While ruling on a very significant legal point, the Delhi High Court has in a remarkable, robust, rational and recent judgment titled Sh. Ram Sarup Lugani & Anr vs Nirmal Lugani & Ors. in CS(OS) 182/2019 & I.A. 22105/2022 (Interim Direction) that was reserved on December 22, 2022 and then which was finally pronounced on January 4, 2023 has ruled clearly that courts can permit a person to join an application seeking leave to institute a suit against a Trust under Section 92 of the Code of Civil Procedure as at that stage the suit is yet to be instituted.

It must be mentioned here that while tackling a case wherein one of the two plaintiffs had died even before the court had granted the leave to file a suit, and therefore a prayer was made seeking impleadment of two or more persons as co-plaintiffs, Hon’ble Mr Justice Yashwant Varma said that court does not lack the power to permit persons to join an application seeking leave to sue a Trust. It was also made clear by the Court that no provision of the Code, either expressly or impliedly prohibits persons from joining an application for leave to sue.

I.A. No. 8273/2021 (Appropriate Direction)

At the very outset, this brief, brilliant and balanced judgment authored by the Single Judge Bench of Delhi High Court comprising of Hon’ble Mr Justice Yashwant Varma sets the ball rolling by first and foremost putting forth in para 1 that, This application has been preferred for the impleadment of Major Atul Dev and Dr. Neerja Lugani Sethi as co-plaintiffs or to be impleaded as parties in light of subsequent developments which are set forth in the said application. A further prayer is made for leave being granted to the proposed co-plaintiffs to institute the accompanying suit under Section 92 of the Code of Civil Procedure, 1908 (CPC).

Be it noted, the Bench points out in para 2 that:
It becomes pertinent to note that the present matter is still to be registered, in stricto sensu, as a suit under Section 92 of the Code since leave to institute is yet to be granted. The prayer made in the instant application in essence appears to be to permit the individuals noted above to join as applicants in I.A No. 4760/2019 which is pending consideration.

To put things in perspective, the Bench then envisages in para 3 that:
The suit proposed to be instituted under Section 92 of the Code relates to the affairs of a public charitable trust named Raghuvanshi Charitable Trust. The application for leave was originally preferred by Shri Ram Sarup Lugani and Shri Bahushrut Lugani. On 04 April 2019, this Court while noticing the issues which arise in some detail, proceeded to pass an order restraining the defendants from withdrawing any money directly or indirectly for themselves from the funds of the defendant No.7 or the schools falling under the management and control of the Trust.

As we see, the Bench discloses in para 4 that:
The Trust itself is stated to have been constituted as a not-for-profit entity dedicated to the objective of establishing schools, colleges and other social institutions. The allegation in the proposed suit was that the defendant Nos. 1 to 6 are jointly and severely mis-conducting themselves and acting contrary to the aims and objectives of the Trust. While this Court proceeded to pass the interlocutory order of restraint on 01 April 2019, the record would reflect that the application for leave to institute the suit remains pending on the board of the Court.

It is worth noting that the Bench clearly states in para 13 that:
Undoubtedly, a Section 92 suit cannot be recognized as having come to be instituted unless the application for grant of leave of the Court is granted. Till that time, the suit would remain a proposed action with respect to the affairs of a public charitable trust. Evidently, in Rahul Jain on the date when leave was granted by the Court, there was only one individual who remained on the record of the application seeking leave. It is in that backdrop that the Court came to conclude that the order granting leave was unsustainable.

Most significantly, the Bench minces no words to hold unequivocally in para 15 that:
The position which thus emerges from the aforesaid discussion would be that a suit under Section 92 of the Code would be recognized as having been instituted only after the application seeking leave of the Court has been obtained and granted. Till such time as that application is allowed and the Court grants leave, the suit remains a proposed action in respect of a trust. It is the grant of leave by the Court on an application preferred for that purpose by two or more persons that leads to the registration of the suit. It is in that backdrop that the decision in Rahul Jain is liable to be appreciated and understood.

Bearing in mind the express provisions of Section 92 of the Code, Rahul Jain correctly holds that at least two persons must be in existence on the date when the application for leave is either taken up for consideration or on the date when leave is granted. The decision clearly holds that it is either of the two afore-noted dates which would be determinate. Rahul Jain also rightly found that a defect which relates to the minimum number of applicants who must be present before the Court on the pivotal date cannot be cured by way of impleadment after leave has been granted.

