Delhi High Court
Smt. Anjali Sawhney vs Anjali Trust And Others on 31 July, 2001
Equivalent citations: 94(2001)DLT132, 2002 A I H C 1383, (2001) 94 DLT 132
Author: A.K. Sikri
Bench: A.K. Sikri
ORDER A.K. Sikri, J.
1. Both the suits are filed by Smt. Anjali Sawhney as plaintiff. Suit No. 1797/92 is for rendition of accounts, mandatory and permanent injunction. Defendant No. 1 is Anjali Trust and defendants 2 and 3 are its trustees. Shri Madhav Prasad Birla as a Settler had created a Trust Fund vide Deed of Settlement dated 8-3-1978 in the name of Anjali Trust i.e. Defendant No. 1. The plaintiff was made beneficiary of this Trust. Shri Madhav prasad Birla was the Uncle of the plaintiff. He appointed himself as one of the Trustees along with other co-trustees viz. his wife, Defendant No. 1, his brother's wife Smt. Sumitra Devi Birla, Shri puran Chand Sawhney and Shri Babu Lal Niwar. Thereafter vide Deed of Settlement dated 2.9.1986 he created another Trust Fund is the name of Anjali Trust (1986) for the benefit of the plaintiff in which he appointed himself and his wife as well as Defendant No. 3 as co-trustees. Shri Puran Chand Sawhney, Smt. Sumitra Devi Birla and Shri Babu Lal Niwar resigned as Trustees on different dates from the Trust Fund which was created in the name of Defendant No. 1 in the year 1978. Vide Supplemental Deed dated 3.3.1988, in place of Trustees who resigned, Defendant No. 3 was appointed as co-trustee. This way Trustees in both 1978 Trust as well as 1986 Trust became the same, namely, Sh. Madhav Prasad Birla as well as Defendants 2 and 3. After the death of Shri Madhav Prasad Birla Defendants 2 and 3 are the only Trustees managing these Trusts. It is the case of the plaintiff that the Trust created by Deed of Settlement dated 8.3.1978 was for a period of 10 years i.e. till 13.3.1988. It owns movable and immovable properties including commercial flat admeasuring 920 sq. ft situated at first floor in the main building known as E.C.E. House, kasturba Gandhi Marg, New Delhi. After 13.3.1988 defendants 2 and 3 were required to handover all the assets, properties, balance income and true and correct account of income and expenditure of defendant No. 1 to the plaintiff. They failed to do so in spite of repeated demands made by the plaintiff in this behalf. It is also stated that the plaintiff was getting some minor amounts from defendant No. 1 but after the death of Shri Madhav Prasad Birla intentions of defendants 2 and 3 became dishonest and they have not paid any amount to the plaintiff. Defendants 2 and 3 are illegally and unauthorisedly retaining the funds and assets of defendant No. 1 for their own personal benefits. On these averments, the plaintiff has prayed for decree of rendition of accounts directing defendants 2 and 3 to render true and correct accounts of income and expenditure of the Trust i.e. Defendant No. 1 to the plaintiff. Decree for mandatory injunction is also sought directing defendants 2 and 3 to handover all assets, properties of defendant No. 1 to the plaintiff. Prayer for decree of permanent injunction is to the effect that defendants be restrained from acting and/or representing Trustees of Defendant No. 1 and from managing and or dealing with assets and properties of the Trust in any manner.
2. Written statement is filed on behalf of defendants wherein various objections are taken to the maintainability of the suit. Relying upon Supplemental Deed dated 3.3.1988 between Settler of the Trust, Trustees and the plaintiff it is submitted that as per that Deed the Trustees i.e. Defendants 2 and 3 have to manage the Trust for the benefit of the beneficiary, namely, the plaintiff and upon here death to divide, handover and transfer the same to the children of the beneficiary at the time of her death in equal proportion. Therefore, the plaintiff has only life interest and during entire period of her life it is the defendants 2 and 3 who are to manage the trust and then divide, handover and transfer the Trust Fund to the children of the plaintiff in equal proportion. It is also stated that the defendants are managing the Trust in accordance with terms of the Trust. Objections regarding territorial jurisdiction, proper valuation of the suit, mis-joinder of parties etc. are also taken.
3. The plaintiff has filed replication reiterating the averments contained the plaint and denying those objections made in the written statement.
4. By an order passed in C.M.(M).No. 266/97 on 29.7.1998 three more suits i.e. Suit No. 345/95 pending in the Court of Shahabuddin, Civil Judge, Delhi; Suit no. 235/92 pending in the Court of Mr. Sudesh Kumar Civil Judge, Delhi; and Suit No. 408/92 pending in the Court of Mr. M.R. Sethi, Civil Judge, Delhi which were filed by the name plaintiff against same defendants have been withdrawn from three and are transferred to this Court which are tried along with this suit.
