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If what was being agitated were the public rights, the matter would definitely fall within the scope

ASHOK KUMAR GUPTA & ANR.V. M/S SITALAXMI SAHUWALA  MEDICAL TRUST AND OTHERS, CIVIL APPEAL NO.1917 OF 2020  Arising out of Special Leave Petition (Civil)No.21306 of 2019.

Public charitable trust was being run as a private family trust; that the object of the Trust was being ignored; and that there was necessity to frame a proper scheme for administration of the Trust through competent persons. The reliefs prayed for are diverse. It is true that the reliefs prayed for include a relief where the first plaintiff is also being sought to be included as one of the trustees along with other trustees from medical profession and from public, for proper and effective administration of the Trust. Therefore, the matter is not out of the scope of the Section 92 of the Code or not. The substance of the matter as well as the principal relief claimed in the suit is quite clear that what was being agitated were the public rights.

The brief facts of case are as follows; defendant 2(husband) and defendant 3(wife) is a couple. They have 3 children-plaintiff 1(son), defendant 4(son) and a daughter. The husband of their daughter is defendant 7. Plaintiff 1 is the eldest son and married to plaintiff 2 and defendant 4 is the youngest son and married to defendant 5. The plaintiffs are the trustees of 1st defendant’s trust (public charitable trust). The 2nd defendant settled in Coimbatore 1959 and he was managing the firm called M/s Indian Roller Flour Mills. 1st plaintiff secured an admission in medical college and he graduated from Coimbatore Medical College completing MBBS. He pursued his studies further in post-graduation and completed his M.S. from Madras Medical College, Chennai, and is thus a qualified surgeon who has graduated from the Madras University. 2nd defendant has constructed a charitable hospital. The 2nd defendant as author of the trust established the 1st defendant Trust, M/s Sitalaxmi Sahuwala Medical Trust, under registered Trust Deed dated 09.04.1980. The objects of the trust include rendering financial assistance and donations by establishing and assisting running of a hospital, surgical homes; health trainings, nursing homes, maternity homes and dispensaries. The 1st plaintiff who is a qualified medical practitioner will look after the institution and administer the hospital where a part of the hospital can be run for charity and the 1st plaintiff can have his consultations and in patients admitted to serve the people in society. The four trustees appointed under the Deed of Trust are both the plaintiffs and defendants 2 & 3 and they have been appointed for life. The 2nd defendant is the Managing Trustee and the 1st plaintiff was appointed as the Joint Managing Trustee. The 1st plaintiff was taking care of administration of this hospital till the year 2003-04.

After 2003-2004  the 4th defendant – brother of appellant No.1 who did not have any medical qualification or any expertise to run the hospital and manage the Trust had been in control of the Trust and the objects of the Trust were not getting fulfilled; and that the appellants were sought to be removed from the board of trustees.

The plaintiffs submitted that time has come for this Honorable Court to interfere with the affairs of the 1st defendant Trust and to frame a proper scheme for administration of the Trust. The defendants are converting the public charitable trust into a private family trust with rubber stamp trustees. The defendants are guilty of ignoring the objects of the Trust and in misappropriating the income earned by the Trust by restraining its real income by converting the hospital into a business venture.

The plaintiff has framed a scheme for following reasons:

  1. The administration of the Trust should be in proper hands and the hospital should be administered by competent qualified Doctors.

  2. No charity is performed by the 1st defendant Trust and records are created and fabricated for the said purpose for the past 5 years. No free medical aid is provided and allowed to be provided. Only the 1st plaintiff gives free consultation to patients.

  3. No regular meeting of the Trust is conducted and no procedures are followed for proper conduct of meetings. No resolutions are passed and minutes are not recorded.

  4. Trustees are appointed and removed according to the whims of defendants 2 & 4 and no democratic system is followed.

  5. Complaints are frequently emerging from Doctors and Patients that the 4th defendant is demanding and receiving kickback of various amounts involved and the 1st plaintiff has been informed to watch out the activities of the 4th defendant and to direct him to mend his ways, to preserve the reputation of hospital. Etc.

The appellants have filed a suit seeking leave to institute the Suit under Section 92 of the Code of Civil Procedure, 1908.

The basic issue involved in the matter is whether the appellants were rightly granted leave under Section 92 of the Code by the Trial Court.

The district court of Coimbatore has granted a leave under section 92 of the code. After that 2nd Respondent filed a suit seeking revocation of leave granted to the appellants. The District Court vide order dated 27.11.2012 held that the appellants had made out a prima facie case and there was no necessity to revoke the leave already granted. The District Court, thus, dismissed suit of Respondent holding inter alia.

Later Respondents have filed a suit in High Court where the High Court held that the leave under Section 92 of the Code could not have been granted by observing From the previous judgments, it is well settled that the main purpose of provision under Section 92 of CPC is to give a protection to public trust or charitable, by suits being filed against them and the Courts should also to see that there is a prima facie case either breach of trust or of necessity of obtaining direction from the Court on the basis of allegation made in the plaint.

The Supreme Court relied on Sugra Bibi case, which is same as the present case, the suit was brought by the plaintiff in representative capacity. If in respect of a trust which had set up a hospital, a request was made for framing of a proper scope of administration by appointing trustee from medical profession and from public for proper and effective administration of the Trust, the matter would definitely fall within the scope of Section 92 of the Code The Supreme Court allowed this appeal, set aside the view taken by the High Court and restore the decision arrived at by the District Court. The appeal stands allowed without any order as to costs.

“If in respect of a trust which had set up a hospital, a request was made for framing of a proper scope of administration by appointing trustee from medical profession and from public for proper and effective administration of the Trust, the matter would definitely fall within the scope of Section 92 of the Code. In the circumstances, we allow this appeal, set aside the view taken by the High Court and restore the decision arrived at by the District Court. The appeal stands allowed without any order as to costs.”

– Vishal Varma

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