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Showing contexts for: powers of a trustee in Khar Gymkhana And 5 Ors vs Shyam G. Shroff And 28 Ors on 25 August, 2022Matching Fragments
58. Mr. Seervai has submitted that the Plaintiff's contention that the Trustees cannot be removed is incorrect and a complete misreading of the Trust Deed as well as the Rules of the Gymkhana. Clause 4 clearly shows that the Trustee shall hold office for life unless removed from office by a Resolution passed by the Khar Gymkhana at a General Meeting by 3/4th majority. This is also provided in Rule 41(f). Clause 4 and Rule 41(f) cannot be read in a manner that would clearly do violence to the plain language. The same would render the Clause as well as the Rule nugatory and otiose, apart from depriving the members of a right conferred upon them both under the Trust Deed as also the Rules. Mr. Seervai has thereafter dealt with the Plaintiff's argument 1-IAL-28477-2021.DOC that there can be no removal of all Trustees and therefore there can be no appointments of all Trustees. He has submitted that this argument is misconceived and is based on a misreading and misinterpretation of both Clause 7 of the Trust Deed, and Rule 43 of the said Rules. Neither of these deal with the removal of a Trustee. The Plaintiffs have tried to conflate Clauses 4 and Rule 41(f) with Clause 7 and Rule 43. The Plaintiff's argument that Clauses 4 and 7 of the Trust Deed are one and the same and relate to the removal of Trustees is incorrect on a reading of these very clauses. If the Settlors intended to use the word 'remove' or 'removal' in reference to a Trustee of the Gymkhana, then they would have inserted the same in Clause 7. Even otherwise, the words 'or cause' can never include 'removal' and which is expressly and only dealt with in Clause 4. On a reading of the clauses of the Trust Deed and the Rules, it is also evident that words in Clause 7 apart from being read ejusdem generis, grants the power to appoint Trustees of the Gymkhana as there can never be a scenario where there is a complete void i.e. no Trustees due to their removal. The Trust Deed itself does not provide for its dissolution. In the present case, there was no vacuum as the Co-
66. Mr. Seervai has also distinguished the decision in the case of Sri Agasthyar (Supra) where it has been held that no power has been given to the Trustee to amend, alter, vary or change in any manner the objects of the Trust. In the present case, there is no question that arises as to the power of a Trustee and secondly the Deed provides for removal as well as for appointment of Trustees. Also there is no change being sought to the objects of the Trust. He has also distinguished CIT, Kanpur Vs. Kamla (Supra) on facts. The facts therein are not relatable to the present case as in that case a new Trust Deed was sought to be substituted which was beyond the powers of Civil Court. The conclusion of the Court on those facts was that a Trust can only be administered in terms of an amendment directed by the Court and the Trustees were and must be deemed to have been under a legal obligation to hold properties only for the object and with the 1-IAL-28477-2021.DOC powers set out in the Trust Deed as amended. Further, it was not open to the Income Tax office to say that the Trustees could administer the Trust in accordance with the original deed and that the claim for exemption had to be dealt with on on the basis of the original deed. It is evident therefrom that a Civil Court can rectify instruments like Trust Deeds which does not arise in the present case.
78. A plain and literal reading of Clause 4 of the Trust Deed makes it clear that the Trustees shall hold office for life unless removed from office by Resolution passed by the Khar Gymkhana at a General Meeting of the Gymkhana by a 3/4th majority of votes. Thus it is clear that the members of the Khar Gymkhana have power to remove the Trustees by a Resolution passed at a General Meeting of the Gymkhana. In Rule 41(f), it is made clear that the Trustee shall be deemed to have vacated his office and shall cease to act as Trustee if in a General Meeting of the members of the Gymkhana by a majority of 3/4th members present and entitled to vote, resolved to remove it. In my prima facie view, there is consistency between clause 4 of the Trust Deed 1-IAL-28477-2021.DOC and Rule 41 (f) of the said Rules. Both contemplate removal of the Trustee by 3/4th majority of the members at a General Meeting. Both also contemplate that the Trustee shall hold office for life unless removed from office by a Resolution passed by the Khar Gymkhana at a General Meeting by 3/4th majority. This necessary would be by 3/4th members present at such General Meeting. Otherwise any other interpretation would be in violation of the plain and literal reading of Clause 4 with Rule 41(f) of the said Rules. I do not accept the interpretation placed on clause 4 of the Trust Deed by Mr. Vashi on behalf of the Plaintiffs that the 3/4th majority referred to in Clause 4 is 3/4th majority of the members entitled to vote which means votes of all members of the Gymkhana and not the members present. Clause 4 of the Trust Deed also envisages 3/4th majority of the votes of only those present at the General Meeting as the words used therein "...... at a general meeting of the Gymkhana" would necessarily mean members present at the meeting. In my prima facie view, Rule 41(f) of the said Rules which was amended in 1975 is in conformity with Clause 4 of the Trust Deed and there is no inconsistency between the said Rule and Clause 4 of the Trust Deed. I also do not find merit in the submissions of Mr. Vashi that if 1-IAL-28477-2021.DOC Clause 4 is to be read as votes of those who present in the meeting, then the clause would have the same language as set out in Rules 72 and 73. Rules 72 and 73 referred to the members who are entitled to vote and which are not. These Rules are enabling provisions and the requisite Rule for the removal of Trustees at a General Meeting is Rule 41(f). Further, Rule 73 (iii) makes it clear that only the votes of the Members present at the meeting or who attend the AGM shall be counted. Thus the Trustee can be removed by 3/4th of all members present at the yearly meeting as has been done in the present case. Reading of Clause 4 with Rule 41(f), in any other manner would render the Clause as well as the Rule nugatory and otiose, apart from depriving the members of a right conferred upon them both under the Trust Deed as also the Rules.
80. Rule 62 provides for Requisition of Special Body General Meeting by 100 members who are eligible to vote. As per Rule 41(f) the members have the power to remove a Trustee or all Trustees at such meeting and in view of my finding that there cannot be a vacuum and / or no Trustees due to their removal, the new Co-Trustees have been validly appointed on the 1-IAL-28477-2021.DOC same day at the said Meeting Requisition by the members under Rule 62 of the said Rules. Thus in my prima facie view, there is no violation of either the Trust Deed or the Rules in the removal of the Co-Trustees and appointment of new Co-Trustees.