Dismissed

Jakka Prasada Rao v. D.Diva Sulochana Papa

Telangana HC3 Sept 2014CMA/433/2014

Case brief

AI extract

What is this about?

This civil miscellaneous appeal challenges the trial court's dismissal of a petition to appoint a receiver for a prayer house. The High Court upheld the dismissal, ruling that the petitioners failed to prove misappropriation of funds or establish the necessary prima facie case and imminent danger required to appoint a receiver under Order XL Rule 1 of the CPC.

What did the court decide?

The Civil Miscellaneous Appeal was dismissed, confirming the order of the trial court and refusing the appointment of a receiver.

Jakka Prasada Rao Vs D.Diva Sulochana Papa — Property and Title | Telangana HC (2014)

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THE HON’BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE SMT. JUSTICE ANIS

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CIVIL MISCELLANEOUS APPEAL NO. 433 OF 2014

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JUDGMENT: (Per the Hon’ble Smt. Justice Anis)

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1. This Civil Miscellaneous Appeal, under Order XLIII Rules 1 and 2 of the Code of Civil Procedure, 1908 (for short ‘C.P.C.), is directed against the order, dated 30.12.2013 passed in I.A.No.841 of 2013 in O.S.No.1100 of 2013 on the file of the III Additional District Judge, Ranga Reddy District at L.B.Nagar.

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2. Appellants were arrayed as the petitioners, while the respondents as the respondents in I.A. before the trial Court.

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3. For the sake of convenience, the parties are referred to as arrayed in the I.A. before the trial Court.

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4. The petitioners filed the petition under Order XL Rule 1 read with Section 151 C.P.C. to appoint a receiver for administering the petition schedule property and funds of Bethel Prayer House (for short ‘BPH’).

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5. The brief averments made in the petition filed before the trial Court are as follows:

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The petitioners are the believers of Jesus Christ and they regularly attend the prayers at BPH. The petitioners being the representatives of several others who are equally interested in the

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management, administration and related activity being conducted by the BPH. The believers of Christianity have come together with an understanding that they should have a prayer house for them to conduct prayers, preach the message of God and conduct other charitable activity, and therefore, under the guidance of late Sri D.J. Samuel and Mr. Jacob, they started conducting prayers in a small hut and the said two persons have obtained government patta land in the name of their mother by name Mallepuvamma, Daniel Sikhamani, John Peter – one of their brother’s son, Hebsiba – another sister’s son and D.J. Samuel and his daughters Jasmine and Hannah. One more patta was standing in the name of late Mallepuvamma – mother of D.J. Samuel and Jacob. Thus, basing on six pattas, a prayer house was started. The believers/worshipers who regularly attend the prayer in the prayer house used to donate money by putting in the donation box. The said D.J. Samuel and Jacob earlier used to receive the donations and now the respondents have been receiving the huge money from the BPH by opening the donation boxes which were not accounted for and which have gone for utilizing for their personal expenditure. When the petitioners are questioning the action of the respondents, the respondents created a trust under respondent No.10, but they have no right to create such trust. The land acquired for the construction of church is free of cost and the prayer house was constructed in the petition schedule property from the contributions and offerings made by the worshipers and believers of Jesus Christ. The respondents denied that there were misappropriation of funds and also claimed that the petitioners

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cannot claim that all the believers in the Christianity are the owners of the BPH. The actions of the respondents 1 to 9 have been the subject-matter of O.S.No.2118 of 2011 on the file of the II Additional Senior Civil Judge, Ranga Reddy District filed by M/s.Bethel Prayer House, which is a registered Society represented by one Vinayakumar against D.Jacob (respondent No.9), with regard to misuse, abuse and misappropriation of funds by the respondents. The petitioners are regularly attending the prayer house and offering their prayers. The petitioners questioned the respondents that they are receiving offerings and donations from the believers from time to time and those offerings have not been accounted for, but still there is no bank account. The prayer house is being administered as per the whims and fancies of the respondents and the respondents are treating the prayer house as their personal property. So far, the respondents received Rs.2 crores and they have misappropriated the same. The respondents do not show any account and there is no proper management of the prayer house. One of the worshipers filed a criminal case, which was referred to Jeedimetla police by the Metropolitan Magistrate, Medchal in Crime No.36 of 2012 and the same was closed as the matter is of civil nature. Hence, the petitioners filed the suit and sought for permission of Court under Section 92 C.P.C. The average collection of prayer house in every week is in between Rs.15,000/- to Rs.20,000/- and the respondents failed to account for the same. Since there is misappropriation of funds, it is just and necessary to appoint a receiver to look after the accounts and day-to-day management of

