Gopal Jhunjhunwala & Ors vs Bimal Kumar Poddar & Ors
2023 Latest Caselaw 2380 Cal/2

                 IN THE HIGH COURT AT CALCUTTA
                 (Ordinary Original Civil Jurisdiction)
                              ORIGINAL SIDE


Present:

The Hon'ble Justice Krishna Rao



                          IA No: GA 7 of 2022

                          IA No: GA 9 of 2023

                           In CS 204 of 2017


                      Gopal Jhunjhunwala & Ors.
                                  Versus
                      Bimal Kumar Poddar & Ors.




           Mrs. Noelle Banerjee
           Mr. Yash Vardhan Deora

           Ms. Sulagna Mukherjee
           Ms. Nayantara Bhatterjee
           Ms. Surobhi Banerjee


           Mr. Jishnu Chowdhury
           Ms. Richa Raman



Hearing Concluded On : 17.07.2023

Judgment on    : 30.08.2023
                                        2


Krishna Rao, J.:


1.

The plaintiffs have filed Civil Suit No. 204 of 2017 praying for framing

scheme for the management of the Poddar Chhatra Niwas Trust, under

which the managing committee of the Poddar Chhatra Niwas should

operate and ensure the furtherance of the objects of the Trust and

proper management, maintenance and upkeep of the Trust property

and for providing proper facilities to its boarders and allied prayers.

2. During the pendency of the suit, the plaintiffs and the defendants have

filed a joint application being GA 9 of 2023 praying for a decree on the

basis of the terms of settlement annexed with the said application.

3. One Raj Kumar Rungta and Pradeep Agarwall have filed an application

being GA 7 of 2022 praying for addition of parties in the suit and allied

prayers. The joint application filed by the plaintiffs and the defendants

and the application filed by the applicants namely Raj Kumar Rungta

and Pradeep Agarwal have taken up for hearing together for proper

adjudication of the instant matter.

4. One Gajanand Poddar created a Public Charitable Trust by his Will

dated 6th April, 1925. The executors of the said will became the first

trustees of the said trust. The Will was challenged by one Satya

Narayan Poddar before this Court being CS No. 425 of 1926. The said

Satya Narayan Poddar was the adopted son of Gajanand Poddar. In the

said suit, Satya Narayan Poddar prayed for a declaration that the Will

of the deceased Gajanand Poddar was invalid and inoperative.

Ultimately, the suit was disposed of on compromise in terms of the

settlement entered between the parties. The Will provided that the

trustees were to purchase a building to be used as boarding house for

the benefit of Marwari students in the city of Calcutta. The Public Trust

came to be known as of "Estate of Gajanand Poddar Trust (Charitable)"

in terms of the decree passed by this Court in CS 425 of 1926.

5. As per the Will, the boarding house initially known as Marwari Chhatra

Niwas which had initially commenced operation from rented premises.

In the year 1931, a plot of land was purchased and a building was

constructed thereupon and the boarding house was shifted to the

premises No. 150, Chittaranjan Avenue, Kolkata - 700003. The

boarding house came to be known as "Poddar Chhatra Niwas".

6. As per the Will of the deceased Gajanand Poddar, a committee was

formed by the trustees for the management, maintenance, and upkeep

of the hostel, the said committee was known as managing committee of

the Poddar Chhatra Niwas. The managing committee framed its rule

and bye-laws and regulated by the same.

7. To obtain loan from the State Bank of India, a formal Deed of Trust was

executed in the year 1981-82 and after obtaining loan, a new building

was constructed and the ground floor of the said building was let out to

the State Bank of India with the undertaking that the loan amount

would be adjusted against the rent payable to the Trust. The rent was

collected by the Trust and not by the managing committee. In the year

1998, the loan was repaid and in the year 2014-15, the bank vacated

the portion and thereafter the said portion was given on rent to other

entities.

8. The disputes and differences arose between the Managing Committee

and the trustees with regard to the utilization of the rent generated

from the ground floor of the newly constructed building which led to

filing of the present suit. It is the case of the plaintiff that the rent

which was generating, was not being utilized for the benefit of the

hostel and the condition of the hostel was deplorable and the building

required immediate repairing. Another suit was filed by the trustees

before this Court against the plaintiff. During the pendency of both the

suits, the plaintiffs and the defendants have entered into a settlement

on 20th December, 2022 and have filed an application being G.A No. 9

of 2023 for decree in terms of settlement entered between the parties.