5. At this state I.A. 646/99 under Section 56 of the Indian Trust Act, 1882 has been filed by the plaintiff. In this application, the plaintiff has prayed that all properties of the Trust be transferred to the plaintiff forthwith under the provision of Section 56 of the Act without prejudice to here rights to claim proper accounts etc. It is stated that the plaintiff has got right to seek such an order in view of provision of Section 56 of the Act which reads as under:
"56. Right to specific execution.- The beneficiary is entitled to have the intention of the author of the trust specifically executed to the extent of the beneficiary's interests:
Right to transfer of possession.- And, where there is only one beneficiary and he is competent to contract, or where there are several beneficiaries and they are competent to contract and all of one mind, he or they may require the trustee to transfer the trust property to him or them, or to such person as he or they may direct.
When property has been transferred to bequeathed for the benefit of a married woman, so that she shall not have power to deprive herself of her beneficial interest, nothing in the second clause of this section applies to such property during here marriage".
6. The submission is that the plaintiff being the only beneficiary and competent to contract she may require the Trustees to transfer the Trust property to her. The defendants have filed reply to this application opposing to prayer. The twin objections are as follows:
A. The suit itself is under Section 56 of the Act and the prayer no. 2 in the main suit is the same prayer which is made in this application and allowing this application would amount to allowing the main prayer in the suit itself at this interim stage which should not be permitted.
B. Section-56 does not apply as the plaintiff is not the only beneficiary. Children of the plaintiff are also beneficiaries as is clear from the reading of the Trust Deeds. The plaintiff has only life interest and after here death it is living children of the plaintiff who would be entitled to divide the Trust property in equal shares. Therefore, application made by the plaintiff on the averments that she is the only trustee and competent to act is misconceived. When there are several beneficiaries all should be competent to contract and all should be of one mind. Application having not been filed on behalf of the children disclosing that all of them at idem, such an application is not maintainable. In support defendants also relied upon judgment of Calcutta High Court in the case of Sm. Sircar and others Vs. Official Trustees of West Bengal . It was submitted that what was to be seen is that whether the beneficiary requiring the trustees to exclusive conveyance of legal estate as the beneficiary may direct was the exclusive beneficiary. In this case ultimate beneficiaries were the children and, therefore, the plaintiff was not the exclusive beneficiary.
7. Before appreciating the respective contentions, it would be appropriate to scan through the relevant portions of the two Settlement Deeds. Deed of Settlement dated 8.3.1978 is between Shri Madhav Prasad Birla as Settler and 5 trustees. It mentions that out of love and affection which bears towards Anjali Sawhney, the plaintiff herein, and for diverse other causes and considerations he is desirous of making a settlement of which Settler hereby transfers, assigns and confirms unto the Trustees the sum of Rs.1,000/- and all he rights, title, and interest of the Settler in the said sum unto the Trustees. The name of the Trust Fund given is "Anjali Trust". Apart from other conditions, it is stated that the Trust shall be for a period of 10 years i.e. till 13.3.1988 and trustees shall in their absolute discretion pay or utilise the net income or in the case and Trustees so desire the corpus of the Trust Fund for the maintenance, education, medical and other personal expenses and expenses on travel in India and abroad of the said Anjali Sawhney and here children. After the expiry of the period the corpus of the Trust Fund was to be transferred and handed over to Anjali Sawhney absolutely. In case Anjali Sawhney shall die before 13.3.1988 then the corpus was to be transferred and handed over to the children of Anjali Sawhney living at that time. It is not necessary to mention other terms of the Deed of Settlement.
8. Supplemental Deed dated 3.3.1988 is between Shri Madhav Prasad Birla as Settle (Party of the 1st Part), three Trustees, namely, Shri Madhav Prasad Birla and defendants 2 and 3 (Party of the 2nd Part) and Smt. Anjali Sawhney (Party of the 3rd Part). It is Supplemental to Deed of Settlement dated 8.3.1978 and Deed of Settlement dated 2.9.1986. Recital Nos. 1 and 2 of this Deed read as under:
"1. By the said First Settlement Deed the Settler herein settled upon Trustees therein a sum of Rs.1,000/- and any other property and investments of any kind whatsoever into which the same of any part thereof might be converted, invested or varied from time to time or such as may be acquired by the Trustees therein or come to their hands, upon thrust to hold the same for the period mentioned therein for the maintenance, education, medical and other expenses of the Beneficiary herein and her children and upon here death transfer and handover the residue to the children of the Beneficiary living at that time in such proportion as the Trustees therein shall absolutely think fit.
2. By the said Second Settlement Deed the Settler herein settled upon the Trustees therein a sum of Rs.2,500/- and any other property and investments of any kind whatsoever into which the same of any part thereof might be converted, invested or varied from time to time or such as may be acquired by the Trustees therein or come to their hands, upon trust to hold the same for the period mentioned therein for the maintenance, education medical and other expenses of the Beneficiary herein and upon here death transfer and handover the residue to the children of the Beneficiary living at that time in equal proportion".
