Telangana High Court
V.C.Parekh Charitable Trust And 5 ... vs Union Of India And 2 Others on 23 December, 2022
Author: K. Lakshman
Bench: K.Lakshman
THE HONOURABLE SRI JUSTICE K.LAKSHMAN
WRIT PETITION No.41172 OF 2022
ORDER:
Heard Sri Manu, learned counsel for the petitioners and Sri Alluri Krishnamraju, learned Standing Counsel appearing for respondents - Bank.
2. This Writ Petition is filed to declare the proceedings dated 06.09.2022 issued by the respondents, as illegal and inaction of 3rd respondent in not permitting the petitioners i.e. Managing Trustee Sri Premal C. Parekh, son of late Sri Chandrakant M. Parekh, to operate the Bank Account No.020001000017794 with 3rd respondent Bank, as illegal.
3. Facts of the case:-
1st petitioner is a Trust registered under the provisions of the Trust Act, 1992. Petitioner Nos.2 to 5 are its Trustees. They are holding account bearing Ac.No.020001000017794 with 3rd respondent Bank. It has entered into Memorandum of Understanding (MOU), dated 14.09.2021 with the Hyderabad Eye Institute (HEI) to extend support towards their services at the LV Prasad Eye Institute, Madanapalle Centre, Chittoor District, AP State. As per the said MOU, 1st petitioner 2 has to pay an amount of rupees one Crore to the said HEI from the aforesaid account of 1st petitioner-Trust with 3rd respondent. Vide proceedings dated 06.09.2022, 3rd respondent informed the petitioner that there are several discrepancies in multiple Trust Deeds produced and therefore, 3rd respondent is not entitled to permit 1st petitioner to allow operations of the Trust in the said account. Thus, 3rd respondent advised 1st petitioner to rectify the said discrepancies by following due process of law to enable 3rd respondent to allow operations of 1st petitioner in the said account. Feeling aggrieved by the same, the petitioner herein has filed the present writ petition.
4. Sri Manu, learned counsel for the petitioners would submit that 3rd respondent is not in a position to appreciate the difference between the Trust and Trust Deeds. There are no discrepancies in the Trust Deeds produced by the petitioners herein. 1st petitioner-Trust is having immovable property and therefore, on the advice of the 3rd respondent Bank, it got the Trust registered. There is change of Trustees and the same is in terms of the original Trust Deed. There is no change in the objects of 1st petitioner-Trust. There is no deviation from the objects. Even then, the respondents have issued the aforesaid proceedings dated 3 06.09.2022 requesting the 1st petitioner to rectify the discrepancies though there are no discrepancies.
5. He would further submit that as per Section 46 of the Act, the Trustees cannot renounce the Trust after acceptance. As per Section 76 of the Act, on the death or discharge of one of several co-Trustees, the Trust survives and the Trust property passes to the others, unless the instrument of Trust expressly declares otherwise. Even then, 3rd respondent is insisting to rectify the discrepancies vide impugned proceedings dated 06.09.2022.
6. Whereas, Sri Alluri Krishnamraju, learned Standing Counsel appearing for respondents - Bank would submit that there are discrepancies in the copies of Trust Deeds produced by the petitioners. The said discrepancies are specifically pointed out in the counter filed by the respondents. The 1st petitioner cannot replace Trust Deed and there should be record of change and proper resolutions. Therefore, 3rd respondent advised 1st petitioner-Trust to rectify the said discrepancies. Instead of rectifying the said discrepancies, the petitioner herein had filed the present writ petition.
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7. Perusal of the record would reveal that 1st petitioner-Trust was formed on 01.07.1995 and deed of Trust was executed. The following 5 persons are the Trustees:-
1) Chandrakant M.Parekh,
2) Sri Ketan C.Parekh,
2) Smt. Anita K.Parekh,
3) Sri Premal C.Parekh,
4) Smt. Komal P.Parekh.
The name of the Trust is 'V.C.Parekh Charitable Trust'. The aims and objects of the Trust are also specifically mentioned in Clause No.4 of the said deed. As per Clause No.5 of the said Deed, the number of Trustees should be five. As and when vacancy falls on account of retirement or on account of death or on account of resignation for any other reason, the remaining Trustees shall select some person of integrity and reputation who gives his consent to act as Trustee along with the existing Trustees and such person shall be taken as Trustee in the place of any vacancy that falls, with a two third majority of the total Trustees. Clause 14 of the deed says that the bank account of Trust shall be opened in the name of the Trust in one or more Banks approved by the Board of Trustees, which shall be operated upon by any one of the Trustees.
