THE HON’BLE SRI JUSTICE V.V.S.RAO APPEAL SUIT No.150 OF 1991 AND TRANSFER A.S.No.1474 OF 2001 % 29.12.2010 # Dr K.Subbaiah … Appellant VERSUS $ C.N.Krishnamacharlu, S/o.Narasimha Charlu and others ...Respondents < GIST: > HEAD NOTE: !Counsel for Appellant : Sri M.N.Narasimha Reddy and Sri C.Sadasiva Reddy ^Counsel for Respondents: Sri P.Jagadish Chandra Prasad Sri C.Subba Rao ? Cases referred 1. (2003) 8 SCC 413 : AIR 2003 SC 3397 2. (2004) 1 SCC 287 : AIR 2003 SC 3789 3. (2004) 10 SCC 779 4. (1997) 7 SCC 567 : AIR 1997 SC 2930 5. (1996) 8 SCC 128 : AIR 1996 SC 869 6. (2010) 4 SCC 301 7. (2009) 10 SCC 564 8. (2008) 11 SCC 573 9. (2007) 11 SCC 126 10. (2005) 11 SCC 45 11. (2005) 4 SCC 530 12. (2005) 3 SCC 551 13. (2004) 6 SCC 531 14. (1978) 1 SCC 405 15. (1975) 3 SCC 322 16. (1991) 2 SCC 180 17. 1989 Supp (1) SCC 487 : AIR 1989 SC 1834 18. (2005) 5 SCC 1 19. (2008) 10 SCC 227 20. (2008) 8 SCC 358 21. (2006) 12 SCC 607 22. (2005) 2 SCC 515 23. (2009) 5 SCC 313 24. (2008) 5 SCC 58 25. (1995) 1 SCC 560 26. (1985) 3 SCC 398 27. (1976) 2 SCC 521 28. (2010) 2 SCC 273 29. (2008) 7 SCC 353 30. (1992) 3 SCC 169 31. AIR 1979 SC 1628 32. (1900) A.C. 260 33. (1957) A.C. 436 : (1957) 1 All ER 49 (HL) 34. AIR 1937 Nag 65 35. AIR 1952 Mad 559 : (1951) II MLJ 43 36. (1977) 3 SCC 474 : AIR 1977 SC 734 37. (2009) 13 SCC 301 : 2009 (2) ALD 112 (SC) 38. (1996) 9 SCC 388 : AIR 1996 SC 2220 39. (2004) 9 SCC 734 : AIR 2004 SC 2428 40. AIR 1953 SC 7 41. AIR 1976 SC 794 42. AIR 1959 SC 443 43. AIR 1964 SC 529 44. 2007 (2) ALD 435 45. AIR 1964 SC 1323 46. AIR 1951 SC 103 47. AIR 1951 SC 139 48. AIR 1953 SC 7 49. AIR 1963 SC 1703 50. AIR 1994 SC 1202 51. 1966 (1) An.W.R. 272 52. AIR 1982 Pat 32 53. AIR 1964 SC 587 THE HON’BLE SRI JUSTICE V.V.S.RAO APPEAL SUIT No.150 OF 1991 AND TRANSFER A.S.No.1474 OF 2001 29.12.2010 Between: Dr K.Subbaiah …. Appellant AND C.N.Krishnamacharlu And others. … Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO APPEAL SUIT No.150 OF 1991 AND TRANSFER A.S.No.1474 OF 2001 COMMON JUDGMENT: INTRODUCTION These two appeals arise out of the same Judgment of the trial Court. A.S.No.150 of 1991 is filed by defendant No.10 and the other transferred appeal is filed by defendants 12 and 13, the legal representatives of defendant No.8, who died during pendency of suit. The appeal filed before the Court of the District Judge, Kadapa stands transferred to this Court. The dispute in these cases is in respect of land admeasuring 0.67 cents in survey No.455 (suit schedule property) in Proddatur town. The persons who were allegedly members of Sundaracharlu Club (the club, for brevity) on the one hand and the first and second generation legal heirs of late Curram Sundaracharlu (CSC) are fighting this three decades long drawn Court battle for the property. In this Judgment, the parties are referred to as they are arrayed in the suit. PLEADINGS C.S.Narasimhacharlu (CSN), C.S.Krishnamacharlu (CSK) and C.N.Srinivasacharlu (CNS) are sons of CSC. Plaintiffs 1 and 2 are sons of CSK and third plaintiff is son of CSN. They instituted the suit registered as O.S.No.69 of 1980 on the file of the Court of the Subordinate Judge, Proddatur, which was transferred as O.S.No.68 of 1985 to the Court of the Subordinate Judge, Kadapa. It was instituted for declaration of plaintiffs right to the suit schedule property together with open site, constructions, structures and improvements made thereon, to declare the right of the plaintiffs and first defendant to the portion of the suit schedule in occupation of defendant No.8 and for a direction to defendants 12 to 18 to deliver possession of the property. Their case in the plaint is as below. The suit schedule property was originally owned by CSC. He died in 1922, leaving behind his three sons. On 13.05.1938, CSN and CSK executed a registered document in favour of M/s.V.Shankara Rao, B.Bala Narayana Reddy and Ananda Rao, for the purpose of conducting the club in the memory of CSC, i.e., Sundaracharlu Club. The registered deed under which the property was demised was subject to the condition that the property shall be used for the purpose of playing tennis and taking up recreational activities. It was stipulated therein that if for any reason, the club activities are stopped, the property will revert to the donors or their legal heirs. The donees shall have no right of alienation. The property shall be used to run the club in the memory of their father CSC with a view to promote sports, games and goodwill among the public of the town. Four members of legal profession, namely, D.Krishna Rao, V.Shankara Rao, K.Bala Narayana Reddy and Ananda Rao