Operation Asha  v. Shelly Batra: A Critical Appreciation of the Landmark Judgment on S. 92, CPC

Saji Koduvath, Advocate, Kottayam.

Introduction

The Supreme Court decision, Operation Asha  v. Shelly Batra (delivered on 05 August 2025), will be a significant and impactful judgment in the history of Indian law.

Reflection on Two questions of Critical Significance

The decision, Operation Asha  v. Shelly Batra, prompts reflection on two questions of critical and profound significance. They are:

  • 1. Can an institution/organisation be considered as a ‘trust’?
  • 2. Is it possible for a Registered Society –
    • to create a trust upon the properties that have been acquired by the society after its registration, and
    • to ‘vest’ its properties in a ‘trust’ to have scrutiny thereof under Section 92 CPC?

The reflections of this author, in a nutshell, are the following –

  • In law, it is a misconception to match or equate a Trust with an Institution or Organisation. A trust cannot be created upon the “property belonging to a society”.
  • But this proposition is subject to certain qualifications.
    • That is, certain properties held by a Society may be that vest with the Society only for administration – E.g., (i) where a charitable association is established, after a valid ‘dedication‘ of property – for the enjoyment of the public – by a group of persons, for the administration of the dedicated property (or the trust); (ii) a society formed with the object of dedicating property for a public charitable purpose; (iii) a Society is formed by the beneficiaries for administering a charitable institution (already) established by valid ‘dedication‘ of property.

This legal position is vividly presented in Operation Asha v. Shelly Batra. It reads as under:

  • “However, if it is argued that a trust has instead separately been created for holding the property of the society after its registration as a society, the same must be clearly and sufficiently proven. Here, the separate trust which has been created and the properties which has been vested in said trust would be subject to scrutiny under Section 92. In both these scenarios, an ‘express trust’ would be created and in a suit under Section 92 CPC, the first criterion i.e., the existence of an express or constructive trust, would be met.”

Why it is a Misconception to Equate a Trust with an Association

  • 1. In legal parlance, ‘trust’ is a concept, and the Association is a reality. (It is true, in common language, the word ‘trust’ is often used – as though the concept has assumed a tangible ‘shape’.)
  • In Indian law, a trust is an ‘obligation‘; not a legal entity or organisation—it is neither a person nor a Society. A trust is a duty imposed upon the trustees to manage and administer the trust property for the benefit of the beneficiaries; whereas, a Society is an association of individuals. Both are fundamentally distinct. Any attempt to blend the legal character of a trust with that of a Society would run contrary to their distinctive legal frameworks and is totally inconsistent with established principles of jurisprudence.
  • 2. Property of a Society vests in its Members subject to the contract (Bylaws) and the basic or essential principles upon which it is founded.

Why No ‘Trust’ in a “Property Belonging to a Society”

  • 1. Under Indian law, members of a Registered Society are not permitted to ‘dedicate’ property belonging to the society, as the Societies Registration Act, 1860, comprehensively governs the vesting and management of such property. As per Section 5 of the Act, if the property is not vested in trustees, it automatically vests in the Governing Body of the Society. Furthermore, the Act itself prescribes the procedure for dealing with the society’s property upon its dissolution. Any attempt by the members to transfer such property outside this legal framework will stand inconsistent with the statutory scheme and is therefore impermissible.   
  • 2. Section 92 CPC envisages ‘express or constructive trust’. This requirement is brought home only when there is dedication of property.
    • Note: The “property belonging to a society” cannot be dedicated, after its Registration, even by a unanimous decision of its entire members, because the Society Registration Act governs the ‘vesting’, as stated above.
  • 3. Societies, both registered and unregistered, are voluntary associations of persons. Article 19(1)(c) of our Constitution guarantees freedom to form associations and unions.  It includes in itself the right of effective functioning so as to achieve its lawful objectives.
  • 4. Since the Civil Courts’ jurisdiction to interfere in the internal affairs of a Society is well-defined by the Societies Registration Act and common law, the LAW does not envisage interference upon the “property belonging to a society” under Section 92 CPC.  

