IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA OSA No.: 1 of 2002 & Cross Objection No. 2 of 2002 Reserved On. 27.10.2008. Date of decision: 12.11.2008 Advocate General. … Appellant Versus Ludhiana Dharamshala Committee & others … Respondents Coram The Hon’ble Mr.Justice Deepak Gupta, J. The Hon’ble Mr. Justice V.K.Ahuja, J. Whether approved for reporting?1 No. For the appellant: Mr. B.K.Malhotra and Mr. B.C.Negi, Advocate. For the respondents No.1, 4, 17 M/s Vikram Thakur and Lovneesh Kanwar, and 20. Advocate. Per Deepak Gupta, J. The present appeal and cross objections are directed against the judgement and decree passed by a learned Single Judge of this Court on 2nd July, 1998, whereby he has dismissed the suit filed by the appellant (here-in-after referred to as the plaintiff) and has issued certain directions. The suit in the present case was filed by the learned Advocate General for the State of Himachal Pradesh under Section 92 of the Code of Civil Procedure. The suit was filed against the Ludhiana Dharamshala Committee, a society registered under the Societies Registration Act and 22 other defendants. The main contention in the suit was that a 1 Whether the reporters of the local papers may be allowed to see the Judgment? Yes. 2 Dharamshala near the shrine of Goddess Chintpurni was set up by collecting funds from the public and the same was being managed by the defendant No.1-Society. It was further alleged that the defendants No. 2 to 23 who were members at various times of the society had been fighting against each other leading to mismanagement of the society. This feud between two factions of the society led to several civil and criminal proceedings being initiated by the two groups against each other. On the application of the Station House Officer, Dehra Gopipur, the Sub-Divisional Magistrate came to the prima facie opinion that there was apprehension of breach of peace and therefore a receiver was appointed to look after the affairs of the Dharamshala. The Tehsildar, Dehra Gopipur was appointed as receiver of the Dharamshala. Thereafter, defendants No. 1 to 4 filed a suit before the learned Sub Judge, Dehra, praying for an injunction directing defendant No.5 not to interfere in the management and administrative affairs of the Committee and the Dharamshala. There were many off-shoots of this litigation details of all of which need not be given. Out of litigation between the two parties, one LPA No. 13 of 1989 came to be filed and that LPA was disposed of by a Division Bench of this Court on March 19, 1990. While disposing of the LPA, the Court had noticed the submission made by the learned Advocate General that he intends to file a suit under Section 92 of the Civil Procedure Code for proper management and administration of the Committee, etc. The Court was also of the opinion that a proper scheme is necessary for the proper management of the charitable trust and its assets and one month’s time was given to the Advocate General to file the suit. 3 Thereafter, the present suit was filed. The defendants contested the suit on various grounds. During the pendency of the legal proceedings the two rival factions patched up their differences. The defendants also raised a plea that respondent-1 was a registered society and no public charitable trust either express or implied was constituted in terms of Section 92 of the CPC. It was further urged that suit was not maintainable. According to the defendants, the constitution of the Society was a private one. It was further alleged that the elections are being held regularly and the property of the institution is being managed properly and there was no need to formulate a scheme. On the pleadings of the parties, the following issues were framed:- 1. Whether defendant No.1 is a public charitable trust, as alleged? OPP. 2. Whether there are circumstances regarding management of the affairs of defendant No.1 necessitating the plaintiff to file the suit claiming a decree? OPP. 3. To what relief is the plaintiff entitled to in the instant suit? OPP 4. Whether the suit is not maintainable in the present form? OPD5. 5. Whether the suit is barred under the principle of resjudicata due to the decision in Civil Suit No. 70 of 1984 and LPA No. 13 of 1989, as alleged? OPD. 6. Whether the plaintiff has no locus standi to file the suit claiming reliefs? OPD. 7. Whether the suit is bad for mis-joinder of parties? If so, which are those parties? OPD 5. 8. Whether the suit is not within the period of limitation, as alleged? OPD 5. 4 9. Whether the suit has not been properly valued for purposes of court fee and jurisdiction, as alleged? If so, what is the correct valuation? OPD. 10. Whether the suit is bad for non-joinder of necessary parties? If so, who are those parties? OPD. 11. Whether the plaint does not disclose any cause of action? OPD. 12. Relief. The learned Single Judge decided issue No. 1 in favour of the defendants and against the plaintiff. Issue No. 2 was also decided in favour of the defendants. Other issues are not relevant for the purpose of this appeal. The main points which arise for consideration in this appeal are:- 1. Whether the Ludhiana Dharamshala situated at Chintpurni being run by the respondent No.1 is a public charitable trust within the meaning of Section 92 of the Act? 2. Whether there was mis-management in the running of the trust, which necessitates the framing of a scheme for the proper management and administration of the trust and its assets? As far as the first question is