Court Can Permit Parties To Join Application Seeking Leave To Sue Trust Under Section 92 CPC Before Grant Of Leave: Delhi High Court

In the application for leave to sue instituted by the original applicants, it was contended that the defendants were misconducting themselves and acting contrary to the aims and objectives of Raghuvanshi Charitable Trust.

Relying upon the decision of the Delhi High Court in Rahul Jain versus Pradeep Kumar & Ors. (2006), the opposite party argued that since the number of applicants surviving upon the application seeking leave to sue stood reduced to less than two, the application seeking impleadment fails to meet the requirements of Section 92 and thus, it must be rejected.

Justice Varma said it was held in Rahul Jain that on the date when an application seeking leave to sue is taken up for consideration, the record must reflect that it is supported by not less than two individuals in light of the mandatory provisions of Section 92.

"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," said the bench.

Observing that Rahul Jain correctly holds that a fundamental defect from which an application for leave may suffer cannot be rectified after leave has been granted, the court noted 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," said Justice Varma.

The court further said 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 aforenoted 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 added.

The bench said neither Rahul Jain nor any other decision rendered either by the Delhi High 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."

The court thus said the application seeking joining of Major Dev and Dr Sethi 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. 

"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," it added.

Allowing the application, the court permitted Major Dev and Dr Sethi to join as applicants in the application seeking leave to sue.

Case Title: Ram Sarup Lugani & Anr. versus Nirmal Lugani & Ors.

Citation: 2023 LiveLaw (Del) 7 

Counsel for the Plaintiffs: Mr. Darpan Wadhwa, Sr. Adv. with Ms. Ruchira Gupta, Ms. Harshita Sharma, Ms. Neelakshi Bhaduria, Advs

Counsel for the Defendant: Mr. Faisal Sherwani, Mr. Aditya Vikram, Mr. Shikher Deep Aggarwal, Ms. Sanjukta Kaushik, Ms. Spandana, Advs

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