B.S. Adityan
& Ors Vs. B. Ramachandran Adityan & Ors [2004] Insc 279 (16 April 2004)
S. Rajendra
Babu & Doraiswamy Raju Rajendra Babu, J. :
A deed
of declaration was executed by S.B. Adityan consisting of himself, his elder
brother S.T. Adityan and the first respondent herein, B. Ramachandran Adityan
as Trustees on 1.3.1954.
Under
a deed of resignation dated 19.5.1959 the first respondent herein resigned as
Trustee and also as Director of Daily Thanthi. By a deed of appointment of
trustees executed on 22.5.1959 the first appellant B.S. Adityan son of S.P. Adityan
and the second appellant were appointed as one of the new trustees and also to
be the Director of Daily Thanthi. A supplementary deed was also executed on
28.6.1961. On 8.11.1961 the Founder resigned. On 2.3.1962 a decree was passed
by the High Court in C.S. No. 90/1961 approving the supplementary deed dated
28.6.1961. On 27.12.1963 S.T. Adityan resigned. In the last week of June 1978
the Founder executed three deeds of appointments of trustees appointing
himself, his elder brother S.T. Adityan and the first respondent as additional
trustees of Thanthi Trust.
The
Appellants filed applications under Section 92 Civil Procedure Code (CPC) for
leave to file suits challenging the said appointments and leave was granted and
the said suits are numbered as C.S. Nos. 352 and 353 of 1978. On 29.8.1978 the
first respondent and his uncle S.T. Adityan filed application under Section 92
CPC for leave to file a suit for removing appellants Nos. 1 and 2 as trustees.
On 13.9.1978 an temporary order of injunction was made by the High Court
restraining the newly appointed trustees from interfering with the management
of the trust on the condition that the first appellant must deposit a sum of Rs.
1 lakh per month. All the three newly appointed trustees, that is, Founder,
S.T. Adityan and the first respondent executed resignation deeds and withdrew
the application No. 3147/1978 filed under Section 92 CPC. Inasmuch as the newly
appointed trustees resigned their trusteeship and withdrew their application
under Section 92 CPC, the appellants proceeded on the basis that suits C.S.
Nos. 352 and 353 of 1978 had become unnecessary and withdrew the same.
While
the matter stood thus, on 20.1.1981 Kannan Adityan and Kathiresa Adityan filed
an application No. 165/1981 under Section 92 CPC for leave to file a suit for
appointing them as additional trustees and for rendition of accounts by the
first and second appellants. The appellants filed application No. 879/1991 for
permission of court to cross-examine the applicants therein, that is, Kannan Adityan
and Kathiresa Adityan, to establish the fact that it was the father of the
petitioners therein who was supplying all documents and materials and who was
conducting the proceedings and that they were 21 and 18 years of age and were
students then studying in the Engineering College. The said application filed
by the appellants came to be dismissed by the learned single Judge. On appeal
filed in O.S.A. No. 152/1981 the Division Bench held that it would be in the
interest of justice to allow the appellants therein to cross- examine Kannan Adityan
and Kathiresa Adityan.
When
the matter was carried to this Court, this Court dismissed the Special Leave
Petition No. 6040 of 1982 by observing that the cross-examination, however, was
confined to the question of sanction and principles governing the same. An
application had been filed under Order XI Rule 21 CPC which having been
dismissed and on appeal having been confirmed by the Division Bench, the same
matter was carried to this Court by way of a special leave petition. This Court
disposed of the said special leave petition and ultimately by an order made on
18.1.1993 dismissed it.
The
trustees, namely, the first and the second appellants, resolved to appoint Mr. Maruthai
Pillai, Mrs. Sarojini Varadappan and Mr. R. Somasundaram as additional
trustees. On 3.1.1994 respondents Nos. 1 to 4 filed an application No. 33/1994
for leave to file a suit under Section 92 CPC for framing a scheme, for removal
of appellants No. 1 and 2 as trustees and for accounts. An application No.
