FAO No. 94 of 2017

**“CR”** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE K.HARILAL** **&** ## **THE HONOURABLE MRS. JUSTICE ANNIE JOHN** **WEDNESDAY,THE 05TH DAY OF SEPTEMBER 2018 / 14TH BHADRA, 1940** **F.A.O.No. 94 of 2017** **O.P.NO.308/2016 of II ADDL.DISTRICT COURT,THIRUVANANTHAPURAM** **- APPELLANTS IN F.A.O. PETITOINERS 1 TO 10 & 12 TO 17 IN O.P.:** - **1 PROF. MEERAN MALUK MOHAMMED.S., AGED 76, S/O. M. SAYED KANNU, JAMEELATH,PYARIS ROAD, THIRUVANANTHAPURAM - 695 010.** - **2 SALIH K.M., AGED 76, S/O. KHADER KUNJU, T.C.48/1007(1), NEW BUNGLOW, KARIMBUVILA, AMBALATHARA, THIRUVANANTHAPURAM - 695 026.** - **3 MOHAMMED ABDUL KHADER, AGED 82, S/O,.ALI HASSAN PILLAI, FA, T.C.41/12, MANACAUD P.O., THIRUVANANTHAPURAM - 695 009.** - **4 SHAHUL HAMEED, AGED 67, S/O. AHAMED KAMANU, NAJI VILA, M.C.STREET,BALARAMAPURAM, THIRUVANANTHAPURAM - 695 501.** - **5 ADV. HUSAIN . M.M., AGED 63, S/O. MOHAMED KASSIM, MINNATHE, PIPELINE ROAD, AMBALAM JUNCTION, THIRUVANANTHAPURAM - 695 005.** - **6 MOHAMMED P., AGED 77, S/O. PODIKANNU SAHIB, T.C.12/1233, LAW COLLEGE JUNCTION, THIRUVANANTHAPURAM - 695 037.** - **7 AHAMMED KUTTY P.M., AGED 67, S/O. MOHAMMED HANEEFA, T.C.49/102 (5),KAMALESWARAM, NEAR MAJESTIC MAHAL, MANACAUD P.O.,THIRUVANANTHAPURAM - 695 009.** **FAO.No. 94 of 2017** ## **-:2:-** - **8 ADV. NOUFALA M.K., AGED 46, S/O. MOHAMED KASSIM, T.C. 20/1234(2),KARAMANA, THIRUVANANTHAPURAM - 695 009.** - **9 BASHEER N.A., AGED 67, S/O. K. NAGOOR KANNU, DAHLIA, CHEKKAKONAM P.O., KARAKULAM, THIRUVANANTHAPURAM - 695 564.** - **10 ABDUL KHADIR S., AGED 83, S/O.SAYED MEERAN RAWTHER, ALFAJIR, T.C.11/485, NANTHANCODE, KOWDIAR P.O,THIRUVANANTHAPURAM - 695 003.** - **11 SHAHUL HAMEED.K., (TRIDA), AGED 78, S/O. KASIM MUSTAFA,T.C.11/1640, FIRDOUS, M.R.A 82, MANCHADIVILA ROAD,KOWDIAR P.O., THIRUVANANTHAPURAM - 695 003.** - **12 EBRAHIM H.M., AGED 68, S/O. HAMEEDKHAN, SURUMA, T.C.24/590, THYCAUD P.O., THIRUVANANTHAPURAM - 695 014.** - **13 SALIM A.B., AGED 63, S/O. ABOOBACKER, SUNANA COTTAGE, KAVALIYUR P.O., VARKALA, THIRUVANANTHAPURAM - 695 014.** - **14 RAHIM M.A. KANYA, AGED 64, S/O. MUHAMMED IBRAHIM, NO.28, KANYA,VALIYAVEEDU LANE, KAMALESWARAM P.O., MANACAUD, THIRUVANANTHAPURAM - 695 009.** - **15 NIZAR A., AGED 53, S/O. ABDUL GAFOOR VAZHAKUTTAN, PANDARAVILA VEEDU,VELLAYANI JUNCTION, NEMOM P.O., THIRUVANANTHAPURAM - 695 020** - **16 ABDUL KHADAR M., (KARALI), AGED 72, S/O.MEERA SAHIB, KARALI PUTHEN VEEDU,VALLAKADAVU P.O., THIRUVANANTHAPURAM - 695 008.** ## **FAO.No. 94 of 2017** ## **-:3:-** **BY ADVS.SRI. P.B. KRISHNAN SRI. P.B. SUBRAMANYAN SRI. P.M. NEELAKANDAN SRI. SABU GEORGE SRI. S. NITHIN (ANCHAL)** ## **- RESPONDENTS IN F.A.O. RESPONDENTS AND PETITIONER 11 IN O.P :** **1 THE MUSLIM ASSOCIATION, THIRUVANANTHAPURAM, REG.NO.40 OF 1966, NANDAVANAM,THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY. 2 P.M. PAREED BHAVAKHAN, AGED 65, S/O.PEER MOHAMED, SECRETARY, MUSLIM ASSOCIATION,THIRUVANANTHAPURAM RESIDING AT APARTMENT NO. 15 E, TOWER – 5, ASSET SIGNATURE, MENAMKULAM, KAZHAKKUTTOM P.O,THIRUVANANTHAPURAM. 3 E.M. NAJEEB, AGED 60, S/O. ILYAS MOHAMED, PRESIDENT, MUSLIM ASSOCIATION, THIRUVANANTHAPURAM, RESIDING AT 1ST FLOOR, NEW CORPORATION BUILDING, PALAYAM,THIRUVANANTHAPURAM. 4 IBRAHIM RAWTHER, AGED 65, TREASURER, MUSLIM ASSOCIATION, THIRUVANANTHAPURAM, RESIDING AT ASHIMA, JAWAHAR LANE, VELLAYAMBALAM, THIRUVANANTHAPURAM. 5 BASHEER KOYA A., AGED 78, S/O. ABDUL RAHEEM, PILLAR PALACE, T.C.17/1684, POOJAPPURA, THIRUVANANTHAPURAM - 695 012.** **R1 TO R3 BY ADVS.SRI.KRISHNANUNNI(SR) SRI.LIJU.V.STEPHEN SMT. INDU SUSAN JACOB** **THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 17.7.2018, THE COURT ON 05.09.2018, DELIVERED THE FOLLOWING:** **FAO.No. 94 of 2017** ## **-:4:-** ## **J U D G M E N T** ## **K. Harilal, J.** **The appellants are the petitioners 1 to 10 and 12 to 17 in O.P.(Trust) No.308 of 2016 of the Additional District Court-II, Thiruvananthapuram. The aforesaid Original Petition was filed under Section 92(1) of** **the Code of Civil Procedure, 1908** _**(hereinafter referred to as 'the**_ _**C.P.C.')**_ **by 17 persons, who are the executive committee members of the 1[st] respondent. The 1[st] respondent is an association of persons, registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act,** **FAO.No. 94 of 2017** ## **-:5:-** **the Act XII of 1955(Kerala). The respondents 2 to 4 are the Secretary, President and Treasurer respectively of the Association. As per the averments in the said petition, the 1[st] respondent, the Muslim Association, Thiruvananthapuram, was formed on 03.11.1957 and subsequently, it was registered as a society under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955, the Act XII of 1955** _**(hereinafter referred to as 'Act XII of 1955')**_ **on 22.08.1966. While so, another Association by name 'Muslim Club', a constructive public Trust, got amalgamated with the Muslim Association and thereby obtained the characteristics of a public Trust. So,** **FAO.No. 94 of 2017** ## **-:6:-** **O.P.