Madras High Court
V.Sulochana vs Kee Pee Yes (Trust) on 30 November, 2015
Author: C.S.Karnan
Bench: C.S.Karnan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 30.11.2015
CORAM
THE HONOURABLE MR.JUSTICE C.S.KARNAN
A.S.(MD) No.180 of 2007 &
M.P.(MD).Nos.1 and 2 of 2007
V.Sulochana ... Appellant / Plaintiff
vs.
1.Kee Pee Yes (Trust)
rep.by its Secretary
M.L.Bright, s/o.Rev.Bright David
Kodaikanal, Kodaikanal Taluk
Dindigul District
2.Vimala M.Bright
3.Angel Johnson
4.Mourin Jeyaraj
5.Karuna David
6.Deepthi Jeyaraj
7.Jeyasuresh Jeyaraj ... Respondents / Defendants
PRAYER: Appeal is filed, under Section 96 of the Civil Procedure Code,
against the judgment and decree, dated 07.09.2007, and made in O.S.No.129 of
2005, on the file of the Additional District Judge-cum-Sessions Judge, at
Dindigul (Fast Track Court, Dindigul).
!For Appellant : Mr.R.Madhusudhanan
^For Respondents: Mr.A.Natarajan, Senior Counsel
for M/s.K.Hema Karthikeyan
Mr.M.Jegadeesan for R2 to R7
:JUDGMENT
The plaintiff had submitted that the suit property belonged to first defendant Trust, which is a Private Trust, who had purchased the same under a registered Sale Deed, dated 18.11.1996. All the trustees had given their consent to the Secretary of the Trust for alienation of the suit property. Accordingly, the Secretary had entered into a Sale Agreement, dated 13.10.2004, with her for the sale of the suit property for a total sale consideration of Rs.2,41,000/- and she had also paid a sum of Rs.50,000/- as advance. Both the parties had agreed to execute Sale Deed within a period of 180 days from the date of agreement. After arranging the balance sale consideration, she had requested the Secretary of the Trust to execute the Sale Deed. But, he had refused to execute a Sale Deed and to fulfil the contractual obligation. Hence, she had filed a suit in O.S.No.129 of 2005, before the learned Additional District Judge, Dindigul, for specific performance.
2. She had further submitted that the first defendant had agreed to sell the suit property along with other landed properties, measuring about 42 Acres, belonging to them. Therefore, her brother Vijaya Bhoopathy had arranged to execute separate sale agreements in favour of him, his mother, sister Solochana / plaintiff, brother Kanakasabapathy and uncle Parthasarathy and accordingly, separate sale agreements had been executed. Though it had been mentioned in the agreements that possession of the subject property had not been handed over to the purchasers, on the date of the agreements itself Vijaya Bhoopathi was given possession of the entire subject property. From the date of the agreements, the agreement-holders had occupied the house situated in the subject property. Thereafter, on the consent of the first defendant, they had removed the unwanted trees and shrubs grown in the subject property.
3. Further, she had submitted that they had levelled the subject land by engaging JCP machine, rectified the damaged electrical wires fixed in the house situated on the subject land and rectified the damaged wires of the motor pumpsets, by spending a sum of Rs.2,00,000/-. Subsequently, her brother Vijaya Bhoopathy had paid an additional advance amount of Rs.10,00,000/- on 16.12.2004 and Rs.5,00,000/- on 17.01.2005 to the first defendant for all the five agreements. For the said payment, endorsements were made in the agreements. As such, she was liable to pay the balance sale consideration a sum of Rs.41,000/-, after deducting the advance amount.
4. She had further submitted that after arranging the balance sale consideration, she had informed the first defendant to receive the same and execute the Sale Deed. But, the first defendant with mala fide intention caused delay with petty excuses. He had not come forward to execute the Sale Deed. Hence, Vijaya Bhoopathy on behalf of all the agreement-holders had issued a legal notice, to the first defendant, through telegram, on 24.05.2005. After receipt of the same also, the first defendant had not come forward to execute the Sale Deed. Subsequently, the first defendant and his men had attempted to encroach the subject lands, which are under the occupation of the agreement-holders. Her counsel had issued a legal notice on 07.06.2005 to the first defendant and thereafter also the first defendant had not come forward to execute the Sale Deed as per the agreement, dated 13.10.2004. Hence, she had filed the above suit for specific performance of contract for sale. She had also sought for an alternative prayer that if the Trial Court is unable to grant a decree for specific performance, she is entitled to receive the advance amount from the first defendant. She had also prayed for interim injunction till the disposal of the suit that the sale agreement as well as the occupation of the suit property shall not be disturbed.
