Kerala High Court
S.N.D.P.Yogam vs G.Krishnamoorthy on 27 May, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
&
THE HONOURABLE MRS. JUSTICE C.S. SUDHA
FRIDAY, THE 27TH DAY OF MAY 2022 / 6TH JYAISHTA, 1944
RFA NO. 843 OF 2009
AGAINST THE JUDGMENT IN OS No.45/1999 OF THE VI ADDITIONAL
DISTRICT COURT, ERNAKULAM
APPELLANTS/DEFENDANTS 1 & 2:
1 S.N.D.P.YOGUM A PUBLIC LIMITED COMPANY,
REP.BY ITS PRINCIPAL OFFICER, NAMELY THE GENERAL
SECRETARY, V.K.NATESAN, S/O.KESAVAN, AND HAVING
HIS OFFICE AT SNDP YOGAM OFFICE, KOLLAM.
2 V.K.NATESAN,
S/O.KESAVAN, VELLAPPALLIL HOUSE,
KANICHUKULANGARA, CHERTHALA.
BY ADVS.
SRI.A.N.RAJAN BABU
SRI.A.R.EASWAR LAL
SRI.P.GOPALAKRISHNAN
SRI.A.K.GOPI
RESPONDENTS/PLAINTIFFS & DEFENDANTS 3 TO 18:
1 G.KRISHNAMOORTHY (DIED)
S/O.GOPALAN, RETIRED SUPERINTENDENT OF POLICE,
RESIDING AT KRISHNA NIKETAN, NEYYATTINKARA
VILLAGE.
2 REGHUNATHA PANICKER,
S/O.NARAYANA PANICKER, RETIRED ASSISTANT EXCISE
COMMISSIONER, PADMAVILASAM, THALAYAL DESOM,
ATHIYANALLOOR VILLAGE.
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 2
3 P.E.VELAYUDHAN,
S/O.ITTAMAN, PARALEKKUDIYIL, THOPPUMPADY,
RAMESWARAM VILLAGE, KOCHI TALUK.
4 K.P.GOPI,
S/O.NARAYANAN, KOCHUPARAMBIL, THULASIPPARA,
IRATTAYAR P.O., UDAMBANCHOLLA, IDUKKI.
5 V.N.MOHANKUMAR,
S/O.P.A.NARAYANAN, VADAKKINADATHU, VENNALA P.O.,
EDAPPALLY, THEKKUMBHAGOM VILLAGE.
6 K.K.SUNILKUMAR,
S/O.KRISHNAN, SECRETARY, SREE NARAYANA FORUM FOR
SOCIAL JUSTICE, RESIDING AT SATHYALAYAM,
CHANGANKULANGARA.
7 C.K.VIDHYA SAGAR,
VICE PRESIDENT, SNDP YOGAM, CHENGOKAL,
THODUPUZHA.
*8 A.S.PRATAP SINGH PRESIDENT (DIED),
SNDP YOGUM, S.N.VIHAR, KANIMANGALAM P.O.,
TRICHUR-27. (DELETED)
9 KAVYAD MADHAVANKUTTY,
DEVASWOM SECRETARY, KAVYAD HOUSE, PEERAPPANCODE,
VENJARAMOODE, TRIVANDRUM.
10 M.B.SREEKUMAR,
MOHANAVILASAM, THUNGUKAVU P.O., PATHANAMTHITTA.
11 MOHAN SANKAR,
LAKSHMI NIVAS, PATTATHANAM EAST, KOLLAM P.O.
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 3
12 M.P.SHAJI BONSALE,
MUGHAPPIL, KOZHAKKEKARA VADAKKU, VALIYAPARAMBU,,
KARTHIKAPPALLY.
13 V.K.ASHOKAN,
VELLAMPATHU VEEDU, BENETH ROAD,
CHEMBOOKAVU, THRISSUR.
14 T.S.SANJEEV,
THARAMMEL VEEDU MURINJAKAL P.O., KOODAL,
PATHANAMTHITTA.
15 E.M.MURALEEDHARAN,
EETTUMMAL VEEDU, ANUPAMA, SNDY ROAD,
PALLURUTHY, KOCHI-5.
*16 A.K.SOMAN,
AYYANKOYIKKAL, PUTHUPPALLY P.O.,
KOTTAYAM. (NAME DELETED)
17 B.YAMUNA PRASAD,
VENUVILASAM, AMARAVILA P.O., NEYYATTINKARA.
18 K.N.DIVAKARAN,
KALARIKKAL, ADIMALI.
*19 P.R.SADANANDHAN,
PULLARKKAD HOUSE, NEAR KSRTC, PERUMBAVOOR P.O.,
KUNNATHUNAD.(NAME DELETED)
*20 V.PONNAN,
JEM MANSION, MARUTHORVATTOM P.O.,
CHERTHALA. (NAME DELETED)
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 4
*21 K.K.SUNILKUMAR,
SECRETARY, SREE NARAYANA FORUM FOR SOCIAL
JUSTICE, RESIDING AT SATHYALAYAM,
CHANGANKULANGARA, COCHIN.(NAME DELETED)
*22 M.R.SASIDHARAN,
S/O.RAGHAVAN, SOCIAL WORK, MANAKADAVU VILLAGE,
ARIKUZHA,, THODUPUZHA TALUK.(NAME DELETED)
*23 P.J.SADANANDAN,
S/O.NEELAKANDAN, RESIDING AT MODIYIL HOUSE,
PAZHANGADI VILLAGE,RANNI VILLAGE,
PATHANAMTHITTA. (NAME DELETED)
NAMES OF RESPONDENTS 19, 21 AND 22 DELETED FROM
PARTY ARRAY VIDE ORDER DATED 2/07/2018 IN IA
2766/10.
NAME OF RESPONDENTS 8, 16, 20 AND 23 ARE DELETED
FROM THE PARTY ARRAY AT THE RISK OF THE
PETITIONERS/APPELLANTS AS PER ORDER DATED
18.02.2021 IN IA 4 OF 2020.
IT IS RECORDED THAT R9 DIED AND LEGAL HEIRS OF
DECEASED R9 NEED NOT BE IMPLEDED AS PER ORDER
DATED 18.02.2021 IN IA NO.4 OF 2020. R9 BEING NOT
A SHARER IN THE NON TRADING COMPANY BUT ONLY A
MEMBER AND HIS MEMBERSHIP BEING NOT TRANSFERABLE.
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 5
BY ADVS.
SRI.V.R.KESAVA KAIMAL FOR R9
SRI.ENOCH DAVID SIMON JOEL FOR R7
SRI.M.G.KARTHIKEYAN FOR R10, R14 AND R17
SRI.T.I.ABDUL SALAM FOR R7
SRI.P.B.KRISHNAN FOR R7
SRI.P.B.SUBRAMANYAN FOR R7
SRI.SABU GEORGE FOR R7
SMT.B.ANUSREE FOR R7
SRI.MANU VYASAN PETER FOR R7
SRI.K.JAGADEESCHANDRAN NAIR FOR R5
SMT.MEERA P. FOR R7
SRI.J.KRISHNAKUMAR FOR R5
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD
ON 27.05.2022, ALONG WITH CO.57/2010, THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 6
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
&
THE HONOURABLE MRS. JUSTICE C.S. SUDHA
FRIDAY, THE 27TH DAY OF MAY 2022 / 6TH JYAISHTA, 1944
CO NO. 57 OF 2010
IN
RFA 843 OF 2009
AGAINST THE DECREE AND JUDGMENT DATED 8.4.2009 IN OS No.
45/1999 IN THE DISTRICT COURT, ERNAKULAM
CROSS APPELLANTS/RESPONDENTS 5 & 6 /PLAINTIFFS 5 & 6:
1 V.N.MOHANKUMAR,
S/O.P.A.NARAYANAN, VADAKKINADATHU, VENNALA P.O.,
EDAPPALLY, THEKKUMBHAGOM VILLAGE.
2 K.K.SUNILKUMAR,
S/O.KRISHNAN, SECRETARY, SREE NARAYANA FORUM FOR
SOCIAL JUSTICE, RESIDING AT SATHIYALAYAM,
CHANGANKULANGARA.
BY ADV SRI.K.JAGADEESCHANDRAN NAIR
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 7
CROSS APPEAL RESPONDENTS/APPELLANTS/DEFENDANTS &
PLAINTIFFS NO.1 TO 4:
1 S.N.D.P.YOGUM A PUBLIC LIMITED COMPANY,
REP.BY ITS PRINCIPAL OFFICER, NAMELY THE GENERAL
SECRETARY, V.K.NATESAN, S/O.KESAVAN, AND HAVING
HIS OFFICE AT SNDP YOGAM OFFICE, KOLLAM.
2 V.K.NATESAN,
S/O.KESAVAN, VELLAPPALLIL HOUSE,
KANICHUKULANGARA, CHERTHALA.
3 C.K.VIDHYA SAGAR,
VICE PRESIDENT, SNDP YOGAM, CHENGOKAL,
THODUPUZHA.
4 A.S.PRATAP SINGH PRESIDENT (DIED),
SNDP YOGUM, S.N.VIHAR, KANIMANGALAM P.O.,
TRICHUR-27.
