R. VENUGOPALA NAIDU AND ORS. versus VENKATARAYULU NAIDU CHARITIES AND ORS.

Citation: [1989] SUPP. 1 S.C.R. 760 · Decided: 26-10-1989 · Supreme Court of India · Bench: S. NATARAJAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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R. VENUGOPALA NAIDU AND ORS. 
..,--
A 
v. 
VENKATARA YULU NAIDU CHARITIES AND ORS. 
OCTOBER 26, 1989 
B 
(S. NATARAJAN AND KULDIP SINGH, JJ.) 
Civil Procedure Code, 1908: Section 92-Representative suit-
Nature of-Whether all persons interested in a trust are parties to the 
suit. 
'-
c 
Respondent No. 1 is a public trust. The trust owns several proper-
ties. On the ground that the trust properties were improperly and 
fraudulently alienated, a suit was filed under Section 92 CPC for 
removing the trustee and appointing a new trustee and to recover trust 
properties alienated by the said trustee. The sub-judge permitted the 
trustees to continue and framed a scheme-decree for the future manage-
D 
men! and administration of trust. The scheme also granted liberty to 
the parties to apply to the sub-court for further directions as regards 
the administration of the trust. 
b 
The trustees filed an interim application before the sub-court and 
• 
obtained permission to sell two properties. The appellants filed an 
E 
interim application for setting aside the order granting permission to 
the trust for selling the two properties, alleging that the negotiated price 
was only about 20% of the market price. The sub-judge dismissed the 
application on the ground that the applicants had no locus-standi to file 
the application under clauses 13 and 14 of the Scheme-decree as they 
were not parties to the Original suit. 
F 
On revision the High Court also came to the conclusion that the 
application was not maintainable. 
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This appeal, by special leave, is against the said judgment of the 
High Court. 
0 
On behalf of the appellants, it was contended that since the suit 
under section 92 CPC being a representative suit, the scheme-decree 
binds not only the parties thereto, but all those who are interested in the 
trust. 
H 
The contention of the Respondents was that only the two persons 
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760 
·c 
R.V. NAIDU v. V.N. CHARITIES 
761 
who filed the original suit can be considered as "parties" in terms of A 
clause 14 of the scheme-decree and since the appellants were not 
plaintiffs in the suit, they have no locus-standi to file an application 
under clauses 13 and 14 of the scheme decree. 
Allowing the appeals, this Court, 
HELD: 1.1 A suit under Section 92 of the Code is a suit of a special 
nature for the protection of Public rights ii:t the Public Trusts and 
charities. The suit is fundamentally on behalf of the entire body of 
persons who are interested in the trust. It is for the vindication of public 
B 
• rights. The beneficiaries of the trust, which may consist of public at 
large, may choose two or more persons amongst themselves for the 
purpose of filing a suit under Section 92 of the Code and the suit-title in 
C 
that event would show only their names as plaintiffs. The named 
plaintiffs being the representatives of the public at large which is 
interested in the trust all such interested persons would be considered in 
the eyes of law to be .Parties to the suit. A suit under Section 92 of the 
Code is thus a representative suit and as such binds not only the parties D 
named in the suit~title but all those who are interested in the trust .. It is 
for that reason that explanation VI to Section 11 of Code constructively 
bar by res-judicata the entire body of interested persons from reagitat-
ing the matters directly and substantially in issue in an earlier suit 
under Section 92 of the Code. (766B-C] 
1.2 A suit whether under Section 92 of the Civil Procedure Code 
or under Order 1 Rule 8 of Civil Procedure Code is by the representa-
tives of large number of persons who have a common Interest. The very 
nature of a representative suit makes all those who have common 
interest in the suit as parties. In the Instant case all persons who 
E 
are interested in the respondent trust are parties to the original suit F 
and as such can exercise their rights under clauses 13 and 14 of 
scheme-decree. (766H; 767 A] 
Raje Anandrao v. Shamrao and Ors., (1961] 3 SCR 930; Ahmed 
Adam Sail and Ors. v. Inayatullah Mekhri and Ors., (1964] 2 SCR 647 
relied on. 
G 
2.1 The property of religious and charitable endowments or 
institutions must be jealously protected because large segment of the 
community has beneficial interest therein. Sale by private negotiations 
which is not visible to the public eye and may even give rise to public 
suspicion should not, therefore, be permitted unless there are special H 
A 
B 
c 
D 
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