that since the year 1952 the respondents, a public Trust are in the management of the Hospital run by the Trust. In the circumstances, it will be desirable and appropriate that the said management is continued with the respondents. However, certain directions are given hereinbelow to ensure that the respondent Trust take necessary steps for the improvement and effective management of the Trust Hospital. Hence, the following order :

(i) The petition stands disposed of in terms of the minutes of order and sanction is accorded to the scheme annexed thereto.

(ii) The Official Trustees shall inspect for the purpose of ascertaining the management of the said Trust after a period of six months from this order and then submit a report before the Court and if necessary seek directions from the Court.

(iii) Such six monthly report will be submitted for a period of one year and then annual report will be submitted for the period of two years thereafter before the Court.

(iv) Liberty to the parties to seek directions from the Court, if necessary.

(v) Issuance of certified copy is expedited.

4 On 18th November, 1993 the immovable property of the

Hospital was transferred to respondent. The handing over of the

immovable property is evidenced by a plaque unveiled by the then Minister

of State for Public Health, Government of Maharashtra at the Hospital

premises. By a letter dated 24 th August, 1995 respondent no.1, viz.,

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applicant in this chamber summons, addressed a letter to petitioner

pointing out that several Fixed Deposit Receipts of the Hospital had not

been handed over to respondent and that the matured deposits were being

reinvested by petitioner, which actions were in violation of this Hon'ble

Court's order dated 8th November, 1993. Petitioner was called upon to hand

over all the funds of the Hospital to respondent no.1. Petitioner did not

respond to the letter despite reminders. Large portions of the Hospital

building were demolished by the Municipal Corporation of Greater Mumbai

as the same had become unsafe for housing patients.

5 Respondent no.1 managed the said Hospital for few years, but

soon it fell in disrepair and was practically closed down. Respondent no.1

was unable to manage the charitable Hospital with the available trust

funds. It therefore proposed to enter into a Memorandum of Understanding

with respondent no.2 and approached the Charity Commissioner for a

permission under section 36 of the Bombay Public Trusts Act (for short

"BPT Act"). By an order dated 3rd November, 2004 passed in Misc.

Application No.94 of 2004, the Charity Commissioner held that in view of

the fact that Indian Red Cross Society had been exempted from all the

provisions of Bombay Pubic Trusts Act except Chapter IV thereof by the

Government vide notification dated 24th February, 1992, his permission

under section 36 of the BPT Act was not necessary. Thereafter respondent

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no.1 entered into a Memorandum of Understanding (for short "the MOU")

with respondent no.2 on 13th July, 2005.

6 Respondent no.1/applicant kept writing to petitioner to

comply with the order dated 8th November, 1993 but petitioner did not

comply with the directions contained in the order dated 8 th November,

1993. Hence this present application.

7 It must be noted that petitioner had also filed a chamber

summons bearing no.151 of 2007 for setting aside the order of this court

dated 8th November, 1993 and for a declaration that the MOU was illegal.

That chamber summons came to be dismissed by an order dated 8 th July,

2009. We shall rely upon the said order while discussing the defence of

petitioner that the MOU was illegal.

8 It is the case of the applicant that by an order dated

8th November, 1993 in the present misc. petition, the members of

respondent no.1 were appointed as Trustees of all properties of the Adams

Wylie Memorial Hospital. Petitioner was directed to complete the transfer

of all assets of the said Hospital to respondent within a period of three

months and respondent was to manage and run the hospital for "all time to

come" as per the sanctioned scheme. Clauses 3,5,6,7,8 (v) and 8(vi) of the

Scheme approved by this court read as under :

"(3) The Indian Red Cross Society (hereinafter referred to as the Society) will be the sole Trustees in place and stead of the Official Trustees, Maharashtra, Bombay and as such all the properties of Adams Wylie

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Memorial Hospital (hereinafter for brevity's sake referred to as "the said Trust") as described in the Schedule hereto, shall immediately vest in the Society without any further order or act, deed or thing of any party. (5) The Society will be in charge of day-to-day management and running of the Hospital for all time to come.

(6) With effect from the appointed day, all the liabilities, debts and obligations of the said Trust will be that of the Society alone. (7) For the purpose of implementing and carrying out the Scheme and to facilitate the proper working, administration and management of the said Hospital, the Society shall have full and absolute power and authority to do all acts, deeds and things for the proper management, administration and working of the Hospital and all activities connected therewith including entering into any Scheme or arrangement with any person or party to further the object of rendering medical aid in the State of Maharashtra. (8) (v) renovate and/or reconstruct or put up a new building on the said land and/or refurnish the same or any part thereof and equip the same with new furniture and new modern/latest equipment which will always belong and become a part and parcel of the trust property.

(8) (vi) construct and/or set up a new Hospital in the name and for the memory of Adams Wylie in any part of the State of Maharashtra, which will always belong and become a part and parcel of the trust property."