constituted a trust. All of them were tennis players and were running tennis club in the local cotton press compound. As it was not conducive and convenient, they started ‘Sundaracharlu Club’. The trust Board took delivery of the possession and started running the club, which enjoyed good reputation. All respectable elite of the town were its members. In 1945, necessary rules, regulations and bye-laws were framed. Elections were to be held annually for choosing office bearers and members of Managing Committee to look after the administration of the club. After the demise of the members of the trust Board, the club was being managed by elected body till 1974. Thereafter, the dignified character of the club started fading away. The club fell into disrepute and ignominy. The administration fell into the hands of group of persons and thereafter there was no general body meeting to elect the office bearers. No list of persons is maintained and the respective members of the club became helpless to raise their voice. The club went into the hands of people with shady character. It became den for bad characters with criminal conduct. It became a private affair and was not running for the purpose for which the land was donated. The respectable and elite of the town frequently complained to the plaintiffs 1 to 3 as well as law enforcement authorities about the imminent danger which the club in the hands of shady characters was posing to general public and law and order situation in the town. There has been chain of events for over a decade of grave character like murders, attempt to murder and disturbance originated from the club premises as per the police record. Some of the offenders were arrested in the club premises as it became a joint for anti social activities like gambling, drinking, debauchery and it earned very bad name. Defendant 8 encroached upon a portion of suit schedule property on the northern side without any manner of right. The persons in management did not protest. Some members made efforts to remove the encroachments. A collusive settlement between the defendant 8 and persons in management was brought into effect after reference to first defendant as arbitrator. Defendant 8 agreed to leave the encroached portion except an extent of Acs.0.1½ cents as shown in the plaint plan. The said settlement is not binding on the plaintiffs and defendant 8 is liable to be evicted. As the purpose for which plaintiffs’ predecessors gave the land does not exist, the land must revert back to the donor’s family. Notices were issued on 14.07.1976 requiring the defendants to deliver possession of club premises. Defendant 10 sent reply on his behalf and on behalf of unnamed President and Secretary of the club. From 1973 till 1977, various groups began laying claims to the control and management of the club without any legitimate membership. There were violent incidents. Therefore, Inspector of Police, I-Town P.S., Proddatur instituted proceedings under Section 145 of Code of Criminal Procedure, 1973 (Cr. P.C.) being M.C.No.35 of 1978 before Sub Divisional Magistrate cum Revenue Divisional Officer, Jammalamadugu (RDO, for brevity). RDO passed interim orders on 19.09.1978 attaching the club under Section 146(1) of Cr.P.C. till the rights of the parties are decided by competent Court. All persons were restrained from claiming or entering the club. The Sub Inspector of Police attached the club on 21.09.1978 under Panchanama. A detailed enquiry was conducted by RDO in which plaintiffs stated that there are gross and grave violations of terms of the gift deed. The RDO passed final orders on 24.03.1979 confirming the interim order dated 19.09.1978 ordering that the attachment shall continue till the dispute is resolved by a competent civil Court. The Sub Inspector of Police was directed to hand over the club premises to successful parties after final adjudication. The club is therefore in custodia legis. Defendants 2 to 7 claimed and proclaimed to be the persons in charge of the club and therefore, they are impleaded. The plaintiffs reserved the right to implead other persons if necessary. Defendant 10 is influential and popular person who is making hectic efforts to take possession of the suit schedule property without any right. Therefore, he is impleaded as party to the suit. Defendant 11 is running elementary school in a portion of the suit schedule property unauthorisedly. He has no right to do so. As the Sub Inspector of Police is in possession of the suit schedule club, he is impleaded as defendant 9. Defendants 8, 10 and 11 filed written statements. Second defendant