PRINC.SECR.,GOVT.OF KARNATAKA & ANR. Vs. RAGINI NARAYAN & ANR.

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 8895 of 2012, Judgment Date: Sep 20, 2016

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8895 OF 2012

Principal Secretary,
Government of Karnataka and Another … Appellants

Versus

Ragini Narayan and Another …Respondents

J U D G M E N T

Prafulla C. Pant, J.

This appeal is directed against judgment and order dated 24.03.2010,
passed by the High Court of Karnataka at Bangalore in R.F.A. No. 788 of
2009 (DEC-INJ), whereby said Court has dismissed the appeal. The appeal
before the High Court had arisen out of the decree passed by the XXVII
Additional City Civil Judge, Bangalore, in O.S. No. 2680 of 2000, whereby
the suit seeking declaration that the plaintiff is Donor Trustee, was
decreed by the trial court in her favour.

Brief facts of the case are that the plaintiff (Respondent No. 1 herein)
Ragini Narayan filed a suit for declaration that after death of her
husband, she is the Donor Trustee of B.M. Sreenivasaiah Educational Trust,
Bangalore (for short “BMS Trust”). It is not disputed that late Shri B.M.
Sreenivasaiah, a philanthropist, started BMS College of Engineering in the
year 1946. After his death it was his son B.S. Narayan, who was running
the institution. In 1957, the institution was transferred to BMS Trust by
B.S. Narayan (since died). The then Government of Mysore (now Government
of Karnataka) extended financial assistance to the Trust to clear its
encumbrances, and agreed to establish the BMS College for Women by the
Trust. It is stated that the appellant/ Government of Karnataka gave grant-
in-aid for the three colleges run by the Trust.

The plaintiff’s case is that she is legally wedded wife of B.S. Narayan
(the original Donor Trustee) as she got married to him on 21.05.1984, after
he divorced his first wife, namely, Smt. Minnie Narayan. It is pleaded
that the plaintiff continued to live as his wife till his death on
23.08.1995. It is further pleaded that vide Trust Deed dated 02.12.1957,
Dharmaprakasha Rajakaryasakta B.M. Sreenivasaiah Educational Trust was
created by B.S. Narayan, his mother and step mother by transferring
properties worth Rs.5000 crores. The Council of Trustees consisted of five
members (trustees) with B.S. Narayan as a Donor Trustee. In terms of the
Trust Deed B.S. Narayan and all his successors had the right to appoint
three of the trustees while the remaining one trustee was to be
appointed/nominated by the Government of Karnataka (defendant No
2/appellant herein).

The Council of Trustees in the presence of the then Chief Minister, in its
meeting dated 12.10.1978 resolved to amend the Trust Deed allowing B.S.
Narayan to nominate any person as Donor Trustee for life time and also
provided for succession to the Donor Trustee. The State Government
(appellant) approved said amendment vide communication dated 25.09.1979 and
supplementary Trust Deed was executed on 25.06.1981, but the amendment
regarding succession to the Donor Trusteeship was not carried out.

Dispute starts from the year 1994. On 10.12.1994 in another meeting of
Council of Trustees, a resolution was passed to amend the Trust Deed to
give effect to the succession to Donor Trusteeship, with certain changes
from the earlier resolution mentioned in preceding para. In the light of
the amendment made in 1994, a Deed dated 30.01.1995 was registered
providing that after the life time of B.S. Narayan, his senior most lineal
descendant or a member of his family, nominated by him or his wife, shall
be the Donor Trustee. It is pleaded by the plaintiff that B.S. Narayan,
exercising powers under clause IV(iv) of the Trust Deed, vide document
dated 16.01.1995, nominated the plaintiff to be the Donor Trustee in his
place with effect from 16.01.1995. The plaintiff has further pleaded that
B.S. Narayan never revoked said delegation till his death. The document
dated 30.01.1995 further provided that after death of B. S. Narayan his
wife shall be the Donor Trustee under the Trust Deed.

Admittedly, B.S. Narayan died on 23.08.1995 in Workhardt Hospital where he
was undergoing treatment for cancer of colon. B.S. Narayan died issueless
leaving behind his mother Smt. Laxmamma and the plaintiff. Claiming
herself to be the Donor Trustee after the death of her husband, the
plaintiff wrote letter dated 28.08.1995 to Shri Y. Ramachandra, Chairman of
the Trust. Prof. P.V. Bhandari, who was the Government nominee/trustee,
forwarded the letter of the plaintiff to the Government. Vide letter dated
30.09.1995, the plaintiff sought cooperation of the State Government in
discharging functions by her as a Donor Trustee. However, there was no
response from the Government and in the meanwhile Y. Ramachandra, Chairman
of the Trust appears to have written a letter dated 15.09.1995 requesting
the State Government to take over the Trust. It appears that the
appellants appointed M.R. Sreenivasa Murthy (respondent No. 2 herein) as
Donor Trustee vide communication dated 07.11.1995.