Read Articles by the same author:

Instances Where a Society Falls Under the Clutches of S. 92 CPC

Section 92 CPC envisages ‘trust’ in a general, and not in a restrictive, sense as it refers to ‘express or constructive trust created for public purposes of a charitable or religious nature’. The following are the instances of imposing ‘trust’ (upon the property of a Society) to be subjected to the jurisdiction under Section 92 CPC:

  1. If a charitable institution is established by an association of persons through a valid dedication of property, it acquires the character of a trust for a public purpose within the meaning of Section 92 of the CPC. The subsequent registration of the association under the Societies Registration Act will not alter or extinguish its trust, which had arisen from the original act of dedication and the charitable purpose it serves
    •  Note: 1. Such property cannot be treated as the property ‘belonging to’ the association. (The property of a society is described in Section 5 of the So. Regn. Act as the property ‘belonging to the society’.)
    • 2. Beneficiaries of such a public trust will be outsiders (other than the members of the association) or, at least, outsiders must also be the beneficiaries.
  2. If it is manifested from the nature of an association (Society or a Non-Trading-Company) that a property held by such an institution is meant for the benefit of the third parties or public, i.e., other than the members of the association.
  3. If a society is formed with the object of dedicating property for a public charitable or religious purpose, and if the property is so dedicated and a trust is predicated.
  4. If the society accepts a gift of a property with the obligation to manage the same for the benefit of the beneficiaries intended by the donee.
    • The Delhi High  Court has held in Young Men’s Christian Association of Ernakulam v. National Council YMCAs of India (relying ono Swami Shivshankargiri Chella Swami v. Satya Gyan Niketan, (2017) 4 SCC 77) that a public trust can be validly created by gifting property to a society on condition that the same should be used for a specific public purpose and by appointing the society as its trustee.

The Supreme Court, in Swami Shivshankargiri Chella Swami v. Satya Gyan Niketan,considered whether a trust would arise when the donor waqfed (gifted) property to a society, registered under the Indian Societies Registration Act, 1960, for the development and publicity of the Hindi Language. The property was gifted on condition that the society would not have the right to mortgage or the right of sale. The society had not been taking any interest in achieving the purpose. Therefore, a petition was filed under Section 92 of CPC. The district judge allowed the petition, observing that prima facie it appeared that a constructive trust was created. The district judge relied on the Kerala High Court decision in Sukumaran v. Akamala Sree Dharma Sastha. The High Court, in Revision, reversed the order of the district judge.  The matter was finally considered by the Apex Court, by ‘special leave’.  The Apex Court upheld the view of the District Judge, observing as under:

  • “We have noticed that the trust deed was executed in favour of the respondents. But it appears in view of the facts and circumstances of this case and the submissions made on behalf of the respondents, that it was waqfed/gifted for a lawful purpose i.e. a “trust” (which) is an obligation annexed to the ownership of the property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another owner, (Act II of 1882 Trusts, Section 3]. Accordingly, in our opinion, the application filed by the appellants was falling within the required ambit of Section 92 of CPC and the learned district judge had rightly permitted the appellants to institute a suit.”

In Sukumaran v. Akamala Sree Dharma Sastha, the Kerala High Court relied on the following passage from Keshava Panicker v. Damodara Panicker:

  • “The effect of the Societies Registration Act is not to invest properties of the society with the character of trust property. Even if the purpose for which the society was formed was charitable purpose the property acquired for this purpose will belong to the society and there is no trust and no trust can be predicated……. if there was a trust created by the public, for a public charitable purpose namely establishing, maintaining and running a school the fact of the registration of a 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”.

The Delhi High Court, in Young Mens Christian Association of Ernakulam v. National Council YMCAs of India, considered whether the term “express or constructive trust” in Section 92 CPC was attracted when a society (National Council YMCAs of India) held ‘in trust’ property belonging to different organisations, and observed as under:

  • “In this backdrop, a perusal of Section 92 of the CPC reveals that the term “express or constructive trust” does not relate to a trust constituted under the Indian Trusts Act, but anybody or entity which holds in trust any property and is created for public purposes of a charitable or religious nature. A society can also satisfy the test of express or constructive trust created for public purposes.”

The Delhi High Court found that the National Council YMCAs was in both ‘express’ and ‘constructive’ trust of the properties belonging to its member YMCAs. The mere fact that the defendant is a registered society did not take away its true character. The defendant is an organisation which worked for a public purpose and is subject to the jurisdiction of Section 92 of the CPC. The defendant (National Council YMCAs of India) contended that it was not a trust but a society registered under the Societies Registration Act. There was a clear distinction between the nature of a trust and a society. If only it could be proved that the society could in fact be termed as a trust created for public purposes of a charitable or a religious character, leave under Section 92 of the CPC could be granted. The settled position on this issue was that if a society that was functioning in a fully democratic fashion, and there was no settler who had vested property in the society, leave could not be granted under Sec. 92. The court considered the following judgments:

  • Swami Shivshankargiri Chella v. Satya Gyan Niketan:  AIR 2017 SC 1221,
  • K. Rajamanickam v. Periyar Self Respect Propaganda Institution: AIR 2007 Mad 25,
  • Abhaya A Society Registered v. J.A. Raheem: AIR 2005 Ker 233,
  • Advocate General v. Bhartiya AdamJati Sewak Sangh: 2001-3 ShimLC 319,
  • S. Guhans v. Rukmani Devi Arundale: AIR 1988 Mad 1,
  • Kesava Panicker v. Damodara Panicker, AIR 1976 Ker 86.

