2021 (9) TMI 1516 - SC - Indian Laws

Refusal to terminate the proceedings in two first appeals arising out of a Scheme decree passed in respect of a temple governed by the Bombay Public Trusts Act, 1950, despite the appellants seeking to withdraw the appeals - view taken by the High Court is that the proceedings in the appeals cannot be terminated merely because of the withdrawal of the appeals by the appellants, since the rights of 3rd parties are also involved is correct or not. HELD THAT - Such a view may not be correct due to the following reasons - (i) This Court, by its order dated 22.11.2013, which we have extracted above, has permitted in no uncertain terms, the withdrawal of the appeals. Thereafter it is not open to the High Court to proceed with the hearing of the appeals. (ii) The procedure sought to be adopted by the High court, namely to hear the appeals in the interest of third parties, despite the appellants seeking to withdraw them, is possible only in two circumstances namely, (a) when there are cross objections, which can independently proceed in terms of Order XLI Rule 22(4) CPC; or (b) when a transposition takes place in terms of Order XXIII Rule 1A CPC. In this case, there were no cross objections and hence Order XLI Rule 22(4) has no application. There was also no transposition and hence 3rd parties cannot seek to continue the appeals; (iii) Proceedings for the framing of a Scheme for the administration of a Trust are no doubt proceedings in rem. Therefore, up to the stage of passing of the final decree approving a Scheme, even 3rd parties are entitled to intervene and object to the whole or part of the Scheme. But once the final decree approving the Scheme is passed, any person objecting to the final decree should independently file an appeal and cannot ride piggyback on the appellants shoulders. If they choose to do so they have to fall once the appellants withdraw the appeals; (iv) In any case it was the appellants before the High Court who have given an undertaking to this Court at the time of hearing of SLP(C)No.27929 of 2012 that they shall not move the Charity Commissioner for modification or variation of the Scheme. Such an undertaking is not binding on third parties. Therefore, it is not as though the rights of 3rd party intervenors are completely obliterated. They always have their own remedies in law and they cannot insist upon their grievances being addressed to in the appeals filed by the appellants herein. The impugned order of the High Court dated 05.03.2015 is set aside - appeal allowed.

Summary

Issues:
1. Termination of proceedings in appeals despite withdrawal by appellants.
2. Rights of third parties in appeal proceedings.
3. Validity of High Court's decision to proceed with the hearing despite withdrawal.

Issue 1: Termination of proceedings in appeals despite withdrawal by appellants
The Supreme Court considered an appeal where the High Court of Gujarat refused to terminate proceedings in two first appeals despite the appellants seeking to withdraw them. The case originated from a Scheme decree concerning a temple governed by the Bombay Public Trusts Act, 1950. The City Civil Court had passed a final decree framing a Scheme for the temple's administration and management of its properties. The appellants later filed applications to withdraw the appeals unconditionally, which were initially dismissed by the High Court.

Issue 2: Rights of third parties in appeal proceedings
The High Court justified its decision to proceed with the hearing of the appeals on the grounds that the rights of third parties were involved. However, the Supreme Court disagreed with this view. It emphasized that once the Supreme Court had permitted the withdrawal of the appeals, the High Court should not have continued with the proceedings. The Court explained that third parties could only continue appeals in specific circumstances, such as when cross-objections were present or transposition occurred, which was not the case here.

Issue 3: Validity of High Court's decision to proceed with the hearing despite withdrawal
The Supreme Court held that the High Court's decision to proceed with the hearing despite the withdrawal of the appeals was incorrect. The Court highlighted that the appellants had given an undertaking not to seek modification of the Scheme decree, but this undertaking did not bind third parties. Therefore, the rights of third-party intervenors were not extinguished, and they could pursue their grievances independently. Ultimately, the Supreme Court allowed the appeals, set aside the High Court's order, and declared the appeals as dismissed, thereby terminating the proceedings before the High Court.

In conclusion, the Supreme Court clarified the legal position regarding the termination of appeal proceedings upon withdrawal by the appellants and the rights of third parties in such situations. The judgment emphasized the importance of upholding the decisions of higher courts and ensuring that third parties have the opportunity to address their grievances independently.