1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION APPEAL FROM ORDER NO.46 OF 2009 WITH CIVIL APPLICATION NO. 60 OF 2009 Dr.Moreshwar Shivram Rege : Appellant versus Dr.Shripad Shivram Rege and ors. : Respondents. Shri V A Thorat, Senior Counsel, i/by Rose M Vasudeo for the Appellant. Shri Rajendra V Pai with Shri P P Chawan i/by M/s.ARA Law & Associates for the Respondent No.1. Shri M P Rao with Shri Sandeep Shinde i/by M/s. ANS Law & Associates for Respondent No.2. Shri A A Kumbhakoni i/by Shri Tejas D Deshmukh for the Respondent No.3. Shri C U Singh, Senior Counsel, with Ms Deepa P Chawan i/by Shri V M Bhate for the Respondent No.5. Shri Arun Shukla i/by M/s. Shukla & Shukla for the Respondent No.6. Shri Durgaprasad S Sabnis for the Respondent No.7. CORAM : R.M.SAVANT, J. DATED : FEBRUARY 09, 2009 2 P.C. 1. By this Appeal the Appellant/Plaintiff challenges the order dated 23th December 2008 passed by the learned Judge, City Civil Court Bombay by which order the interim relief prayed for in the Notice of Motion in regard to operation of the Bank Accounts of the trust known as Balmohan Vidyamandir Trust was rejected. 2. The Appellant/Plaintiff has filed Short Cause Suit (L) No.2846 of 2008. The main relief in the said suit is for a declaration as regards the Resolution dated 12/12/2008 passed by the Trustees removing the Plaintiff from the post of Managing Trustee. 3. In the said Suit, the Plaintiff filed Notice of Motion Exhibit-6 inter alia praying for the following reliefs :- “(a) That pending the hearing and final disposal of the suit this Hon'ble Court be pleased 3 to restrain Defendant Nos.6 to 10 by an interim order and injunction from desisting to act on the mandate given by the Board of Trustees of Balmohan Vidyamandir Trust (i) requiring Defendants Nos. 6 1o 10 to allow Balmohan Vidyamandir Trust to operate the bank accounts of the said trust mentioned in Exhibit “C” to the Plaint by any two trustees, one of whom must be the Managing Trustee and (i) communicating to them that the Plaintiff was the Managing Trustee of Balmohan Vidyamandir Trust as mentioned in paragraph 10 of the plaint; (b) That pending hearing and final disposal of the suit this Hon'ble Court be pleased to restrain Defendants Nos.1, 2 and 5 by a temporary injunction from any manner acting upon or in pursuance of the purported Resolution dated 12/12/2008 referred to in prayer clause (a) of plaint; (c) That pending the hearing and final disposal of the suit this Hon'ble Court be pleased to restrain Defendant Nos.1 and 2 from conducting 4 meetings of Balmohan Vidyamandir Trust unless such meetings are convened by the Plaintiff as the Managing Trustee of Balmohan Vidyamandir Trust.” 4. It is the case of the Plaintiff that he is a Managing Trustee of a a reputed public trust namely Balmohan Vidyamandir Trust which runs a number of schools popularly known as Balmohan Vidyamandir Schools in the city of Mumbai. It is the case of the Plaintiff that on the basis of the Deed of Trust, he has been appointed as a Managing Trustee for life and, he therefore cannot be removed from his trusteeship as a Managing Trustee of the said Trust. It is further the case of the Plaintiff that the Defendant No.1 held a meeting of the said Trust on 12/12/2008 in which meeting a Resolution was passed removing the Plaintiff from the post of Managing Trustee and appointing the Defendant No.1 as a Managing Trustee of the said Trust. According to the Plaintiff, the said Resolution passed by the Trust is not valid, legal and is bad in law as there is no power in the Trust Deed for the trustees to remove the 5 Plaintiff from the post of the Managing Trustee. It is further the case of the Plaintiff that on the basis of the said Resolution a Change Report is filed under Section 22 of the Bombay Public Trusts Act before the Charity Commissioner and it is further the case of the Plaintiff that on the basis of the said illegal Resolution dated 12/12/2008, the Defendant No.1 started functioning as Managing Trustee and communicated the said fact to the bankers of the said Trust being Defendant Nos.6 to 10 who on account of the said communication has frozen the accounts of the said Trust thereby paralysing the functioning of the said Trust and putting in jeopardy the running of the schools. The Plaintiff therefore by the above motion has claimed the reliefs in terms of the prayer clause (a) to restrain the Defendant Nos.6 to 10 from desisting to act on the mandate given by the Board of Trustees of the said Trust requiring the Defendant Nos.6 to 10 to allow Balmohan Vidyamandir Trust to operate the bank accounts of the said Trust by any two trustees, one of whom must be the Managing Trustee and to communicate the Defendant Nos.6 to 10 that the Plaintiff was the Managing Trustee of 6 Balmohan Vidyamandir Trust and the Defendant Nos.1, 2 and 5 to be restrained by temporary injunction from acting upon or in pursuance of the purported Resolution dated 12/12/2008 and to restrain the Defendant Nos.1 and 2 from conducting meetings of Balmohan Vidyamandir Trust unless such meetings are convened by the Plaintiff as the Managing Trustee of the Balmohan Vidyamandir Trust. 