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the prayer house till the disposal of the suit.

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6. The brief averments made in the Counter filed by the respondents 1 to 10 before the trial Court are as follows:

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The respondents denied the allegations leveled by the petitioners and stated that the relatives of respondent No.9 have obtained a patta land of 100 Sq. yards each and delivered the same to respondent No.9 and others for establishing a prayer house to propagate Christianity. The respondent No.9 was conducting prayers since 1988. The petitioners had not been involved either in the establishment of the prayer house or conducting prayers for several years. The petitioners having colluded with one Rachel and Laxmi, cheated the respondent No.9 and filed the present suit. There is no illegality in allotment of plots or construction of prayer house or conducting prayers in the prayer house. The believers in the Christianity are entitled to make donations for the maintenance and conducting of the prayer house. It is not illegal to make use of the collections by constructing the prayer house and to appoint supervising persons from the religious authorities. The 5^th petitioner and others developed malicious and greedy conduct to grab the prayer house, formed a Society and resorted to the litigation by filing O.S.Nos.2118 of 2011 and 715 of 2012. In fact, the owners of plots of land have created a registered Trust and the property was allowed to be developed as a prayer house. The owners of plots of land have practically sacrificed their plots for the benefit of the prayer house. There was no misuse and misappropriation of funds in construction and conducting of prayer house. The Hon’ble High

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Court in C.M.A.No.2 of 2013 categorically held that the so-called society is directed not to interfere with the conduct of the prayer house by respondent No.9 and others. The petitioners have no right to question the formation of the Trust and its objectives. The petitioners apart from making bald and baseless complaints, are not able to show a single instance of misuse by respondents 1 to 9. The respondents have been religiously conducting prayer house without any selfish motive by investing their lands for more than 25 years. The notebook filed by the respondents shows the receipts from the believers in Christianity. Keeping the collections in a bank account and withdrawing the amount by itself, cannot be construed as a misappropriation in the absence of any cogent material. The orders passed in I.A.1799 of 2012 in O.S.No.715 of 2012 were set aside by the Hon’ble High Court in C.M.A.No.2 of 2013. Hence, there is no necessity for appointing a receiver and finally prayed the Court to dismiss the petition with costs.

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7. The respondent No.11 reported no counter before the trial Court.

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8. After considering the oral and documentary evidence, the trial Court dismissed the petition filed by the petitioners as the petitioners failed to establish the necessity for appointment of a receiver in this case.

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9. Aggrieved by the order of the trial Court, the petitioners preferred the present Civil Miscellaneous Appeal.

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10. The learned counsel for the appellants/petitioners argued

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that the trial Court has not properly appreciated the facts on record; that the trial Court without going through the entire pleadings and documents, dismissed the petition basing on surmises and conjectures; that the trial Court failed to see the prima facie case, balance of convenience and basic ingredient for appointment of receiver; that the trial Court also failed to notice that there are misappropriation of funds by the respondents and the prayer house is being mismanaged and misused by the respondents, and therefore, the trial Court ought to have appointed a receiver for administrating the affairs of the prayer house.

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It is also argued that huge funds are coming to the prayer house and the respondents are not maintaining proper accounts, and funds are being misappropriated for the personal use of the respondents by diverting the funds, and therefore, the trial Court ought to have appointed a receiver to prevent the mismanagement of the prayer house. It is further argued that the order of the trial Court in dismissing the petition is perverse, illegal and arbitrary. Therefore, prayed the Court to appoint a receiver.

