Mr. Vijay Raghurama Shetty vs Baun Foundation Trust And Others on 26 September, 2011

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               IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                           CIVIL APPELLATE JURISDICTION




                                                                                      
                 CIVIL REVISION APPLICATION NO. 530 OF 2011




                                                              
     Mr. Vijay Raghurama Shetty                         ...        Applicant
           Versus
     Baun Foundation Trust and others                  ...         Respondents




                                                             
     Mr. Navroz Seervai, Senior Counsel with Mr. Ashutosh Kumbhkoni, Senior
     Counsel and Mr. Z. Andhyaruzina, Advocate with Mr. Amit Vyas, Advocate and
     Mr. Sanjay Israni, Advocate with Mr. S. Singh and Ms. Nikita Ajwani with Mr.




                                              
     Melvyn Fernandes, Advocates i/b. M/s. Rajani Associates for the Applicant.
     Mr. D. D. Madon, Senior Counsel with Mr. Ravi Gandhi, Advocate i/b. M/s.
                            
     Kanga & Co. for Respondents.
                           
                                               CORAM : R. M. BORDE, J.

MONDAY, SEPTEMBER 26, 2011

ORAL JUDGEMENT:

Rule. Rule made returnable forthwith.

2. The revision petitioner – original defendant is taking exception to
the order passed by the Judge, City Civil Court, Bombay on 01.07.2011 in Suit

No. 1210 of 2011 holding that the Court does have jurisdiction to try and
entertain the Suit.

3. The instant revision petition is presented by the original defendant
in Suit No. 1210 of 2011. The original plaintiff No. 1 is Baun Foundation Trust
(“said Trust” for short) which is a Public Charitable Trust registered under the
provisions of the Bombay Public Trust Act, 1950 (“BPT Act” for short). It is
not disputed that the original plaintiff No.2 is the founder trustee of the said
Trust as also the original plaintiff Nos. 3 to 5 are the trustees of the said Trust.
According to the plaintiffs, the defendant was also the trustee of the said Trust

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until his term came to an end. The said Trust was formed in 1964 with an object
to establish and run a hospital. The plaintiff No.2 and his wife late Smt. Shalini

Shetty are amongst the founders of the said Trust. In the year 1990, additional
trustees were taken in by the said Trust and those trustees are petitioner

(defendant) and the plaintiff No.3 / respondent No.3. The defendant is son of
plaintiff No.2 and Smt. Shalini Shetty. After inclusion of the additional trustees,
a change was reported to the Charity Commissioner on 21.03.1990. According

to the plaintiffs, as per the provisions contained in the Constitution of the said
Trust, the trustees are to be appointed for the period of three years. It is also
contended that there arose some dispute between the defendant and the other

trustees and it is alleged that the defendant started interfering in the day-to-day

affairs of the said Trust. It is also averred in the plaint that the term of the
defendant came to an end on 21.03.2011, and thereupon, the remaining trustees

of Trust recorded a decision not to renew the term of the defendant. Since, it is
alleged, that the defendant was interfering in the administration of the said
Trust, the Suit was presented by plaintiff Nos. 1 to 5 claiming decree of

injunction against him. It is also contended in the plaint itself that Suit is
entertainable in the absence of prior sanction of Charity Commissioner as

provided under Sections 50 and 51 of the BPT Act. The prayers made in the
plaint, and more specifically, prayer clauses (a) and (b) are quoted below:

a. That the Defendant, his servants, agents, or any person or

persons claiming by, under or through him be restrained by a
permanent order and injunction of this Hon’ble Court from
threatening the Plaintiffs in any manner and be further restrained
from entering upon and remaining in the premises situated at the
Plaintiff No. 1’s premises at Cumballa Hill Hospital 93-95, August

Kranti Marg, Mumbai 400 036, the Plaintiff No.2 at his office at
Cumballa Hill Hospital 93-95, August Kranti Marg, Mumbai 400
036 and his residence at 1-B, Manek, 11, L.D. Ruparel Marg,
Mumbai- 400 006, the Plaintiff No.3 at her residence at Asha Mahal,
1st Floor, Flat No.6, Nowrojee Gamadia Road, Mumbai-400 026, her
office at 107-109, Konark Shram, 156, M. M. Malviya Road, Tardeo,
Mumbai 400 034 and also at her office at Messrs. Shalini
Enterprises, Block No.5, Ground Floor, Mishree Mansion, August
Kranti Marg, Mumbai 400 036, the Plaintiff No.4 at his residence at
33, Tenerife, Little Gibbs Road, Malabar Hill, Mumbai 400 014 and
the Plaintiff No.5 at his residence at 403/3 Radhakrishna Nagar,
Malpa Hill No.3, Andheri (East), Mumbai 400 093;