(Trust) No.308 of 2016 was filed, seeking leave under Section 92 of the C.P.C., for filing a suit in regard to the affairs of the Muslim Association, Thiruvananthapuram. The reliefs sought for are, to remove the respondents 2 to 4 from the office, appointing new trustees, rendering of accounts and settling of a scheme.** **2. The respondents opposed the said petition, contending that the Muslim Association is not a public trust, within the meaning of Section 92 of the C.P.C. So also, they denied the allegations of misappropriation, mismanagement and maladministration alleged against them. The said O.P.(Trust) was dismissed by the trial** **FAO.No. 94 of 2017** ## **-:7:-** **court on 12.01.2017, holding that the Muslim Association is not a public trust. The petitioners preferred appeal and on 14.02.2017, by judgment in F.A.O. No.7 of 2017, this Court set aside the order of the trial court and remanded the O.P.(Trust) to the court below for fresh decision. The remand was confined to the question, whether the Muslim Association is a public trust, only? All other aspects, including cause of action were concluded in favour of the appellants. Though the respondents have preferred R.P. No.181 of 2017, the same was also dismissed. They approached the Supreme Court by filing S.L.P. No.13800 of 2017 and the Supreme Court dismissed the S.L.P. at the admission stage, with a** **FAO.No. 94 of 2017** ## **-:8:-** **clarification that the remand is an open** **remand. After the remand, the petitioners amended the original petition incorporating paragraph Nos.2(B) to 2(D). The matter was heard again after the remand and the District Court dismissed the said petition, on a finding that the Muslim Association is not a public trust, within the meaning of Section 92 of the C.P.C. The legality and correctness of the aforesaid finding, is assailed in this F.A.O.** **3. Heard the learned Counsel for the appellants and the learned counsel for the respondents.** **4. The sum and substance of the argument advanced by the learned counsel for the appellants is that the Muslim** **FAO.No. 94 of 2017** ## **-:9:-** **Association has become public trust, by the amalgamation of an unregistered** **organisation called 'Muslim Club' with the Muslim Association in 1968-1969. The was the amalgamation/merger approved by meeting of the working committee of the Muslim Association held on 23.04.1968. According to the learned counsel for the appellants, the legal impact of the merger, the handing over the corpus by the 'Muslim Club' to Muslim Association, coupled with the obligations accepted by the Muslim Association has created a constructive public Trust for charitable purpose, within the meaning of Section 92 of the C.P.C. By the amalgamation, Muslim Club has lost its existence and the corpus is accepted by the** **FAO.No. 94 of 2017** ## **-:10:-** **Muslim Association, subject to specific obligations. So also, it is contended that the corpus was intermingled with the funds of the Muslim Association and the segregation has become impossible, as a separate account was not maintained. Resultantly, the Muslim Association which was registered under Act XII of 1955 was converted to a public trust. In order to substantiate the aforesaid argument, the learned counsel for the appellants cited the decisions reported in** _**M.Dasaratharami Reddi and Another v. D.Subba Rao and Others**_ **[AIR 1957 SC 797],** _**Kesava Panicker v. Damodara Panicker and others**_ **[1975 KLT 797 (FB)],** _**Sukumaran v. Akamala Sree Dharma Sastha Idol**_ **[1992 (1) KLT 432],** **FAO.No. 94 of 2017** ## **-:11:-** ## _**Amrithakumari v. Ramanathan**_ **[1998(2) KLT** **305] and** _**M.S. V.V. Thayanayagi Achi v.C.T.C.T. Chidambaram Chettiar and Others**_ **[AIR 1962 Madras 406].** **5. Per contra, the learned counsel for the respondents submits that the Muslim Association is a society registered under Act XII of 1955 and there cannot be a merger by the amalgamation of Muslim Club with the Muslim Association. It is further contended that the Muslim Association was formed in the year 1957 and thereafter the same was registered as a society under Act XII of 1955 on 22.08.1966 and thereafter, Muslim Association is functioning as a society, despite the acceptance of certain amount from the Muslim Club by the decision** **FAO.No. 94 of 2017** ## **-:12:-** **dated 23.04.1966. According to the learned counsel, a society registered under Act XII of 1955 can never be converted to a public trust. So also, it is contended that there is no blending or intermingling of corpus funds, as the same can be separated at any time. In order to substantiate the aforesaid contention, the learned counsel for the respondents cited the decisions in** _**Kesava Panicker v. Damodara Panicker and others**_ **[1975 KLT 797 (FB)],** _**Abhaya and Others v. Raheem and Others**_ **[2005 (3) KLT 891],** _**Vidyodaya Trust v. Mohan Prasad R. and Others**_ **[(2008)AIR(SC) 1633]: [2008(2) KLT 68].