OPERATION ASHA v. SHELLY BATRA & ORS

Citation: 2025 INSC 932, [2025] 8 S.C.R. 411

Court: Supreme Court of India

Bench: J.B. Pardiwala and R. Mahadevan, JJ.

Judgment text

SUPREME COURT OF INDIA Operation Asha v. Shelly Batra & Ors. Civil Appeal No. 10048 of 2025 [2025] 8 S. C. R. 411 : 2025 INSC 932 Operation Asha v. Shelly Batra & Ors. (Civil Appeal No. 10048 of 2025) 05 August 2025 [J. B. Pardiwala* and R. Mahadevan, JJ. ] Issue for Consideration Issue arose as to whether the appellant Society registered under the Societies Registration Act, 1860 can be said to have fulfilled all the requirements stipulated u/s. 92 CPC for the purpose of instituting a suit under the said provision. Headnotes† Code of Civil Procedure, 1908 - s. 92 - Public charities - Requirements to be fulfilled for instituting a suit u/s. 92 - Appellant society, is a not-for-profit society, registered under the 1860 Act - Respondent no. 3-CEO of the appellant society, terminated the services/employment of respondent no. 1-medical health professional and co-founder - After the removal of the respondent no. 1 as a Board member, both the respondent no. 1 and her mother-respondent no.

2 instituted a suit u/s. 92 for declaration, permanent and prohibitory injunction and, rendition of accounts alleging misconduct and breach of several society's by-laws by the respondent no. 3 and respondent no. 4 - Thereafter, respondent nos. 1 and 2 filed an application seeking leave to institute the civil suit against the appellant Society along with the respondent nos. 3 to 10 - Single Judge granted leave to the respondent nos. 1 and 2 for instituting a suit u/s. 92 holding that all the elements and ingredients u/s. 92 stood fulfilled - Appeal thereagainst dismissed by the Division Bench - Challenge to: Held: Respondent nos. 1 and 2 made several allegations of siphoning of funds by the respondent nos.

3 and 4, for their own personal use, could be said to have prima facie satisfied the condition required to apply the doctrine of constructive trust to the present facts - If these allegations are found to have no substance or plainly false, the entire suit would fail - That would happen * Author 412 also when the circumstances which required the imposition of a constructive trust do not exist/have not been proven - However, if found true, all the property diverted for the purpose of obtaining a pecuniary advantage would be subject to a constructive trust, the administration of which can be sought in a suit u/s. 92 and the respondent nos. 3 and 4 respectively would be considered to be 'constructive trustees'- While scrutinising whether the respondent nos.

1 and 2 are persons interested in the trust and whether they are bringing the suit in a representative capacity, it is not just their designation or position which must be looked into or given importance to - While recognising that they have also sought some remedies related to personal grievances and the wrongful dismissal of the respondent no. 1 which could be seen as unduly magnifying an election dispute, there are several other allegations in the plaint which cannot simply be ignored and which give the respondent nos. 1 and 2, a dual role/capacity, whilst they're agitating the matter u/s. 92 - Larger background in which the suit is brought alludes to the existence of public interest also at play - Reliefs claimed by the plaintiffs, must fall within those reliefs outlined u/s.

92(1) - Reliefs in the present plaint, insofar as they agitate private rights, cannot be granted under a suit of this nature - Suit filed before the Single Judge of the High Court to be commenced - Societies Registration Act, 1860. [Paras 137 (xv), (xvii), 138] Code of Civil Procedure, 1908 - s. 92 - Object and purpose - Conditions to be fulfilled for the applicability of s. 92: Held: Suit u/s.

92 is a representative suit of a special nature since the action is instituted on behalf of the public beneficiaries and in public interest - Obtaining a 'grant of leave' from the court before the suit can be proceeded with, acts as a procedural and legislative safeguard in order to prevent public trusts from being subjected to undue harassment through frivolous suits being filed against them - However, at the stage of grant of leave, the court neither adjudicates upon the merits of the dispute nor confers any substantive rights upon the parties - Certain conditions or essential pre-requisites need to be fulfilled for a suit to be maintainable under this provision are-the trust in question must be created for public purposes of a charitable or religious nature; there must exist a breach of trust or a direction of the court must be necessary for the administration of the trust; and the relief claimed must be one or other of the reliefs as enumerated u/s.

92(1) - To establish that a suit is not maintainable u/s. 92, it is sufficient to prove that any one Operation Asha v. Shelly Batra & Ors. of the conditions enumerated above has not been met, however, in order to assert its maintainability, all the said conditions need to be satisfied - Furthermore, special nature of the suit u/s.

92 requires it to be filed fundamentally on behalf of the public for the vindication of public rights - Thus, courts must go beyond the reliefs and also give due regard to the object and purpose for which the suit is brought - True nature of the suit must be determined on a comprehensive understanding of the facts of the matter and a hard-and-fast rule cannot be made - Fact that certain private rights are being agitated must not be reason enough to ignore the other allegations made in the suit and dismiss it outrightly, provided the suit is instituted in a representative capacity - Issues involving the day-to-day management of the institution and grievances by members qua other members as regards the election of members or certain board decisions, must not be made in a suit of this nature, especially when such grievances can be redressed through other mechanisms or under a regular suit not falling within s. 92. [Para 137(i), (ii), (xix), (xx)] Societies Registration Act, 1860 - s.

5 - Property of society how vested - Doctrine of constructive trust and its applicability to a society: Held: Effect of registration under the 1860 Act would not be to automatically invest the properties of the society with the character of trust property - s. 5 provides two options, or mechanisms through which a society can hold the property belonging to itself, one, in trustee(s) or, two, in the governing body of the society - While the society cannot be considered as an 'express trust', for an entity to be brought within the rigours of s.

92, the plaintiff has the option of also contending that a 'constructive trust' exists in the circumstances and a breach of such a constructive trust has occurred or that the directions of the Court are necessary for the administration of such a constructive trust - Constructive trust, arises by operation of law, without regard to or irrespective of the intention of the parties to create a trust - It is imposed predominantly because the person holding the title to the property would profit by a wrong or would be unjustly enriched if they were permitted to keep the property - For this equitable doctrine to be applied, fiduciary must receive property or money which he cannot conscientiously retain - It is only thereafter that a constructive trust would be raised in favour of the beneficiaries on whose account the money was originally received - Factum that the fiduciary 'withheld' the property from its 414 rightful beneficiaries must be established - That such a fiduciary sought to misapply the property in contravention to the covenants that bound him, or sought to gain an advantage for himself, must be proved for a constructive trust to come into existence by the operation of law - That he further divested the said siphoned property/funds, would have to be proved in order to assert that the 'constructive trust' has additionally been breached - Even in the absence of such a further divestment, the directions of the court may still be necessary for the administration of the constructive trust.

[Para 137 (vii), (xi), (xii), (xiii), (xiv)] Case Law Cited Ashok Kumar Gupta & Anr. v. Sitalaxmi Sahuwala Medical Trust & Ors. [2020] 2 SCR 983 : (2020) 4 SCC 321; Shiromani Gurudwara Prabandhak Committee v. Som Nath Dass [2000] 2 SCR 705 : (2000) 4 SCC 146; Swami Paramatmanand Saraswati v. Ramji Tripathi [1975] 1 SCR 790 : (1974) 2 SCC 695; Ahman Adam Sait and Others v. M. E. Makhri and Others, 1963 SCC OnLine SC 71; Shiromani Gurdwara Parbandhak Committee v. Mahant Harnam Singh [2003] Supp. 3 SCR 805 : (2003) 11 SCC 377; Vidyodaya Trust v. Mohan Prasad [2008] 3 SCR 569 : (2008) 4 SCC 115; Swami Shivshankargiri Chella Swami v. Satya Gyan Niketan [2017] 2 SCR 365 : (2017) 4 SCC 771; Bihar State Board Religious Trust, Patna v. Mahant Sri Biseshwar Das [1971] 3 SCR 680 : (1971) 1 SCC 574; Kuldip Chand and Another v. Advocate-General to Government of H. P. and Others [2003] 1 SCR 1195 : (2003) 5 SCC 46; Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v.