5 KAVYAD MADHAVANKUTTY,
DEVASWOM SECRETARY, KAVYAD HOUSE, PEERAPPANCODE,
VENJARAMOODE, TRIVANDRUM.
6 M.B.SREEKUMAR,
MOHANAVILASAM, THUNGUKAVU P.O., PATHANAMTHITTA.
7 MOHAN SANKAR,
LAKSHMI NIVAS, PATTATHANAM EAST, KOLLAM P.O.
8 M.P.SHAJI BONSALE,
MUGHAPPIL, KOZHAKKEKARA VADAKKU, VALIYAPARAMBU,
KARTHIKAPPALLY.
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 8
9 V.K.ASHOKAN,
THARAMMEL VEEDU, MURINJAKAL P.O., KOODAL,
PATHANAMTHITTA.
10 T.S.SANJEEV,
THARAMMEL VEEDU MURINJAKAL P.O.,
KOODAL, PATHANAMTHITTA.
11 E.M.MURALEEDHARAN,
ETTUMMAL VEEDU, ANUPAMA, SNDY ROAD,
PALLURUTHY, KOCHI-5.
12 A.K.SOMAN,
AYYANKOYIKKAL, PUTHUPPALLY P.O.,
KOTTAYAM.
13 B.YAMUNA PRASAD,
VENUVILASAM, AMARAVILA P.O., NEYYATTINKARA.
14 K.N.DIVAKARAN,
KALARIKKAL, ADIMALI.
15 P.R.SADANANDHAN,
PULLARKKAD HOUSE, NEAR KSRTC, PERUMBAVOOR P.O.,
KUNNATHUNAD.
16 V.PONNAN,
JEM MANSION, MARUTHORVATTOM P.O.,
CHERTHALA.
17 M.R.SASIDHARAN,
S/O.RAGHAVAN, SOCIAL WORK, MANAKADAVU VILLAGE,
ARIKUZHA, THODUPUZHA TALUK, (ADDL.18 TH
DEFENDANT)
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 9
18 P.J.SADANANDAN,
S/O.NEELAKANDAN, RESIDING AT MODIYIL HOUSE,
PAZHANGADI VILLAGE, RANNI VILLAGE, PATHAMTHITTA.
(ADDL. 19TH DEFENDANT)
BY ADV. SRI.A.N.RAJAN BABU FOR R1 AND R8
THIS CROSS OBJECTION/CROSS APPEAL HAVING BEEN FINALLY
HEARD ON 27.05.2022, ALONG WITH RFA.843/2009, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
R.F.A. No.843 of 2009 &
C.O. No.57 of 2010 10
C.R.
P.B.SURESH KUMAR & C.S.SUDHA, JJ.
-----------------------------------------------
R.F.A. No.843 of 2009
and
Cross Objection No.57 of 2010
-----------------------------------------------
Dated this the 27th day of May, 2022.
JUDGMENT
P.B.Suresh Kumar, J.
The above appeal and cross objection are directed
against the judgment and decree dated 08.04.2009 in O.S.No.45
of 1999 on the files of the Court of the District Judge, Ernakulam.
Defendants 1 and 2 are the appellants in the appeal and
plaintiffs 5 and 6 are the objectors in the cross objection.
2. The suit was one instituted in a representative
capacity with the leave of the court under Section 92 of the
Code of Civil Procedure (the Code) for removal of defendants 2
R.F.A. No.843 of 2009 &
to 16 from the administration of Aruvippuram Sree Narayana
Dharma Paripalana Yogam (the Yogam) and for framing of a
scheme for its administration.
3. The plaintiffs are members of the Yogam. The
first defendant is the Yogam itself and defendants 2 to 16 are
the members of the Council of the Yogam on whom the
administration of the Yogam vests in terms of the Articles of
Association of the Yogam. The Yogam was registered as a
public limited company under the Indian Companies Act, 1882,
as applied to the erstwhile Travancore, without the addition of
the word "Limited" to its name. Going by the objects of the
Yogam as disclosed in its Memorandum of Association, it is a
body constituted for carrying out the daily poojas, annual
festivals and all other requirements of Aruvippuram Siva Temple
and other temples which are brought under it and for improving
the spiritual and temporal education and for developing the
industrial habits of those belonging to Ezhava community by
establishing and conducting/running temples, hermitages,
R.F.A. No.843 of 2009 &
schools and other institutions.
4. The Articles of Association of the Yogam, among
others, provide that anyone who belongs to Ezhava Community
and who subscribes to the rules of the Yogam and pays the
value of one share of the Yogam will become a member of the
Yogam. The Articles of Association also provide that the
management of the Yogam will vest in a Board of Directors
elected at its annual general meeting consisting of a President,
a Vice-President, a General Secretary, a Devaswom Secretary
and other members. The Articles of Association also provide
that there shall be a council for the administration of the Yogam
consisting of not more than 15 members of the Board of
Directors including four office bearers. The Articles of
Association also provide that the General Secretary would be
the executive officer of the Yogam.
5. The plaint is a repetitive assemblage of facts,
evidence and arguments, relevant and irrelevant, and it is
unnecessary to refer to the whole of the averments in the plaint
R.F.A. No.843 of 2009 &
for the purpose of this case. As noted, the suit is one instituted
for relief under section 92 of the Code on the premise that the
Yogam is a public religious and charitable trust. In the context of
the nature of the relief sought in the suit, bereft of unnecessary
and irrelevant details, the case set out by the plaintiffs in the
plaint is that in the absence of any provision in the
Memorandum of Association of the Yogam enabling formation of
Branches and Unions, the formation of Branches and Unions for
the Yogam is unauthorised; that even if it is assumed that it is
permissible for the Yogam to have Branches and Unions, in the
absence of any provision in its Memorandum of Association or
Articles of Association as to the status of the Branches and
Unions, there exists a serious doubt right from the very
beginning of the establishment of the Yogam as to whether the
Branches and Unions of the Yogam are independent units
capable of acquiring assets and incurring liabilities; that on
account of this doubt, the assets and liabilities as also the
income and expenditure of the Branches and Unions are not
R.F.A. No.843 of 2009 &
shown in the Annual Statement of Accounts of the Yogam; that
on account of this doubt, while the Yogam is exercising
disciplinary control over the affairs of the Branches and Unions
and asserting rights over the assets of the Branches and Unions,
it is disowning the liabilities of the Branches and Unions; that
the doubt aforesaid led to various litigations between the Yogam
and its Branches and Unions concerning the disciplinary action
taken by the Yogam as also the rights over the assets of the
Branches and Unions, including the institutions run by them and
that the said state of affairs as regards the inter relationship
between the Yogam and its Branches and Unions are not
conducive for a proper administration of the Yogam. It is also
the case of the plaintiffs that although the Articles of Association
of the Yogam originally framed conferred a right to all members
of the Yogam to participate in its annual general meeting and to
elect the members of the Board of Directors and office bearers
of the Yogam, having regard to the difficulty experienced in
course of time in the matter of convening an annual general
R.F.A. No.843 of 2009 &
meeting with the participation of all its members, the number of
which would run into several lakhs, the aforesaid provision in
the Articles of Association was amended on 19.03.1966 and a
provision was introduced in its place for a representative annual
general meeting of one percentage of the members of the
Yogam; that later even the said percentage was reduced to half
by way of another amendment; that the said amendments
which take away the right of the members of the Yogam to
participate in its annual general meeting and to elect the office
bearers of the Yogam are illegal and not conducive for a proper
administration of the Yogam. It is also the case of the plaintiffs
that later several other amendments were also made to the
Articles of Association of the Yogam, otherwise than in
accordance with the provisions of the applicable law governing
the company, and in terms of one of such amendments, several
persons who are not elected representatives of the members of
the Yogam were also permitted to participate and elect the
office bearers of the Yogam in its annual general meeting.
R.F.A. No.843 of 2009 &
According to the plaintiffs, even assuming that the amendment
made to the Articles of Association of the Yogam in terms of
which a representative annual general meeting was introduced
is valid, the amendment made to the Articles of Association in
terms of which persons other than the representatives of the
members of the Yogam were permitted to participate and elect
the office bearers of the Yogam in its annual general meeting is
unauthorised and not conducive for a proper administration of
the Yogam. It is also the case of the plaintiffs that unbridled and
arbitrary disciplinary power is retained by the offices and
officers of the Yogam over the Branches and Unions of the
Yogam as also over its members; that such powers are not
conducive for a proper administration of a social organisation
like the Yogam.
6. Defendants 1 to 3, 6, 9 and 11 to 16 contested
the suit by filing a joint written statement. It was contended by
the said defendants, among others, that the Yogam is not a
public trust; that it is only a company governed by the law
R.F.A. No.843 of 2009 &
relating to companies as applicable from time to time and that
the suit under Section 92 of the Code is therefore not
maintainable. It was also contended by them that the Yogam
has obtained exemption from the provisions of Sections 172 to
279 and Article 14 of Table C of Schedule I of the Companies
Act, 1956 from the Central Government in terms of Section
25(6) of the said statute and in the light of the exemption
aforesaid, the amendments made to the Articles of Association
of the Yogam cannot be said to be illegal. It was also contended
by them that clause 12 of the Articles of the Yogam provides for
establishment of Branches and Unions for the Yogam and
Branches and Unions have been established in accordance with
the sub-rules framed under clause 12 of the Articles. It was also
contended by them that the Branches and Unions of the Yogam
are under the control of the Yogam; that the assets of the
Branches and Unions of the Yogam belong to the Yogam and
that it is not necessary to show the assets and liabilities as also
the income and expenditure of the Branches and Unions in the
R.F.A. No.843 of 2009 &
Annual Accounts of the Yogam. It was also contended by them
that powers reserved in favour of the offices and officers of the
Yogam are necessary for the proper administration of the
Yogam.