5. The Secretary of the Trust had filed a written statement and resisted the suit. He had submitted that the suit as framed by the plaintiff was not maintainable under law. The Kay Pee Yes Trust was not a juristic person, which could be sued in a Court of law. Any suit in respect of the properties or any matter touching the affairs of the Trust had to be filed in the name of all the Trustees. The said Trust was a Public Charitable Trust and it was not a Private Trust as stated by the plaintiff. The suit was not sustainable in law as the alleged agreement, dated 13.10.2004, had not bound upon the Trust or the Board of Trustees. As per the terms of the Trust Deed, dated 15.03.1996, it was the Board of Trustees, comprising of seven individuals, who had the full control and management of all the assets of the said Trust and any dispossession and transfer of any immovable property could be made only by the unanimous consent of all the trustees. Hence, the suit for specific performance could not be brought against the Trust.
6. He had further submitted that he received the advance amount under the impression that he had the power and authority to do so. The alleged resolution, dated 02.10.2004, had been given at the request of the plaintiff and no such resolution was passed. However, he was advised to state that he had no such power or authority to deal with the property of the Trust as seen in the Sale Agreement, dated 13.10.2004, which is ab initio void. However, to show his bona fide, he was ready to return the advance amount.
7. Further, he had submitted that it was false to state that with the consent of all the trustees, the sale agreement, dated 13.10.2004 was executed. As per the terms of the Trust Deed, dated 15.03.1996, the concurrence of all the trustees is necessary in a transaction for making a sale or a contract of sale in respect of the Trust property. He had acted on a misconception that he has had the right to deal with the property individually as the Secretary of the Trust. Subsequently, this action was found to be incorrect when he got the expert opinion. The Plaintiff had also not asked the concurrence of all the co-trustees when she entered into the agreement, which is a necessary corollary affecting the Trust property. The said agreement, is unenforceable and unexecutable through Court of law against the Trust as the agreement is void since it had failed to contemplate the statutory requirements. Hence, the plaintiff was not entitled to the relief of specific performance of contract as the contract for sale, dated 13.10.2004, would not be a concluded one, because it was not enforceable through Court of law. After receiving the legal notice, dated 06.06.2005, he clearly explained to the plaintiff that the contract for sale was not legally valid and also requested him to get back the advance amount paid to him. Inspite of that, the plaintiff had filed the suit in order to grab the Trust property, illegally.
8. He had further submitted that as per the terms of the agreement, dated 13.10.2004, the possession would be handed over to the purchaser only after execution of the Sale Deed. At no point of time, possession of the suit property was given. It was only the Trustees, who together were the owners of the Trust property and were in possession and the same could not be handed over by him. Moreover, the subject property was measuring about 42 Acres and as such the possession would be with the owner i.e.Trust. It was false to state that possession of the suit property was handed over to the plaintiff. Infact, the suit property was a part of huge extent of 42 Acres having only natural growth of trees and it had been unprotected on all sides and any one could enter and exit the lands from any corner. A house had been situated in a fraction of the said land covering an extent of 1800 sq.ft., and the same was also kept unprotected. All the Trustees were residing at different places and taking advantage of the fact, the plaintiff created documents to file the suit. It was false to say that the agreement-holders had spent Rs.2,00,000/- for improving the property and they had no right to do so.
9. He had further submitted that the plaintiff and other persons, with whom similar agreements were entered into by him, had removed the trees by trespassing the property and also removed the lock of the house and they replaced it with their own lock. The value of the trees cut down by them would be around Rs.2,00,000/-. It was false to allege that with the aid of the hooligans, he had attempted to dispossess the plaintiff as there was no such necessity when the plaintiff was not in possession of the suit property. Hence, it was prayed to dismiss the suit.
