1 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19-08-2011 CORAM: THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN O.P.No.296 OF 2010 M.G.DEVASAHAYAM .. Petitioner vs. 1.Sir John D'Monte Trust Represented by its Sole Trustee The Arch Bishop of Madras-Mylapore, 41, Santhome High Road, Chennai-600 004. 2.Rt. Rev. A.M.Chinnappa Arch-Bishop of Madras-Mylapore, Archbishop's House, 41, Santhome High Road, Chennai-600 004. .. Respondents This original petition is filed under Section 3 of the Charitable and Religious Trust Act, 1920 for a direction to the respondents to provide to the petitioner with the information more fully described in Schedule 'A' to this petition and for the appointment of an independent Auditor to examine and audit the accounts of the respondents for the past 3 years from the date of this petition. For Petitioner : Mr.Mr.Karthik Seshadri for M/s.Iyer and Thomas. For Respondents : M.K.Kabir, Senior Counsel for Mr.M.Dhiraviyanathan O R D E R This is a petition filed under Section 3 of the Charitable and Religious Trusts Act, 1920 (hereinafter referred to as the Act) seeking a direction to the first respondent - trust and the second respondent – sole trustee https://hcservices.ecourts.gov.in/hcservices/ 2 to provide the information sought for by the petitioner listed in schedule A to the petition and also seeking a direction for the appointment of an independent auditor to examine and audit the accounts of the first respondent trust for a period of three years immediately preceding the date of petition. 2. I have heard Mr.Karthik Seshadri, for M/s.Iyer and Thomas, learned counsel for the petitioner and Mr.M.K.Kabir, learned Senior Counsel appearing for Mr.M.Dhiraviyanathan, learned counsel for the respondents. 3. By a last Will and Testament executed on 19.7.1820, one Mr.John D'Monte bequeathed all his fortunes in favour of various charitable institutions principally under the control and management of the Bishop or Vicar General of St.Thome. The Will also contains a direction to appoint and nominate annually a Committee of Syndics consisting of six pious and respectable persons. The testator also executed a Codicil on 25.4.1821. The said Will was probated on the file of the then Supreme Court of Judicature at Madras in the year 1827. 4. One of the properties owned by the said trust is a vast extent of land measuring approximately 180 grounds in Chamiers Road. The property is known as Benz Garden. 5. In the year 2002, the first respondent – trust represented by its sole trustee filed OP.NOs.219 and 220 of 2002 under Section 7 of the Act, praying for sanctioning and approving an agreement of lease entered into by the https://hcservices.ecourts.gov.in/hcservices/ 3 trust with two institutions by name Holy Satellite Town Private Limited and Sathyabama Institute of Science and Technology. The petitioner herein, who is an ex-service man and a retired bureaucrat, attempted to intervene and oppose those petitions. Though the applications for impleading filed by the petitioner were dismissed, his opposition to the project was considered by this Court, on the basis that the petitioner is an interested person. Ultimately, the said petitions filed by the trust were dismissed by this Court. 6. After the dismissal of the said petitions, the petitioner came across the occupation of the property by the two institutions with whom the lease had been entered into. Therefore, the petitioner issued a notice dated 3.2.2007, to which the respondents sent an evasive reply on 25.2.2007. 7. Thereafter, the respondents entered into a Memorandum of Understanding on 12.11.2007 with a company by name Nitesh Estates Private Limited for the lease of the said property to them for a period of 66 years and for its development by the lessee. This information came to light when the proposed lessee company attempted to raise funds through public issues. It was found upon enquiry that the proposed lessee had also issued a disclaimer in the offer document filed with the Securities Exchange Board of India that it had not tied up the funding for financing the proposed project. However, the documents disclose that they had paid a sum of Rs.50 Million to the respondents under https://hcservices.ecourts.gov.in/hcservices/ 4 the Memorandum of Understanding. But, the details of the Memorandum of Understanding were not available. 8. It also came to light that the respondents entered into the agreement with several parties, one of whom instituted a suit in CS.No.501 of 2007 on the file of this Court. All these activities, shrouded in secrecy, has compelled the petitioner to come up with the above petition under Section 3 of the Act, for the reliefs referred to above. 