Sh. Babu Ram & Anr vs Trident Educational Trust & Ors
2018 Latest Caselaw 7336 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                              Date of decision: 13.12.2018
+      CS(OS) 90/2018

       SH. BABU RAM & ANR                             .....Plaintiffs
                 Through   Mr.H.S.Phoolka, Sr.Adv. with Mr.Aporv
                           Malik, Mr.Advin Goel and Ms.Shilpa
                           Dewan, Advs.
                      Versus
       TRIDENT EDUCATIONAL TRUST & ORS.            ..... Defendants
                 Through   Mr.Alok Agarwal, Mr. Marshal Kumar and
                           Ms.Shurthi, Advs.

       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J. (ORAL)

IA Nos.2910/2018 & 6510/2018

1. The plaintiff has filed the accompanying suit for declaration, injunction and rendition of account with respect to the public charitable trust i.e. Trident Educational Trust being defendant No.1. IA No.2910/2018 is filed under Order 39 Rule 1 and 2 CPC seeking an ex parte injunction. On 28.2.2018 when the said suit came up for hearing this court in the said application had restrained the defendants from selling, alienating or transferring any of the trust properties till the next date of hearing. Defendants No.1,3,4,7, 8 & 10 have moved IA No.6510/2018 under Order 39 Rule 4 CPC for setting aside of the said ex parte injunction order dated 28.2.2018.

2. The brief facts as spelt out in the plaint are that the plaintiff claims to be the Trustee of defendant No.1 Trust. It is pleaded that the plaintiff being a

Trustee is empowered to seek leave of this court under section 92 of CPC to file a suit seeking an equitable relief on account of mismanagement of the affairs of the Trust by defendants No.2 to 6. It is pleaded that the plaintiff decided to form a Trust and apart from the plaintiffs herein Sh. Inder Mohan, Sh. Sudhan Kumar/Sudhan Rawat, Sh. Subhash Chaudhary, Sh. Rajive Chaudhary, Smt. Sunita Kumar, Sh. Anshuman Rawat and Sh. Rajive Kumar were impleaded as permanent trustees and on 10.6.2008 a Public Charitable Trust i.e. defendant No.1 was registered with the Sub Registrar-I, Delhi with the sole motive and object to run, maintain and assist any educational or other institute for coaching, guidance, counseling or vocational training etc. As per the Trust Deed permanent Trustees shall be nine and the decisions of the Trust shall be taken with the mutual consent of all the permanent Trustees. The Trust to start an educational institution purchased various properties at village Duhai, Pargana, Jalalabad, Tehsil and District Ghaziabad, U.P. in 2008.

3. It is the case of the plaintiff that though the Trust was created for charitable purposes by plaintiff No.1 alongwith other Trustees but defendant No.2, 4 and 5 have mischievously and with mala fide intention appointed their own relatives and acquaintances at various levels of the Trust and started creating hindrance in the management of the Trust. In 2012 defendants No.2 to 6 are said to have taken over the management of the Trust for their personal vested interest in collusion and connivance with each other.

4. It is further pleaded that defendants No.2 to 6 without any resolution, consent and approval of the Trustees have carved out a residential project under the name and style of Indraprastha City Colony within the boundary

wall of the Trident Educational Institute on the property of the Trust. They have sold many plots falling in Khasra No.286, which is the land of defendant No.1 Trust. It is pleaded that the plaintiff immediately approached this court and filed Civil Suit being CS(OS) No.45/2017 titled as Babu Ram & Another vs. Trident Educational Trust & Others. It is pleaded that being honest and caring citizens, plaintiffs to keep their vision alive decided to trust the defendants once again and withdrew the said suit being CS(OS)45/2017. However, recently the plaintiffs have learnt that the defendants have continued selling off the properties of defendant No.1 Trust illegally under the Housing Scheme Indraprastha City Colony. Hence, the present suit has now again been instituted seeking various reliefs including a preliminary decree of rendition of accounts against defendants No.2 to 10, a decree of declaration declaring defendants No.2 to 10 have ceased to be Trustees/Management of the Trust etc.

