Tadikela Subbaiah Trust (R) vs Sri C Mahesh Kumar
2021 Latest Caselaw 5170 Kant

                                     M.F.A.No.2672/2021

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      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 1ST DAY OF DECEMBER 2021

                         BEFORE

         THE HON'BLE MRS JUSTICE K.S.MUDAGAL

     MISCELLANEOUS FIRST APPEAL NO.2672/2021(CPC)

BETWEEN:

1.      TADIKELA SUBBAIAH TRUST (R)
        SUBBAIAH INSTITUTE OF MEDICAL SCIENCES
        DULY REGISTERED UNDER THE INDIA TRUST ACT
        NEAR SUBBAIAH HOSPITAL COMPLEX
        JAIL ROAD, SHIMOGA KARNATAKA
        REPRESENTED BY MANAGING TRUSTEE
        SRI T SUBBARAMAIAH

2.      SRI T.SUBBARAMAIAH
        S/O LATE T SUBBAIAH
        AGED ABOUT 80 YEARS
        MANAGING TRUSTEE

3.      DR.S.NAGENDRA
        S/O T.SUBBARAMAIAH
        AGED ABOUT 56 YEARS
        TRUSTEE

4.      DR.LATHA R TELANG
        D/O RAMACHANDRA TELANG
        AGED ABOUT 50 YEARS
        TRUSTEE

5.      DR.S.SRINIVAS
        S/O T SUBBRAMAIAH
        AGED ABOUT 54 YEARS
        TRUSTEE

6.      DR.C.M.VINAYA KUMARI
        D/O MOHAN KUMAR
        AGED ABOUT 45 YEARS
        TRUSTEE
                                     M.F.A.No.2672/2021

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       A2 TO A6 ARE R/AT
       3RD CROSS, GANDHINAGAR
       SHIVAMOGGA                        ...APPELLANTS

(BY SRI JAYAKUMAR S PATIL, SENIOR COUNSEL FOR
    SRI S.B.TOTAD, ADVOCATE)

AND:

SRI C.MAHESH KUMAR
S/O LATE CHIKKAIAH
AGED ABOUT 56 YEARS
(WRONGLY CLAIMED-LIFE TRUSTEE
FINANCIAL ADMINISTRATOR
TADIKELA SUBBAIAH TRUST)
R/AT NO.601, H-BLOCK
BRIGADE GATEWAY
WORLD TRADE CENTRE
BENGALURU - 560 022

AND ALSO AS STATED
IN HIS AFFIDAVIT
R/AT NO.137, "AVVANAMANE"
NEAR GANESHA TEMPLE
GANDHINAGAR, BHADRAVATHI                ...RESPONDENT
(BY SRI M.S.SHYAMSUNDAR, ADVOCATE FOR C/R)
     THIS MFA IS FILED UNDER ORDER XLIII RULE 1(R) OF
CPC PRAYING TO SET ASIDE THE ORDER DATED 23.04.2021
PASSED BY THE PRINCIPAL DISTRICT AND SESSIONS JUDGE,
SHIVAMOGGA IN O.S.NO.4/2021 ON IA NO.2.

      THIS MFA COMING ON FOR FURTHER HEARING THIS
DAY, THE COURT DELIVERED THE FOLLOWING:

                   JUDGMENT

Heard.

2. Aggrieved by the interim injunction order

granted against them, the defendants in O.S.No.4/2021 M.F.A.No.2672/2021

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on the file of the Principal District & Sessions Judge,

Shivamogga have preferred the above appeal.

3. The respondent is the plaintiff and the

appellants are the defendants in O.S.No.4/2021. For the

purpose of convenience, the parties will be referred to

henceforth according to their ranks before the trial Court.

4. Defendant No.1 in the suit is a Public

Charitable Trust duly constituted under the Trust deed

dated 29.08.2003. Defendant Nos.2 to 6 are the trustees

of defendant No.1. The Trust was promoted with the

object to render medical services and for that purpose

established Medical Educational Institutions at

Shivamogga.