adopted the statement of defendant 11 and defendant 1 and defendants 2 to 7 remained ex parte. Be it also noted that during the pendency of the suit, plaintiffs 10 to 18 are added as legal representatives (LRs) of first plaintiff and defendants 4 to 9 are added as LRs of second plaintiff. Defendant 8 also died during the pendency and his LRs are on record as defendants 12 to 16. In the written statement, defendant 8 did not dispute about CSN and CSK executing a deed to perpetuate the memory of their father. He also does not dispute Sundaracharlu Club being run for the purpose for which the property was gifted. He alleges that the condition was onerous and being a clog, the same does not make the transfer a conditional one. He put up a cattle shed and hayricks and enjoyed site since 1934, by enclosing the same with a mud wall on the southern site. On the date of purchase, there is no compound wall on the southern site abutting the area known as Sundaracharlu thota. Defendant 8 is in possession continuously, uninterruptedly and knowledge of all the concerned and therefore, he perfected title by adverse possession as against the owners of Sundaracharlu thota. He denied allegation that he encroached upon the land of the club site. He, however, does not dispute the alleged resolution by the executive committee of the Club for settlement and ultimately, settlement between defendant 8 and the Club. As per the settlement, he was asked to shift the mud wall a little further towards north upto the line of electric and telephone poles adjacent to the south of the mud wall. Accordingly, he demolished wall and constructed pucca wall. The first defendant submitted a report that which was approved by the Club. The legal heirs of CSC, therefore, cannot raise any dispute. They are estopped from questioning the action of the club in settling the boundary dispute with defendant 8 who has not encroached upon any club land. In the written statement of defendant 10, who is a member of the Club, the following averments are made. The Club had been functioning properly and is being managed on sound lines. Suit schedule land was transferred on 13.5.1938 for running the Club in the name of Sundaracharlu, the father of the donors, for the purpose of outdoor games like tennis and indoor games, as a recreation for the elite of Proddatur town. There is nothing prohibiting taking up other activities. The first defendant is a member of the Club and he is aware that all the activities are being carried on as per the deed and the Club enjoys good reputation. The defeasance clause in the gift deed was never intended to enable the donors to resume possession and claim ownership for themselves. If some culprits entered the premises after the closure of the Club and use as a place of refuse, the Club members cannot be held responsible. When defendant 10 and others tried to change the office doors, rumours were spread and taking advantage of the same, plaintiffs pressed the matter for obvious reasons with a view to get the Club closed and reclaim the property which is worth Rs.6,00,000/- even by the date of filing the suit besides the building valued at Rs.1,00,000/-. The defendant 10 further pleaded that the Club is registered body with rules and regulations. Any allegations of mismanagement, maladministration, misapplication and misappropriation of funds are internal matters of the Club, which can be questioned by the members of the body and plaintiffs cannot have any say in the same. While admitting the proceedings under Section 145 of the Criminal Procedure Code, 1973 being M.C.No.35 of 1978, he stated that in spite of the same the Club is not defunct and the tennis court is being used every day from the date of resumption of possession by defendant 10 and other members. The plaintiffs have knowledge of the occupation of Club portion by defendant 8 and the efforts of first defendant to arbitrate the matter. The defendant 10 is taking all necessary steps for revival of the Club. The defendant 11 filed written statement alleging that he is not at all necessary party to the suit. He denied having taken possession of the Club property for running a school. ISSUES FOR TRIAL AND FINDINGS OF TRIAL COURT Based on the rival claims, the trial Court framed the following issues: 1. Whether the plaintiffs are the owners of the suit schedule property A B E F as shown in the plaint plan together with the super structure shown as G H I J? 2. Whether the plaintiffs and D1 are the owners of the portion marked as B C D E in plaint plan which is now in the occupation of the 8th defendant? 