7. Both sides adduced evidence, oral and
documentary. Thereupon, on an appraisal of the materials on
record, the court below came to the conclusion that the Yogam
is the successor body of Aruvipuram Kshetra Yogam which was a
trust created for public purposes of charitable and religious
nature; that it was subsequently registered as a company and
that the subsequent registration of the Yogam as a company will
not oust the jurisdiction of the court in respect of the same
under Section 92 of the Code. On the aforesaid findings, the
Court found that the suit is maintainable. On facts, it was found
by the court below that the plaintiffs are entitled to a decree for
settling a scheme for the administration of the Yogam. The
Court however held that the plaintiffs have not made out a case
for removal of defendants 2 to 16 from the administration of the
R.F.A. No.843 of 2009 &
Yogam. In fact, it was specifically pleaded by the plaintiffs in
the plaint that the order of the Central Government granting
exemption to the Yogam from the provisions of the Companies
Act, 1956 so as to enable the Yogam to convene a
representative annual general meeting is invalid, and the said
case of the plaintiffs was also repelled by the court below. In
the light of the said findings, the court below passed a
preliminary decree directing framing of a scheme for the
administration of the Yogam in accordance with the law
applicable to the Companies. Defendants 1 and 2 are
aggrieved by the said decision of the court below and hence the
appeal. The cross objection is by plaintiffs 5 and 6 challenging,
among others, the finding rendered by the court below as
regards the correctness of the order passed by the Central
Government granting exemption to the Yogam from the
provisions of the Companies Act, 1956 as also the finding that
the plaintiffs have not made out a case for removal of the
defendants from the administration of the Yogam.
R.F.A. No.843 of 2009 &
8. It is seen that some among the plaintiffs as also
the defendants passed away pending suit and appeal and in the
nature of the suit, their legal representatives have not been
brought on record.
9. Heard Adv.Sri.A.N.Rajan Babu for defendants 1
and 2, Adv.Sri.D.Anil Kumar for the surviving plaintiffs and
Adv.Sri.P.B.Krishnan for the third defendant.
10. The learned counsel for defendants 1 and 2
contended at the outset that the suit is not maintainable as the
Yogam is neither an express nor a constructive trust created for
public purposes of a charitable or religious nature. The learned
counsel attempted to demonstrate the said contention pointing
out that there is no pleading or evidence in the case to show
that the Yogam is the successor body of Aruvipuram Kshetra
Yogam as found by the court below. According to the learned
counsel, the Yogam is an independent body registered as a
company and none of the assets of Aruvipuram Kshetra Yogam
got vested in or transferred to the Yogam. It was also
R.F.A. No.843 of 2009 &
contended by the learned counsel that only a trust, the
beneficiaries of which belong to public or a class thereof, which
is unascertainable, could be regarded as a trust falling within
the scope of Section 92. It was argued by the learned counsel
that even if it is found that the Yogam is a trust, insofar as its
members are ascertainable, it can only be regarded as a private
trust. It was also argued by the learned counsel that at any rate,
there is no finding by the court below that there is breach of
trust on the part of the defendants and the court below, in the
circumstances, ought not have directed framing of a scheme for
the administration of the Yogam. As regards the facts pleaded
by the plaintiffs in the plaint to seek a decree for settling a
scheme for the administration of the Yogam, it was argued by
the learned counsel alternatively that none of them would justify
the decree sought for by the plaintiffs. It was also argued by the
learned counsel in this regard that the alleged defects, lacunas,
loopholes, excessive powers etc. in the Articles of Association of
the Yogam do not also justify the decree sought for by the
R.F.A. No.843 of 2009 &
plaintiffs.
11. Per contra, the learned counsel for the plaintiffs
argued that the relief under Section 92 of the Code could not
only be claimed in cases where there are allegations of breach
of trust, but also in cases where the direction of the court is
deemed necessary for the administration of trusts falling under
that statutory provision. It was pointed out by the learned
counsel that until 1966, Articles of the Yogam was in
accordance with Table 'A' of Schedule I to the Companies Act,
1956 and consequently, each member had a right to vote in the
annual general meeting of the Yogam. Although the Articles
were amended later to introduce a representative participation
and voting of the members in the annual general meeting, and
an order of exemption from the relevant provisions of the Act
was obtained from the Central Government for the said purpose,
it was submitted by the learned counsel that a challenge against
the representative participation and voting introduced by
amending the Articles of the Yogam was upheld by this Court in
R.F.A. No.843 of 2009 &
W.P.(C) Nos.8382 of 2020 and 1385 of 2021. It was also
submitted by the learned counsel that even though it was
clarified in the judgment in the said case that the same will not
in any way nullify the meetings and elections conducted earlier,
it has been categorically declared that the decisions taken by
the Yogam to restrict the voting rights of its members will not
gain sanctity of law and all the members of the Yogam have
right to vote in any election to be held by the Yogam. It was
also argued by the learned counsel that Article 39 of the Articles
of the Yogam as amended in the year 1999 gives unbridled and
arbitrary powers to the General Secretary. Placing reliance on
the uncontroverted averments made by the plaintiffs in
paragraph 18 of the plaint, the learned counsel submitted that it
has been established in the suit that the General Secretary of
the Yogam was abusing the said power. It was also argued by
the learned counsel that the company law does not empower
the Yogam to establish Branches or Unions and the provisions
made for the said purpose in the Articles are unsustainable in
R.F.A. No.843 of 2009 &
law. It was also pointed out by the learned counsel that the
jural relationship between the Yogam and its Unions and
similarly, the Yogam and its Branches has always been a cause
for litigations, especially in respect of the rights over the
educational and other institutions established by the Branches
and Unions. The learned counsel has drawn our attention to the
documents pertaining to some of such litigations. The
submission made by the learned counsel in this regard was that
it is therefore necessary in the best interest of the community to
have a legal pronouncement as to the status of the Branches
and Unions of the Yogam. It was also pointed out by the learned
counsel that the assets and liabilities as also the income and
expenditure of the Branches and Unions are not shown in the
annual statement of accounts of the Yogam, taking the stand
that they are independent bodies. But at the same time, it was
pointed out by the counsel that Yogam is retaining disciplinary
control over its Branches and Unions and asserting rights over
the institutions run by the Branches and Unions. It was also
R.F.A. No.843 of 2009 &
argued by the learned counsel that if the Branches and Unions
of the Yogam are independent bodies, there is no need for any
provision in the Articles of Association enabling the Yogam to
control their activities. Considering the large number of
memberships in the Yogam, it is submitted by the learned
counsel that it is imperative to have a legal framework for a
proper democratic representation of members in the general
meeting of the Yogam. The upshot of the submissions made by
the learned counsel was that there is absolutely no justification
to interfere with the impugned decision directing framing of a
scheme for a proper administration of the Yogam.
12. Although the third defendant is a person who
filed written statement along with defendants 1 and 2, the
learned counsel appearing for him, in fact, supported the
impugned judgment on the premise that a decree directing
framing of a scheme for the proper administration of the Yogam
is only in the best interests of not only the members of the
Yogam in particular, but also the members of Ezhava community
R.F.A. No.843 of 2009 &
in general.
13. In reply to the arguments advanced by the
learned counsel for the plaintiffs, the learned counsel for
defendants 1 and 2 submitted that powers given to the General
Secretary under the Articles of Association are not inconsistent
with the company law. Placing reliance on Sections 2(9) and
2(14) of the Companies Act, 2013, the learned counsel for
defendants 1 and 2 refuted the argument advanced by the
learned counsel for the plaintiffs that the company law does not
contemplate the concept of Branches and Unions. According to
the learned counsel, Branches and Unions are necessary to
achieve the aims and objectives of the Yogam and also for the
administrative convenience of the Yogam.
14. We have examined the arguments advanced by
the learned counsel for the parties on either side.
15. In the absence of any comprehensive law on the
subject of public trusts in India, Section 92 of the Code has
attained great significance insofar as it provides for various
R.F.A. No.843 of 2009 &
methods to remedy the malfunctioning of public trusts. In order
to attract Section 92 of the Code, it is now well settled that the
suit in the first place should be one relating to a trust created for
public purposes of a charitable or religious nature. In the second
place, it must proceed either on an allegation of breach of trust
or of the necessity of having directions from the court for
administration of the trust. In the third place, the reliefs claimed
must be one or other reliefs specified in the section and lastly,
the suit must be one brought in a representative capacity in the
interest of the public or of the trust itself and not for vindicating
the private rights of the plaintiffs. There is no dispute in this
case on the last two aspects referred to above. Going by the
arguments advanced by the learned counsel for the defendants
1 and 2, the dispute pertains only on the first two aspects. The
first and foremost question arises for consideration therefore is
whether the Yogam is a trust created for public purposes of a
charitable or religious nature. If the question aforesaid is
answered in the affirmative, necessarily, the question whether
R.F.A. No.843 of 2009 &
the plaintiffs are entitled to a decree for settlement of a scheme
for the administration of the Yogam would also arise for
consideration. We shall first deal with the question as to
whether the Yogam is a trust created for public purposes of a
charitable or religious nature.
