Noor Educational Trust vs M/S. Z.N.S Builders And ...
2022 Latest Caselaw 90 Tel

              HON'BLE SRI JUSTICE P.NAVEEN RAO
                             AND
              HON'BLE SMT. JUSTICE P.SREE SUDHA

                    APPEAL SUIT No.228 OF 2021

                              JUDGMENT

(per Justice P.Sree Sudha)

1. This appeal is filed by Noor Educational Trust (for short, 'the

Trust') against the orders dated 15.09.2021 passed in I.A.No.332 of

2021 in O.S.No.72 of 2021 on the file of the learned I Additional

District Judge, Mahabubnagar, allowing the application filed by

Defendant Nos.2 and 3 in the suit for rejection of the plaint.

2. The appellant - Trust herein is the plaintiff and respondent

Nos.1 and 2 are defendant Nos.2 and 3 in the suit.

3. The backdrop of the case, in brief, is as follows:

One late Mirza Ahmed Baig had established a Society under

the name of "Noor Educational Society" (for short, 'the society") on

22.11.1986 and the said Society purchased various extents of

land, totalling to Acs.22.22 guntas, in Sy.No.27/A1 under a

registered sale deed dated 22.10.1998 vide Document No.4970 of

1998 of the Office of the Sub-Registrar, Shadnagar. The

agricultural land was converted into non-agricultural, as per the

Land Conversion Certificate dated 13.09.1999 issued by the

Mandal Revenue Officer, Farooqnagar, Shadnagar, and also

established Noor College of Engineering and Technology and Noor

P.G.College of Computer Sciences, to impart higher education.

4. Later, to achieve the aims and objectives of the Society in

more efficient way, it was decided to dissolve the Society in a

General Body Meeting held on 01.04.2002 by passing a resolution,

and, after its dissolution, in its place, Mirza Ahmed Baig

constituted a trust, namely, "Noor Educational Trust", registered

under Deed of Declaration dated 09.04.2002, vide Document

No.34/IV/2002 of Sub-Registrar, Azampura, represented by its

trustee - Mirza Mohammed Hussain Baig and M/s.ZNS Builders

and Developers - second defendant was the signatory to the

registered trust deed.

5. It is the case of the plaintiff that the Deed of Declaration of

Trust was registered on 09.04.2002, and thus, the acts of the first

defendant to claim the existence of Society even after 01.04.2002,

are false. Mr.Mirza Ahmed Baig died on 25.07.2017. Thereafter,

the first defendant continued to be the trustee of the Trust,

fabricated document in the form of antedated letter and finally

brought into existence the void sale deed dated 06.07.2002 vide

Document No.10365 of 2021 of Sub-Registrar, Farooqnagar, and

therefore, the plaintiff - Trust filed O.S.No.72 of 2021 on the file of

the learned I Additional District Judge, Mahabubagar, for declaring

the sale deed as void, abinitio and is not binding on the Noor

Educational Trust and also to restrain Defendant Nos.1 to 3 from

interfering into peaceful possession of the suit schedule property of

the Trust and for perpetual injunction.

6. During the pendency of the said suit, defendant Nos.2 and 3

filed I.A.No.332 of 2021 in the present suit to reject the plaint. In

the affidavit filed in support of the application, it is contended that

the plaintiff in the suit filed W.P.No.6177 of 2019 seeking

directions to the registration authorities to receive the documents

presented by it for sale of the Trust property, situated in Sy.No.618

total extent of land admeasuring Acs.13.18 guntas situated in

Chatanpally Village, Farooqnagar Mandal, Ranga Reddy District,

and it was allowed on 25.03.2019, and as such, the transaction

occurred in the name of Defendant Nos.2 and 3 vide sale deed

dated 06.07.2021, is absolutely legal. They stated that the plaintiff

filed resolution of the general body meeting of the Society, in

which, he signed in the capacity of its treasurer and the said

resolution was filed before this Court, wherein it was stated that

since the Society is running into severe losses and for the sake of

survival of the Society and its objectives, the Society resolved to

sell off its properties to generate funds, which indicates that the

Society still exists.

