IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 30.04.2010 C O R A M THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR S.A.No.63 of 2010 S.Saravanamuthu ... Appellant(Plaintiff) Vs. 1.V.Moorthy 2.V.Indirani 3.A.Babu 4.A.Jaganmohan Rao 5.D.Kamalakar ... Respondents(Defendants 1 to 5) Second appeal filed under Section 100 of the Civil Procedure Code against the judgment and decree of the learned V Additional Judge, City Civil Court, Chennai dated 29.09.2009 made in A.S.No.324 of 2007 confirming the judgment and decree of the XI Assistant Judge, City Civil Court, Chennai dated 12.01.2007 made in O.S.No.5851 of 2004. For Appellant : Mr.T.R.Rajagopalan, Sr.Counsel for Mr.K.Lakshmi Kumaran For Respondent : Mr.M.S.Krishnan, Sr. Counsel for Mr.P.Tamilavel J U D G M E N T The plaintiff in the original suit O.S.No.5851 of 2004 on the file of the learned XI Assitant Judge, City Civil Court, Chennai is the appellant in the second appeal. The suit was filed by the appellant herein/plaintiff against the respondents herein for a permanent injunction restraining them from interfering with the administration and management of the technical institution of the said Trust, namely Thirutani Arulmiku Murugen Educational Trust. Though the suit was filed against totally five persons, the suit, as against the fifth respondent (Kamalakar), had been dismissed for non-prosecution and the suit, as against the other respondents, namely respondents 1 to 4 alone was proceeded with. Out of the above said four persons, namely respondents 1 to 4, except the first respondent/first defendant, the other three respondents, did not contest the suit and remained ex-parte before https://hcservices.ecourts.gov.in/hcservices/ the trial court. The first respondent/first defendant alone filed a written statement and contested the suit. The said suit was decreed as prayed for by the learned XI Assistant Judge, City Civil Court, Chennai by judgment and decree dated 12.01.2007, without cost. 2. As against the said judgment and decree of the trial court, the first respondent herein/first defendant preferred an appeal on the file of the lower appellate court, namely the court of the learned V Additional Judge, City Civil Court, Chennai in A.S.No.324/2007. In the said appeal, a petition under Order XLI Rule 27 of Civil Procedure Code was filed as C.M.P.No.199/2009 for reception of additional documentary evidence. The learned lower appellate judge allowed the said petition and marked the document produced by the first respondent herein/first defendant as Ex.B1 and disposed of the said petition. So far as the appeal is concerned, the learned lower appellate judge, on a re-appreciation of evidence, allowed the appeal by his judgment and decree dated 29.09.2009, reversed and set aside the decree passed by the trial court and dismissed the suit O.S.No.5851/2004 filed by the appellant herein/plaintiff, with a direction that the respective parties should bear their own cost. The said judgment and decree of the learned lower appellate judge dated 29.09.2009 is impugned in this second appeal. 3. After notice before admission to the respondents was ordered, the first respondent alone entered appearance through counsel. The submissions made by Mr.T.R.Rajagopalan, learned senior counsel, representing the counsel on record for the appellant and by Mr.M.S.Krishnan, learned Senior counsel, representing the counsel on record for the first respondent were heard. The judgments of the courts below and the decrees drawn therefrom and also the documents produced in the form of typed set were perused. 4. The plaintiff in O.S.No.5851/2004 on the file of the XI Assistant Judge, City Civil Court, Chennai, who proved to be successful before the trial court but unsuccessful before the lower appellate court in an appeal filed by the first respondent herein, has come forward with the present second appeal questioning the correctness of the judgment and decree of the lower appellate court. The suit was filed by the appellant for a bare injunction not to interfere with the administration and management of the technical institution of the suit trust, by name Thirutani Arulmiku Murugen Educational Trust. The said prayer was made based on the contention of the appellant herein/plaintiff that when the above said trust faced certain difficulties in running the trust institution, namely a polytechnic in the name of the trust, the Board of Trustees, by a resolution dated 25.10.1999 entrusted the administration and management of the trust with the https://hcservices.ecourts.gov.in/hcservices/ appellant/plaintiff; that the same was followed by a Memorandum of Understanding dated 27.10.1999 to the effect that the object of the trust should be completed entirely by the plaintiff and the then existing trustees agreed to resign their trusteeship receiving certain amount as compensation; that the respondents 1 to 5 herein/defendants 1 to 5 expressed in categorical terms in the MOU that they were unable to continue as trustees