** **6. The specific case pleaded by the appellants/petitioners is that the 1[st]** **FAO.No. 94 of 2017** ## **-:13:-** **respondent Muslim Association was a registered society. But, in the year 1968, it obtained the characteristics of a constructive public trust falling under Section 92 of the C.P.C., when another association by name 'Muslim Club', a constructive public trust got amalgamated with the 1[st] respondent association.** **7. It is further pleaded that the funds of the club were blended with the capital fund of the association, with the express obligation cast upon it to distribute scholarships to eligible students. Now, it is impossible to segregate the funds of the club from the capital of the Muslim Association. Thus, the obligation created by the merger** **FAO.No. 94 of 2017** ## **-:14:-** **ascribed the Association the character of a public trust, within the meaning of Section 92 of the C.P.C. It is further alleged that respondent Nos.2 to 4 are guilty of breach of trust and there are rampant mismanagement and maladministration of trust. 14 persons were nominated in the executive committee in violation of the bye-laws. No meeting was held in the manner provided in the bye-law. New members are being admitted in violation of** **the decision taken by the general body held** **on 30.06.2007. There is a loss of** ` **148 lakhs, as per the audit report. There were manipulations of accounts and misappropriation of funds. But, the audit report was rejected without any reasoning.** **FAO.No. 94 of 2017** ## **-:15:-** **After remand, they have amended the earlier pleadings by incorporating two paragraphs 2(B) to 2(D), disclosing the aforesaid facts.** **8. But, according to the respondents, the Muslim Association is not a public trust, within the meaning of Section 92 of the C.P.C. It is a society registered under Act XII of 1955. Therefore, the Original Petition itself is not maintainable and leave cannot be granted to sue under Section 92 of the C.P.C. The amalgamation of the Muslim Club was intended to continue their objectives through the Muslim Association. So, the club gave** ` **30,250/- and it was used for purchasing a building. So, the members of** **FAO.No. 94 of 2017** ## **-:16:-** **the club can at the most claim a charge over the said building only and they have no special say in the management and administration of the society.** **9. The prime question to be considered is, whether the court below is justified in finding that the 1[st]** **Association is not a respondent/Muslim public trust, within the meaning of Section 92 of the C.P.C.?** **10. The first point to be considered is, what is the nature of enquiry to be conducted under Section 92 of the C.P.C.? This question will stand settled by the decision in** _**Major Archbishop, Angamaly and Others v. P.A.Lalan Tharakan and Others**_ **[2016(3) KHC 359]. In this decision,** **FAO.No. 94 of 2017** ## **-:17:-** **the Court held that the Court has to consider not only the averments in the plaint, but also the contentions raised by** **the respondents, since notice was issued to them. The pleadings has to be analysed in the light of the contentions raised in the objection also. Thus, the court below has rightly understood the nature of enquiry to be conducted for granting leave under Section 92 of the C.P.C.** **11. On an analysis of the pleadings set out in additional paragraph Nos. 2(B) to 2(D), we find that the theory of merger, which ascribed to the Muslim Association, and the character of public trust rests on the assertion that Muslim Club was a constructive public trust. We are of the** **FAO.No. 94 of 2017** ## **-:18:-** **opinion that, if the Muslim Club was not a constructive public trust, as asserted by the plaintiff, there cannot be any ascription of the character of a public trust to the Muslim Association by the merger of Muslim Club with Muslim Association. Was Muslim Club a public trust?** **12. Going by the additional paragraph in 2(B), it is stated that the Muslim Club was formed in 1947 by a group of prominent citizens of Thiruvananthapuram. The intention in forming the club was to engage themselves in charitable activities, especially in the field of education. Further, it is asserted that Muslim Club was a constructive public trust that** **FAO.No. 94 of 2017** ## **-:19:-** **existed between 1947 and 1968.