9. The applicants in G.A No. 7 of 2022 prayed for adding them as party to

the suit and allied prayers. The applicants says that the applicants

have a direct interest in the present suit filed by the plaintiff being CS

No. 204 of 2017 as the applicants have been appointed as member of

the Managing Committee of Poddar Chhatra Niwas created for the

purpose of management, maintenance and upkeep of the boarding

house created by the trustees of the Estate of Gajanand Poddar Trust

for Marwari students of Kolkata. They say that they are the ex-boarders

of such boarding/hostel and are also members of the Alumni

Association.

10. Ms. Noelle Banerjee, learned Advocate representing the applicants in

G.A No.7 of 2022 submitted that the applicant no.1 is an ex-boarder

and ex-President of the Alumni Association who was inducted as

member of the Managing Committee under a registered irrevocable

Trust Deed of 2018. The second applicant namely Pradeep Agarwal was

inducted in the Managing Committee by a letter dated 6th February,

2019 and thus he is a necessary party to the suit.

11. Ms. Banerjee submitted that there never been any re-election and

accordingly all members of the Managing Committee including the

applicants remained and continued to be members of the Managing

Committee and have interest in the suit. She submits that the

applicants have neither resigned nor are aware of their removal in

terms of the trust deed.

12. Ms. Banerjee submitted that upon perusal of the terms and conditions

of the settlement arrived between the plaintiffs and the defendants it is

evident that the said compromise is collusive as the same does not

account for the money embezzlement as alleged in the plaint. She

submits that the plaintiffs themselves have made complaint to the

Income Tax department and other authorities regarding misuse of

funds of the trust but in the settlement deed there is no whisper about

the said amount.

13. Mr. Jishnu Chowdhury, learned Advocate representing the defendants

submitted that on 20th December, 2022, the members of the Managing

Committee and the trustees, i.e., the plaintiffs and the defendants have

settled all the disputes and unanimously decided on the manner, in

which the Chhatra Niwas is to be run and has relied upon the clauses

of the settlement agreement entered between the parties.

14. Mr. Chowdhury submitted that the applicants are neither the member

of managing committee nor the trustee. He submits that the applicants

were the ex-members of the Managing Committee and at present they

are no way connected with the plaintiffs.

15. Mr. Chowdhury submitted that applicant must have a real and direct

interest in the subject matter of the suit but in the present case, the

applicants are no way connected with the instant proceeding.

16. Before considering the prayer in connection with G.A No. 9 of 2023 for

acceptance of the settlement arrived between the plaintiffs and the

defendants this Court is of the view that the application filed by the

applicants being G.A No. 7 of 2022 is required to be decided first.

17. The applicants intending to be added as party in the suit on the ground

that the applicant no.1 was the ex-boarder and ex-President of the

Alumni Association who was inducted as a member of the Managing

Committee in the year 2018 and the applicant no. 2 was inducted in a

Managing Committee on 6th February, 2019. The plaintiffs as well as

the defendants have denied with regard to their locus satndi.

18. As per Clause 6.1 of the Trust Deed dated 11th July 2018, the applicant

no. 1 was inducted as member of Managing Committee. Clause 6.2 of

the Trust Deed provides for tenure and as per the said clause the

tenure is of two years. As on the date of filing of the present application

by the applicant the time period of two years has elapsed and it cannot

be said that the applicant continue to be a trustee/member of the

Managing Committee. Similarly the applicant no. 2 is claiming to be a

member of Managing Committee in terms of a letter dated 6th February,

2019 but again the two years period is over and it is not the case of the

applicants that the applicants have been re elected after the completion

of the said period.