7. It is further stated in the accompanying affidavit that the

plaintiff also filed another W.P.No.5647 of 2019 seeking directions

against the Government Officials from interfering with Society's

possession of its lands and this Court by its order dated

19.03.2019 in I.A.No.1 of 2019 held that the respondents therein

not to interfere with the petitioner's possession over the subject

land, even if warranted, except in accordance with the due

procedure laid down by law. According to the respondents herein,

this finding shows that the Society is an active existing entity and

holder of title in possession.

8. The respondents stated that the plaintiff also represented

and defended the Society in O.S.No.263 of 2010 on the file of the

learned Senior Civil Judge, Mahabubnagar, which was

re-numbered as O.S.No.143 of 2014 and O.S.No.28 of 2017 was

also filed before the learned Principal Junior Civil Judge,

Shadnagar. They filed certified copies of the Vakalat and written

statement in O.S.No.263 of 2010 and chief-examination affidavit in

O.S.No.143 of 2014 to show that the Society is the title holder and

also possessor of the suit lands. They are bona fide and genuine

purchasers of the schedule property. The sale deed was also

registered in the office of the Sub-Registrar, Farooqnagar, without

any objections. Having represented the above suits in the capacity

of Treasurer of the Society, the plaintiff has now filed the present

suit stating that the Society was dissolved, but he has not given

any intimation of the resolution to the Registrar of Societies,

Telangana, as required under Section 24 of the Telangana Societies

Registration Act, 2001 (for short, 'the Act of 2001').

9. The respondents strongly contend that the Society still exists

in the Registrar of Societies and the said Society is also in

possession of a valid certificate of registration bearing No.2826

dated 22.1.1986. Indeed, the Trust was set up separately in order

to support other educational causes such as awarding of

scholarships and other related activities for deserving and

underprivileged students. They also relied upon Section 25 of the

Act of 2001 and further stated that none of the mandatory steps

required under Sections 24 and 25 of the Act of 2001 were initiated

or followed by the plaintiff, and thus, it has no locus-standi to file

the suit.

10. The respondents would further submit that on 05.02.2021

the Society represented by its Joint Secretary entered into a rental

agreement with the Principal/Special Officer of MJPTBCW

Residential School, Shadnagar, leasing out its defunct buildings,

and thus, the Society was an active body organization at the time

of execution of sale deed. They would also contend that the Trust

Declaration Deed was executed on 09.04.2002 and as such Society

was dissolved before declaration of Trust was signed on

09.04.2002 and thus, the very author of Trust was a non-existing

entity as on 09.04.2002. As such the Deed of Trust is void and ab

initio as per the Indian Trusts Act, 1882.

11. According to the respondents, though in the Trust Deed it

was declared to be a 'Family Trust', the objects of the Trust

indicate that it was set up for a greater public interest of

education. The ownership titles of the Noor College of Engineering

and Technology and Noor P.G. College of Computer Sciences are

still remaining with the Society before execution of sale deed on

06.07.2021. Moreover, mere registration of the Trust Declaration

Deed does not confer any right upon the Trustees and the property

shall be transferred in their name. They would further state that

the plaintiff is a habitual litigant and had filed an S.O.P.No.24 of

2020 by another sister society-Moghal Educational Society, but it

was rejected on 17.02.2021. Basing on the complaint lodged by the

plaintiff against the respondents herein, an FIR No.562 of 2021

dated 09.07.2021 was registered but the Investigating Officer filed

a final report on 31.07.2021 citing the reasons for such closure as

'false complaint'.

12. The second defendant also relied upon letter dated

03.08.2021 addressed by the Assistant Director, Survey and Land

Records to the District Town and Country Planning Officer, R.R.

District and also relied upon a judgment of the Hon'ble Apex Court

reported in T.ARVINDANDAM V/s. T.V.SATTYAPAL1 and

requested the Court below to reject the plaint.

