IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.09.2011 CORAM THE HON'BLE MRS. JUSTICE R.BANUMATHI and THE HON'BLE MR. JUSTICE B.RAJENDRAN O.S.A.Nos.100, 101, 105 and 106 of 2011 O.S.A.No.100 of 2011: 1.Rajendra Gupta 2.Asoka Gupta 3.M/s.Picnic Hotels Private Limited rep. By its Director Rajendra Gupta. ... Appellants vs. 1.The Corporation of Chennai, rep. by its Commissioner, Ripon Buildings, Chennai-3. 2.Victoria Public Hall Trust, rep. by its Trustee, 1133, Poonamallee Hgh Road, Chennai-3. ... Respondents O.S.A.No.101 of 2011 1.Sanjay Gupta 2.M/s.Picnic Park Hotels Private Limited, rep. by its Director Sanjay Gupta. ... Appellants. vs. 1.The Corporation of Chennai, rep. by its Commissioner, Rippon Buildings, Chennai-3. 2.Victoria Public Hall Trust, rep. by its Trustee, 1133, Poonamallee Hgh Road, Chennai-3. ... Respondents https://hcservices.ecourts.gov.in/hcservices/ O.S.A.Nos.105 & 106 of 2011 1.Rajendra Gupta 2.Asoka Gupta ... Appellants. vs. 1.Victoria Public Hall Trust, rep. by its Trustees, having its registered office at 1133, Poonamallee High Road, Chennai-600 003. 2.The Sheriff of Chennai and Chairman, Victoria Public Hall Trust. 3.The Mayor of Chennai, Trustee, Victoria Public Hall Trust. 4.Southern India Chamber of Commerce, Trustee, Victoria Public Hall Trust. 5.Andhra Chamber of Commerce, Trustee, Victoria Public Hall Trust. 6.Rajah of Vizianagaram, Trustee, Victoria Public Hall Trust. 7.The President, The Madras Advocates Association, Trustee, Victoria Public Hall Trust. Nos.2 to 8 having office at 1133, Poonamallee High Road, Chennai-600 003. 8.The Corporation of Chennai, rep. by its Commissioner, Ripon Buildings, Madras. ... Respondents M.P.No.3 of 2011 in OSA.No.101 of 2011: The Chennai Metro Rail Limited, rep. by its Managing Director, No.11/6, Seethammal Road, Alwarpet, Chennai-18. ... Petitioner/Proposed Respondent vs. 1.Sanjay Gupta https://hcservices.ecourts.gov.in/hcservices/ 2.M/s.Picnic Park Hotels Pvt. Ltd., rep. by its Director Sanjay Gupta, No.1132/2, Poonamallee High Road, Chennai-3. 3.The Corporation of Chennai, rep. by its Commissioner, Ripon Buildings, Chennai-3. 4.Victoria Public Hall Trust, No.1133, Poonamallee High Road, Chennai-3. ... Respondents/Appellants 1 & 2 Respondents 1 & 2 M.P.No.5 of 2011 in OSA.No.100 of 2011: The Chennai Metro Rail Limited, rep. by its Managing Director, No.11/6, Seethammal Road, Alwarpet, Chennai-18. ... Petitioner/Proposed Respondent vs. 1.Rajendra Gupta 2.Asoka Gupta 3.M/s.Picnic Hotels Pvt. Ltd., rep. by its Director Rajendra Gupta, No.1132/1, Poonamallee High Road, Chennai-3. 4.The Corporation of Chennai, rep. by its Commissioner, Ripon Buildings, Chennai-3. 5.Victoria Public Trust, rep. by its Trustee, No.1133, Poonamallee High Road, Chennai-3. ... Respondents/Appellants 1 to 3 Respondents 1 & 2 Original Side Appeals are filed under Order XXXVI Rule 1 of the Original Side Rules read with Clause 15 of the Letters Patent against the order dated 01.04.2011 made in O.A.No.1202 of 2009 in C.S.No.1037 of 2009, OA.1201 in CS.1306/09, A.No.1930 of 2009 in C.S.No.98 of 1957 and O.A.1931/09 in O.S.No.98/1957 on the file of this Court. M.P.Nos.3 and 5 of 2011 are filed under Order VIII, Rule 14 of Original Side Rules read with Section 151 C.P.C. praying to implead Chennai Metro Rail Limited as party Respondent in the appeals. For Appellants : Mr.T.R.Rajagopalan in OSA.100,105 Senior Counsel & 106/2011 for Mr.Satish Parasaran https://hcservices.ecourts.gov.in/hcservices/ For Appellant in : Mr. A.L. Somayaji SC for OSA.No.101/2011 Mr.S.R.Rajagopal For Respondent : Mr.N.R.Chandran No.1 Senior Counsel for Mr.G.T.Subramaniam For Petitioner in M.P.No.3/2011 in : Mr.R.Thiagarajan, OSA.No.101/2011 & Senior Counsel M.P.No.5/2011 in : for OSA.No.100/2011 Mr.V.Ramajagadeesan COMMON JUDGMENT R.BANUMATHI,J Whether the person who is personally benefited by commercially exploiting public property can maintain applications in the Scheme suit and whether the sub-lessee who continues in possession even after the expiry of the period of original lease can seek to protect his possession are the points falling for consideration in these appeals. 