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              b.      That the Defendant be directed by a permanent mandatory

order of injunction from interfering with and / or causing
disturbance in day to day affairs of the Plaintiffs business and / or

causing any harassment to the Plaintiffs and / or their staff members
in the premises situated at the Plaintiff No. 1’s premises at Cumballa
Hill Hospital 93-95, August Kranti Marg, Mumbai 400 036, the

Plaintiff No.2 at his office at Cumballa Hill Hospital 93-95, August
Kranti Marg, Mumbai 400 036 and his residence at 1-B, Manek, 11,
L.D. Ruparel Marg, Mumbai- 400 006, the Plaintiff No.3 at her
residence at Asha Mahal, 1st Floor, Flat No.6, Nowrojee Gamadia
Road, Mumbai-400 026, her office at 107-109, Konark Shram, 156,

M. M. Malviya Road, Tardeo, Mumbai 400 034 and also at her office
at Messrs. Shalini Enterprises, Block No.5, Ground Floor, Mishree
Mansion, August Kranti Marg, Mumbai 400 036, the Plaintiff No.4
at his residence at 33, Tenerife, Little Gibbs Road, Malabar Hill,
Mumbai 400 014 and the Plaintiff No.5 at his residence at 403/3

Radhakrishna Nagar, Malpa Hill No.3, Andheri (East), Mumbai 400
093;

4. Defendant objected to the jurisdiction of the Civil Court by

presenting an application. According to the defendant, the issues involved in
the Suit are required to be dealt with by the authorities constituted under the
BPT Act. It is also the contention of the defendant that the Suit claiming an

order of injunction against him is not maintainable without securing prior
sanction of the Charity Commissioner as required under Section 51 of the BPT

Act. The objection tendered by the defendant was considered by the learned
Judge of the City Civil Court. In the absence of there being any evidence led by

the parties in support of the respective contentions raised by them, the Trial
Court recorded the finding that the Court has jurisdiction to entertain the Suit
while considering Exhibit-2, which order is impugned in this Civil Revision
Application.

5. Section 80 of the BPT Act relates to bar of jurisdiction on the
Civil Court which provides thus:

“Section 80 : Bar of jurisdiction
Save as expressly provided in this Act, no Civil Court shall have
jurisdiction to decide or deal with any question which is by or under
this Act to be decided or dealt with by any officer or authority under
this Act, and in respect of which the decision or order of such
officer or authority has been made final and conclusive.”

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6. Section 50 of the Act relates to presentation of Suits by or against
or relating to public trusts or trustees or others. If the Suit is for any declaration

or injunction in favour of or against a public trust or trustee or trustees or
beneficiary thereof, the Charity Commissioner after making such enquiry as he

thinks necessary or two or more persons having an interest in case the Suit is
under sub-clauses (i) to (iii), or one or more such persons in case the Suit is
under sub-clause (iv), having obtained the consent in writing of the Charity

Commissioner as provided in Section 51 may institute a suit whether
contentious or not in the Court within the local limits of whose jurisdiction the
whole or part of the subject matter of the trust is situate to obtain a decree for

any of the following reliefs:

(a) to (o)

…

(p) declaration or denying any right in favour of or against a

public trust or trustee or trustees or beneficiary thereof and
issuing injunctions in appropriate cases; or

(q) …

Clause (p) is relevant for consideration which relates to declaring

or denying any right in favour of or against, a public trust or trustee or trustees

or beneficiary thereof and issuing injunctions in appropriate cases.

7. Section 50 further provides that no suit claiming any of the reliefs

specified in this Section shall be instituted in respect of any public trust, except
in conformity with the provisions thereof. Thus, the suit as contemplated by
Section 50(iv)(p) can be instituted after securing consent in writing of the

Charity Commissioner by one or more of such persons. It is contended that for
institution of the suit prior permission of the Charity Commissioner is essential
and unless such permission is secured, the suit is not entertainable.

