Section 92 CPC suits: No interim protective orders before leave, rules Supreme Court; urgent leave may be granted ex parte

The appellants instituted proceedings under Section 92 of the Code of Civil Procedure, 1908 (“CPC”), along with an application seeking leave to institute a suit concerning the management and affairs of the respondent public charitable trust.

Pending consideration of the leave application, the Principal District and Sessions Judge, Mandya, appointed an ad hoc committee comprising the existing trustees under Order XL Rule 1(a) CPC to manage the trust’s day-to-day affairs.

The Karnataka High Court set aside that order, holding that a Section 92 suit is “stillborn” until leave is granted and that the Civil Court lacks jurisdiction to pass interlocutory orders during the pendency of the leave application.

The appellants challenged the High Court’s decision before the Supreme Court.

Whether a Civil Court seized of a plaint under Section 92 CPC and an accompanying application for leave may pass protective or preservatory interim orders before leave to institute the suit is granted?

Whether the Court may appoint a receiver under Section 94 read with Order XL Rule 1(a), or invoke its inherent powers under Section 151 CPC, during the pendency of the Section 92 leave application?

Whether, in cases of compelling urgency, notice to the proposed defendants may be dispensed with before granting leave under Section 92 CPC?

Section 92 CPC requires persons instituting a representative suit concerning an alleged breach or administration of a public charitable or religious trust to have obtained the Court’s leave before instituting the suit; this requirement is mandatory and operates as a safeguard against vexatious litigation.

Sections 26 and Order IV CPC ordinarily contemplate institution of a suit through presentation of a plaint, but a Section 92 suit does not come into existence until leave is granted.

Section 94 CPC and Order XL Rule 1(a) CPC authorise supplemental relief, including appointment of a receiver, but such powers presuppose an underlying, validly instituted proceeding.

Section 141 CPC extends CPC procedure to miscellaneous proceedings only insofar as applicable and cannot override the substantive safeguards embodied in Section 92.

The inherent power under Section 151 CPC cannot be exercised in conflict with an express or implied statutory scheme, and general provisions cannot derogate from the special requirements of Section 92.

The Court relied on R.M. Narayana Chettiar v. N. Lakshmanan Chettiar, which treats leave under Section 92 as peremptory, and distinguished the broader protective approach in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal and other authorities as unavailable where jurisdiction itself has not arisen.

Nevertheless, following the principle recognised in R.M. Narayana Chettiar, the Court held that notice before granting leave may be dispensed with where urgent circumstances make prior notice impracticable, provided reasons are recorded.

The Court treated the leave application under Section 92 as a threshold or gateway proceeding rather than a substantive suit.

Although the application was registered separately under the Karnataka Civil Rules of Practice, that procedural registration did not create a pending suit or confer jurisdiction to entertain interlocutory applications.

Since no valid Section 92 suit existed before leave was granted, an application for appointment of a receiver under Order XL Rule 1(a) could not be maintained as a supplemental proceeding under Section 94; the phrase “whether before or after decree” in Order XL also presupposed a properly instituted suit.

The Court rejected the argument that the receiver’s allegedly preservatory character could cure the lack of jurisdiction, observing that appointment of a receiver in a public trust would displace existing management and could prejudice the trust if leave were ultimately refused.

Section 151 and the principle favouring an interpretation that preserves jurisdiction could not be invoked to bypass the mandatory statutory safeguard in Section 92.

At the same time, the Court balanced the protective purpose of Section 92 with the need to prevent imminent harm by holding that, where compelling urgency is shown, the Court may grant leave without prior notice and thereafter exercise interim jurisdiction in the instituted suit; such departure must be supported by cogent reasons and remains subject to challenge or revocation by the defendants.

Such jurisdiction arises only after leave has been granted and the suit is instituted.

However, where compelling urgency is demonstrated, the Court may dispense with prior notice and grant leave ex parte, recording reasons in writing; interim relief may then be considered in the duly instituted suit.

With this clarification, the appeals were dismissed and the pending applications were disposed of.