2. Prime property in Poonamallee High Road to an extent of 57 grounds was leased to the Trustees of Victoria Public Hall [V.P. Hall] Trust for construction of Town Hall which is to be used for public purposes or private purposes of cultural and educational activities. Prime property worth several crores so leased for a noble cause was diverted to personal benefit of making the profit. It is the typical case that exploitation of the public property by putting up multi- storied buildings with palatial facade for running hotel business for personal aggrandisement. Appellants whose claim of sublease expired even on 30.04.1985 seeks to protect their possession even after the surrender of leasehold rights by the original lessee – V.P. Hall Trust. It is the typical case where public property has been siphoned off under the cover of documents and protective umbrella of the Court orders. After the land and buildings were handed over by V.P. Hall Trust [original lessee] to the Corporation [original owner] and after recording of compromise, can Appellants seek to retain the leasehold rights beyond the period of original lease of the original lessee themselves is the core point in issue. 3. Factual background of the matter:- In 1880's certain senior noted citizens decided to establish Town Hall in Madras for the use and benefit of the public. For the said purpose, several citizens of Madras contributed various amounts and influential Committee of the citizens of Madras was constituted to carry out the project of construction of a Town Hall. As a result of negotiations Committee https://hcservices.ecourts.gov.in/hcservices/ with the Municipal Commissioner for the Town of Madras, Corporation passed resolutions dated 21.2.1883, 03.09.1884 and 24.09.1885 allotting the land of an extent of about 57 grounds on a 99 year lease, on a rent of 8 annas per ground per annum. Allotment was infavour of the Committee for construction of a Town Hall. 4. Deed of Trust was drawn up by an indenture entered into on 18.02.1888 to which (i) Subscribers to the building fund of Town Hall were parties of the first part; (ii) Committee of persons constituted to carry out project of construction of a Town Hall were parties of the second part; (iii) Original body of 12 Trustees constituted to handle the subscriptions were included as parties of the third part. On the said date i.e. 18.02.1888, there was lease agreement between the Municipal Commissioner of City of Madras and the Trustees of the Town Hall under which 57 grounds was leased to the Trustees on a lease of 99 years at a rent of 8 annas per ground per annum renewable at the end of each term of 99 years. Lease agreement stipulates for payment of rent, strict compliance of terms with condition to re-enter possession on non-compliance of certain terms. It was resolved under the said Deed of Trust that (i) Town Hall to be constructed which shall be named "Victoria Public Hall" and that the Hall to be used only for the purposes specified in the Deed of Trust; (ii) Declaration that the Trustees will hold the properties and constitution and administration of the Committee of Trustees. In 1889, the Rajah of Vizianagaram advanced a huge sum of money on a mortgage over the Victoria Public Hall on condition that if he was vested with nominating powers, he would forego the entire mortgage debt due to him. Therefore, the then Advocate-General of Madras filed suit in C.S.No.223 of 1905 seeking leave to amend the Deed of Trust so as to provide for appointment of 13th Trustee by Rajah Sahib of Vizianagaram and his successors. By the judgment and decree dated 09.01.1906, the Court modified the Deed of Trust by framing a scheme decree making a provision regarding nomination of 13th Trustee by Rajah of Vizianagaram. 