5. The Trust was registered in the office of the

Sub-Registrar of Shivamogga. The Trust established

medical college by name Subbaiah Institute of Medical

Science. In course of time, the activities of the Trust

were expanded by opening Dental College, Nursing

College, Medical College and a Hospital with 700 beds M.F.A.No.2672/2021

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etc., for the benefit of the rural people in Shivamogga

District.

6. Under the resolution dated 24.10.2013, the

plaintiff was taken as one of the Trustees of defendant

No.1 Trust. There was supplementary Trust deed to that

effect. He was assigned to do certain works entrusted by

the Chairman of the Trust. Before induction of the

plaintiff, defendant No.1 had applied to the Government

of Karnataka seeking linguistic minority status.

7. After induction of the plaintiff, the Trust filed

W.P.No.31024/2013 against the Government and others

for consideration of its requisition for conferring Linguistic

Minority status on it. By virtue of the order passed in

W.P.No.31024/2013, the institutions run by the Trust

were recognized as Linguistic Minority Institutions. The

intake capacity of the medical college was also increased

to 150 seats.

8. The defendants issued letter dated

28.08.2014 alleging that the plaintiff misusing his position

as Trustee misappropriated huge funds and extracted M.F.A.No.2672/2021

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money from the students, thereby cheated the Trust and

the students. The complaints were filed against the

plaintiff in Shivamogga police stations for the offences of

criminal breach of trust, fraud, criminal conspiracy,

insulting or causing annoyance to provoke breach of

peace etc. The plaintiff was arrested in the said cases.

9. On 15.09.2014, the plaintiff was informed

that he has failed to reply to the show cause notice dated

28.08.2014 and his tenure as trustee would expire on

24.10.2014. Under the show cause notice dated

28.09.2014 he was also called upon to remit the money

collected from the students along with the related

documents of 24 students of MBBS course.

10. Another show cause notice dated 22.10.2014

was issued alleging that the plaintiff fraudulently collected

the cheques of the Trust promising to secure loans for the

Trust. The defendants convened meeting on 23.11.2014

for taking decision in the matter for removal of the

plaintiff from the Trust.

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11. The plaintiff filed O.S.No.9026/2014 before

the City Civil Court, Shivamogga for permanent injunction

restraining the Trust from holding the meeting. An

ex-parte temporary injunction was granted in the said

case. By the time, the temporary injunction was

communicated the meeting had been held. In the said

meeting, it was resolved to issue show cause notice to the

plaintiff for his removal.

12. Eventually in another meeting dated

01.12.2014, the Trust passed resolution to remove the

plaintiff from the Trust. The Supplementary Trust deeds

dated 24.10.2013 and 03.06.2013 were cancelled, by

another registered supplementary trust deed wherein the

trust was reconstituted by removing the plaintiff as

trustee. In view of such subsequent development, the

plaintiff withdrew O.S.No.9026/2014 as having become

infructuous.

13. On 30.04.2015, the plaintiff filed

O.S.No.4127/2015 before XXX Additional City Civil &

Sessions Judge, Bengaluru against the defendants M.F.A.No.2672/2021

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seeking declaration that the resolutions for his removal

from the trust, notice of termination were null and void

and not binding on him. He further sought perpetual

injunction to restrain the defendants from obstructing or

causing any hindrance from discharging his day-to-day

affairs and duties as life trustee and financial

administrator in defendant No.1 Trust.

14. In O.S.No.4127/2015, the plaintiff filed

I.A.No.2 seeking temporary injunction against the

defendants from obstructing him in discharging his

functions as trustee. Learned XXX Additional City Civil &

Sessions Judge, Bengaluru on hearing both side, allowed

the said application and granted temporary injunction.

Defendant No.3 challenged the said order before this

Court in M.F.A.No.3746/2015. This Court on hearing both

side, by order dated 24.06.2015 allowed the appeal, set

aside the order of the trial Court and rejected I.A.No.2

holding that there is no prima-facie case, balance of

convenience and irreparable injury lie in favour of the

defendants.