** **13. Therefore, the point to be considered is, whether the appellants/ petitioners have succeeded in proving that Muslim Club was a constructive public trust? It is admitted that the club was not a registered one. The only available document on record with respect to the characteristics of Muslim Club is Ext.A1. But, on an examination of Ext.A1, we find that Ext.A1 will not give any assistance to find out the character of Muslim Club, as a public trust. The relevant paragraph 12 of Ext.A1, which deals with the amalgamation of Muslim Club with Muslim Association, does not say anything about the constitution of the Muslim Club. It is** **FAO.No. 94 of 2017** ## **-:20:-** **stated that the club has collected certain amount from several persons and by utilising that amount, they have purchased a building and started a hostel. Subsequently, the hostel was closed and the building was let out on rent and the rent** **obtained from the building had been utilised for granting scholarship to certain students. Thereafter, they have sold away the said building and the capital obtained from the sale of the said building was invested with Marakkar Motors and the** **club got** ` **2,700/-, as annual income from the said investment. Subsequently, the club became defunct and in that circumstance, they decided to amalgamate the Muslim Club with the Muslim Association** **FAO.No. 94 of 2017** ## **-:21:-** **with certain conditions and the conditions are enumerated clause as Nos., as (I) to (V). Had it been a public Trust, the capital obtained from selling the sole building would not have been invested with a private business concern for more income. On an examination of those conditions, we find that the sole purpose of merger is to grant scholarship to certain students only. The merger has no other objective. It is stated that the Muslim Club has given** ` **30,250/- to the Muslim Association and subsequently Muslim Association has purchased the building investing** ` **1,12,530/-, including** ` **30,250/-. It is discernible from the conditions, whereby** **FAO.No. 94 of 2017** ## **-:22:-** ` **30,250/- has been given to the Muslim Association, that the aim and object of the amalgamation is confined to granting of scholarship to students only. No criteria has been formulated for granting scholarship to students or for selection of students. What is stated in clause No.(i) is that the income from the capital given to the Muslim Association will be used for granting scholarship to eligible Muslim students. Thus, it could be seen that the charity is confined to the students belonging to a particular religion only, even though it is contended that Muslim Club was formed for charity and its working capital was collected from the public.** **14. Ext.A1 does not state so. No** **FAO.No. 94 of 2017** ## **-:23:-** **other evidence has been produced to prove that Muslim Club was engaged in any other charitable purpose. There is no material to show that the object of the Muslim Club was public charity, other than granting some scholarship to the students belonging to Muslim community.** **15. At this juncture, the decision reported in** _**Kidangoor Devaswom and Others v. K.N. Krishnan Namboothiri and Others**_ **[2016 (1) KLT 778(DB)] is relevant. In the aforesaid decision, it is held that in order to hold that a private temple has become a public temple, dedication is an essential requirement to be established. Dedication should be one of such a nature that the owners had completely divested** **FAO.No. 94 of 2017** ## **-:24:-** **their ownership over the property. The aforesaid principle is applicable to all public trusts, irrespective of the religion. Thus, there must be a distinct, clear and unambiguous expression of intention to divest the property or fund. The evidence of actual divestment of the right, title and interest of the donor of the property to charity and the same must have vested in the trust. The constitution of the Muslim Club is kept in dark. In other words, the plaintiffs failed to prove that Muslim Club was a constructive public trust, as alleged in the petition. No bye-law was produced in evidence. How did the Muslim Club form? What is described about the Club in Ext.A1 is that, it is a** **FAO.No. 94 of 2017** ## **-:25:-** **social and cultural association established in the year 1948. Nomenclature also does not suggest the character of a public trust, though it is not material.** **16. When can a trust be said to be a public trust. Generally, the origin of the trust, the intention of the settlers, the purpose for which the trust was created, sources of funds, the manner in which its affairs are being managed, nature and extent of gifts received by it, the rights exercised by the public, are relevant factors, which would determine the constitution of a public trust. Nothing has been produced to establish the aforesaid relevant factors. In the above view point, the appellants have failed to prove that** **FAO.No. 94 of 2017** ## **-:26:-** **Muslim Club was a public trust, as asserted in paragraph 2(B) of the amended pleadings.