State of Delhi and Another [1962] Supp. 1 SCR 156 : 1961 SCC OnLine SC 145; Illachi Devi and Ors. v. Jain Society, Protection of Orphans India and Others [2003] Supp. 4 SCR 62 : (2003) 8 SCC 413; Tata Memorial Hospital Workers Union v. Tata Memorial Centre and Another [2010] 9 SCR 723 : (2010) 8 SCC 480; Janardan Dagdu Khomane and Another v. Eknath Bhiku Yadav & Ors. [2019] 13 SCR 390 : (2019) 10 SCC 395; Syed Mohd. Salie Labbai v. Mohd. Hanifa [1976] 3 SCR 721 : (1976) 4 SCC 780; T. Varghese George v. Kora K. George [2011] 12 SCR 1070 : (2012) 1 SCC 369; Mahant Pragdasji Guru Bhagwandasji v. Patel Ishwarlalbhai Narsibhai [1952] 1 SCR 513 : (1952) 1 SCC 323; Charan Singh v. Darshan Singh [1975] 3 SCR 48 : (1975) 1 SCC 298; Sugra Bibi v. Hazi Kummu Mia [1969] 3 SCR 83 : 1968 SCC OnLine SC 99 - referred to. Operation Asha v. Shelly Batra & Ors. S. R. Bahugana v. All India Women's Conference and Ors. (2009) ILR 7 Delhi 614; Abhaya v. JA Raheem, 2005 SCC OnLine Ker 234; K. Rajamanickam v.

Periyar Self Respect Propaganda Institution, Thiruchirapalli, 2006 SCC OnLine Mad 379; The Young Mens Christian Association of Ernakulam and Ors. v. National Council YMCAS of India, 2018 SCC OnLine Del 9909; Babu Bhagwan Din and Ors. v. Gir Har Saroop and Ors. , 1939 SCC OnLine PC 47; Gurunatharudhaswami Guru Shidharudhaswami v. Bhimappa Gangadhrawappa Divate, 1948 SCC OnLine PC 43; Kesava Panicker v. Damodara Panicker and Others, 1974 SCC OnLine Ker 58; C. Chikka Venkatappa & Another v. D. Hanumanthappa & Others, 1970 SCC OnLine Kar 16; Shri Dnyaneshwar Madhuradwait Sampradayik Mandal, Amravati v. Charity Commissioner, Bombay and Another, 1980 SCC OnLine Bom 120; Board of Governors St. Thomas School and Others v. A. K. George and Another, 1984 SCC OnLine Cal 56; The Advocate General v. Bhartiya Adam Jati Sewak Sangh and Ors. , MANU/HP/0182/2001; Gopal L. Raheja v. Vijay B. Raheja, 2007 SCC OnLine Bom 399; Budreedas v.

Choonilal, ILR 33 Cal 789; Tirumalai-Tirupati Devasthanams Committee v. Udiayar Krishnayya Shanbhaga, 1943 SCC OnLine Mad 48 - referred to. Knight v. Knight (1840) 3 Beav 148; Beatty v. Guggenhein Exploration Co. (1919) 225 N. Y. 380; Meinhard v. Salmon (1928) 249 N. Y. 458; Newton v. Porter, 69 N. Y. 133 (1877); Campbell v. Drake, 39 N. C. 94 (1845); Pope v. Garrett, 147 Tex. 18 (1948); McAnulty v. Std. Ins. Co. (2023) 81 F. 4th 1091; Bailey v. Angove's Pty Ltd. (2016) UKSC 47; Keech v. Sandford (1726) Sel Cah Ch 61; Paragon Finance plc v. Thakerar & Co. (1999) 1 All ER 400; Stevens v. Hotel Portfolio II UK Ltd. (2025) UKSC 28 referred to. Books and Periodicals Cited Mukherjee on the Indian Trust Act, 1881 (2021); Halsbury Laws of India; P Ramantha Aiyar in Advanced Law Lexicon - referred to. List of Acts Code of Civil Procedure, 1908; Societies Registration Act, 1860; Trusts Act, 1882; Prohibition of Benami Property Transactions Act, 1988.

416 List of Keywords Section 92 CPC; Public charitable institutions; Public charities; Trust; Public purpose; Charitable or religious nature; Society construed as trust or constructive trust; Vesting of properties in Executive Committee; Doctrine of constructive trust; Breach of trust; Administration of trust; Persons having an interest in the trust; Constructive trustees; Public interest; Express trust; Gross financial impropriety; Siphoning off funds/donations; Representative suit of a special nature; If not vested in trustee. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10048 of 2025 From the Judgment and Order dated 21. 08. 2024 of the High Court of Delhi at New Delhi in FAOOS No. 114 of 2024 Appearances for Parties Advs. for the Appellant: Dama Seshadri Naidu, Sr. Adv. , Bishwajit Dubey, Ms. Radhika Bishwajit Dubey, Karan Khetani, Umesh Dubey, Ms. Madhulika, Ms. Vuzmal Nehru, Manoj K. Mishra. Advs.

for the Respondents: Jai Anant Dehadrai, Sidharth Sharma, Anubhav Lamba, Pulkit Agarwal. Judgment / Order of the Supreme Court Judgment J. B. Pardiwala, J. For the convenience of exposition, this judgment is divided into the following parts: - INDEX* A. FACTUAL MATRIX ................................................................... 2 B. THE IMPUGNED JUDGMENT ................................................. 15 C. SUBMISSIONS OF THE PARTIES ......................................... 18 * Ed. Note: Pagination as per the original Judgment. Operation Asha v. Shelly Batra & Ors. i. Submissions on behalf of the Appellant ....................... 18 ii. Submissions on behalf of the respondent no. 1 .......... 22 iii. Submissions on behalf of the respondent nos. 3 and 4 .................................................................................. 24 D. ISSUES FOR DETERMINATION ............................................. 25 E.

ANALYSIS ................................................................................ 25 i. The Object and purpose behind Section 92 of the CPC .................................................................................... 25 ii. Conditions to be fulfilled for the applicability of Section 92 of the CPC ................................................................... 33 A. The trust being created for a public purpose of a charitable or religious nature ....................................... 36 I. Whether a Society can be construed to be a 'trust or a 'constructive trust'? ........................................ 37 a. Circumstances under which the creation of a trust has been inferred ................................... 37 b. Views of different High Courts on the issue ... 55 c. Section 5 of the Societies Registration Act, 1860 and the 'vesting' of properties in the Executive Committee. ..................................... 82 d.

The doctrine of constructive trust and its applicability to a society functioning for public purposes of a religious or charitable nature ... 99 B. A breach of trust or the directions of the court being necessary for the administration of the trust ............... 129 C. The institution of the suit must be made by two or more persons "having an interest in the trust" ...................... 136 D. The reliefs falling within the scope of those enumerated under Section 92(1) of the CPC along with the object, purpose and capacity in which the suit is brought. ....... 140 F. CONCLUSION ......................................................................... 157 418 1. Leave granted. 2. This appeal arises from the judgment and order passed by the High Court of Delhi dated 21. 08. 2024 in FAO(OS) No. 114 of 2024 (hereinafter, the "impugned decision"), by which the High Court dismissed the appeal filed by the appellant herein against the judgment and order dated 03. 05.

2024 passed by a learned Single Judge of the High Court in CS(OS) No. 153 of 2020 allowing the application under Section 92 of the Code of Civil Procedure, 1908 (hereinafter, the "CPC") filed by the respondent nos. 1 and 2 respectively, seeking leave to institute the subject suit. A. FACTUAL MATRIX 3. Operation ASHA (hereinafter, the "appellant Society/original defendant no. 1") is a not-for-profit society founded in the year 2005 and registered under the Societies Registration Act, 1860 with its registered office in New Delhi. The appellant Society is engaged in providing health services through a plethora of activities primarily to the underprivileged sections of the society across India with special emphasis on the treatment, education and prevention of tuberculosis and other diseases. The same can be inferred from the Memorandum of Association (hereinafter, the "MoA") of the appellant Society. The aims and objectives of the appellant Society are as follows: "4.

AIMS AND OBJECTS MAIN OBJECTIVES OF THE SOCIETY ARE GIVEN BELOW. 4. 1. 1 To develop, establish, maintain and provide health and all other related services, and to help, aid, assist, arrange, co-ordinate, organize maintain and carry on activities connected with one of health quality of life, nursing facilities, socio-economic aspects, general welfare and problems of the society with special emphasis on provision of services for the underprivileged sections of the society as per Govt. rule. 4. 1. 2 To develop, establish, make and provide microcredit microfinance and all other related services, and to help, aid, assist, arrange, contribute, co-ordinate, organize maintain and carry on activities connected with concerns Operation Asha v. Shelly Batra & Ors. of microcredit and micro finance. Socio-economic aspects, general welfare and problems of the society with special emphasis on provision of services for the underprivileged sections of the society as per Govt. rule. 4. 1.

