IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 10.08.2009 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM AND THE HONOURABLE MR.JUSTICE R.SUBBIAH O.S.A.Nos.142 to 144 of 2009 1. S.D. Joseph 2. A.D.Sundararaj 3. D.S.V.J. Vasan Members of Madras YMCA .. Appellants in OSA 142 to 144/09 Vs. 1. E.Ebinesan 2. J.S.Jeyakardoss 3. YMCA Madras Trust, rep. By its Trustee, Dr.G.Ebinesan Young Men's Christian Association, No.223, NSC Bose Road, Chennai – 600 001. 4. Crystal Creations (India) Pvt.Ltd. A1-92, 9th Main Road, Anna Nagar, Chennai – 600 040 rep. By its Director, Sarah Suchitra Savariragan.. Respondents 1 to 4 in all the OSAs 5. R.Reginald Raj Member, Madras YMCA, S/o J.C.Raj, No.5, Rajavelu Lane, Royapuram, Chennai – 600 013...5th respondent in OSA.143/2009 6. Alex Charleston, Member – Madras YMCA, S/o Y.D.Charleston, No. 14-A, Brewery Road, Shenoy Nagar West, Chennai – 600 030. 7. F.C.Jacob Sumithiran, Member – Madras YMCA, S/o Rev. Barnabas Christian, No.S-56, Anna Nagar, Chennai – 600 040 ..Respondents 6 & 7 in OSA.143/2009 & Respondents 5 & 6 in OSA.144/2009 https://hcservices.ecourts.gov.in/hcservices/ These appeals have been preferred under Order XXXVI Rule 11 of O.S. Rules r/w Clause 15 of Letters Patent (1) to set aside the decree and judgement dated 30.4.2009 passed by the learned single Judge in C.S.No.862 of 2003 (in OSA 142/09)(2) To set aside the fair and decretal order dated 30.4.2009 passed by the learned single Judge in Application No.5385 of 2003 in CS.No.862 of 2003 and (in OSA 143/09)(3) to set aside the fair and decretal order dated 30.4.2009 passed by the learned single Judge in Application No.303 of 2004 in C.S.No.862/2003 (in OSA 144/09) respectively. For Appellants : Mr.R.Thiagarajan, Senior counsel for Mr.Isaac Mohanlal For Respondents : Mr.R.Krishnamoorthy, Senior Counsel for Mr. S.Raghunathan for R1 to R3 Mr.V.T.Gopalan, Senior counsel for Mr.G.Krishnakumar for R4 COMMON JUDGMENT (The judgment of the Court was delivered by M.CHOCKALINGAM, J.) This judgment shall govern all these three appeals viz., OSA.No.142 of 2009, OSA.No.143 of 2009 and OSA.No.144 of 2009. 2. O.S.A.No.142 of 2009 challenges the grant of permission in favour of the plaintiffs in C.S.No.862/2003 while the other two O.S.A.Nos.143 & 144/2009 challenge the dismissal of revocation of leave originally granted in favour of the plaintiffs to lead the suit and for impleadment of the appellants. 3. The said suit was filed to grant for permission to YMCA to enter into, with the Developer, the memorandum of understanding, as per the annexure and also agreements as may be required for the purpose of joint development and construction of the buildings over the scheduled mentioned property and to grant permission to the plaintiffs to execute lease deed or deeds in favour of the developer and its nominee or assignee of 53/100th share of the said property for a term not exceeding 99 years on the following allegations. 4. The first plaintiff/first respondent herein was the General Secretary of Y.M.C.A, a registered Trust under the Societies Registration Act, while the second plaintiff/second respondent herein was a Trustee. YMCA has been rendering yeomen services in and around Chennai. YMCA is managed by Board of Directors, while its properties are managed by the Board of Trustees which has landed property comprised of 19 acres situated at 4/341 Old Mahabalipuram Road, Kottivakkam, Chennai which is described in the scheduled to the property. Pursuant to the proposal to develop an extent of 10 acres, out of 19 acres, it desired to enter into joint development agreement with M/s. Crystal creations India Private Limited. The developer also gave consent to invest its own fund for development of the property. YMCA does not have resources nor liquidity to develop the property. On perusal of the offers from different companies, M/s. Crystal Creations Private Limited was selected for the said purpose. The Board of Directors and Board of Trustees decided to accept the said offer on 03.09.2003 and 15.9.2003 respectively. The said 10 acres https://hcservices.ecourts.gov.in/hcservices/ were agreed to be developed in the ratio of 47:53. The YMCA was to retain 47% while 53% being leased to the developer. A lease deed has to be executed for 5.24 acres out of the total extent of 10 acres for a period of 99 years in favour of the developer. The developer would pay a sum of Rs.2 lakhs per annum as lease rental for a period of 33 years and thereafter, the increased rent, 10% over and above the last amount lease rent paid. On the expiry of the period of 99 years, the ownership of the building would revert to YMCA. Under such circumstances, permission is sought for under Section 92(1)(f) of the Code of Civil Procedure. 5. The defendant/developer has supported the case of the plaintiffs/respondents 1 & 2 herein. While the matter stood thus, number of applications were filed, one for revoking the permission originally granted, while the other to implead the appellants herein. 6. The learned senior counsel appearing respondents raised the following contentions. The respondents were the former Directors and full members of the YMCA. The property was highly valuable. It would be not lesser than 30 lakhs per ground. Neither the General Body has given sanction for the said proposal nor the Board of Directors have authorised the plaintiffs to institute the suit. The Board did not know about the nature of the joint venture. It was actually alienated behind the back of the Board. The property is more suited for establishment of professional college. The said alienation was highly detrimental and destructive of the objects and prospects of YMCA. The applicants have no authority to file a suit and it was not maintainable. The suit property is in active use for the institution for conducting sports. The YMCA was not in need of any funds and it has got huge deposits in banks. The