10. The fifth defendant had filed her written statement stating that it was false to state that the subject properties were administered only by the Secretary of the Trust. They were absolutely belonging to Kay Pee yes Trust and managed by the entire Board of Trustees collectively and not by any single individual. The Sale Agreement, dated 13.10.2004, entered into between the plaintiff and the first defendant was void as it was contrary and opposed to the Deed of Declaration of Trust, dated 15.03.1996. The conditions contained in the Deed of Declaration of Trust, dated 15.03.1996, in Article 19(e) had not been complied with. The unanimous consent of all the trustees was not rendered to sell the Trust property, which was mandatory under law to dispose of any immovable properties belonging to the Trust.
11. She had further submitted that the Board of Trustees did not pass any resolution to sell the Trust properties at any point of time and no Board Meeting was held at any place in this aspect. The Board of Trustees had not passed any resolution for rendering their unanimous consent to sell the Trust properties. The conditions prescribed in the Deed of Declaration of Trust for sale of Trust properties had not been duly complied with. Hence, the agreement had not bound upon the Trust.
12. Further, she had submitted that the Secretary of the Trust alone had decided to sell the Trust properties to the plaintiff without the concurrence of all other Trustees as if he had the power to deal with the properties. Though he had acted in good faith, he had exceeded his power by entering into the Sale Agreement without the unanimous concurrence of all other Trustees. He had been completely misled by the said Vijayaboopathi, who had deceived the Secretary in this regard and there by decided to grab the Trust properties by illegal means. The price fixed by the plaintiff and the Secretary for the suit properties was very low and not in conformity with the market price prevailing in the vicinity. The Secretary was misguided by the said Vijayaboopathi in this context and thereby tried to cause heavy monitory loss to the Trust.
13. She had further submitted that the Trustees did not delegate their power or authorized the first defendant to deal with the Trust properties individually. The sale agreement was devised by the plaintiff with the object of snatching the Trust properties by all means. Moreover, the Trust had entered into a Memorandum of Understanding with the Mother Teresa Women's University, Kodaikanal, for starting a Women's College in the subject properties. The object and purpose for which the Trust was constituted would be achieved if an educational institution had been established in the subject properties than to sell the same. The sale agreement entered into between the plaintiff and the Secretary was not in conformity with the object for which the Trust had been created and hence the agreement was not enforceable and ineffective under law. The said agreement had breached the very purpose for which the Trust had been endowed.
14. Further, she had submitted that the Trustees had not handed over the possession of the suit properties to the said Vijayaboopathi at any point of time. The relatives of the plaintiff, who are plaintiffs in O.S.Nos.21, 127, 128, 129 and 130 of 2005, had handed over the possession to Vijayaboopathi, which was not an acceptable one. Her relatives were not having right or power to handover the Trust properties to Vijayaboopathi, as these properties had been belonging to the Trust and the Board of Trustees were in the possession and enjoyment of the same. The plaintiff had not produced any positive evidence to show that the suit properties were handed over to Vijayaboopathi by the Board of Trustees. The documents filed along with the plaint in this aspect were created by the plaintiff and the said Vijayaboopathi to suit their vexatious case. On the other hand, the recital of the sale agreement, dated 13.10.2004, on which the plaintiff had based her entire case, had stated that the possession of the agreement property was retained by the Trustees and not handed over to the proposed buyers.
15. She had further submitted that the defendants learnt that the agreement- holders had been cutting trees and removed the locks worth Rs.2,00,000/- from the suit properties under the guise of ex parte injunction obtained by them. The defendants had reserved their right to file suit for damages against the plaintiff for Rs.2,00,000/-. The subject properties were in the absolute possession and enjoyment of the Board Trustees till date. This fact had been clearly established from the averments of the Sale Agreement, dated 13.10.2004. When the contractual part of the Sale Agreement was clear and unambiguous regarding the handing over of possession of the subject properties, it was unnecessary and unwarranted to search for outside evidence.
16. Further, she had submitted that at the outset, the defendants learnt that the Secretary of the Trust did not have any intention to retain the advance amount received from the plaintiff as advance. Moreover, they did not know anything regarding the actual money transaction held between Vijayaboopathi and the Secretary. The defendants, particularly the Trust, are in noway liable for the money received by the first defendant. They also advised the Secretary to refund the sale advance to the plaintiff or to deposit the same into Court. Under law, the plaintiff could not compel the other Trustees, who were not parties to contract, to sell the Trust properties. The suit, as framed by the plaintiff, was not maintainable under law. The plaintiff had no cause of action to file the suit. The plaintiff was not entitled to the relief of specific performance of contract as the agreement is not enforceable under law. Hence, she prayed to dismiss the suit.