5. Scheme decree framed in C.S.No.223 of 1905 was modified by another judgment and decree in C.S.No.263 of 1921 dated 13.12.1921 at the instance of the then Advocate-General. The said decree prescribed number of Trustees as "12" and that they were to be the residents of the locality. Decree also stipulates that two of the Trustees shall always be drawn from the European Community, two from Eurasian (Anglo Indian) Community, two from Hindu Community and two from the Mohammedan Community. An application was moved by the Trustees in A.No.918 of 1953 in C.S.No.263 of 1921 seeking permission of the Court to hand over the Hall to the Corporation of Madras. On objection raised by the then Advocate-General and other citizens as to the maintainability of such application, by the order dated 24.04.1953, the said application [A.No.918 of 1953] was dismissed as not maintainable and Court referred the Trustees to seek redressal in an appropriate proceedings under Section 92 of C.P.C. https://hcservices.ecourts.gov.in/hcservices/ 6. Four persons viz., (i) K.Ranga Prasad; (ii) V.Srinivasan; (iii) T.S.Kumaraswami Mudaliar; and (iv) Syed Hussain instituted a suit in C.S.No.98 of 1957 under Section 92 C.P.C. alleging that some of the Trustees have collusively handed over the Victoria Public Hall to the Corporation and challenging the same, they sought for framing of proper and appropriate scheme for the purposes of effectuating the terms of original Trust deed. It appears from the judgment and decree dated 15.09.1961 in C.S.No.98 of 1957, 1st Defendant viz., Trustees of V.P. Hall Trust as well as the 2nd Defendant viz., Advocate-General remained absent. Plaintiffs and 3rd Defendant viz., Corporation entered into a Memorandum of Compromise and on the basis of the said Memorandum of Compromise, a scheme was framed by the Court. It was also recorded in the Memorandum of Compromise that Lessor – Corporation of Madras has invested a sum of Rs.88,616.99 for renovating the Hall and making it fit and proper for putting it to the use of the Trust objects. Since Corporation has invested large sums of money for renovation of the demised premises, it was stipulated that Corporation should also be represented in the Board of Trustees for proper management of the Trust. Under the scheme, a new Board of Trustees were constituted comprising of (i) the Sheriff of Madras as its Chairman; (ii) the Mayor of Madras; (iii) a nominee of Southern Indian Chamber of Commerce; (iv) a nominee of Andhra Chamber of Commerce; (v) a nominee of Madras State Sangeeth Nataka Sangam; (vi) a nominee of Rajah of Vizianagaram; (vii) the President of Madras Advocates' Association; (viii) one non-official representative selected by High Court of Madras and (ix) the Commissioner of the Corporation of Madras as the Secretary. In the Memorandum of Compromise, it was agreed that the newly appointed Trustees would pay a sum of Rs.19,861.89 being the accumulation of rent in part payment of the expenses incurred by the Corporation for renovation of the Trust property and Board of Trustees would also keep on paying the entire proceeds of the Trust from the property month by month towards the payment of the expenses incurred by the Corporation till it was fully paid. 7. By an agreement of lease dated 11.07.1963, the Board of Trustees sub-leased a portion of the property measuring about 10 grounds for the purpose of running Cafeteria to one N.D.Gupta, father of the Appellants. The building plan submitted by the sub-lessee N.D.Gupta was rejected by the Corporation on 30.04.1964 and the same was set aside by the Government later. Thereafter, the Corporation granted building permission on 29.12.1965 and the sub-lessee put up a building which was assigned Door No.1132. 8. Subsequently, in pursuance of a resolution dated 27.05.1968, the Joint Secretary and Treasurer of V.P. Hall Trust executed a Deed of lease on 17.07.1968 infavour of N.D.Gupta granting a sub-lease of the land of an extent of 13 grounds and 1720 sq. ft. with permission to the sub-lessee to put up one storied building including a mezzanine https://hcservices.ecourts.gov.in/hcservices/ floor, as approved by the Trust Board. It was made clear in Clause 2 of the Deed of lease that the sub-lessee shall put up one storied building at his own costs as per the plan approved by the Trust Board in conformity with architectural design of the main building and equip the same for the purposes of running a Cafeteria. Under Clause 4, the sub-lease was for a period of 18 years commencing from 01.04.1968 i.e. 31.03.1986. Under Clause 5, the sub-lease was renewable at the option of the sub-lessee for a further period of 22 years subject to certain conditions. Under Clause 6, the sub-lessee was obliged, after the expiry of the period of sub-lease to surrender possession of the property with all the superstructures standing thereon without claiming any compensation. This lease itself was beyond the period of original lease i.e. 31.03.1985. 