16. A trust is nothing but a confidence reposed in a
person or body with respect to property under his possession or
over which he can exercise a power, for holding the property or
exercising the power, for the benefit of some other person or
object [See Halsbury's Laws of England (2nd Edition, Vol. 33 Page
87)]. A trust of a religious nature is a trust created with the
object of securing the spiritual well being of a person or persons
according to his/their faith. A trust of a charitable nature, on the
other hand, is a trust created with the object of bestowing upon
persons who are in need of benevolence in any form. A public
trust differs from a private trust in important particulars. In the
case of the former, the beneficial interest is vested in an
uncertain and fluctuating body and the trust itself is of a
R.F.A. No.843 of 2009 &
permanent character, whereas, in the case of the latter, the
beneficial interest is vested absolutely in one or more
ascertainable individuals and the trust need not be a permanent
one. The fact that the uncertain and fluctuating body is only a
section of the public or members of a particular community does
not make the trust a private one. In order to see whether a trust
is a public or private one, the real substance of the trust and the
primary intention of the creator of the trust must be looked into,
which are essentially questions of facts. No deed is necessary
and no trustee need be appointed for creation of a trust, for the
law imposes the duties of trustee upon the founder or his heirs
or successors or such other person as might have control or
possession over the endowed property. It is now trite that if
there is a trust created for public purposes of a charitable or
religious nature, the fact that a company or other body is
formed subsequently for executing the trust does not change
the character of the trust or the subject matter of the trust
namely, the property which has been constituted as a trust
R.F.A. No.843 of 2009 &
property [See Kesava Panicker v. Damodara Panicker and
others, 1975 KLT 797 (FB)]. In other words, for the application
of Section 92 of the Code, it makes no difference whether the
trustee is an individual or a company [See
M.Gomathinarayagam Pillai and others v.
Sri.Manthramurthi High School Committee, Tirunelveli,
AIR 1963 Mad 387]. With the aforesaid principles in mind, let us
examine the question as to whether the Yogam is a public trust.
17. In the plaint, the Yogam was arrayed as the first
defendant and the then members of the council of the Yogam
were arrayed defendants 2 to 16. It is alleged in the plaint that
the first defendant is the trust and defendants 2 to 16 are the
trustees. In the context of the contention taken by the
contesting defendants that the suit is not maintainable since
the Yogam is not a public trust, the stand taken by the plaintiffs
is that the registration of the Yogam as a company for
administration does not alter its character and the Yogam
continued to be a public trust notwithstanding its registration as
R.F.A. No.843 of 2009 &
a company. Of course, there is no pleading in the plaint that the
Yogam was an existing body which was subsequently registered
as a company. As is well known, the courts have parens patriae
jurisdiction over public trusts for safeguarding the same [See
Imayam Trust v. Balakumar, 2015 SCC OnLine Mad 2685].
As such, according to us, strict application of rules of pleadings,
especially in the matter of adjudicating the question as to
whether the body in respect of which a suit is instituted under
Section 92 is a public trust, may not be warranted or justified,
for strict application of rules of pleadings may at times affect
larger public interest.
18. As noted, there is no dispute between the
parties to the fact that the Yogam is a body constituted, among
others, for administering the affairs of Aruvipuram Siva temple
and other temples that are brought under it. While the plaintiffs
assert that the Yogam is the reconstituted body of Aruvipuram
Kshetra Yogam, defendants 1 and 2 assert that the Yogam has
nothing to do with the said body. Defendants 1 and 2 would
R.F.A. No.843 of 2009 &
attempt to establish the said case pointing out that none of the
properties of Aruvipuram temple got vested or transferred to the
Yogam and all the properties of the Yogam are properties either
purchased or acquired by the Yogam after its incorporation as a
company. They have also submitted at the time of arguments
that the properties of Aruvipuram Siva temple were transferred
to Sivagiri Dharma Sangham Mutt by Sree Narayana Guru in
terms of a will executed by him. As noted, the court below
found on facts that the Yogam is the reconstituted body of a
public trust of religious and charitable nature namely
Aruvipuram Kshetra Yogam which was in existence at
Aruvipuram Siva temple and it is on that basis that the court
came to the conclusion that the Yogam is a public trust
amenable to the jurisdiction of the Court under Section 92 of the
Code. The contentions aforesaid namely that none of the
properties of Aruvipuram temple got vested or transferred to the
Yogam; that all the properties of the Yogam are properties
either purchased or acquired by the Yogam after its
R.F.A. No.843 of 2009 &
incorporation as a company and that the properties of
Aruvipuram Siva temple were transferred to Sivagiri Dharma
Sangham Mutt by Sree Narayana Guru, do not appear to have
been raised before the court below and the same have therefore
not been dealt with in the impugned judgement.
19. Ext.A37 produced on the side of the plaintiffs is
the chapter of a book dealing with the establishment of the
Yogam published by the Yogam itself. The book is one written
by the then General Secretary of the Yogam. The fifth plaintiff is
the person who gave evidence in the suit on behalf of the
plaintiffs as PW1. Ext.A37 has been produced by the fifth
plaintiff along with his proof affidavit. The relevant portion of the
proof affidavit reads thus:
"The official history of the SNDP Yogam prepared and published
at the instance of the SNDP Yogam by Prof.P.S.Velayudhan, who
was the then General Secretary and Principal Officer of the SNDP
Yogam at pages 86 to 95 shows that the SNDP Yogam originated
as a trust for the administration and management of the
Aruvipuram Siva Temple and other properties obtained by way of
gift from various persons who entrusted the same to the SNDP
Yogam for the purpose and for the benefit of donors and other
R.F.A. No.843 of 2009 &
beneficiaries, who form a substantial section of the public. The
mere registration and incorporation of an association formed for
charitable purposes as a company for the management of such
properties among other objects will not have the effect of making
it anything other than a public trust. The copy of the relevant
pages have been extracted and produced and marked as Exhibit
A37". (underline supplied)
The contesting defendants have neither discredited the said
evidence of the fifth plaintiff as PW1 nor have they disputed the
contents of Ext.A37 in any other manner known to law. Ext.A37
is the chapter in the book dealing with the emergence of Sree
Narayana Guru as a renowned spiritual leader and social
reformer. It is recited in Ext.A37 that even before Dr.Palpu
started his movement for the upliftment of those belonging to
Ezhava community, Sree Narayana Guru started a parallel
movement for their spiritual and social upliftment. It is also
recited in Ext.A37 that the Siva Temple established by Sree
Narayana Guru at Aruvipuram in the course of time became a
place of pilgrimage. It is also recited in Ext.A37 that it became a
practice at the premises of the Aruvipuram temple in course of
R.F.A. No.843 of 2009 &
time to give food to the pilgrims and a body called "Vavoottu
Yogam" was established for the said purpose. It is also recited
in Ext.A37 that shortly a hermitage also came to be established
as part of the Aruvipuram temple and it was felt in course of
time that the hermitage shall be retained as a permanent
institution. It is also recited Ext.A37 that properties have been
received in course of time by way of gift/donation from the
general public for the development of the Aruvipuram Shiva
temple and the hermitage attached to it, and a manager was
also appointed for the properties of the temple and hermitage. It
is also recited in Ext.A37 that in course of time, it became
necessary to expand "Vavoottu Yogam" for the proper
administration of the temple, the hermitage and institutions
attached to it, as also the properties received by way of
gift/donation and consequently, "Vavoottu Yogam" was
reconstituted as "Aruvipuram Kshetra Yogam". It is also recited
in Ext.A37 that later during 1078 ME, as directed by Sree
Narayana Guru, a special general body of Aruvipuram Kshetra
R.F.A. No.843 of 2009 &
Yogam was convened with a view to develop "Aruvipuram
Kshetra Yogam" further as a mass organisation of those
belonging to Ezhava community and it was decided in the said
special general body to convert Aruvipuram Kshetra Yogam as
Sree Narayana Dharma Paripalana Yogam for the said purpose
and register the same as a company. The relevant portion of
Ext.A37 reads thus:
"അധ ക ത മസ യ തതതത അര വ പ റ ഒര ത ർഥ ടന
കകന മ യ ത ർ . വ വ ൾ 'ബല ' യട തന
ഭകജനങൾ അവ തട ക$ട ക സ ധ രണമ യ .
ബല യർപ ച കഴ ഞ ആള കൾ അവ തട വ ന+മ ച
സ, മ കള തട ഉപക/+ങൾ ന+വ ച കക വ ല ൽ തത ഴ ത
ആണ1 മടങ യ ര ത1. വ വ ൾ വ ക$ട
ഭകജനങൾക1 ആഹ ര അവ തടന തക ട ത ത ടങ .