17. After considering the averments of the parties, the Trial Court had framed the following issues:
i. Whether the plaintiff is entitled to the relief of specific performance?
ii. Whether the Sale Agreement, dated 13.10.2004, is valid? iii. Whether the suit property is under the occupation of the respondents?
iv. To what other reliefs the plaintiff is entitled? v. Whether the Sale Agreement will bind upon the other Trustees?
18. On the side of the plaintiff, four witnesses were examined as P.Ws.1 to 4 and 25 documents were marked as Exs.P1 to P25. On the side of the defendants, the first defendant was examined as D.W.1 and three documents were marked as Exs.D1 to D3.
19. P.W.1 had adduced evidence that the suit property is situated at Palakkaluthu Village in District Taluk, measuring about 42 Acres. She entered into a Sale Agreement with the first defendant on 13.10.2004. The suit property belonged to the first defendant Trust. The members of the Trust are relatives. From the date of Sale Agreement, the plaintiff and her family members are in possession of the suit property. Apart from the advance amount, the agreement-holders had spent a sum of Rs.2,00,000/- for levelling and repairing the old house situated in the suit property. The defendants, after receiving huge amount towards advance, refused to execute Sale Deed. She had marked the Sale Agreement, dated 13.10.2004, receipts, dated 25.09.2004, 11.10.2004, 16.12.2004 and 17.01.2005, for payment of Rs.50,000/-, Rs.5,00,000/-, Rs.10,00,000/- and Rs.5,00,000/- respectively, copy of the resolution, , copy of the land particulars for sale, E.B.Bill, sketch, receipt for payment to Everest Earth Movers, property tax receipt, telegram notice, Advocate notice, acknowledgement card and copy of the complaint.
20. Other three witnesses had adduced evidence, which is corroborative with the evidence of P.W.1.
21. D.W.1 had adduced evidence stating that the Sale Agreement, dated 13.10.2004, is not binding upon the Trust. As per the Bye-laws of the Trust, the Trust property can be alienated or transferred only with the consent of all the Trust members. On 02.10.2004, the Trust members had not passed any resolution. Further, as per the agreement, dated 13.10.2004, the advance sale consideration will be paid to the plaintiff by the first defendant. As per the Trust Deed, all the members should sign in the relevant documents.
The plaintiff had not obtained consent from all of the Trust members. The possession of the suit property had not been handed over to the plaintiff. Actually, all the Trust members are occupying and enjoying the entire suit property. The plaintiff had not spent any amount for maintaining the suit property. The plaintiff had cut down the trees standing in the suit property unlawfully.
22. After recording evidence of witnesses and on perusing the exhibits marked by both parties and after hearing arguments of the learned counsel on either side, the Trial Court, by Judgment and Decree, dated 07.09.2007, had dismissed the suit with liberty to the plaintiff to receive the advance amount from the defendants. Not being satisfied with the same, the plaintiff has preferred this appeal.
23. The highly competent counsel Mr.R.Madusudanan appearing for the appellant has submitted that the first defendant had executed a Sale Agreement to and in favour of the plaintiff on 13.10.2004. The said agreement had been duly registered on the file of the concerned Sub-Registrar's Office. As such, the Sale Agreement is sustainable under law. The first defendant has locus standi to alienate the property on behalf of the Trust. The other Trust members had conducted a meeting along with the first defendant and passed a resolution, before entering into the sale agreement. The same was communicated to the plaintiff. Thereafter, the plaintiff agreed to purchase the suit property. The defendants have categorically admitted the mode of payment. Therefore, the suit for specific performance is maintainable under law. There is no shortcoming or lapse in the original registered Sale Agreement, dated 13.04.2004, which is still existing and not cancelled as of now.