3. Whether the plaintiffs are entitled for the reliefs of declaration and recovery of possession as prayed for? 4. To what relief? During the trial, the third plaintiff, Krishnamacharyulu, deposed as P.W.1 besides examining two members; a retired Deputy Tahsildar as P.W.2 and a retired teacher and former Secretary of the Club as P.W.3. Exs.A1 to A12 were also marked. Defendants examined D.W.1 to D.W.7, who include one former President of the Club, one former Secretary of the Club, one former Secretary of the Tennis Club and a tennis ball picker of Tennis Court. The defendants also marked Exs.B1 to B4. Whether the plaintiffs are owners of suit schedule property with the super structure thereon? On this issue, the trial Court found in favour of the plaintiffs and held that in view of the defeasance clause the suit schedule property shall revert back to the legal heirs of CSN and CSK. On issues 2 and 3 also the findings were recorded in favour of the plaintiffs. The trial Court also found that Sundaracharlu Club which was under attachment till the date of the trial Court judgment, had no responsible person to hold elections and that nobody was interested in running the Club. ARGUMENTS OF APPELLANTS AND RESPONDENTS In these appeals, the Counsel for the appellant/defendant 10 in A.S.No.150 of 1991 and the Counsel for appellants/legal heirs of defendant 8, made the following submissions. Sundaracharlu Club is a registered society with byelaws and regulations. Therefore the suit against the members of the Club would not lie. A suit has to be instituted in the name of the Society represented by its Secretary and, therefore, the suit itself is not maintainable. The defeasance clause cannot be interpreted in such a manner as conferring any right on the legal heirs of CSC to take back possession as long as some activity – outdoor and indoor games, reading room etc., are carried on by the Club members. Alternatively they submit that the Club cannot be said to have been closed down. The Club was closed temporarily during the period of attachment by the Sub Divisional Magistrate. Such temporary stoppage of activities does not amount to closure under Section 13 of the Societies Act, 1860, and in the entire administration and management of the Club no acts of malfeasance or misfeasance were reported nor proved and, therefore, the trial Court was in error. The Senior Counsel for the respondents/plaintiffs points out that the defendants never raised objection regarding maintainability of the suit and, therefore, it cannot be permitted now. He would urge that the society nowhere existed and the defendants alone contested the possession of the Club. They were made parties in the suit for declaration and possession. He further adds that unlike a company the society is not a juristic person and, therefore, it cannot hold property in perpetuity and cannot be sued in a declaratory suit. He placed reliance on Illachi Devi v Jain Society, Protection of Orphans India[1]. Nextly he submits that the declaratory decree with consequential relief of possession is not liable to be set aside in appeal at the instance of defendant 10 and legal heirs of defendant 8. Their case has to be adjudicated only with reference to their stand in their respective written statements. As other defendants did not choose to file appeals against the declaratory decree such a plea is beyond the scope of appeal. In support of the submission he relies on Rafique Bibi v Sayed Waliuddin[2]. He would urge that defendant 8 cannot be permitted to raise plea of adverse possession as he claims under an arbitration settlement. For this purpose, he relies on Karnataka Board of Wakf v Govt. of India[3]. According to the Senior Counsel, Ex.A1 makes it a conditional transfer and in the event of failure to carry on the activities for which the land was donated, the legal heirs of Sundaracharlu are entitled to get back the possession. He would urge that the plaintiffs amply proved the plea and if the land is taken possession neither the Society nor members would suffer any legal injury. According to him as per Section 10 of the Limitation Act, 1963, when the property is held in trust, the limitation would not apply. He contends that under Ex.A1 title of the property was never transferred and, therefore, it is always open to reclaim the land especially when defendants 8 and 10 do not have any personal right much less legally enforceable right in the suit schedule property. The background pleadings and the rival submissions made before this Court give rise to four issues for consideration, which are taken up one after the other. MAINTAINABILITY OF THE