ച ല നപമ ണ കതള അത ന1തറ ഭ രവ ഹ കള യ ന ശയ ച ;
"വ വ$ട കയ ഗ " എത ര കപര അത ന ണ യ . അര വ പ റ
ക:നതകത തട ത സന; സ മഠമ ണ യ ; മഠതത ഒര സ ര
സ പനമ ക വളർകതണത ഒര വ+;മ യ . അക ലത ണ1
തക ട ർ ച നയ ന സ, മ കൾ തന1തറ കഴ ലള
സ,ത കതള തകയ മ$വ യ ര പണ (ഒര പണ = 15 ന. പ.)
വ ങ തക ണ1 1864 -ൽ (തക ലവർഷ 1069 കമട 12 -ആ
ത യത ) സ, മ യ തട കപർതകഴ ത തക ട തത1 . അ തത
കപടയ ൽ പ .പരകമ+,രൻ (ഡ .പലE വ ന1തറ കജഷGൻ) അവർകതള
അര വ പ റ ക ര;ങൾക മ കനജര ക
R.F.A. No.843 of 2009 &
മ ക; ർന മ വ നൽക ന യമ കയ തചയI ."
xxxxxxx
1899 ൽ വ വ$ട കയ ഗ ക കറക$ട വ പ ലതപട ത
പര ഷJര ച . ക:നതക ര;ങള ധർമസ,ത ക$ട തൽ
ഭ ഗയ യ ഉതരവ / ത,കത ട ക$ട യ കന ക ത ന1
അങതന ഒര കയ ഗത ന1തറ അവ+; കനര ട . മഹ കവ
ക മ രന + ന1തറ ഭ ഷയ ൽ പറഞ ൽ, തക ലവർഷ 1074
അര വ പ റ ക:നതത ന1തറ അഭ വLദ കയയ ഭരണകതയ
ഉകN+ ച1 തനയ റ ൻകര ത ര വനനപ ര ഈ ത ല$ക കള ല ള
സ,ജനങള ൽ ഏത ന മ ന;ന തര ക$ട കചർത1 'അര വ പ റ
ക:നതകയ ഗ ' എ കപര ൽ ഒര സ ഘ ഏർതപട ത .
xxxxxxx
1078 ൽ സ, മ യ തട ആജയന സര ച1
ത ര വനനപ രത സമ പ നപക/+ങള ല മ ള ഈഴവ
നപമ ണ കൾക1 ഒര ആകല ചന കയ ഗ ക$ട ത ന1
ക മ രന + ൻ :ണകത കൾ അയച ക കഴ യ ലള
കമല ലയ ബ ഗ വ ൽതവച1 കനപത;ക
:ണ കതപടവര തടയ 'അര വ പ റ
ക:നതകയ ഗ ഗങ'ള തടയ ഒര സ യ കകയ ഗ കചർ .
കഡ കXർ പലE , ക മ രന + ൻ, എ .കഗ വ ൻ ത ടങ യവർക
പ റതമ എൻ.ക മ രൻ, വ രണപള ൽ പതന ഭപണ കർ
മ തല യ കക കളജ വ /; ർത കള ആ കയ ഗത ൽ
സ ബന ച ര . അര വ പ റ ക:നതകയ ഗതത
വ പ ലതപട ത കമന ന യമമന സര ച1 രജ സർതചയI ഒര
ഈഴവ ബഹ ജനസ ഘടന സ പ കക എ ത യര
ആകല ചന വ ഷയ . പലർക പലവ ധ സ +യങള മ യ ,
വല യ വ /നപത വ /ങള അ നട . ആകല ചന
കയ ഗത ൽ ഉ യച സ +യങൾക1 കഡ കXറ
R.F.A. No.843 of 2009 &
ക മ രന + ന മറ പട പറഞ . കയ ഗത ന1തറ ആവ+;
ത ർത കബ ധ;തപട ത . 1078 ധന മ സ 23-)o ത യത , മ ൻ
ന ശയമന സര ച1 'അര വ പ റ ക:നതകയ ഗ' ത ന1തറ ഒര
വ ക+ഷ ൽ സകമളന ക$ട . ആ കയ ഗത ൽതവച1 'ഈഴവർക1
തപ ത വ ൽ മതസ ബനവ ല^ക കവ മ യ മ ർഗങള ൽ'
അഭ; ത കകവര ത ത ന1 'അര വ പ റ
ക:നതകയ ഗതത' 'ഒര മഹ ജന കയ ഗമ ക ത ർകണതമ
ത ര മ ന ച ;' എല യ ടത മ ള കയ ഗ;ന ര യ
സമ / യ ഗങതള അ ഗങള യ കചർത1 ഒര
കജ യ1ന1റ1സ1റ1കറ ക1 കമന യ യ കയ ഗതത രജ സർ
തചയണതമ ന ശയ തചയI . 1078 ഇടവ 2-)o ത യത
(നക സI വർഷ 1903 തമയ1 15-)o ത യത ) അര വ പ റ
ക:നതകയ ഗതത അര വ പ റ ന+ ന ര യണ ധർമ
പര പ ലനകയ ഗ എ കപര ൽ ത ര വ ത ക$റ തല 1063-)
മ ണതത 1-)0 റഗ കലഷൻ (1882 തല 6-)o നമർ ഇന;ൻ
കമന സ1 ആകX1 ) അന സര ച1 രജ സർ തചയI ."
(underline supplied)
The recitals aforesaid in Ext.A37 would establish beyond doubt
that Yogam is the reconstituted body of "Aruvipuram Kshetra
Yogam" which was subsequently registered as a company with a
view to expand the same as a mass organisation of those
belonging to Ezhava community. As noted, the main object of
the Yogam as disclosed in its Memorandum of Association is to
conduct the daily poojas, annual festivals as also other
R.F.A. No.843 of 2009 &
requirements in relation to Aruvipuram Siva Temple and other
temples brought under it. The relevant clause of the
Memorandum of Association of the Yogam reads thus:
"അര വ പ റ + വക:നതത ല അകത ട കചർ കത ,
അത ന1തറ കഴ ൽ ഉൾതപടകത ഉൾതപട കത ആയ
ക:നതങള ല ഉള ന ത;പ$ജ, വർകഷ തവ മ തല യ സകല
ക ര;ങള നടത ക."
The aforesaid object of the Yogam would reinforce the finding
aforesaid that the Yogam is the reconstituted body of
"Aruvipuram Kshetra Yogam". As noted, the contesting
defendants have no case that the Aruvipuram Kshetra Yogam
was not a public trust of religious and charitable nature.
Similarly, they have also no case that Aruvipuram Kshetra
Yogam continued to exist even after the establishment of the
Yogam. Even otherwise, going by the principles of Hindu Law
dealing with the essentials of a religious and charitable trust, the
recitals in Ext.A37 would show that Aruvipuram Kshetra Yogam
was a public trust of a religious and charitable nature in respect
of Aruvipuram temple and the various institutions attached to it
R.F.A. No.843 of 2009 &
and the properties owned by it.
20. The object of the Yogam as extracted in the
preceding paragraph would also show that there is no substance
in the argument advanced by defendants 1 and 2 that Yogam
had no properties when it was incorporated as a company. The
object aforesaid, if understood in the light of Ext.A37 would
show that Yogam being the successor of Aruvipuram kshetra
Yogam had control over Aruvipuram Shiva Temple and the
institutions attached to it and the properties owned by it. There
is also no substance in the argument that all the properties of
Aruvipuram Temple have been later divested by Sree Narayana
Guru to Sivagiri Dharma Sangham Mutt, for the said properties
being properties dedicated for a public purpose, going by the
principles of Hindu Law, its original owners including the founder
of the trust cannot claim any more rights over the same [See
page 33, B.K.Mukherjea on the Hindu Law of Religious and
Charitable Trust Fifth Edition]. As noted, one of the contentions
raised by the learned counsel for defendants 1 and 2 at the time
R.F.A. No.843 of 2009 &
of arguments was that even if it is assumed that the Yogam is a
trust, it can never be construed as a public trust in order to
attract the provision contained in Section 92 of the Code, for the
beneficiaries of the Yogam are only ascertainable members of
the Yogam who belong to Ezhava community. There is no
substance in this contention also, for the very purpose of
reconstitution of Aruvipuram Kshetra Yogam as Yogam as
revealed from the objects disclosed in the Memorandum of
Association of the Yogam was to expand the Aruvipuram Kshetra
Yogam as a mass organisation for enhancing the spiritual and
temporal education and developing the industrial habits of those
belonging to Ezhava community and for matters incidental
thereto. In the light of the said object, it cannot be said that the
beneficiaries of the Yogam are only members of the Yogam who
belong to Ezhava community. On the other hand, going by the
Memorandum of Association of the Yogam, beneficiaries of the
Yogam are those belonging to Ezhava community. In the light of
the discussion aforesaid, we do not find any infirmity in the
R.F.A. No.843 of 2009 &
finding rendered by the court below that Yogam is a public trust
falling within the scope of Section 92 of the Code.
