IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SECOND APPEAL No 303 of 1986 For Approval and Signature: Hon'ble MR.JUSTICE K.M.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- AMBALAL OKARLAL PATEL Versus FILOMAN PATHUBHAI PATEL -------------------------------------------------------------- Appearance: 1. Second Appeal No. 303 of 1986 MR MD PANDYA for Petitioner No. 1-2,4,6-21 MR K.H.KAJI with MR MAKWAN for M/S TRIVEDI & GUPTA for Petitioner No. 3,5 MR JASHVANT M PATEL for Respondent No. 1-3 MRS KETTY A MEHTA for Respondent No. 4-5,7 RULE NOT RECD BACK for Respondent No. 6 MR AD OZA, Ld. GOVERNMENT PLEADER for Respondent No. 8 -------------------------------------------------------------- CORAM : MR.JUSTICE K.M.MEHTA Date of decision: 21/03/2003 C.A.V. JUDGEMENT 1. Ambalal Okarlal Patel and others, appellants original plaintiffs have filed this second appeal under section 100 of the Code of Civil Procedure, against the judgment and decree dated 11th August, 1986, passed by the learned Extra Assistant Judge, Bharuch, in Regular Civil Appeal No.72 of 1984. The learned Judge by his impugned judgment was pleased to allow the appeal and quashed and set aside the judgment dated 31st March, 1984, passed by the learned Civil Judge (S.D.), Bharuch in Regular Civil Suit No.72 of 1972. BACKGROUND OF THE MATTER: 2. In the year 1898 A.D. some American Missionaries established a religious institution (Church) at Valsad for propagation of protestant faith of Christian religion and to establish and manage the churches for the people professing that faith. Gradually their activities were extended and similar institutions came into being at Ankleshwar in Bharuch District and at Jalalpore Town in Navsari Taluka of Valsad District. In course of time, these activities were further extended to various other places in the then Bombay State. For administrative facilities and convenience, such local institutions came to be grouped into two categories viz. one (1) comprising of such institutions situated in the Maharashtra Area of the then State of Bombay and another (2) of institutions situated in the Gujarat State area of that State. These institutions were respectively known as the second District Church of Brethren and the First District Church of Brethren (latter is hereinafter referred to as "The Brethren Church"). 2.1 The object of the Brethren Church was to propagate the work of the Church of the Brethren in Western India in order to reveal Christ by means of evengelistic, educational, medical, literary, industrial schools, social and charitable activities leading to the establishment of the kingdom of God. Present Controversy: 2.2 The case in brief which is relevant for the appeal of the plaintiffs - appellants No.1 to 4 herein are that, in the year 1970, six denominations of Protestant Christian faith in India decided to merge themselves to form a united Church of North India (`CNI' for short) for common and better management. One of the uniting denominations functioning in Gujarat was the First District Church of Brethren (hereinafter referred to as `the Brethren Church'). The said Brethren Church was registered in the year 1944 as a Society under the Societies Registration Act, 1860 (`SR Act' for short). 2.2(A) Prior to its registration under the BPT Act, the Brethren Church had its Memorandum of Association and Rules and Regulations framed under the SR Act which provided, inter alia, by Rule 4 of the General Rules, that upon winding up or dissolution of the Trust its properties should be transferred to some institution having objects similar to the society, to be determined by the 3/5th vote in the last business session of the society before the time of dissolution. It was stated that in view of section 13 of the SR Act which provided that the society may be dissolved by majority of 3/5th of the members of the society at a general meeting convened for the purpose. 2.3 After coming into force of the Bombay Public Trusts Act, 1950 (`BPT Act' for short) in the then State of Bombay, the Brethren Church was registered as a Public Trust at No.E/827 (Bom.) initially with the office of the Deputy Charity Commissioner of Greater Bombay, by considering its Memorandum of Association as its Trust Deed. Under the definition of Public Trust under Sec.2(13) of the BPT Act, a society has also been included in the said definition. 2.4 After the formation of the separate State of Gujarat, the Brethren Church was registered on 22.6.60 under the BPT Act at No.EG/643 (Bharuch) with the office of the Assistant Charity Commissioner, Baroda Region, Bharuch. 2.5 In the Schedule-I of the register of the Public Trust maintained by the Charity Commissioner under Sr.No.EG/643 under the head `Particular of document creating the Trust' in col.6 following is mentioned "Memorandum of Association". 2.6 It has been stated by the plaintiffs that in the plaint and memo of appeal and at the time of hearing of this appeal there was a move by various uniting denominations to merge into CNI including those of Maharashtra and Gujarat came to be crystalised in various meetings held by various congregations and churches. So far as the Brethren Church was concerned, at a meeting of its Governing Body held on 17.2.70, it was resolved by the general meeting to dissolve itself and merge with the CNI. The said resolution was passed at the meeting consisting of 78 members wherein 70 members voted in favour of the merger and 8 members voted against. The then office bearers of the Brethren Church, viz. President, Secretary, Trustees were also present at the said meeting. The resolution was passed as aforesaid and all six uniting denominations merged to form CNI at the inaugural function at Nagpur on 29.11.1970 by submitting the necessary resolutions of merger passed in their authentic governing bodies and signed by their authorised office bearers, and accepted the Plan of Church Union in India and Pakistan, 4th revised edition, 1965 (4th Plan for short) along with the constitution of CNI mentioned therein at part-I and became constituent of CNI from the day of inauguration i.e. 29.11.1970 onwards. All their members became members of the united church i.e. CNI which includes defendant No.1 to 4 and their associated of Special Civil Suit No.72/1979. Under the arrangement mentioned in the 4th Plan interim working arrangement was carried out within all the churches which merged into the CNI. This interim arrangement continued upto 7.10.1977. 