Case: Menakuru Dasaratharami Reddi Vs. Duddukuru Subba Rao

1. This is an appeal by defendants 47 and 48 and the principal question which is raised for our decision in the appeal is whether the properties in suit are the subject-matter of public charitable trust or are merely burdened or charged with the obligation in favour of the specified charities. The suit from which this appeal arises was filed with the sanction of the Collector under S. 92 of the Civil P.C. and the plaintiffs alleged that the properties in suit were the subject- matter of a public charitable trust and that a scheme may be framed for the administration of the saidpresent appellants who are in possession of a substantial portion of the properties in suit as alienees have resisted this claim. They conceded that the properties in their hands were subject to the charge in favour of the charities but they denied that the said properties were the subject matter of a charitable trust. Several other pleas were made by the parties but the principal question in dispute between them was in regard to the character of the properties in suit. Both the learned trial Judge and the High Court of Madras have upheld the plaintiffshas been declared that the properties in question are trust properties and a direction has been issued that a scheme of management should be frame in respect of the trust with a view to carry out the charitable intentions of the settlor. It is this decree which is challenged before us by Mr. Alladi Kuppuswami on behalf of defendants 47 and 48 and his argument is that the view taken by the Court below about the character of the properties is based upon a misconstruction of the decree in question.In the plaint, it was alleged that one Purushottam had been earning and purchasing large properties and endowing and dedicating them for public charitable purpose sinceIn about 1919 Purushottam who had then become old wanted to place the charities which he had been till then personally administering on a permanent and enduring basis. That is why he executed and registered a deed of trust on 17th March 1919. By this document, a trust in respect of his properties was created and three trustee were appointed to administer the trust. Purushottam himself was one of these trustees and two advocates, Mr. Reballa Subbarayudu and Mr. C. Viswanadha Rao, were hiswould appear that Purushottams son Ramakrishnayya did not approve of this arrangement and he began to obstruct the administration of the trust. As a result of this obstructive attitude adopted by Ramakrishnayya, two suits had to be filed by the trustees against Ramakrishnayya and his associates who interfered with the management of the trust. These two suits were O. S. No. 599 of 1919 and O. S. No. 68 of 1920 on the files of the District Munsiffs Court, Kavali, and the District Court, Nellore,were subsequently transferred to the Sub- Court, Nellore, and numbered as O. S. No. 39 of 1921 and O. S. No. 67 of 1921 in the said Court. Pending the hearing of these suits the two advocates trustees withdrew from the suits leaving the conduct of the suits solely in charge of Purushottam. Ultimately the two suits ended in ato the plaint in the present suit out of which this appeal has arisen, this compromise decree was fraudulent and collusive the object of the parties being to efface the character of the trust properties completely and to create individual rights in Purushottam, his son Ramakrishnayya and the other defendants who claimed to be alienees fromplaint even alleged that, in persuading the Court to pass the said compromise decree, the parties effectively played fraud on the Court and the trust. Since the compromise was thus null and void, it cannot affect the original trust created by Purushottam in 1919. That is why the plaint alleged that the properties mentioned in Sch. A which were covered by the original deed of trust of 1919 were trust properties and asked in substance for the framing of a scheme for the administration of the said trust.3. At the date of this suit both Purushottam and his son Ramakrishnayya were dead. Ramakishnayyas son Ramalingeswara Rao was therefore impleaded asA large number of defendants had to be impleaded to the suit because the properties had been alienated both by Ramakrishnayya and Ramalingeswara Rao to several purchasers. Defendants 47 and 48 were two of such7th June 1942, an agreement of sale by defendant 1 in favour of defendants 47 and 48 was executed and a decree for specific performance was ultimately passed in their favour. It was then that defendants 47 and 48 were impleaded to this suit on 3rd January 1944. These defendants substantially adopted the defence raised by the other contesting defendants who were already on theprincipal contention raised on their behalf was that the compromise decree was not fraudulent or collusive that it represented a fair and bona fide family settlement between Purushottam and his son Ramakrishnayya and as such the decree was binding against Purushottam and the trust alleged to have been created by him in 1919.4. On the pleadings of the parties, the learned trial Judge framed ten issues. He found that the suit was competent, that the compromise decree was not shown to be collusive or fraudulent and it was binding on the trust. Even so, the said compromise decree itself created a trust in