24. The very competent counsel has further submitted that the plaintiff had marked 25 documents pertaining to the suit properties. From the date of agreement, the plaintiff and her family members are in possession and enjoyment of the same after removing unnecessary standing trees and shrubs. Besides the plaintiff had engaged a JCB machine for levelling the suit property. Hence, the plaintiff's possession is a permissive possession as well as a lawful possession. Now, all the defendants have colluded with each other with mala fide intention and denying to execute Sale Deed, since the plaintiff is ready and willing to pay the balance sale consideration. As such, the readiness and willingness have been established before the Trial Court.
25. The learned counsel has further submitted that the first respondent received a part of the sale consideration towards advance for improving the Trust with the consent of other respondents. The first respondent had purchased the property during 1996. On 02.10.2004, the Trust had conducted a meeting, wherein all the trustees took part and passed a resolution authorizing the Secretary of the Trust to sell the subject property. Hence, the other trustees cannot change their view. Further, the sale of the subject property was for the welfare of the Trust. The same was agreed by the other Trustees. Further, the Trustees are relatives. Before filing the suit, a legal action has been initiated for executing the Sale Deed before expiry of the agreement period. As such, the suit has been filed within the stipulated period. The Secretary of the Trust, in his written statement, has stated that the plaintiff had cut down the trees standing in the subject land. It clearly proves that the plaintiff is in the possession and enjoyment of the subject property. Hence, the learned counsel has prayed this Court to set aside the Judgment and Decree passed by the Trial Court.
26. Mr.A.Natarajan, learned Senior Counsel appearing for the first respondent, has submitted that the sale agreement had been executed by the Secretary of the Trust without the consent of the other trustees. All the Trustees are having equal responsibilities to maintain the Trust. As such, the sale agreement had not been executed by all the Trustees jointly. Further, a part of the sale consideration had been received by the Secretary of the Trust and not by other Trustees. Therefore, the sale agreement is not valid under law. It is clearly mentioned in the Sale Agreement, dated 13.10.2004, that possession had not been handed over to the plaintiff. The cause of action arose from the date on which the sale agreement is entered into and hence the sale agreement is a vital document. Therefore, the claim of the plaintiff and her family members that they are in possession and enjoyment of the subject property, is nothing but a theoretical one. All the documents pertaining to the subject property are standing in the name of the Trust. The date of the sale agreement is 13.10.2004, but the suit was filed on 08.06.2005 i.e, after expiry of the stipulated period. Hence, the suit is not maintainable as per Section 5 of the Limitation Act.
27. Further, the learned counsel has submitted that as per Clause-19 of the Trust Deed, the Board of Trustees shall remain in full control and management of all the affairs of Trust, properties, assets and transactions of the Trust, without prejudice to the generality, but the sale agreement has been executed by the first defendant in favour of the plaintiff, which is in prejudice of the Trust and also breach of the Trustees' management affairs. As per Clause-19(3) of the Trust Deed, if the Trust decides to sell or dispose of any immovable properties belonging to it, all the Trust members have to give their consent. In the instant case, the other trustees, namely, respondents 2 to 7 have not given their consent to the first respondent for alienating the subject property. Therefore, the Sale Agreement executed by the first respondent runs against the welfare of the Trust and also is in violation of the terms and conditions of the Trust Deed. As such, the Sale Agreement is not in a position to be proceeded further. The main object of the Trust is to establish an Education Institution for the general public. As such, the Trust is functioning for the general public.
28. The very competent counsel has submitted that the plaintiff's main prayer is to execute Sale Deed after receiving the balance sale consideration. The plaintiff had also sought for an alternative relief of refund of advance amount. While the suit was pending before the Trial Court, the first defendant remitted the advance amount into the Trial Court. Hence, readiness and willingness does not arise in the instant case. Accordingly, the suit for specific performance is not maintainable. The Trial Court has also granted an alternative relief to the plaintiff as prayed for. In support of his contention, the learned counsel has placed reliance upon the following decisions:
i. Shanti Vijay And Co. v. Princess Fatima Fouzia, reported in (1979) 4 SCC 602;
ii. Janakirama Iyer v. Nilakanta Iyer, reported in AIR 1962 SC 633; and iii. Fatima Fauzia v. Syed Ul-Mulk, reported in AIR 1979 AP 229.
