M S PADMARAJAIAH Vs. COMMISSIONER BANGLORE MAHANAGARA PALIKE

JUDGEMENT

(1.) THE petition under Section 92 (1) of the CPC seeking leave of the court to institute a suit under Section 92 of the CPC came to be dismissed by the trial court and hence the petitioners are before this court in this appeal.

(2.) THE facts in brief are to the effect that late Mothikane Padmanabhaiah constituted a trust by the trust deed dated 9-7-1921 as mothikhane Thimmappaiah Jain Vidyarthi nilaya, for the benefit of Jain students and as per the trust deed, the property which is mentioned therein comprised of a hostel, was to be made use of for the purpose of providing hostel facility to the Jain students and also for helping the Jain students to carry on their education and it was the desire of the settler that in order to perpetuate the memory of late thimmappaiah, the trust property be run in the name of late Thimmappaiah Jain Vidyarthi nilaya and the vacant portion of the Trust property shall be made use of in whatever manner the trustee deems fit, but the revenue or income i. e. , received from making use of vacant portion shall also be used for the students' scholarship and the trustees shall also take steps to develop the hostel building. The deed also mentioned that all these objects will have to be carried out by the Jaina Education fund Association. It is the case of the appellants herein that the main purpose of the Trust has now been given up and instead of developing the hostel which was there and providing scholarship and other educational facilities to the Jain students, the Trust property is now being converted into a commercial complex inasmuch as a Jainbhavan has been constructed in the trust property and there is also a marriage hall which is in the name of ninth respondent Sri D. Virendra Heggade and apart from this, the old hostel building has been demolished and a new building has been put up and the Jainbhawan as well as newly put up hostel buildings are situated within the same trust property and they form two portions of the same huge complex. It is also the case of the appellants that apart from the above changes, the respondents have also mortgaged the entire Trust property to HUDCO and raised a loan of rupees two crores and in the process, the respondents have claimed themselves as the owners of the Trust property and as if the Trust property was given as a gift to them, they have mortgaged the entire trust property which act on the part of the respondents is clear breach of the Trust's terms and conditions. Another reason for the appellants to move the trial Court for grant of leave is that the Khatha was also changed into the names of the respondents and so far as the income is concerned, even the latest statement of accounts of the respondents-association does not reveal as to what was that income derived by the Trust property and how much of the said income was spent towards achieving the objectives of the Trust. It is the case of the appellants that by changing the entire nature of the Trust property as well as by changing the objective behind the Trust, the respondents have allowed the Trust property now to become vulnerable in that, tax liability is also being faced by the Trust. The respondents by permitting the Trust property to be made use of for the purposes which are beyond the purview of the Trust deed itself and having commercialised the entire Trust property, and the income that is received being not less than Rs. 30 lakhs, the respondents having not been able to ensure that the trust property continue to receive tax exemption under the Income-tax Act, but on the other hand, the tax liability is now put on the Trust property including Municipal tax, and thus have violated the conditions of the Trust. Further, a plain reading of the statement of accounts will also indicate that neither advance tax nor any income-tax has been paid by the respondents and nowhere it is found from the perusal of the statement of account for the period 1-4-2006 to 30-3-2007 as to what was the amount that was spent towards the scholarship and other benefits to the students of the jain community. All these facts, therefore, clearly go to establish that the third respondent Karnataka Jain Association has violated the condition of the Trust and thus there has been a breach of the trust conditions. One other factor which also gives rise to the inference that there has been a breach of the trust conditions is that several portions of the properties have been encroached upon by others and as such, the appellants were constrained to move the trial Court by filing a petition under Section 92 (1) of the CPC seeking leave of the Court to institute suit under section 92 of the C. P. C. The reliefs claimed in the said suit are as follows :

(3.) OBJECTIONS were filed on behalf of respondents 2 to 7 which were adopted by respondents 8 and 9. No objections were filed by respondents 1 and 11. It is the stand of the above respondents in their objections before the trial Court that neither there has been violation of any of the conditions of the Trust nor can it be held that there has been any misappropriation of funds of the Trusts. It is the specific case of the respondents that no Trust in the name of Mothikane Thimmappaiah was created and as could be seen from the Trust deed itself, it is the Karnataka Jain Association which has been entrusted with the Trust property to carry out the objectives of the settler. It is also contended by the respondents that whatever encroachment that has been alleged were not due to the action taken by the present respondent but the said encroachment had taken place even before the present respondents came on the scene. It is also the case of the respondents that whatever improvements that have been now made over the trust property were the improvements which the appellants themselves had proposed to carry out. Therefore, the allegation that is now made by the appellants does not stand to reason. As far as raising of the loan from financial institution is concerned, the said step was taken only to develop the Trust property and to provide more Hostel rooms to the Jain students with modern facilities and, therefore, it cannot be said that all the improvements done are in the nature of breach of trust.