1030/1994 was filed seeking to implead Maruthai Pillai, Mrs. Sarojini Varadappan
and R. Somasundaram as parties to application No. 33/1994. A number of
incidental applications Nos. 214/1994, 215/1994, 1901/1994 and 153/1994 were
filed for various reasons like appointment of receiver, impleadment of parties
and for publication of the proceedings in newspapers. The appellants also filed
an application to dismiss the said applications filed under Section 92 CPC in limini.
C.S. No. 1509/1994 was filed by Kannan Adityan and Kathiresa Adityan for a
declaration as follows :- "The order of dismissal passed in Application
No. 165/1981 filed by the plaintiffs herein under the provisions of Section 92
of the CPC for grant of leave of this Hon'ble Court and the unnumbered suit
filed along with the said application and confirmed by the Division Bench and
by Supreme Court of India by order dated 18.1.1993 made in S.L.P. No. 3362 and
3363 of 1987 are vitiated by fraud, without jurisdiction non est in law and
void, and consequently to set aside all the orders made in Application No. 165
of 1981 and the unnumbered suit filed along with the said application including
that of the order dated 18.1.1993 passed by the Supreme Court of India in
S.L.P. No. 3362 and 3363 of 1987 and restore application No. 165 of 1981 along
with the suit referred to above to file and to hear the same afresh."
Application
filed by the appellants for dismissal of application No. 33/1994 filed under
Section 92 CPC was dismissed by a learned Single Judge and several orders were
made in other applications. While O.S.A. No. 62/1996 was filed against the
order dismissing application No. 33/1994 filed under Section 92 CPC, O.S.A. Nos.
63 and 64 of 1996 were filed in regard to certain other incidental reliefs. The
Division Bench by an order made on 16.7.1996 allowed the appeals and thus by
allowing O.S.A. No. 62/1996 it allowed application No. 33/1994 granting leave
to the appellants therein to file suit under Section 92 CPC against the
appellants herein. In the said order the Division Bench also considered the
scope of Section 92 CPC, impact of the amendment of the Civil Procedure Code in
1976 requiring the Court to give permission in place of the Advocate General to
give consent thereto, and also noticed several decisions of the Courts on the
aforesaid matters. While some of the decisions have taken the view that an
order granting such permission is an administrative order, some other courts
have taken the view that such an order is liable to be reviewed under Article
226 of the Constitution. The High Court went on to hold that a notice to
defendants before leave is not necessary as a rule of law but as a rule of
caution, the court should normally give notice to the defendants before
granting permission to institute a suit under Section 92 CPC; that the
defendants could bring to the notice of the court that the allegations made in
the plaint are frivolous or reckless and that in a given case, they could point
out that the persons who are applying for leave are doing so merely with a view
to harass the trust or have such antecedents that it would be undesirable to
grant leave to such persons; that Section 141 CPC is not applicable to a proceeding
which is administrative in nature. The High Court examined the facts of the
case in the light of principles adverted to by it.
In the
normal course if an appeal is filed against an order granting permission to a
party to file a suit as falling under Section 92 CPC, we do not normally
interfere with an order made by the High Court nor do we think of entertaining
a proceeding of this nature under Article 136 of the Constitution because the
order made thereunder will not determine the rights of the parties, but only
enable a party to initiate a proceeding.
Shri
K. Parasaran, learned senior counsel appearing for the appellants herein,
submitted that the present case is one of the third round of litigation in
respect of the some trust property; that what is to be considered in the
present case is not trust in relation to an immovable property but in relation
to a newspaper "Dina Thanthi" or "Daily Thanthi" at present
being published as a daily newspaper in Tamil language together with the
goodwill thereof, the Head Office of which being presently situated at 60, Cutchery
Road, Mylapore, Madras as a going concern with all its assets and liabilities
and all the printing machine, printing types, furniture and accessories of the
newspaper formed part of the trust property; that it is a running newspaper
business which is the property held under and impressed with Trust which
required great skill to run a venture of such a nature; that immovable
properties had been subsequently acquired for the Trust where offices have been
located and business is carried out and there are also guest houses at one or
two centres. The appellants filed an application No. 2421 of 1994 under Section
92 CPC read with Section 151 CPC to dismiss the application filed by
respondents 1 to 4 for leave to file a suit under Section 92 CPC for framing a
scheme, for removal of appellants Nos. 1 and 2 as trustees and for accounts.