Communication dated 07.11.1995, issued on behalf of the appellants
appointing Respondent No. 2 as Donor Trustee, was challenged by the
plaintiff Ragini Narayan in Writ Petition No. 40933 of 1995 which was
disposed of by the High Court leaving the plaintiff to avail the remedy
available before the
Civil Court, and a Committee of Chairman and Trustees appointed by the
court was directed to manage the affairs of the Trust, in the meantime.
Consequently the suit was filed.

Apart from the appellants, Respondent No. 2 (defendant No. 3 before the
civil court) contested the suit. He filed his separate written statement.
The pleas taken by him are in substance the same as raised by the
appellants (defendant Nos. 1 and 2). It is pleaded by the defendants that
under proviso to clause VI (xii) of the Trust Deed approval of the State
Government was necessary for any amendment in the Trust Deed. It is
further pleaded that as per original clause (IV)(1) B.S. Narayan, the
designated original Donor Trustee was to hold the office during his life
time, whereafter his senior most lineal descendants were to succeed as
Donor Trustee. And in absence of any lineal descendant trustee, the
nominee of State Government was to act as Donor Trustee. The case of the
defendants is that the State Government had given its approval to the
amendment dated 12.10.1978 in respect of para IV(iv) of the Trust Deed
which was incorporated in the supplementary Trust Deed dated 25.06.1981.
It is further stated that insofar as proposed amendment to clause (IV)(1)
is concerned, since B.S. Narayan himself withheld nomination of his first
wife Minnie Narayan as Donor Trustee after his death, as such, said
amendment did not form part of the supplementary Trust Deed dated
25.06.1981. It is stated on behalf of the appellants and Respondent No. 2
that the Council of Trustees had no authority to amend the original Trust
Deed without the consent of the Government of Karnataka. As such, the
amendment dated 10.12.1994 registered on 30.01.1995 relied on behalf of the
plaintiff, being without the approval of the State Government, is
inoperative. Even otherwise as per the amendment of 1995, the power to
delegate the powers of Donor Trustee was to be exercised for a limited
period i.e. during life time of B.S. Narayan, and the plaintiff as the
wife of B.S. Narayan has no right to continue as Donor Trustee after the
death of her husband.

The trial court, as well as the High Court, has decided the issue as to the
validity of marriage of the plaintiff with B.S. Narayan in her favour.
Both the courts have also found that B.S. Narayan had an authority to
nominate his wife, and that the delegation of powers of Donor Trustee in
favour of the plaintiff suffers from no illegality. The High Court has
upheld the decree passed by the trial court in favour of the plaintiff.
Hence this appeal through special leave.

Before further discussion, we think it necessary to reproduce relevant
paras from the original Trust Deed 07,1957: -

“IV(i) The management of “THE TRUST” shall vest in “THE COUNCIL OF
TRUSTEES” consisting of five members. Sri B.S. Narayan “DONOR” hereto
during his life time shall be a member of the council of trustees; and
after him the successive senior most lineal descendant of the said donor
(1) shall be one such trustee and shall have the powers and rights of donor
“1” under these paras. If this mode of succession fails all the powers
exercisable by the Donor (1) under terms of this deed, including powers of
appointment of trustees under this deed, shall vest with the Government of
Mysore.”

…. …. …. …. …. …. …

“IV(iv) For the purposes of sub para (i) of clause IV supra Donor (1) shall
have the power of nominating in his place or any person for such period or
periods as may be specified or for the life time of such member, to
exercise all or any of the powers vested in Donor (1) under this deed as
may be delegated and such nominee shall subject to the foregoing be deemed
to be donor (1) within the meaning of the Deed.”

…. …. …. …. …. …. …

“VI(xii) Notwithstanding anything contained in these presents “The
Trustees” shall have power to alter, amend or to add to any of the clauses
of this document consistent with the objects and purposes of “The Trust”.
“The Trustees” shall have power to negotiate, conclude and effectuate such
agreements with Government State or Union, local bodies or other
authorities or bodies for purposes of obtaining financial and/or technical
aid in any form as they deem fit on such conditions as may appear fit to
them, for furtherance of the purposes of the institutions created under
“The Trust” and for that purpose shall have power to include or to co-opt
further trustee or trustees; to cede or curtail or transfer all or any such
power to any government of body, as may be found fit and proper and to
effect such alterations in the clauses of this deed, not inconsistent with
the objects and purposes of “The Trust” as in their opinion may appear
necessary and desirable.