** **17. Further, the specific case in the amended pleadings is that, a constructive trust was created in the General Body held on 23.4.1968, when the Muslim Club got merged with the Muslim Association. When the first respondent, a registered society, acquired funds of such an alleged constructive Trust, can it be said that the society declared itself as a trustee of that property and that the character and nature of the society hitherto would completely be reformed to a constructive trust, for public purposes of a charitable** **or religious nature? Absolutely there is no evidence to establish such** **FAO.No. 94 of 2017** ## **-:27:-** **transformation from a Society to Public Trust. Is it possible under law?** **18. Let us examine the effect and impact of 'merger'. The doctrine of 'merger' has been explained in Corpus Juris Secundum Vol.LVII.pp. 1067-68, thus:** **"to merge" means to sink or disappear in something else; to become ascribed or extinguished to be combined or be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an** **absorption or swallowing up so as to involve a loss of identity and individuality."** **FAO.No. 94 of 2017** ## **-:28:-** **19. In P.Ramanatha Aiyar's Law Lexicon 4[th] Edn. Page 3044, it is explained thus:** **The word "merger" generally is defined as absorption of a thing of less importance by a greater, whereby the lesser ceases to exist, but the greater is not increased and rights are said to be merged when the same person, who is bound to pay is also entitled to receive.** **20. Thus, it is inferable from the meanings given to merger by the aforesaid authorities that where there is a merger of** **lesser into a greater, as a result of merger, the lesser would become absorbed or ceases to exist. The lesser will lose its identity and individuality by the** **FAO.No. 94 of 2017** ## **-:29:-** **swallowing up of the greater.** **21. In the above view, we hold that by the merger, the Muslim Club has lost its identity and individuality. In short, the Muslim Club ceased to exist by merger. Therefore, nothing could be ascribed to the Muslim Association from a non existing association.** **22. Can a Society be transformed to a Public Trust by the acquisition of property or money from an association of people with an obligation to do some charity? Let us examine the constitution of Muslim Association to determine the possibility of such a transformation to a public trust by the acquisition of some property or money** **FAO.No. 94 of 2017** ## **-:30:-** **from an association or a group of people with an obligation to do some charitable work. First of all, we have to examine the relevant provisions under Act XII of 1955, whereunder the society has been registered.** **23. The preamble of Act XII of 1955 states as follows: It is expedient that provision should be made for improving the legal condition of societies, established for the promotion of literature, science or fine arts or for the diffusion of useful knowledge or for charitable purposes. According to Section 3 of Act XII of 1955, any seven or more persons associated to any charitable purpose may, by subscribing their names to a Memorandum of Association and filing the same with the Registrar,** **FAO.No. 94 of 2017** ## **-:31:-** **form themselves into a society. Section 8 of Act XII of 1955 deals with the property of the Society and it reads as follows:** **24.** _**8. Property of society how vested.--**_ **The property, movable and immovable, belonging to a society, if not vested in trustees, shall be deemed to be vested, for the time being, in the governing body of such society, and in all proceedings, civil and criminal, may be described as the property of the governing body of such society by their proper title.** **25. It is discernible from the said provision that, unless the property had already been vested separately in trustees, it shall vest in the governing body of the** **FAO.No. 94 of 2017** ## **-:32:-** **society. Here, it is to be borne in mind that the appellants have no case that the Muslim Association was a public Trust, before its registration as a society under Act XII of 1955. Therefore, the property was not vested with trustees and the property was vested in the governing body of the society.** **26. Section 25 deals with the application to Court for dissolution, framing schemes etc.** **1. When an application is made by the State Government or 10% of the members on the rolls of a society to the District Court within the jurisdiction of which the society is registered, the Court may, after** **FAO.No. 94 of 2017** ## **-:33:-** **enquiry and on being satisfied that it is just and equitable, pass any of the following orders:** - **(a) removing the existing governing body and appointing a fresh governing body; or** - **(b) framing a scheme for the better and efficient management of the society; or** - **(c) dissolving the society;** **2. Where the application under sub-section** **(1) is by the members of the society, the applicant shall deposit in court along with the application the sum of Rs.100/- in cash as security for costs.