9. The respondents have filed a counter to the main original petition contending inter alia (i) that the petitioner is not "a person interested" within the meaning of Section 3 of the Act; (ii) that since the petitioner is neither a trustee nor a beneficiary nor a person, who has contributed to the activities of the trust, he cannot be termed as a person interested; (iii) that three persons had already instituted the suit in CS.NO.156 of 2002 on the file of this Court, claiming that they are members of a forum by name Forum for Catholic Unity; (iv) that the leave granted by this Court to those three persons under Section 92 of the Civil Procedure Code was later revoked and the appeal filed by them was also dismissed by the Division Bench; (v) that the issue is not pending in the Supreme Court; (vi) that the petitioner herein is acting in tandem with https://hcservices.ecourts.gov.in/hcservices/ 5 one Mr.L.M.Menezes, who was one of the plaintiffs in the said suit; (vii) that the said Mr.L.M.Menezes was a member of the committee constituted by the the Archbishop for developing one of the properties of the trust; (viii) that the committee issued newspaper advertisements on 1.9.1996, inviting offers from project management consultants; (ix) there was a good response to the newspaper advertisement by several companies, 12 of whom were shortlisted by the committee; (x) that the petitioner herein represented one of the firms byname Infracon before the committee, but the proposal of the said company was not accepted; (xi) that the petitioner's interest was thus commercial in nature and hence, he cannot be termed as a person interested; (xii) that the petitioner prevented renovation of the Santhome Cathedral Basilica by filing petitions before the Chennai Metropolitan Development Authority and the Archeological Survey of India; (xiii) that he also filed public interest litigation in this regard in WP.NO. 33355 of 2004, but the same was dismissed by an order dated 10.12.2004; (xiv) that having failed in those attempts, the petitioner has come up with the above original petition; (xv) that after filing the above original petition, the https://hcservices.ecourts.gov.in/hcservices/ 6 petitioner also invoked the provisions of the Right to Information Act before the Director of Exemptions under the Income Tax Act; (xvi) that it is very peculiar that the petitioner is showing interest only in Benz Garden property; (xvii) that even according to the petitioner, the letter dated 3.2.2007 was replied to on 25.2.2007 and after issuing a rejoinder dated 13.3.2007, the petitioner kept quiet for more than three years; (xviii) that the observations contained in the order dismissing the earlier original petitions in OP.Nos.219 and 220 of 2002 would not make the petitioner a person interested; (xix) that the respondents are under no obligation to disclose the terms of the Memorandum of Understanding dated 12.11.2007; (xx) that as and when the Memorandum of Understanding materialises, the petitioner could come up with an application under Section 7 of the Act, at which point of time, he may take advantage of the caveat, which he had already filed; (xxi) that the allegation that the affairs of the public charitable trust are not being conducted in a transparent manner is ill-founded; (xxii) that public charities are entitled to protection both under Section 92 of the Code and under the Act, from being harassed from all and sundry; and https://hcservices.ecourts.gov.in/hcservices/ 7 (xxiii) that the prayer of the petitioner to go on a fishing expedition to extract information from the trust, cannot be entertained by this Court. 10. Both parties have not let in any evidence. However, both parties have filed certain documents, the truth and veracity of which are not in question. Therefore, in the light of the pleadings and the documents filed, the questions that fallfor consideration in the original petition are (i) whether the petitioner can be construed as a person interested in the trust ? and (ii) whether the petitioner is entitled, even if he is a person interested, to the directions sought for in the main original petition ? PERSON INTERESTED : 11. As pointed out earlier, this is a petition filed under Section 3 of the Charitable and Religious Trusts Act. The Act was the culmination of a debate for over 50 years, on the efficacy of the Religious Endowments Act, 1868. The history of evolution of the Act is found in the statement of its objects and reasons, which read as follows : "The Religious Endowments Act, 1868 (XX of 1863), was the result of the decision of the Government to divest its officers of all direct superintendence and control of religious and charitable endowments in India, transferring their functions to manager or managing committee and merely making provision for intervention by https://hcservices.ecourts.gov.in/hcservices/ 8 the Civil Courts on application made by any person interested in a particular institution. This policy, however, did not long remain unchallenged, and since 1866 there have been constant complaints, especially in the Madras Presidency, as to the inefficacy of the Act to prevent squandering or misappropriation of the funds of such endowments, and suggestions for its amendment have from time to time been made to the Government of India. Mr.Ananda Charlu in 1897, Mr.Srinivasa Rao in 1903 and Dr.