HC: Court to exercise jurisdiction u/S. 92 CPC, there must be factual finding to show the Trust was a Public charitable or a Religious Trust [Read Judgment]

In, Adarsha Sugama Sangeetha Academy vs Vrinda S. Rao & Others, the Single Bench of Karnataka HC has held that in order to maintain a suit under Section 92 of the CPCA trial Court must ascertain the material on record to satisfy that the  persons applying should show the existence of a public charitable or a religious Trust or a purpose. There should be a clear breach of the terms of the Trust.

Facts

 proceeding under Section 92(1) of the CPC was initiated by the petitioners seeking leave of the Trial Court to present a suit against the respondents. The petitioner No.1 claimed to be a Trustee of the respondent No.1. The petitioners asserted that the respondent No.1 was a public charitable Trust of which the petitioner No.1 and respondent Nos.2 to 5 are the Trustees. The petitioners alleged that the meetings of the Trust were not conducted regularly and that not even a single Annual A General Body meeting of the Trust was held. With these and various other allegations, the petitioners sought permission to file a suit to frame a scheme for management of the Trust. Along with the petition under Section 92(1) of the CPC.

The Trial court Allowed the Petition and hence aggrieved by the same, the defendant filed the writ petition under Article 227 of the Constitution before the Karnataka HC to quash aside the findings of the Trial Court.

Contention Made

Petitioner: that the Petitioner was not a public charitable Trust and the Respondent was not a person interested in the affairs of the Trust. Further, that a perusal of the Trust deed does not disclose any charitable activities

Respondent: that Petitioner was registered as a charitable Trust and that it had obtained registration under Section 12A of the Income Tax Act, 1961, And Income Tax returns filed by the Petitioner declared itself as a charitable Trust.

Court Observation

The Single Bench of Karnataka HC, while noting the statutory provision observed that;

1. In order to maintain a suit under Section 92 of the CPC., persons applying should show the existence of a public charitable or a religious Trust or a purpose.
2. There should be a clear breach of the terms of the Trust.
3. The Court to exercise jurisdiction, there must be a factual finding from the material placed on record whether the Trust was a public charitable or a religious Trust
4. whether the persons approaching the Court have any interest in the Trust.
5. whether there is a breach of the Trust and
6. if yes, the Court would determine the modalities of a scheme for the better and effective administration of the Trust under its supervision.

Court Judgment

The Karnataka HC while setting aside the order of the Trial Court has held that the Trial Court had not applied its mind to the question whether the Trust was charitable or religious and whether the petitioners were really interested in the affairs of the Trust.

Hence HC, remanded back the matter to the Trial Court to consider the matter in accordance with law.

Case: Adarsha Sugama Sangeetha Academy vs Vrinda S. Rao & Others

Citation: WRIT PETITION NO.33264 OF 2016 (GM-CPC)

Bench: Hon’ble Mr Justice R. Nataraj

Decided on: 1st August, 2022

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