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11. On the other hand, the learned counsel for the respondents vehemently opposed for appointment of a receiver on the ground that respondents 1 to 9 are the founders of BPH and the said prayer house belongs to them; that the petitioners never made any donations to the prayer house and never participated in construction of the prayer house; that the petitioners have no right to question the management and affairs of the BPH as the prayer house being properly maintained by the respondents and that there

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is no misappropriation of funds as alleged by the petitioners.

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It is further argued that a Trust was created on 25.11.2011

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and it was named as ‘Bethel Prayer House’; that the objects of the prayer house is to worship Jesus Christ and to help the poor in the matter of social upliftment, imparting true education, maintaining hospitals, etc. and the respondents are discharging their duties without any misappropriation of funds; that after formation of the Trust, bank account was being maintained properly and that R.11’s Society has no role to play in the BPH.

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It is further argued that when the 5^th petitioner and others filed O.S.No.715 of 2012 and obtained injunction in I.A.No.1799 of 2012 and the same was set aside by this Court in C.M.A.No.2 of 2013 by holding that the Society has no role to play with the BPH, and therefore, finally prayed the Court to dismiss the Civil Miscellaneous Appeal.

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12. After hearing both sides, the point that arises for consideration is:

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Whether the appellants/petitioners have made out any case to set aside the impugned order passed by the trial Court as prayed for?

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13. POINT:

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It is an admitted fact that late Sri D.J.Samuel and Jacob started constructing the prayer house in the year 1988 in a small

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hut. The respondents 1 to 9 are the owners of the pattas bearing Nos.151, 142, 143, 150, 151 and 152 and they have the said land for construction of a prayer house. There is a donation box in the said Bethel Prayer House (BPH). The believers and worshippers, who regularly attend the prayers in BPH, used to donate the money by putting the same in the donation box. The respondents 1 to 9 have been receiving the said funds and maintaining and administrating the affairs of the BPH. The petitioners and some other persons formed themselves into a Society and filed O.S.No.715 of 2012 and obtained injunction orders in I.A.No.1799 of 2012. The respondents in the said I.A.No.1799 of 2012, aggrieved by the injunction order and filed C.M.A.No.2 of 2013 before this Court and this Court allowed the C.M.A. by holding as follows:

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“The respondent-Society comprised of a limited number of persons and the appellants and others were in management of the Church, by the time the respondent was formed. It is just ununderstandable as to how the respondent can have the control over the management of the Church. The trial Court did not take this important aspect into account and allowed the I.A.”

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14. Admittedly, R.11 – Society cannot claim exclusive right over BPH. Likewise, the petitioners, who filed the present appeal stating that they are the believers and worshippers of Christianity, regularly attending the prayer house and donating the money, have a right to question the respondents with regard to mismanagement

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and misappropriation of funds of BPH.

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15. Order XL, Rule 1 C.P.C. reads thus:

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“1. Appointment of receivers—

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(1) Where it appears to the Court to be just and convenient, the Court may by order—

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(a) appointment a receiver of any property, whether before or after decree;

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(b) remove any person from the possession or custody of the property;

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(c) commit the same to the possession, custody or management of the receiver; and

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(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such those powers as the Court thinks fit.

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(2) Nothing in this rule shall authorize the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove.”

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16. The High Court of Madras while dealing with the application for appointment of receiver in a case of T.Krishnaswamy Chetty

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Vs. C.Thangavelu Chetty and others^[1] , enunciated five principles, which can be described as the “panch sadachar” of the Courts exercising equity jurisdiction in appointing receivers, are as follows:

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(1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. The discretion is not arbitrary or absolute: it is a sound and judicial discretion, taking into account all the circumstances of the case, exercised-for the purpose of permitting the ends of justice, and protecting the rights of all parties interested in the

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controversy and the subject-matter and based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial proceeding.