** **27. Thus Section 25 of Act XII of 1955** **provides a specific procedure for filing a suit for dissolution of a society or for** **FAO.No. 94 of 2017** ## **-:34:-** **framing a scheme or for removing the existing governing body and appointing a fresh governing body.** **28. On a combined reading of the various provisions under Act XII of 1955, more particularly Sections 8 and 25 of Act XII of 1955, we are of the opinion that where a society registered under Act XII of 1955 acquires any property for the purpose of achieving the objectives of the society, the property is owned by the society and it belongs to it. In other words, society is a juristic legal entity, who holds the property and the society has a legal obligation to use the property in accordance with the aim and objective of the society as contemplated under the by-laws of the** **FAO.No. 94 of 2017** ## **-:35:-** **society, made under Act XII of 1955. At any view point, the acquisition of any property or money by a society registered under Act XII of 1955 from another association with an obligation to do some charity cannot be a declaration of public trust, in respect of the property acquired by the society. Since the object of the society registered under Act XII of 1955 is for charitable purposes, the obligation, if any, annexed with property or money also would stand merged into the object of the society and it will not alter the character of the constitution of the society and the society will continue as such under the bye-laws of the society. Where any association or group of people merges into a society, registered under Act** **FAO.No. 94 of 2017** ## **-:36:-** **XII of 1955, the former would lose its identity and individuality and thereby it will cease to exist. The property or money acquired by the society as a result of merger would be subject to and governed by the provisions under Act XII of 1955 and the bye-laws made thereunder. The constitution of a society registered under Act XII of 1955 can never be transformed to a public trust and as such a society cannot function with dual character or nay character other than that of a society, contemplated under Act XII of 1955. As Act XII of 1955 is clothed with sufficient provisions to protect and safeguard any obligation annexed with the property accepted by the society, breach of obligation, if any, also would** **FAO.No. 94 of 2017** ## **-:37:-** **fall under Section 25 of Act XII of 1955 and would not fall under Section 92 of the C.P.C.** **30. In this context, the decision laid down by the Single Bench of this Court in** _**Abhaya and Others v. Raheem and Others**_ **[2005 (3) KLT 891], assumes relevance and significance and we agree with the said decision.** **31. The learned counsel for the appellants placed reliance on** _**Kesava Panicker v. Damodara Panicker and others**_ **[1975 KLT 797 (FB)] and contended that a society registered under Act XII of 1955 also can be a public trust, within the meaning of Section 92 of the C.P.C. We have meticulously gone through the aforesaid** **FAO.No. 94 of 2017** ## **-:38:-** **decision. The facts of the case would show that the entire community in the area, took an active interest and contributed funds for the purpose of creating a 'trust fund', in order that a school may be established. A committee was formed for collecting funds. The proceedings of the meeting clearly indicate their intention to create a trust fund and subsequently, the trust fund was utilised for the construction of the school building and for the ancillary purposes for establishing and maintaining the work of that school. Subsequently, a society was registered under Act XII of 1955. In that context, the Full Bench of this Court held that, if there was a trust created by the public for a public** **FAO.No. 94 of 2017** ## **-:39:-** **charitable purpose, i.e., establishing, maintaining and running a school, the fact of the registration of the society could not change the character of the properties, which had already been constituted as trust properties and impressed with the trust and any addition to those properties must also have the same character. But, in the instant case, admittedly, the appellants have no case that before the registration of Muslim Association as a society under Act XII of 1955, it was a public trust or the properties were obtained for as a public trust or anybody had dedicated any property for the public trust. In the absence of declaration as a public trust prior to the registration of society, the** **FAO.No. 94 of 2017** ## **-:40:-** **proposition laid down in the aforesaid decision cannot be applied to the facts of the instant case.