plaintiffs should have approached the Court invoking section 92 of C.P.C. before commencement of the transaction. The plaintiffs have entered into joint venture agreement. They have negotiated the terms, share and price also and only thereafter they have approached the Court which would clearly indicate lack of bonafide of their part. The plaintiffs, with ulterior motive, have caused publication only on the day prior to the date of hearing. All the trustees should have arrayed as parties to the suit. The leased out property for the period of 99 years would neither be prudent nor reasonable. It is highly impracticable to restore status quo ante after the period 99 years since there is all possibility of creation of third party interest in the property by the promoters. Under such circumstances, the respondents have got to be added as party and the leave granted to the applicant to file the suit under section 92 of C.P.C. has got to be revoked. 7. On the above pleadings, the learned Single Judge raised four points for determination as found in the judgement and no oral evidence was adduced on either side. 8. After hearing the arguments advanced, the learned Single Judge granted permission to enter into Memorandum of Understanding with the developers and also to execute the lease deed in favour of the developer in respect of 53/100th share for the terms not exceeding 99 years while all the applications made were dismissed. https://hcservices.ecourts.gov.in/hcservices/ 9. Advancing the arguments on behalf of the appellants, the learned Senior counsel Mr.R.Thiagarajan would submit that the learned trial Court should have dismissed the suit seeking permission under section 92 of CPC. The developer M/s. Crystal Creation Private Limited was impleaded as a defendant in the suit. The rights of the parties under the agreement cannot be decided under Section 92 of CPC. The application to revoke the leave was made in the year 2003 and the same was pending. Without deciding the application, the defendant M/s. Crystal Creation Private Limited was impleaded as defendant in the suit in the year 2008 which was also beyond the scope of Section 92 CPC. The appellants are the full members of the Madras YMCA. Hence, they had interest to protect and preserve the properties of the Institution. 10. Added further learned counsel the dismissal of the application for impleadment by the appellants was erroneous. Had they been impleaded as a party, they would have established that the averments and the documents filed by the plaintiffs were incorrect and the proposed joint venture was adverse to the interest of the Trust. The suit was filed by Mr.J.Ebinesan as General Secretary and by J.S.Jayakardoss as the President of the Madras YMCA without adding the other Trustee either as plaintiffs or defendants. It is true the Trust was impleaded as the defendant but was six years after the institution of the suit. The Directors who were constructive trustees were not impleaded. The Trust has no legal entity but the trustees are legal entities. In the absence of a clause in the Deed, all the Trustees should be parties to deal either as plaintiffs or defendants. It was contended before the trial Court that the plaintiffs had no authorisation as required from the Board of Directors was unsustainable. As per the bye laws the Board of Directors were supreme body and only if the Board passes resolution, the Trustees could act. At the time when the suit was filed no one was shown as defendant and they were impleaded after six years of the institution of the suit, that too, only after serious objections raised by four Directors and five full members. 11. Added further learned counsel, the Court by order dated 21.11.2003 directed the plaintiffs to give notice by publication in leading dailies. This was intended to invite objections, if any, from anyone having interest in the Society and the Trust against the proposed deal and to file their objections to the Court either in person or through their counsel on or before 5.12.2003. The suit was posted for orders on 5.12.2003. While the matter stood thus, the plaintiff deliberately published the notice barely a day before the matter was posted, that was, on 4.12.2003 stating that C.S.No.862 of 2003 was filed by the plaintiff under section 92 of C.P.C. seeking permission for developing an extent of 10 acres of land belonging to YMCA situate at Kottivakkam and for the purpose of leasing an extent of 53/100th share of the said property to M/s. Crystal Creations (India) Private Limited and assigns for a period not exceeding 99 years. While the direction was issued to the plaintiff to give publication by order dated 21.11.2003, it was ordered that any person interested in the Trust having any objections to the proposal could file their objections in the Court on or before 5.12.2003. It is also stated in the publication that the suit was posted for hearing on https://hcservices.ecourts.gov.in/hcservices/ 5.12.2003. It was observed by the learned Judge that it is only a mere lapse on the part of the plaintiffs in not publishing the above notice as specified by the Court. But it was deliberate, wilful and fraudulent play on the part of the plaintiffs to avoid the people raising objections. It is further observed by the trial judge that the application filed by the appellants seeking to implead themselves as party to the proceedings have been filed with ulterior motive to prolong the litigation. The ulterior motive was not explained by the plaintiff. The appellants never protracted the matter but for obvious reasons the plaintiffs protracted the matter for six long years. This was not considered by the trial Court. 