The Delhi High Court (in Young Mens Christian Association of Ernakulam) also relied on Kesava Panicker v. Damodara Panicker, where it was held that if a trust was created for a public or charitable purpose, the fact that it was registered as a society would not change the character of the properties.

The Delhi High Court distinguished

  • Abhaya, A Society v. JA Raheem,
  • S. Guhans v. Rukmini Devi Arundale,  
  • K. Rajamanickam v. Periyar Self Respect Propaganda Institution, and
  • Advocate General v. Bhartiya Adam Jati Sewak Sangh

pointing out that these cases did not show that they held ‘in trust’ any property belonging to a different organisation. In these cases the property was owned by the Society concerned and it belonged to it. But, National Council YMCAs of India, the defendant, was formed to promote the work of the YMCA Movement in India and to resuscitate the existing languishing YMCAs and aid in formation of new YMCAs. It started administering and looking after the existing YMCAs which were formed even before it came into existence as a Society. The defendant “holds in trust, properties on behalf of the member YMCAs”. Thus, the defendant was in both ‘express’ and ‘constructive’ trust of the properties belonging to its members. The agreements in respect of immovable properties were actually signed for and on behalf of the members by the defendant. The defendant was thus playing the role of not merely an association holding something in trust but also has the power to enter into a transaction in respect of such properties.

Fact of the Case, Operation Asha  v. Shelly Batra, in a Nutshell

  • Operation Asha v. Shelly Batra, arose from a suit filed under Section 92 CPC.
  • The suit was filed by Shelly Batra and her mother, co-founders of a trust, alleging misconduct and breach of several of the society’s by-laws by the defendant No. 3, the CEO of the Society
  • Single Judge of the Delhi High Court allowed the application of the plaintiff filed under Section 92.
  • The Division Bench dismissed the appeal filed by the defendant Society.
  • The Supreme Court of India also dismissed the challenge of the Society.

Importance of the SC Judgment

In this erudite judgment, the Apex Court upheld the plaintiff’s right to proceed against the defendant Society under Section 92 CPC; and delivered a ruling, offering a comprehensive analysis on the following pivotal legal issues –

  • 1. Scope of the words ‘Constructive Trust’ in Section 92 CPC.
  • 2. What is the significance of the phrase, “if not vested in trustees,” in Section 5 of the Societies Registration Act?  

Operation Asha  v. Shelly Batra: Important Findings

The Apex Court (Justice JB Pardiwala and Justice R. Mahadevan) observed, inter alia, as under:

1. A suit under S. 92, CPC is a representative suit

  • “A suit under Section 92 of the CPC 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 and also to obviate a situation that would cause a further wastage of resources which can otherwise be put towards public charitable or religious aims. 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.”

2. Institution/ organisation can be a ‘trust’ or a ‘constructive trust’

  • “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’.“

3. Registration as Society could not change the character of Trust

  • “If the aforementioned circumstances exist and the entity has been, much later in time, registered as a society under the Societies Registration Act, 1860, it would still be treated as a ‘public trust’ as per the dictum of the Full Bench of the Kerala High Court in Kesava Panicker (supra) wherein it was observed that the mere factum of registration of a society under the Societies Registration Act, 1860, after it attained the characteristics of a public trust, could not change the character of the properties which had already been constituted as trust properties.”
  • “However, if the institution has been registered, from its inception, as a society under the Societies Registration Act, 1860, it is true that whenever a society acquires property, it cannot be said that it declares itself a trustee in respect of said property. In other words, the effect of registration under the Societies Registration Act, 1860 would not be to automatically invest the properties of the society with the character of trust property. This has been consistently laid down by the decisions of several High Courts.”

4. Property belonging to the society can be vested in ‘trustees’

  • “Having said so, one must examine what effect the mechanism of vesting provided under Section 5 of the Societies Registration Act, 1860 has on the society. It reads that –
    • “The property, movable and immovable, belonging to a society registered under this Act, if not vested in trustees, shall be deemed to be vested, for the time being, in the governing body of such society[…]”.
  • What  follows is that the property belonging to the society can either be vested in ‘trustees’ or in the governing body of the society. This vesting has been envisaged because a society registered under the aforesaid Act is not a juristic person or a body corporate capable of holding property by itself.”