5. Defendants have filed their reply to IA No.2910/2018 and have also filed IA No.6510/2018 seeking to set aside the ex parte injunction order dated 28.2.2018. It has been pleaded by the defendants/applicants that prior to filing of the present suit an identical suit for rendition of account and permanent injunction being CS(OS) 45/2017 titled Babu Ram & Another vs. Trident Educational Trust & Others was filed and dismissed as withdrawn without permission to file a fresh suit on the same cause of action. Hence, it is pleaded that the present suit is barred based on the same cause of action and seeking the same reliefs. It is pleaded that it is the clandestine motive of the plaintiff to derails the working of the Trust by putting all kinds of hindrances in the business of the defendant. The previous suit was compromised and was withdrawn on 31.5.2017. The compromise

application records that the plaintiff is satisfied with the governance of the Trust and does not wish to be a part of the Trust anymore. It is further stated that as part of the compromise entire dues of various relatives of the plaintiff were paid at the time of the last compromise and hence the plaintiff had withdrawn from the Trust. Only a formality of a formal resignation letter was not undertaken from the plaintiff. Hence, it is pleded that the plaintiff has turned dishonest and wants to pressurize the defendants into parting with additional sums of money.

6. I have heard learned counsel for the parties. Learned senior counsel appearing for the defendants has reiterated as follows:-

(i) That the present suit is barred under Order 23 Rule 1 CPC in view of the fact that a similar suit based on the same cause of action seeking virtually identical reliefs was dismissed as withdrawn on 31.5.2017 without liberty to file a fresh suit. Hence, this suit is barred under Order 23 Rule 1 CPC.

(ii) It is pleaded that payments have been made to the relatives of the plaintiff in terms of the compromise arrived at by the parties. There is no bona fide in the new suit.

(iii) It is also pleaded that the only reason why sale of assets of defendant No.1 Trust was being done was on account of huge outstanding loan with the bankers i.e. PNB. The sale has been effected to repay the said loans. It is pleaded that even after the total land that was sold, 8 acres of land is still available with the defendant No.1 and as per AICTE Rule only 2.5 acres of land is required for running of an institution. It is pleaded that the defendant No.1 will be running an educational institute from the said remaining land.

7. Learned senior counsel appearing for the plaintiff has, however, pleaded that the reason for sale of land is make belief. The defendants have illegally closed the college. The loan of PNB was paid back in 2016 and as of today there is no loan pending. Regarding the payment of amounts to the relatives of the plaintiffs it is pleaded that the defendants had made payment to private parties for refund of loans taken from them. No amount was paid to the plaintiff. It is further pleaded that the properties are being sold at a low price and money is being siphoned off. Learned counsel has also relied upon judgment of this court in Infonox Software Private Limited & Ors. vs. Raj Kumar Dubey and Ors., 240 (2017) DLT 37.

8. Order 23 Rule 1CPC read as follows:-

1. Withdrawal of suit or abandonment of part of claim.-

(1) At any time after the institution of a suit, the plaintiffs may as against all or any of the defendants abandon his suit or abandon a part of his claim.

Provided that where the plaintiff is a minor or other person to whom the provisions contained in rules to 14 of Order XXXII extend, neither the suit nor any part of the claim shall be abandoned without the leave of the court.

(2) An application for leave under the proviso to sub-rule (1) shall be accompanied by an affidavit of the next friend and also, if the minor or such other person is represented by a pleader, by a certificate of the pleader to the effect that the abandonment proposed is, in his opinion, for the benefit of the minor or such other person.

(3) Where the court is satisfied,--

a) that a suit must fail by reason of some formal defect, or

(b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of a suit or part of a claim,

it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject matter of such suit or such part of the claim.

(4) Where the plaintiff,--

(a) abandons any suit or part of claim under sub-rule (1), or

(b) withdraws from a suit or part of a claim without the permission referred to in sub-rule (3)

he shall be liable for such costs as the court may award and shall be precluded from instituting any fresh suit in respect of such subject matter or such part of the claim."

9. Hence, where a plaintiff withdraws from a suit without permission to file a fresh suit he is precluded from instituting any fresh suit in respect of such subject matter and such part of the claim. A perusal of the present plaint filed by the plaintiff and the previous suit filed by the plaintiff in 2017 being CS(OS)45/2017 would show that the two plaints are virtually identical. A perusal of the prayer clause would also show that virtually identical prayers have been sought in the present suit as were sought in the previous suit. The following prayers have been sought in the present suit:

"a. pass a preliminary decree of rendition of account against the defendant No. 2 to 10, thereby directing the defendant No. 2 to 10 to render true account (income, expenditure, ledger books), earnings, assets, stocks of the trust (Defendant No.l) and appoint a receiver/chartered accountant for due audit of the books of account of the Defendant No.1 trust and consequent upon conduct of

inquiry/audit by way of preliminary decree pass a final decree of rendition of account; and

b. Pass decree of rendition of account against the defendant No. 2 to 10, thereby directing the defendant No. 2 to 10 to render true account (income, expenditure, ledger books), earnings, assets, stocks as well as the income of the trust (Defendant No. 1); and

c. Pass a decree of declaration, declaring defendant No. 2 to 10 ceases to be a trustee/management of the trust (Defendant No. 1); and

d. Pass a decree of permanent injunction against the defendant No. 2 to 10 restraining them from representing themselves as trustee and office bearers of Defendant No. 1 and/or operating the bank account; and

e. Pass a decree of permanent injunction restraining the defendant No. 2 and 10 not to interfere in management and day to day affairs of the trust in any manner whatsoever; and

f. Pass a Decree of permanent injunction against the defendant No. 2 to 10 restraining them from creating third party interest in the property (movable and immovable) and assets of the Defendant No. 1; and

g. Pass a decree of mandatory injunction against the defendant No. 2 to 10 thereby issue a mandate to handover the books of account, ledgers, minutes of meeting, bank accounts and other valuable securities to the plaintiffs; and

h. Award cost of the suit in favour of the plaintiffs and against the defendants."

The following prayers have been sought in the previous suit being CS

(OS) 45/2017:

"a. Pass a preliminary decree of rendition of account against the defendant Nos. 2 to 8, thereby directing the defendant Nos. 2 to 8 to render true account (income, expenditure, ledger books), earnings, assets, stocks of the trust (Defendant No. 1) and appoint a receiver/chartered accountant for due audit of the books, of account of the Defendant No.1 trust and consequent upon conduct of inquiry/audit by way of preliminary decree pass a final decree rendition of account; and

b. Pass decree of rendition of account against the defendant Nos.2 to 8, thereby directing the defendant Nos.2 to 8 to render true account (income, expenditure, ledger books), earnings, assets, stocks as well as the income of the trust (Defendant No.1); and

c. Pass a. decree of declaration, declaring defendant Nos.2 to 8 ceases to be a trustee/management of the trust (Defendant No.1); and

d. Pass a decree of permanent injunction against the defendant Nos.2 to 8 restraining them, from representing themselves as trustee and office bearers of Defendant No. 1 and/or operating the bank account; and

e. Pass a decree of permanent injunction restraining the defendant Nos.2 and 8 not to interfere in management and day to day affairs of the trust in any manner whatsoever; and

f. Pass a decree of permanent injunction against the defendant Nos.2 to 8 restraining them from creating third party interest in the property (moveable and immoveable) and assets of the defendant No.1; and

g. Pass a decree of mandatory injunction against the defendant Nos.2 to 8 thereby issue a mandate to hand

over the books of account, ledgers, minutes of meeting, bank accounts and other valuable securities to the plaintiffs; and

h. Pass a decree of permanent injunction against the defendant No.9 thereby restraining defendant No.9 his assigns, agent, representative or any person acting through him from creating any third party interest in plot No.23 to 24 failing in Khasra No.286, admeasuring 120 sq.yds; and

i. Award cost of the suit in favour of the plaintiffs and the defendants."

10. The perusal of the two prayer clauses noted above would show that the prayers sought in the present suit and in the previous suit are substantially and perhaps wholly identical. The grievances are the same in these two plaints, namely, about mismanagement and sale of immoveable properties of the trust illegally.

11. As already noted above, the first suit filed in January, 2017 was withdrawn simplicitor by the plaintiffs. During pendency of the said earlier suit in 2017 the plaintiffs had moved an application under order 23 Rule 1(1) CPC for withdrawal of the said suit. It was averred in the said application being IA 7070/2017 as follows:-

"1.That the present matter is pending adjudication before this Hon'ble Court and is now fixed for further proceedings on 11.07.2017.

2. That the Applicants/Plaintiffs are filing the present Application to seek the liberty of this Hon'ble Court to withdraw the present Suit against all the Defendants herein, in view of the out of court settlement/understanding arrived between the parties. Moreover, the Applicants/Plaintiffs respectfully submit that after withdrawal of the present Suit,

they wish to resign from the designation of trustees in the Defendant No.l Trust and do not wish to continue in the management of the trust or the trust properties in future.

3. Moreover, the Applicants/Plaintiffs respectfully submits that at joint meeting with all the Defendant Trustees, the Applicants/Plaintiffs were convinced that the state of affairs of the Defendant No. 1Trust has been done in the interest of the Trust and all accounts have been maintained properly and in case of any defect or deficiency, the Defendant Trustees will solely be held responsible and are ready to indemnify the. Plaintiffs for all future claims if any in respect of the Defendant No. 1 Trust.