and they would submit their resignation letters; that all the respondents received the compensation mentioned in the MOU and thereafter ceased to have anything to do with the management and administration of the technical institution; that the management and administration of the technical institution stands vested totally with the appellant/plaintiff and the appellant/plaintiff is the sole person in management and administration of the technical institution; that while so, the first defendant wanted the trust to be handed over to him by sending a legal notice through his advocate on 30.06.2004 which was suitably replied; that the respondents/defendants, who have relinquished their office of trustees, did have no right to interfere or meddle with the administration of the institution which stands vested with the plaintiff and that since the respondents/defendants tried to interfere with the administration of the technical institution, the appellant/plaintiff was constrained to file the suit for the above said relief. 5. The contesting defendant, namely the first respondent herein/first defendant filed a written statement contending that, though such a Memorandum of Understanding dated 27.10.1999 was signed by the parties as pleaded in the plaint, the same was not acted upon and the MOU did not come into force, as the conditions found in the same, were not complied with by the appellant/plaintiff. It was contended further therein that the first respondent/first defendant is the founder trustee of the trust even on the date of filing of the suit and that hence the suit for injunction against him was not maintainable. It was also submitted by the first respondent/first defendant that he had filed another suit in this regard as O.S.No.40/2005 on the file of the XVI Assistant Judge, City Civil Court, Chennai and that the plaintiff had got no right to carry on with the affairs of the trust, as he was removed form the trust by the other trustees. 6. Based on the above said pleadings, the learned trial judge framed two issues, which are as follows:- 1.Whether the plaintiff is entitled to the relief of permanent injunction as prayed for in the suit? 2.To what relief the plaintiff is entitled? In the trial, the appellant/plaintiff figured as the sole witness and deposed as P.W.1, besides marking Exs.A1 to A12 on his side. On the side of the respondents/defendants, the first https://hcservices.ecourts.gov.in/hcservices/ respondent/first defendant figured as D.W.1, the sole witness and no document was marked before the trial court. 7. The learned trial judge, after considering the pleadings and evidence in the light of the arguments advanced on either side, decided the issue No.1 in favour of the appellant herein/plaintiff and held that the appellant/plaintiff was entitled to the relief of permanent injunction as prayed for. The same was based on the resolution of the suit trust dated 25.10.1999 and the MOU dated 27.10.1999, a copy of which is marked as Ex.A1 and MOU dated 27.10.1999 marked as Ex.A2. However, the learned trial judge made an observation that the amount payable as per the MOU was not paid to the defendants in full and that the amount that still remains to be payable as on the date of the plaint could not be ascertained on the basis of the statement of accounts produced by the appellant/plaintiff as Ex.A8. However, relying on an arbitration clause, found in Ex.A2-MOU, which says, "in case there arises any dispute between the parties hereto in respect of the above MOU, the parties will be at liberty to refer such disputes for arbitration under the Arbitration and Conciliation Act, 1996" and held that since such a condition had been incorporated in the MOU, the respondents/defendants could not interfere with the management of the institution, without referring the matter under the provisions of the Arbitration and Conciliation Act, 1996 for arbitration. 8. It was also answered by the learned trial judge that the resolution dated 25.10.1999 under which the management and administration of the institution run by the trust was entrusted to the appellant/plaintiff, was not subsequently cancelled; that the MOU marked as Ex.A2 was also not cancelled by referring the dispute to arbitration as per the arbitration clause on the ground that the entire amount agreed to be paid under the MOU was not paid and that hence the respondents/defendants were not entitled to interfere with the plaintiff's management and administration of the institution run by the trust. Regarding the second issue, the learned trial judge came to the conclusion that the appellant/plaintiff was not entitled to any other relief, other than the relief of permanent injunction. Accordingly, the learned trial judge decreed the suit as prayed for without cost by judgment and decree dated 12.01.2007. 