8. The Counsel appearing for the original defendant – revision
petitioner contends that the name of the defendant appears in the Schedule 1
which is maintained as provided under Section 17 of the BPT Act read with

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Rule 5 of the Rules framed thereunder. It is thus contended that until the name
of the defendant appears in the said Schedule, he shall be deemed to be a trustee

of the Trust. It is also contended that considering the averments noted in the
plaint, it is evident that the defendant was adopted as a trustee of the said Trust

since 21.03.1990 and he continued until the year 2009. In paragraph 3 of the
plaint, it is stated that the defendant was inducted as a trustee in the year 1990,
and it is further noted in paragraph 5 of the plaint that in the year 2009, dispute

had arisen between plaintiff No. 2 and the defendant whereby the defendant had
started interfering in the day to day affairs of the said Trust thereby acting
contrary to the objects of the said Trust. Thus, it is evident that the defendant

has continued to be a trustee since the year 1990 till the year 2009. In para 7 of

the plaint it is recited that since the harassment, obstructions and interference
had continued and also since the same had reached beyond limits in March,

2011 and as the term of the defendant had ended, the then trustees had
unanimously decided not to renew the term of the defendant. Accordingly, a
resolution came to be passed in the meeting of the Trustees held on 24.03.2011,

wherein the term of the defendant as a trustee came to an end since the same
was not renewed by the then trustees. It is also informed that the change report

has been tendered with the Charity Commissioner in respect of the occurrence
of the change i.e. cessation of the trusteeship of defendant.

9. Section 22 of the BPT Act deals with the aspect of the occurrence
of change and it is the Charity Authorities established under the BPT Act are
empowered to hold an inquiry in respect of the occurrence of the change and

render a decision in that regard. It is stated that the change in respect of the
Constitution of the trustees of the said Trust is reported to the Charity
Commissioner and the defendant has also raised an objection with the Charity
Commissioner objecting to the change. It is the contention of the defendant that
it is only the Charity Authorities who are authorised to decide the aspect as
regards whether a person continues to be a trustee of the Trust and whether
change report is worthy of acceptance or not. It is the exclusive jurisdiction of

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the Charity Commissioner to decide the related issue. The Counsel appearing
for the revision petitioner invited my attention to the pleading in the plaint and

contended that considering the pleadings and the provisions of Section 17 of
the BPT Act read with Rule 5 of the Rules as also the entries in the Schedule 1,

it is to be presumed that the defendant is a trustee of the trust until his name is
removed from Schedule 1 and the issue as to whether he continues to be a
trustee or not is required to be dealt with by the Charity Authorities having

jurisdiction to deal with the issues. It is contended that in order to determine the
controversy involved in the suit, and with a view to consider the objection
raised by the defendant as regards the jurisdiction of the Civil Court to entertain

the dispute, a finding needs to be recorded as to whether the defendant is a

trustee of the trust or not. It is contended that whether the defendant is a trustee
of the trust, is a jurisdictional fact and this jurisdictional fact has to be

considered by the Court only after receiving the evidence. In the instant matter,
there was no evidence placed on record on jurisdictional aspect of the matter
and the decision rendered by the Trial Court in the absence of determination on

the jurisdictional fact is unsustainable. Reliance is placed on the judgment in
the matter of Carona Limited Vs. Parvathy Swaminathan and Sons reported in

(2007) 8 SCC 559. In paragraph Nos. 26 to 28 of the judgment, the Apex Court
has observed thus:

“Jurisdictional fact

26. The learned counsel for the appellant company submitted that
the fact as to “paid-up share capital” of rupees one crore or more
of a company is a “jurisdictional fact” and in absence of such fact,
the court has no jurisdiction to proceed on the basis of the Rent

Act is not applicable. The learned counsel is right. The fact as to
“paid-up share capital” of a company can be said to be a
“preliminary” or “jurisdictional fact” and said fact would confer
jurisdiction on the court to consider the question whether the
provisions of the Rent Act were applicable. The question,
however, is whether in the present case, the learned counsel for
the appellant tenant is right in submitting that the “jurisdictional
fact” did not exist and the Rent Act was, therefore, applicable.