21. As noted, it was argued by the learned counsel
for defendants 1 and 2 that in order to grant relief in a suit
under Section 92 of the Code, it has to be established that there
is breach of trust on the part of the trustees and insofar as the
plaintiffs have not made out a case of breach of trust on the part
of the defendants, the court below ought not have passed a
decree for settling a scheme for the administration of the
Yogam. Going by the plain meaning of the words used in
Section 92 of the Code, the relief provided for under that Section
can be granted in cases where the direction of the court is
deemed necessary for the administration of a public trust of
religious or charitable nature also. But, that does not mean that
relief under that Section can be claimed merely on an assertion
that the direction of the Court is necessary for the
administration of a trust. The expression "where the direction of
the court is deemed necessary for the administration of any
R.F.A. No.843 of 2009 &
such trust" indicates that what is provided for in the provision is
that for the purpose invoking the jurisdiction of the court under
section 92 of the Code, it should appear to the court or the court
should come to think that its direction is necessary for the
administration of the trust. Although the object of Section 92 of
the Code is to protect the interests of the public who are
beneficiaries of trusts created for public purposes of a charitable
or religious nature, having regard to the scheme of the said
provision that administration of public trusts shall not be put to
halt on account of frivolous and vexatious litigations, according
to us, the expression "where the direction of the court is
deemed necessary for the administration of any such trust",
would take within its fold only cases where in the absence of a
direction of the court, the objects of the trust would be defeated.
In other words, the provision aforesaid is intended to cover only
cases where, in the absence of a direction by the Court, there
would be breach of trust in a wider sense that the trust may not
achieve its object for want of proper administration.
R.F.A. No.843 of 2009 &
22. Let us now examine the question whether the
plaintiffs have made out a case for direction of the court under
Section 92 of the Code for the administration of the Yogam. The
Yogam which had a humble beginning has now grown up as a
mighty organisation of those belonging to Ezhava community. It
has established directly and indirectly through its Branches and
Unions, large number of temples, hermitages, schools, colleges
and other educational institutions. Its membership has
increased many-fold in course of time and it has now several
lakhs of persons as members. As noted, going by the Articles of
Association of the Yogam, the Management of the Yogam is
vested in a Board of Directors who are to be elected at its
annual general meeting and they are entitled to continue in
office until a new Board of Directors is elected at the succeeding
annual general meeting of the Yogam. The Board consists of a
President, a Vice-President, a General Secretary and a
Devaswom Secretary and other members. The fact that the
office bearers of the Yogam shall be duly elected for the proper
R.F.A. No.843 of 2009 &
administration of the Yogam is not disputed by anyone. As
noted, the main case of the plaintiffs is that although the
Articles of Association of the Yogam originally framed conferred
a right on all members of the Yogam to participate in the
process of electing its office bearers at its annual general
meeting, the relevant provision in the Articles of Association was
amended on 19.03.1966 and a provision was introduced in its
place for a representative annual general meeting of one
percentage of the total members of the Yogam and later even
the said percentage was reduced to half by way of another
amendment and that the said amendments which take away the
right of the members of the Yogam to participate in the process
of electing its office bearers are illegal. It is also the case of the
plaintiffs that even if the said amendments are valid, while
amending the Articles of Association of the Yogam, appropriate
provisions have not been made to ensure that the participants
of the annual general meetings are the true representatives of
the members of the Yogam by prescribing an immutable time
R.F.A. No.843 of 2009 &
schedule for the election of representatives of the members of
the Yogam to attend the annual general meetings. It is also the
case of the plaintiffs that the Articles of Association of the
Yogam was amended on several occasions thereafter and the
said amendments include an amendment permitting the former
office bearers of the Yogam and various others to participate in
the annual general meeting which elects the office bearers of
the Yogam and that the aforesaid amendment which permits
participation of persons other than the elected representatives
of the Yogam has brought about a situation where even the
elected representatives of the members of Yogam have no role
in the matter of electing the office bearers of the Yogam. In
short, according to the plaintiffs, the office bearers of the
Yogam elected from time to time after the amendments
aforesaid are not the true representatives of the members of the
Yogam and the direction of the court is necessary to restore the
right of the members of the Yogam to participate in the process
of electing its office bearers and to ensure that the Yogam is
R.F.A. No.843 of 2009 &
being administered by the office bearers elected by its
members.
23. As noted, the Yogam was registered as a public
limited company under the Indian Companies Act, 1882, as
applied to the erstwhile State of Travancore. The registration of
a body like the Yogam as a company was permissible under the
Indian Companies Act, 1882. Indian Companies Act, 1882 was
later replaced by the Indian Companies Act, 1913. When Indian
Companies Act, 1913 was replaced later by the Companies Act,
1956, the Yogam continued to be governed by the replaced
enactment. While so, the Kerala Non Trading Companies Act,
1961 (the Kerala Act) came into force with effect from
01.03.1962. It is admitted by the contesting defendants that by
virtue of the provisions contained in the Kerala Act, the Yogam
is governed by the said statute thereafter and not by the
Companies Act, 1956 and its successor enactment. In terms of
Sections 3 to 6 of the Kerala Act, registration of the Yogam as a
Non Trading Company under the Indian Companies Act, 1882 is
R.F.A. No.843 of 2009 &
deemed to be a registration in the State of Kerala under the
Kerala Act. In other words, after coming into force of the Kerala
Act, the Yogam ceased to be governed by the Indian Companies
Act, 1882 and its successor enactments. Regulation 5(6) of the
Regulations framed under the Kerala Act stipulates that no
alteration shall be made to the Memorandum of Association or
Articles of Association of companies falling under the said
statute, unless the alteration has been previously submitted to
and approved by the Government.
24. The fact that the Articles of Association of the
Yogam framed originally conferred a right to all members of the
Yogam to participate in the process of electing the office bearers
of the Yogam at its annual general meeting and the fact that the
said provision was replaced by way of an amendment on
19.03.1966 with a provision for a representative annual general
meeting, are not disputed. It is seen that the aforesaid
amendment was made when the Yogam found it difficult to
convene annual general meetings of all its members running to
R.F.A. No.843 of 2009 &
several lakhs. The amendment aforesaid was held to be void as
violative of Table C of Schedule 1 of the Companies Act, 1956 by
a Division Bench of this Court on 28.11.1972 in A.S.No.116 of
1971. It is seen that without taking note of the fact that the
Companies Act, 1956 does not apply to the Yogam after the
introduction of the Kerala Act, it was observed in the judgment
in the said case that to tackle the situation, the Yogam would be
at liberty to obtain exemption from the provisions of the
Companies Act invoking the power of the Central Government
under Section 25(6) of the Companies Act, 1956. In the light of
the said observation, the Yogam moved the Central Government
under Section 25(6) of the Companies Act 1956 and without
taking note of the fact that the Companies Act, 1956 does not
apply to the Yogam after the introduction of Kerala Act, the
Central Government has exempted the Yogam from the
provisions of Sections 172(2), 219 and Article 14 of Table C of
Schedule 1 of the Companies Act, 1956 on 20.08.1974. Ext.B5 is
the order issued by the Central Government in this regard. It is
R.F.A. No.843 of 2009 &
on the strength of Ext.B5 order, the Yogam got over the
judgment of this Court in A.S.No.116 of 1971 and the members
of the Yogam were denied opportunity to participate in the
process of electing its office bearers at its annual general
meeting since 1974.
25. It is seen that Ext.B5 order has been challenged
before this court by some of the members of the Yogam in W.P.
(C) Nos.8382 of 2020 and 1385 of 2021 and it was found in the
said case that in the light of the provisions contained in the
Kerala Act, the registration of the Yogam as a Non Trading
Company under the Companies Act, 1882 is deemed to be a
registration in the State of Kerala under the Kerala Act and that
the application under Section 25(6), in the circumstances,
should have been preferred by the Yogam before the State
Government. On the above findings, this Court set aside Ext.B5
order. The relevant findings contained in paragraphs 20 and 21
of the judgment in W.P.(C) Nos.8382 of 2020 and 1385 of 2021
read thus:
R.F.A. No.843 of 2009 &
"20. Ext.P5 purports to have been issued on an application
submitted before the Central Government under Section 25(6) of
the Companies Act, 1956. The application has been preferred
admittedly after the Kerala Act came into force in 1962. The
apparent reason for preferring the application before the Central
Government is the observation contained in the judgment in
Aravindhan (supra). In the said judgment, this Court had only
observed that the Yogam is not without remedy and they can
always approach the Central Government under Section 25. This
Court had not considered whether such an application has to be
preferred before the Central Government or the State Government
in view of the Kerala Act. As a matter of fact it was not even
brought to the notice of the Court that the Kerala Act applies to the
Yogam. Thus Ext.P5 cannot be justified as an order issued on the
basis of directions issued by this Court.
21. By operation of Sections 3 to 6 of the Kerala Act, the
registration of Yogam as a non-trading company under the
Companies Act, 1956 is deemed to be a registration in the State of
Kerala. The Kerala Act is a statute falling under Entry 32 of List II of
the Seventh Schedule of the Constitution and the State Legislature
has exclusive power to make laws with respect to the matter. After
coming into force of the Kerala Act, the Companies Act, 1956 can
no longer govern the Yogam. Sections 3 to 6 of the Kerala Act in
effect facilitates the transfer of governance from under the
Companies Act, 1956 to the Kerala Act. Section 3 specifically says
that the operation of the Companies Act, 1956 with regard to
companies coming under the Kerala Act, will be subject to such
modifications specified in the Schedule to the Kerala Act. One such
modification made by the Schedule is that references to "the
R.F.A. No.843 of 2009 &
Central Government" and "Government" where it refers to the
Central Government shall be construed as references to the
Government of Kerala". Section 25 of the Companies Act, 1956 will
thus have to be read with the above modification and the
necessary result is that an application under Section 25(6) has to
be preferred before the State Government and not the Central
Government, in the case of the Yogam, after 1.3.1962. Admittedly,
Ext.P5 was issued on the basis of an application preferred much
after 1962. Ext.P5 is hence not issued by the competent authority
and hence cannot stand the test of law."