2.7 A splinter group being less than 5% of the members of the former Brethren Church held a meeting against the Constitution of CNI on 26.11.78 and purpotedly decided to sever their connections with the CNI with effect from 1.12.78 and to function thereafter as the Brethren Church, according to the constitution of the former Brethren Church. Thereafter the said splinter group created disputes and differences with the representative body of the CNI, viz. Executive Committee of the Gujarat Diocese and stated functioning in the name of the so-called Brethren Church, and started collecting funds, donations etc. in the said name. 2.8 Being aggrieved and dissatisfied with the said action, the appellants No.1 to 4 original plaintiffs filed a suit being Special Civil Suit No.72/79 before the learned Civil Judge (S.D.), Bharuch, on 25.7.79 for certain reliefs after narrating in extenso their aforesaid events and the disputes, differences and conflicts between the splinter group and the CNI. It claimed the following reliefs: (a) It may please be declared that the former First District Church of Brethren has ceased to exist. (b) It may please be declared that the Church of North India is the legal continuation and successor of the First District Church of Brethren together with the right, title, claim, interest in or over its properties and the constitution, decisions and resolution of the Church of North India, its Synod and Gujarat Diocesan Council are binding on all the Pastorates in Gujarat which were functioning as local churches or congregations under the First District Church of Brethren. 2.9 Subsequently CNI Churches, the appellants No.5 to 21 herein applied to be joined as parties of the suit and were impleaded as defendants No.5 to 21. The appellants defendants had filed a written statement supporting the appellant plaintiffs case and prayers as set out in the plaint. Respondent No.4 to 7 also applied to be joined as parties and they were joined as defendants No.22 to 25. They opposed the prayers made by the appellants plaintiffs in the suit. 2.10 Shri Maganlal Balsari - the defendant No.4 filed his written statement at Exh.23 and contested the suit. He admitted the facts upto the publication of the 4th plan of union in 1965. However, he contended that there was no question of dissolution and that the recommendation was for formation of Union of all the Churches and Church of Northern India to represent the union. According to him, the local churches had to give their opinion on the proposal for union on or before 30.6.1988 and by that time only 13 congregations had given their opinions out of which 11 accepted the proposal for union. Remaining 8 congregations gave their opinion in favour of the union after 30.6.1968, which according to the defendant No.4 could not be accepted. It was therefore contended that 2/3 of the 21 congregations had not expressed their opinion on or before 30.6.68 and hence there was no valid acceptance of the proposal to join union. The defendant contended that there was no dissolution of Brethren Church. He further contended that the appellant had no right to file the suit, that the resolutions of 1968 and 1970 were illegal, invalid and void. That the defendants had a right to part company from CNI and had a right to revise the Brethren Church. That the CNI was not the legal continuation and successor of the first district church of Brethren. That the reliefs claimed by the plaintiffs were against public policy and were hit by Articles 25-26 of the Constitution of India. That the court had no jurisdiction to entertain the suit as it does not relate to a civil dispute. That the suit is bad for non-joinder of parties. That the suit is not maintainable as the appellant had not obtained necessary permission from the Charity Commissioner under Section 80 of the Bombay Public Trust Act. 2.11 The parties led evidence and ultimately the trial court before proceeding to determine the questions involved in the matter was pleased to issue a notice to the Charity Commissioner under Sec.56B of the Bombay Public Trust Act, as it felt that the suit involved questions against public charitable purpose. 2.11(A) The Charity Commissioner filed a written statement at Exh.132. In the said written statement it was specifically contended that in view of the BPT Act, the question whether or not a trust exists and such trust is a public trust or particular property is the property of such trust, is to be decided exclusively by the Deputy or Assistant Charity Commissioner appointed under the Act. After due inquiry as provided under the Act, the Assistant Charity Commissioner, Bharuch, has registered "the First District Church of Brethren" as a public trust at No.E-643 (Bharuch) under the Bombay Public Trusts Act, 1950. The decision of the Assistant Charity Commissioner, Bharuch unless set-aside as provided under the Act is final and conclusive. It was further submitted that the jurisdiction of the Court is also barred under Section 80 of the Act and therefore the plaintiffs are not entitled to the reliefs as prayed for by them and the suit deserves to be dismissed. The said written statement was filed on 10th April, 1981. 