13. After considering the rival submissions made by both the

parties and on perusing the material available on record, the Court

below, while allowing the application filed by the Defendant Nos.2

and 3 for rejection of the plaint, observed that the actual dispute is

in respect of existence or non-existence of the Society and also

transfer of its properties, as per the version of the plaintiff to the

plaintiff Trust. As per Section 23 of the Act of 2001, in the event of

any dispute arising among the Committee or the members of the

Society, in respect of any matter relating to the affairs of the

society, any member of the society may proceed with the dispute

under the provisions of Arbitration and Conciliation Act, 1996

(Central Act 26 of 1996) or may file an application in the District

Court concerned.

14. The Court below relied upon a decision of this Court

reported in ANDHRA EVANGELICAL LUTHERN CHURCH,

GUNTUR V/s. B.SYAMSUNDAR2 and observed that the suit is

barred by the Act of 2001 and is not filed by authorized person.

Signature on writ petitions filed subsequent to 09.04.2002 were

denied and thus it is a vexatious litigation. The Court below relied

upon the decision T.ARVINDAM's case (supra) and held that the

plaint does not disclose the cause of action and is barred by law

and finally rejected the plaint. Aggrieved by the said order, the

present appeal is preferred.

AIR 1977 SC 2421

2003 (2) ALD 191

15. Learned counsel for the appellant-plaintiff would contend

that the Court below erroneously applied Section 23 of the Act of

2001, while acknowledging that there is a dispute between the

parties with respect to the existence of the Society, since the said

Act was made applicable to the State of Telangana only from

18.08.2014. It is further stated that the resolution dated

01.04.2002 unambiguously speaks of the fact that the Society is

dissolved, and in its place, the Trust is created.

16. While denying the contention as regards filing of

authorisation to file the suit, it is vehemently contended by the

learned counsel for the appellant that as per Section 13 of the

Indian Trusts Act, 1882, a duty is cast on every trustee to defend

Trust properties. The another ground urged by the appellant-

plaintiff is that Section 23 of the Act of 2001 does not apply to the

case on hand and that the decision referred to by the Court below

in ANDHRA EVANGELICAL LUTHERN CHURCH's case (supra)

cannot be made applicable, since the facts of that case and the

facts of this appeal are altogether different. According to the

appellant, the Court below erred in following the requirements of

Order 7 Rule 11 CPC; that the Court below erroneously relied upon

the decision of the Hon'ble Apex Court in T.ARVINDAM's case

(supra) and rejected the plaint; and therefore, the order of rejection

deserves to be set aside.

17. Basing on the above pleadings, now the point that arises for consideration in this appeal would be 'Whether the order passed by the Court below is wrong, if so, it is liable to be set aside.'?

18. Before going into the issue in detail, it is apposite to extract

the ingredients of Order-7 Rule-11 CPC, as under:

'O-VII Rule 11 - Rejection of plaint.--The plaint shall be rejected in the following cases:-

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

(e) where it is not filed in duplicate;

(f) where the plaintiff fails to comply with the provisions of rule 9;

Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature for correcting the valuation or supplying the requisite stamp- paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.'

19. It is settled law that while considering the application under

Order 7 Rule 11 C.P.C., the Court has to examine only the

averments made in the plaint and not the pleas taken by the

defendant in the written statement. To reject the plaint it should

appear from the statement in the plaint that it is barred by law,

so that frivolous litigation need not be kept pending. It should be

apparent from the reading of the plaint that the suit is not

maintainable. In the judgment of RAJENDRA BAJORIA V/s.

HEMANT KUMAR JALAN (Civil Appeal Nos.58195822 of 2021,

dated 21.09.2021), it was held by the Supreme Court as under:

" .....power conferred on the Court to terminate a civil action is a drastic one, and the conditions enumerated under Order VII Rule 11 of C.P.C. are required to be strictly adhered to. However, under Order VII Rule 11 of C.P.C., the duty is cast upon the Court to determine whether the plaint discloses a cause of action, by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law.....underlying object of Order VII Rule 11 of C.P.C. It is also held that underlying object of Order VII Rule 11 of CPC is that when a plaint does not disclose a cause of action, the court would not permit the plaintiff to unnecessarily protract the proceedings. It is also held that as provided under Order VII Rule 13 of the Civil Procedure Code, the order of rejection of the plaint shall not of its own force preclude the plaintiffs from presenting a fresh plaint in respect of the same cause of action."