27. Stated simply, the fact or facts upon which the jurisdiction of
a court, a tribunal or an authority depends can be said to be a
“jurisdictional fact”. If the jurisdictional fact exists, a court,

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tribunal or authority has jurisdiction to decide other issues. If
such fact does not exist, a court, tribunal or authority cannot act. It
is also well settled that a court or a tribunal cannot wrongly

assume existence of jurisdictional fact and proceed to decide a
matter. The underlying principle is that by erroneously assuming
existence of a jurisdictional fact, a subordinate court or an inferior

tribunal cannot confer upon itself jurisdiction which it otherwise
does not posses.

28. In Halsbary’s Law of England (4th Edn.), Vol. 1, Para 55, p.
61; Reissue, Vol. 1(1), Para 68, pp. 114-15, it has been stated:

“Whether the jurisdiction of a tribunal is dependent on the
existence of a particular state of affairs, that state of affairs may be
described as preliminary to, or collateral to the merits of, the
issue. If, at the inception of an inquiry by an inferior tribunal, a
challenge is made to its jurisdiction, the tribunal has to make up

its mind whether to act or not and can give a ruling on the
preliminary or collateral issue; but that ruling is not conclusive.”

The existence of a jurisdictional fact is thus a sine qua non or
condition precedent to the assumption of jurisdiction by a court or

tribunal.”

10. In the instant matter, whether the defendant continues to be a
trustee of the said Trust is a jurisdictional fact and determination of the said

question is a sine qua non or condition precedent to arrive at findings as regards

the jurisdiction of the Civil Court to entertain the dispute. Reliance is also
placed on the judgment of the Division Bench in the matter of Satpuda Tapi
Parisar Sahakari Sakhar Karkhana Limited Vs. Jagruti Industries and another

reported in 2008 (5) Bom.C.R. page 284. In sub para 12 of paragraph No.9 , it
is quoted thus:

12. We would, at this stage, refer to the precise principle laid
down by this Court is the case of (Fazlehussein Vs. Yusufally),

AIR 1995 Bom.55, wherein the Court has, after observing that the
averments made in the plaint would be sufficient to decide the
question of jurisdiction, held as under:-

“In considering the preliminary issue, the Court must
look into the averments in the plaint and consider any
objections which the defendant may choose to raise
against the maintainability of the action on those
averments. The question of jurisdiction which is raised
by way of a demurrer has always to be decided on the
allegations made in the plaint and not on the
contentions that the defendant may raise. It is true that

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if the jurisdiction of the Court depends upon the proof
of a fact and the question as to the existence or
otherwise of that fact is canvassed, the parties may lead

evidence in support of their respective cases before the
preliminary issue as to jurisdiction of the Court is
decided.”

The jurisdiction of the Court depends upon the proof of a fact or a
question as to whether defendant is a trustee of the trust and unless the parties

lead evidence in support of their respective contentions, any decision on
preliminary issue cannot be arrived at. According to the revision petitioner, the
decision arrived at by the Civil Court, without deciding the jurisdictional fact as

to whether the defendant continues as a trustee of trust, is erroneous.

11.

It is contended by the respondents-original plaintiffs that as per
the provisions of the Constitution of the said Trust, there are two categories of

members. The plaintiff No.2 is the founder trustee or the trustee of the ‘other
part’ and continues to remain as a life time trustee. Whereas, the other trustees
including the defendant can be categorized who can continue for a period of

three years. Clause 9(b) of the Constitution of the Trust provides that save as

expressly provided in sub-clause (a) above, all the trustees or trustee for the
time being of the said Trust shall on the expiration of three years from the date
of their or his appointment as trustees or trustee as hereinafter provided retire

from the trust of these presents. Thus, it is contended that the term of the trustee
i.e. the defendant has come to an end in March 2009 after expiration of the
period of three years of his appointment.

12. It is a matter of record that while the issue of jurisdiction of the
Court was taken up for consideration, the resolutions pertaining to continuation
of defendant as a trustee of the trust at the interval of every three years were not
placed on record. However, the same appears to have been placed on record, at
a subsequent stage, after the Court rendered decision on the issue of jurisdiction.
As stated above, there is an averment in paras 3 to 5 of the plaint that the

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defendant was inducted as trustee of the trust in the year 1990 and the defendant
continued until the year 2009. Thus, in order to determine the jurisdiction of the