4. The Applicants/Plaintiffs therefore does not wish to further pursue the present matter and have no other grievance left against the Defendants herein and wishes to withdraw the present Suit in view of the amicable settlement arrived between the parties.

5. Thus, the Applicants/Plaintiffs are filing the present Application seeking the liberty of this Hon'ble Court to withdraw the present Suit bearing CS(OS) No. 45 of 2017 titled as Babu Ram & Anr. Vs. Trident Educational Trust & Ors.,against all the Defendantsherein, in the interest of justice."

The said application was allowed and the suit was dismissed as withdrawn on 31.5.2017. The order reads as follows:-

"lA No.7070/2017 (of plaintiffs u/O XXIII R-l(l) CPC)

1. The plaintiffs/applicants seek to withdraw the suit.

2. The counsel for the defendants has no objection.

3. Allowed and disposed of.

CS(OS) 45/2017 & lA No.4453/2017 (u/O XL R-1 CPC)

4. The suit is dismissed as withdrawn.

5. Needless to state the interim order stands vacated. The parties to bear their own costs.

6. The date of 11July, 2017 is cancelled."

12. It is clear from a reading of the above application and order that the

plaintiff had sought unconditional liberty of this court to withdraw the suit. He had also stated that he wishes to resign from the designation of Trustee in defendant No.1 Trust. He has also noted that he is convinced that the state of affairs of defendant No.1 is in order and hence he had filed the said application. The application was duly supported by his own affidavit and his wife's affidavit. No liberty was sought to institute or file a fresh suit based on the same facts and same cause of action.

13. I may look at the legal position regarding Order 23 Rule 1 CPC. The Supreme Court in Sarguja Transport Service vs. State Transport Appellate Tribunal, M.P.Gwalior and Others, (1987) 1 SCC 5 held as follows:-

"7. The Code as it now stands thus makes a distinction between 'abandonment' of a suit and 'withdrawal' from a suit with permission to file a fresh suit. It provides that where the plaintiff abandons a suit or withdraws from a suit without the permission, referred to in Sub-rule (3) of Rule 1 of Order XXIII of the Code, he shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim. The principle underlying Rule 1 of Order XXIII of the Code is that when a plaintiff once institutes a suit in a Court and thereby avails of a remedy given to him under law, he cannot be permitted to institute a fresh suit in respect of the same subject-matter again after abandoning the earlier suit or by withdrawing it without the permission of the Court to file fresh suit. Invito beneficium non datur.

The law confers upon a man no rights or benefits which he does not desire. Whoever waives, abandons or disclaims a right will loose it. In order to prevent a litigant from abusing the process of the Court by instituting suits again and again on the same cause of action without any good reason the Code insists that he should obtain the permission of the Court to file a fresh suit after establishing either of the two grounds mentioned in Sub-rule (3) of Rule 1 of Order XXIII. The principle underlying

the above rule is founded on public policy, but it is not the same as the rule of res judicata contained in Section 11 of the Code which provides that no court shall try any suit or issue in which the matter directly or substantially in issue has been directly or substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. The rule of res judicata applies to a case where the suit or an issue has already been heard and finally decided by a Court. In the case of abandonment or withdrawal of a suit without the permission of the Court to file a fresh suit, there is no prior adjudication of a suit or an issue is involved, yet the Code provides, as stated earlier, that a second suit will not lie in Sub- rule (4) of Rule 1 of Order XXIII of the Code when the first suit is withdrawn without the permission referred to in Sub-rule (3) in order to prevent the abuse of the process of the Court."

14. Reference may also be had to the judgment of this Court on Infonox Software Private Limited & Ors. vs. Raj Kumar Dubey and Ors.(supra), wherein the court held as follows:

"18. Order 23 Rule 1 (4) CPC precludes a party from instituting a fresh suit only in respect of the same subject matter which was the subject matter of the first suit which was withdrawn/abandoned.

