THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY C.M.A.No.77 of 2011 JUDGMENT: Respondent Nos.1 to 3 herein ﬁled O.S.No.558 of 2008 in the Court of the II Additional Chief Judge, City Civil Court, Hyderabad, against the appellants, who are defendant Nos.1, 2, 4 and 5 and respondent Nos.4 to 10 (a) to declare that defendant Nos.2 to 7 are liable to be disqualiﬁed as Trustees of Juloori Veereshalingam Charitable Trust (respondent No.1) on account of their acts of breach of trust, and for rendition of accounts; (b) to frame a scheme for management of the Trust as per the objectives of the Trust, by appointing new Trustees; (c ) to declare the development agreement entered into between the appellants and respondent Nos.4 to 6 with respondent No.7 herein as not binding on the Trust and the general public; and (d) for perpetual injunction, to restrain the appellants from interfering with the affairs of the Trust, in any manner. For the sake of convenience, the parties are referred to as arrayed in the suit, hereafter. The plaintiﬀs have ﬁled I.A.No.2828 of 2010 under Order 39 Rules 1 and 2 C.P.C., with a prayer to restrain the defendants from leasing out, mortgaging, encumbering, selling or inducting third parties into the possession of the suit schedule property, admeasuring 4840 square yards, earlier known as Juloori Vajramma Kalyana Mandapam, Secunderabad. The trial Court passed an order, dated 28.12.2010, appointing one Sri P.Jithender Reddy, Advocate as Receiver to take possession of 65% of the constructed area of the shopping complex, to lease the property through public auction and to deposit the rents into the Court; after deducting incidental expenses and a sum of Rs.5,000/- towards fee. The brief facts that gave rise to the ﬁling of the suit are as under: Sri Juloori Veereshalingam, a noted businessman in Secunderabad in the ﬁeld of Textiles established a Trust in his name with an objective of propagation of education and learning among poor and down trodden, establishment and maintenance of colleges, schools, hostels, awarding scholarships, fellowships to the needy, extending medical aid to needy poor; and to provide adequate source of income for such activities. Three persons, by name Juloori Nagaraja Rao, Chama Kasinath (defendant No.2) and Bachu Srinivasa Rao (defendant No.3) were nominated as Trustees. Veereshalingam died on 19.04.1979 and his son Nagaraja Rao died in the year 1987. The wife of Veereshalingam, by name Vajramma was inducted as a Trustee. However, she has resigned and in her place one Kothapally Rajender Rao, defendant No.7, was inducted as a Trustee. The Trust acquired Acs.3.00 of land in a prime locality in Secunderabad. Ac.2.00 of the same was sold and with the sale proceeds thereof, the Trust constructed a magniﬁcent Marriage Hall in Ac.1.00, facing the main road. It was named after Juloori Vajramma. The income from the Hall was being used for the objectives of the Trust. At that stage, defendant No.2 assumed predominant position in the Trust and he inducted his two sons and two sons-in-law as Trustees. Without stopping at that, he initiated steps for change of character of the Trust from public trust to a private trust. A decision was also taken to demolish Kalyana Mandapam and to bring about a shopping complex in that land. Plaintiﬀ Nos.1 and 2 are sons of late Juloori Nagaraja Rao i.e. grand children of Veereshalingam and plaintiﬀ No.3 is said to be a social worker. They ﬁled the suit for the reliefs mentioned above. They pleaded that the defendants subjected the Turst to gross mismanagement for their personal beneﬁt, to such an extent that they have borrowed huge amounts from diﬀerent Banks by mortgaging the Trust property. With these and other allegations, they prayed for the relief of framing of a scheme, re- constitution of the Trust and certain ancillary reliefs. Sri Ch.Dhanamjaya, learned counsel for defendant Nos.1, 2, 4 and 5 (appellants), Sri B.Adinarayana Rao, learned counsel for the plaintiﬀs, Sri Resu Mahender Reddy, learned counsel for defendant Nos.8 to 10 and Sri B.Harinatha Rao, learned counsel for respondent No.10-defendant No.11 have advanced extensive arguments touching on the merits and legal aspects. It is not in dispute that there existed a fabulous marriage function hall constructed over an area of Ac.1.00 and that it was being given on nominal rents without any proﬁt motive. In case the Trustees felt that the income derived from the function hall is not adequate to meet the expenditure towards any welfare activities, they could have certainly taken a well-informed decision. Nowhere in the pleadings, they have indicated the nature of welfare activities, much less the amount spent on them. The manner in which the Trust was reconstituted and its character was changed, would indicate that the Trustees have treated the property as their own. That is evident from the fact that defendant Nos.1, 2, 4 and 5 have borrowed crores of rupees from I.D.B.I. Bank, defendant No.11, by oﬀering the trust property as security. As of now, the liability is said to be around Rs.30 crores. In addition to that, they have collected about Rs.4 crores from the builders, outside the scope of the agreement. Here itself, it needs to be mentioned that the agreement between the builder and the Trust was that the entire expenditure for construction of the commercial complex shall be incurred by the builder and in return, they shall take 35% of the constructed area. 65% of the constructed area is to be given to the Trust. There was no mention of any payment or receipt of money in the agreement. Still, the Trustees are said to have received an amount of Rs.4,45,00,000/- by promising to repay it to the Bank. Their oblique motive is further evident from the fact that they ensured that there does not exist any trace of the name of the original founder or his family. A function hall with the name “Juloori Vajramma Kalyana Mandapam” was demolished and the complex which is now constructed is named ‘Vajra Maruthy’. Though a representation is made to this Court that the provision is made for a Kalyana Mandapam in the complex, it appears to be a clear misrepresentation. The trial Court was right in its conclusion that the property and the Trust is not at all safe in the hands of the Trustees. This Court is not inclined to interfere with the order under appeal. In the interlocutory application, the relief of temporary injunction was prayed for. The application was mainly contested by defendant Nos.1, 2, 4 and 5, the appellants herein. They pleaded that various steps taken by them are permissible in law and for the furtherance of the aims of the Trust. The trial Court found that the steps taken by the defendants were not at all in the interest of the Trust and appointment of a Receiver is warranted, to protect the interests of the Trust. Though the I.A. was ﬁled under Order 39 Rules 1 and 2 C.P.C., it issued directions, which are referable to Order 40 C.P.C. Normally, this Court must stop, once it expresses its view on the legality or otherwise of the order under appeal. However, in the instant case, what is involved is the administration of a Trust. For all practical purposes, the present Trustees or most of them have hijacked it for their personal gain. Time has come to put a stop to their activities. In addition to dismissing the appeal and upholding the order of the trial Court appointing a Receiver, this Court directs that the Trust property is not at all be liable to be proceeded for recovery of any amounts that were borrowed by any of the Trustees and in particular, defendant Nos.1, 2, 4 and 5. Further, the builder shall be entitled to recover the amount given by him to defendant Nos.1, 2, 4 and 5 without reference to the income or other proceeds from the constructed area that falls to the share of the Trust. The trial Court shall endeavour to constitute an interim Trust Board comprising of an experienced Advocate, a Chartered Accountant and a retired District Judge to ensure that adequate area in terms of the development agreement is allocated to the Trust, the same is put to proper use and the income derived there from is used for advancing the objectives enunciated by the founder of the Trust. The appeal is accordingly dismissed. There shall be no order as to costs. _____________________ L.NARASIMHA REDDY,J Dt:09.11.2011. kdl