9. As against the judgment and decree of the trial court, the first respondent herein/first defendant filed an appeal on the file of the lower appellate court in A.S.No.324/2007. In the said appeal, the first respondent herein/first defendant, who figured as the appellant before the lower appellate court filed C.M.P.No.199/2009 for reception of the certified copy of the Trust Deed as an additional piece of evidence. The said petition filed under Order LXI Rule 27 was not opposed and hence the said petition https://hcservices.ecourts.gov.in/hcservices/ was allowed. The document sought to be produced as the additional evidence is nothing but a certified copy of the trust deed. The dispute is relating to the administration of the trust and the management of the technical institution run by the trust. Naturally speaking, the appellant/plaintiff should have filed the said document. However, the same was sought to be filed by the first respondent herein/defendant in the appeal filed before the lower appellate court and the petition for reception of additional evidence was also not opposed. The learned lower appellate judge also came to the conclusion that the entire case was based on the Trust Deed itself and that hence the production of the said Trust Deed was useful for deciding the case in an appropriate manner. The marking of the document was also not opposed and hence the same was marked as Ex.B1 and was considered along with the other evidence, both oral and documentary, adduced before the trial court. Upon such a consideration, the learned lower appellate judge came to the conclusion that the trial court committed a grave error in decreeing the suit without properly considering the fact that the appellant herein/plaintiff who had come to the court with the suit for injunction, had not come with clean hands and that he had not fulfilled the obligations imposed on him under the Memorandum of Understanding, which he relies on in support of his contention that he is entitled to the exclusive management and administration of the institution of the trust. The learned lower appellate judge has also come to the conclusion that the first respondent herein/first defendant had not resigned as trustee of the suit trust; that the appellant herein/plaintiff has not proved that all other trustees had resigned; that on the other hand Exs.A4 and A5 which relate to two of the trustees alone were produced and that the other two trustees are not proved to be either resigned or removed as trustees or relinquished their trusteeship. Even in respect of the alleged resignation by the 3rd and 4th respondents/3rd and 4th defendants, the learned lower appellate judge has found that there was no evidence to show that the said resignations were accepted or rejected by passing necessary resolution by the trust in the trust board meeting. 10. The learned lower appellate judge has also held that the receipt relied on by the appellant/plaintiff and marked as Ex.A2 evidences payment of Rs.3,45,000/- alone and that the payment of the entire amount stipulated in Ex.A2-MOU was not substantiated by the appellant/plaintiff. The learned lower appellate judge has also observed that the management and administration of the institution was entrusted to the appellant herein/plaintiff, as he was the then secretary of the trust, for the sole purpose of achieving the object of the trust and that as such the appellant herein/plaintiff could not run the institution entrusted to him according to his whims and fancies and for his personal benefit. https://hcservices.ecourts.gov.in/hcservices/ 11. Regarding the arbitration clause, the learned lower appellate judge has come to the conclusion that it was the plaintiff, who should have been found fault with for not relying on the arbitration clause and referring the matter to arbitration; that when the plaintiff chose to file the suit, there was no obligation on the part of the defendants to refer the dispute to arbitration and that hence the trial court's view that the defendants could not interfere with the administration and management of the educational institution run by the trust without referring the dispute to arbitration, was improper and unsustainable. The lower appellate court, being the final court of appeal on facts, on a thorough re-appreciation of evidence, came to the conclusion that the obligations imposed on the appellant herein/plaintiff under Ex.A2-MOU were not wholly fulfilled by him; that he had not come to the court with clean hands; that he could not appropriate and repropriate while relying on Ex.A2-MOU; that the first respondent herein/first defendant had not resigned as a trustee of the suit trust and that hence the relief of permanent injunction prayed for by the appellant herein/plaintiff could not be granted. Consequently, the learned lower appellate judge allowed the appeal, set aside the judgment and decree of the trial court and dismissed the suit without cost. Thus the appellant herein/plaintiff is before this court by filing the second appeal on various grounds set out in the memorandum of second appeal. 