2.11(B) On pleadings of the parties, the learned trial Judge framed issues at Exh.117. After recording the evidence of the parties and after hearing the learned advocates for the parties the learned trial Judge by his judgment and decree dated 31st March, 1984, decreed the suit of the plaintiffs. The learned trial Judge has held as under: (a) The plaintiffs had a right to file the suit. (b) All the six Uniting Churches were dissolved and they had united and had become one church viz. The Church of North India. (c) The Brethren Church was also dissolved and ceased to exist as a separate entity. (d) The defendant Nos.1 to 4 failed to prove the resolutions dated 19.2.68 and 17.2.70 were illegal or invalid. (e) It was not proved that these was no valid consent given by 21 congregations. (f) The defendants No.1 to 4 failed to prove that they could part company from C.N.I. and that they had a right to secede. (g) That the defendants No.1 to 4 failed to prove that they had a right to revive the Brethren Church. (h) The C.N.I. is the legal continuation and successor of the first district church of Brethren. (i) That the reliefs claimed by the plaintiffs were not against public policy. (j) The Civil Court had jurisdiction to entertain the suit. (k) The suit was not bad for non-joinder of parties. (l) The suit is maintainable without permission of Charity Commissioner u/s 80 of the BPT Act. (m) The suit was not barred u/s.80 of the BPT Act. (n) The plaintiffs were entitled to the reliefs claimed. 2.12 Being aggrieved and dissatisfied with the said judgment and decree of the trial court, the original defendants and present respondents had filed Regular Civil Appeal No.72/84 in the District Court at Bharuch. 2.13 Thereafter, the learned Assistant Judge, Bharuch decided the said appeal against the present appellants by his judgment and decree dated 11.8.86. The learned Judge has held as under: (a) The Brethren Church was not dissolved and had not ceased to exist. (b) The Civil Court had no jurisdiction to entertain the suit. (c) The suit was barred u/s.80 of the BPT Act. (d) The plaintiffs had no right to file the suit. (e) The defendants failed to prove that they could part company of C.N.I. and that they had a right to secedes. (f) The defendants failed to prove that they had a right to revive the Brethren Church. (g) The C.N.I. was not proved to be a legal continuation and successor of the first district church of Brethren. (h) The reliefs claimed in the suit were not against public policy. 2.14 Being aggrieved and dissatisfied with the said judgment the present appellants preferred an appeal under Section 100 of the Code of Civil Procedure being Second Appeal No.303/86 before this Court on December 1986 with four substantial questions of law which reads as under: (1) Whether a society registered under the SR Act would stand dissolved on complying with the formality mentioned in Section 13 of the SR Act? If yes, whether the facts that the society is a Public Trust under the BPT Act would make any difference? (2) Whether the civil court has jurisdiction to entertain and try the suit for declaration the a society registered under the SR Act has been dissolved and is no longer in existence? If yes, whether the facts that the society is a Public Trust by virtue of the inclusive definition of Public Trust in the BPT Act would make any difference? (3) Whether there is any real or apparent conflict between the provisions of the SR Act and the BPT Act in relation to the formalities for dissolution of a society (which is also a Public Trust) and with regard to the forum which can decide the question? If yes, how can that inconsistency be resolved? (4) Whether the plaintiff has no right to sue? 2.15 However, when the appeal was admitted on 19th January, 1987, this Court framed following substantial question of law. (1) Whether after complying with the formalities as mentioned in Sec.13 of the S.R.Act, whether provisions of the Bombay Public Trust Act will be required to be complied with to decide as to whether the society which is dissolved exists as a Trust under the Bombay Public Trust Act? CONTENTION OF MR.K.H.KAZI, L.A. FOR THE APPELLANT 3. Mr.K.H.Kaji, learned Senior Counsel with Mr.Makwan, learned advocate has invited my attention to the provisions of the Societies Registration Act, 1860 (`S.R. Act' for short) particularly sec.5 and 13 of the Act which reads as under: "Sec.5 Property of society how vested :- The property, movable and immovable, belonging to a society registered under this Act, if not vested in trustees, shall be deemed to be vested, for the time being, in the governing body of such society, and in all proceedings, civil and criminal, may be described as the property of the governing body of such society by their proper title." "Sec.13 Provision for dissolution of societies and adjustment of their affairs :- Any number not less than three-fifths of the members of any society may determine that it shall be dissolved, and thereupon it shall be dissolved forthwith, or at the time then agreed upon, and all necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities according to the rules of the said society applicable thereto, if any, and if not, then as the governing body shall find expedient, provided that, in the event of any dispute arising among the said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal Court of original civil jurisdiction of the district in which the chief building of the society is situate, and the Court shall make such order in the matter as it shall deem requisite: Provided that no society shall be dissolved unless three-fifths of the members shall have expressed a wish for such dissolution by their votes delivered in person or by proxy, at a general meeting convened for the purpose." 