19. The applicants have relied upon the judgments reported AIR 1918 Cal

810 (Norendra Nath Kumar and another -vs- Atul Chandra

Bandopadhya and others), (2005) 11 SCC 403 (Amit Kumar Shaw

and Anr. -vs- Farida Kahtoon and Anr), (2020) 4 SCC 321 (Ashok

Kumar Gupta And Anr. -vs- Sitalaxmi Sahuwala Medical Trust &

Ors.), AIR 1972 All 478 (Karuna Shankar Dube -vs- Krishna Kant

Shukla), 2019 SCC Online MP 6117 (Tilak Sahkarigrah Nirman

Sanstha Maryadit -vs- Aqeel Ahmed and Others), (1999) 2 SCC 577

(Savitri Devi -vs- District Judge, Gorakhpur & Ors.),

MANU/WB/0081/2002 (Pradip Kr. Chaterjee -vs- Registrar of

Cooperative Society and Ors.) and Order passed in Civil Appeal No.

4900 of 2010 (Mumbai International Airport Pvt. Ltd. -vs- Regency

Convention Centre & Hotels Private Ltd. & Ors.) dated 6th July,

2010.

20. This Court considered the cases relied by the applicants. It is true that

if the party able to prove that he is the necessary party he can be

impleaded in the suit for proper adjudication of the case. In the present

case, the applicants failed to prove that they are connected with the

plaintiff any way, they are having any interest in the trust or their

presence is necessary in the suit for proper adjudication of the suit.

Accordingly, the judgments relied by the applicants are distinguishable

from the facts and circumstances of the case in hand.

21. In view of the above, the application filed by the applicants being G.A

No. 7 of 2022 is thus dismissed.

22. Now the question whether decree can be passed in terms of the

settlement arrived between the parties as prayed for in G.A No. 9 of

2023.

23. The plaintiffs have filed the suit being C.S No. 204 of 2017 praying for

the following reliefs:

"a) A scheme be framed for the management of the Poddar Chhatra Niwas Trust, under which the Managing Committee of Poddar Chhatra Niwas should operate and ensure the furtherance of the objects of the trust and proper management, maintenance and upkeep of the trust property and for providing proper facilities to its boarders;

b) A Decree of declaration, that the deed of declaration of trust, 1982 and its various clauses runs contrary to the intention and will of Late Gajanand Poddar and is

wrongful, illegal, null and void and that the trustees and/or the defendants appointed by and under the terms of the same have no authority to either represent or hold themselves out to be the trustees of the trust or to manage its fund or administer its affairs;

c) A Decree for delivery up and cancellation of the said Declaration of Trust dated 10th June, 1982;

d) A decree of mandatory injunction directing the defendants their men, agents, assigns and or legal representatives to render true and correct account of all income and expenditure of the trust since the making of the deed of declaration 1982 and in the alternative and inquiry into such accounts;

e) A decree for mandatory injunction directing the defendants, their men, agent, assigns and or legal representatives to account for all funds that may, on the furnishing of such accounts be found not to have been used for the purposes of the Poddar Chhatra Niwas;

f) A decree for mandatory injunction directing the defendants and each of them, their men, servants, agents and/or assigns, to disclose all the bank accounts that they have been operating for depositing the rents;

g) A decree for mandatory injunction directing the trustees and each of them, their men's servants, agents and/or assigns to pay into the trust all such sums together with such interest thereon as to this Hon'ble Court may seem fit and proper, in the event of proper accounts not being furnished or it appearing that the trust funds have been siphoned away, misused or misutilised by the defendants;

h) A decree of declaration that the defendants have no authority to either represent or hold themselves out as trustees or to represent the trust, participate in its affairs or seek to manage or administer the same including the bank accounts of the trust;

i) A decree for perpetual injunction retraining the defendants their men, agents, assigns and or legal representatives from collecting rent from the commercial tenants/occupants on the ground floor of the premises No. 150, Chittaranjan Avenue, Kolkata - 700007;

j) A decree of Perpetual Injunction retraining the defendants their men, agents, assigns and or legal

representatives from operating all the bank accounts as created by the defendants;

k) A decree for perpetual injunction retraining the defendants their men, agents, assigns and or legal representatives from alienating and or dealing with any property belonging to the trust in any manner whatsoever or any part of portion thereof including by letting out any further or other portion of the ground floor of the new building at the premises No. 150, Chittaranjan Avenue, Kolkata - 700007;

l) Receiver;

m) Attachment;

n) Costs;

o) Such further order and/or orders."