3 To establish hospitals, medical schools and colleges, nursing schools and colleges, dispensaries, laboratories research institutions and other educational institutions as per Govt. rule. 4. 1. 4 To purchase or otherwise deal in medicines and equipment required for maintenance of health, hygiene and microcredit/ microfinance. 4. 1. 5 To aid, promote establish, maintain, run and encourage alternative systems of medicine and establish training and research centers for this purpose as Govt, rule. 4. 1. 6 To aid, promote, establish, maintain, run and encourage microcredit/microfinance as per Govt. rule. 4. 1. 7 To open centers and institutes for diagnostic, curative, therapeutic and research of medical sciences as per Govt. rule, 4. 1. 8 To provide free medicines to the poor. " 4.

The MoA of the appellant Society also stipulates that all the incomes and earnings of the society, whether movable or immovable, shall solely be utilised to further the aims and objectives of the appellant Society. Furthermore, it is also stated that the members of the appellant society would not be entitled to any profits by virtue of their membership.

The relevant portion of the MoA is extracted hereinbelow: "All the incomes, earnings, movable or immovable properties of the society shall be solely utilized and applied towards the promotion of its aims and objectives only as set forth in the memorandum of association and no profits thereof shall be paid or transferred directly or indirectly by way of dividends, bonus, profits or in any manner whatsoever to the present or past members or to any person claiming through any one or more of the present or the past members, no member of the society shall have any profits, whatsoever by virtue of his membership, the 420 names, addresses, occupations and signatures of the present members of the executive committee tο whom the management and affairs of the society are entrusted as required under section 2 of the societies registration act, 1860 (punjab amendment act of 1957) as extended and applicable to the national capital territory & all state of india. " (Emphasis supplied) 5.

A few other relevant clauses from the Articles of Association (hereinafter, the "AoA") of the appellant Society are reproduced hereinbelow: "6. DUTIES & OBLIGATIONS OF MEMBERS All and every member 6. 1 Shall attend the Board of meetings regularly; 6. 2 Shall give necessary information to the Society, pertaining to matters necessary to be known by the Society; 6. 3 Shall not indulge in activities, which may prove prejudicial to the Aims and Objects of the Society and/or to the Rules and Regulations of the Society; 6. 4 Shall maintain sanctity of the secrets and confidentiality of police matters of the Society and its members; -xxx- 11. 2 POWERS & DUTIES OF THE EXECUTIVE COMMITTEE 11. 2. 1 All the properties, movable, immovable, and other kind of assets shall stand vested in the Committee. 11. 2. 2 The business and the affairs of the Society shall be managed and administered by the Committee. 11. 2.

3 Without prejudice to the generality of the foregoing provisions, the Committee shall have the following powers. 11. 2. 3. 1 To acquire by gift, purchase, exchange, lease or in any other manner land, building, or other immovable, property together with all rights pertaining thereto. Operation Asha v. Shelly Batra & Ors. 11. 2. 3. 2 To manage the properties of the Society. 11. 2. 3. 3 To accept the management of any trust, fund, or endowment or any other ... in which the Society is interested. 11. 2. 3. 4 To raise funds for the Society by way of gifts, donations, grants-in-aid or otherwise within India or outside, as provided in the bye-laws. 11. 2. 3. 5 To raise loans, stand guarantee for loans and do all acts necessary to raising the loans to further the objects of the Society. 11. 2. 3. 6 To receive monies, securities, instruments, investments, or any other assets for and on behalf of the Society. 11. 2. 3. 7 To enter into agreements contracts for and on behalf of the Society. 11.

2. 3. 8 To manage, serve, transfer or otherwise disposeoff any property, movable or immovable of the Society. 11. 2. 3. 9 To prescribe the powers, duties and functions of the office-bearers. 11. 2. 3. 10 To exercise control over the President and the General secretary of the Society including the powers of dismissal. 11. 2. 3. 11 To appoint the Secretary of the Society. 11. 2. 3. 12 To elect new members to the Committee when casual vacancies occur. 11. 2. 3. 13 To appoint the Secretary of the society. -xxx- 13. SOURCES OF INCOME & UTILIAZATION OF FUNDS Funds will be raised by way of grants-in-aid, donations, gifts, subscriptions fees, and income from investments, loans and other means available to the Society under the Act. Funds will be used to carry out the Aims and Objectives of the Society. " 422 6. Dr. Shelly Batra (hereinafter, the "respondent no. 1/original plaintiff no. 1") is a medical health professional and co-founder of the appellant Society. Vide communication dated 19.

06. 2020, Mr. Sandeep Ahuja (hereinafter, the "respondent no. 3/original defendant no. 2") who is also the co-founder and CEO of the appellant Society terminated the services/employment of the respondent no. 1. The communication alleged that the termination of the respondent no. 1 was on account of various "omissions including misrepresentation" of her daughter's previous employment, fabrication of documents, misappropriation of the assets and funds of the NGO as well as gross misbehaviour with the staff and the employees. Subsequently, on 23. 06. 2020, the Board of the appellant Society is said to have passed a resolution terminating the respondent no. 1 from the post/office of President of the appellant Society. Soon thereafter, on 27. 06. 2020, the Board of the appellant Society is also said to have removed the respondent no. 1 from her capacity as a member of their Board. 7. Mrs. Usha Gupta, (hereinafter, the "Respondent No. 2/original plaintiff no.

2"), who is the mother of the respondent no. 1, is one of the current members of the Board of the appellant Society. Immediately after the removal of the respondent no. 1 as a Board member, both the respondent no. 1 and respondent no. 2 (collectively also referred to as the "original plaintiffs") instituted an Original Suit bearing CS (OS) No. 153 of 2020 on 28. 06. 2020 under Section 92 of the CPC before a learned Single Judge of the High Court for declaration, permanent & prohibitory injunction and, rendition of accounts. They alleged misconduct and breach of several of the society's by-laws by the respondent no. 3 and one Ms. Suniti Ahuja (hereinafter, the "respondent no. 4/original defendant no. 3"). The original defendant nos. 4 to 8 respectively are current Board members and the original defendant no. 9 is a former Board member of the appellant Society. 8. To further elaborate in detail, the respondent nos.

1 and 2 respectively (original plaintiffs) alleged the following in the suit instituted by them: i. That the respondent nos. 3 and 4 respectively, were indulging in gross financial impropriety, misconduct and siphoning off funds/ donations which were received by the appellant Society into various shell companies/entities controlled by them and their friends/relatives. Such funds were utilised and misappropriated Operation Asha v. Shelly Batra & Ors. for personal gains. Furthermore, that the funds received by the society have been utilised for activities outside India, which is impermissible, since the requisite permission was not taken from the appropriate governmental authorities and yet, tax benefits were illegally availed for the same. ii. That there has been a severe mismanagement in the administration of the appellant Society by the respondent nos. 3 and 4 respectively.

They have avoided making accounting provisions for statutory disbursements in the form of provident fund or gratuity to their employees and are also engaging in cross-payment of salaries to employees through their sister concerns with a view to avoid the grant of statutorily mandated employee benefits. iii. That the respondent no. 3 has misrepresented information and thereby misled the donors of the appellant Society with an intent to defraud them by claiming that the appellant society had provided COVID-19 related services to more than 12,600 families and 10,000 migrants, however, the same remains entirely uncorroborated and unsubstantiated. iv. That the respondent nos. 3 and 4 respectively, used force and coerced several employees in order to illegally take away the property of the appellant Society. This includes pressurizing the original defendant no. 8 to hand over the ATM card, passbook etc.

of the account in which his salary is remitted and utilising those funds for personal needs. Furthermore, it was alleged that they have also demanded compulsory kickbacks from the employees engaged by the appellant Society by threatening, coercing and blackmailing them with immediate termination of employment, with a view to siphon employee payments. v. That respondent no. 3 has also regularly misbehaved by issuing threats of personal injury and also indulged in discriminatory behaviour against the employees of the appellant society on the basis of race, caste, religion and sex. vi. That, around February 2020, the respondent no. 1 approached the respondent nos. 3 and 4 respectively to resolve the aforesaid issues, amongst others. In retaliation, she was harassed and threatened to exit from her position at the appellant Society. 424 9. The reliefs prayed for in the aforesaid suit are reproduced hereinbelow: "PRAYER 35.