12. Added further learned counsel, when the appellants came to know about the proposal and the deal and that too, meant for 99 years, they immediately made an application that they should be added as parties to raise their objections but that application was also dismissed. When permission was sought for under 92 CPC, it cannot be granted mechanically or as a matter of course, the the motive behind the institution of the suit must be taken into consideration, that too, especially in view of the fact that no defendants were arraigned in the suit. The suit has been instituted without the knowledge and approval of the Board of Directors. The Board of Directors is the managing committee but they did not authorise the plaintiffs to institute the suit. The permission of the Board was neither sought for nor given and the plaintiffs have no authority to enter into joint venture. The trial Judge has observed that the order granting leave is administrative in character and therefore, it does not affect the rights and interest of the parties concerned. The order granting leave was purely administrative and the leave to sue is granted and objections if any raised have to be considered judiciously before revoking the leave. Hence, it has to be borne that only the extracts of the minutes of the said meeting of the Board of Directors on 3.9.2003 was produced against the demand for the original since at the said meeting the Board of Directors have no details about the transaction. 13. Further, the learned Single Judge has observed in its order that the landed property are lying vacant and therefore, there was possibility of encroachment by the miscreants. But this observation is not correct since there is a compound wall and in the property number of institutions are being run as on today. Hence, no question of encroachment would arise. There is absolutely no need for the alienation of the property at this juncture as there are number of institutions being run in that part of the property for decades. They were actually used for the institution and it is a place where the professional college could be established but this was not taken into consideration and even since there was no need or urgency, in particular, to lease out the property for a period of 99 years, which would be detrimental to the interest of the Trust and which was not taken into consideration by the trial Judge. Further, a criminal case for the breach of trust and for misappropriation were actually initiated against the first plaintiff and also criminal case was pending. Under such circumstances, they could not even continue as General Secretary or the President respectively. Their continuance in office is unauthorized and illegal. Further, in the instant case, it was brought to the notice of Court that the matter was actually https://hcservices.ecourts.gov.in/hcservices/ pending before the Court of criminal law and the Trustees and Directors were parties to the meeting in which resolutions have been passed. 14. Added further learned counsel, needless to say, the suit under section 92 CPC being a representative suit is binding not only the parties thereby but also the others who are interested in the Trust. All the co-trustees must join in a suit unless instrument of Trust otherwise provides. The Trusts are not legal entities. The trustees alone are legal entities and the office of the trust is one irrespective of the number of trustees and hence, all the trustees should join either as plaintiffs or defendants in the suit or proceedings relating to the Trust or its properties. But the trial Judge has erroneously granted permission and also dismissed the application for revocation. The application for impleadment of the appellants, for the reasons stated above, should have been allowed but it has been refused. In view of the above, the learned senior counsel would submit that the order of the learned trial Judge has got to be set aside. 15. Advancing the arguments on behalf of the respondents Mr.R.Krishnamoorthy, the learned senior counsel, would submit that YMCA is a registered Association registered under the Societies Registration Act. The management of YMCA is vested with the Board of Directors but the properties is vested with YMCA Madras Trust. The Board of Directors comprises of 21 Directors, one third of whom are elected annually at the Annual General Meeting. The term of office of a Director is for a period of 3 years. This case was filed for the purpose of getting permission to enter into a Memorandum of Understanding in respect of the annexure as found in Annexure 'D' for the purpose of joint development and construction of the building. It can executed lease deed in favour of the Developers in respect of 53/100th share of the trust property for the term not exceeding 99 years. 16. As regards the first contention raised by the appellant that actually publication was ordered by the Court on 21.11.2003 and the case was posted on 5.12.2003 but the publication was made on 4.12.2003, therefore, it is found to be defective and there was no proper publication made, under such circumstances, originally, the leave granted should have been revoked are concerned, this contention has got to be discountenanced. According to the learned counsel, granting leave is administrative in character, apart from that, out of four trustees, two trustees have filed the suit. Thereafter, the trust was also added as a party. When the resolution was passed, all the trustees participated in the same. So long as the property actually vested in the hands of the Trust, the Trustees are competent to deal with the matter. They have acted with utmost care. Even the scheme does not require that they must be placed before the General Body of the Trust. The Trustees have participated before passing resolution. 