9. The Corporation filed suit in O.S.No.2083 of 1968 on the file of City Civil Court, Chennai challenging the sub-lease granted by the Board of Trustees infavour of N.D.Gupta. The Corporation also rejected the application for grant of a licence to run a hotel in the premises. But the refusal of the Corporation to grant a licence to run a hotel was set aside in a Writ Petition in W.P.No.752 of 1969 by the order dated 21.04.1969. 10. The suit O.S.No.2083 of 1968 filed by the Corporation challenging the sub-lease granted by the Board of Trustees infavour of N.D.Gupta was dismissed by the City Civil Court, Chennai upholding the power of the Trustees both under the scheme decrees and under Section 108 (j) of Transfer of Property Act. Though the first appeal filed by the Corporation was allowed in their favour, the second appeals in S.A.Nos.1350 of 1970 and 1262 of 1971 filed respectively by N.D.Gupta and the Board of Trustees were allowed by this Court by a judgment and decree dated 23.11.1972. 11. Even during the currency of earlier lease, the said lease dated 17.7.1968 executed infavour of N.D.Gupta was modified by another lease deed dated 12.10.1973. The period of lease stipulated was up to 30.09.2028 [period of 55 years]. All modifications are said to have been made under the lease deed dated 12.10.1973 were heavily loaded infavour of the sub-lessee. Lease deed dated 12.10.1973 enabled the sub-lessee N.D.Gupta to put up new multi-storied construction. In pursuance of the modified lease deed dated 12.10.1973, N.D.Gupta applied permission for putting up multi-storied hotel complex cum lodging house in the leased premises and Corporation rejected the application for planning permit. The said decision of the Corporation was challenged in W.P.No.4367 of 1975 and the matter was fought up to the Supreme Court. Thereafter, Government issued G.O.Ms.No.985 dated 16.11.1981 permitting N.D.Gupta to put up multi-storied building comprising of ground plus three floors. In pursuance of the same, N.D.Gupta constructed a building and the same was assigned Door No.1132/1. https://hcservices.ecourts.gov.in/hcservices/ 12. Litigation regarding extension of lease – On 06.10.1984, Board of Trustees issued notice to the Corporation seeking extension of the lease of the entire extent of 57 grounds. Since Corporation did not respond to the request for extension of lease for another 99 years, Board of Trustees have filed suit O.S.No.1349 of 1985 seeking renewal of lease for another 99 years. The said suit was decreed on 07.04.1993 granting declaration that the Trust was entitled to have the lease extended by another 99 years on the same terms and conditions contained in the original lease dated 18.02.1888. First appeal filed by the Corporation in A.S.No.334 of 1993 was dismissed on 31.8.1995 and the Second Appeal filed by the Corporation in S.A.No.144 of 1997 was dismissed for non-prosecution on 07.11.2001. 13. Resolution dated 11.03.2009 and Compromise in S.A.No.144 of 1997 - Thereafter, Board of Trustees have passed resolution dated 11.03.2009 renouncing and dissolving the Trust and resolving to surrender all the properties to the Corporation. Resolution dated 11.03.2009 also requested the Government to form a new Trust so as to restore the original glory and prominence of Victoria Public Hall. As per the terms of the Compromise, Trust had handed over all the properties to the Corporation and gave up their claim for extension of lease. Subsequently, on applications, S.A.No.144 of 1997 was restored to file. After restoration of the appeal, Memorandum of Compromise dated 15.07.2009 was entered into and S.A.No.144 of 1997 was disposed in terms of the Memorandum of Compromise by the judgment and decree dated 21.08.2009. 