20. O.S.No.72 of 2021 was filed by the Educational Trust,

represented by Mirza Mohammed Hussain Baig for declaring that

the sale deed dated 06.06.2021 is 'void ab-initio' and is not binding

on the Trust and also for permanent injunction restraining

defendant Nos.1 to 3 from interfering with the valid physical

possession of the suit schedule property. The defendants opposed

the suit on the ground that suit is vexatious and against law and

filed by the person without authorization. In view of Section 13 and

36 of the Indian Trust Act, 1982, a duty is cast upon on every

trustee to defend the trust property. As such, the question of

authorization or resolution to authorize a particular trust to file the

suit does not arise. The appellant further stated that Mirza

Mohammed Hussain Baig/defendant No.1 is also a signatory of the

registered trust deed vide document No.34/IV/2002dated

09.04.2002.

21. The Court below specifically mentioned in the order that, the

main dispute is with regard to existence and non-existence of the

society and also transfer of its properties. Dispute means

controversy having both positive and negative aspects. It

postulates assertion of the claim of one party and its denial of

them by the other. As the trial Court clearly acknowledges that

there is dispute regarding existence of the society, it is a triable

issue to be adjudicated after adducing evidence of both the parties.

22. As per Section 23 of the A.P. Societies Registration Act, 2001

in the event of any dispute arising among the committee members

or the members of the society in respect of any matter relating to

the affairs of the society, any member of the society may proceed

with the dispute under the provisions of Registration and Stamp

Act, 1996 or may file application before the District Court

concerned and the said Court shall, after necessary enquiry, pass

such orders as it may deem fit. Even as per the decision reported

in ANDHRA EVANGELICAL LUTHERN CHURCH's case (supra),

jurisdiction of Civil Courts is barred when dispute falls under

Section 23 of the A.P. Societies Registration Act of 2001. Having

noticed that there is a dispute on status of the society, prima facie,

it cannot be said that the provisions of Section 23 of the Act of

2001 are attracted straight away. The appellant filed original trust

deed before the trial Court during the arguments and asserted that

the Trust is in existence and the Trust is trying to protect its

properties. Thus, the judgment of ANDHRA EVANGELICAL

LUTHERN CHURCH stated supra is not applicable to the facts of

this case. In the said case, the plaintiff was a society, but, in this

case, the plaintiff is a trust.

23. The other ground on which the plaint was rejected was

denying signature on the writ petition filed subsequent to

09.04.2002 (the date of trust deed) by Mirza Mohammed Hussain

Baig now representing the Trust; and the earlier litigation referred

in the plaint shows that it is a vexatious litigation. As per the

judgment of T.ARAVINDAM V/s. T.V.SATYAPAL 3, when there is

no clear title or right to sue, the Court shall exercise power under

Order 7 Rule 11 C.P.C. and nip it in the bud. The trial Court held

that the plaint does not disclose cause of action and is barred by

law. In fact the facts of the said case are entirely different from the

facts of this case. The said judgment substantiates the rejection of

plaint on the ground of "clever drafting to create an illusion of

creation of cause of action."

24. The issue whether the society was dissolved by way of trust

deed dated 09.04.2002 with effect from 01.04.2002 and the

present suit is filed by the trustee, who is not authorized to do so,

and that the question as to whether the signature was denied are

the core issues relating to the question of fact, which can be

decided in the suit after framing the issues and adducing evidence

in that regard. Therefore, the suit of the plaintiff cannot be

dismissed without conducting trial. Basing on the above facts, we

are of the opinion that the trial Court erred in rejecting the plaint.

25. Hence, the appeal is allowed setting aside the order dated

15.09.2021 passed in I.A.No.332 of 2021 in O.S.No.72 of 2021 on

AIR 1977 SC 2421

the file of I Additional District Judge, Mahabubnagar and the

Court below is directed to restore the suit and to proceed with the

same in accordance with law. No Costs.

26. Miscellaneous Petitions, if any, pending in this appeal shall

stand closed.

___________________ P.NAVEEN RAO, J

___________________ P.SREE SUDHA, J 7th JANUARY, 2022

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