17. In the instant case, the developer has also made an application to participate in the proceedings and he has been shown as a defendant. At this instance, it is true that the appellants actually made application to become as parties. Three or four https://hcservices.ecourts.gov.in/hcservices/ trustees have participated in the resolution approving the development. With ulterior motive, they came forward to add them as parties. Once there are no other members or Directors to oppose the same, merely because of the publication made on 4.12.2003 when the case was to be taken up on 5.12.2003, it cannot be stated that any prejudice was caused. The learned counsel would further add, in the instant case as per the agreement between the parties, it was for a period of 99 years. The YMCA Trust does not have the sources to develop the property. The property is situated outside Madras. An agreement have entered into for 10 acres of property. Now, 5.24 acres of land was given for the purpose of promotion and two acres was kept for car parking, and in so far as the understanding between the parties for the promotions was actually at the rate of 53:47 i.e., 53 % being leased out to the promoter and 47% to be retained by the Trust. It is also pertinent to point out that in the share relating to the ownership of the property if the construction is made, 53% of the constructed portion would be in the hands of the promoter, only as a lessee, for a period of 99 years and thus, the property would be vested in the hands of the developer for a period of 99 years. Thus, no inch of property would be vested in the hands of the developer and it would be beneficial to the Trust. 18. Added further learned counsel, it is the case where permission was sought for and the trial Court has considered all the contentions putforth. In the counter affidavit it is averred that the trust was not having sufficient means and the arguments advanced before this Court was that out of the properties, two are mortgaged and the properties are likely to be brought for sale under The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and it would be quite indicative of the fact that the trust was not having sufficient sources. Under such circumstances, if development was made, it would be beneficial to the interest of the trust which would fetch Rs. 2 lakhs per year which will continue for 33 years and when 33 years was over, 10% rent has to be increased. Under such circumstances, from any point of view, it cannot be stated that it is detriment to the interest of the Trust. The trial Court has taken all the contentions putforth and having found that it is for the interest of the Trust, no impediment was felt by the trial Judge to grant the relief . The order of the trial Court, insofar as permission is granted and the denial of the request by the appellants to add them as parties are concerned, the trial Judge has taken a correct view. Four of the retired Directors have come up with an application only with a view to prolong the litigation . It is clearly found that they have come forward with an application with ulterior motive to add them as party which lacks bonafide. Considering the same, the trial Judge has dismissed the application and the order passed by the trial Judge has to be sustained by this Court. 19. Advancing the argument on behalf of the promoter/defendant, Mr.V.T.Gopalan, the learned senior counsel would submit the application was filed by the promoter to add him as defendant and after hearing the parties he was added as defendant. It is true that this defendant supports the case of the plaintiffs. He has putforth the proposal and only after the order of this Court, he has parted with a sum of Rs.2 crores with the Trust. It is true that https://hcservices.ecourts.gov.in/hcservices/ publication has been made and there are some irregularity but it is curable. Further, so long as all other procedural formalities are concerned, the plaintiff has sought the Court's permission for approval of the Board of Directors and all the Trustees have come forward and the Court has also considered all the aspects of the matter for granting the relief, under such circumstances, the defendant who is the third party and who was also party to the proceedings before the trial Judge, has acted pursuant to the order of the Court. Under such circumstances the order of the trial Judge has got to be confirmed. 20. The Court paid its anxious consideration on the submissions made. 21. It is not in controversy that the respondent 1 to 3/plaintiffs have sought for permission under Section 92 of the Code of Civil Procedure to enter into Memorandum of Understanding with the developer and to execute lease deeds in favour of the developer of 53/100th share to the property for a term not exceeding 99 years. 22. It is a case where no oral evidence was adduced. The Court looked into the materials available and heard the submissions made. The trial Court dismissed two applications, one for adding the appellants as parties to the suit and the other application to revoke the permission originally granted in favour of the plaintiff, and ordered the application for leave to sue. The learned counsel for the parties took the Court to the Scheme and also to the orders of the Court passed previously in the original side by which it could be seen that the Management of YMCA is vested with the Directors while all the properties of YMCA are vested in the hands of the Trust. It is also not in controversy that at the initiation of the proceedings, the trustees have brought forth the suit and two of the trustees were actually not added as parties. Pending the suit ,an application was made by the appellants that they should also be added as parties and they should also be heard and the leave which was granted originally by the Court should be revoked on the reason adduced by them. The developer had made applications to add him as a party to the proceedings and he has also added as a defendant. At this juncture, it has to be pointed out that an application was made by the defendant to add him as a party and the same was ordered by the Court when the defendant/developer did not have any interest or right to argue in his favour in the suit property but he