In light of the above facts and circumstances of the case, Plaintiffs most humbly pray that this Hon'ble Court may grant the following reliefs in its favour: (a) Pass a decree of declaration holding that all the decisions taken by the Board of Defendant No. 1 and/or any Board member or employee or personnel w. e. f. 01-06- 2020 onwards are illegal, wrong and void, in the present facts and circumstances, and therefore, set-aside; and/or (b) Pass a decree of declaration holding that the termination of Dr. Shelly Batra (Plaintiff No. 1) from the post/office of President vide Board Resolution dated 23-06-2020 and ouster from the Board of Defendant No. I vide Board Resolution dated 27-06-2020 is illegal, wrong and void in the present facts and circumstances, and restoring her office/post in the affairs of Defendant No. 1; and/or c) Pass a decree for permanent & prohibitory injunction against the Defendant Nos. 2 and 3 by removing them from the Board of Defendant No.

1 on account of the illegalities & breach of the bye-laws of Defendant No. 1, and restraining them from being involved in the activities/affairs of the Board of Defendant No. 1 either as member or employee or contractor or advisor or anyway whatsoever; (d) Pass a decree for rendition of accounts of profits/ monies siphoned, misappropriated, illegally earned by Defendant Nos. 2-3 for their personal use/benefit from the accounts/funds of Defendant No. 1, and further a decree for recovery of the amount be found to be due, siphoned, misappropriated, etc. by the Defendant Nos. 2-3 along with interest @18% in favour of Defendant No. 1; and/or I Pass a decree or order regarding settling the scheme of the Defendant No. 1 by amending its bye-laws in such manner that no one family gets complete control of the affairs of Defendant No. 1: Operation Asha v. Shelly Batra & Ors.

(f) Costs: (g) Any other relief (s) which this Hon'ble Court deems, fit, just and proper may also be awarded in favour of the Plaintiffs, in the interest of justice. " 10. In pursuance of the aforesaid, the respondent nos. 1 and 2 respectively, filed an application being I. A. No. 5009 of 2020 in CS (OS) No. 153 of 2020 seeking leave to institute the civil suit against the appellant Society along with the respondent nos. 3 to 10 (collectively referred to as the "original defendants") before the learned Single Judge of the High Court. In the said application, it was stated that the appellant Society is a public charitable institution - an NGO engaged in the healthcare industry. The main objectives of the society as evidenced by its by-laws is public welfare and therefore, it would fall under the ambit of "public charities" mentioned under Section 92 of the CPC. The respondent nos.

1 and 2 respectively (original plaintiffs) have been involved in the functioning of the appellant Society since its inception and have a justified and bona fide interest in the society, Therefore, they are "interested persons" as required by Section 92. Furthermore, since numerous breaches have occurred in the conduct of business/affairs of the appellant Society, the direction of the court would be of utmost necessity for its administration. 11. After taking seisin of the matter, vide order dated 05. 08. 2020, the learned Single Judge of the High Court appointed Justice (retd. ) R. V. Easwar as the Chairperson of the Board of the appellant Society with the consent of both the parties.

Directions were issued to the Chairperson to submit a report and conduct a financial audit in order to ascertain, amongst others, whether there has been a defalcation or siphoning off of funds that the donors have contributed towards the appellant Society and to make suggestions as to how the working of the society can be improved. The Chairperson submitted three reports dated 26. 08. 2020, 03. 10. 2020 and 09. 12. 2020 respectively. On, 13. 08. 2021, an Interim Forensic Audit Report and on 20. 09. 2021, a Final Forensic Audit Report respectively, are also said to have been submitted by the auditors appointed for the said purpose. 12. The learned Single Judge of the High Court vide the judgment and order dated 03. 05. 2024 granted leave to the respondent nos. 1 and 2 (original plaintiffs) for the purpose of instituting a suit under Section 92 of the CPC.

While holding that all the elements and ingredients 426 under Section 92 of the CPC stood fulfilled and granting leave, the learned Single Judge observed as follows: i. First, whether it be the Interim Forensic Audit Report dated 13. 08. 2021 or the various reports submitted under the Chairmanship of Justice (retd. ) R. V. Easwar, there was no gainsaying that actions are required to be taken to remedy the state of affairs of the appellant Society, particularly in relation to its financial affairs and administrations, for which the directions of the court may be necessary. ii. Secondly, heavy reliance was placed on the decision of this Court in Ashok Kumar Gupta & Anr vs. Sitalaxmi Sahuwala Medical Trust & Ors. reported in (2020) 4 SCC 321 to grant leave under Section 92 of the CPC since the enunciation of law in the said decision is also said to have been made in a strikingly similar factual background.

It was reiterated that it is the dominant purpose of the suit, as discernible strictly from the allegations made in the plaint that is required to be assessed by the court while considering whether leave must be granted to institute the suit or not. iii. Thirdly, that the respondent no. 1 (original plaintiff no. 1) being one of the co-founders of the appellant Society and a long-time President of its Board, along with the respondent no. 2 (original plaintiff no. 2) who has been associated with the appellant Society for an extended period of time while also continuing to be a member of its Board, would constitute 'persons having an interest in the trust'. iv.

Fourthly, while referring to Article 13 of the AoA as per which the society is entitled to raise funds by way of gifts, donations, grants-in-aid or otherwise strictly for the purpose of carrying out the aims and objectives of the society, it was opined that the formal 'entrustment' of property or funds by a third-party to the appellant Society would not be a necessary ingredient to hold that the society is a 'constructive trust'. If that formality were a sine-qua-non, the very distinction between a 'trust' and a 'constructive trust' would stand obliterated. Since any grant-in-aid, donation or gift made by a third-party to the society would, by its very nature, be intended to be used for the benefit of those in need of medical care in furtherance of Operation Asha v. Shelly Batra & Ors. the objects of the society, it was held that this in-itself would be sufficient to infer that all such grants-in-aid, donations gifts etc.

, made to the society would become property 'entrusted' to it, by reason of which the society would acquire the character of a 'constructive trust'. v. Fifthly, after perusing the aims and objects of the appellant Society as detailed in the MoA it was declared that the appellant Society is evidently engaged in a 'public purpose of charitable nature' since they principally provide health care services to the underprivileged sections of the society, specifically with respect to the treatment, education and prevention of tuberculosis. vi. Lastly, that the claims made in the suit also co-relate and fall within the scope of the reliefs contemplated under Section 92 of the CPC, more particularly sub-sections (1)(d) and (1)(h) thereof. 13. The relevant observations made by the learned Single Judge are reproduced hereinbelow: "20.

Therefore, we must not lose sight of the fact, that for purposes of deciding whether leave should be granted under section 92 CPC, it is only the allegations in the plaint that should be looked into in the first instance; it being available to the court to even dismiss the suit if after evidence is led it is found that the breach of the trust alleged was not made-out. 21. To reiterate it is the dominant purpose of the suit, as discernible only from the allegations in the plaint, that is required to be assessed by the court at the stage of considering whether leave should be granted under section 92 CPC to institute a suit. " 22. In the present case, the following assertions are found in the plaint: 22. 1. Plaintiff No. 1 is one of the co-founders of defendant No. 1 society and has been a long time President of its Board, Plaintiff No. 2. has been associated with defendant No.

1 society for a long time and continues to be a member of the Board of the society, even if she is plaintiff No. 1's mother. In fact these assertions appear to reflect the admitted position. 428 22. 2. Plaintiff No. 1 has played a pivotal role in the functioning of the society ever since it was established. -xxx- "22. 4. Furthermore, a perusal of the Articles of Association ('AOA') of defendant No. 1 society inter-alia shows that the management of the society is entrusted to an Executive Committee, which is entitled to raise funds for the society by way of gifts, donations, grants-in-aid or otherwise, which funds are to be used to carry-out the aims and objectives of the society. Attention in this behalf may be drawn to Article 13 of the AoA of the society, which reads as follows [... ] In the opinion of this court, the formal 'entrustment' of property or funds by a third-party to defendant No. 1 society is not a necessary ingredient to hold that the society is a constructive trust'.

If that formality were a sine-qua-non, the very distinction between a 'trust' and a 'constructive trust' would get obliterated. This court is of the view, that any grant-in-aid, donation or gift made by a third-party to the society is, by its very nature, meant and intended to be used for the benefit of those in need of medical care in furtherance of the objects and purpose of the society. This, in itself, is sufficient to infer that all such grants-in- aid, donations, gifts etc. made to the society are property entrusted to it, by reason of which the society acquires the character of a 'constructive trust'. " 22. 5. Also, defendant No. 1 is evidently engaged in a public purpose of charitable nature, since it provides medical-aid and relief to patients of tuberculosis who otherwise cannot afford treatment, thereby fulfilling the other criterion of section 92 CPC. 22. 6. In this manner, defendant No.