9. It has two terms and the relevant for our purposes is Term No. 1 which reads as under:
"1. The Settler, Trustees and the Beneficiary have mutually agreed and decided that the Trusts constituted and administered by and under both the First Settlement Deed and Second Settlement Deed shall continue to be administered and managed by the Trustees herein for the objects and purposes mentioned therein and that the Trustees herein shall continue to administer and manage the Trust Fund for the benefit of the Beneficiary herein and upon here death to divide, hand over and transfer the same to the children of the Beneficiary herein living at the time of death in equal proportion".
10. The reading of the aforesaid first Deed of Settlement dated 8th March, 1988 clearly suggests that the Trust is made for the benefit of Smt. Anjali Sawhney i.e. the plaintiff. The first Deed of Settlement dated 8th March, 1978 was initially made for a period of 10 years contributing a sum of Rs.1,000/-. Thereafter vide second Deed of Settlement dated 2nd September, 1986 the settler herein settled upon the trustees herein a sum of Rs.2,500/-. Thereafter after the expiry of 10 years Supplemental Deed dated 3rd March, 1988 was executed. This supplemental Deed stipulates that the Trusts constituted under first as well as second Settlement Deed shall continue to be administered and managed by the trustees for the benefit of the beneficiary Smt. Anjali Sawhney. It is only upon her death that the Trust Fund is to be divided, handed over and transferred to the children of Smt. Anjali Sawhney at the time of her death in equal proportion. It may be mentioned that all these deeds in their recitals, define as to who the beneficiary is and clearly mention the same of Smt. Anjali Sawhney that is the plaintiff as the beneficiary. In fact in the first Deed of Settlement dated 8th March, 1978 which was for a period of 10 years, para-3(c) stipulates that after the expiry of 10 years the corpus of the trust fund was to be handed over to Smt. Anjali Sawhney absolutely. No doubt it is stated in para-(b) of para-3 that the income or the corpus of the trust fund is to be utilised for the maintenance, education etc. of Smt. Anjali Sawhney and her children. Mere mention of the name of her children would not affect the character of the trust which was created for love and affection of Smt. Anjali Sawhney and who has been described as the only beneficiary i.e. Smt. Anjali Sawhney and the words "her children" are conspicuously ommitted. The children are described as children of the beneficiary who are to share the trust fund on the death of Smt. Anjali Sawhney the beneficiary. Therefore, the sole beneficiary is Smt. Anjali Sawhney only. As per Supplemental Deed so long as the trust is to be administered, it is to be administered for the benefit of Smt. Anjali Sawhney. The trust is to be administered during here life and after her death the trust is not to be administered and the Trust Fund is to be divided, handed over and transferred to the living children of Smt. Anjali Sawhney in equal proportion. Therefore, the learned counsel for the defendant is not correct in contending that the plaintiff is not the only beneficiary and that provisions of Section 56 would not apply. Once it is held that Smt. Anjali Sawhney is the sole and only beneficiary, provisions of Section 56 of the Trust Act get attracted, the intention only of the sole beneficiary is required as it is not a case of "several beneficiaries". The provisions of Section 56 having satisfied the beneficiary i.e. the plaintiff in this case has right to transfer of possession the Trust property to her. It is the different matter that she would continue to hold this till her life time and on here death the same will be divided, handed over and transferred to here children in equal proportion. I am also not impressed with the contention of the learned counsel for the defendants that if these applications are allowed, it would amount to allowing the main prayer in the suit itself at interim state. There is no absolute principle of law that the relief at interim stage, which may be the relief in the main suit cannot be granted. It depends on facts and circumstances of the each case. Even otherwise there are various other reliefs claimed by the plaintiff in her shit including rendition of accounts by the defendants and the suit would proceed for adjudication on those reliefs. In the present case Section 56 gives an absolute privilege to the beneficiary to exercise here right to transfer the Trust Property to her. After all the Trust is created for the benefit of the beneficiary and if the beneficiary is competent to contract and wants the transfer of property to her, the trustees who are holding the property in trust and for the benefit of beneficiary cannot frustrate this right of her and continue to manage the same against his wishes. She is sui Jurisdiction and is clearly entitled to the income and, therefore, she can require the trustee is liable to refund the trust fund and the Income there from to the person who has vested interest under the settlement. A trustees is not entitled to withhold property after demand of possession of the same by a cestui que trust entitled thereto and if he refuses to do so Section 56 of the Indian Trust Act, 1882 gives the beneficiary right to file a suit to recover the trust fund. The mandate and purpose of Section 56 is amply clear which has to be given effect to if the conditions stated in Section 56 are satisfied.
11. Both the applications are accordingly allowed. The defendants are directed to transfer all the Trust Properties to the plaintiff forthwith. She shall, however, hold the trust properties in terms of the Deed of Trust so that after her death the trust fund could be divided, handed over and transferred to her living children in equal proportion.
12. Applications stand disposed of.