12. As against the decree passed by an appellate court, a further appeal, namely second appeal, shall lie to the High Court under Section 100 of CPC only on a substantial question of law. Unless a substantial question of law is proved to have arising for adjudication in the second appeal, no second appeal against the appellate court decree shall be entertained. In Section 100(3) & (4) of CPC it has been stated that an appeal under the section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal and where the high court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. The following are stated to be substantial question of law involved in the second appeal as per the memorandum of appeal: 1.Whether the first appellate court is right in reversing the decree and judgment of the trial court? 2.Whether the first respondent is entitled to the relief as he is estopped under law after the resolution dated 25.10.1999? 13. The above said second question incorporated in the memorandum of appeal does not convey a proper meaning, as it contains a mistake which has been highlighted by underlining the https://hcservices.ecourts.gov.in/hcservices/ words wrongly used. As it was pointed out by the court that the substantial questions of law formulated by the appellant and incorporated in the memorandum of appeal were not proper and were not in fact substantial questions of law, the learned counsel for the appellant chose to produce a further memorandum containing five questions as substantial questions of law involved in the second appeal. They are as follows: (1)When under Ex.A1 Resolution passed by the Trust Board on 25.10.1999, the exclusive right of management was entrusted to the plaintiff, is the lower appellate court right in rejecting the claim of the plaintiff? 2.Is the lower appellate court right in rejecting the plaintiff's claim to be in management after holding that the MOU Ex.A2 acted upon by entrusting the management to the plaintiff and also by receiving part amount as per MOU under Ex.A3? 3.Is the lower appellate court right in dismissing the suit inspite of the categorical admission of the 1st defendant in Ex.A6 notice that the plaintiff was entrusted to manage the affairs of the Trust? 4.When the defendants had not moved an application under Sec.8 of the Arbitration and Conciliation Act, 1996, is the lower appellate court right in holding that the plaintiff ought to have approached the Arbitrator for the settlement of dispute regarding the interference of other Trustees in his administration? 5.Is not the 1st defendant estopped from interfering with the plaintiff's management of the suit trust after having received the amount as per MOU under Ex.A3? 14. But upon hearing the arguments advanced on the side of the appellant herein/plaintiff and on behalf of the first respondent herein/first defendant, this court is of the view that the appellant herein/plaintiff has not proved the involvement of any substantial question of law in this case. Admittedly, Thirutani Arulmiku Murugen Educational Trust was founded on the 15th day of September 1997 by the first respondent herein/first defendant under the registered Trust Deed dated 15.09.1997. A certified copy of the same has been produced by the first respondent herein and marked as Ex.B1. All the parties to the suit rely on Ex.B1. Under Ex.B1, the appellant/plaintiff, the respondents 1 to 5/defendants 1 to 5 and one Srinivasan constituted the Board of Trustees and formed the above said trust for public charitable purpose. The first respondent/first defendant is described to be the founder of the trust. What happened to https://hcservices.ecourts.gov.in/hcservices/ Srinivasan who figured as the sixth trustee as per the trust deed, has not been adverted to by either of the parties. However, since it is inferred, from the conduct of the parties and the manner in which they put forward their pleading in the evidence, that the said Srinivasan subsequently ceased to be a trustee when a resolution dated 25.10.1999 marked as Ex.A1 was passed. The said Srinivasan was shown to be a ex-trustee in the said resolution. The MOU marked as Ex.A2 was entered into between the defendants 1 to 5, as parties of the first part and the appellant/plaintiff, as party of the second part. In the said MOU, Srinivasan was not shown to be a person continuing as a trustee on the date of Ex.A2. Ex.A2 contains a recital to the effect that Srinivasan was relieved from the activities of the trust as per the minutes of meeting held on 25.10.1999. Therefore, becomes the admitted case of both the parties that the appellant herein/plaintiff and the respondents 1 to 5 herein/defendants 1 to 5 were the trustees of the suit trust, namely Thiruthani Arulmiku Murugen Educational Trust, as on the date of Ex.A2. 