The learned Single Judge, by an order made on 21.12.1999, allowed application
filed by the appellant herein in application No. 2421 of 1994 to dismiss the
application filed under Section 92 read with Section 151 CPC. On appeal, as
stated earlier, the Division Bench also in original side granted leave to
respondents Nos. 1 to 4 to file suit under Section 92 CPC against the
appellants in the present case.
The
learned counsel for the appellants urged that the order that was passed under
Section 92 CPC granting permission to file a suit is whether administrative in
character or otherwise; that this does arise when the objections of the
defendants are considered; that as to scope of the meaning of the expressions
"order, judgment, decree and adjudication". He drew our attention to
decision in Pitchayya & Anr. v. Venkatakrishnamacharlu & Ors., AIR 1930
Madras 129, to the effect that the object
of Section 92 CPC is to safeguard the rights of public and of institutions
under trustees. In this regard, he specifically drew our attention to National
Sewing Thread Co. Ltd. v. James Chadwick & Bros. Ltd., 1953 SCR 1028. He
also adverted to decision in R.M.A.R.A. Adaikappa Chettiar & Anr. v. R. Chandrasekhara
Thevar, AIR(35)1948 PC 12, to contend that where a legal right is in dispute
and the ordinary courts of the country are seized of such dispute the courts
are governed by ordinary rules of procedure applicable thereto and an appeal
lies if authorised by such rules, notwithstanding that the legal right claimed
arises under a special stature which does not in terms confer a right of
appeal. In R.M. Narayana Chettiar & Anr. v. N. Lakshmanan Chettiar &
Ors. 1991 (1) SCC 48, this Court has examined in detail the scope of Section 92
CPC and explained the object underlying therein in granting permission to file
a suit. In this case, this Court held that court should normally give notice to
the defendants before granting leave as a rule of caution but court is not
bound to do so in all circumstances and non-issuance of notice would not render
the suit bad or non-maintainable and defendants can at any time apply for
revocation of the leave and provision under Section 104(1)(ffa) for appeal
against refusal of grant of leave does not lead to a different conclusion.
In the
light of this decision, we do not consider it necessary to advert to other
decisions cited by the learned counsel. More so, the matter was considered by
the Law Commission in its Report submitted in April 1992 on this aspect of the
matter. After noticing various decision of different courts and the decision in
R.M. Narayana Chettiar's case (supra), the Law Commission recommended that to
expect the court to issue notice and then to try the several points of detail
before granting leave in the light of the objections put forth by the
respective defendants, would mean that there will be a trial before trial and
this would not be desirable. The recommendation of the Law Commission was,
therefore, to insert an Explanation below Section 92 CPC to the effect that the
court may grant leave under this Section without issuing notice to any other
person, but this does not, of course, mean that the court will grant leave as a
matter of course. Particular emphasis is made and heavy reliance is placed on
the decision of this Court in Shankarlal Aggarwal & Ors. v. Shankarlal Poddar
& Ors., 1964 (1) SCR 717, to emphasise distinction between administrative
and judicial orders. It is urged that order from which the appeal was preferred
was not a judgment within the meaning of clause 15 of the Letters Patent and so
no appeal lies to the Division Bench. Reference is made to the decision of this
Court in Institute of Chartered Accountants v. L.K. Ratna & Ors., 1986 (3) SCR 1049, to
bring out distinction between administrative and judicial order. Scope of
Section 92 CPC was examined in Charan Singh & Anr. v. Darshan Singh &
Ors., 1975 (3) SCR 48, where the whole case turned on the facts arising in that
particular case.
Our
attention was also drawn to a decision of this Court in T. Arivandandam v. T.V.