5. A public trust could be created prior to the Registration of a Society

  • “The phrase, ‘if not vested in trustees, ‘ must be read to mean that a trust can be created, either expressly or impliedly, before or after the registration of a society, for the purpose of holding its properties. A public trust would be created prior to the registration of a society if the broad circumstances enumerated under point (v) are met. In such a case, all the properties of the society which had been imbued with the character of ‘trust property’ would be subject to Section 92.

A Separate Trust can also be Created after Registration

  • However, if it is argued that a trust has instead separately been created for holding the property of the society after its registration as a society, the same must be clearly and sufficiently proven. Here, the separate trust which has been created and the properties which has been vested in said trust would be subject to scrutiny under Section 92. In both these scenarios, an ‘express trust’ would be created and in a suit under Section 92 CPC, the first criteria i.e., the existence of an express or constructive trust, would be met.

6. Society cannot be considered as an ‘express trust’; It can be a ‘constructive trust’

  • “Therefore, while the society cannot be considered as an ‘express trust’, what must also be noted, at this crucial juncture, is that, for an entity to be brought within the rigours of Section 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.”

7. Finally the Apex Court directed as under:

  • “The underlying suit bearing CS (OS) No. 153 of 2020 filed before the Single Judge of the High Court must be commenced at the earliest and the High Court must pay careful attention to whether the circumstances necessitating the imposition of a ‘constructive trust’ is made out. If yes, it must delineate the properties which would be subjected to the constructive trust and assess whether the reliefs prayed for under prayers (c), (d) and (e) respectively of the present plaint may be granted.”

It is a Misconception to Equate a Trust with an Institution or Organisation

In Operation Asha v. Dr. Shelly Batra, the Hon’ble Supreme Court observed in Para (137.iv) as under:

  • “iv. “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’.”

Did our Apex Court mean to convey, by the afore-quoted words — an ‘organisation’ (against which the reliefs are sought) can be equated as a ‘trust’ or a ‘constructive trust’?

  • No. Because in our law, a trust is not a legal entity—it is neither a person nor an institution. The blending of Trust with an Association of Persons is totally against the concept of Trust in Indian Law.

A trust, in law, is a legal obligation attached to property, requiring the trustees to administer that property for the benefit of others. It is a mere relationship with property. Therefore, a trust cannot be equated with an institution or organisation. Such a conflation is both legally and conceptually unsound.

  • Therefore, when relief is sought under the principles of trust law, the proper inquiry is not whether the institution is a trust, but whether it holds property (as trustee) subject to trust obligations—whether express or constructive. The distinction is subtle but critical in ensuring a sound legal analysis.
  • An association of persons, or a society, is formed with specific aims and objectives by the joint effort of its founding members. A trust is an obligation created by the author or founder of the trust, upon the trustee in whom the burden is cast to administer the property for the benefit of the beneficiaries.  
  • A society functions under its bye laws formulated by the founding members. The administration of a trust is carried on under the directions of the author (in the deed of foundation, or otherwise).
  • The bye laws of a society can be amended as provided under the bye laws and/or under the provisions of the Act under which it is registered. The edicts of the founder in the founding deed of a trust cannot be varied.
  • A society can be wound up following the procedures specified in the law. In trust, the principle is ‘once a trust always a trust’.
  • The property of a society vests with its members subject to its basic principles or trust upon which it is founded and to the Act, if any, under which it is registered. A trustee is the legal-owner of the trust property and the property vets in him as such.
  • A society functions under its bye laws which partake the character of a contract. The State and the Court protect the trust as ‘parens  patreae’.
  • The administrators of a society can resign their office.  But the trustees cannot renounce.
  • In terms of Section 5 of the Societies Registration Act, the property of a society could vest in the trustees; and only in the absence of vesting of such property in the trustees the same would be deemed to have been vested for the time being in the governing body of such society.

Trust Definition

  • Sec. 3 of the Indian Trusts Act, 1882 defines trust as under:
  • “Trust: A ‘trust’ is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner.”

Legal Conceptions

From the definition, it is clear that ‘Trust’ holds the following conceptions:

  • Trust is ‘an obligation’ upon the trustee.
  • It is to administer the endowed property.
  • The administration must be done by the trustee as if he is the owner  of the trust property.
  • It must be done by him accepting the intents desired by the author.
  • And, the same must be for the benefit of the beneficiaries.

It is clear that the word ‘trust’ is used in law as an ‘abstract countable noun’, similar to ‘a concept’, ‘an idea’ or ‘a duty’.