favour of public charities and in respect of the properties which had been allotted by the compromise decree to the share of Purushottam. It would be noticed that according to the plaint the trust for administration of which a scheme was claimed by the plaintiff was the trust created by Purushottam inthe learned trial judge held that this trust deed had been effectively substituted by the arrangement evidenced in the compromise decree, he proceeded to consider the effect of this compromise decree and since he thought that this comppromise decree itself created a trust in substitution of the original trust of 1919 he proceeded to pass a decree in favour of the plaintiffs in respect of the substituted trust. This decree was passed onThe matter was taken to the High Court of Madras by defendants 47 and15-12-1948, the appeal preferred by defendants 47 and 48 was dismissed and the decree passed by the trial Court was confirmed. The learned Judges of the High Court of Madras dealt substantially with the question of the construction of the compromise decree and since they came to the conclusion that the said decree constituted a public charitable trust in respect of the properties assigned to the share of Purushottam, they saw no reason to interfere with the decree underother points were raised before the High Court. They were, whether the obligation arising out of the trust is annexed to the property that fell to the share of Purushottam under the compromise decree and whether the said decree was collusive and not binding on the trust. The High Court took the view that, since the compromise decree itself created a trust and it was possible to give relief to the plaintiffs on that view, it was not necessary to consider the said two47 and 48 then preferred the present appeal to this Court.

Reasoning:
We do not propose to consider the merits of this interesting argument because, in our opinion, it is too late for the plaintiffs to raise such a point. We have already mentioned that one of the issues specifically raised between the parties in the present litigation was in regard to the nature and effect of the compromise decree. In fact we have already indicated that when we found that the learned Judges of the High Court of Madras had not considered this issue, by our interlocutory judgment we invited the High Court to consider this issue along withposition now is that both the Courts below have found that the compromise decree was not collusive or fraudulent and it binds the trust. The respondent has not filed any objection to the finding submitted by the High Court of Andhra in pursuance to our interlocutory judgment. Indeed, if the plaintiffs had adhered to their original case they should have insisted upon obtaining a decree for a scheme of the original trust ofis true that a decree for a scheme was passed in favour of the plaintiffs but this decree was passed on the assumption that a subsequent compromise decree had created a public trust. It is clear from the plaint that the plaintiffs had not alternatively asked for a scheme of the subsequent trust. That being so, it was really necessary for the plaintiffs to have preferred an appeal against the trial Courts decree and urged that the original trust deed had not been effaced and that it was still subsisting notwithstanding the compromise decree and that a scheme should be framed in respect of the said originalappears that the plaintiffs were content to acquiesce in the finding that the subsequent compromise decree bound the original trust deed and, as matters then stood, it did not make any practical difference to the plaintiffs case because they got a scheme for the administration of the trust though new properties were substituted for the old to constitute the subject-matter of the trust; but in law the conduct of the plaintiffs amounted to an admission that the compromise decree effaced the original trust in that the properties of the trust were changed in the manner indicated in thethe High Court of Madras, the only point which the plaintiffs urged was that the compromise decree created a trust. It is true that this compromise decree was intended for the benefit of the charities covered by the earlier deed of trust and the argument was that the properties which were allotted to the share of Purushottam by the compromise decree should be deemed to have been substituted for the original properties of theadopted this attitude it is now not open to the plaintiffs to contend that the terms of the compromise decree do not bind the trust, that the decree per se constituted a breach of trust and that the original trust is wholly unaffected by whatever Purushottam did in the subsequent litigation. In our opinion, therefore, it is unnecessary to consider the merits of the contention which Mr. Tatachari attempted to raise before us.13. Since we hold that the compromise decree had not created a public trust, it is unnecessary to consider any other point. We wish to make it clear that Mr. Alladi Kuppuswami expressly told us that his clients have always agreed that the properties in their hands are burdened with the obligation to discharge the charities mentioned in the deed of trust executed by Purushottam in 1919. We accordingly declare that the properties in the hands of the appellants are subject to the charge in favour of the said charities.