(now Sir) Rash Behari Ghosh in 1908, for example promoted amending Bills, but none of them became law. More recently in 1911, a private Bill was introduced in Bombay Legislative Council by the Hon'ble Sir Ibrahim Rahimtoola, to provide for the registration of all charitable trusts, exceeding a certain value and for the annual audit of the accounts of such trusts by auditors approved by Government. Endowments of a purely religious nature were not included but the contents of the Bill made it clear that the ultimate object was to press for legislation for religious as well as secular trusts. About the same time a private Bill was promoted by two non-official members of the Madras Legislative Council to provide for the regular publication of the accounts of all religious endowments above a certain value and for their audit by an officer to be appointed by the District Judge. These proposals led the Government of India to reconsider the policy in force since 1863. In March 1914, the whole subject was discussed at a mixed conference of official and non official gentlemen representing the Hindu, Mohammadan, Sikh and Buddist https://hcservices.ecourts.gov.in/hcservices/ 9 communities. The present Bill, which is the outcome of the deliberations of that conference, has as its objects the simplification and cheapening of the legal processes by which persons interested can obtain information regarding the working of both religious and charitable trusts, and the exercise of a more efficient control over the action of the trustees. The Bill provides that any person interested in a trust may apply by petition to the District Judge for an order directing the trustee to furnish him with information as to the nature and objects of the trust and the value, condition, management and application of the subject matter of the trust, and of the income belonging thereto, or as to any of these matters, and also directing that the accounts of the trust shall be examined and audited. Failure to comply with such an order of the Court would be deemed a breach of trust." 12. The very preamble to the Act indicates three purposes for which the Act was enacted. They are (i) to provide facilities for obtaining information regarding trusts created for public purposes of charitable or religious nature; (ii) to enable the trustees of such trusts to obtain the direction of a Court on certain materials; and (iii) to make special provision for the payment of expenditure incurred in certain suits against the trustees of such trusts. 13. It is important to note that the provisions of the Act do not apply (i) to public trusts to which the provisions of the Bombay Public Trusts Act, 1950 apply; https://hcservices.ecourts.gov.in/hcservices/ 10 (ii) to the public trusts covered by the Rajasthan Public Trusts Act; (iii) to Hindu Religious and Charitable Institutions covered by the Andra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1966; and (iv) to institutions coming within the purview of the Tamilnadu Hindu Religious and Charitable Endowments Act, 1959. 14. Section 3 of the Act under which the present original petition is filed reads as follows : "Power to apply to the Court in respect of trusts of a charitable or religious nature : Save as hereinafter provided in this Act, any person having an interest in any express or constructive trust created or existing for a public purpose of a charitable or religious nature may apply by petition to the Court within the local limits of whose jurisdiction any substantial part of the subject matter of the trust is situate to obtain an order embodying all or any of the following directions, namely : (1) directing the trustee to furnish the petitioner through the Court with particulars as to the nature and objects of the trust, and of the value, condition, management and application of the subject matter of the trust, and of the income belonging thereto, or as to any of these matters, and (2) directing that the accounts of the trust shall be examined and audited. Provided that no person shall apply for any such direction in respect of accounts relating to a period more than three years prior to the date of the petition." https://hcservices.ecourts.gov.in/hcservices/ 