Are you looking for a legal research tool ?
Get Started
Do check other products like LIBIL, a legal due diligence tool to get a litigation check report and Case Management tool to monitor and collaborate on cases.

M/s. Deelipkumar And Co v. Mulla Gulamali And Saffia Rai Dhanaliwaia Trust By Its Secretary, Sabbir Kurban Hussain Dhanaliwaia

M/s. Deelipkumar And Co v. Mulla Gulamali And Saffia Rai Dhanaliwaia Trust By Its Secretary, Sabbir Kurban Hussain Dhanaliwaia

(High Court Of Judicature At Madras)

Second Appeal No. 1119 Of 1993 | 24-09-1997

1. This second appeal is filed by the unsuccessful defendant.

2. The suit was filed for delivery of vacant possession of the suit property by the plaintiff.

3. The case of the plaintiff is that the plaintiff is a public charitable trust. The defendant is a monthly tenant in a portion in the ground floor on payment of Rs.226. The tenancy is for non-residential purpose. On 26.7.1982, notice was sent for payment of rent, As there was no payment on 7.9.1982, notice determining the tenancy was sent. Since there was no compliance the suit was filed.

4. The defendant contended that the allegation of nonpayment of rent for 44 months was not correct. Notice dated 7.9.1982 terminating the tenancy was not valid in the law. In the additional written statement the defendant asserted that the plaintiff was not a public charitable trust. Hence it was not entitled for exemption. In substance, the defence was that the suit was not maintainable in the civil court and the remedy was before the Rent Controller.

5. The trial court framed two issues and one additional issue. The additional issue related to the character of the trust as to whether it is a Public Charitable Trust or not.

6. The trial court considered additional issue No. 1 in detail and came to the conclusion that the plaintiff is a public charitable trust and hence it is exempted from the purview of the Rent Control Act, by virtue of G.O.Ms.No.2000 of 1976. Hence, the suit was decreed. The defendant filed the appeal before the Principal Judge, Madras. The learned principal judge considered the point No. 1 relating the character of the trust and allowed the appeal in part and remanded the matter for fresh disposal. After remand, once again the trial court found that the plaintiff was a public trust. Hence decreed the suit. When the matter came up before the VI the Additional Judge, by way of appeal once again the appellate court considered the point as to whether the plaintiff is a public trust or private trust and opined that the plaintiff is a public trust. Hence, it confirmed the decree and the judgment of the trial court. In this appeal, the only point urged by the learned counsel for the appellant is that the plaintiff is not a public charitable trust and it is only a private one and therefore the exemption from the purview of the Rent Control Act is not available. Consequently, the suit is not maintainable.

7. On the other hand, the learned counsel for the respondent Mr.V.Raghavachari contended that since the beneficiaries are public and they are not identifiable, the plaintiff must be deemed to be a public one.

8. The court below considered that the beneficiaries were members of the public and not the members of the family of the original trustee. Hence, the plaintiff must be deemed to be a public one.

9. The contention of the learned counsel for appellant is that even though the benefits are conferred upon the public, the management of the trust is in the hands of the family of the original trustee and as such the Trust must be deemed to be only a private trust.