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15. The plaintiff challenged the said order of this

Court before the Hon'ble Supreme Court in Petition(s) for

Special Leave to Appeal (C) No.23904/2015. The Hon'ble

Supreme Court on hearing both side by the order dated

31.08.2015 dismissed the Special Leave Petition.

16. Thereafter in O.S.No.4127/2015 defendant

No.3 filed I.A.No.6 under Order VII Rule 10A and 11(a) of

CPC for rejection of the plaint. The said Court after

hearing both side, partly allowed the said application and

directed to return the plaint to present the same before

the District Court at Shivamogga on the ground that it

lacks territorial jurisdiction. After passing such order, the

plaintiff presented the said plaint before II Additional

Senior Civil Judge, Shivamogga which was registered in

O.S.No.51/2019.

17. In O.S.No.51/2019 the defendants filed

I.A.No.5 to return the plaint for presenting the same

before District Court. The said application was allowed

and the plaint was returned for presentation before the

District Court, Shivamogga. On such return, the plaint M.F.A.No.2672/2021

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was presented in the Principal District Court, Shivamogga

and registered in O.S.No.4/2021.

18. In O.S.No.4/2021, the plaintiff filed I.A.No.2

seeking injunction to restrain the defendants from

changing the nature of the property or alienating or

encumbering the movable or immovable properties, any

assets/Multispecialty Hospitals, Nursing Homes acquired

either in the name of defendant No.1 Trust or in the name

of other defendants from the date of his induction as

trustee until disposal of the suit, even on the count of

good interest of the Trust or its institution or its subjects

without express permission of the Court.

19. In the affidavit filed in support of the

application, the plaintiff contended that after his induction

as a trustee, he has spent an amount of Rs.42.15 crores

for the development of the institution of the Trust by

pooling his resources and borrowing loans. He further

alleged that diverting funds of the Trust, the defendants

have acquired huge assets in their individual names. The

defendants denied the allegations made in the affidavit M.F.A.No.2672/2021

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filed in support of I.A.No.2 about embezzlement of the

Trust's fund. For that the plaintiff filed rejoinder affidavit

claiming that out of the income of the Trust the

defendants have acquired and established Maxx Super

Specialty Hospital, Maxx Angles Mother and Child

Hospital, Maxx Multi Specialty Cancer Hospital, Maxx

Hospital at Shivamogga.

20. The trial Court on hearing both side, by the

impugned order allowed I.A.No.2 and granted temporary

injunction restraining the defendants not only from

alienating or encumbering the trust properties, but also

the properties standing in the names of defendant Nos.2

to 6 till disposal of the suit. The trial Court further

directed that the defendants are at liberty to offer bank

guarantee in respect of new educational courses without

creating charge over the assets of the Trust with the prior

permission of the Court.

21. Sri. Jayakumar.S.Patil learned Senior Counsel

appearing for Sri.S.B.Totad, learned Counsel on record for

the appellant/defendant reiterating the grounds of the M.F.A.No.2672/2021

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appeal assails the impugned order on the following

grounds:

i) The maintainability of the suit itself is

doubtful. If the suit is treated as one for declaration and

injunction simplicitor, then having regard to the valuation

made and Section 15 of CPC the suit shall lie before the

Civil Judge and not the District Judge. Indeed the

allegation and the prayer made in the plaint attract

Section 92 of the Civil Code of Procedure. In such case,

the suit cannot be maintained without leave of the Court

such suit shall be only by Advocate General or two or

more persons having interest in the trust.

ii) In the plaint absolutely there was no pleading

regarding the plaintiff investing Rs.42.15 crores. For the

first time, after five years of institution of the suit, he

introduced such case.

iii) The trial Court overlooked the judgment of

this Court in MFA No.3746/2015 wherein it was already

held that the plaintiff has failed to make out prima-facie

case.

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iv) Since the defendant had to furnish the Bank

guarantee for commencement of new course, for

disbursement of the salary to the Doctors and the other

staff of several institutions, the impugned order causes

hardship to the defendant.

v) Any relief for temporary injunction should be

in aid of the main relief. Since there was no prayer for

accounts, the application was not maintainable. The order

of the trial Court is perverse and arbitrary.