Court to deal with the issue as to whether the defendant discontinued as a
trustee of the Trust on expiry of the period of three years or whether he

continues by virtue of his inclusion of name in Schedule 1 maintained by the
Charity Authorities and by virtue of provisions of Section 17 of the BPT Act
read with Rule 5 of the Rules, is a matter required to be dealt with and decided

by the Civil Court on recording evidence of the parties on jurisdictional fact.
The issue as to whether the defendant continues to be a trustee of the trust is a
matter required to be dealt with by the Court before arriving at the decision as to

whether the Civil Court has jurisdiction to entertain and decide the dispute. It is

the argument advanced by the original defendant (revision petitioner herein)
that the reported change in respect of deletion of name of defendant from the list

of trustees of the Trust is a matter pending adjudication before the Charity
Authorities and the defendant has raised an objection before the appropriate
Charity Authority for effecting change and so such question is required to be

dealt with by Charity Authorities. The issue as to whether the change as
occurred in the constitution of the Trust is required to be dealt with by the

Charity Authorities as contemplated by Section 22 of the BPT Act. The Civil
Court needs to apply mind to the facts of the case as well as relevant provisions
of the BPT Act and then arrive at conclusion as to whether Civil Court can have

jurisdiction to deal with issues involved in the Suit.

13. The learned Counsel appearing for the respondents vehemently

contended that it is not the case of the continuation or discontinuation of the
defendant as a trustee of the Trust. However, the defendant ceases to be a
trustee by virtue of operation of the provisions of the said Constitution on the
expiry of period of three years from the date of his appointment. Once he
ceases to be a trustee of the Trust, his status is rendered as ‘trespasser’, and as
such, the Suit is entertainable. As stated above, the jurisdictional fact as to
whether the defendant continues to be a trustee of the Trust or not is required to

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be dealt with by the Civil Court after receiving evidence that will be led by the
parties in that behalf. As stated above, the resolutions indicating that during the

period of last twenty years, the defendant was continued as a trustee of the Trust
by the adopting resolutions from time to time, were not before the Court when

the decision was rendered on the issue. In these circumstances, it would not be
proper for me to comment upon the authenticity or otherwise of the resolutions
placed on record before the Trial Court after the decision was rendered. It

would be open for the learned Judge of the City Civil Court to deal with the
documentary and other evidence that would be placed before him for
determination of the jurisdictional fact as to whether the defendant continues to

be a trustee of the Trust.

14.

In view of the discussion as above, I am of the view that the

matter is required to be remitted back to the Civil Court for rendering a decision
in the matter afresh and for recording findings on the jurisdictional fact as
regards the trusteeship of the defendant.

15. It is the contention of the respondent that merely because the

change report is presented, it does not mean that the change has not occurred.
The change in the Constitution of the Trust takes place on the date of adoption
of resolution. In this regard, a reliance is placed on the judgment in the matter

of Vijay K. Mehta and another Vs. Charu K. Mehta and others reported in 2008
(5) ALL MR page 366 so also in the matter of Madanrao s/o. Nanasaheb
Chavan Vs. State of Maharashtra and others reported in 2002(4)Mh.L.J. Page

872. There can be no dual opinion about the proposition that the change takes
place once the resolution is adopted. However, in the instant matter, for the
reasons recorded above, I am of the opinion that the jurisdictional fact as to
whether the defendant ceases to be a trustee of the Trust is to be determined by
the Civil Court after taking into consideration various aspects and the questions
of fact on the basis of interpretation of the provisions of the BPT Act need to be
determined by Civil Court. The matter, therefore, needs to be remitted back to

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the Civil Court for determination of the questions raised in matter and for
rendering decision afresh on the point of jurisdiction of Civil Court to entertain

Suit.

16. For the reasons recorded above, the Civil Revision Application
needs to be allowed and same is accordingly allowed. The order passed by the
Judge, City Civil Court, Bombay on 01.07.2011 in Suit No. 1210 of 2011 below

Exhibit-2 is quashed and set aside and the matter is remitted back to the Trial
Court for rendering decision afresh in accordance with law. The learned Trial
Court shall decide the issue afresh as expeditiously as possible, preferably

within a period of eight weeks from today. Rule is accordingly made absolute.
No costs.

17. The learned Judge of the Trial Court, while rendering decision in
the matter, shall not be influenced by view adopted by him earlier while
deciding Exhibit-2 and the observations made by this Court touching the merits

of the controversy.

18. All pending Civil Applications, if any, stand disposed of
accordingly.

(R.M. BORDE, J)

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