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(2) The Court should not appoint a receiver except upon proof by the plaintiff that prima facie he has very excellent chance of succeeding in the suit.

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(3) Not only must the plaintiff show a case of adverse and conflicting claims to property, but, he must show some emergency or danger or loss demanding immediate action and of his own right, he must be reasonably clear and free from doubt. The element of danger is an important consideration. A Court will not act on possible danger only; the danger must be great and imminent demanding immediate relief. It has been truly said that a Court will never appoint a receiver merely on the ground that it will do no harm.

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(4) An order appointing a receiver will not be. made where it has the effect of depriving a defendant of a 'de facto' possession since that might cause irreparable wrong. If the dispute is as to title only, the Court very reluctantly disturbs possession by receiver, but if the property is exposed to danger and loss and the person in possession has obtained it through, fraud or force the Court will interpose by receiver for the security of the property. It would be different where the property is shown to be 'in medio', that is to say, in the enjoyment of no one, as the Court can hardly do wrong in taking possession: it will then be the common interest of all the parties that the Court should prevent a scramble as no one seems to be in actual lawful enjoyment of the property and no harm can be done to anyone by taking it and preserving it for the benefit of the legitimate who may prove successful. Therefore, even if there is no allegation of waste and mismanagement the fact that the property is more or less 'in medio' is sufficient to vest a Court with jurisdiction to appoint a receiver. Otherwise a receiver should not be appointed in supersession of a bone fide possessor of property in controversy and bona fides have to be presumed until the contrary is established or can be indubitably inferred. (5) The Court, on the application of a receiver, looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct has been free from blame. He must come to Court with clean hands and

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should not have disentitled himself to the equitable relief by laches, delay, acquiescence etc.”

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17. The appellants, whose petition was dismissed by the trial Court in I.A.841 of 2013, have to establish the above five requirements embodies in the words ‘just and convenient’ as per Order XL Rule 1 C.P.C. Therefore, the burden of proof lies on the appellants/petitioners to prove that the respondents 1 to 9 are misappropriating the funds of the respondent No.11 society. The bank statement supported the version of the respondents that they are depositing the funds in the bank account. Admittedly, respondents 1 to 9 established the BPH church and they are maintaining the said church in their private property donated to the BPH. Further, on 25.11.2011, a Trust deed was registered and the respondents 1 to 9 are the trustees of BPH. As per the Trust deed, the trustees shall render true and accurate accounts of all money received and spent and of all material in respect thereof in course of management of trust fund or in relation to the carrying out of the objects and purposes of the trust as well as of all the assets, credits and effect of the trust fund. 18. As per the record, the petitioners have not produced any material that the respondents are not maintaining the accounts properly and it is not the case of the petitioners that they have contributed huge donations to the church and the said funds were misappropriated by the respondents 1 to 9. Further, the respondents 1 to 9 have opened a bank account in Andhra Bank at HMT Industrial Estate on 26.11.2010 i.e. prior to the registration of

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Trust deed. Therefore, the appellants/petitioners failed to prove the ingredients of Order XL Rule 1 C.P.C. and the trial Court, after considering the evidence on record, rightly held that the petitioners failed to establish the necessity for appointing a receiver and that order needs no interference by this Court. Hence, the appeal is devoid of merit and is liable to be dismissed.

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19. In the result, the Civil Miscellaneous Appeal is dismissed, confirming the order dated 30.12.2013, passed by the learned III Additional District Judge, Ranga Reddy District at L.B.Nagar, in I.A.No.841 of 2013 in O.S.No.1100 of 2013. No order as to costs.

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20. Miscellaneous Petitions, if any, pending in the Civil Miscellaneous Appeal shall stand closed.

(K.C. BHANU, J)

(ANIS, J)

03.09.2014 Anr

THE HON’BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE SMT. JUSTICE ANIS

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CIVIL MISCELLANEOUS APPEAL NO. 433 OF 2014 (per the Hon’ble Smt. Justice Anis)