Santal Mission Of Northern Churches Dispute | Jharkhand High Court Holds Declaration Against 1968 Transfer Barred By Limitation, Non-Joinder

A Division Bench of Chief Justice M.S. Sonak and Justice Rajesh Shankar also held that the declaratory relief was barred by limitation and could not have been granted without impleading the transferee company, the Trust Association of Northern Evangelical Lutheran Church, as a defendant.

The dispute traced its origin to 1880, when Rev. Hans Peter Doerresen and Rev. Laurentius Olaves Skrefsrud founded the missionary society initially known as the Indian Home Mission to the Santals and later as the Santal Mission of Northern Churches. A Trust Deed dated April 21, 1880 was executed to secure properties acquired for the mission. A scheme for management of the trust properties was later settled in Title Suit No. 1 of 1914 and incorporated into a supplementary trust deed dated December 8, 1920.

The Evangelical Lutheran Churches subsequently evolved into the Trust Association of Northern Evangelical Lutheran Church, which became a self-governing and independent Church and was registered as a company under the Companies Act, 1956. On February 10, 1968, the existing trustees of the Santal Mission of Northern Churches executed an Instrument of Transfer introducing the company as a new trustee.

In 1971, persons claiming to be beneficiaries of the trust instituted Title Suit No. 5 of 1971 under Section 92 CPC after obtaining the Advocate General's consent. They sought, among other reliefs, settlement of a scheme for proper management of the trust, removal of the existing trustees and a declaration that the Instrument of Transfer dated February 10, 1968 was illegal and inoperative. However, the transferee company itself was not impleaded, though its directors were arrayed as defendants.

The Trial Court decreed the suit and declared the Instrument of Transfer illegal, inoperative and non-binding. In a connected suit, Title Suit No. 11 of 1971, the Trial Court granted substantially all the reliefs sought by the plaintiffs. On appeal, a Single Judge of the Patna High Court allowed the appeal arising from Title Suit No. 5 of 1971 and restored the Instrument of Transfer. The present Letters Patent Appeals challenged that common judgment dated June 30, 1992.

The appellants contended that Title Suit No. 5 of 1971 had been properly instituted under Section 92 CPC and that the First Appellate Court had ignored evidence concerning alleged misconduct of the trustees and an unauthorised and fraudulent transfer of the trust properties. They also argued that the Instrument of Transfer was invalid because one of the trustees had acted through a power of attorney, allegedly contrary to Sections 47 and 48 of the Indian Trusts Act, 1882.

Mr Sudhir Kumar Sharma, appearing for the intervener, submitted that the Indian Trusts Act applied only to private trusts, whereas the Santal Mission of Northern Churches was a public trust governed by its trust deed and the court-framed scheme.

The respondents defended the appellate judgment. Mr Anil Kumar submitted that a declaration that the Instrument of Transfer was invalid and illegal ab initio could not be granted in a suit under Section 92 CPC, particularly after the Trial Court rejected the principal reliefs of framing a scheme and removing the trustees.

Suit Maintainable, But Relief Not Made Out

The High Court held that maintainability under Section 92 CPC had to be examined on the basis of the allegations in the plaint. Since the plaint alleged breach of trust and mismanagement and the prescribed procedural formalities had been complied with, the suit was maintainable and properly instituted.

However, the Court clarified that maintainability alone was insufficient to decree the suit. The allegations had to be proved before relief could be granted. The reliefs for framing a scheme and removing the trustees had been rejected, and no case was made out for declaring the Instrument of Transfer illegal or inoperative.

The Bench observed that the Trial Court had proceeded to invalidate the Instrument of Transfer despite refusing the two principal reliefs founded on the alleged breach of trust. The Court held:

“Thus, Title Suit No. 05/1971 was maintainable, properly constituted and instituted. However, the relief to formulate a scheme for the administration of the Trust or its properties, or to remove its existing trustees, was correctly denied. Further, no case was made out for the relief to declare the Instrument of Transfer dated 10.02.1968 illegal, inoperative and not binding upon the plaintiffs.”

Declaratory Relief Barred By Limitation

The Court further held that the declaratory relief was governed by Article 58 of the Limitation Act, which prescribes three years from the date when the right to sue first accrues.

According to the pleadings, the cause of action arose on February 10, 1968, while the suit was instituted on June 4, 1971, beyond the prescribed three-year period. The declaratory relief was introduced later through an amendment application dated January 6, 1972. Even assuming that the amendment related back to the date of institution, the relief remained barred by limitation.

The Court noted that Section 3 of the Limitation Act imposed a duty upon the court to examine limitation even where the defendants had not raised it. It held that the Trial Court's decree warranted reversal on this ground as well.

Company Was A Necessary Party

The Bench also held that the transferee company was a necessary party because the declaration sought would have seriously affected it and visited it with civil consequences. It rejected the argument that impleading all the company's directors cured the defect, observing that a company has a legal identity independent of its directors and shareholders. It held:

“Therefore, impleading some or even all the directors, without impleading the company itself, cannot cure the defect of non-joinder of a necessary party.”

No Illegality In Instrument Of Transfer Established

The Court found that the allegations of mala fides, fraud and collusion had not been established. It observed that the appellants had not identified any specific clause of the trust deed or its subsequent modifications that prohibited admission of a new trustee or arrangements ensuring the trust's continued operation.

The contention that the Instrument of Transfer divested the trust of its properties was also not substantiated by proven facts or law. The Bench held that the appellants had misconstrued the instrument's scope and failed to prove either breach of trust or maladministration.

The Court further rejected the contention that execution of the Instrument of Transfer through a trustee's power of attorney violated Sections 47 and 48 of the Indian Trusts Act. It noted that the explanation to Section 47 permits appointment of an attorney to perform a merely ministerial act involving no independent discretion.

Since all the trustees had independently decided that admitting a new trustee was in the trust's interest, the attorney's execution of the document could not be treated as an impermissible delegation.

Finding no merit in either appeal, the Court dismissed both without any order as to costs.

Case Title: Dilip David Hansda and Ors. v. Mr. Oddvar Holmedal and Ors.

Case Number: L.P.A. No. 79 of 1992

Appearance: Mr Rajeeva Sharma, Senior Advocate, Mr Om Prakash and Mr Ritesh Kumar appeared for the Appellants. Mr Anil Kumar, Senior Advocate, Mr Rahul Kumar and Ms Chandana Kumari appeared for the Respondents. Mr Sudhir Kumar Sharma appeared for the Intervener.