1 society fulfils all conditions necessary to invoke section 92 CPC, as enunciated by the Supreme Court in Ashok Kumar Gupta (supra) and the elements required to qualify as a 'constructive trust' as laid down by a Co-ordinate Bench of this court in The Young Mens Christian Association of Ernakulam (supra) cited above. Operation Asha v. Shelly Batra & Ors. 23. In addition, the IFAR as well as the multiple audit reports submitted in relation to the administration and financial affairs of the society, including under the chairmanship of Justice Easwar, clearly disclose that the manner in which the affairs of the society are being run, requires closer consideration and scrutiny. 24. Furthermore, the claims made in the suit also co-relate and fall within the scope of the reliefs contemplated in section 92 CPC, especially section 92(d) and (h) thereof; 25.

In the above view of the matter, this court is persuaded to hold that all elements and ingredients of section 92 CPC are satisfied; and that therefore, the plaintiffs are entitled to grant of leave to institute the present suit under section 92, CPC. 26. To obviate any ambiguity, it may be clarified that the grant of leave to the plaintiffs to institute the suit would not prevent the court from dismissing die suit subsequently, if the allegations contained in the plaint are found not to be substantiated. 27. The application is accordingly allowed. " (Emphasis supplied) B. THE IMPUGNED JUDGMENT 14. Aggrieved by the aforesaid judgment and order of the learned Single Judge dated 03. 05. 2024, the appellant Society preferred an appeal being FAO (OS) No. 114 of 2024 before the Division Bench of the High Court. The Division Bench while dismissing the appeal, observed as follows: i.

First, reliance was, again, placed on the decision of this Court in Ashok Kumar Gupta (supra) in order to delineate the conditions that are required to be satisfied under Section 92 of the CPC. ii. Secondly, the Division Bench echoed the observations made by the Single Judge in as much as observing that the appellant Society is admittedly of a charitable nature as evident from its MoA. iii. Thirdly, reliance was placed on the relevant provisions of the MoA which stipulated that all the incomes, earnings, movable or immovable properties of the society shall be solely applied towards furthering the objectives of the society and no profits shall be paid, either directly or indirectly, to the members of the Board or any person claiming through or under them. Furthermore, while referring to Article 11. 2.

1 of the AoA which specifically stated that all the properties, movable, immovable and other kinds of assets shall stand vested in the Executive Committee of the appellant Society, the Division Bench expressed its agreement with the views of the Single Judge that all donations, gifts etc. made to the appellant Society are property 'entrusted' to it, due to which the society would acquire the character of a 'constructive trust'. iv. Fourthly, referring tothe decision of this Court in Shiromani Gurudwara Prabandhak Committee vs. Som Nath Dass reported in 2000 (4) SCC 146, it opined that the donations, gifts, etc. , being received by the appellant Society and being vested in the Committee from various institutions would constitute an 'endowment' for public purpose. v.

Lastly, although the Bench acknowledged the contention of the counsel for the appellant Society that prayer (b) of the plaint agitates a personal/private grievance, yet it took the view that the reliefs sought in prayers (d) and (e) of the plaint fall within those reliefs contemplated under sub-section (1) of Section 92 of the CPC. The relevant observations of the Division Bench are reproduced hereinbelow: "12. Admittedly, the Appellant-society is of a charitable nature as it has been formed primarily for serving the under-privileged sections of the society, in particular, patients suffering from tuberculosis. [... ] 13.

The Memorandum of Association further stipulates that all the incomes, earnings, movable or immovable properties of the society shall be solely utilized and applied towards the promotion of its aims and objectives only as set forth in the Memorandum of Association and no profits thereof shall be paid or transferred directly or indirectly by way of dividends, Operation Asha v. Shelly Batra & Ors. bonus or profits in any manner whatsoever to the present or past members or to any person claiming through any one or more of the present or the past members. The Memorandum of Association also states that no member of the society shall have any profits, whatsoever by virtue of his membership, the names, addresses, occupations and signatures of the present members of the Executive Committee to whom the management and affairs of the society are entrusted, as required under Section 2 of the Societies Registration Act, 1860 (Punjab Amendment Act of 1957). 14. Article 11. 2.

1 of the Articles of Association specifically stipulates that all the properties, movable, immovable and other kinds of assets shall stand vested in the Committee. 15. Keeping in view the aforesaid as well as the fact that the Appellant has been set-up with the primary objective of providing medical relief to patients, who otherwise cannot afford such treatment, this Court is in agreement with the view of the learned Single Judge that all the donations, gifts etc. made to the Appellant-society are property entrusted to it, by reason of which the society acquires the character of a 'constructive trust'. 16. In the above context, it would also be necessary to refer to the judgment of Supreme Court in Shiromani Gurudwara Prabandhak Committee vs.

Som Nath Dass 2000 (4) SCC 146, wherein it has been held that an "endowment" is, when the donor parts with his property for it to be used for a public purpose and its entrustment is to a person or group of persons for carrying out the objective of such entrustment. It was held that once an endowment is made, it is final and irrevocable and it is onerous duty of the persons entrusted with such endowment to carry out the objectives of this entrustment. It was further held once an endowment, it never reverts even to the donor. The Supreme Court has also considered 432 that endowment" means property or pecuniary means bestowed as a permanent fund, as endowment of a college, hospital or library, and is understood in common parlance as a fund yielding income for support of an institution. Having regard to the aforesaid, it is clear that donations, gifts etc.

which were being received by the Appellant, and being vested in the committee, from various institutions would be endowment for public purpose. " 17. Though the learned senior counsel for the Appellant is correct in contending that prayer (b) of the plaint agitates a personal/private grievance yet this Court is of the view that the reliefs sought in prayers (d) and (e) of the plaint fall within the reliefs mentioned in sub section (1) of Section 92 CPC. 18. Consequently, this Court is of the view that the impugned order calls for no interference. Accordingly, the present appeal along with the application is dismissed. " (Emphasis supplied) C. SUBMISSIONS OF THE PARTIES i. Submissions on behalf of the Appellant 15. Mr. Dama Seshadri Naidu, the learned Senior Counsel appearing for the appellant Society submitted that the appellant Society is a 'registered society' under the Societies Registration Act, 1960 and is not a 'Trust' for the purposes of Section 92 of the CPC.

It was argued that it is a settled law that the governing body members of the society shall only become 'trustees' if a trust is created for the purpose of managing the assets of the society. The same not being the case in the present scenario, the suit cannot be held to be maintainable. To fortify his argument that a suit under Section 92 would not be maintainable against a 'registered society', the counsel placed reliance on the decision of the Delhi High Court in S. R. Bahugana v. All India Women's Conference and Ors. reported in (2009) ILR 7 Delhi 614 and that of the Kerala High Court in Abhaya vs. JA Raheem reported in 2005 SCC OnLine Ker 234. Operation Asha v. Shelly Batra & Ors. 16. The counsel submitted that as per the AoA of the appellant Society, the property of the society is not held in a 'trust', which is the fundamental requirement for the appellant Society to be termed as a 'constructive trust'. Specific reference was made to Clauses 11. 2. 1 and 11. 2. 3.

8 of the AoA respectively to contend that the property of the society stands vested in the 'Committee' or Governing Body of the Society, as per the mandate of Section 5 of the Societies Registration Act, 1860. On this aspect, reliance was placed on the decision of the Madras High Court in K. Rajamanickam v. Periyar Self Respect Propaganda Institution, Thiruchirapalli reported in 2006 SCC OnLine Mad 379. 17. Taking recourse to the decision of this Court in Swami Paramatmanand Saraswati v. Ramji Tripathi reported in 1974 2 SCC 695, it was submitted that, while deciding an application under Section 92 of the CPC, the court must only look at the averments made in the plaint. The plaint, in the present case, is conspicuously silent on how the appellant Society falls within the definition of the term 'constructive trust'. Therefore, it was submitted that the underlying suit is clearly beyond the ambit of Section 92. 18.