19. As to what would constitute "subject matter" the Supreme Court in Vallabh Das v. Madan Lal & Ors., AIR 1970 SC 987, held as follows:

"5. Rule 1, Order 23, CPC empowers the courts to permit a plaintiff to withdraw from the suit brought by him with liberty to institute a fresh suit in respect of the subject- matter of that suit on such terms as it thinks fit. The terms imposed on the plaintiff in the previous suit was that before bringing a fresh suit on the same cause of action, he must

pay the costs of the defendants. Therefore we have to see whether that condition governs the institution of the present suit. For deciding that question we have to see whether the suit from which this appeal arises is in respect of the same subject-matter that was in litigation in the previous suit. The expression "subject-matter" is not defined in the Civil Procedure Code. It does not mean property. That expression has a reference to a right in the property which the plaintiff seeks to enforce. That expression includes the cause of action and the relief claimed. Unless the cause of action and the relief claimed in the second suit are the same as in the first suit, it cannot be said that the subject-matter of the second suit is the same as that in the previous suit. Now coming to the case before us in the first suit Dr. Madan Lal was seeking to enforce his right to partition and separate possession. In the present suit he seeks to get possession of the suit properties from a trespasser on the basis of his title. In the first suit the cause of action was the division of status between Dr. Madan Lal and his adoptive father and the relief claimed was the conversion of joint possession into separate possession. In the present suit the plaintiff is seeking possession of the suit properties from a trespasser. In the first case his cause of action arose on the day he got separated from his family. In the present suit the cause of action, namely, the series of transactions which formed the basis of his title to the suit properties, arose on the death of his adoptive father and mother. It is true that both in the previous suit as well as in the present suit the factum and validity of adoption of Dr. Madan Lal came up for decision. But that adoption was not the cause of action in the first nor is it the cause of action in the present suit. It was merely an antecedent even which conferred certain rights on him. Mere identity of some of the issues in the two suits does not bring about an identity of the subject matter in the two suits. As observed in Rakhma Bai v. Mahadeo Narayan, I.L.R. 42 Bom. 1155 the expression "subject matter" in Order 23, Rule 1, CPC means the series of acts or transactions alleged to exist giving rise to the relief claimed. In other words

"subject matter" means the bundle of facts which have to be proved in order to entitle the plaintiff to the relief claimed by him. We accept as correct the observations of Wallis C.J. in Singa Reddi v. Subba Reddi, I.L.R. 39 Mad. 987 that where the cause of action and the relief claimed in the second suit are not the same as the cause of action and the relief claimed in the first suit, the second suit cannot be considered to have been brought in respect of the same subject matter as the first suit."

15. An important aspect of Order 23 Rule 1(4), CPC is that it precludes a party from instituting a fresh suit only in respect of the same subject matter which was the subject matter of the first suit which was withdrawn/abandoned.

16. The fact of this case are that the plaintiff filed a suit based on the cause of action, namely, mismanagement of the Trust including sale of assets of the Trust and unconditionally withdrew the suit. Prima facie based on the same allegations and same cause of action, he cannot be permitted to file the present suit as has been done. I have no hesitation in concluding that prima facie the subject matter of this suit and the previous suit filed by the plaintiffs are identical. Prima facie it appears that the present suit would not be maintainable.

17. That apart from the above conclusion, I may also note that the plaintiff first filed the first suit in January 2017, claiming that the defendants are alienating the properties of the trust illegally. He has on his own thereafter withdrawn the suit on 31.05.2017 meaning thereby he has accepted the acts of the defendants and acquiesced to the sale of the immoveable properties. Now after eight months later he has sought to again file a fresh suit raising the same allegations all over again. Taking into the account his conduct of

having acquiesced to the sale and having given in writing that he was satisfied with the conduct of the trust by the defendants, he cannot now be permitted to approach this court again to seek an interim order restraining the defendants from doing, the same acts which defendant were doing in May 2017. Hence, even otherwise, in my opinion, the interim order passed by this court on 28.02.2018 is liable to be vacated.

18. Regarding reliance of the learned senior counsel for the plaintiff on the judgment of this court in Infonox Software Pvt. Ltd. and Ors. vs. Raj Kumar Dubey and Ors. (supra) is concerned the reliance is misplaced. That was a case where this court had held that the subsequent suit that was filed by the plaintiff therein was based on a different cause of action and seeking a different relief. The subject matter of the first suit in that case was different than the subject matter of the second suit. The said judgment does not help the case of the plaintiff.

19. The application being IA No.2910/2010 is dismissed and IA No.6510/2018 is allowed. Interim order dated 28.02.2018 stands vacated. However, the defendants will place on record an affidavit every quarter giving full details of every sale of the immoveable assets, including any consideration or part consideration received and full details of sale affected, if any.

(JAYANT NATH) JUDGE

DECEMBER 13, 2018/n corrected and released on 29.01.2019.