9 It is the case of applicant/respondent no.1, with whom I totally

agree, that the order dated 8th November, 1993 read with Scheme makes it

abundantly clear that respondent no.1 was to be the sole Trustees and

owner of the said Hospital. Respondent no.1 will be in exclusive charge of

all the properties and funds of the Trust, petitioner will complete the

transfer of assets to respondent no.1 within three months and respondent

no.1 will manage and run the Hospital for all time to come as per the

Scheme annexed. The subject matter of the present chamber summons is

only the movable properties which are as mentioned in part 'C' of the

Schedule annexed to the minutes of order, i.e., all movable assets such as

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investments, bank accounts, cash, insurance policies, books of accounts,

title deeds, documents, etc.

10 As per the Scheme, from the clauses quoted above, it is also

quite clear that respondent no.1 will be the sole Trustees in place of

petitioner and all the properties of the Hospital as described in the

Schedule shall immediately vest in the Society without any further order or

act, deed or thing of any party; respondent no.1 will be in charge of all the

properties and funds of the Trust and hold it in Trust as per the provisions

of the Indentures of Trust dated 9th September, 1903, 14th August, 1933 and

23rd January, 1937; respondent no.1 will be in charge of day-to-day

management and running of the Hospital for all time to come; respondent

no.1 shall have full and absolute power and authority to do all acts, deeds

and things for the proper management, administration and working of the

Hospital and all activities connected therewith including entering into any

Scheme or arrangement with any person or party to further the object of

rendering medical aid in the State of Maharashtra; renovate and/or

reconstruct or put up a new building on the said land and/or refurnish the

same or any part thereof and equip the same with new furniture and

equipments and construct and/or set up a new Hospital as well.

11 In effect, petitioner was out of the whole Scheme and the

members of respondent no.1 became the Trustees and as such solely

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entitled to all the assets and properties of the Trust. As stated earlier,

petitioner accepted this factual position and officially transferred to

respondent no.1 all the immovable properties of the said Hospital/Trust on

or about 18th November, 1993. There is no dispute in this regard. When it

came to transferring the movable properties as quoted above, petitioner has

refused to comply with the order passed by this Court.

12 Petitioner has filed an affidavit in reply of one Mangal Kisan

Patil, the Administrative General, Maharashtra State, affirmed on

11th January, 2007. The reply could be split into three parts, (a) the order

dated 8th November, 1993 is a decree as per the provisions of Section 27 of

the Official Trustees Act, 1913 and hence cannot be adjudicated by taking

out chamber summons as sought to be done by respondent no.1/applicant

and hence the chamber summons should be dismissed; (b) under Article

136, Part 1, 3rd Division of the Schedule to the Limitation Act, 1963, the

time prescribed is 12 years for the purpose of execution of any decree other

than a decree granting a mandatory injunction or order of any Civil Court

and since 12 years from 8th November, 1993 expired some time in on or

about 7th November, 20005 and the chamber summons has been lodged

only on 8th January, 2007, the application is barred by limitation and (c)

the MOU entered into between applicant/respondent no.1 and respondent

no.2 was illegal.

Gauri Gaekwad 





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13                 So   far   as   the   third   defence   of   petitioner   is   concerned,   after 

filing the affidavit in reply, petitioner took out a chamber summons bearing

no.151 of 2007 for setting aside the order of this Court dated 8 th November,

1993 and for a declaration that the MOU with respondent no.2 was illegal.

That chamber summons came to be dismissed by a reasoned order dated

8th July, 2009. Paragraphs 7 and 8 of the said order read as under :

"7. This chamber summons has been taken out in Misc. Petition No.48 of 1990 which has been decided on 8th November 1993 in terms of the minutes of order. If the petitioner was aggrieved by the decision dated 8 th November 1993, he possibly had two remedies; one to challenge the order in appeal and the other to apply for review of the order, if no appeal was filed. By the present chamber summons, the petitioner is not seeking variation of the order but is seeking to scrap/cancel the order. This, in my view, cannot be done by a chamber summons under the provisions of Rule 121 of the Bombay High Court (O.S.) Rules.

8. Learned counsel for the petitioner submitted that the chamber summons has been taken out under the provisions of section 25 read with section 29 of the Official Trustees Act,1913. Section 25of the Official Trustees Act reads thus:

"25. Power of High Court to make orders in respect of property vested in Official Trustee. The High Court may make such orders as it thinks fit respecting any trust property vested in the Official Trustee, or the income or produce thereof."

A proceeding, whether by way of a suit or chamber summons or otherwise, for enforcing the rights under section 25 of the Official Trustees Act can be taken only in respect of a trust property which vests in the Official Trustee. By virtue of the order dated 8th November 1993, the trust property ceased to vest in the Official Trustee because the respondent no.1 was appointed as the trustee in place and stead of the Official Trustee. With effect from 8th November, 1993, the trust property stood vested in the respondent no.1.