** **32. We further find that in** _**Sukumaran v. Akamala Sree Dharma Sastha Idol**_ **[1992 (1) KLT 432] also, a public trust was subsequently got registered as a society under the Societies Registration Act. In that context, this Court held that even after the registration as a society, a suit under Section 92 is maintainable as there was a public trust prior to the registration as society. In** _**Amrithakumari v. Ramanathan**_ **[1998 (2) KLT 305] also, we find that this Court held that if there was a trust created by public for a public charitable purpose, namely, establishing,** **FAO.No. 94 of 2017** ## **-:41:-** **maintaining and running a school, the fact of registration of a society could not change the character of the properties. We further find that in paragraph 12 of the decision in** _**Abhaya and Others v. Raheem and Others**_ **[2005 (3) KLT 891],** _**Kesava Panicker's**_ **case (supra) was referred and quoted and distinguished. In** _**Kesava Panicker**_ **'s case (supra), there were materials to show that public trust was in existence and later that trust was got registered under the provisions of Act XII of 1955. The registration of the society could not change the character of the trust, provided there was originally a trust having property and subsequently got registered as a society. Thus, the formation of a** **FAO.No. 94 of 2017** ## **-:42:-** **society under the provisions of Act XII of 1955, to carry out any charitable or social purpose, would not make the society a public trust. Where there was a preexisting trust, that character cannot be changed by registration under Act XII of 1955. So, we find that the ratio of the decision in** _**Kesava Panicker**_ **'s case (supra) would not render any assistance or any aid to the appellants to the facts in the instant case. In the instant case, admittedly, the appellants have no case that before the registration under Act XII of 1955, Muslim Association was a public trust.** **33. According to the appellants, attributes of a public trust was ascribed** **FAO.No. 94 of 2017** ## **-:43:-** **to a society by amalgamation with the Muslim Club only. Then, the question to be considered is, whether the entrustment of the entire working capital of Muslim Club with society converts the character of the society to a public trust. According to the appellants, when an obligation is annexed to the ownership of a property, which was entrusted to a society that contemplates a public purpose and thereby a public trust is created. The created obligation would replace the set of obligation and the aim and objective of the pre-existing society. In other words, the aims and objectives of the society would completely be effaced and a new obligation would creep in that place.** **FAO.No. 94 of 2017** ## **-:44:-** **34. We have already held that such a transformation from society to public Trust is legally impossible. That apart, absolutely, there is no evidence to prove that the Muslim Association has absolutely subrogated the character of the Muslim Club and the entire aim and objective of the society have transformed to the sole objective created by merger. The appellants have projected Ext.A1 as a deed of merger the actual minutes, whereby the decision was taken, for merger with the Muslim Association. But, no change of character of the society is evident from Ext.A1 or from the pleadings. The bye-laws of the Muslim Association would show that the programme of activities of the Muslim Association is** **FAO.No. 94 of 2017** ## **-:45:-** **multifaceted. As rightly observed by the trial court, Ext.A1 would show that the Association proceeded with its previous goals to construct a building named 'Seethi Sahib building', Thampanoor scheme'. Running of existing hostels, running of colleges, women hostels, renovation work of Palayam Masjid, running of Engineering Colleges etc. They are the major activities of the Muslim Association. On an analysis of the programme of activities enumerated as 1 to 20, we find that those activities are not confined to public charity. Therefore, it has come out in evidence that, despite the merger of Muslim Club with Muslim Association, Muslim Association has been continuing its own programmes and** **FAO.No. 94 of 2017** ## **-:46:-** **activities, as that of earlier, before the amalgamation and there is no evidence to prove that the amalgamation has caused any fundamental impact on the aims and objectives of programme of activities of the Muslim Association. The aims and objectives of the Muslim Association are specifically stated in clause (iii). On an examination of the aims and objectives, it is not possible to assume that, by the amalgamation, the original objectives of the Association has got converted to a public charity. That apart, from the original bye-law, it is discernible that the Association has no valuable asset at the time of its formation. So also, as rightly observed by the court below, it is** **FAO.No. 94 of 2017** ## **-:47:-** **impossible to assume that the society might have the incidents of a trust at the time when it was formed. In the absence of property, no trust can be created. In the above view, it is not required to examine whether there was any element of public trust in the Association before the registration as society.