3(A) It was submitted that Section 13 of the SR Act which provided that the society may be dissolved by majority of 3/5th of the members of the society at a general meeting convened for the purpose. 3.1 He has also invited my attention to Memorandum of Association of the First District of the Church of the Brethren in India particularly clause 4 which reads as under: "Cl.4 If upon winding up or the dissolution of the District Meeting of the First District of the Church of the Brethren in India there remain, after the satisfaction of all its debts and labilities, any property whatsoever, the same shall not be paid to any individual church or individual of the District, but shall be transferred to some board, institution or institutions, having objects similar to the Society, to be determined by a 3/5 vote in the last business session of the Society before the time of dissolution, and in default of that, by the High Court of Juricature of Bombay." 3.2 He has also invited my attention to Sec.26 of the Bombay Public Trusts Act, 1950 (`BPT Act' for short) which provides that the Court to forward copy of decision to Charity Commissioner. 3.3 The learned counsel for the appellants has made following submissions: (1) That the Brethren Church was a society and it was validly dissolved and was merged with the CNI with all its properties etc. by their resolutions dated 17.2.70 passed in total compliance with section 13 of the SR Act and Rule 4 of the General Rules and the Regulations of its Memorandum of Association of the Brethren Church framed under the SR Act. This decision does not fall within the scope of inquiry of the Charity Commissioner under the BPT Act merely because the society is a deemed Public Trust covered by Section 2(13) of the BPT Act. (2) In case the said dissolution and merger and transfer of the properties to CNI is obstructed to by so called members of the former society now dissolved, the said dispute does not fall within the scope of the Charity Commissioner under any of its provisions and can only be decided by a civil court of competent jurisdiction. (3) The Charity Commissioner is not competent to decide the question whether the society is dissolved or not in compliance with its Memorandum of Articles and Rules and Regulations. Such question in relation thereto is within the jurisdiction of the civil court. (4) Once the civil court decides this issue, the Charity Commissioner has to implement the same under sec.26 of the BPT Act by amending and altering its registration in that behalf. The jurisdiction of the Charity Commissioner with regard to the society may pertain to in the realm of administration of the society or its management but not to its existence or dissolution which has to be carried out in terms of the SR Act. (5) In view of the findings of both the lower courts that factually the resolutions were passed by the former Brethren Church on 17.2.70 to dissolve and merge itself with the CNI, the same has only to be given effect to by the Charity Commissioner under section 26 of the BPT Act. He is not to decide anything nor to hold any inquiry as contemplated by section 19 or 22 of the BPT Act. (6) The nature of the suit filed in the instance case and the prayers are not for a finding that the Trust is dissolved or is extinguished but only that the society named as the Brethren Church has ceased to exist because of passing of appropriate resolution under sec.13 of the SR Act read with rule 4 of the general rules of the society. Similarly, the declaration that the CNI is a legal continuation and successor of the former Brethren Church is also consequence of the extinction of the Brethren Church. (7) The primary reliefs in the plaint are permanent injunction preventing the former members of the Brethren Church from acting contrary to the decision of CNI and for a further permanent injunction against the said members from acting in the name of the Brethren Church or from collecting funds etc. The nature of the suit has to be decided by looking at the plaint as a whole and the substance of the various reliefs claimed as observed by the decision of the High Court of Gujarat. It is, therefore, submitted that the suit does not fall within the scope of Sec.80 of the BPT Act as the prayers claimed are outside the scope of the inquiry and the decision of the Charity Commissioner under the BPT Act and therefore, does not fall within the scope of the BPT Act. (8) The suit is in substance, a suit for permanent injunction against the persons of splinter group who are obstructing the possession and management of the properties of CNI which after the dissolution of the former Brethren Church and its merger with CNI were part of the properties of CNI. It may be noted that such obstruction was at the instance of few members of the former Brethren Church, but they are in different position. Legally, they are trespassers against whom a suit can be validly filed in civil court as held by this Court in the case reported in 1966 GLR 1011. (Re.Malek Chitta Rasul vs. Pathan Mohmedkhan Kalukhan). (9) Both the lower courts have held that the resolutions regarding dissolution and merger have been passed in compliance with the provisions of the SR Act and that it is not open to the respondents to contend that they can part company of CNI, they can secede from CNI or revive the Brethren Church. This concurrent finding is based on the fact that the provisions of the SR Act have been properly complied with for the dissolution and merger of the Brethren Church.