‘A Trust’ is “An Obligation” and Not a Legal Entity

‘A trust’, according to the definition, being ‘an obligation’, it is clear that ‘a trust’ does not convey the idea that the ‘trust’ is a legal person, an association of persons, or a tangible or corporeal property.

  • The following are the important decisions on this point.
    • Govt. of the Province of Bombay v. Pestonji Ardeshir Wadia:  AIR 1949 PC 143;
    • Thiagesar Dharma Vanikam  v.  CIT: AIR 1964 Mad 483: 1963- 50 ITR 798  (Mad); 
    • Ramdass Trust v. Damodardas 1967 Raj LW 273;
    • Duli Chand v. Mahabir Pershad Trilok  Chand Trust: AIR 1984 Del 144;
    • Thanthi Trust v. Wealth Tax Officer: 1989- 45 TAXMAN 121: 1989-178  ITR 28;
    • Chikkamuniyappa Reddy Memorial Trust v. State: ILR 1997  Kar 2460;
    • KishorelalAsera v. Haji Essa Abba: 2003-3 Mad LW 372: 2003-3 CCC367;
    • Sagar Sharma v. Addl. CIT: 2011-239 CTR 169: 2011-336  ITR 611;
    • Sambandam v. Nataraja Chettiar: 2012-1 Mad LW 530.

As explained above:

  • ‘A trust’ is ‘an obligation’ or a fiduciary duty upon the trustee to administer the trust property for the benefit of the beneficiaries.
  • ‘Trust’ being an obligation or fiduciary duty upon the trustee to administer the trust property for the benefit of the beneficiaries, it is essentially a legal concept.
  • The expression ‘a trust’ in the definition, being followed by the words ‘is an obligation’, it is clear that ‘a trust’ does not convey the idea that it is a tangible matter or a corporeal property.
  • Trust differs from an ‘Endowment’ for,the latter is basically a tangible corporeal reality to which social concepts are adhered to.
  • The trust-property (or the dedicated-property) vests in the ‘legal ownership’ of the trustee.  
  • The term ‘endowment’ stands analogous to ‘trust property’, and not to ‘trust’ as such.
  • From the above, it is clear that, legally, the ‘trust’:
    • (i)   cannot be a juristic person;
    • (ii) cannot be an association of persons; and
    • (iii) cannot be a tangible endowment or a corporeal property.
  • In Surya Kant Chunilal v. Mahesh Chand, AIR 1972 Del. 72 it is held as under:
    • “Further defendant No. 2 (Trust) is not a registered body or a juristic person. The properties of the Trust vest in the trustees.”
  • In Kansara Abdulrehman Sadruddin v. Trustees of the Maniar Jamat Ahmadabad it is observed by the Gujarat High Court as under:
    • “The ‘trust property’ is nothing but the subject matter of the trust; that is, a property which is impressed with the obligation giving rise to a trust. When we speak of a trust, we speak merely of the requisite obligation which is annexed to the ownership of a property. This obligation is not a legal entity in any sense; as for example, the trust cannot own any property the property is owned by the trustee who is an entity by himself different from the trust, a trust cannot sue and a trust cannot be sued; it is only a trustee who can sue and who can be sued. It is only a trustee who can hold properties. A ‘trust’ cannot be a landlord since the trust properties vest in the legal ownership of the trustees. It is the trustee alone who can be a landlord. Since the trust is not a legal entity, no question of hardship suffered by the trust or accommodation required by the trust can arise for consideration.”

Defining Features of Societies

The following points are important and significant, and they should not be overlooked while exploring the status of societies.