24. The terms of settlement arrived between the parties on the basis of

which the plaintiff and the defendant prays for decree reads as follows :

"TERMS OF SETTLEMENT

THIS TERMS OF SETTLEMENT is made on this 20th Day of December, 2022 BETWEEN1) Bimal Kumar Poddar, son of Late Kali Prasad Poddar, Residing at 34A, Ballygaunge Place, Kolkata - 700019,

2) Amal Kumar Poddar, son of Late Kali Prasad Poddar, residing at 34A, Ballygaunge Place, Kolkata - 700019,

3) Anil Kumar Poddar, son of Late Satnarain Poddar, residing at 13, Queens Park, Kolkata - 7000019, 4) Mudit Poddar, son of Sri Anil Kumar Poddar, residing at 13, Queens Park, Kolkata - 700019 represented by Anil Kumar Poddar hereinafter known as the FIRST PARTY.

AND

1) Gopal Jhunjhunwalla, son of Govardhan Lal Jhunjhunwala, residing at 2/2, Bright Street, Kolkata

- 700019, 2) Anand Prakash, son of Giridhari Prakash, residing at South City Tower II, Flat No. 12A, 375, Prince Anwar Shah Road, Kolkata - 700068, 3)

Pawan Kumar Lila, son of Late Sree Krishanlal, working for gain at 5 No. Fancy Lane, 5th Floor, Kolkata - 700001, 4) Om Prakash Agarwal, son of Late Dwarka Prasad Agarwal, residing at 105/1, Bidhan Nagar, Flat No. 603, E Block, Kolkata - 700067 represented by Gopal Jhunjhunwalla, hereinafter known as the SECOND PARTY.

WHEREAS the parties of the first Part are the trustees of PCNT is a charitable trust created in or about 1926 in pursuance of the decree and order dated 26th August, 1926 passed in Suit No. 425 of 1926 (Satnarain Poddar -vs- Nagarmull Goenka & Ors.) in the matter of the estate of Late Ganganad Poddar, which Trust was functioning informally and for its proper management this trust was formally registered as Poddar Chhatra Niwas Trust (hereinafter referred to as the "PCNT") with the Registrar of Assurance, Calcutta in Book No.1 Volume No. 106, pages from 167 to 182, Being No. 6025 in the year 1982 through a Declaration of Trust made on 10th June, 1982. WHEREAS the parties of the First Part are the trustees of the Poddar Chhatra Niwas Trust and represent PCNT and the parties of the Second Part are the Trustee of PCN and represent PCN.

WHEREAS a charitable trust created in or about 1926 in pursuance of the decree and order dated 26th August, 1926 passed in Suit No. 425 of 1926 (Satnarain Poddar -vs- Nagarmull Goenka & Ors.) in the matter of the estate of Late Ganganad Poddar, which Trust was functioning informally and for its proper management this trust was formally registered as Poddar Chhatra Niwas Trust (hereinafter referred to as the "PCNT") with the Registrar of Assurance, Calcutta in Book No.1 Volume No. 106, pages from 167 to 182, Being No. 6025 in the year 1982 through a Declaration of Trust made on 10th June, 1982.

AND WHEREAS an independent charitable trust was created in and around 1935 by then trustees in terms of power vests with them as per the terms of Settlement of Title Suit No. 425 of 1956 dt.

26/08/1926 and since then PCN is governed independently having its independent rules & regulations and bye laws for the governance and management of the hostel and since then managing the hostel on charitable basis by having separate staffs, electric meter, telephone connection, separate bank account and collecting the boarding charges from the boarders and making payments of all the operational costs and also looking after all the upkeep of the Hostel and for proper governance & management of the trust property, this trust was formally registered as PODDAR CHHATRA NIWAS with the Registrar of Assurances, Calcutta in Book No.1 Volume No. 106, pages from 167 to 182, Being No. 6025 in the year 2018 through a Declaration of Trust made on 20th July, 2018.