To further substantiate his submissions as regards the appellant Society not being a 'constructive trust', the counsel stated that "a constructive trust is another species of trust where a trust is automatically imposed by equity on an owner of property but in special circumstances where it is unconscionable for the owner of property to hold the property purely for his own benefit". To illustrate, where a trustee of a leasehold property at the termination of the lease renews the lease purportedly in his own personal favour or where a trustee has wrongfully gratuitously transferred trust property to an innocent done who upon subsequently discovering the trust attempts to retain the property for himself. It was submitted that Mukherjee on the Indian Trust Act, 1881 (2021) also elaborated on the Doctrine of Constructive Trust by arguing that a 'constructive trust' arises not by the act of parties but by operation of law.

When a trustee gains some personal advantage by utilising his trusteeship, he becomes a constructive trustee in respect of the advantages gained. 19. The counsel submitted that the Halsbury Laws of India on the nature of a constructive trust remarks that a constructive trust attaches by 434 law to a specific property which is neither expressly subject to any trust nor subject to a resulting trust but, which is held by a person in circumstances where it would be inequitable to allow him to assert full beneficial ownership of the property. In the present case, he argued that the factual situation is entirely different and the property of the appellant Society is vested in the governing body of the Society. 20. It was also submitted that the prayers made in the present suit demonstrate that the same has been filed solely for the purpose of vindication of personal rights of the respondent no. 1.

More specifically, the prayers seek to declare the board decisions taken by the appellant Society from 01. 06. 2020 as null and void, since her employment/ services were terminated during this time. The respondent no. 1 also seeks a declaration that her termination was bad in law along with a direction that the respondent no. 3 be removed from the appellant Society. These reliefs are clearly beyond the scope of Section 92 and smack of personal vendetta and enmity. No relief has been sought for the benefit of the society or to improve its functioning. 21. It was submitted that the provisions under Section 92 of the CPC can be invoked only when two conditions are satisfied i. e. (a) it should be with regard to a public trust to obtain a decree for the purposes mentioned in the said provision, and (b) the suit should be on behalf of the Advocate General or two or more persons having an interest in the trust.

He submitted that both the aforesaid conditions have not been fulfilled in the present case since the appellant Society is not a public trust and there is no pleading in the plaint showing that the respondent no. 2 (original plaintiff no. 2) is a party having an "interest" in the society. Moreover, the respondent no. 2 has not even signed the plaint in the instant suit. 22. In light of the aforesaid, it was submitted that the impugned decision is upheld, it would obliterate the distinction carved out by law between a 'trust' and a 'society' for which two different legislations have been enacted. Therefore, it was prayed that the impugned decision be set aside and the underlying suit, pending before the High Court, be dismissed. ii. Submissions on behalf of the respondent no. 1 23. On the other hand, Mr. Jai Anant Dehadrai, the learned counsel appearing for the respondent no. 1 submitted that the ingredients Operation Asha v. Shelly Batra & Ors.

required to be satisfied before invoking Section 92 of the CPC was clearly laid down in Ashok Kumar Gupta (supra) as follows: (a) There should be a breach of express or constructive trust; (b) The trust must have been created for a public purpose, either of a charitable or religious nature; (c) The suit must seek for reliefs as enumerated under Section 92(1) of the CPC. 24. The counsel submitted that the appellant society was formed with the specific aim to serve the underprivileged members of the society who are suffering from tuberculosis and who cannot afford its treatment. The same is evident from the MoA of the appellant Society. The donors, who are based in India as well as abroad, primarily the United States, were providing funds in order to further this very objective. Therefore, the appellant Society, being engaged in the social welfare of the general public, possesses the characteristics of an organisation with a 'charitable nature'. 25.

In order to canvass the argument that a society registered under the Societies Registration Act, 1860 can be construed as a 'constructive trust', the counsel placed reliance on the decision of the Delhi High Court in The Young Mens Christian Association of Ernakulam and Ors. v. National Council YMCAS of India reported in 2018 SCC OnLine Del 9909 wherein it was opined that a society registered under the Societies Registration Act, 1860 can be construed as a constructive trust if its satisfies the elements mentioned in Section 3 of the Indian Trusts Act, 1882. 26. It was submitted that the appellant Society is being entrusted with the funds from the donors for public service.

Upon a perusal of the Memorandum of Association, it is evident that all the earnings and income generated, or funds received by the society shall only be utilised for the betterment of the general public and to provide free health services, and no profits shall be transferred directly or indirectly to the members of the society. Additionally, Clause 11. 2. 1 of the AoA specifically provides that "All the properties, movable, immovable and other kind of assets shall stand vested in the Committee". Therefore, all the donor funds, gifts etc. are entrusted to the appellant Society to be utilised for the public purpose as enumerated in the aims and objectives contained in 436 its MoA. For all these reasons, the society acquires the character of a 'constructive trust'. 27. It was submitted that the reliefs sought in the plaint are in complete consonance with Section 92(1) of the CPC and the impugned decision has specifically held that the reliefs sought by the respondent nos.

1 and 2 respectively in their plaint, in particular, prayers (d) and (e) fall within the reliefs mentioned under Section 92(1). Hence, the plaint satisfies yet another ingredient required under Section 92 of the CPC. 28. In light of the aforesaid, it was submitted that the appellant Society though registered under the Societies Registration Act, 1860 yet must be construed as falling within the expression of a 'constructive trust' under Section 92 of the CPC as it holds property for charitable work. Therefore, the impugned decision granting leave to institute the suit, suffers from no infirmity and may not be interfered with. iii. Submissions on behalf of the respondent nos. 3 and 4 29. The learned Counsel appearing on behalf of the respondent nos. 3 and 4 respectively, submitted that the application seeking leave to institute the present suit has been filed in complete disregard of the mandatory conditions stipulated under Section 92 of the CPC.

Section 92 requires a suit of this nature to be filed by at least two interested parties. While the respondent no. 2 (original plaintiff no. 2) has been included as one of the plaintiffs, it is pertinent to note that the plaint has not been signed by the respondent no. 2. Additionally, there is neither any verification on behalf of the respondent no. 2 nor an affidavit in support of the plaint, as required under Section 26(2) of the CPC. These substantial procedural breaches render the plaint non-est in the eyes of law, and consequently, make it liable to be rejected at the very threshold. It was further submitted that there is a strong likelihood that the signatures of the respondent no. 2 was fraudulently affixed in the suit documents. 30.

The counsel vehemently submitted that the suit under Section 92 of the CPC is legally untenable as it falls to fulfil the requisite conditions as regards maintainability and also for the reason that it is completely based on false allegations and has been filed to wreck a personal vendetta against the respondent nos. 3 and 4 respectively. Therefore, it was prayed that the present appeal be allowed and the impugned decision be set aside. Operation Asha v. Shelly Batra & Ors. D. ISSUES FOR DETERMINATION 31. Having heard the learned counsel appearing on behalf of the parties and having gone through the materials on record, the only question that falls for our consideration is whether in the facts and circumstances of the present case, the appellant Society registered under the Societies Registration Act, 1860 can be said to have fulfilled all the requirements stipulated under Section 92 of the CPC for the purpose of instituting a suit under the said provision? E. ANALYSIS i.

The Object and purpose behind Section 92 of the CPC. 32. Section 92 of the CPC reads as follows: " 92.

Public charities-- (1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or where the direction of the Court is deemed necessary for the administration of any such trust, the Advocate-General, or two or more persons having an interest in the trust and having obtained the [leave of the Court,] may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other Court empowered in that behalf by the State Government within the local limits of whose jurisdiction the whole or any part of the subject-matter of the trust is situate to obtain a decree-- (a) removing any trustee; (b) appointing a new trustee; I vesting any property in a trustee; [(cc) directing a trustee who has been removed or a person who has ceased to be a trustee, to deliver possession of any trust property in his possession to the person entitled to the possession of such property;] (d) directing accounts and inquiries; I declaring what proportion of the trust property or of the interest therein shall be allocated to any particular object of the trust; (f) authorising the whole or any part of the trust property to be let, sold, mortgaged or exchanged; (g) settling a scheme; or (h) granting such further or other relief as the nature of the case may require.

(2) Save as provided by the Religious Endowments Act, 1863 (20 of 1863), [or by any corresponding law in force in [the territories which, immediately before the 1st November, 1956, were comprised in Part B States]], no suit claiming any of the reliefs specified in sub-section (1) shall be instituted in respect of any such trust as is therein referred to except in conformity with the provisions of that sub-section.