  • 1. Societies, both registered and unregistered, are voluntary associations of persons. Article 19(1)(c) of our Constitution guarantees freedom to form associations and unions.  It includes in itself the right of effective functioning so as to achieve its lawful objectives.
  • 2. The Societies, as understood in our legal system, are identified in English Common Law as ‘Members’ Clubs’ and ‘Friendly Societies’.
  • 3. Societies are formed for accomplishing social, charitable, or benevolent objectives as desired by the founders and can be allowed to be modified by the future members in their discretion.
  • 4. They are funded, mainly, on voluntary donations from members or outsiders.
  • 5. Property of a Society (though theoretically joint property of the members) is maintained for the benefit of persons other than the members also (true, therefore encumbered with obligations pertaining to ‘trust’). It can be allowed to be modified by the future members in their discretion.
  • 6. Societies are registered under the Central or State Societies Registration Act, for acquiring legal identity and recognition alone.
  • 7. A society formed for religious purposes can also be registered under the Societies Registration Act as the society formed for religious purposes would also ordinarily be a Society for charitable purposes.
  • 8. But, it is held by the Patna High Court in Md. Yunus v. The Inspector General of Registration that the Societies Registration Act does not embrace purposes which are religious or predominantly religious. It is explained in Nelson v. Kallayam Pastorate by our Apex Court that when the Church, indisputably, carries on secular activities also, keeping in view the interest of the general public, there is no reason as to why in a case of mismanagement of such (registered) charitable organisations, although run by minorities, the Court cannot oversee its functions.
  • 9. Bye Laws Bind as Contract. The members of a club or society, both registered and unregistered, are bound by the memorandum of association and its rules and regulations. The bye-laws bind its members as a contract. Even the formation of a society itself is based on a contract. When a person becomes a member of the society, he would have no independent rights, and lose his individuality qua the society, except those that are given to him by the statutes concerned and bylaws; and the rights of members merge in the rights of the society. In State of UP v. CD Chheoki Employees Co-operative Society, AIR 1997  SC  1413, our Apex Court explicated it with the analogy that the stream cannot rise higher than the source. It reads:
    •  “Thus, it is settled law that no citizen has a fundamental right under Article 19(1)(c) to become a member of a Cooperative Society. His right is governed by the provisions of the statute. So, the right to become or to continue being a member of the society is a statutory right. On fulfillment of the qualifications prescribed to become a member and for being a member of the society and on admission, he becomes a member. His being a member of the society is subject to the operation of the Act, Rules and bye-laws applicable from time to time. A member of the society has no independent right qua the society and it is the society that is entitled to represent as the corporate aggregate. No individual member is entitled to assail the constitutionality of the provisions of the Act, Rules and the bye-laws as he has his right under the Act, Rules and the bye-laws and is subject to its operation. The stream cannot rise higher than the source.” (Quoted in Zoroastrian Co-op. H. Society Ltd. v. District Registrar: AIR 2005  SC  2306; Supreme Court Bar Association v. BD Kaushik: (2011) 13 SCC 774; Chandigarh Housing Board v. Devinder Singh: AIR 2007 SC 1723.)
  • Civil Courts’ Jurisdiction to Interfere in the Internal Affairs of a Society is well-defined by Common-Law. Unless by express mode or by necessary implication barred, civil courts’ jurisdiction permeates into every civil matter including that of the private associations and even clubs. When the affairs of such institutions, associations etc. are governed by statutes, the courts test the validity of their actions on the touch stone of such statutes. If such bodies are not directly governed by any statute but being administered under their own rules, bye laws etc., their impugned actions are tested in the light of those rules or bye laws. The courts enquire whether their acts were in conformity with those rules and bye laws, and following the principles of natural justice.

Endowment and Trust

  • ‘Trust’ is essentially a legal concept; whereas, ‘endowment’ is a corporeal reality to which social concepts are adhered. An endowment is founded by dedication of property for the purposes of religion or charity, having both the subject and object certain and capable of ascertainment.
  • An ‘endowment’ may be public or private. From the usage of the word ‘endow’ and the connected word ‘endowment’  it is clear that they relate to the idea of giving, bequeathing, or dedicating property or other possession, for some specified purpose.  According to Chambers’ Twentieth Century Dictionary, the word ‘endowment’ means: ‘that which is settled on any person or institution’. Webster’s International Dictionary gives the following meaning to the word ‘endowment’:
    • “(1) The act of bestowing a dower, fund, or permanent provision for support. (2) That which is bestowed or settled on a person or an institution; property, fund, or revenue permanently appropriated to any object; as the endowment of a church, a hospital or a college. (3) That which is given or bestowed upon the person or mind; gift of nature, accomplishment; natural capacity; talents; usually in the plural.”

Sec. 92 CPC is Not Attracted Always to Matters of a Society

Because, no ‘dedication’ of “property belonging to a society”. (See also notes above, under the head – A Society May Be Subjected  to the Jurisdiction of S. 92 CPC)

A suit with respect to the administrative matters of a society (both registered and unregistered), or property ‘belongs to a society’, is not controlled by Section 92. Section 92 pertains to public trusts. 

Dedication of specified property by a competent person is essential for a valid endowment.  It is relinquishment of entire rights of the donor or founder in the property dedicated. For a valid dedication, there should be proof of renunciation by the owner or divestment of his title to the property dedicated.

Sec. 92 CPC envisages ‘express or constructive trust created for public purposes of a charitable or religious nature’. This requirement is brought home only when there is dedication of property. That is, unless there is an ‘express or constructive’ public trust founded by explicit ‘express or constructive’ dedication of the property divesting the rights of former owner over the same, ‘for public purposes of a charitable or religious nature’, Sec. 92 CPC is not attracted. 