5. At the time of hearing of the said Motion, the Plaintiff restricted the interim relief claimed only to the operation of the Banks Accounts and for that purpose sought directions against the Defendant Nos.6 to 10 that they be directed to operate the banks accounts only on the basis of the instructions given by the Plaintiff. 6. The Defendant No.1 filed his reply to the said Motion and contended that even if the Trust Deed provides appointment of the Managing Committee for life, the Managing Trustee could be removed by a Resolution passed by a majority of the Trustees. 7 Therefore, according to the Defendant No.1, the Resolution passed on 12/12/2008 is valid and legal and the Defendant No.1 has become the Managing Trustee of the said Balmohan Vidyamandir Trust. Accordingly a Change Report has been submitted to the Charity Commissioner. The Defendant No.1 has also raised objection to the maintainability of the said suit on the ground that the Plaintiff had not obtained permission of the Charity Commissioner. The Defendant No.1 has also raised an objection that the Civil Court has no jurisdiction to entertain and try the said suit, as the reliefs sought for by the Plaintiff fall within the purview of Section 50 of the Bombay Public Trust Act. The Defendant No.1 has contended that the Resolution dated 12/12/2008 has been acted upon and now the Plaintiff can not claim any relief as he is no-more the Managing Trustee of the Balmohan Vidyamandir Trust. 7. The trial Court heard the said Notice of Motion for the interim reliefs sought to the extent mentioned earlier in this order. The trial Court accepted the contention of the Respondent No.1 that 8 once a Resolution is passed appointing a particular person as a trustee, the said appointment, need not wait the result of the Change Report proceedings and the person so appointed can function as such from the date of the resolution. The trial Court relied upon the judgment of a learned Single Judge of this Court reported in 2002 (3) Bom. C R 161 in the case of Chembur Trombay Education Society & ors. V/s. D K Marathe & ors. The relevant paragraph of the said Judgment is Para No.11 wherein the learned Single Judge has referred to the decision of the Apex Court, reported in AIR 1993 SCW 2006 in the case of Managing Committee, Khalsa Middle School v/s. Smt.Mohinder Kaur. The relevant portion of the Paragraph 11 is reproduced herein under :- “The Apex Court was called upon to examine similar provision of Societies Registration Act, 1860. The scheme of Section 12A of that Act is more or less same as Section 22 of Bombay Public Trusts Act. The Apex court compared the said provision with the provisions of Sections 18 9 and 19 of Companies Act which mandates that the alteration or amendment to the Memorandum of Association of the Company takes effect from the date of its registration only. In that context the Apex Court in paragraph 11 of the said judgment has observed that in absence of any requirement in the Act, that the alteration in the Rules and Regulations must be registered with the Registrar, it cannot be held that registration of the amendment is a condition precedent for such an alteration to come into effect. A priory, any amendment or change brought about in accordance with law would come into effect from the date of Resolution of the society to bring about such change. This proposition is fortified from the plain language of Section 22 of Bombay Public Trusts Act. The said Section requires that where any change occurs in any of the entries recorded in the register kept under Section 17, the Trustee shall within ninety days from the date of the occurrence of such change, report such change to the Deputy or Assistant Charity Commissioner as the case may be.” 10 “Giving the natural meaning to this word in Section 22 of the Act, coupled with the principle enunciated by the Apex Court that when the Act does not require that registration of any change is a condition precedent, to come into effect, I have no hesitation in taking the view that amendment to the constitution as well as subsequent elections of the President and members of the Governing Council, therefore, came into effect from the date of respective Resolution of the General Body. The enquiry postulated under section 22 is only to ascertain