Provided that any resolution of “The Trustees” touching the alteration of
this deed or amending of any of its clauses shall not be operative unless
concurred to by donor “1” and approved by the Government of Mysore.”

(emphasis supplied)

Now, we come to the relevant amendments in the Trust Deed, including the
one dated 10.12.1994 relied by the plaintiff but disputed by the appellants
and Respondent No. 2. The table showing clause (IV) (i) as it existed in
original deed, the one after 1978 amendment, and disputed amendment of 1994
(registered on 30.01.1995) are shown below:

(emphasis supplied)

It is clear from the record that in the year 1957 B.S. Narayan was a
bachelor. Later he got married to Minnie Narayan before 1978 amendment,
and divorced her in 1982. There is concurrent finding of fact that B.S.
Narayan got remarried in 1984 to plaintiff Ragini Narayan. It is also
relevant to mention here, that there is no dispute that amendments mooted
by B.S. Narayan in 1978 were approved by the State Government (appellant
No.2) vide communication dated 25.09.1979. It is argued by Shri K. K.
Venugopal, Senior Advocate appearing on behalf of the appellants and Shri
S. Ganesh, Senior Advocate for respondent no.2 that since there was no
approval of the State Government to the amendment of 1994, as such it
cannot be said that such an amendment was operative, or that B.S. Narayan
could have acted under the amended para (IV)(i) of the Deed to nominate the
plaintiff (Ragini Narayan) as a Donor Trustee. It is further submitted
that without the aid of Resolution dated 10.12.1994 read with delegation of
power made by B.S. Narayan in favour of the plaintiff, she has no
entitlement to discharge functions of the Donor Trustee. It is contended
that the Deed of Nomination dated 16.01.1995 in favour of Ragini Narayan,
allegedly executed by B.S. Narayan is not a valid document. It is pointed
out that the amended deed based on Resolution dated 10.12.1994 was not
registered, by the date 16.01.1995 as the registration is said to have been
done only on 30.01.1995. As such, delegation of power in favour of
plaintiff on 16.01.1995 is not valid. It is vehemently argued that since
the amendment registered on 30.01.1995 was a non-starter as such the same
was non-effective. Ragini Narayan, after the death of B.S. Narayan could
not have nominated herself as a Donor Trustee.

In reply to above, Shri C.A. Sundaram, learned senior counsel appearing for
the plaintiff – Respondent no.1, pointed out that under Section 47 of the
Registration Act, 1908, the document registered on a subsequent date
relates to the date of execution. It is further submitted that since the
date of Resolution was 10.12.1994, as such there was no impediment on the
part of B.S. Narayan to exercise his powers under the amended Para IV(i).

Section 47 of Registration Act, 1908 reads as under:

“47. Time from which registered document operates. – A registered document
shall operate from the time which it would have commenced to operate if no
registration thereof had been required or made, and not from the time of
its registration”

In view of the above provision of law, we are in agreement with the
submission of learned counsel for the Respondent no.1 that the document
registered on a subsequent date, operates from the date of execution, not
from the date of registration.

However, what is more required to be examined in the present case is as to
whether Resolution for amendment dated 10.12.1994 had its approval from the
State Government or not. We have already quoted proviso to Para VI (xii)
of the original Trust Deed which requires that any alteration of the deed
or amendment therein would require concurrence of Donor Trustee and that of
the State Government.

Though on behalf of the appellants and the Respondent no.2, it is contended
that the State Government had not given any approval to the amendment
relied upon on behalf of the plaintiff, but certain documents on record
clearly show that there was approval of the State Government to the
disputed amendment of 1994. One of such documents (dated13.8.1995) is
Annexure A-7 filed by the Respondent No.2 with the additional documents,
which is copy of the ‘Deed of Appointment’ of the Government of Karnataka
as successor Donor Trustee of executant B.S. Narayan. In our opinion, the
appellants cannot approbate and reprobate at the same time. On one hand
they rely on this document to nominate M.R. Srinivasa Murthy, and appoint
him as Donor Trustee, and on the other hand, they are not ready to accept
the approval of State Government to the Amendment Deed registered on
30.01.1995 on the basis of which the executant has exercised the powers in
nominating the Donor Trustee. Para 2 of Annexure A-7 i.e. ‘Deed of
Appointment’ dated 13.08.1995 executed by B.S. Narayan reads as under:

“…….WHEREAS the above executant is the Donor Trustee of a Registered
Educational Trust, created under document dated 02.12.1957 and registered
as Document No.2944/57-58 in Book I, Volume 48, pages 10 to 35, registered
in the Office of the Sub-Registrar, Bangalore City South, and WHEREAS the
above document created the B.M.S. Educational Trust, which document was
subsequently amended once by registered document No. 498/81-82 dated
25.06.1981 and further amended by a second document dated 30.01.1995 and
registered as document No.531/94-95, after following the formalities
required in regard to amendment, which included the approval of the
Government of the State of Karnataka and ……….”