Therefore, on the date of the chamber summons the trust property was not vested in the Official Trustee and, therefore, he could not apply under section 25 of the Official Trustees Act. I fail to see how section 29 of the Official Trustees Act helps the petitioner. Section 29 says that nothing in the Act shall be deemed to prevent the transfer by the Official Trustee of any property vested in him to any other lawfully appointed trustee or any other person if the court so directs. In fact, the Official Trustee himself approached the court for a direction that the trust properties should be transferred to the respondent no.1. The order dated 8th November 1993 was passed by the court transferring the trust property to the respondent no.1. The order was

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clearly passed by virtue of the power conferred upon the court under section 29 of the Official Trustees Act. It cannot be said that the order dated 8th November, 1993 in any way violates the provisions of section 29 of the Official Trustees Act."

14 So far as the first defence that chamber summons is not

maintainable and an execution application has to be taken, in my view, is a

hyper technical defence. In a situation of this nature, where there is an

order of this Court pursuant to which the Hospital and assets and the

properties of the Trust stood vested in favour of respondent no.1,

respondent no.1/applicant need not go through a cumbrous procedure to

file an execution application. Even if respondent no.1 files an execution

application, the relief that would be sought is to direct petitioner to hand

over the movable properties and that is exactly what respondent no.1 is

seeking in this chamber summons. Moreover, this would also avoid

multiplicity of proceedings if we direct respondent no.1 to file execution

proceedings as suggested by petitioner. If such a relief can be granted in the

execution proceedings, I see no reason why I should not grant the same

relief in the present chamber summons.

15 As far as the defence of limitation is concerned, I must observe

that petitioner is actually making a hostile claim by denying the right of the

Trust and continue to be in possession for over a period of 24 years since

the order was passed. I am unable to fathom the animus of petitioner

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holding the movable properties when pursuant to an order of this Court the

same have vested in respondent no.1. In effect, petitioner is usurping the

movable properties of the Trust which this Court had held exclusively vest

in applicant/respondent no.1 and respondent no.1 will be in charge of all

the properties and funds of the Trust and will hold it in Trust. In fact in the

minutes of order dated 8th November, 1993 it also recorded that the

transfer of assets to respondent no.1 should have been completed within

three months despite which for almost 24 years petitioner has failed and

neglected to transfer the movable properties. In effect, petitioner has been

removed from the office of Trusteeship. When as a Trustee, petitioner was

in possession of the Trust property, his fiduciary capacity as that of a

Trustee could be discharged only by handing over possession of the Trust

property to the respondent no.1/applicant. Moreover, his possession even

after the removal would be in the fiduciary capacity of a de facto

Trusteeship. Therefore, his possession would still be the possession of the

Trust. The Official Trustee, who was a Trustee never obtained his discharge

by handing over the Trust property but continued to be in possession of the

movable assets. The Trust cannot be deemed to be out of possession of the

same. The principle of Article 136 of the Limitation Act will not have any

application. A person in such possession which had its foundation in a

fiduciary obligation, without discharge of the same by redelivery to the

Trust or its representative cannot plead that it is for the representative to

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show that within 12 years of the order, he has filed for enforcement of the

order. The possession of an ex-trustee, till he discharges his obligation to

hand over all Trust properties to the Trust or the subsequent Trustees,

would be deemed to be that of the Trust itself. Hence in my opinion, the

application of respondent no.1 is not barred under Article 136 of the

Limitation Act. I find support of this view from the judgment of a Division

Bench of Andhra Pradesh in the matter of Uppalapati Venkataratnam vs.

Sri Chennakeswavaswami Temple, Uppalapadu1.

16 It has to be noted that the conduct of petitioner smacks of

malafide. In my view, there is no cause for petitioner to refuse handing over

the movable assets to respondent no.1/applicant since the same is vested in

respondent no.1. The money belongs to the Trust and the member of

respondent no.1 have in the place and stead of petitioner being made

Trustees of all properties of the Hospital and in exclusive charge of all the

properties and funds of the said Trust to hold it in Trust as per the three

Indenture of Trust dated 9th September, 2003, 14th August, 1933 and

23rd January, 1937, petitioner cannot refuse to part with the movable

properties.

17 In the circumstances, in my view, the chamber summons has to

be allowed in terms of prayer clauses - (a), (b) and (c). In view of the

1. AIR 1972 Andhra Pradesh 152

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above, petitioner cannot be justified in lodging any complaint with the

Municipal Corporation of Greater Mumbai and the Police and any other

authorities. All such authorities to whom a complaint has been lodged by

petitioner are directed not to act on those complaints, which are hereby

disposed.

18 Chamber summons is, therefore, allowed and accordingly

disposed in terms of prayer clauses - (a), (b) and (c).

19 Petitioner is directed to take all steps within two weeks and to

transfer all assets, properties, investments, in the name of the said Hospital

to respondent no.1 within four weeks from today.

(K.R. SHRIRAM, J.)

Gauri Gaekwad