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D. Gopalaswami Mudaliar Vs. Subramanya Pillai and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai
Decided On
Reported inAIR1942Mad397; (1942)1MLJ272
AppellantD. Gopalaswami Mudaliar
RespondentSubramanya Pillai and anr.
Cases ReferredCourt. In Shanmuga Mudali v. Arunagiri Mudali
Excerpt:
- .....act of the majority would bind the minority trustees. but the question did not arise before the learned judge. the case before him arose out of a scheme decree in which there was a provision for the election of a managing trustee. the question was whether the consent of the majority was substantial compliance with the clause in the decree in the scheme suit. the learned judge held that it was substantial compliance with the scheme. at page 671, the learned judge observed:the purpose of clause 4, has been substantially complied with, that being, as i read it, that for the appointment of executive trustee a majority of the trustees should consent.so ultimately the decision was rested on the learned judge's view of the clause in the decree and he held that the terms of that clause were.....
Judgment:

Somayya, J.

1. The defendant appeals against the decree of the Subordinate Judge of Trichinopoly passed in A.S. No. 32 of 1939. The respondent filed the suit for a declaration that the appellant should be restrained by an injunction from collecting the rent of the B Schedule property from the tenants and from interfering with the collection of the same by the plaintiff. The plaintiff says that he was elected the managing trustee by a majority of the trustees of the suit charity and that the defendant has therefore no right to interfere with the management of the managing trustee.

2. The first question is whether a majority of the trustees have a right to elect one of them as the managing trustee so as to oust the minority trustees from, taking part in the management. It is true that the trustees acting together can come to arrangement by which they may provide for the management of the trust properties and, provided that the arrangement is in the interests of the institution, it will govern the relations between the parties. But the question is whether three out of five trustees can elect one of the three as the managing trustee and seek to prevent the other two trustees from interfering with the management of the trustee elected by them. Each and every trustee is responsible for the acts of his co-trustees and he is liable for any acts of misfeasance or negligence committed by the other co-trustees. This involves the position that each trustee is entitled to take part in the management of the trust estate. If he voluntarily agrees to an arrangement by which one of them is to manage either by turns or for a particular period, it might be that he is bound by the result of his action. But without authority I am not prepared to consent to the proposition that the majority can claim that one of them shall have all the rights of management and prevent the others from taking part in the management.

3. In Nilamani Poricha v. Appanna Poncho (1935) 70 M.L.J. 262 the Court enforced an arrangement which was entered into by all the parties and said that it was valid until it was set aside by agreement or until it was set aside by Court. In Shanmuga Mudali v. Arunagiri Mudali (1932) 36 L.W. 669 Wallace, J., assumed that it is within the powers of the majority of trustees to elect one of them as the managing trustee and that this act of the majority would bind the minority trustees. But the question did not arise before the learned Judge. The case before him arose out of a scheme decree in which there was a provision for the election of a managing trustee. The question was whether the consent of the majority was substantial compliance with the clause in the decree in the scheme suit. The learned Judge held that it was substantial compliance with the scheme. At page 671, the learned Judge observed:

the purpose of Clause 4, has been substantially complied with, that being, as I read it, that for the appointment of executive trustee a majority of the trustees should consent.

So ultimately the decision was rested on the learned Judge's view of the clause in the decree and he held that the terms of that clause were substantially complied with by the majority of the trustees consenting to the appointment of one of them as the executive trustee. In a prior part of the judgment the learned Judge said:

Any body of trustees can by resolution in the ordinary way appoint any one of their number as the managing or executive trustee, and if the clause was designed not to express but to curtail this right, I should expect it to have been expressed in very different terms, such as that no executive trustee shall be appointed except with the express consent in writing of all the trustees.

The learned Judge has not given any authority in support of this statement and, as I said the judgment ultimately turned on what he considered to be the true construction of the particular clause in the scheme decree. The reason of the rule laying down that each and every trustee is responsible for the mismanagement and negligence of the other trustees requires that each trustee should be free to take part in the management along with the other trustees. If the proposition contended for by the respondent's learned advocate is accepted, while continuing to be responsible for, the mismanagement of the other trustees, the minority trustee-would be powerless to interfere in time and prevent mismanagement. I do not think this position can be accepted. I therefore hold that the plaintiff was not validly appointed as the executive trustee. This is enough to dispose of the appeal and I do not think it is necessary to go into the question what exactly was the position of the defendant who claims a much larger right than that of an ordinary trustee.

4. The second appeal is allowed and the suit is dismissed. The appellant will have his costs throughout from the trust estate. The respondent will bear his own costs.

5. Leave refused.


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