11 15. A reading of Section 3 shows that it not only enables a person who is interested in the Trust to apply to the Court, but also specifies the nature of reliefs that could be sought for by such a person. The person, who invokes Section 3 should be "a person having an interest in the trust." It is needless to point out that the trust in respect of which the application is made, should be a trust created or existing for a public purpose of a charitable or religious nature. It could be either an express trust or a constructive trust. The direction that could be sought under Section 3 are (i) to direct the trustee to furnish the particulars, such as to the nature and objects of the trust and of the value, condition, management and application of the subject matter of the trust and of the income belonging thereto; and (ii) to examine and audit the accounts of the trust. The proviso to Section 3 imposes a restriction in the nature of a limitation, to the effect that a direction in respect of the accounts relating to a period more than three years prior to the date of the petition cannot be sought for. 16. The procedure to be followed by the Court, upon a petition being presented under Section 3, is narrated in Section 5. Under Section 5(1), the Court should first consider whether the trust in question is a trust to which the Act applies. The Court should then consider whether the petitioner has an interest therein. It is only when these https://hcservices.ecourts.gov.in/hcservices/ 12 two conditions are satisfied that the Court should cause a notice to be served on the trustee, after fixing the date of hearing of the petition. If the trustee appears and makes a claim that there is no trust or that the Act does not apply to the trust, the Court should give an opportunity to such a person to institute a suit for declaration within three months. Till then, the proceedings are bound to be stayed. If, within three months, the person, who claims that there is no trust or that the Act does not apply to the trust in question, does not institute the suit, the Court shall proceed with the petition under Section 3. Section 7 of the Act enables the trustee of an express or a constructive trust to apply to the Court for its opinion, advice or direction on any question affecting the management or administration of the trust property. 17. Section 9 of the Act bars the filing of any petition under any of the provisions of the Act (i) if a suit instituted in accordance with the provisions of Section 92 of the Code is already pending; (ii) if the trust property is vested in the treasurer of charitable endowments or the Administrator General or the Official Trustee or on any society registered under the Societies Registration Act, 1860; or (iii) if a scheme for the administration of the trust property had been settled and approved by any Court of competent jurisdiction. 18. A reading of Section 3 of the Act shows that it has similarities to Section 92 of the Code, though there https://hcservices.ecourts.gov.in/hcservices/ 13 are also distinguishing features. While Section 3 of the Act can be invoked even by a single person having an interest, Section 92(1) of the Code can be invoked by two or more persons having an interest in the trust and that too, only after having obtained the leave of the Court. The purpose and object of Section 3 of the Act is merely to issue two kinds of directions, one for furnishing particulars such as the nature and objects of the trust, the value, condition, management and application of the subject matter of the trust and the other, for submitting the accounts of the trust for the purpose of examination and audit. However, the directions that could be issued under Section 92(1) of the Code are very elaborate and broad. This is why Section 9 bars a petition under the provisions of the Act, if a suit instituted under Section 92 of the Code is already pending. 19. Be that as it may, the expression "any person having an interest" appearing in Section 3 of the Act and the expression "two or more persons having interest in the trust" appearing in Section 92(1) of the Code cannot have different meanings or interpretations. Therefore, let us now have a look, at how the expression "person having interest in the trust" has been interpreted by the Courts. In Kannan Adityan & 4 Others Vs. Adityan & 6 Others [1996 (2) LW 364], a Division Bench of this Court considered all the decisions on the interpretation of the expression "person having an interest in the trust". The relevant https://hcservices.ecourts.gov.in/hcservices/ 14 portion of the said decision reads as follows : "...the Section provides that the plaintiffs in a suit under Section 92, Code of Civil Procedure, must be persons having an interest