14. Thereafter, Corporation issued eviction notice dated 28.08.2009 directing the legal heirs of N.D.Gupta as well as the Companies floated by N.D.Gupta to vacate and hand over vacant possession. These notices were challenged in W.P.Nos.18532 & 22890 of 2009 and interim orders were obtained. By the order dated 04.11.2009 Justice K.Chandru,J dismissed all the Writ Petitions. Even though, Appellants have also challenged the notice of eviction in the Writ Petition, curiously Appellants have withdrawn their Writ Petitions on 03.12.2009 and on 15.12.2009 respectively. Without seeking any liberty from the Court withdrawn unconditionally. Corporation also issued notice of demolition dated 29.09.2009 and the same became the subject matter of challenge in the Writ Petitions in W.P.Nos.21519 to 21525 of 2009. 15. Before ever withdrawing the Writ Petitions, Appellants [Rajendra Gupta and Asoka Gupta] who are the sons of late N.D.Gupta took out two applications in A.Nos.1930 and 1931 of 2009 in the scheme suit in C.S.No.98 of 1957 praying for (i) reconstitution of the Board of Trustees of V.P. Hall Trust; (ii) for re-vesting the properties back to the Trust from the Corporation. In the scheme suit C.S.No.98 of 1957, Appellants Rajendra Gupta and Asoka Gupta have also filed O.A.No.421 of 2009 seeking for interim injunction restraining the Respondents therein from in any manner interfering with the leasehold https://hcservices.ecourts.gov.in/hcservices/ right or interest in the property. 16. C.S.No.1036 of 2009 was filed by (i) Sanjay Gupta; (ii) M/s.Picnic Park Hotels Private Limited against the Corporation of Chennai and V.P. Hall Trust seeking for the reliefs (i) Declaration that the lease deed executed by V.P. Hall Trust on 12.10.1973 is valid till 30.09.2028 and is binding on the Corporation; (ii) Declaration that the resolution dated 11.03.2009 passed by the Trust surrendering its properties to the Corporation is null and void; (iii) Declaration that the Memorandum of Compromise dated 15.07.2009 entered between the Defendants 1 and 2 and filed in S.A.No.144 of 1997 is null and void and not binding on the Plaintiffs; (iv) Permanent injunction restraining the Defendants from in any manner interfering with Plaintiffs' right of possession and enjoyment as sub-lessees. 17. C.S.No.1037 of 2009 has been filed by (i) Rajendra Gupta; (ii) Asoka Gupta and (iii) M/s.Picnic Hotels Private Limited against the Corporation and V.P. Hall Trust seeking for the same reliefs as sought for in C.S.No.1036 of 2009. 18. Along with the suits [C.S.Nos.1036 & 1037 of 2009], Plaintiffs have filed O.A.Nos.1201 and 1202 of 2009 respectively seeking temporary injunction. 19. Averments in the counter-affidavit - Resisting the applications, Corporation filed counter-affidavit stating that the lease was executed on 18.02.1888 for the purpose of constructing Public Hall in the name of V.P. Hall Trust for the use of general public. After so many changes in the Trust Board, lease deed expired on 30.04.1985. Even after the expiry of lease deed, Trust did not hand over possession of the leasehold land to the Corporation and several litigations were pending between the Corporation and the Trust. It is averred that the lease given by the Trust to N.D.Gupta for 13 grounds and 1720 sq. ft. of land for running restaurant is not binding on the Corporation and the permission granted by the Trust to N.D.Gupta to put up multi-storied hotel in 13 grounds and 1720 sq. ft. is totally invalid. Due to the necessity for doing renovation to the building and for putting the building for public utility, Trust changed their attitude and resolved to end the litigation and entered into a compromise on 11.03.2009. The compromise memo filed by V.P. Hall Trust and the Corporation was recorded by the High Court in S.A.No.144 of 1997. The lease deed executed infavour of N.D.Gupta by V.P. Hall Trust is in gross violation of the terms and conditions of the original lease deed dated 18.02.1888 and not binding upon the Corporation. Plaintiffs are in occupation of nearly 13 grounds and 1720 sq. ft. of Corporation property worth about Rs.70 to 80 Crores for a meagre amount of Rs.1000/- as lease rent is not entitled to any injunction as sought for. https://hcservices.ecourts.gov.in/hcservices/ 20. Before the learned single Judge V.P. Hall Trust did not enter appearance. 