22. Sri M.S.Shyamsundar, learned counsel for

respondent/plaintiff justifies the impugned order on the

following grounds:

i) The issue of the jurisdiction was not raised

before the trial Court, therefore Section 21 of the Civil

Code of Procedure bars raising of such issue before this

Court for the first time in appeal.

ii) This Court rejected the earlier application of

the plaintiff on the ground that the trial Court had no

territorial jurisdiction. The injunction sought in that case M.F.A.No.2672/2021

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was different. Therefore the judgment in MFA

No.3746/2015 has no bearing in the matter.

iii) Rs.42.15 crores was paid by the plaintiff to

first defendant's loan account. Plaintiff has issued notice

demanding repayment of the said amount and

contemplating to file recovery suit.

iv) The plaintiff was the only outsider and all the

defendants were the members of the same family.

Therefore to cause loss to the plaintiff, they are trying to

raise loan creating charge on the trust properties.

v) The Criminal cases registered against the

plaintiff were quashed. Section 92 of CPC does not apply

to the cases between trustee and trust, but the same

applies to the cases filed by the outsider against the trust.

vi) By the impugned order, the trial Court has

not totally barred the defendants from raising loan, but

has only put a rider that they should seek permission of

the Court before raising any such loan.

vii) Since the trial Court has considered all the

issues, this Court in the appellate jurisdiction cannot

interfere with such discretionary order.

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23. In support of his submission, he relied the

following judgment:

i) Muhammed Azhar Ali V/s Abdul Razzaq Bidri and another1;

ii) Dodda-Basti @ Guru Basti Trust vs. Public Trust created under a Will by deceased Venkayya2.

24. It is no doubt true that the order granting or

rejecting the relief of temporary injunction being

discretionary one, such order cannot be interfered in the

appellate jurisdiction unless it is shown that the order

suffers vice of perversity, arbitrariness or capriciousness.

Non consideration of the documents produced before the

Court and deviating from the settled legal principles

amount to perversity.

25. It is settled principle of law that to seek the

relief of temporary injunction, the applicant has to satisfy

the following :

i) That he has a prima-facie case. Prima-facie

case means prima-facie case of his legal right and injury

C.R.P No.200007/2018 D.D. 31.08.2021.

RSA No.5827/2011 D.D.28.07.2015 M.F.A.No.2672/2021

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to such right, that his suit is not vexatious and there is

serious question to be decided on the trial.

ii) The balance of convenience lies in his favour.

iii) If temporary injunction is not granted, he will

put to irreparable injury.

26. In the light of the above principles, this Court

has to see whether the plaintiff made out a prima-facie

case. It is settled principle of law that any interim relief

by way of temporary injunction sought by the plaintiff

should be in aid of the main relief sought in the suit. Such

relief should relate to subject matter of the suit.

27. The suit was for declaration that the removal

of the plaintiff from the trust is null and void and for

injunction to restrain the defendants from obstructing or

causing any hindrance from discharging his functions as

life trustee and Financial Administrator. The plaintiff had

valued the suit at Rs.2,000/-. In the ordinary course as

per Section 15 of CPC such suit should be filed before the

Civil Judge.

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28. It is claimed that the said suit is not covered

under Section 92 of CPC. To advance that contention, the

learned counsel for the plaintiff himself relied on the

judgments of this Court referred to supra. In the

judgment of Mohammed Azhar Ali's case it was held

that the suit filed by the plaintiff to vindicate their

personal rights i.e., to claim back their alleged positions

as Trustees of the Charitable trust and for cancellation of

two resolution and Supplementary Deed of Trust, Section

92 of CPC is not applicable.

29. In Dodda-Basti's case relied on by the

learned counsel for defendants it was held that not every

suit claiming reliefs specified in Section 92 of CPC can be

brought under the said Section, but only the suits

claiming the relief by individuals as representatives of the

public for vindication of public rights, shall be treated as

the suits under Section 92 of CPC.