[(3) The Court may alter the original purposes of an express or constructive trust created for public purposes of a charitable or religious nature and allow the property or income of such trust or any portion thereof to be applied cy pres in one or more of the following circumstances, namely:-- (a) where the original purposes of the trust, in whole or in part,-- (i) have been, as far as may be, fulfilled; or (ii) cannot be carried out at all, or cannot be carried out according to the directions given in the instrument creating the trust or, where there is no such instrument, according to the spirit of the trust; or (b) where the original purposes of the trust provide a use for a part only of the property available by virtue of the trust; or I where the property available by virtue of the trust and other property applicable for similar purposes can be more effectively used in conjunction with, and to that end can Operation Asha v. Shelly Batra & Ors.

suitably be made applicable to any other purpose, regard being had to the spirit of the trust and its applicability to common purposes; or (d) where the original purposes, in whole or in part, were laid down by reference to an area which then was, but has since ceased to be, a unit for such purposes; or I where the original purposes, in whole or in part, have, since they were laid down,-- (i) been adequately provided for by other means, or (ii) ceased, as being useless or harmful to the community, or (iii) ceased to be, in law, charitable, or (iv) ceased in any other way to provide a suitable and effective method of using the property available by virtue of the trust, regard being had to the spirit of the trust. ]" (Emphasis supplied) 33. A suit under this provision can be termed as a 'representative suit of a special nature' since the object behind the enactment of this provision is the protection of public rights in the public trust.

Therefore, the parties filing a suit by invoking this section are considered to be representatives of the public. 34. A three-judge bench of this Court in Ahman Adam Sait and Others v. M. E. Makhri and Others reported in 1963 SCC OnLine SC 71 had elaborated on how a suit under Section 92 of the CPC is a 'representative suit' while deciding whether the second suit would be barred by constructive res judicata. It was stated that when a suit is brought under Section 92, by two or more persons interested in the trust, they could be said to have taken upon themselves the responsibility of representing all the beneficiaries in the trust and though, all the said beneficiaries may not be expressly impleaded in the suit, the action is essentially instituted on their behalf and the relief claimed is representative in character.

While stating so, however, it was clarified that the plaintiffs bringing the second suit must have the 'same interest' as that of the plaintiffs or defendants of the earlier representative suit, for the principle of res judicata to apply. In other words, it must be examined if the interest of the plaintiffs in 440 the second suit was represented in the earlier representative suit. The relevant observations are thus: "16. In assessing the validity of this argument, it is necessary to consider the basis of the decisions that a decree passed in a suit under Section 92 binds all parties. The basis of this view is that a suit under Section 92 is a representative suit and is brought with the necessary sanction required by it on behalf of all the beneficiaries interested in the Trust.

The said section authorises two or more persons having an interest in the trust to file a suit for claiming one or more of the reliefs specified in clauses (a) to (h) of sub- section (1) after consent in writing there prescribed has been obtained. Thus, when a suit is brought under Section 92, it is brought by two or more persons interested in the trust who have taken upon themselves the responsibility of representing all the beneficiaries of the Trust. In such a suit, though all the beneficiaries may not be expressly impleaded, the action is instituted on their behalf and relief is claimed in a representative character. This position immediately attracts the provisions of Explanation VI to Section 11 of the Code.

Explanation VI provides that where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating. It is clear that Section 11 read with its Explanation VI leads to the result that a decree passed in suit instituted by persons to which Explanation VI applies will bar further claims by persons interested in the same right in respect of which the prior suit had been instituted. Explanation VI thus illustrates one aspect of constructive res judicata.

Where a representative suit is brought under Section 92 and a decree is passed in such a suit, law assumes that all persons who have the same interest as the plaintiffs in the representative suit were represented by the said plaintiffs and, therefore, are constructively barred by res judicata from reagitating the matters directly and substantially in issue in the said earlier suit. " (Emphasis supplied) Operation Asha v. Shelly Batra & Ors. 35. Similarly, in Shiromani Gurdwara Parbandhak Committee v. Mahant Harnam Singh reported in (2003) 11 SCC 377, this Court had opined that a suit under Section 92 is of a special nature and for the protection of public rights in public trust and charities. It is for the vindication of public rights since the suit is instituted fundamentally on behalf of the entire body of persons who are interested in the trust. It cannot be said that only those persons whose names are in the suit-title would be considered to be the parties to the suit.

The named plaintiffs are only the representatives of the public at large who are interested in the suit and therefore, in the eyes of law, all such interested persons would be considered to be parties to the suit. The relevant observations are reproduced hereinbelow: "19. As observed by this Court in R. Venugopala Naidu v. Venkatarayulu Naidu Charities [1989 Supp (2) SCC 356 : AIR 1990 SC 444] a suit under Section 92 CPC is a suit of special nature for the protection of public rights in the public trust and charities. The suit is fundamentally on behalf of the entire body of persons who are interested in the trust. It is for the vindication of public rights. The beneficiaries of the trust, which may consist of the public at large, may choose two or more persons amongst themselves for the purpose of filing a suit under Section 92 CPC and the suit-title in that event would show only their names as plaintiffs.

Can we say that the persons whose names are in the suit-title are the only parties to the suit? The answer would be in the negative. The named plaintiffs being the representatives of the public at large which is interested in the trust, all such interested persons would be considered in the eyes of the law to be parties to the suit. A suit under Section 92 CPC is thus a representative suit and as such binds not only the parties named in the suit-title but all those who share common interest and are interested in the trust. It is for that reason that Explanation VI to Section 11 CPC constructively bars by res judicata the entire body of interested persons from reagitating the matters directly and substantially in issue in an earlier suit under Section 92 CPC. " (Emphasis supplied) 442 36. In Vidyodaya Trust v.

Mohan Prasadreported in (2008) 4 SCC 115, this Court had emphasised that it is not every suit which relates to a public trust of religious or charitable nature and which contains reliefs which fall within some of the clauses under sub-section (1) of Section 92 that can be brought under the ambit of Section 92 of the CPC. Those suits must also essentially be initiated by individuals as representatives of the public for the vindication of public rights. While opining so, this Court also elaborated on the object behind requiring a 'grant of leave' from the appropriate court before the suit can be proceeded with. The same was said to have been mandated as a pre-requisite or a procedural safeguard in order to prevent the public trusts from being subjected to undue harassment through frivolous suits being filed against them.

If the persons responsible for the management of the trusts are subjected to multiplicity of legal proceedings, then it would be the ultimate beneficiaries of the trust who would lose out since the trust would have to dedicate time to defend the suit and the funds which are to be utilised to further the objectives of the public trust would also have to be re-routed and wasted on litigation. In the opinion of the Court, this ordeal might also dissuade persons of high moral character and honest intentions from becoming trustees of public trusts. The pertinent observations are reproduced hereinbelow: 18. Prior to legislative change made by the Code of Civil Procedure (Amendment) Act (104 of 1976) the expression used was "consent in writing of the Advocate General". This expression has been substituted by the words "leave of the Court". Sub-section (3) has also been inserted by the Amendment Act.

The object of Section 92 CPC is to protect the public trust of a charitable and religious nature from being subjected to harassment by suits filed against them. Public trusts for charitable and religious purpose are run for the benefit of the public. No individual should take benefit from them. If the persons in management of the trusts are subjected to multiplicity of legal proceedings, funds which are to be used for charitable or religious purposes would be wasted on litigation. The harassment might dissuade respectable and honest people from becoming trustees of pubic trusts. Thus, there is need for scrutiny. -xxx- Operation Asha v. Shelly Batra & Ors. 25. In Sugra Bibi v.

Hazi Kummu Mia [AIR 1943 Mad 466] it was held that the mere fact that the suit relates to public trust of religious or charitable nature and the reliefs claimed fall within some of the clauses of sub-section (1) of Section 92 would not by itself attract the operation of the section, unless the suit is of a representative character instituted in the interest of the public and not merely for vindication of the individual or personal rights of the plaintiffs. 26. To put it differently, it is not every suit claiming reliefs specified in Section 92 that can be brought under the section; but only the suits which besides claiming any of the reliefs are brought by individuals as representatives of the public for vindication of public rights. As a decisive factor the Court has to go beyond the relief and have regard to the capacity in which the plaintiff has sued and the purpose for which the suit was brought.

The courts have to be careful to eliminate the possibility of a suit being laid against public trusts under Section 92 by persons whose activities were not for protection of the interests of the public trusts. [... ]" (Emphasis supplied) 37. In Swami Shivshankargiri Chella Swami v. Satya Gyan Niketan, reported in (2017) 4 SCC 771, while holding that a trust can be created by virtue of a conditional gift,this Court had also elaborated on the purpose behind requiring grant of leave from the court under Section 92 before a suit can be instituted. It was opined that such a condition has been legislatively prescribed in order to prevent a public trust from being harassed or to obviate the institution of reckless or frivolous suits against its trustees. The relevant observations are as thus: "11. The present Section 92 CPC corresponds to Section 539 of the old Code of 1883 and has been borrowed in part from 52 Geo. 3, c. 101, called Romilly's Act of the United Kingdom.