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8. The other deed of Trust was entered into on 11.08.2021 and it got registered as document No.185/IV/2021 with the following Trustees:-
1. Sri Ketan C.Parekh,
2. Smt. Anita K.Parekh and
3. Kum. Heer K. Parekh.
In the said Trust deed, it is mentioned that Sri Ketan C.Parekh, Smt.Anita K. Parekh along with Sri Premal C. Parekh and Komal Parekh are carrying on Charitable Activities wide Trust deed dated 01.07.1995. Whereas, Sri Premal C. Parekh and Komal P.Parekh desire to retire from the Trust as Trustees w.e.f. 01.04.2021 and they retired on 31.03.2021. It is also specifically mentioned that the number of Trustees should be 4. Sri Kethan C.Parekh shall be designated as the Managing Trustee, who shall be in-charge of the day-to-day affairs of the Trust.
9. Thereafter, a Trust Deed dated 21.04.2022 was executed and got it registered as document No.21/IV/2022, dated 31.04.2022 with the following Trustees:-
1. Smt. Anita K.Parekh,
2. Sri Premal C.Parekh
3. Smt. Komal P.Parekh
4. Kum. Heer K.Parekh and
5. Ms. Simran C.Parekh.6
In the said Trust Deed, it is also mentioned that Chandrakant M.Parekh and Ketan C.Parekh have been Trustees of 1st petitioner-Trust as per unregistered Trust Deed dated 01.07.1995. Chandrakant M.Parekh expired on 27.10.2012 and Ketan C. Parekh expired on 11.12.2021. In view of their death, remaining Trustees have agreed to continue the said Trust and selected Ms. Heer K. Parekh and Ms. Simran P.Parekh, Trustees of the said Trust and they have consented for the same w.e.f.19.03.2022. A resolution was passed to the said effect in the meeting held on 10.03.2022. The number of Trustees should be five. Sri Premal C. Parekh is the Managing Trustee and in his absence any one of the two other Trustees as per convenience would represent the Trust.
10. Clause 13 of the said Trust deed, deals with the operation of bank account and bank account of the Trust is already opened and it says bank account of the Trust has already opened with IOB, Secunderabad branch which shall be continued. Further, bank accounts can be opened in the name of the Trust in one or more Banks, approved by the Board of Trustees. The Bank accounts shall be operated upon by any one of the Trustees. At clause No.26, it is mentioned that the Trust will run as per the Indian Trust Act and other applicable laws. 7
11. Thus there is no dispute with regard to formation of Trust and execution of original deed of Trust dated 01.07.1995. As per the said deed, the number of Trustees should be 5 and as and when vacancy falls on account of retirement or on account of death etc., the remaining Trustees shall nominate a person on integrity and reputation who gives on reputation as Trustee in the place of any vacancy that falls with 2/3rd majority of the total Trustees. Thereafter, they have entered into another Trust deed dated 11.08.2021. In the said Trust Deed, it is mentioned that Premal C.Parekh and Komal P.Parekh retired from Trust as Trustees w.e.f. 01.04.2021 and they retired on 31.03.2021. Though number of Trustees is mentioned as 4, only three persons have signed and the said Trust Deed was entered only with three members. Thereafter, another Trust Deed was entered into on 21.04.2022 with five Trustees including the aforesaid Premal C.Parekh and Komal P. Parekh retired from the Trust on 31.03.2021 itself and there is no mention about the same in the third Trust deed dated 21.04.2022. However, in the third Trust deed, there are 5 Trustees. The said aspect created suspension and the same is discrepancy according to the 3rd respondent.
12. In the counter, it is specifically contended about the letter dated 15.01.2013 addressed by Kethan C.Parekh Managing Trustee 8 informing the Bank that Sri Chandrakant M.Parekh had retired on 27.10 .2012 and Kethan C.Parekh appointed as new Managing Trustee. Vide letter dated 31.01.2022 Sri Premal C.Parekh forwarded a copy of letter dated 01.09.2013 to the Managing Trustee wherein it was informed that she had resigned from the post of Trustee and requested to update the same in Bank records and give authorization to access and operate the bank account to present Trustees as per Trust Deed dated 11.08.2021. She had given NOC for allowing operations in the account. It is also further contention of the 3rd respondent that it is a new Trust deed not an amendment to the original Trust deed dated 01.07.1995. Thus there are discrepancies in the Trust deeds. Therefore, 3rd respondent bank has advised new Trustees that they have to provide a detailed resolution by operating the accounts of the Trust along with outgoing/old Trustees with KYC forms and specimen signatures are also to be provided. Since the old account opening form is not having proper mandate who can operate the account and the Trust is making high value transactions.