(emphasis supplied)

Another important document which throws light on this point is Annexure P-7
dated 7.11.1995 which is copy of the letter issued by the Government of
Karnataka to the Member Secretary of B.M.S. Trust, Bangalore appointing
M.R. Srinivasa Murthy, IAS, as Donor Trustee. Said document is reproduced
below:

“GOVERNMENT OF KARNATAKA

No.ED108TEC95 Karnataka Government Secretariat,

Sachivalaya-II,

Bangalore, Dated: November 07, 1995

From:

The Principal Secretary to Govt. of Karnataka,

Education Department, Bangalore.

The Member Secretary,

B.M. Srinivasaiah Educational Trust,

Bangalore.

Sir

Sub: Acceptance of appointment as a Donor Trustee by the Government
of Karnataka for B.M. Srinivasaiah Educational Trust.

Ref: 1. Letter from Sri Y. Ramachandra, Chairman of the Trust,
dtd.15.09.1995

2. Deed of Appointment dtd. 13.08.95 executed by the late Donor
Trustee Sri B.S. Narayan.

….

With reference to the above mentioned Communication/documents, the
Government of Karnataka has accepted the nomination as the Donor-Trustee of
B.M. Srinivasaiah Educational Trust and is assuming the role of Donor-
Trustee with immediate effect. Sri M.R. Sreenivasa Murthy, IAS, is hereby
appointed to function as Donor-Trustee on behalf of the Government of
Karnataka with immediate effect.

Please extend all co-operation to him and assist him in the discharge
of his functions.

Yours faithfully,

Sd/-

(U.P. SHARMA)

PRINCIPAL SECRETARY TO GOVERNMENT

EDUCATION DEPARTMENT.”

From the above mentioned letter, it is clear that Deed of Appointment dated
13.08.1995 was referred by the State Government, and it cannot be said that
the State Government had not approved the Resolution dated 10.12.1994 on
the basis of which Deed of Amendment was registered on 30.01.1995. That
being so, now we have to examine whether it is the plaintiff who was
validly nominated Donor Trustee or the State Government? From the para
(IV)(i) of the original Trust Deed dated 02.12.1957, it is clear that B.S.
Narayan was to continue as Donor Trustee during his life time whereafter he
was to be succeeded by his lineal descendant, and if the mode of succession
fails then, power of the appointment of the Trust Deed was to vest with the
State Government. Amendment of 1978 as shown in the chart quoted earlier,
makes it clear that name of Minnie Narayan was added in para (IV)(i) as
nominee to succeed from B.S. Narayan, and thereafter senior most of the
lineal descendant, and if the mode of succession fail, the powers were to
be exercised by the State Government. It appears that after Minnie Narayan
was divorced by B.S. Narayan, and he (B.S. Narayan) got married to Ragini
Narayan (plaintiff) whereafter further amendment was proposed and passed
through Resolution dated 10.12.1994 (as mentioned in amended deed
registered on 30.01.1995) and by this amendment i.e. of 1994 name of Minnie
Narayan was deleted, and it was mentioned that after the life time of B.S.
Narayan, his senior most lineal descendant or a member of his family or his
wife was to succeed, and if mode of succession fails, then powers of Donor
Trustee were to be exercised by the State Government.

There is concurrent finding of fact of the courts below that Ragini Narayan
was the wife of B.S. Narayan Donor Trustee, at the time of his death, as
such it cannot be said that mode of succession mentioned in para (IV)(i)
failed. Whether it is amendment of 1978 or 1995 the expression "or his
wife” is there. In our opinion the words-‘or his wife’ in the amendment of
1978 to which the appellants admittedly approved refer to wife of the Donor
Trustee. Same expression is retained in the 30.01.1995 amendment. The
amendment of 1978 was, admittedly, approved by the State of Karnataka.
Insofar as the amendment of 1994 is concerned, we have already held that by
virtue of Ex.A-7 dated 13.8.1995, the recital contained therein and in view
of the letter of the State Government dated 7.11.1995 the consent of the
State Government to the amendment of 1994 can be readily inferred.
Therefore, we do not find any error in the impugned order passed by the
High Court. However, we clarify that any nominee appointed by the State
Government as Trustee will be entitled to function as ordinary trustee in
the Council of Trustees as provided in the Trust Deed but not as the Donor
Trustee till the succession as mentioned in the Trust Deed (as amended)
fails.

For the reasons as discussed above, the appeal is dismissed.

……………….....…………J.
[Ranjan Gogoi]

.……………….……………J.
New Delhi; [Prafulla C. Pant]
September 20, 2016.

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