10. In this case, Ex.A-1 was produced. As per Ex.A-1 the trust, has been registered under the Societies Registration Act. Ex.A-2 contain objects of the trust. The main objects are to give donations to educational and charitable institutions and to open and maintain schools and colleges for imparting general or technical education. The list of members of the Governing Body is also given at page No.2. There are 9 members in the Governing Body, Ex.A-2 is the rules and regulations. In Ex.A-3, there is a mention about the membership and management. The members shall not be less than 7 and more than 11. The trust is managed by a Governing Body called Managing Committee, which consists of President, Vice President, Secretary, Joint Secretary, Treasurer and 3 or more Trustees but not exceeding the limit mentioned in Art.4 above, that is the strength should not exceed it. The office-bearers are elected from among the 11 members. They have to be elected once in three years. The subscribers to the Memorandum of Association are the original members of the Governing Body of the Trust. As per Ex.A-2 there are 9 members, who have subscribed to the memorandum of association. One of the trustees shall be nominated by the Governing Body. As regards the succession to the membership, there is a provision in Ex.A-3. A member resigning or retiring may nominate any of his sons or grandsons to succeed him as may be acceptable to the managing committee. From Ex.A-3, what we find is that a group of 11 persons can alone be the management of the Trust, Further, when they retire, they can nominate their sons or grandsons acceptable to the managing committee. It is therefore clear that the management is vested only in the hands of the original subscribers to the memorandum of Association and it is not open to the public. The learned Counsel for the appellant submitted the following decision in support of his contention mat if the management is entrusted to a group of persons only men its succession is also among their successors and the trust even though the benefits are conferred to me members of the public cannot be treated as a public trust.

11. The learned counsel for the appellant cited me decision in Radhakanta Deb v. The Commissioner, H.R. & .C.E., Orissa Radhakanta Deb v. The Commissioner, H.R. & .C.E., Orissa Radhakanta Deb v. The Commissioner, H.R. & .C.E., Orissa, A.I.R. 1981 S.C. 798: (1981)2 S.C.C. 273. In me said case, the Apex Court had issued criteria for determining as to whether a trust is a public or a private one. In paragraph 14 of me judgment of the Apex Court, the criteria has been set out. These are:

(1) where me origin of the endowment cannot be ascertained, the question whether the user of the temple by members of the public is as of right;

(2) The fact that the control and management vests either in a large body of persons or in me members of me public and me founder does not retain any control over me management. Allied to mis may be a circumstance where the evidence shows mat mere is provision for a scheme to be framed by associating the members of the public at large;

(3) Where, however, a document is available to prove the nature and origin of the endowment and the recitals of the document show that the control and management of the temple is retained with the founder or his descendants, and mat extensive properties are dedicated for the purpose of the maintenance of me temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature;

(4) Where me evidence shows mat the founder of the endowment did not make any stipulation for offerings or contributions to be made by members of the public to the temple, this wound be an important intrinsic circumstance to indicate me private nature of me endowment.

12. From the above, it is clear that even though the public are the beneficiaries, the benefit is not conferred on them as of right. The second criteria is that of control and management and the third one is also very important, which states that if the document creating the endowment shows that the control and management of the temple is retained with the founder or his descendants, it will be a conclusive proof to show that the endowment was a private one.

13. The above principles have been set our in State of Bihar v. Biseshwar Das , A.I.R. 1971 S.C. 2057. In paragraph 13 the Apex Court also stressed the criteria of management.

13. In(1938)65 I.A. 252: A.I.R. 1938 EC. 195, the PrivyCouncil held the mere fact that mahants of a particular order did not marry and properties held by mem descended from guru to chela was not indicative of and did not raise a presumption of such properties being religious properties. If originally the property was acquired by a mahant, the fact of its descent subsequently from guru to chela did not lead to the conclusion that it had lost its secular character. Where, however, a property is dedicated to an idol for the object of performing its puja and other necessary ceremonies the person managing such property is only a shebait, idol being a juristic person in Hindu Law capable of holding such property. If it is alleged that such property is a trust property held for public purposes to which Acts, such as the Charitable and Religious Trusts Act, 1920 or the present Act, applies it has to be shown that the trust is not a private trust but is one substantially for public purposes of a religious and charitable nature. In such cases provision for the service of the sadhus, occasional guests and wayfarers does not render a trust for an idol into a trust for public purposes. This is because where the main purpose of the trust is making provision for the due worship of an idol and performance of its seva puja and other ceremonies, the feeding of sadhus and giving hospitality to wayfarers are inevitable. These are regarded as duties forming part of the due worship of the duties of the particular deity. (See: Ramsaran Das v. Jairamdas Ramsaran Das v. Jairamdas Ramsaran Das v. Jairamdas, A.I.R 1943 Pat. 135) [LQ/PatHC/1942/104] . Therefore, evidence that sadhus and other persons visiting the temple are given food and shelter is not by itself indicative of the temple being a public temple or its properties being subject to a public trust.