A perusal of the judgment in the said case also reveals that the
Yogam has not disputed in the case the fact that it is governed
by the Kerala Act, with effect from its promulgation namely,
01.03.1962. It is also revealed from the judgment that in the
light of the provisions contained in the Kerala Act, the Yogam
has even preferred applications before the competent authority
under the central statute to transfer the records relating to it to
the State Government. Another issue considered in the said
case was whether the passage of time and continued
acceptance of Ext.B5 order for several years would legitimise
the order, and the said issue was answered by the court in the
R.F.A. No.843 of 2009 &
negative. It is however seen that even though the order of
exemption granted by the Central Government was set at
naught by this court in terms of the judgment in in W.P.(C)
Nos.8382 of 2020 and 1385 of 2021, having regard to the
ramification of that decision, this court did not set aside all
actions that had been carried out on the basis of the order that
was set aside by clarifying that the judgment will not in any way
nullify the meetings held by the Yogam or elections conducted
earlier. Nevertheless, it is reiterated in the Judgment that the
decision taken in the meetings to restrict the voting right will
not gain sanctity of law. The operative portion of the judgment
reads thus:
x x x x "In the result, Ext.P5 order is set aside. It is
declared that clause 44 of the Articles of Association of the
SNDP Yogam is ultra vires the statutory provisions contained
in the Companies Act, 1956 read with the provisions of the
Kerala Non-Trading Companies Act,1961. It is declared that all
the members of the Yogam have a right to vote in any election
to be held by the Yogam".
R.F.A. No.843 of 2009 &
It is admitted by the parties that the judgment in W.P.(C) Nos.
8382 of 2020 and 1385 of 2021 has become final. We have
perused the judgment in W.P.(C) Nos.8382 of 2020 and 1385 of
2021 and we are in agreement with the findings and conclusion
therein. In other words, the case set out by the plaintiffs that the
exemption granted by the Central Government to the Yogam
from the provisions of the Companies Act, 1956, on the strength
of which the members of the Yogam are deprived of their right
to participate in its annual general meeting and elect the office
bearers of the Yogam is bad in law is to be accepted as correct.
Needless to say, the finding to the contrary rendered by the
court below and challenged by plaintiffs 5 and 6 in the cross
objection is unsustainable in law.
26. The only inference possible from the finding that
denial of opportunity to the members of the Yogam to
participate in its annual general meeting and elect the office
bearers of the Yogam is bad in law, is that the Yogam was not
managed and administered by duly elected office bearers right
R.F.A. No.843 of 2009 &
from 19.03.1966. The judgment in W.P.(C) Nos.8382 of 2020
and 1385 of 2021 was rendered on 24.01.2022. The contesting
defendants have no case that they have obtained exemption
from the State Government from the requirements of the
company law in terms of the Kerala Act so as to justify
convening of a representative annual general meeting of the
members of the Yogam. On the other hand, it has come out
that the office bearers of the Yogam who have assumed office
as early as on 9.8.2015 are continuing even now on the strength
of the invalid provisions in the Articles of Association. Of
course, it is open to the contesting defendants to argue that
since the elections of office bearers of the Yogam held prior to
the judgment in W.P.(C) Nos.8382 of 2020 and 1385 of 2021
have not been set at naught by this court, though held to be
invalid, the Yogam could obtain exemption from the relevant
provisions of the Company Law from the State Government in
terms of the Kerala Act. But, what would be the situation if the
State Government does not exempt the Yogam from the
R.F.A. No.843 of 2009 &
provisions of the said statute? Even if the State Government
grants exemption as done by the Central Government, the
questions viz, whether the members of the Yogam could be
deprived of their right to participate in the annual general
meeting to elect its office bearers and whether the election of
the office bearers of the Yogam by the representatives of the
members of the Yogam would be sufficient for the due
administration of the Yogam so as to achieve its objects etc.
would remain unanswered. True, the inability of the Yogam to
convene the annual general meeting of all its members running
to several lakhs is a genuine difficulty to be addressed. Whether
a representative annual general meeting would be a solution for
the said difficulty, is another question which needs to be
addressed. That apart, the fact that the Articles of Association of
the Yogam have been subsequently amended and large number
of persons other than the representatives of the Yogam have
been permitted to participate in the annual general meeting
which elects the office bearers of the Yogam is not disputed by
R.F.A. No.843 of 2009 &
the contesting defendants. The specific case pleaded by the
plaintiffs in this regard is that Article 44 of the Articles of
Association which permits such participation is against the
provisions of the Companies Act and not conducive for a proper
administration of the Yogam. The court below has accepted the
said case of the plaintiffs. Paragraph 51 of the impugned
judgment dealing with the said aspect reads thus:
"Section 41 of the Companies Act defines member of the
company. There is no dispute to the fact that the annual
general body meeting of the company means the meeting of
the members of the company. Therefore reading of Section 41
along with section 166 of the Companies Act show that only
members of the company can participate the general body
meeting. Clause 44 of Ext.A4 authorises some other persons
like Ex-President, Vice President, Devaswom Secretary, Yogam
Directors, Union President, Union Secretary, Union Council etc.
to participate the annual general body meeting even if they are
not elected by the members from their respective unions,
sakhas etc. It seems that these provisions in the Clause 44 of
Ext.A4 bye law is against the spirit of the Companies Act.
Therefore that provision also require reconsideration and
modification".
We do not find any infirmity in the said finding of the court
below. Are these issues that could be tackled by the Yogam is
R.F.A. No.843 of 2009 &
the next question. As indicated, if these are issues that could be
tackled by the Yogam, an interference by the Court under
Section 92 of the Code may not be justified. But, as far as the
Yogam is concerned, according to us, the affairs as regards
persons who are entitled to participate in its annual general
meeting to elect its office bearers, appear to be in an untidy
state which cannot be tackled by the Yogam. We are, therefore,
of the view that the plaintiffs are justified in seeking direction of
the court under Section 92 of the Code for administration of the
Yogam on that ground. We take this view also for the reason
that having regard to the large number of members of the
Yogam, it is imperative for the Yogam to have a legal framework
for a proper democratic representation of the members in its
annual general meeting in the interests of the Yogam.
27. As revealed from the pleadings of the plaintiffs,
one aspect highlighted by the plaintiffs in the plaint for justifying
an approach to the court invoking the power under Section 92 of
the Code is that arbitrary and unbridled powers are reserved in
R.F.A. No.843 of 2009 &
favour of the offices and officers of the Yogam and the said
arbitrary and unbridled powers are being abused by
person/persons holding the respective offices. According to the
plaintiffs, such unbridled and arbitrary powers are not conducive
for the proper administration of an organisation in the nature of
Yogam. The case of the contesting defendants in this regard is
that the powers reserved in terms of the Articles of Association
in favour of its offices are neither arbitrary nor excessive and
that the same are necessary for the proper administration of the
Yogam. Whether the powers reserved in terms of the Articles
of Association of the Yogam in favour of its various offices are
reasonable and necessary for the proper administration of the
Yogam is a question to be addressed by the competent body of
the Yogam itself. But, when there is a serious dispute as to the
authority of persons who are to elect the Board of Directors and
other office bearers of the Yogam on whom the administration of
Yogam vests, the plaintiffs cannot be faulted for having
approached the Court for a direction for the administration of
R.F.A. No.843 of 2009 &
the trust under Section 92 of the Code on this ground as well,
for want of a competent forum for redressal of the genuine
grievances of the members of the Yogam is a fact that can
certainly be reckoned in the matter of deciding the question
whether the case on hand is a case for direction of the court
under Section 92 of the Code.
28. As noted, it is also the case of the plaintiffs that
the Memorandum of Association of the Yogam does not provide
for formation of Branches and Unions for the Yogam and the
formation of Branches and Unions for the Yogam is therefore
unauthorised. It is alleged by the plaintiffs that even if it is
assumed that it is permissible for the Yogam to have Branches
and Unions, it is not defined anywhere as to what shall be the
status of the Branches and Unions of the Yogam, more precisely
as to whether the Branches and Unions of the Yogam are
integral part of the Yogam or independent bodies, as a result of
which there have been litigations between the Yogam and its
Branches and Unions right from the very inception of its
R.F.A. No.843 of 2009 &
functioning. It is also alleged by the plaintiffs that in the absence
of any indication as to the status of the Branches and Unions of
the Yogam, the assets and liabilities as also the income and
expenditure of the Branches and Unions are never shown in the
annual accounts and balance sheet of the Yogam. It is also
alleged by the plaintiffs that the said state of affairs as regards
the status of Branches and Unions of the Yogam is not
conducive for a proper administration of the Yogam. According
to the plaintiffs, for a proper administration of the Yogam to
achieve its objects, the Branches and Unions of the Yogam shall
be integral part of the Yogam and the Yogam is thereby bound
to include the income and expenditure as also the assets and
liabilities of the Branches and Unions in the annual statements
submitted in the annual general meeting with the auditors
report regarding it. It is stated that this is a serious defect in the
administration of the Yogam which needs to be remedied by a
drastic re-framing of the Articles of Association of the Yogam for
which the direction of the Court is necessary and having regard
R.F.A. No.843 of 2009 &
to the present state of affairs of the Yogam, the existing
structure of the Yogam cannot be corrected.
