Calcutta High Court
Sharmila Shetty & Anr vs Hemen Barooah Benevolent & Family Trust ... on 8 August, 2016
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
O-6
GA No.1578 of 2014
CS No.175 of 2014
GA No.406 of 2016
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
SHARMILA SHETTY & ANR.
Versus
HEMEN BAROOAH BENEVOLENT & FAMILY TRUST & ORS.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
Date : 8th August, 2016.
Appearance:
Mr. Jishnu Saha, Sr. Adv.
Mr. Sakya Sen, Adv.
Mr. Ratnanko Banerji, Sr. Adv.
Mr. S. Ghose, Adv.
Mr. Satadweep Bhattacharya, Adv.
The Court : The suit challenges the amendments to a deed of trust of April 5, 2011 effected during the lifetime of the settlor who was the managing trustee and the sole beneficiary of the trust during his lifetime.
The trust was created by a registered document of April 5, 2011 by Hemendra Prasad Barooah, who made most of his money from tea and diversified into related and other business. The trust, named as the Hemen Barooah Benevolent and 2 Family Trust, was started with a corpus of Rs.10,000/- with the right to receive gifts and donations from others. The deed is in the form of an agreement between the settlor and the initial trustees including the first plaintiff. The first plaintiff is a signatory to the deed through a power of attorney. The trust envisaged that it would hold funds and even control shares in companies. After the demise of the settlor, a percentage of the annual income of the trust goes for certain charities, including at least two other foundations set up by the settlor and, though the expression in the deed is "other charities for general public", such other charities include an art gallery set up by the settlor. The sense that one gets from the document is not that the trust is to reach out to those sitting outside temples or mosques for alms.
After the demise of the settlor, the major percentage of the annual income of the trust goes to certain family members who are described as beneficiaries. Originally, seven beneficiaries were indicated and those seven were the immediate relatives of the settlor at the time of creation of the trust. The settlor's wife had predeceased him. The beneficiaries who were to benefit under the trust upon the death of the settlor included the widow of the settlor's predeceased son and the granddaughter through the predeceased son; the elder daughter and the grandsons through such elder daughter; and, the first plaintiff as the younger daughter and her son, the second plaintiff.
For reasons that are not necessary to be gone into at this stage, the first plaintiff fell out with her father some two or three years prior to his death. There were proceedings before the Company Law Board and in a civil court arising out of the disputes between the father and daughter. As a result of such differences, the trust deed of April 5, 2011 came to be amended by the settlor first on November 21, 2011, 3 then on November 2, 2012 and finally on February 8, 2013. The settlor died on July 31, 2013.
By the amendments, the first plaintiff was removed as one of the trustees, the plaintiffs were removed as future beneficiaries of the trust after the demise of the settlor and certain modifications were made as to the number of trustees and the composition thereof.
It may be profitable to see some of the clauses of the original trust deed. Clause 5 of such deed announced in clear terms that the trustees "shall hold the Trust Fund and the net income of the Trust for the exclusive benefit of the Settlor during his lifetime..." Clause 6 of the document provided for the trust to become a public charitable trust upon the death of the last of the family member beneficiaries indicated in Clause 5 thereof. Clause 7.1 of the deed reiterated that the trust was "for sole and exclusive benefit of the Settlor so long he is alive" and the settlor would have "absolute and indefeasible right, power and authority to revoke the Trust hereby created and also to vary, modify and alter or amend any term, condition or covenant..." Clause 9.1 identified the settlor as the managing trustee during his lifetime. Clause 9.6 of the deed reserved the right of the settlor to remove any trustee and appoint any other.
It appears that during the lifetime of the settlor, several of the companies directly or indirectly controlled by the settlor and referred to at clause 2 of the recital to the deed of April 5, 2011 parked their shares or their shares in other companies in the trust and the trust now substantially controls the flagship company of the group, B & A Ltd.
The plaintiffs claim that for several years prior to the settlor's death, the settlor came to be under the control of the second defendant. The plaintiffs suggest that the amendments to the deed were not made by the settlor; but they were carried out by 4 the second defendant in the name of the settlor. The plaintiffs allege that the second defendant had such control over the settlor during the last stages of his life, that the settlor became estranged from his wife of long for the last days of her life and fought bitterly with the first plaintiff and some other relatives. The plaintiffs point out that the settlor was always particularly fond of the first plaintiff and openly announced as such; and it was unnatural for the settlor to turn against the first plaintiff or even institute proceedings against her.
However, the plaintiffs do not show anything to suggest that the settlor was not capable of deciding for himself or the settlor's name was wrongly used by the second defendant for the purpose of effecting the amendments to the deed of April 5, 2011 complained of herein. Further, it is evident that from or about the middle of 2011 disputes arose between the settlor and the first plaintiff and proceedings were instituted by the settlor against the first plaintiff. The first plaintiff, at the relevant time, made no attempt to allege or establish that the actions instituted against the first plaintiff were not really by her father, but by the second defendant misusing the name of the father. Prima facie, it appears that the disputes were real and they were between the father and the daughter. If such was the case in the middle of 2011, it may not have been surprising that towards the end of the year the first plaintiff was removed as a trustee and a year later she and her son were removed as future beneficiaries of the trust.
When the settlor had unequivocally identified himself as the sole beneficiary of the trust during his lifetime and the document of April 5, 2011 reserved all the powers unto the settlor to revoke or modify or alter the terms of the trust, the present challenge cannot be maintained as to the acts of the settlor during his lifetime other than on the ground that it was not really the settlor who committed them, but it 5 was some other in the name of the settlor. That case these plaintiffs have not been able to establish, even in the slightest.
The plaintiffs refer to the trust being a public trust and, as such, the terms of its document of creation being incapable of alteration once the trust had been established. However, it is evident from the document of April 5, 2011 that the trust was to be a private trust for the sole benefit of the settlor during his lifetime and it was to assume the character of a public trust to the extent of a certain percentage of its annual income, only upon the death of the settlor. The argument regarding the public trust cannot carry the plaintiffs' case forward since the modifications to the original deed of trust were effected prior to the death of the settlor when it was a trust for the sole benefit of the settlor.
Once it is appreciated that the plaintiffs may have no legal right to canvass for the settlor having removed one of the plaintiffs as a trustee and both the plaintiffs as future beneficiaries, as to what perceived irregularity was committed in the functioning of the trust subsequent to the settlor's death, may not be a concern of the plaintiffs. This action is only for the personal cause of the plaintiffs and an attempt to undo the removal of the plaintiffs as beneficiaries and the removal of the first plaintiff as a trustee. Indeed, the cause of action appears to be illusory.
Since the plaintiffs have not been able to show how the settlor could not have modified the deed of trust or make changes thereto during his lifetime, there is really no case that the defendants have to answer.
GA No.1578 of 2014 is dismissed.
All interim orders stand vacated.
It does not appear that the plaintiffs have, or either of them has, any semblance of a right to complain of any matters pertaining to the trust. As a 6 consequence, GA No.406 of 2016, which was filed by the plaintiffs complaining of the induction of some other trustee, is dismissed as being an attempt by the plaintiffs to intermeddle in the affairs of a trust in which they have no right.
The plaintiffs will pay costs assessed at 1000 GM to the trust, which will be used only for the charitable purpose of the trust and 500 GM to the West Bengal State Legal Services Authority for these completely misconceived petitions.
Urgent certified website copies of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(SANJIB BANERJEE, J.) kc.