21. Findings of learned single Judge - Upon consideration of various submissions, learned single Judge dismissed all the applications by the impugned common order dated 01.04.2011 interalia holding - ●Plaintiffs are not the "persons interested" in the Trust and they cannot seek reconstitution of Board of Trustees and re-vesting of the properties in the Trust; ●Lease deed dated 12.10.1973 is lopsided and heavily loaded infavour of the sub-lessee. The said document dated 12.10.1973 would only subserve the interest of the Plaintiffs and would not serve the interest of the Trust nor any public interest; ●Decree in O.S.No.1349 of 1985 never got executed and having regard to the huge expenditure involved for renovation of Victoria Public Hall, Trustees have taken wise decision to hand over Victoria Public Hall to the Corporation and cannot be said to be a fraudulent one; ●The action of Board of Trustees, resolution dated 11.03.2009 surrendering possession of Victoria Public Hall to the Corporation is based upon justice, equity and good conscience; ●Surrendering of lease hold land to the Corporation is actually for the benefit of the public and not detrimental to the Trust; Findings that Appellants-Plaintiffs have not established prima facie case for grant of injunction and it is open to the Corporation to issue notice to the Appellants-Plaintiffs and proceed further for recovery of possession of the land in question from them. 22. Contentions of Appellants - Assailing the impugned order passed, learned Senior Counsel Mr.T.R.Rajagopalan appearing along with learned counsel Mr.S.Parthasarathy has mainly raised the following contentions:- ●As per the documents viz., Trust Deed dated 18.02.1888, lease deed dated 12.10.1973 and the scheme decree in C.S.No.98 of 1957, power was given to the Trustees to execute sub-lease, which is confirmed in the scheme decree and therefore, sub-lease in favour of N.D.Gupta has been validly created which has been upheld by the Courts and authorities and while so, the sub-lease cannot be made to come to an end by collusive act of the Trust and the Corporation behind the back of the Appellants; ●The Trustees are governed by the scheme decree in C.S.No.98 of 1957 and the Court is the guardian of the public Trust and while so, the Trustees were not justified in going before the Civil Court in S.A.No.144 https://hcservices.ecourts.gov.in/hcservices/ of 1997 to record the compromise and the compromise decree in S.A.No.144 of 1997 cannot be sustained and the same will not affect the sub-lease infavour of Appellants; ●Plaintiffs have made out a prima facie case and while so, the learned single Judge has gone beyond the scope of applications and erred in proceeding to record the findings on the merits of the matter as if the main suit was heard and not interlocutory applications; most of the recorded findings are not supported by materials; ●The learned single Judge did not keep in view that the prima facie case and the balance of convenience is infavour of the appellants/plaintiffs; Reliance was placed upon number of decisions which we would refer to at appropriate places. 23. Mr.S.R.Rajagopal, learned counsel appearing for the Appellants in O.S.A.No.101 of 2011 interalia contended that the findings in respect of the lease deed dated 12.10.1973 have been made in the absence of hearing the Trust or without notice in the applications to the Trust and the said findings in respect of the lease deed dated 12.10.1973 are contrary, perverse to the judgment in the Second Appeal in S.A.Nos.1350 of 1970 and 1262 of 1971. It was further submitted that the finding of the learned single Judge that V.P. Hall has not served any different purpose after the grant of lease in favour of N.D.Gupta in the year 1963 is not supported by any material on record and the impugned order suffers from inconsistent findings. Learned counsel also contended that Memo of Compromise recorded in S.A.No.144 of 1997 is not valid and the same cannot bind the Appellants in O.S.A.No.101 of 2011. In support of his contention, learned counsel relied upon (1987) 1 SCC 712 [Tirath Ram Gupta v. Gurubachan Singh and another]. 24. Contention of Corporation - Onbehalf of Corporation, Mr.N.R.Chandran, learned Senior Counsel appearing along with