14. As we have already seen that the management has to be vested only with a group of 11 persons, even when they retire or resign, they can nominate their sons or grandsons. The public has no right to get into the management.

15. The learned counsel for the respondent on the other hand vehemently contended that one and the only criteria to determine is whether the trust is a public or a private one. If the benefit is conferred on the public and not restricted to any members of the family then the trust in question must be deemed to be a public one.

16. The learned counsel for the respondent cited the decision in Bankel Singh v. Radha Bai Krishnadass Lala Kalyanamalapa Trust, 1978 T.N.L.J. 426. In the said case, the question was whether the trust in question was a public or a private one. The consideration in the said case was with reference to the beneficiaries only. The criteria laid down by the Supreme Court in the above cited judgments were not considered by the learned single Judge of this Court. Even though the learned Judge has noticed that the trustee has to be selected from the members of the family for the purpose of administration of trust the learned Judge has not considered the consequences of the right of administration. Therefore, in the light of the decision of the Supreme Court mentioned above, the said judgement cannot be relied upon.

17. In Wazir Shah v. Sant Shah, A.I.R. 1961 J. & K. 42 in paragraph 10 also, the learned single Judge, Jammu & Kashmir High Court has held as follows:

10. In order to determine whether a particular trust is a public trust within the meaning of Sec.92, C.P.C. we have to see whether the beneficial interest is vested in an uncertain and fluctuating body of individuals and whether the trust is of a permanent character. It is admitted that beneficial interest is vested in a body of individuals which is only a section of the public or caste namely the shutra sect.

The fact, however, that the management of the trust vests only in the hands of such persons, namely, shutras in this case and the public has no hand in the said management, by itself would not be sufficient to show that the trust is not a public trust.

The said case is prior to the decision of the Supreme Court mentioned above. The position is different after the judgement of the Supreme Court in Radha Kantha Deb v. Commissioner of H.R & C.E. Radha Kantha Deb v. Commissioner of H.R & C.E. Radha Kantha Deb v. Commissioner of H.R & C.E. , A.I.R. 1981 S.C. 798: (1981)2 S.C.C. 286.

18. In Shanti Devi v. State , A.I.R. 1982 Del 453 [LQ/DelHC/1982/95] the distinction between the public and private trust are set out in paragraph 22.

22. That the settlor did not appoint trustees has never prevented courts of equity from enforcing a trust. A trust will not fail for want of a trustee. This is the principle on which courts have acted. Under Sec.92, C.P.C., the court can appoint new trustees for the administration of the trust. What had made the trust so effective is the co-operation of the courts. In effect the court may be asked to supervise the execution of the trust deed. If the directions of the court are necessary for the administration of they trust a suit can be brought under Sec.92, C.P.C. The directions such as are necessary for carrying out the trust can be given to a trustee, either the existing trustee where there is one, or the new trustee, where one is to be appointed. Budree Das v. Chooni Lal , 1906 I.L.R. 33 Cal. 789at809. In a suit under Sec.92, the court can remove a trustee de son tortand appoint a new trustee. Ramdas Bhagat v. Krishna Prasad Ramdas Bhagat v. Krishna Prasad Ramdas Bhagat v. Krishna Prasad , A.I.R. 1940 Pat. 425 [LQ/PatHC/1940/7] at429.

There is reference to the following fact that settler did not appoint trustee has never prevented courts of equity from enforcing a trust. In paragraph 14 it is stated as follows:

The essential difference between private and public trust is that in the former the beneficiaries are defined and ascertained individuals or who within a definite time can be definitely ascertained but in the latter the beneficial interest must be vested in an uncertain and fluctuating body of persons either the public at large or some considerable portion of it answering a particular description.