concerned, the learned Single Judge has delved into this matter in great detail and has cited a large number of authorities to show what constitutes a public trust. There can be no manner of doubt that in case a trust is created expressly or impliedly for the purpose of religion or charity, it would be a religious or charitable trust. In India, charity is accepted to be an integral part of religion. Hinduism normally accepts the fact that donating any charity is a pious act which brings appropriate reward to the donor. There can be no doubt that the setting up of a Dharamshala at a religious place to house the pilgrims, who want to worship at such religious place, would be both 5 religious and charitable purpose. The essential distinction between a private and public trust is that in the former the beneficiaries are definite and ascertained individuals or who within a specified period of time can be determined with precision but in the case of a public trust the beneficial interest vests in a large fluctuating body of persons. In case the beneficiary of the charity is the public at large or a considerable portion thereof, the body would answer the description of being a public trust. Relevant portion of Section 92 of the Civil Procedure Code reads as follows:- “92. Public charities.-(1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or where the direction of the Court is deemed necessary for the administration of any such trust, the Advocate-General, or two or more persons having an interest in the trust and having obtained the leave of the Court, may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other Court empowered in that behalf by the State Government within the local limits of whose jurisdiction the whole or any part of the subject-matter of the trusts is situate to obtain a decree.“ It is obvious that Section 92 would be applicable only in the case of a public charities created expressly or impliedly for the benefit of the public for a charitable or religious purpose. In case, the requirements of Section 92 are met with, the Advocate General is entitled to file a suit claiming any of the reliefs mentioned in the said Section, which includes the removal of trustees and framing of a scheme. The Apex Court has laid down the following tests in Kuldip Chand and another vs. Advocate General to Government of H.P. and 6 others (2003) 5 Supreme Court Cases 46, as sufficient guidelines to determine in the facts of each case whether an endowment is of public or private nature. “(1) Where the 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 the members of the public and the founder does not retain any control over the management. Allied to this may be a circumstance where the evidence shows that there 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 that extensive properties are dedicated for the purpose of the maintenance of the temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature. (4) Where the evidence shows that 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 would be an important intrinsic circumstance to indicate the private nature of the endowment.” In view of the aforesaid law laid down by the Apex Court, we need not deal with the large number of judgements cited by the learned Single Judge and proceed to decide the matter in light of the aforesaid tests and the evidence led in the present case. 7 DW-2 Shri Amrit Lal Aggarwal is one of the founding members of the body, which set up the Ludhiana Dharamshala at Chintpurni. He in his examination-in-chief states that people of Ludhiana contributed to the building of the institution and the institution is the property of the Dharamshala. In cross-examination, he admits that land for erection of the Dharamshala was purchased in the year 1964 and thereafter the building was raised on it. According to him, the construction of the Dharamshala is an ongoing affair and construction is still going on. He further states that the day-to-day affairs of the Dharamshala are being managed by the Manager of the Dharamshala and members of the Managing Committee of the defendant No.1-Society go there for supervision off and on. According to him, people can stay in the Dharamshala after taking permission from the management. He admits that in case any pilgrim directly goes to the Manager, the Manager has the authority to grant permission to the pilgrim to stay in the Dharamshala. He, however, could not produce any written resolution in this regard and said that these instructions were given orally. He admits that the pilgrims who are given shelter in the Dharamshala are not required to pay any amount but they of their own volition can pay any amount which they desire. DW-1 has no personal knowledge of the date when the land was purchased and from where the amount for purchase of land was received. From the evidence on record, it is obvious that the land for erection of the Dharamshala was purchased in the year 1964 and the Dharamshala was erected within a few years thereafter and has been in existence from the year 1966 at least. The defendants for the reasons best known to them did not care to file the certificate of registration of defendant No.1- 8 Society or the bye-laws of the society. When we had partly heard the appeal on 4th September, 2008, we had felt that the bye-laws and memorandum of association of the society would be necessary to decide the case since they would through light on the origin of defendant No.1 Society and also on the issue whether it was a public trust or not. We accordingly directed the defendants to produce the said documents as also the proceedings evidencing the fact that elections have been held from time to time in the society. These documents have been filed. The certificate of registration of Societies filed by the defendant has been marked as Exhibit C-1, which is the certificate of the registration of the society and shows that defendant No.1 was registered as a society on 17th April, 1969. The rules and regulations of the society have also been produced and marked as Exhibits C-2 and C-3. It would be appropriate to quote the aims and objects of the society, which read as follows:- 1. To acquire or construct Dharamshala for the public. 