WHEREAS disputes and differences had arisen between the two parties with regard to the management and administration of the Hostel and two separate civil suits were filed before the Hon'ble High Court at Calcutta being a) C.S. No. 204 of 2017 (Gopal Jhunjhunwalla Poddar & Ors. -versus- Bimal Poddar & Ors.) and b) C.S. No. 256 of 2018 (Bimal Poddar & Ors. -versus- Gopal Jhunjhunwalla & Ors.). Both the suits are pending adjudication and several orders have been passed in the same from time to time.

WHEREAS during pendency of the two suits, several persons have died namely, Nirmal Modi (expired on 8th May, 2021), Shyam Sunder Sanganeria, (expired on 2nd February, 2018) and Manjushree Poddar, (expired on 11th April, 2022).

WHEREAS both the parties hereto through mutual discussions have settled their disputes in line with the intention of the settlor Late Gajanand Poddar and accordingly are desirous of recording the terms of settlement to avoid any further disputes. Both the parties have duly authorized their representatives through Trustee meeting resolutions dated 1st March

2022 and 5th 2022. Copies whereof are enclosed herewith and marked "A".

  NOW    THIS    TERMS            OF     SETTLEMENT
  WITNESSETH as follows:

Both the parties recognize & accept the present status of their respective position as mentioned herein above. Both have been authorized by the Board of Trustees through resolution dated 1st March, 2022 and 5th March, 2022 respectively in annexed hereto and marked with the letter "A".

The second party agrees that the name of the trust named as 'Poddar Chhatra Niwas' shall be changed to 'Poddar Chhatra Niwas Managing Committee Trust.'

1. Use of trust property and income arising therefrom:

1.1 The trust property presently used as boys hostel facilities for the boarders is under the governance of PCN and at same time part of the front portion on the GR Floor of the trust property is let out from which rent is received by the i.e. PCNT represented by parties of first part.

1.2 The party of the First Part and PCNT has agreed to transfer 80% (eighty per centum) of the net income wef 1.04.2022 (i.e. the income derived after deducting from the gross income all expenses incurred to earn the income i.e. administrative expenses, statutory taxes & other misc. expenses which are incurred directly for earning the incomes of PCNT from the trust property) to Poddar Chhatra Niwas Trust which is represented by parties of Second Part on periodical basis (i.e. every quarter) so that the facilities of the hostel can improved and regular work of repairs& maintenance and upkeep of the PCN Hostel, and the building can be carried out on a regular basis.

1.3 It is also agreed that the decision for renewal or creation of a new tenancy shall be taken

jointly by both the parties hereto through mutual discussions.

2. Governance:

2.1 It was agreed that the Managing committee now known as (Poddar Chhatra Niwas) shall consists of twelve (12) trustees which will be reconstituted as follows in supersession of present managing committee of Poddar Chhatra Niwas-

(a) Three trustees from Poddar Chhatra Niwas Trust i.e.,

1. Mr. Anil Kumar Poddar

2. Mr. Adarsh Poddar

3. Mr. Anirudh Poddar

(b) Two trustees nominated by Poddar Chhatra Alumni Association. The alumni association has nominated

1. Mr. Sandeep Agarwal

2. Mr. Rajesh Singhania for the same.

(c) Five trustees out of existing trustees shall continue to be trustee i.e.,

1. Mr. Gopal Jhunjhunwala

2. Mr. Pawan Kumar Lilha

3. Mr. Anand Prakash

4. Dr. Dhanpat Ram Agarwal

5. Mr. Bajrang Lal Bacchawat.

(d) Two trustees should be inducted from society at large.

3. Property Tax in relation to Trust Property:

The statutory liability in relation to the trust property i.e., Boarding House including municipal tax etc., which has accrued till 31st March, 2022 shall be borne by Poddar Chhatra Niwas Trust (PNCT) out of the fund which it has collected on account of rent so far. All the liabilities concerning municipal tax till 31st March, 2022 will be paid out of the earlier fund by the PCNT. The

liability on account of municipal tax from 1st April, 2022 onwards will be paid out of the current rent which is being received by the PCNT from the tenants. It has been represented by the Trustees of PCNT that the last GR assessment has been done in respect of the said trust property till 2004-2005. The PCNT would try to get the GR assessment done as early as possible and get the supplementary bill issued from Kolkata Municipal Corporation. It is agreed by and between the parties that if valuation in said supplementary bill till 31.03.2022 exceeds the amount received by PCNT as rent in previous years by the PCNT then the differential amount will be paid from the current rent and will be treated as statutory expenses for the purpose of clause hereinabove. It is made clear that the PCNT shall make the payment of current municipal tax within due dates. In case of any delay in payment of municipal taxes (as deducted in terms of above clause on or after 1.04.2022 the interest and penalty will be solely borne by Poddar Chhatra Niwas Trust).