29. In Shanti Vijay's case (cited supra), the Hon'ble Apex Court has observed as follows:
The law governing the execution of trusts is well settled. In the case of a private trust, where there are more trustees than one, all must join in the execution of the trust. The concurrence of all is in general necessary in a transaction effecting the trust property, and a majority cannot bind the trust estate. In order to bind the trust E. estate, the act must be the act of all. They constitute one body in the eye of law, and all must act together. This is, of course, subject to any express direction given by the settlor. The Judicial Committee in Lala Man Mohan Das v. Janki Prasad [LR (1944) 72 IA 39, 52, 53 quoted a passage from Lewin's Law of Trusts, 15th ed., p. 190, to the effect :
"In the case of co-trustees the office is a joint one. Where the administration of the trust is vested in co-trustees they all form as it were but one collective trustee, and there fore must execute the duties of the office in their joint capacity. It is not uncommon to hear one of several trustees spoken of as the acting trustee but the Court knows no such distinction: all who accept the office are in the eye of the law acting trustees. If any one refuses or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court. However, the act of one trustee done with the sanction and approval of a co- trustee may be regarded as the act of both. But such sanction or approval must be strictly proved."
which, in their opinion, contains a correct statement of law applicable in England and that the same doctrine applied to India also. The' decision in Lala Man Mohan Das's case has been followed with approval by this Court in L.Janakirama Iyer v. Nilakanta Iyer [1962 Supp 1 SCR 206].
30. In Janakirama Iyer's case (cited above), the Hon'ble Supreme Court has held as follows:
(17) The next question which falls to be considered is the most important question in these appeals. We have already seen that three trustees were appointed under the trust deed executed by defendants 1 to 6 and two of the impugned sale deeds have been executed by only two out of the said three trustees. The Courts below have held that two out of the three trustees could not convey a valid title and so on that ground alone the two transfers are invalid. It is urged before us that this conclusion is not justified on a fair and reasonable construction of cl. 23 of the trust deed. Be. fore considering this point it is necessary to state the legal position in the matter under the Trusts Act.
(18) Section 48 of the Trusts Act provides that when there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides. It is thus clear that all acts which the trustees intend to take for executing the trust must be taken by all of them acting together. Therefore, there can be no doubt that if the validity of the alienations effected by the trustees falls to be considered only in the light of S.48 the fact that out of the three trustees only two have executed the sale deeds would by itself make the transactions invalid and would not convey title to the alienees. This position is not in doubt.
31. In Fatima Fauzia's case (cited supra), the Andhra Pradesh High Court has held as follows:
?55. To sum up:
LAW :
(1) It is open to the trustee either to accept or reject the office of trusteeship when appointed but he cannot renounce or transfer his duties, functions and powers to some one or body of men and thereby create new trustees in his own place, when once he entered upon the trust unless he obtains the requisite permission of the Court or with the consent of the entire body of beneficiaries or by the authority of a specific provision in the deed of the trust.
(2) Where there are two or more trustees they all form as it were but one collective trustee having statutory duty and obligation to execute the duties. powers and functions of the office of the trustee jointly unless otherwise specifically provided in the instrument of trust (3) Delegation of the powers. functions and duties of a trustee is prohibited under Section 47 of the Trusts Act except in certain exceptional cases such as formal acts.
etc. (4) The act of one of the trustees done with the sanction and approval of the other trustees may, in certain circumstances be construed as the act of all the trustees. The onus is on the party who sets up the plea of sanction or approval of the trustee to strictly prove the same. Where evidence has been let in, the onus of proof loses its importance. The Court is competent to arrive at a correct conclusion in respect of delegation or approval which is a mixed question of fact and law on consideration of the totality of the facts and circumstances.
(5) The discretionary power conferred on the trustee under the deed of trust, be it absolute, or unconditional is subject to judicial control of the principal Court of Civil Jurisdiction under Section 49 of the Trusts Act. (6) The term 'good faith' used in Section 49 of the Act must be meant as "due care and attention" of a reasonable and prudent man. But the definition of 'good faith' in the General Clauses Act cannot be applied to construe the expression "good faith" in S.49 of the Act.
(7) The prime intendment and object of S.49 of the Trusts Act is more to protect the interests of the body of beneficiaries than to punish the trustees for dereliction of their duties and their acts of omission or commission resulting in detriment, damage or loss to the beneficiaries although no fraud, collusion, corrupt motives, gross negligence or mala fides has been either alleged or proved.