Satyapal & Anr., 1978 (1) SCR 742, to contend that the court has a duty in
vexatious suits to exercise appropriate powers under Order VII Rule 11 CPC. Our
attention is also drawn to the decision in John v. Rees & Ors., 1969 (2)
All ER 274. He particularly emphasised that it is not appropriate to give
decision against a party without affording an opportunity to him. Though
reference has been made to several other decisions, we do not think it
necessary to advert to the same.
In
this background, when a specific provision has been made in the Code of Civil
Procedure in Section 104(1)(ffa) allowing an appeal to be filed against an
order refusing to grant leave to file a suit, the appeal filed by the
respondents before the Division Bench was certainly competent to be considered
by that Bench. In this case, on an earlier occasion, when one of the suits was
filed under Section 92 CPC, when the founder had executed a deed of appointment
of trustees and certain interim orders were passed in that suit, the said
application was withdrawn without obtaining leave under Order XXIII Rule 1 on
19.9.1978 inasmuch as the newly appointed trustees had resigned their
trusteeship and withdrew their application under Section 92 CPC, the two suits
C.S. No. 352 and 353 of 1978 filed by appellants were disposed of as having
become infructuous. Later on another application No. 165 of 1981 had been filed
under Section 92 CPC for leave to file a suit for appointing them as additional
trustees and for rendition of accounts. In that proceeding an application No.
879 of 1991 was filed for permission of court to cross-examine the applicants
therein R. Kannan Adityan and R. Kathiresa Adityan in particular to prove the
fact that it was the father of those petitioners therein who was supplying all
documents and materials and who was conducting the proceedings. Application
filed to cross-examine applicants was dismissed by the learned Single Judge.
On
further appeal, the Division Bench held that it would be in the interest of
justice to permit the appellants to cross-examine the said parties. The matter
was carried to this Court in Special Leave Petition No. 6040 of 1982. This
Court dismissed the said Special Leave Petition noticing that the cross-
examination "will be confined to the question of sanction and principles
governing the same", of course, after noticing entire documents. Again,
another application No. 4738 of 1982 was brought before the court to dismiss
application No. 165 of 1991 under Order XI Rule 21 CPC which was, however,
dismissed by the learned Single Judge and the matter was carried in appeal
which was also dismissed by the Division Bench. That matter was brought before
this Court. This Court asked the parties to file the appropriate affidavits in
regard thereto and thereafter all papers were place before the Court. However,
this Court dismissed the Special Leave Petition. It is in this background the
learned counsel submitted that the court ought to have examined the matter in
all necessary details before granting permission under Section 92 CPC. In R.M. Narayana
Chettiar's case (supra), this Court considered in detail the history of the
legislation and whether court is required to give an opportunity of being heard
to the proposed defendants before granting leave to institute a suit under
Section 92 CPC and stated the law on the matter. Although as a rule of caution,
court should normally give notice to the defendants before granting leave under
the said Section to institute a suit, the court is not bound to do so. If a
suit is instituted on the basis of such leave, granted without notice to the
defendants, the suit would not thereby be rendered bad in law or non-
maintainable. Grant of leave cannot be regarded as defeating or even seriously
prejudicing any right of the proposed defendants because it is always open to
them to file an application for revocation of the leave which can be considered
on merits and according to law or even in the course of suit which may be
established that the suit does not fall within the scope of Section 92 CPC. In
that view of the matter, we do not think, there is any reason for us to
interfere with the order made by the High Court.
However,
we may notice one or two aspects. It was not at all necessary for the High
Court to have examined the applicability of Section 141 CPC or otherwise in a
matter of this nature. So also observations made by the High Court in para-28
as to the performance of the learned counsel and general remarks in para-41 as
to events taking place in the country are uncalled for and unwarranted in
dealing with the appeal before it. Such stray excursion will take the matter in
dispute out of focus. The crux of the matter was only whether in granting leave
under Section 92 CPC the proposed parties have to be heard in the matter or not
and whether the suit should have been dismissed in limini under Order VII Rule
11 CPC, particularly when the trustees who had filed the suit had seized some
interest in the matter and they were not mere strangers to the suit or such
persons at whose instance the matter should not have been heard such as
insolvent or a party who does not have sufficient interest in the matter.
In the
result, we dismiss these appeals.
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