2. To provide food for poor and incapable persons. 3. To open sewing schools for the help of poor. 4. To open educational institutions for education of the poor. 5. To provide lodging, boarding and all possible comforts to the public. 6. To open libraries and reading rooms for the public. 7. To install cottage industries to help the poor. 8. To accept donations and special subscriptions and gifts from members and non-members for the help of poor. 9. To do all other lawful things, deeds and actions as are incidental and conclusive for the achievement of any or all the aforesaid objects. It would also be appropriate to refer to the membership clause of the society, which reads as follows:- 1. Every person of sound mind, male or female more than 18 years of age, can become its member. 9 2. Each general member will have to pay Rs.25/- yearly as subscription and this amount can be increased by passing a special resolution. 3. A member, whose subscription remains unpaid for more than 60 days from the due date, will cease to be member of the society automatically. 4. A person who gives subscription for more than Rs.500/- will be treated as life-member. He is not required to pay any subscription but if he intends to become a member of Executive Committee then he required to pay subscription fee Rs.25/- at the time of election of Executive Committee. 5. Each member shall exercise one vote. Absent members are not entitled to vote by way of proxy. 6. Membership register will be kept in the Registered Office of the Society with full names and addresses of the members. 7. A general meeting of the society would take place once in a year. The ending year’s accounts would be taken and explained. The annual election would be held after every three years. 8. The accounting year would be each financial year i.e. from 1st April to 31st March of every year. 9. The quorum of the general meeting would be 1/5th of the entire membership but there would be no such condition for the adjourned meeting. The adjourned meeting can be held on the same day even after the expiry of one hour, if this intimation is specifically mentioned in the agenda. 10. The notice of the general meeting shall be issued at least a fortnight in advance by order of the President. 11. Besides the annual General meeting, Extra ordinary meeting can also be called whenever the President deems it necessary and also be called upon the requisition in writing of at least 50% entitled to vote. Provided further that such meeting on the requisition shall be summoned within thirty days of the receipt of requisition. It is apparent from a perusal of the rules and regulations that any member of the society can be elected to the Managing Committee and hold office of the President, General Secretary, etc. The entire evidence with regard to the creation of the trust has been given above and we shall 10 now examine this evidence in the light of the four tests laid down by the Apex Court. As far as the first test is concerned, in the present case, the origin in the endowment can be ascertained. There is evidence on record that funds were collected from the general public for purchase of land and raising construction of the Dharamshala. There was no registered society in existence till 17th April, 1969 by which time the Dharamshala had already been constructed. It is evident that the endowment was created by collecting money and donations from the public and all members of the public were entitled to stay in the Dharamshala. It has been argued on behalf of the respondents that no person can stay in the Dharamshala as a matter of right and permission of the management has to be taken. However, no documentary evidence has been produced to support this assertion. There is only the bald oral testimony of DW-2 in this behalf. The rules and regulations and bye-laws of the society do not provide that the use of the Dharamshala is limited to any specific class of persons. In fact, there is nothing on record to even show that only the members of the Society are entitled to use the Dharamshala. The Manager of the Dharamshala can no doubt, turn away undesirable persons but if rooms are available and the persons seeking accommodation are not undesirable he would have no authority to refuse permission. The members of the public do not have to pay any amount to stay in Dharamshala. Therefore, it is obviously a charitable and religious venture. The membership of the society is open to all adult members of the public. Every member has an equal right of voting. Therefore, test 11 No.1 is satisfied since use of the Dharamshala is open to all members of the public as of right. As far as the second test is concerned, it is obvious from the rules, regulations and bye-laws of the Society that membership of the society is open to all persons of sound mind more than 