The characteristic distinguishing factor between a ‘Private Trust’ and ‘Public Trust’ is that in the former, beneficiaries are defined and ascertained individuals; and, in the latter, the beneficial interest will be vested in an uncertain and fluctuating body of persons, either the public at large or some considerable portion of it, answering particular description.

Normally, there will be no ‘express or constructive’ dedication of the ‘property belonging to a society’, divesting the rights of the society, ‘for public purposes of a charitable or religious nature’ (even if the objects of the society are charitable and religious purposes); and therefore, Sec. 92 CPC will not be attracted to the ‘property belonging’ to the societies. A society usually uses its property for its own purposes and it will be the property of the Society alone; and it will not be a property in respect of which it is possible to predicate a public trustas envisaged in Sec. 92 CPC. The same will be the position of Non-Trading-Companies also.

In ‘Abhaya’ a Society v. Raheem, while dealing whether Sec. 92 CPC is attracted to the affairs of a registered society, it is pointed out by the Kerala High Court that to constitute a trust there must be author, trustees, beneficiary, trust property and beneficial interest.

It is also clear from the wordings of Sec. 92 CPC that express or constructive trust in its ‘strict sense’ is envisaged in Sec. 92; and not trust in its ‘wider or general sense’ so as to include all ‘fiduciary relationships’. Section 92 CPC is held out on the principles of ‘parens patriae’, once a trust always a trust, and the court is the protector of all charities.

In Pragdasji v. Ishwarlalbhai  our Apex Court pointed out that a suit under Sec. 92 is a suit of a special nature which presupposes the existence of a public trust of a religious or charitable character and that it must pray for one or other of the reliefs that are specifically mentioned in the Section. It is only when these conditions are fulfilled; a suit could be brought under Sec. 92.

Section 92 CPC does not specifically make any provision to remove the persons in management of the society and to appoint new managing body. 

If Valid Dedication, No Change of Character, On Regn. as Socieety

As stated above, normally, the property acquired by a society does not part-take the character of ‘public purpose’ stated in Sec. 92 CPC. But, if a charitable or religious institution of a public nature is expressly or constructively founded by an ascertainable number of persons or an association, by valid dedication of properties acquired by the members or society, it will accomplish the character of ‘public purpose’ stated in Sec. 92 CPC.

Subsequent registration of an association involved in a trust, under the Societies Registration Act, will not make any change to the trust character of the properties dedicated.  Kesava Panicker v. Damodara Panicker  was a case where the entire community in a particular area took an active interest and contributed funds for the purpose of creating ‘a trust fund’ for establishing a school. A committee was formed for collecting funds. Utilising that fund the school building was constructed. Subsequently a society was formed and registered under the Societies Registration Act for the purpose of management of the school. A question arose whether the character of the properties would be changed by the formation of the society. The Full Bench of the Kerala High Court held as under:

  • “If there was a trust created by the public, for a public charitable purpose namely establishing, maintaining and running a school, the fact of the registration of a 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.”

‘Property belonging to a Society’ ‘merely describes‘ the property

In Unani Tibia College case the Constitution Bench of the Supreme Court has held that the expression ‘property belonging to a society’ does not give the society a corporate status and it ‘merely describes the property which vests in trustees or governing body’ and that the provisions of the Societies Registration Act did not give a ‘corporate status’ to a society ‘for the purpose of holding and acquiring property’.  In this decision, it is further held:

  • “….. Those provisions undoubtedly give certain privileges to a society registered under that Act and the privileges are of considerable importance and some of those privileges are analogous to the privileges enjoyed by a corporation, but there is really no incorporation in the sense in which that word is legally understood.”
  • “…..  Thus something in the nature of perpetual succession is conceded by the provision that the society’s property is to vest in the trustees for the time being of the society for the use and benefit of the society and its members and of all persons claiming through the members according to the society’s rules, and further (and this is the most noteworthy provision) that the property shall pass to succeeding trustees without assignment or transfer.”

Vesting of Property – In Members, subject to the BYLAWS

Property of a Society vests in its Members subject to the contract and the foundational principles upon which it is founded. It should not be lost sight of –

  • The ownership of the ‘property of a society’ does not absolutely vest either in its members or in the governing body, but it vests in the members of the society subject to the bye laws or contract, and the fundamental principles or ‘trust’ upon which it is founded.
  • Therefore, the members do not have any proprietary or beneficial interest in the property of the society, and they cannot claim any interest in the property of the dissolved society.

