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In Re: D.V. Gundappa and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 132 of 1949-50
Judge
Reported inAIR1951Kant6; AIR1951Mys6
ActsTrusts Act, 1882 - Sections 34
AppellantIn Re: D.V. Gundappa and ors.
Advocates:C. Nagaraja Rao, Adv.
Excerpt:
.....1916 for the benefit of education to poor students. the reference in the sale deed to the condition that the trustees should preserve 'mooldhan' is quite satisfied by the amounts realised by the sale of the shop being deposited in government treasury for the purpose of the trust. the trust is for the benefit of poor students. the property is in a dilapidated condition and there is hardly any doubt that the trustees who are respectable gentlemen are praying for the gale of the property in the best interest of the beneficiaries......district judge, bangalore, in mis. case no. 256 of 48-49 refusing to grant sanction for sale of a trust property by the trustees who are the petitioners in the case.2. the trust was created by vajapayam krishniah on 5th january 1916 for the benefit of education to poor students. one of the properties is a shop in chickpet, bangalore. according to the verified statement filed by the trustees the shop is in need of repairs and requires heavy funds for that purpose. it is fetching a small rent of rs. 45 par month. one bhimraj prathapathmal is prepared to buy the property for rs. 32,000. it is urged that if this amount is deposited with government the rate of interest that it would fetch is 4 per cent. there is hardly any doubt, that in case the property is sold and the amount deposited as.....
Judgment:
ORDER

Mallappa, J.

1. This revision petition is against the order, dated 19th July 1949, parsed by the Additional District Judge, Bangalore, in Mis. case No. 256 of 48-49 refusing to grant sanction for sale of a trust property by the trustees who are the petitioners in the case.

2. The trust was created by Vajapayam Krishniah on 5th January 1916 for the benefit of education to poor students. One of the properties is a shop in Chickpet, Bangalore. According to the verified statement filed by the trustees the shop is in need of repairs and requires heavy funds for that purpose. It is fetching a small rent of Rs. 45 par month. One Bhimraj Prathapathmal is prepared to buy the property for Rs. 32,000. It is urged that if this amount is deposited with Government the rate of interest that it would fetch is 4 per cent. There is hardly any doubt, that in case the property is sold and the amount deposited as stated above, it is very advantageous to the beneficiaries. This will avoid large amounts being spent in repairing the building and the building failing down in case the repairs are not effected in time. It is no doubt true that as observed by the learned District Judge, there is no provision in the trust deed expressly authorising the trustees to sell the property. But it has, however, to be observed that there is nothing in the trust deed which prohibits them from selling the property. The reference in the sale deed to the condition that the trustees should preserve 'Mooldhan' is quite satisfied by the amounts realised by the sale of the shop being deposited in Government Treasury for the purpose of the trust.

3. The point for consideration is whether under the circumstances of the case the Court could give a direction for the sale of the property as applied for by the trustees. According to Section 36, Mysore Trust Act:

'In addition to the powers expressly conferred by this Act and by the instrument of trust, and subject to the restrictions, if any, contained in such instrument, and to the provisions of Section 16, a trustee may do all acts which are reasonable and proper for the realization, protection or benefit of the trust property, and for the protection or support of a beneficiary who is not competent to contract.'

While the trustees have these powers, it is open to them to file an application under Section 34 of the Act for necessary advice or direction in matters respecting the management or administration of the trust property. That section reads as follows:

'Any trustee may, without instituting a suit, apply by petition to a principal civil Court of original jurisdiction for its opinion, advice or direction on any present questions respecting the management or administration of the trust property other than questions of detail, difficulty or importance, not proper in the opinion of the Court for summary disposal.'

It will be noticed that the District Court has ample powers to give direction or advice in matters of this kind.

4. In re New, (1901) 2 Ch. D. 534, it was observed as follows :

'Where in the administration or management of a trust estate by the trustees, especially where the estate consists of a business or of shares in a mercantile company, there arises an emergency or a state of circumstances which it may reasonably be supposed was not foreseen or anticipated by the author of the trust and is unprovided for by the trust instrument, and which renders it desirable and perhaps even essential, in the interests of the beneficiaries, that certain acts should be done by the trustees which they themselves have no power to do, and to which the consent of all the beneficiaries cannot be obtained by reason of some not being sui juris or not yet In existence, the Court will exercise Its general administrative jurisdiction by sanctioning, on behalf of all parties interested, those acts being done by the trustees.'

The principle laid down in this decision was followed in In re Shirinbai, 43 Bom. 519 : (A. I. R. (6) 1919 Bom. 119). It was a case in which, as in this case, the trustees applied for permission to sell some immovable properties and it was observed in it :

'That the present case, however, was one of emergency not foreseen or anticipated by the author of the trust, and the sale though not provided for by the trust instrument ought, in the interests of all the beneficiaries concerned, to be sanctioned by the Court in the exercise of its extra-ordinary jurisdiction; that the extraordinary jurisdiction of the Court to sanction a sale of immovable property in the absence of a power of sale in that behalf in the trust instrument is of an extremely delicate character and should be exorcised with the greatest caution.'

The observations in In re Shirinbai, 43 Bom. 519 : (A. I. R. (6) 1919 Bom. 119) have been reaffirmed by Mulla J. in P.D. De Souza v. K.R. Daphtary, A. I. R. (11) 1924 Bom. 252 at p. 255 : (87 I.C. 230) and they are as follows :

'That the High Court of Bombay has this jurisdiction (to sanction a sale of the trust property by trustees where no power of sale is given by the trust deed) is beyond all doubt. This jurisdiction was recognised in In re Manilal, 25 Bom. 353 : (3 Bom. L. K. 411) where Sir Lawrence Jenkins sanctioned the sale of a minor's interest in Hindu joint family property. It was also recognised in In re Shirinbai, 43 Bom. 519:(A.I.R. (6) 1919 Bom. 119), where Marten J. sanctioned a sale by trustees of immovable property vested in them. But this jurisdiction is of an extremely delicate character and has to be exercised with the greatest caution. 'The principle' as observed by Romer L. J. In re New, (1901) 2 Ch. D. 534 'seems to be this--that the Court may, on an emergency, do something not authorised by the trust. It has no general power to interfere with or disregard the trust; but there are oases where the Court has gone beyond the express provisions of the trust Instrument--cases of emergency, oases not foreseen or provided for by the author of the trust, where the circumstances require that something should be done.'

5. It is thus clear that Courts have ample powers to give necessary directions in cases of this kind though extreme caution has to be observed in giving directions. The beneficiaries in this case are not particular individuals whose objection can be ascertained. The trust is for the benefit of poor students. The property is in a dilapidated condition and there is hardly any doubt that the trustees who are respectable gentlemen are praying for the gale of the property in the best interest of the beneficiaries. Under these circumstances, I allow the revision petition and direct that the trustees may sell the property as applied for by them provided that the purchaser deposits the amount of Rs. 32,000 in Government Treasury in the name of the trust for its use the trustees being authorised to draw interest only.


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