the factum as to whether the change has occurred or not. In the event, the competent authority is satisfied that the change has not occurred in accordance with law, only then that change will have to be undone and status quo ante will have to be restored. A fortiori, resolution of the general body of the Society is sufficient to ignite the change of amendment in the constitution as well as of electing new general body for administering the affairs of the Society. The fact that the change report is pending consideration before the Charity Commissioner, would be of no avail. Understood thus, as a necessary corollary, 11 it will have to be held that the respondent-Shri Marathe ceased to be the President of the Society from the date when the General Body elected another President in its meeting dated June 18, 1995. If this be the position, the respondent-Shri Marathe will have no right whatsoever to continue in the post of president and, there would be no question of granting any mandatory relief at this stage. 8. The trial Court also relied upon the judgment of another learned Single Judge this Court reported in 2008(5) Mh.L J 853 in the case of Vijay K Mehta & Anr. v/s. Charu K Mehta & ors. In the said judgment the scope of the proceedings under Section 22 of the Bombay Public Trusts Act viz newly appointed trustees was an Issue. Para 22 of the said Judgment is relevant and the same is reproduced herein under :- “Paragraph 22 : What Section 22 contemplates is that the changes already effected by the Trust will attain finality from the date it is entered in the register but that does not mean that till the changes are recorded in the register the Trustees so appointed cannot function as Trustees. 12 Suppose in a given case the Trustee has died and in his place a new Trustee is appointed and a Change Report filed to that effect is pending. In such a case can it be said that the dead Trustee continues to be a Trustee and the new Trustee cannot be said to be a Trustee till the Change Report is accepted and recorded in the register ? Certainly not. Therefore the order under Section 22 (3) of B.P.T. Act merely gives finality to the changes already effected by the Trust and that order does not make the changes effective from that date. This is also a view expressed by the learned Single Judge in the case of Chembur Trombay Eduction (Supra) and endorsed by the Division Bench of this Court in the case of Ganesh M Thawre (supra)” 9. Relying upon the said judgments, the trial Court held that the Trustee appointed is entitled to discharge his duties as a Trustee from the date of the Resolution and, therefore, pendency of the proceedings under Section 22 of the Bombay Public Trusts Act cannot stop him from functioning as such. 13 10. Since in the present case, the Resolution was passed on 12/12/2008 by a majority, in which the Defendant No.1 is appointed as a Managing Trustee, the trial Court was of the view that the Defendant No.1 i.e the Respondent No.1 herein cannot be restrained from acting as a Managing Trustee by passing an interim order to that effect. The trial Court, therefore, did not find any prima facie case in favour of the Plaintiff and, therefore, rejected the interim relief prayed for. 11. I have heard the learned counsel for the parties. The learned Senior Counsel for the Appellant, learned counsel for the Respondent No.1 and the learned Senior Counsel for the Respondent No.5 made submissions as regards, whether the trustees had the power to remove the Managing Trustee under the Trust Deed. The principal contention advanced by the learned Senior Counsel for the Appellant/Plaintiff was that there is no provision in the trust deed for removal of the Managing Trustee and, 14 the Resolution passed at the time when the Plaintiff was appointed as the Managing Trustee was that he would be the Managing Trustee for life. The learned Senior Counsel for the Appellant has also questioned the manner in which the said Resolution was passed, as according to him, in the meeting, which was held on 12/12/2008, there were only 3 trustees present , who passed the said Resolution. He further submitted that the Plaintiff has been associated with the said Trust since last 42-45 years and never once were his credentials or bonafides in question. 