18 years of age. There is no restriction in this regard. Every member has one vote and has an equal right to take part in the affairs of the society as long as he continues to pay his subscription. All members elect the executive body which consists of President, Senior Vice President, Junior Vice President, General Secretary, Joint Secretary, Treasurer and Executive Members, the total number of which, including office bearers, does not exceed 15. The management of the society, therefore, vests in a large body of persons and any member of the public has the right to enroll himself as a member of the society and he can get elected to the executive body of the society and can also become an office bearer of the society. It is apparent that the management, therefore, vests in a large fluctuating body wherein members of the general public can easily associate themselves. The management is not restricted to the founding members. Therefore, the second test is also satisfied. As far as test No.3 is concerned, there no document or written recital was recorded at the time of the creation of the trust in the year 1964. It is, however, apparent that funds were collected from the general public for purchase of land and building of the Dharamshala. There is material on record to show that contributions were made not only by the original settlers of the trust but that contributions were also received from the general public and in fact one of the objects of the society is to accept 12 donations from members and non-members for help of the poor. The society came into existence only in the year 1969. The trust was already in existence. The trust was a public trust. The society only manages this trust. Even the aims and objects of the society as well as the rules and regulations of the society clearly point to the fact that what was intended by the founders of the trust was a body dedicated to the public at large. The rules and regulations do not contain any stipulation that the use of the Dharamshala is limited to the members of the Society. Even if it be assumed that the use is limited to the members of the society since membership is open to every person of sound mind over 18 years of age, the necessary inference is that the Dharamshala is dedicated for a public purpose and this endowment was not of a private nature. Therefore, test No.3 is satisfied. Test No.4 is also satisfied in the present case since the evidence shows that prior to the creation of the trust donations and contributions were made by the members of the public and even after creation of the society the aims and objects themselves provide for receipt of donation by the society from non-members also. We are, therefore, of the considered opinion that all the four tests laid down by the apex Court are satisfied in the present case and there can be no manner of doubt that the trust is a public trust. In our considered view the single Judge gravely erred in holding that the trust in question was not a public trust only on the ground that the defendant No.1 is a society. As pointed out above, the trust came into existence in the year 1964 when land was first purchased form donations collected from the public at large. The society came into existence much later. The 13 trust has all the attributes of a public trust and therefore we set aside the findings of the learned Single Judge on Issue No.1. Having held that the trust in question is a public trust, we must next consider the fact whether there is any need to frame a scheme or remove the trustees in this case. It is not in every case of a public trust that the Court will direct the framing of a scheme. Before the Court orders that a scheme is framed, it must be satisfied that the trust as originally created is not being properly managed or that the persons managing the trust are misusing their authority. In the present case, there is evidence on record to show that prior to the institution of the suit there was litigation between two factions. Both the factions wanted to have control of the trust. It is proved on record that there was factionalism in the trust. However, there is no evidence on the record of this case to show that this factionalism led to any mismanagement in the trust. The evidence led by the plaintiff is totally lacking in this regard. PW-1 is the District Language Officer, who is incharge of the management of the Mata Chintpurni temple. All he states is that once when he happened to visit the Dharamshala he was told by a person who was staying there that cleanliness is not being carried out in the Dharamshala. This evidence is in the nature of hearsay and totally inadmissible. This witness has no personal knowledge in respect of the mismanagement of the trust. The statement of PW-2 and PW-3 is also totally vague. All that they state is that the Dharamshala is not being managed properly and is deteriorating fast. Other than this general statement, no other specific shortcomings in the management of the Dharamshala have been pointed 14 out. These general allegations are not sufficient in our view to order the removal of the duly elected members of the Managing Committee. The rules and regulations of the society which have been placed before us lay down a well defined procedure of elections to the executive body and office bearers of the society-defendant No.1, who have to manage the Dharamshala. We are of the considered view that in case these rules and regulations of the society itself are followed the society can be well looked after.