Allowed

S.Seran and 2 others v. The Advocate General, Government of Tamilnadu and 10 others

Madras HC28 Jul 2022A/2912/2022

Case brief

AI extract

What is this about?

The court granted leave to institute a suit under Section 92 CPC based on allegations of maladministration and mismanagement by the respondents in the administration of charitable trusts, following a prior order allowing such suits.

What did the court decide?

Leave to institute a suit under Section 92 of the Code of Civil Procedure was granted, and the application was ordered accordingly.

S.Seran and 2 others Vs The Advocate General… — Writ and Judicial Review | Madras HC (2022)

¶1

A.No.2912 of 2022 in CS.DR.No.3602 of 2022

¶2

KRISHNAN RAMASAMY, J.,

¶3

This application has been filed seeking to grant leave to the applicants/plaintiffs to institute a present suit under Section 92 of the Code of Civil Procedure.

¶4

2.This Court vide order dated 30.11.2021 in batch of applications i.e O.A.Nos.283 of 2019 etc., in Paragraph Nos.72 – VII and 27 (3) (4) held as follows.

¶5

“72 (vii) Two or more applicants in Application Nos.1749, 1802, 1803 and 1927 of 2019, Application Nos.10091, 10092, 10096 and 10097 of 2018 and Original Application No.210 of 2019 can join together and present a plaint within six weeks from the date of this order, i.e institute a suit under section 92 of CPC inter-alia regarding 3^rd and 4^th compartments”

¶6

1/10

¶7

https://www.mhc.tn.gov.in/judis

¶8

“27. ............

¶9

The four distinct compartments are as follows:

¶10

1...... 2......

¶11

3.Maladministration, mismanagement, managerial fraud and malfeasance (particularly, with regard to lease) – procedure, form and substance of proceedings in this regard;

¶12

4.Other financial and administrative issue regarding which allegations and counter allegations have been made – have to be gone into procedure such issues are raised in accordance with the procedure prescribed by law – examination thereof as per settled procedure qua dispute of the present nature.”

¶13

3.The applicants herein are also the applicants in A.Nos10091 and

¶14

10092 of 2018, therefore he would submit that he filed present suit for the irregularities committed by the defendants 4 to 8 during their tenure,

¶15

2/10

¶16

https://www.mhc.tn.gov.in/judis

¶17

which is morefully stated in the affidavit filed by the applicants in

¶18

paragraph No. 11, which are as follows:

¶19

“11.....

¶20

a) By way of Resolution No. 27 dated 10.02.2014 the Board consisting of respondents 4 to 7 along with some other trustees resolved to construct an auditorium in the premises of C. Kandaswamy Naidu College for men for the benefits of Students and same be named as Amma Arangam. Similarly another resolution was passed by respondents 4 to 7 along with some other trustees and resolved to construct an auditorium namely Anna Arangam the premises of Pachaiyappas College campus for the benefit of the students (the schedule mentioned properties herein),

¶21

b) However in contrary to the said resolution defendants 4 to 8 passed another resolution (Resolution No. 169 and 169-A dated 10.04.2017) and as per the said resolution the said two buildings (Amma Arangam at C kandaswamy Naidu College and Anna Arangam at

¶22

3/10

¶23

https://www.mhc.tn.gov.in/judis

¶24

Pachaiyappa's College campus, Chennai) was not constructed as auditorium and instead, it was constructed as a fully furnished marriage halls and it was leased out to 9th defendant without proper notification and valuation and the same is against the interest of the Trust. Further defendants 4 to 8 executed two registered lease deeds both dated 02.05.2017 registered as document No: 2028 of 2017 in the office of sub registrar of Anna Nagar and 2220 of 2017 in the office of Sub Registrar of Periyamed, for a period of twenty years in favour of 9th defendant to use the building, the schedule mentioned properties herein, for marriage functions, family functions and exhibitions for a paltry sum of Rs. 1,50,00,000/- (One crore fifty lakhs) and 75,00,000/- (Seventy five lakhs) per year respectively. The registration fee of Rs 37,95,050/- plus Rs 20,000/- has also been borne by the Trust completely.

¶25

c) Schedule 'A' mentioned properties was purchased by the Trust from Tamil Nadu Housing Board by way of registered sale deed dated 17.7.2003 and as per the terms of the sale deed the

¶26

4/10

¶27

https://www.mhc.tn.gov.in/judis

¶28

property has to be used only for education purpose. However in violation of the said condition, schedule 'A' property along with schedule 'B' property are used for commercial purpose by converting the same as marriage hall.

¶29

d) Further both the marriage hall Amman arangam as well as Anna arangam is unauthorized construction and also against the object of the trust. For construction of said Marriage halls no permission was obtained from Director of College Education, Corporation, Chennai Metropolitan Development Authority and other authorities. Due to the misdeed of defendants 4 to 8 the schedule mentioned properties is facing the threat of being demolished by authorities.