(8) The trustees are bound to sell trust property under every possible best advantage to the body of beneficiaries to secure the highest price. The trustees must exercise prudence and reasonable diligence in inviting competition after due and proper publication with the sole object of securing the best price for the estate.
(9) The Trustees have a statutory duty and obligation to execute the trust and in particular to sell the estate with utmost diligence, care, attention and intelligence as a responsible and prudent man would deal with such property, if it were their own.
(10) Where the trustees fail to ad honestly, reasonably diligently and with due care and attention to obtain the best price for the trust property the, Court under Section 49 of the Trusts Act is not only empowered but is bound to interdict and correct the conduct of the trustees and the purchaser and refuse to compel specific performance of the agreement. (11) Even an honest and bona fide sale of trust property by the trustees on a misconception of law or facts, wrong or erroneous judgment without the further proof that they acted reasonably and in good faith would not be valid and binding on the body of the beneficiaries and consequently, no valid and enforceable title in such property, would pass under transaction to the purchaser or purchasers as the case may be.
(12) Where the sale of the Trust property results in obtaining inadequate price on account of hasty, improvident, and unreasonable acts of commission or omission of the trustees coupled with the lack of good faith, such sale would be invalid, improper and not binding either on the trust or the body of beneficiaries in spite of absolute power being conferred on the trustees under the Trust Deed as it would come within the purview of S.49 of the Trusts Act.
(13) The principles applicable to Court sales or liquidator sales and held by public auction after due and proper publication would not be applicable to determine the validity or otherwise of the sales of trust property by the trustees notwithstanding the fact that the deed of trust confers absolute or unlimited discretion on the trustees.
32. Mr.M.Jegadeesan, learned counsel appearing for the respondents 2 to 7 has adopted the arguments of Mr.A.Natarajan, learned Senior Counsel appearing for the first respondent.
33. From the above discussions, this Court is of the view that:
i. The suit property absolutely belongs to the Trust. As per the terms and conditions of the Trust Deed, all the Board Trustees shall have full control and management of all affairs, properties, assets, transactions of the Trust. The terms have been described in Clause 19 of the Trust Deed. In the instant case, all the Trust members are having equal power for any negotiation over the suit property. The Trust members / respondents 2 to 7 have not given any written consent to the first respondent to negotiate on the suit property. As such, the Sale Agreement, dated 13.10.2004, is not fit to be proceeded with further.
ii. As per Clause 19(e) of the Trust Deed, to sell or dispose of any immovable properties belonging to the Trust, the consent of all the Trust members is necessary. In the instant case, there is no documentary proof to show that all the Trust members have given their consent. Hence, the Sale Agreement, dated 13.10.2004, runs against the Trust directions. Therefore, the suit property cannot be sold in favour of the appellant herein. iii. The plaintiff's main prayer before the Trial Court was to execute Sale Deed after receiving the balance sale consideration. He had also sought for alternative prayer for return of advance amount. The Trial Court had granted the alternative relief. The first respondent had deposited the entire advance amount to the credit of O.S.No.129 of 2005, on the file of the Additional District Court, Dindigul. As such, the alternative relief has been duly complied with. Hence, the appellant will not be prejudiced by the Judgment and Decree of the Trial Court.
iv. The Sale Agreement had been executed on 13.10.2004. The suit for specific performance had been filed on 08.06.2005. It clearly indicates that the suit had been filed after expiry of the stipulated period. v. As per the Sale Agreement, the physical possession had not been handed over to the appellant. In the absence of agreement clause regarding physical possession, how the appellant can occupy the suit property. Hence, the appellant's plea regarding occupation and enjoyment of the suit property can only be considered as theoretical and devoid of merits.
34. On considering the facts and circumstances of the case, arguments advanced by the learned counsel on either side and on perusing the typed set of papers, besides the views of this Court as stated above, this appeal is liable to be dismissed.
35. In the result, this appeal is dismissed and the Judgment and Decree, dated 07.09.2007, and made in O.S.No.129 of 2005, on the file of the Additional District Judge-cum-Sessions Judge, at Dindigul (Fast Track Court), Dindigul, are confirmed. No costs. Consequently, the connected MPs are closed.
To:
The Additional District Judge, (Fast Track Court), Dindigul.
.