in the Trust. Before 1887 the corresponding provision of law prevailing at that time required a direct interest in the Trust. The word "direct" was dropped in 1887 and thereafter the requirement was to have an interest. The words 'having an interest' have been subject matter of judicial consideration in several judgments. In T.R.Ramachandra Aiyar Parameswaran Unni (I.L.R.42 Madras 360), a Full Bench of this Court held that "interest" in Section 92, CPC denotes an interest which is present and substantial and not sentimental or remote or fictitious or purely illusory interest. In that case, a Hindu residing in Madras and another residing in Tellicherry instituted a suit in the District Court of North Malabar under Section 92, Civil Procedure Code, in respect of a Hindu temple situated in Tellicherry. It was found that the former had gone to worship in the temple on one or two occasions in the past and might go there to worship in the future if business took him to Tellicherry and he relied on his right as a Hindu to worship in the temple as entitling him to institute the suit. The majority held that though as a Hindu he might have the right to worship in the temple, he had not on that ground alone the 'interest' required by Section 92 of the Code to maintain the suit. (iii) In Vaithianatha Aiyer Vs. S.Tyagaraja Aiyar {1921 (41) MLJ 20}, a Division Bench of this Court held that where the two plaintiffs https://hcservices.ecourts.gov.in/hcservices/ 15 instituting a suit under Section 92 of the Code of Civil Procedure are the descendants of the founder of the charity, they have an interest within the meaning of the said Section. The Bench observed that the fact that the plaintiffs belong to the family of the founder would naturally give them an interest in the family charity so as to enable them to bring a suit under Section 92 of the Civil Procedure Code. The Bench distinguished the judgment of the Full Bench in T.R.Ramachandra Ayyar's case (ILR 42 Madras 360 = (1919) 9 LW 492). The judgment of this Court was affirmed on appeal by the Privy Council in Vaidyanatha Ayar Vs Swaminathyya Ayyar (AIR 1924 P.C. 221(2) = (1924) 20 LW 803). The Judicial Committee held that the descendants in the female line from the founder of the charity have an 'interest' therein within the meaning of Section 92, Civil Procedure Code, although they may not directly obtain any benefit from it. (iv) In Ramaswami Vs.Karumuthu (AIR 1957 Madras 597), a learned Single Judge of this Court held that a person who was a Hindu and was residing only three miles away, and had saved the trust properties from being sold away by a decree holder and had got the attachment released, and was a lessee in respect of the trust to be by being the highest bidder at an auction held by the Commissioner of Court, is a person vitally interested in the trust and its proper management. (v) In Harnam Singh Vs. Gurdial Singh (AIR 1967 SC 1415), the residents of a village, where free food is served to visitors by an institution running a free kitchen, do not have any interest https://hcservices.ecourts.gov.in/hcservices/ 16 entitling them to file a suit under Section 92, Code of Civil Procedure. On the facts it was found by the Court that the institution was meant for Nirmala Sadhus and the plaintiffs as lambarders and followers of Sikh religion cannot be said to have an interest entitling them to file a suit as Nirmala Sadhus are not Sikhs. (vi) In C.Kalahasti Vs. R.Sukhantharaj (1975 T.L.N.J.155 = (1975) 88 LW 57), a Division Bench of this Court held that old students of a College are persons having an interest in the trust which is in management of the College. (vii) In Kumudavalli Vs. P.N.Purushotham (AIR 1978 Madras 205 = 91 LW 205), another Division Bench of this Court held that a resident of the locality, who has some nexus or connection with the trust in the sense that he has interest in its well being and prosperity can under certain circumstances be taken to be a person having an interest in the trust and in the cause of a public school, such presumptions could also be raised, if he is an old student of the school. The Bench said that if a fair inference could be drawn that a resident in the locality is subjectively interested in the well being of the school and, therefore, the trust, then such an interest would come within the meaning of the expression "having an interest" and cannot be held to be illusory or hypothetical. In that case, the Bench also held that a remote relationship through the female line by itself cannot be such an interest sufficient to lay an action under Section 92, CPC. G.(i) In Jugul Kishore Vs. Shiam lal (AIR 1944 Allahabad 231), a Division Bench of that Court https://hcservices.ecourts.gov.in/hcservices/ 17 held that in cases