12. On the other hand, the learned counsel for the Defendant No.1 and the learned Senior Counsel for the Defendant No.5, relying upon the para having the heading “Board of Trustees” and “Managing Trustee” in the trust deed, submitted that the Managing Trustee is the first amongst equals i.e trustees and that the Trust Deed provides that a trustee could be removed if he acts detrimental to the interest of the trust. It was, therefore, submitted that a conjoint reading of the said clauses makes it clear that a Managing Trustee could be 15 removed if he is acting detrimental to the interest of the trust. The learned counsel for the Respondents submitted that in the instant case, a meeting of the trust was convened on 23/10/2008 to discuss various acts of omissions and commissions committed by the Plaintiff. The Plaintiff and his Son i.e. Respondent No.5 herein attended the said meeting and took objection that henceforth they would attend the meeting only if it is called by the Managing Trustee. Thereafter a meeting was again called on 12/12/2008 wherein again various issues relating to the various acts of omissions and commissions of the Plaintiff and the Respondent No.5 herein were on the agenda. The Plaintiff, though having been issued a notice of that meeting, did not attend the same, it is in the said meeting that the Resolution came to be passed removing the Plaintiff from the post of the Managing Trustee and appointing the Defendant No.1 as the Managing Trustee. The learned counsel therefore submitted that it is not as if the Plaintiff was not given notice to the said meeting or that the Resolution has been passed without following any procedure. The learned counsel submitted that the Charity Commissioner has 16 also submitted a report wherein the Plaintiff has been indicted in the matter of conducting the affairs of the Trust. The learned counsel further submitted that in spite of the order dated 23/12/2008 passed by the City Civil Court, Bombay, the Plaintiff is collecting fees from the students for which no account is maintained. It is further contended on behalf of the Respondents that two banks i.e. Respondent Nos.7 and 9 are acting at the behest of the Plaintiff and not allowing the trustees to operate the accounts of the said trust in the said banks; whereas the three other banks have allowed the trustees to operate the accounts of the said trust in the said banks. 13. I have considered the rival contentions of the parties. In the instant proceedings the subject matter is as regards operation of the banks accounts of the said trust. The legality and validity of the Resolution dated 12/12/2008 removing the Plaintiff from the post of Managing Trustee is not directly in contention. In my view, there is considerable merit in the submissions made on behalf of the Defendants i.e. the Respondents herein that there is power vested in 17 the trustees to remove a trustee who is acting detrimental to the interest of the trust, as rightly submitted by the Respondents, relying upon the Paragraph relating to the Board of Trustees. Prima facie, therefore, it cannot be said that the removal of the Plaintiff has been done without there being any power in the trustees. The various acts of omissions and commissions alleged against the Plaintiff as also the Report of the Charity Commissioner prima facie discloses that the trustees acted infra-vires the provisions of the Trust Deed in passing the said Resolution dated 12/12/2008. In my view, therefore, considering the said fact and in view of the law laid down by this Court in the judgments cited (Supra), the newly appointed trustee is entitled to act as such notwithstanding the Change Reports pending before the Charity Commissioner, the Defendant No.1 in the instant case, is therefore entitled to act as a Managing Trustee though the Change Report is as yet pending. 14. Since the Suit filed by the Plaintiff and the other reliefs claimed in the said Notice of Motion are pending adjudication, in my 18 view, it would not be proper to comment on the legality and validity of the said Resolution dated 12/12/2008 save and except to the extent mentioned herein above. Since the said trust runs as many as four schools wherein about 4500 students are studying and therefore the smooth functioning of the Trust is of utmost importance, in my view, the hearing of the Change Reports Nos.4892 of 2008 and 1473 of 2008 is, therefore, required to be expedited. The learned Charity Commissioner is, therefore, directed to hear and decide the said Change Reports proceedings as expeditiously as possible and within a period of six months from date. 15. It is clarified that the Respondent No.1 herein would be entitled to function as a Managing Trustee and discharge his function as such subject to any orders that would be passed by the competent Court or Authority. The Respondent No.1 to file a monthly statement of the accounts relating to the said Trust before the Charity Commissioner. 19 16. The above Appeal from Order is accordingly dismissed. 17. In view of the dismissal of the above Appeal, the Civil Application No.60 of 2009 does not survive and the same is accordingly disposed of. [R.M.SAVANT, J]