13. Thus, 3rd respondent bank is also not disputing about the objects of the 1st petitioner-Trust. There is no dispute with regard to entering of the aforesaid MOU dated 14.09.2021 by 1st petitioner-Trust with HEI. The cause is noble and there is no dispute. The 1st petitioner- 9 Trust had also agreed to pay an amount of one crore to the said HEI for a noble cause. There is no dispute with regard to the same. At the same time, bank has to follow certain procedures while opening account and permitting the account holder to operate it. It has to follow the circulars issued by the Reserve Bank of India from time to time. 1st petitioner is a Trust. Thus, there are aforesaid discrepancies with regard to Members of Trust, retired persons who retired on 31.03.2021, joining as Trustees of 1st petitioner Trust. There is no explanation with regard to the same in the third Trust Deed dated 21.04.2022. According to the Bank, new Trustees have to provide a detailed resolution for operating the accounts of the Trust along with the outgoing/old Trustees who are operating the accounts till date. They have to submit list of new Trustees with KYC forms and specimen signatures and without account opening form since old account opening form is not having proper mandate, cannot operate the account and the Trust cannot make high value transactions. Therefore, the petitioners have to rectify the said discrepancies.
14. Vide impugned proceedings dated 06.09.2022, 3rd respondent has advised the petitioners to rectify the said discrepancies. 3rd respondent is also not against the petitioners in operating its account and in making transactions. But it has to follow the procedure laid down 10 under law and also the guidelines/instructions with regard to permitting account holder to operate its account more particularly when account holder is a Trust.
15. In this regard, it is relevant to discuss certain provisions of the Act which are extracted below:-
Section 46 of the Act:-
46. Trustee cannot renounce after acceptance.--A Trustee who has accepted the Trust cannot afterwards renounce it except
(a) with the permission of a principal Civil Court of original jurisdiction, or (b) if the beneficiary is competent to contract, with his consent, or (c) by virtue of a special power in the instrument of Trust.
Section 47 of the Act:-
Trustee cannot delegate.--A Trustee cannot delegate his office or any of his duties either to a co-Trustee or to a stranger, unless
(a) the instrument of Trust so provides, or (b) the delegation is in the regular course of business, or (c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation.
Section 76 of the Act:-
Survival of Trust--On the death or discharge of one of several co- Trustees, the Trust survives and the Trust property passes to the others, unless the instrument of Trust expressly declares otherwise.
16. As discussed supra, in the original Trust deed, dated 01.07.1995 there is specific recital with regard to vacancy and the same is continued in the other two Trust deeds. There is no change in the name of the Trust and also its objects. The discrepancies are only with regard to Trustees. On submission of specimen signatures, KYC forms 11 and proper resolution, 3rd respondent will permit the petitioners to operate aforesaid account.
17. It is also relevant to note that all the Trustees in the aforesaid three Trust deeds are members of one family. According to them, there is a resolution passed in the meeting held on 10.03.2022. Therefore, they have to submit the aforesaid resolution to the bank and they have to rectify the discrepancies pointed by 3rd respondent including submission of the resolution, specimen signatures and KYC forms etc. Thus, there are the following discrepancies:-
i. The petitioners have to submit a copy of the resolution dated 10.03.2022 for operating the account of 1st petitioner-Trust along with the outgoing/old Trustees including the petitioner Nos.2 to 6, present Trustees of the 1st petitioner-Trust.
ii. List of new Trustees with KYC forms and specimen signatures.
The petitioners have to rectify the said discrepancies so as to enable the 3rd respondent to permit them to operate the aforesaid bank account bearing No.020001000017794 of the 1st petitioner with the 3rd respondent.
18. In view of the aforesaid discussion, this writ petition is disposed of directing the petitioners to rectify the aforesaid 12 discrepancies within one week from the date of receipt of a copy of this order and on rectifying the said discrepancies, 3rd respondent shall permit the 1st petitioner-Trust to operate its account bearing No. 020001000017794 without creating any hindrance. 3rd respondent is also at liberty to obtain any further information from the petitioners if requires. However, 3rd respondent shall complete the said exercise within one week from the date of rectification of the aforesaid discrepancies by the petitioners herein.
Consequently, miscellaneous Petitions, if any, pending, shall also stand closed.
__________________ K. LAKSHMAN, J Date:23.12.2022.
b/o. vvr.