We can take cue (i) from the observations of our Apex Court in Addanki Narayanappa  v. Bhaskara  Krishnappa that the property which is brought in by the partners when the partnership is formed or which may be acquired in the course of the business of the partnership becomes the property of the firm, and the partnership property will vest in all the partners since a firm has no legal existence; and (ii) from the following erudite assertion of Dr. BK Mukherjea, J., on Hindu Law of Religious and Charitable Trusts:

  • “The idol as representing and embodying the spiritual purpose of the donor is the juristic person recognised by law and in this juristic person the dedicated property vests.”

In case of Registered Societies, the vesting of ownership of the ‘property of a society’ is further subject to the provisions of the Act under which it is registered.

Status of property of a Society acquired after Registration

The property of a Society that was acquired after the registration of a society, also attracts Section 92 CPC if –

  • 1. it is an added property to the existing trust administered by the Society; or
  • 2. it is a property validly acquired by the Society for the purpose of dedicating it to the ‘public’.

Conclusion

For a suit to be maintainable under Section 92 of the Civil Procedure Code, the fundamental requirement is the existence of a valid trust created for public purposes of a charitable or religious nature. The application of Section 92 to the property of a society is subject to strict judicial scrutiny.

  • Courts are consistently cautious in extending the ambit of this provision to Societies, unless there is clear, unequivocal evidence that the property is held under an enforceable trust obligation for charitable or religious purposes.

Importantly, the property in question must not merely be “property belonging to a society,” as such property is governed by the Societies Registration Act, which prescribes its own statutory framework for ownership, management, and dissolution.

End Notes

Vesting of Property in Various Kinds of Associations and Trusts

Club, Society, Firm and Company

Nature of Association.Vesting of Management and Legal Ownership.Vesting  of actual/ ultimate ownershipWhether perma-nent or can it be put an end to
  ClubTrustees or Gov. Body, as per  ByelawsMembers, subject to the byelaws and objectives of foundation.Presumed to be not permanent.[19]
Unregistered. Society/ Association  -do-  -do-Presumed to be permanent.
Registered Society-do--do-Permanent.  SR Act governs dissolution
FirmPartnersPartnersContract/partnership deed governs
Trading CompanyBoard of DirectorsCompanyPermanent. Co. Act govern winding up.
Charitable or Non-trading company  -do-  -do-  -do-

Trusts/Religious-Endowments:

Public Trust– English Law[20]  TrusteesLegal ownership in Trustees; beneficial ownership in Beneficiaries.  Permanent
Public Trust-Indian (common) Law    Trustees  Beneficiaries have only beneficial interest; and, no beneficial ownership. Theoretically, properties vest in public or section who are beneficiaries, subject to the objectives of foundation, as established by evidence or as revealed from the deed of founda-tion or byelaws, if any.        Permanent
Public School, Public Library, etc.  Trustees (called by different names).    -do-  Permanent.
Private religious or charitable trustsManagement on Trustees (called by different names). If the trust/ institution/ endowment is a legal person upon which legal ownership can be vested, legal ownership will be vested upon it.Properties vest in trust/ institution/endowment itself.  If it cannot be – for it is not a legal person – property vests in such persons as established by evidence or the deed of foundation or byelaws.  Beneficiaries have no beneficial ownership.        Presumed to be permanent.
Mosque, Church, Gurudwara, etc.  Management on Trustees (by different names).  If the trust/ institution/ endowment is a legal person upon which legal ownership can be vested, legal ownership will be vested upon it.In trust/institution or endowment itself.  If it cannot be – for it is not a legal person – section of public who are beneficiaries, subject to the objectives of foundation, as established by evidence or as revealed from the deed of foundation or bylaws, if any.  Permanent
  Temple (Public)Management on Shebaits/ Darmkarta/ Ooralen. Since Idol/deity is a legal person upon which legal ownership can be vested, legal ownership vests upon it.  Idol/deitydo-
 Temple (private)-do--do--do-
   MuttManagement on Madathipathi. Since Mutt is a legal person upon which legal ownership can be vested, legal ownership vests upon it.  Mutt-do-
Private Trust (Coming under the Trusts Act  Trustees  Terms/ Deed of Trust govern.Trusts Act governs Extinction and Revocation.[21]

Government School, University, etc.

University, Govt. Hospital, Govt. College, etc.  Administrators as provided in the statute concerned  In the institution itself, if not expressly stated to be in the Government.Presumed to be permanent. Governed by the Statute concerned.

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Book No, 1 – Civil Procedure Code

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Evidence Act – General

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Book No. 2: A Handbook on Constitutional Issues

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Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

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