Court’s Decision
The Supreme Court allowed the appeals and reversed the Karnataka High Court’s judgment which had held that Schedule ‘A’ property (6 acres 8 guntas of temple land) was acquired by ISKCON Mumbai through its Bangalore branch. The Court held that the land was allotted to ISKCON Bangalore, a separately registered society under the Karnataka Societies Registration Act, and all relevant documents corroborated that position. The Court also noted that the High Court’s findings were “completely perverse” and unsupported by any material on record.
Facts
There were two connected suits:
- Suit No. 1758 of 2003: Filed by ISKCON Bangalore and others seeking a declaration of governance rights over the society and a perpetual injunction against certain individuals who allegedly interfered with the society’s control.
- Suit No. 7934 of 2001: Filed by ISKCON Bangalore claiming ownership of immovable and movable properties in Schedules ‘A’, ‘B’, and ‘C’, and seeking declarations that ISKCON Mumbai had no right to control its management or assets. ISKCON Mumbai filed a counterclaim asserting ownership over the properties.
The Trial Court decreed in favour of ISKCON Bangalore in Suit No. 7934 of 2001, but the High Court reversed this. The case reached the Supreme Court through multiple appeals.
Issues
- Whether ISKCON Bangalore was the lawful owner of the Schedule ‘A’ property allotted by the Bangalore Development Authority (BDA)?
- Whether ISKCON Mumbai, through its alleged Bangalore branch, held rights over the property?
- Whether ISKCON Bangalore was a defunct society or a functioning entity?
- Whether ISKCON Mumbai could claim title based on financial and administrative control?
- Whether the High Court erred in reversing the Trial Court’s judgment?
Petitioner’s Arguments (ISKCON Bangalore)
- The land was allotted by BDA based on an application dated 5 February 1987 submitted by ISKCON Bangalore, a registered society under Karnataka law.
- The sale deed dated 3 August 1988 and exemption under the Urban Land (Ceiling and Regulation) Act were granted in ISKCON Bangalore’s name.
- The High Court erred in holding that the round rubber seal and other documents were forged or manipulated, without any credible evidence.
- Madhu Pandit, though not examined, acted consistently as President of ISKCON Bangalore and all correspondence with BDA and other authorities was in that capacity.
- There was no pleading of benami transaction or fraud in the written statement to challenge ISKCON Bangalore’s title.
- ISKCON Mumbai’s claim that Madhu Pandit acted on their behalf was unsupported by documentary evidence or authorization.
- Financial control or consolidated accounts with ISKCON Mumbai did not translate into ownership.
Respondent’s Arguments (ISKCON Mumbai)
- ISKCON Bangalore was a defunct society; actual control, management, and development of the temple were by ISKCON Mumbai through its Bangalore branch.
- Donations for temple construction came using the 80G exemption certificate of ISKCON Mumbai.
- Madhu Pandit and his associates manipulated BDA records and took advantage of similar names to divert the property.
- Documents such as the sale deed and correspondence were signed by Madhu Pandit, who admitted in earlier suits that he was President of ISKCON Mumbai’s Bangalore branch.
- Non-examination of Madhu Pandit was fatal to ISKCON Bangalore’s case.
- The property was never registered with the Charity Commissioner under the MPT Act in Mumbai, but that did not negate title.
Analysis of the Law
- The Court emphasized that under Section 38B(v) of the BDA Act, bulk allotments can be made only to societies registered in Karnataka. ISKCON Mumbai was not eligible.
- The application for allotment, correspondence with BDA, exemption under the ULC Act, and sale deed all named ISKCON Bangalore as the applicant and recipient.
- There was no evidence of any allotment request or document from ISKCON Mumbai.
- Even if funds came via ISKCON Mumbai or its tax benefits were used, that did not override the registered title or make ISKCON Bangalore a benami.
- Financial consolidation does not displace legal ownership.
- No specific pleading or evidence of fraud was provided to justify piercing the corporate veil of ISKCON Bangalore.
Precedent Analysis
- The Court relied on Muddasani Venkata Narsaiah v. Muddasani Sarojana (2016) 12 SCC 288, holding that where execution of a document is not denied, it need not be proved by examining the signatory.
- The Court also relied on K. Karuppuraj v. M. Ganesan (2021) 10 SCC 777, regarding the High Court’s obligation to independently appreciate evidence in a first appeal.
Court’s Reasoning
- The consistent chain of documents showed that ISKCON Bangalore applied for and was allotted the land.
- The High Court’s findings that documents were manipulated lacked evidence and were speculative.
- There was no legal basis to presume that Madhu Pandit acted on behalf of ISKCON Mumbai.
- The Court held that “the High Court committed an error by holding that the Bangalore temple was a branch of ISKCON Mumbai,” noting that the consistent documentary trail pointed to ISKCON Bangalore’s ownership.
- The High Court’s inference that Madhu Pandit and others defrauded ISKCON Mumbai was “unsupported by pleadings and evidence.”
- “The entire approach of the High Court is erroneous and the findings recorded are completely perverse.”
Conclusion
The Supreme Court allowed the appeals and held that:
- ISKCON Bangalore is the lawful owner of Schedule ‘A’ property.
- ISKCON Mumbai has no rights to control or claim the said property.
- The High Court’s judgment was reversed and the Trial Court’s decree was restored in favour of ISKCON Bangalore.
Implications
- This judgment clarifies that legal ownership is determined by the title and statutory compliance, not merely by financial or administrative support.
- It underscores the importance of registered societies maintaining their independent legal identities.
- The ruling prevents powerful religious entities from asserting control over local branches or societies without proper legal standing.
- It also serves as a strong precedent on the evidentiary threshold required to prove fraud or benami claims, emphasizing the need for specific pleadings and credible documents.