SUIT Defendants 8 and 10 contested the suit by filing written statements. Defendants 2 and 11 pleaded misjoinder and defendants 1 and 3 to 7 remained ex parte. The contesting defendants in one voice pleaded that Sundaracharlu Club is a registered association/society with rules, regulations and procedures. No evidence was let in although as many as seven witnesses were examined on their behalf. Presumably for this reason, defendants 8 and 10 did not take a specific plea of maintainability of the suit before the trial Court. They did not allege that the suit against the members is not maintainable. Therefore it is futile for the appellants now to raise such a plea after lapse of about 30 years from the date of the institution of the suit. A society is an association organized for some recognized purpose, be it for charity, business, recreation or social welfare. The Societies Registration Act is an Act (hereafter, Central Act) for the registration of literary, scientific and charitable activities. An association or group of similar minded people with a memorandum of association with (objects therefor) the rules and regulations is registerable. All the property of the society, if not vested in the trustees; shall vest in the governing body of the society (Section 5) and every society registered under the Central Act may sue or be sued in the name of the President, Chairman or Principal Secretary or trustees as shall be determined by the rules and regulations of the society. The proviso to Section 6 of the Central Act enables to sue the President or Chairman or Principal Secretary or trustees of the society if no other person is nominated for the purpose. Therefore, though a society can sue and be sued in the name of its President/Chairman/Secretary, the law does not bar suing its members, who as trustees have control over the property. Before 2001, the Central Act applied to Andhra Area of the State and the Andhra Pradesh (Telangana Area) Public Societies Registration Act, 1350 Fasli (Act 1 of 1350 F) applied to erstwhile Hyderabad State. The Andhra Pradesh Societies Registration Act, 2001 – a consolidating and amending law – repealed Central Act in its application to Andhra area as well as Act 1 of 1350 F. Under the new legal regime, Sections 3 to 9 deal with registration of Societies with memorandum of association and byelaws which are to be filed with the Registrar of Societies. In addition Section 9 of the A.P. Act requires the furnishing of the list of members of the general body every year. Even when an amendment is carried out to byelaws it comes into effect only when they are filed with and are certified by the Registrar of Societies. Section 11 of A.P. Act requires a register of members to be maintained besides keeping the accounts and records of the society. In this case, D.W.1, D.W.2, D.W.3 and D.W.6 were examined. Admittedly they were at some point of time involved in the affairs of the Club. Except D.W.2, the former Secretary of tennis Club, nobody even whispered about the maintaining of the books of accounts or registers. As already pointed out, no evidence was let in like certificate of incorporation, copy of the memorandum of association, copy of the byelaws, the register of members, account books, resolutions passed by the governing body and general body from time to time etc. In the absence of any of these, the defendants 8 and 10 cannot contend at this stage that the suit was not properly instituted. There is yet another reason to reject the submission. The society is not a juristic person unlike a company incorporated under the Companies Act, 1956. It is not capable of ownership of any property. It cannot be sued in its name like a company. This is well settled. I n Illachi Devi, the Supreme Court, while observing that a society is endowed with an “existence” separate from its members for certain purposes, laid down as below. A society registered under the Societies Registration Act is not a body corporate as is the case in respect of a company registered under the Companies Act. In that view of the matter, a society registered under the Societies Registration Act is not a juristic person. The law for the purpose of grant of a probate or Letter of Administration recognises only a juristic person and not a mere conglomeration of persons or a body which does not have any statutory recognition as a juristic person. … … It is well known that there exist certain salient differences between a society registered under the Societies Registration Act, on the one hand, and a company corporate, on the other, principal amongst which is that a company