A bare perusal of the said section would show that a suit can be instituted in respect of a public trust by the Advocate General or two or more persons having an interest in the trust after obtaining leave of the Court in the Principal Civil Court of Original Jurisdiction. An analysis 444 of these provisions would show that it was considered desirable to prevent a public trust from being harassed or put to legal expenses by reckless or frivolous suits being brought against the trustees and hence a provision was made for leave of the court having to be obtained before the suit is instituted. (Emphasis supplied) 38. Thus, the grant of leave under Section 92 of CPC serves as a procedural safeguard, ensuring that public charitable trusts are protected from mala fide suits that may have the consequence of impeding their operations.

At this stage, however, the court neither adjudicates upon the merits of the dispute nor confers any substantive rights upon the parties; what is established is merely the maintainability of the suit which is sought to be initiated by the plaintiffs. ii. Conditions to be fulfilled for the applicability of Section 92 of the CPC 39. Section 92 of the CPC has been created for a specific purpose and to address a specific kind of grievance which has the impact of affecting public rights as enumerated above. Therefore, not all suits can be blindly brought within the fold of this provision. In the facts and circumstances of each case, the court granting leave must examine whether the suit qualifies certain conditions which align with the intent behind the creation of this provision.

Courts must tread with caution so as to weed out those suits which are camouflaged as falling within its ambit just with a view to take an undue benefit of provision and for causing harassment to the public trust or for the vindication of personal rights. 40. This Court in Ashok Kumar Gupta (supra) had laid down three conditions which are a sine qua non in order to invoke Section 92 of the CPC and maintain an action under the said provision. Upon placing reliance on various decisions of this Court, the conditions were delineated as follows - (a) the trust in question must be created for public purposes of a charitable or religious nature; (b) there must exist a breach of trust or a direction of the court must be necessary for the administration of the trust; and (c) the relief claimed must be one or other of the reliefs as enumerated under Section 92(1) of the CPC. The relevant observations are reproduced as thus: Operation Asha v. Shelly Batra & Ors. "10.

While considering the scope of Section 92(1), as it existed then, a Constitution Bench of this Court observed in Madappa v. M. N. Mahanthadevaru [Madappa v. M. N. Mahanthadevaru, (1966) 2 SCR 151 : AIR 1966 SC 878] , as under : (AIR p. 881, para 10) "10. ... Section 92(1) provides for two classes of cases, namely, (i) where there is a breach of trust in a trust created for public purposes of a charitable or religious nature, and (ii) where the direction of the court is deemed necessary for the administration of any such trust. The main purpose of Section 92(1) is to give protection to public trusts of a charitable or religious nature from being subjected to harassment by suits being filed against them. That is why it provides that suits under that section can only be filed either by the Advocate General, or two or more persons having an interest in the trust with the consent in writing of the Advocate General.

The object clearly is that before the Advocate General files a suit or gives his consent for filing a suit under Section 92, he would satisfy himself that there is a prima facie case either of breach of trust or of the necessity for obtaining directions of the Court. The reliefs to be sought in a suit under Section 92(1) are indicated in that section and include removal of any trustee, appointment of a new trustee, vesting of any property in a trustee, directing a removed trustee or person who has ceased to be a trustee to deliver possession of trust property in his possession to the person entitled to the possession of such property, directing accounts and enquiries, declaring what proportion of the trust property or of the interest therein shall be allocated to any particular object of the trust, authorisation of the whole or any part of the trust property to be let, sold, mortgaged or exchanged or settlement of a scheme.

The nature of these reliefs will show that a suit under Section 92 may be filed when there is a breach of trust or when the administration of the trust generally requires improvement. " 446 11. The statement of law so laid down was reiterated: 11. 1. In Bishwanath v. Radha Ballabhji [Bishwanath v. Radha Ballabhji, (1967) 2 SCR 618 : AIR 1967 SC 1044] : (AIR p. 1046, para 7) "7. It is settled law that to invoke Section 92 of the Code of Civil Procedure, 3 conditions have to be satisfied, namely, (i) the trust is created for public purposes of a charitable or religious nature; (ii) there was a breach of trust or a direction of court is necessary in the administration of such a trust; and (iii) the relief claimed is one or other of the reliefs enumerated therein. If any of the 3 conditions is not satisfied, the suit falls outside the scope of the said section. " 11. 2. In Sugra Bibi v. Hazi Kummu Mia [Sugra Bibi v. Hazi Kummu Mia, (1969) 3 SCR 83 : AIR 1969 SC 884] : (AIR p.

885, para 5) "5. It is evident that this section has no application unless three conditions are fulfilled : (1) the suit must relate to a public charitable or religious trust, (2) the suit must be founded on an allegation of breach of trust or the direction of the court is required for administration of the trust, and (3) the reliefs claimed are those which are mentioned in the section. " 12. Three conditions are, therefore, required to be satisfied in order to invoke Section 92 of the Code and to maintain an action under the said section, namely, that: (i) the Trust in question is created for public purposes of a charitable or religious nature; (ii) there is a breach of trust or a direction of court is necessary in the administration of such a Trust; and (iii) the relief claimed is one or other of the reliefs as enumerated in the said section. Consequently, if any of these three conditions is not satisfied, the matter would be outside the scope of said Section 92.

" (Emphasis supplied) Operation Asha v. Shelly Batra & Ors. 41. As a natural corollary, it follows that in order to successfully establish that a suit is beyond the scope of Section 92 of the CPC, it would be sufficient to prove that any one of the conditions enumerated above has not been met. However, on the other hand, for a suit to be maintainable under this provision, the plaintiffs must be able to satisfy the court that all the conditions, or in other words, the necessary ingredients, under this section, have been fulfilled. A. The trust being created for a public purpose of a charitable or religious nature. 42. A trust can be said to have been created for a 'public purpose' when the beneficiaries are the general public who are incapable of exact ascertainment. Even if the beneficiaries are not necessarily the public at large, they must at least be a classified section of it and not a pre-ascertained group of specific individuals. 43.

What constitutes "charitable purpose" has been defined under Section 2 of the Charitable Endowments Act, 1890 as follows: "2. Definition. --In this Act "charitable purpose" includes relief of the poor, education, medical relief and the advancement of any other object of general public utility, but does not include a purpose which relates exclusively to religious teaching or worship. " (Emphasis supplied) Therefore, the term includes relief to the poor, education, medical relief and the advancement of any other object of 'general public utility', while excluding activities whose purpose relates exclusively to religious teaching or worship. 44. There remains no doubt that the appellant Society in the instant case, working towards bringing equity in public health, with particular focus on providing for the education, treatment and prevention of tuberculosis, has been created for a 'public purpose of charitable nature'.

This is clearly evident from its objectives outlined in the MoA and the beneficiaries that it seeks to serve, amongst others. The same is an admitted position and we need not delve into the nitty-gritties of whether the appellant society qualifies this aspect of the aforesaid condition. What remains contested, however, is that the appellant society which has been registered under the Societies Registration 448 Act, 1860 cannot be construed to be a 'trust' or a 'constructive trust' in order to subject it to the jurisdiction under Section 92 of the CPC. I. Whether a Society can be construed to be a 'trust or a 'constructive trust'? 45. A suit under Section 92 of the CPC being one of special nature, presupposes the existence of a public trust of a religious or charitable character. The existence of a public trust is essential, whether express or constructive.

Therefore, a crucial condition that needs satisfaction is whether the institution/organisation in relation to which certain reliefs are sought can in fact be considered to be a 'trust' or a 'constructive trust'. Having said so, however, an express declaration clearly signifying that an entity is a trust or that the properties are trust properties would not be a sine qua non in order to render a suit under Section 92 maintainable. a. Circumstances under which the creation of a trust has been inferred 46. When no formal recognition has been given to the institution, the creation of a trust can be inferred from the relevant circumstances surrounding the coming into existence of and functioning of the institution/entity in question. The Privy Council in Babu Bhagwan Din and Ors. v. Gir Har Saroop and Ors. reported in 1939 SCC OnLine PC 47 was concerned with the question whether a public trus