30. If such contention is accepted and the suit is

treated as the one other than the suit under Section 92 of

CPC, then there was no relief sought in the suit seeking M.F.A.No.2672/2021

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rendition of the accounts or seeking permanent injunction

to restrain the defendants from managing affairs of trust

in any manner. Under such circumstance the relief sought

under IA No.2 was beyond the purview of the suit and the

said relief was not in aid of the main relief sought in the

suit. The Trust properties or the private properties of

defendant Nos.2 to 6 regarding which injunction was

sought were not the subject matter of the suit.

31. The allegations in the affidavit were that the

trustees are mismanaging the affairs of the trust. In other

words, have committed breach of the trust. Even the

order of the learned District Judge dated 01.02.2021

shows that he entertained the suit saying that disputes

relates to the trust, therefore the suit is cognizable by the

District Court. That indicates that the District Court

assumed the jurisdiction under Section 92 of CPC. If that

is the case, as rightly pointed out by Sri Jayakumar

S.Patil, the learned senior counsel, the suit itself is not

maintainable as the same was without the leave of the

Court and not in a representative capacity.

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32. The claim of the plaintiff was that he is the

life trustee and the defendants had no right or power to

remove him from the post of trustee. He also contended

that his removal from the trust is contrary to the order of

temporary injunction granted in the earlier suit. When the

matter was pending before the City Civil Judge, the

plaintiff on the same ground sought temporary injunction

to restrain the defendants from obstructing him or

causing hindrance from discharging duties as life trustee

or financial administrator. The trial Court had granted

temporary injunction.

33. That order was challenged before this Court

in MFA No.3746/2015. This Court observed that there was

serious allegation of mismanagement and misconduct

against the plaintiff and the temporary injunction order

granted in the earlier suit was not communicated to the

defendants. It was further held that the interim order

confined only to the meeting scheduled on 23.11.2014

which was not communicated and the holding of M.F.A.No.2672/2021

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subsequent meetings or removal was not barred under

the said order.

34. This Court further held that when serious

financial irregularities were alleged against the plaintiff, it

will be neither legal nor justifiable to grant of interim

injunction to continue him as a trustee by the temporary

injunction order. Thus it was held that no prima-facie

case was made out. The doubt about the jurisdiction was

one of the grounds to arrive at such conclusion and not

the sole ground.

35. So far as balance of convenience and

irreparable injury also, the said points were held in favour

of the defendants. The trial Court overlooked the order of

this Court passed in M.F.A.No.3746/2015 and the order of

the Hon'ble Supreme Court confirming the same.

36. The plaintiff sought injunction against

borrowing loan by creating the charge on the ground that

he has invested Rs.42.15 crores to bring the trust out of

its financial crisis. Such pleadings were conspicuously M.F.A.No.2672/2021

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absent in the plaint. The trial Court did not consider that

fact which amounts to perversity.

37. Apart from that the trial Court not only

granted injunction against alienation of the trust

properties, but also restrained the defendants from

raising loan by creating charge on their own properties.

Except the bald allegation in the affidavit of the plaintiff,

absolutely there was no material to show that defendant

Nos.2 to 6 have established the other hospitals diverting

the funds of the trust. Still the trial Court held that there

is a prima facie case. Nevertheless the trial Court did not

even refer to the judgment of this Court where under

earlier application of the plaintiff was rejected on the

ground of his failure to make out the prima facie case

which was upheld by the Hon'ble Supreme Court. The

above facts and circumstances clearly show that the

impugned order is perverse, arbitrary and capricious. In

granting injunction in respect of private properties of the

defendants, the trial Court has exceeded its jurisdiction.

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Therefore the order is liable to be set aside. The appeal

is allowed with costs.

The impugned order dated 23.04.2021 passed on

IA No.II in O.S.No.4/2021 is hereby set aside. IA No.II

filed by the plaintiff under Order 39 Rules 1 and 2 of CPC

is hereby dismissed.

At this stage, learned counsel for the

plaintiff/respondent submits that the parties be given

liberty to urge the point of jurisdiction before the trial

Court. The trial Court shall decide the maintainability of

the suit before it in the context of Sections 15 and 92 of

CPC uninfluenced by any of the observations made in the

course of this order.

Sd/-

JUDGE KSR/AKC