15. As per the resolution No.2 dated 25.10.1999, which was marked as Ex.A1, it was resolved to appoint the appellant herein/plaintiff as the permanent chairman of the trust board and the Secretary of the educational institution to manage the institution. As per resolution No.3, certain powers were conferred upon and certain obligations were imposed on the appellant herein/plaintiff for the better management and administration of the educational institution run by the trust. Following the said resolution, a memorandum of understanding was entered into between the respondents 1 to 5 herein / defendants 1 to 5 as parties of the first part and the appellant herein/plaintiff as party of the second part to the said MOU dated 27.10.1999. The same has been marked as Ex.A2. In the MOU it was agreed between the appellant herein/plaintiff and the respondents 1 to 5 herein/defendants 1 to 5 that defendants 1 to 5 would relinquish all their rights and interests over the affairs of the trust in favour of the appellant/plaintiff on payment of a sum of Rs.75,00,000/- in three installments of Rs.25,00,000/- each. Relying on the above said resolution marked as Ex.A1 and the MOU marked as Ex.A2, the appellant herein/plaintiff has contended that the amount agreed to be paid under the MOU was paid to all the respondents herein/defendants 1 to 5; that hence, thereafter the respondents/defendants ceased to have any right to interfere with the affairs of the trust and management of the institution run by the trust and that hence they should be injuncted by way of a permanent injunction from interfering with the appellant's/plaintiff's management and administration of the educational institution run by the suit trust. https://hcservices.ecourts.gov.in/hcservices/ 16. Of course, it is true that the respondents 2 to 5/defendants 2 to 5 have not chosen to contest the suit. But the first respondent herein/first defendant still continues to be a trustee of Thiruthani Arulmiku Murugen Educational Trust and that hence the suit against the trustee of the institution, who incidentally happened to be the founder trustee, for an injunction not to interfere with the affairs of the trust and management of the education institution run by the trust, is not maintainable and the same deserves dismissal. It is the further contention of the first respondent/first defendant that the appellant herein/plaintiff having not fulfilled the obligations under Ex.A2- MOU and having chosen to use the trust funds for his personal benefit, has chosen to come forward with the suit for injunction pursuant to a notice issued by the first respondent herein/first defendant. Alleging that the appellant herein/defendant, without the knowledge of the other trustees, had started to act on his own against the purpose of the trust and calling upon him to hand over the trust and informing that in case of failure he would be forced to take action against the appellant herein/plaintiff in civil and criminal courts, the first respondent/first defendant has issued a legal notice. The said notice has been marked as Ex.A6. A reply was sent to the said notice and a copy of the reply notice dated 14.07.2004 has been marked as Ex.A7. Referring to the MOU dated 27.10.1999, it was stated therein that the first respondent herein/first defendant was estopped from questioning the functioning of the trust, the administration of which had vested exclusively with the appellant herein/plaintiff. It was also stated therein that as per the MOU, entire amount payable to the first respondent was paid to him. 17. The suit was filed on 13.10.2004 i.e. subsequent to the exchange of the above said notices under Exs.A6 and A7. Therefore, it is quite clear that the immediate provocation for the appellant herein/plaintiff to file the suit was the issuance of Ex.A6-notice and the purpose of filing the suit was to pre-empt the first respondent herein/first defendant from approaching the court for any relief touching the functioning of the trust or administration and management of the educational institution run by the trust. In fact, subsequently, the first defendant herein has also filed a suit in this regard, going into the details of which is unnecessary for the disposal of this second appeal. The principal contention of the appellant herein/plaintiff for seeking injunction against the respondents herein/defendants, in particular against the first respondent herein/first defendant, is two folds. Firstly, it is the contention of the appellant that the respondents/defendants, especially the first respondent/first defendant, having received the amount in terms of Ex.A2- MOU, are estopped from interfering with the functioning of the trust and management of the educational institution run by the trust, which https://hcservices.ecourts.gov.in/hcservices/ was solely entrusted to the appellant herein/plaintiff. Secondly, since the management and administration of the educational institution was entrusted to the appellant herein/plaintiff by the resolution of the board dated 25.10.1999 marked as Ex.A1, no individual trustee, in particular when they have agreed to resign from trusteeship, can interfere with the plaintiff's management of the educational institution. 18. The answer given by the contesting respondent, namely the first respondent/first defendant to the above