¶30

e) Further the funds of various other estates of the Trust has been utilized for construction of the said marriage halls and the same amounts to mis utilization of trust funds. Resolution passed for ratification of funds transferred to Amma arangam for construction work in the following forms;

¶31

5/10

¶32

https://www.mhc.tn.gov.in/judis

¶33

i) Transfer of funds from other estates to Amma arangam Rs 6.74 Crores

¶34

ii) Bank loans taken for construction of Amma Arangam 6 crores

¶35

iii) Loan against Fixe deposition for construction 18 crores

¶36

iv) Precolsure of fixed deposit for construction of works and 175th GJC 63

¶37

Lakhs

¶38

v) Preclosure of fixed deposit of Amma Arangam Construction 56 Lakhs (total funds transfers ratifies approximately 31.93 Crores)

¶39

vi) Resolution passed for ratification of funds transferred to Anna arangam for construction work amounted to 2.94 Crores.

¶40

f) The loan borrowed by defendants 4 to 8 from Indian Bank for construction of the said fully furnished marriage halls is a criminal waste and as on date, the outstanding loan amount including the interest and penal interest is about 40 crores. Hence the same remains as a burden for the Trust. In such circumstances, the defendants 4 to 8 are personally liable to repay the said loan and relieve

¶41

6/10

¶42

https://www.mhc.tn.gov.in/judis

¶43

the Trust from the debt.

¶44

g) 9th defendant company was incorporated on 28.12.2016 with the address of Anna Arangam even much prior to the registration of lease deed dated 2.5.2017. This shows that 9th defendant is a company floated by defendants 4 to 8.

¶45

h) Apart from the above irregularities of converting college auditorium into marriage hall, defendatns 4 to 8 has done various other misdeeds and maladministrations. While Govindanaikan Turst was along with Pachayappas Trust, the defendants 4 to 8 mismanaged the estate of Govindanaikan Trust and that is the reason for separation/bifurcation of Govindanaikan Trust from Pachayappas Trust by way of order of Hon'ble High Court in OSA No: 161 of 2013. Hon'ble division bench of this Hon'ble Court in OSA No: 161 of 2013 has given a well considered observation about how the trust is mismanaged and considering the welfare of Govindanaiker trust, found fit to separate Govindanaiker Trust

¶46

7/10

¶47

https://www.mhc.tn.gov.in/judis

¶48

from Pachayappas trust and After separation Justice Chitra Venkatraman was appointed as interim administrator for Govindanaikar Trust. Even after separation, defendants 4 to 8 without handing over the accounts to the interim administrator, misused the funds of Govindanaikar trust. Due to which defendants 4 to 8 faced contempt proceedings (Contempt petition No: 2291 of 2017 dated 25.7.2018) and to get over the contempt .proceedings defendants 4 to 8 paid the misused fund of Rs 49,68,000 back to Govindanaiker Trust.

¶49

i) Even while facing the contempt proceedings 8th defendant issues a letter to Interim Administrator not to handover the accounts of Govindanaikar Trust to the Interim Administrator of Govindanaikar Trust.

¶50

j) 8th defendant filed income Tax assessment for the Trust for the year 2016-2017 with inaccurate particulars, in the capacity of Superintendant of Trust Board though he does not hold that post. Due to which showcause notice

¶51

8/10

¶52

https://www.mhc.tn.gov.in/judis

¶53

dated 30.12.2018 was issued by the Income Tax Department and the same is pending.

¶54

k) Defendants 4 to 8 also committed irregularities in appointment of staffs and teachers and one such example is the appointment of Assistant Professors between the year 2014 to 2016 in various colleges of the trust. The interim administrator Justice P.Shanmugam (Retd) found about 150 Assistant professors appointed, got placement with fake certificates and they do not have required qualification for being appointed as Assistant professors. Hence the Interim Administrator conducted enquiry and issued showcause notice against 150 Assistant professors and the same is pending. Apart from irregularity in appointment of Assistant professors there were irregularity in appointment of principals of various colleges also.”

¶55

4.Hence, he prayed to grant leave to institute a present suit under

¶56

Section 92 of the Code of Civil Procedure.

¶57

9/10

¶58

https://www.mhc.tn.gov.in/judis

¶59

KRISHNAN RAMASAMY, J., rst

¶60

5.Since this Court vide order dated 30.11.2021, in O.A.Nos.283 of 2018 etc batch, permitted the applicants to file a suit and considering the alleged irregularities committed by the respondents 4 to 8 as narrated above, this Court is of the view that it would be appropriate to grant leave to institute a present suit under Section 92 of the Code of Civil Procedure.

¶61

6.Accordingly, this Court granted leave and the present

¶62

Application is ordered.

¶63

28.07.2022

¶64

rst

¶65

A.No.2912 of 2022 in CS.DR.No.3602 of 2022

¶66

10/10

¶67

https://www.mhc.tn.gov.in/judis

S.Seran and 2 others v. The Advocate General, Government of Tamilnadu and 10 others

Case brief

What is this about?

What did the court decide?

S.Seran and 2 others v. The Advocate General, Government of Tamilnadu and 10 others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Kamala Vasudevan and Another Vs Priyanka Vasudevan

Premalatha Mohanraj Vs M/S Green Peace Constructions Pvt. Ltd.

Shanmugam Vs R.Ezhumalai

Suresh Kumar Attri Vs Dharaniselvam and Another

Princy Martin and another Vs R.Martin and 7 others

Suresh Kumar Attri and Another Vs Dharaniselvam and Another