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Showing contexts for: Two trustee in Shavax A. Lal And Ors. vs Syed Masood Hosain And Ors. on 17 January, 1964Matching Fragments
(3) Defendants 1 to 4 and 6 are the trustees of the Nizam's Charitable Trust, of whom the 6th defendant is the nominee of the Government of Andhra Pradesh. The 5th defendant is the Secretary of the Trust Board.
(4) The plaintiff's case, as stated in the plaint is that the 5th defendant, who is the Secretary of the Trust, is in the habit of concluding transactions involving several lakhs of rupees in respect of both purchase and sale of shares without the knowledge, consent or approval of the trustee: that, without confining himself to his legitimate duties as an employee of the trust, he has taken over the control and management of the Trust and is transacting all the important affairs of the Trust and that this is due to the dereliction of duty and negligence on the part of the trustees. It is averred that the 5th defendant has usurped the functions of the trustees and that the trustees have abdicated their functions and duties by merely ratifying the actions of the Secretary without applying their minds. it is also stated that H. E. H. the Nizam has created more than thirty Trusts, involving crores of rupees, most of them being private truste in favour of his sons and relatives, and that in almost all those trusts, the 2nd defendant,. 'a friend of the 5th defendant', has also been made a trustee. It is further averred that the 5th defendant was appointed Secretary to all the private trusts and that the administration of all these trusts is practically left in his hands. On the basis of the allegations of breaches of trust and neglect of duty made by them, the plaintiffs prayed for the removal of defendants 1 and 2 from the offices of trustees; for appointing two new trustees in their place; and for a direction to the trustees to remove the 5th defendant from his office of Secretary.
(i) For the relief of the poor.
(ii) For the maintenance, upkeep and support of public religious institutions.
(iii) For the advancement and propagation of education and learning.
(iv) For giving medical aid and relief.
(v) For the advancement of any other object, particularly in the State of Hyderabad.
(17) The instrument of Trust provides for the appointment by the settlor of a minimum of two and a maximum of five trustees. It assigns to the trustees the shares and securities described in the schedule together with all rights of the settlor incidental or attached to his holding of the said shares and securities. Clause (2) provides that the trustees shall hold the said securities and moneys included in the Trust Fund. Clause (6) provides that the management and administration of the Trust shall be conducted and carried out in and from Hyderabad and the assets comprised in the Trust fund shall be kept in Hyderabad. The trustees are empowered to appoint one of them to act as Chairman of the Board of Trustees. Under clause (11) the trustees are authorised to open or maintain a banking account in their names. Clause (17) provides that the trustees may, from time to time, appoint a Secretary, Treasurer, Supervisor, clerks and other employees as they may deem expedient.
(96) In the light of the foregoing principles, it seems to us that the proposition contended for by the learned counsel is not tenable.
(97) But this does not relieve us from the duty to decide whether, on the facts of this case, the trustees should be suspended. As stated already, there are no specific charges of breach of trust or misfeasance against the trustees, who certainly are respectable people. The only gravamen of charge against defendants 1 and 2 is perhaps that they have been parties to a situation which has placed the 5th defendant virtually in absolute control of the funds of the Trust. The consequences, if any, of the attitude of the trustees can only be determined in the suit. We find, therefore, no warrant for suspending the trustees from their office at this stage. We are fortified in this conclusion because of the direction given by the trial court that two of the trustees should be Receivers. Sri Krishna Menon has contended before us that the appointing of two of the trustees as Receivers will ipso jure result in the suspension of the trustees from their offices. We are unable to agree. In the first place, the appointment of Receivers is for the purpose of safeguarding the interests of the Trust which is a duty attaching to a Court exercising charity jurisdiction. Further, the properties and the affairs of the Trust being in custodia legis will not, in our opinion, affect their title to the office as trustees. It can only mean the supersession for time being of their right of management. When in the exercise of its undoubted supervisory jurisdiction over public trusts and charities, the trial court has come to the conclusion that it is 'just and convenient' to appoint a Receiver, we think that its finding ought not to be lightly interfered with by this Court in appeal.