It cannot be glossed over that the Bench then hastens to add in para 16 stating that:
To the extent of what stands recorded hereinabove, the instant application clearly does not raise an insurmountable obstacle since the applicants are neither seeking impleadment after leave has been granted nor is it one which has been instituted after the Court may have granted permission to a particular set of proposed plaintiffs. However, while learned counsel for the respondent may be correct in his submission that the provisions of Order I Rule 10 or for that matter Order XXII Rule 3 of the Code would not be applicable at this stage since, strictly speaking, a suit is yet to be registered and instituted, the Court finds no justifiable ground to refuse the prayers made in the instant application for the following reasons.

To be sure, the Bench then enunciates in para 17 that:
It must and at the outset be reemphasized that the proposed applicants crave liberty of the Court to join the pending application for grant of leave. This is therefore not a case where parties are proposing to join the lis after leave may have been granted or seeking impleadment in proceedings post the grant of permission by the Court in terms of Section 92. Further, even if the Court were to grant the prayers as made in the instant application, it would not amount to the Court according leave to sue. That would be an issue which would survive for consideration once the Court takes up I.A No. 4760/2019.

Briefly stated, the Bench then mentions in para 18 that:
The Court while arriving at the aforesaid conclusion also bears in mind that the Code, as has been repeatedly held, is not liable to be viewed as exhaustively providing for the infinite contingencies which may arise in the course of civil litigation. It is perhaps to take care of the unpredictable vagaries of litigation that the Legislature in its inherent wisdom preserved and recognised the inherent powers of the Court by insertion of Section 151. Section 151 and its scope was lucidly explained by a Full Bench of the Allahabad High Court in Raj Narain Saxena vs. Bhim Sen and Ors. 1965 SCC OnLine All 109.

Most remarkably, we see quite clearly that the Bench then aptly holds in para 20 that:
The Court is thus of the considered opinion that the grant of the prayers as made in the instant application would not fall foul of any provision of the Code. No provision of the Code, either expressly or impliedly, prohibits persons from joining an application for leave to sue. All that Section 92 mandates is that the application seeking leave must be made by at least two persons. For the purposes of determining whether the aforesaid prescription stands satisfied, the Court must ensure that the statutorily prescribed minimum number of applicants exist on the record on the date when the said application is taken up for consideration or permission to sue is granted.

What’s more, the Bench then lays bare in para 21 maintaining that:
Neither Rahul Jain nor any other decision rendered either by this Court or any other High Court was shown to hold that a Court lacks the power to permit persons joining an application which seeks leave to institute a suit against a trust. Rahul Jain is merely an authority for the proposition that on the date when the application seeking leave to sue is taken up for consideration or permission granted, there must be in existence before the Court two or more persons who pray for and seek that relief. Rahul Jain also constitutes an authority for the principle that a fundamental flaw which may be found to exist on the record on the date when leave is granted is not curable by subsequent impleadment of parties. The Court thus comes to the firm conclusion that the injuncts as propounded in Rahul Jain do not stand attracted in the facts and circumstances of the present case.

As it turned out, the Bench then observed in para 22 that:
The Court further finds that the exercise of power under Section 151 of the Code clearly appears to be permissible in law in absence of an express provision in the Code prohibiting the adoption of the measure propounded by the Court in exercise of it inherent powers. More fundamentally, the facts of the present case clearly justify the invocation of inherent powers in order to ensure that the ends of justice are sub-served and the asserted silence of the Code does not result in prejudice being caused. The situation which arises clearly warrants the invocation of the inherent powers of the Court in order to ensure that the interest of the lis is not rendered a casualty on the altar of a technical and pedantic interpretation of a procedural statute.

As a corollary, the Bench then directed in para 23 noting precisely that, Accordingly, the instant application is allowed. The Court consequently permits Major Atul Dev and Dr. Neerja Lugani Sethi to join as applicants in I.A No. 4760/2019. All contentions of respective parties insofar as they pertain to the merits of the aforesaid application are kept open.

CS(OS) 182/2019 & I.A. 22105/2022 (Interim Direction)

Finally, the Bench concludes its interim direction by directing that:
List again on 10.02.2023.

On the whole, we thus see that the Delhi High Court has made it indubitably clear that the court can certainly permit the parties to join application seeking leave to sue trust under Section 92 CPC before grant of leave as at that stage the suit is yet to be instituted. The Court does not lack the power to grant the same There can be no quibbling with what the Delhi High Court has so very sagaciously held in this leading case. No denying it!

Sanjeev Sirohi, Advocate,
s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut – 250001, Uttar Pradesh