29. As rightly pointed out by the plaintiffs, the
Memorandum of Association of the Yogam does not provide for
establishment of Branches and Unions for the Yogam. Article 12
of the Articles of Association of the Yogam however provides
that the Yogam can have Branches and Unions in accordance
with the sub-rules prescribed in this regard. As contended by the
plaintiffs, the Articles of Association of the Yogam does not
define as to what shall be the status of the Branches and Unions
of Yogam, especially as to whether they are integral part of the
Yogam or independent bodies capable of holding assets and
incurring liabilities. At the same time, it is an admitted fact that
the Articles of Association of the Yogam provides for disciplinary
control over the Branches and Unions of the Yogam by the
Board of Directors and that the powers conferred on the Board
of Directors in this regard include even powers to take over the
Branches and Unions and their assets, and to manage the same.
R.F.A. No.843 of 2009 &
The stand taken by the contesting defendants in their written
statement is that the Branches and Unions have been formed
for the Yogam in accordance with the sub-rules framed as
provided for under Article 12 of the Articles of Association and
that the Branches and Unions of the Yogam have no
independent existence and that the assets of the Branches and
Unions of the Yogam belong to the Yogam and are under its
control. As regards the case set out by the plaintiffs that the
assets and liabilities and the income and expenditure of the
Branches and Unions are never shown in the annual statement
of accounts and the balance sheet of the Yogam, it is stated in
paragraph 27 of the written statement by the contesting
defendants that the assets and liabilities and income and
expenditure of the Branches and Unions need not be shown in
the annual statement of accounts and the balance sheet of the
Yogam.
30. While the specific case of the plaintiffs is that
formation of units like Branches and Unions is neither provided
R.F.A. No.843 of 2009 &
for nor contemplated under the Companies Act, 1886 or its
successor enactments, the contesting defendants assert that
there is no prohibition in law for a company like the Yogam in
forming Units like Branches and Unions for the proper
administration. To bring home the case put forward by the
contesting defendants, their learned counsel argued that the
Branches and the Unions would fall within the scope of Section
2(9) of the Companies Act, 1956 as also Section 2(14) of the
Companies Act, 2013. Section 2(9) of the Companies Act, 1956
defines a branch office in relation to a company as any
establishment described as a branch by the company or any
establishment carrying on either the same or substantially the
same activity as that carried on by the head office of the
company or any establishment engaged in any production,
processing or manufacture, but does not include any
establishment specified in any order made by the Central
Government under Section 8 of the said statute. Section 8 of the
Companies Act, 1956 confers power on the Central Government
R.F.A. No.843 of 2009 &
to declare by order in the case of a company, any
establishment carrying on either the same or substantially the
same activity as that carried on by the head office of the
company or any establishment engaged in any production,
processing or manufacture, shall not be treated as a branch
office of the company for all or any of the purposes of the said
statute. Section 2(14) of the Companies Act, 2013 defines
branch office in relation to a company as any establishment
described as such by the company. According to the contesting
defendants, as trading companies run branches for
administrative convenience, the Yogam is entitled to have
branches for administrative convenience. The contesting
defendants, however, have no case that a body like Union as
provided for in the Articles of Association is either provided for
or contemplated by the relevant Companies Act, 1956 or its
successor enactments.
31. Since the Yogam is registered as a company, it
can have Branches and Unions only if such Branches and Unions
R.F.A. No.843 of 2009 &
are either provided for or contemplated by the relevant law
governing companies. The branches contemplated and provided
for under the Companies Act, 1882 and its successor
enactments are not independent or separate entities and in
terms of the aforesaid statutes, company and its branches
would constitute one single entity [See English Electric Co. of
India Ltd v. Deputy Commercial Tax Officer (1976) 4 SCC
460]. Ext.A42 is the objection filed by the then General
Secretary of the Yogam in Company Petition No.33 of 2007. In
Ext.A42, the stand taken by the Yogam is that the Branches of
the Yogam are unincorporated associations who are entitled to
have separate assets and liabilities; that the internal
administration of the Branches are vested in Branches itself and
all income in the Branches shall be its special assets so also its
liabilities. In Ext.A43, another statement filed by the Yogam in
the very same proceedings, it is also stated that the assets of
the Branches of the Yogam are not the assets of the Yogam and
similarly, the liabilities of the Branches are not the liabilities of
R.F.A. No.843 of 2009 &
the Yogam. Ext.A39 which is another affidavit filed by the then
general secretary of the Yogam in Company Petition No.18 of
1957. In the said affidavit, it is stated that the Branches of the
Yogam have nothing to do with the Yogam, for it has separate
existence, separate membership, separate assets, separate
constitution, independent of the Yogam financially. As noted,
even though the fact that the assets and liabilities and income
and expenditure of the Branches and Unions of the Yogam are
not shown in the annual statement of accounts and the balance
sheet of the Yogam, despite the objections raised by the
auditors of the Yogam is not denied or disputed by the
contesting defendants, it is asserted by the contesting
defendants in the written statement that the assets of the
branches and Unions of the Yogam are under the control of
Yogam. It is thus evident that the Yogam does not have a
consistent case as to whether its Branches and Unions are
independent bodies capable of owning assets and incurring
liabilities. The inconsistency in the stand taken by the Yogam,
R.F.A. No.843 of 2009 &
according to us, is due to the lack of clarity as to the status of
the Branches and Unions of Yogam in terms of the Articles of
Association of the Yogam. It is all the more so since the
Branches and Unions as provided for in the Articles of
Association of the Yogam as also in the sub-rules framed under
the Articles of Association, are not provided for or contemplated
under the Companies Act, 1882 and its successor enactments.
32. If the Yogam and its Branches and Unions
constitute one single entity, if at all the same is the stand of the
Yogam, there is absolutely no reason why the assets and
liabilities as also the income and expenditure of the Branches
and Unions cannot be regarded as assets and liabilities and
income and expenditure of the Yogam. On the other hand, if the
Unions and Shakha are independent units, there is absolutely no
reason why the Yogam should exercise disciplinary control over
its Branches and Unions. Be that as it may, the materials
indicate that the stand of the Yogam is that it intends to have
control over the assets of the Branches and Unions and at the
R.F.A. No.843 of 2009 &
same time, it does not want to take up their liabilities. Even
though it was contended by the contesting defendants in the
written statement filed by them that the assets of the Branches
and Unions of the Yogam are under the control of the Yogam, it
has come out that the Branches and Yogam are acquiring assets
in their name as also incurring liabilities. It has also come out in
evidence that there are several litigations between Yogam and
its Branches and Unions concerning the assets of the Branches
and Unions of the Yogam. It seems that lack of clarity as
regards the inter relationship between the Yogam and its
Branches led to frequent disputes between the Yogam and its
Branches and Unions, especially over the assets of the Branches
and Unions. Needless to say, it is necessary that a legal
pronouncement as to the legal relationship between the Yogam
and its Branches and Unions is to be made for the proper
management of the Yogam in the best interests of its
beneficiaries. The fact that the disputes between the Yogam and
its Branches and Unions have been existing for the last several
R.F.A. No.843 of 2009 &
years and the Yogam could not find a solution for this during all
these years is also prompting us to hold that a permanent
solution on this issue is not possible without the interference of
the Court. In other words, a situation of this nature is also one
warranting direction of the court for administration of the Yogam
under Section 92 of the Code.
33. As indicated, the cross objection of plaintiffs 5
and 6 is filed mainly challenging the decision of the court below
in declining the plaintiffs the relief sought for in the plaint for
removal of defendants 2 to 16 from the administration of the
Yogam. As noted, defendants 2 to 16 in the suit were the
members of the council of the Yogam at the time when the suit
was instituted. Admittedly, the council of the Yogam was
reconstituted on many occasions after the institution of the suit,
although some among defendants 2 to 16 are continuing as the
members of the council of the Yogam even now. Having regard
to the facts and circumstances of the case, the court below
found that the plaintiffs have not made out a case for removal of
R.F.A. No.843 of 2009 &
the said defendants from the administration of the Yogam.
Serious arguments have not been advanced by the plaintiffs in
respect of the said finding of the court below obviously for the
reason that the council of the Yogam was reconstituted after the
institution of the suit. Even otherwise, having regard to the
materials on record, we do not find any infirmity in the said
finding rendered by the court below.
34. In the light of the foregoing discussion, we are
of the view that there is no infirmity in the decision of the court
below that the plaintiffs have made out a case for a direction
under Section 92 of the Code for the administration of the
Yogam. It is all the more so since in terms of impugned
judgment, the direction issued by the court is only for framing of
a scheme for the administration of the Yogam in accordance
with the requirements of the relevant statute governing
companies.
R.F.A. No.843 of 2009 &
In the result, the appeal is dismissed and cross
objection is allowed to the limited extent indicated in paragraph
25 above.
Sd/-
P.B.SURESH KUMAR, JUDGE.
Sd/-
C.S.SUDHA, JUDGE.
YKB/ds/Mn