6. Renovation of the Boarding House and Facilities:

It is also agreed that remaining work of the renovation of the Boarding House and facilities, i.e., plaster and paint work on northern side the Boarding House shall be undertaken and completed by the trustees of Poddar Chattra Niwas Trust out of their earlier fund within Two months from date of signing of this settlement.

7. Dissolution:

In the vent of dissolution of any of the trusts i.e. Poddar Chattra Niwas Trust of Poddar Chhatra Niwas, the property standing at the time of dissolution, shall vest with the remaining trust in case both the trusts are dissolved simultaneously, then such property should be dealt in accordance with law.

8. It is also decided and agreed that after execution of this Terms of Settlement, both the parties shall take steps to withdraw their respective suits on the basis of the Terms of Settlement.

9. All other cases filed by the parties inter se both civil and criminal should be withdrawn by the parties.

IN WITNESSES WHEREOF the parties hereto have hereunto set and subscribed their respective hands and seals the day month and year first above written."

25. The terms of settlement entered between the parties as per the

resolution taken by the committee in its meeting held on 12th March,

2022. The minutes of the meeting reads as follows :

"The chairman informed the house the details contents of the ongoing settlement terms and conditions being executed by the Managing Committee with the Trustees. The same was well appreciated by the members for the best interest of the hostel and its boarders. It was agreed by all the members present unanimously that the same should be signed and executed and an "Out of Court Settlement" must be completed as soon as possible by the Managing Committee. All the members appreciated the efforts being taken by Sri Gopal Jhunjhunwala, President of the MC and Sri Anand Prakash, Member of MC to arrive at the Amicable Settlement which is the best interest of the boarders and the hostel. All the members hoped that there shall be now and of all conflicts between the Trustees and the MC.

The meeting ended with a vote of thanks to Chair."

26. The plaintiffs have filed the suit against the defendants making several

allegations with regard to misutilisation of fund, not maintaining proper

account and for not filing income tax return of the Trust. The specific

allegations have been made in paragraphs 28, 31, 32 and 33 of the

plaint. The plaintiffs have also prayed several reliefs with regard to the

income, expenditure and account of the trust in prayers (d), (e), (f), and

(g) of the plaint.

27. The plaintiffs have made complaint to the income tax department for

misuse of fund of about Rs. 5 crores and by an order dated 23rd July

2018 on the prayer of the counsel for the plaintiff this Court has passed

the following order :

"The Court: Mr. Jishnu Saha, learned Senior Counsel representing the plaintiff has drawn my attention to the balance sheets of the trust for the last six financial years and submits that donation and contribution have increased over a period of time and the affidavit filed by the trustees do not disclose the particulars and identities of the persons receiving donations.

Without prejudice to the rights and contentions that the suit is not maintainable, an affidavit shall be filed by the trustees disclosing the particulars and identities of such entities to whom donations and contributions have been made as mentioned in the statement of accounts for the last six financial years within two weeks from date. A copy of such affidavit shall be served upon the Advocate-on- record of the plaintiff within one week thereafter. The matter stands adjourned for four weeks."

28. In the terms of the settlement entered between the parties nothing is

mentioned about the earlier account only in Clause 1.2 of the said

terms it is mentioned that the First Party shall transfer 80% of the net

income with effect from 1st April, 2022 shall be transfer to the Trust.

29. This Court find that the terms of settlement entered between the

parties is not in consonance with the actual relief prayed for by the

plaintiffs in the suit and the plaintiffs have not mentioned about the

earlier income on the basis of which the suit is filed. This Court is not

satisfied with the terms entered between the parties and thus no decree

can be passed in terms of the said settlement.

30. Accordingly, G.A No. 9 of 2023 is thus dismissed.

(Krishna Rao, J.)