The said principle is derived from the decision of Apex Court in Deoki Nandan v. Muralidhar , 1957 S.C.J. 75:1956S.C.R. 756: 1957 S.C.A. 1956: A.I.R. 1957S.C. 133. In this case, the other criteria laid down by the Supreme Court in A.I.R 1981 S.C. 798, was not considered. Further the said decision was not cited before the Delhi Bench.

19. In Trustees f. Charity Fund v. The Commissioner of Income Tax, Bombay Trustees f. Charity Fund v. The Commissioner of Income Tax, Bombay Trustees f. Charity Fund v. The Commissioner of Income Tax, Bombay , 1961 S.C.J. 477 also, the question that was considered was regarding a trust with reference to the beneficiaries only. The right of management is not considered in the said case. The learned counsel for the petitioner could not bring to the notice of this Court any subsequent decisions after the decision Kasilingam v. P.S.G. College by Technology Kasilingam v. P.S.G. College by Technology Kasilingam v. P.S.G. College by Technology , (1981)1 S.C.C. 405: (1981)1 S.CW.R.267: (1981)2 S.C.R. 490.A.I.R.1981 S.C. .789 was rendered to show that notwithstanding the fact that me right of management was vested in a body to be succeeded by the members of the family of that body, if the beneficiaries are the general public or section thereof, the trust in question should be deemed to be a public trust.

20. One more aspect also may be considered in the light of the observations contained in A.I.R. 1957 S.C. 133. In the said judgment, the distinction between a public and private trust, has already been noticed, that is whereas in the private trust the beneficiaries are specific individuals, in the latter they are the general public or a section thereof. While in the former the beneficiaries are persons who are ascertained or are capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment. If we apply this test also strictly to the present trust, it will be seen that the trust is only a private one. As per Ex.A-2, the objects are not to the public at large or section thereof. It is only to certain ascertainable individuals or institutions. For example, the main objects are to give donations to educational and charitable institutions and then the donations are also to be paid by way of scholarships to individuals and institutions. In these objects, the public has no claim as of right. It is for the management to select or ascertain the persons to whom the amount is to be paid or the scholarship is to be awarded. Therefore, it is not the entire public or a section thereof which is entitled to the benefits as a matter of right. From among the public only certain persons are selected that is the ascertainable individuals alone are entitled for the benefit. Therefore, in my view the trust in question cannot be treated to be a public one.

21. The courts below have not considered the vital aspects, namely, the management and control of the trust. They were guided only by the fact that the public are the beneficiaries and therefore the trust must be treated to be a public one. They have not considered the other aspect. In the circumstance, it is clear that the trust in question cannot be treated to be a public one. Hence the second appeal has to be allowed and accordingly the same is allowed. However, there will be no order as to costs.

Advocate List
  • For the Appellant P. Haridas, Advocate. For the Respondent V. Raghavachari, Advocate.
Bench
  • HON'BLE MR. JUSTICE S.M. ABDUL WAHAB
Eq Citations
  • (1998) 1 MLJ 773
  • LQ/MadHC/1997/1063
Head Note

- Whether a trust is public depends on factors such as the management and control of the trust. - If the management is vested with a group of individuals who nominate their successors, it indicates a private trust. - The Supreme Court's decision in Radhakanta Deb v. Commissioner, H.R. & .C.E., Orissa [A.I.R. 1981 S.C. 798] provides criteria to determine public or private trusts. - The beneficiaries must be an uncertain and fluctuating body, and the control and management must not be retained by the founder or their descendants. - In this case, where management was restricted to a group who could nominate successors, the trust was held to be private and not public. - The judgment distinguished itself from the decision in Bankel Singh v. Radha Bai Krishnadass Lala Kalyanamalapa Trust [1978 T.N.L.J. 426], which considered only the beneficiaries and not the management aspect. - The judgment also noted the essential difference between public and private trusts, referring to Deoki Nandan v. Muralidhar [1957 S.C.J. 75]. - The court held that the trust in question was not public and allowed the appeal.