** **35. It is further contended that the public trust would be created, where once the funds of a constructive public trust is mixed up with the funds of Association, while annexing an obligation to that fund for public purpose, particularly, when funds are inexplicably intertwined.** **36. The learned counsel appearing for** **FAO.No. 94 of 2017** ## **-:48:-** **the appellants cited the decision in** _**M.S. V.V. Thayanayagi Achi v.C.T.C.T. Chidambaram Chettiar and Others**_ **[AIR 1962 Madras 406] in support of the aforesaid arguments. The proposition laid down in the aforesaid decision is that, if a trustee has got land or it's money which are partly of his own and partly that of the trust, the trustee can claim a charge on the property for the extent of his funds, which was expended in the purchase. That is not always easy to ascertain and the working rules appears to be that if the trust money have disappeared and that no residue is left, that trust will be entitled to a charge on the whole until it is ascertained as to what portion of the** **FAO.No. 94 of 2017** ## **-:49:-** **purchase money was contributed by the trustee out of his own funds and not out of the trust money. Onus being casts on the trust to prove as to what portion came from his own funds.** **37. When applying the aforesaid proposition to the instant case, we are of the opinion that there is no blending or intermingling of funds, as Ext.A1 clearly specifies that** ` **30,250/- was contributed to the Muslim Association at the time of amalgamation. In short, the contribution of Muslim Club to the Muslim Association is well ascertainable, though it was not put in a different account. However, admittedly, no amount, other than the aforesaid amount, was given to the Muslim** **FAO.No. 94 of 2017** ## **-:50:-** **Association. When there is no blending of money or intermingling of funds, the funds given by the Muslim Club can be segregated and ascertained.** **38. In** _**M.Dasaratharami Reddi and Another v. D.Subba Rao and Others**_ **[AIR 1957 SC** **797], the Hon'ble Supreme Court has held that the dedication of the property to a religious or charitable purpose may be either complete or partial. If the dedication is complete, a trust in favour of charity is created. If the dedication is partial, trust in favour of the charity is not created, but a charge in favour of the charity is attached and follows the property which retains its original private and secular character. Whether or not** **FAO.No. 94 of 2017** ## **-:51:-** **dedication is complete would naturally be a question of fact to be determined in each case on terms of the relevant documents, if** **question was made as per the document. In such a case, it is always a matter of ascertaining the true intention of the** **parties. It is obvious that such an intention must be gathered on a fair and reasonable construction of the document as a whole. Coming to the instant case, the amount given by the club to the society in the year 1966 was not a substantial amount when considering the activities of the Muslim Association, as evident from the bye-laws of the Muslim Association and it can be segregated easily.** **39. In the above view, we are of the** **FAO.No. 94 of 2017** ## **-:52:-** **opinion that, merely on the basis of the amalgamation and contribution of** ` **30,250/to the Muslim Association, Muslim Association, which was a society registered under Act XII of 1955, would not get the characteristics of a public trust, within the meaning of Section 92 of the C.P.C.** **40. Therefore, we find that the court below is justified in rejecting the petition, on a finding that Muslim Association is not a public trust, within the meaning of Section 92 of the C.P.C. When the Muslim Association is not a public trust, no further enquiry need be conducted as to the allegations of misappropriation and mismanagement levelled against the respondents. As observed by the court** **FAO.No. 94 of 2017** ## **-:53:-** **below, the appellants are not remedy-less and they have the opportunity to proceed in accordance with law provided under Act XII of 1955. The observations made above are confined to jurisdiction under Section 92 of the C.P.C only.** **In the result, this F.A.O. is dismissed. All pending Interlocutory Applications will stand closed.** **Sd/-** **K.HARILAL JUDGE sd/ANNIE JOHN JUDGE** **DST/Bb/Sl**