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Thattan kouther's son, Kumban of thekkumanglam Desam Lakkidi Amsham Vs. Mangalath Manakal Narayanan Nambudripad's son Moorthi Alias Ashtamoorthi Nambudripad and Ors. (20.07.1910 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
Decided On
Reported in7Ind.Cas.422
AppellantThattan kouther's son, Kumban of thekkumanglam Desam Lakkidi Amsham
RespondentMangalath Manakal Narayanan Nambudripad's son Moorthi Alias Ashtamoorthi Nambudripad and Ors.
Cases ReferredIn Luke v. South Kensington Hotel Company
public and charitable trusts - action of majority of trustees--minority not consulted--invalidity--suit for redemption of kanom--plea of renewal--plaintiff trustee-not a party to the renewal--co-trustees not invited to join as co-plaintiffs, effect of--dismissal of suit--representation--estoppel--right of mortgagee to impeach right of redemption claimed by one of the mortgagors. - .....82, that some of the trustees of a devaswom cannot institute a suit on its behalf making the other trustees defendants without having asked them to join as plaintiffs. an exception was made in cases where the other trustees perversely declined to cooperate and the suit was for the benefit of the institution. the last of these cases was doubted in mariyil raman nair v. narayanan nanmbudripad 26 m. 461, but it was unnecessary to decide the question of the necessity for previous request to join as co-plaintiffs, as in that case the plaintiff impeached the renewal, which the co-trustee defendant granted and it was impossible to get one to impeach his own deed. the question, however, was referred to full bench in karatali edamana v. unni kannon 26 m.649. but as that was a suit for redemption.....

1. This is a suit for redemption. The plaintiff is one of the urallars of the Killikurishi devasom. The Kanom sought to be redeemed is of the year 1884. It was granted to the family of the defendants Nos. 1 to 3, defendants Nos. 5 to 10 are impleaded as the remaining urallars of the temple. The defendants set up a renewal in 1905, to which the plaintiff was no party. The 11th defendant is the assignee of the rights of the Kanomdars. The Courts below have held the renewal to be invalid and given a decree to the plaintiff for redemption. The 11th defendant has preferred the second appeal.

2. A preliminary objection was taken that the 11th defendant had no right to prefer the second appeal inasmuch as the plaintiff's co-urallars did not contest the decree of the lower appellate Court. We see no force in this objection. The 11th defendant, as the assignee of the mortgage interest, is entitled to question the right of one of the co-mortgagors to redemption, whether or not the remaining co-mortgagors acquiesce in the claim of the plaintiff.

3. It is argued in Second Appeal that the plaintiff was a consenting party to the renewal and that his name appears in Exhibit XXIV as one of the person present when the resolutions therein set out were adopted. It appears then 'that it is resolved that the uralan, that manages the affairs of the respective years, should grant renewals with the greatest possible number of urallars receiving the renewal fees, signing fees, at the rate now settled from tenants whose term of lease has expired.' The actual renewal now impeached is Exhibit I. The plaintiff was no party to its execution; nor was he consulted about it. We do not understand Exhibit XXIV to dispense with the necessity for all the urallars being consulted before the execution of the renewal. 'The greatest possible number of urallars receiving the renewal fees' does not mean that it is left to the option of a majority to set at naught a minorities and to carry on the business of the devaswom in the matter of renewals without any reference to that minority or without inviting its co-operation. We must, therefore, hold that the plaintiff not having been consulted in respect of the renewal in question is not precluded from impeaching it.

4. It is next contended that the majority of the trustees of the decaswom were parties to the renewals and that in the case of a charitable trust the consent of the majority is sufficient to validate the transaction. 'In the due administration of all trusts of a private nature, the vote or act of the majority of the trustees cannot in the absence of an express or implied power bind a dissenting minority.' See Luke v. South Kensington Hotel Co. 11.Ch.D. 121 : 43.L.J. Ch. 361 : 40 L.T.638 : 27 W.R.514. But it has long been held, owing probably to the validity of perpetuities in charities and the consequent perpetual succession of trustees which would produce a dead-lock in the administration if unanimity were insisted on, that a majority of trustees has power to bind the minority. See Tudor's Charitable Trusts page 259. It does not appear to us to follow from the exception of the validity of the acts of the majority in public and charitable trusts that they may transact the affairs of the trust without any reference to the minority. On the other hand, it seems to us that the very principle of recognising the validity of the acts of the majority involves the necessity of the decision of the majority being arrival at after mutual discussion among all the members. A minority before mutual consultation may be converted into a majority after it. Unanimity on all occasions may be impossible. A majority after consultation and discussion is the nearest approach to it. Reliance was placed on The Attorney-General v. Shearman 48 E.R. 1119, in Support of the view that a majority is sufficient even though the minority had no opportunity to express their views. In this case, there were eleven trustees. There was an original lease by them to one lessee. There was a renewed lease to the original lessee and another by six out of the eleven trustees, the rest having refused to join. When the second lease was impeached, it was held to be valid. This case is no authority for the position that a majority of the trustees can act in respect of a public or charitable trust without giving an opportunity to the minority to state their dissent. In Teramuth v. Lakshmi 6 Ma. 270, it was held that the decision of the majority was binding upon a dissentient minority where the majority of the urallars of a decaswom agreed to renew a knom on terms beneficiate to the derasw on after the question of the renewal had been fairly considered by all the urallars. It was pointed out that in such a case, each had the opportunity to let his views be known before a decision is passed. The High Court remitted an issue for trial whether the renewal was the result of consultation by all the urallars though a majority had actually concurred in signing the deed. Section 16 of the Charitable Trusts Act 1860 (23 and 24 Victoria Chapter, 136) provided 'a majority of two-third of the trustees of any charity assembled at a meeting of their body duly constituted and having power to determine etc., shall also have a legal power on behalf of themselves and their co-trustees etc. to do, enter into, and execute all such acts, deeds, contracts and assurances as shall be requisite for carrying any such sale, exchange, partition, mortgage, lease, or disposition into legal effect; and all such acts, deeds, contracts or assurances shall have the same legal effect as if the same were respectively done, entered into or executed by all the acting trustees for the time being etc.' This Section was repealed by Section 17 of the Charitable Trusts Act 1869 (32 and 33 Victoria Chapter 110). Section 12 of this latter Act replaced the earlier provision thus: 'Where the trustees or parsons acting in the administration of any charity have power to determine on any sale, exchange, partition, mortgage, lease or other disposition of any property of the charity a majority, of those trustees, or persons who are present at a meeting of their body duly constituted and vote on the question, shall have and be deemed to have always had full power to execute and do all such assurances etc., for carrying any such sale etc., into effect and all such assurances etc. shall have the same effect as if they were respectively executed and done by all such trustees or persons etc.' See IV Halsbury's Laws of England, Section 416. This, no doubt, is a statutory provision. But the same rule obtained as regards mutual consultation and opportunity for the statement of each person's views before these statutes. In Wilkinson v. Malin 2 Tyrwhit 544 : 2 C.& J. 636 : 1 L.J Ex. 234, a school master was appointed by a majority of the trustees assembled for the purpose. He was dismissed by five out of the trustees without a meeting and there was no opportunity for the remaining trustees to participate in the business. Dealing with the dismissal, Lord Lyndhurst, C.B., who delivered the judgment of the Court of Exchequer, observed as follows: 'The next question that arises for consideration arises on the ninth and last issues, being whether the master was duly and properly dismissed. Now the dismissal was in this form. There was no public meeting nor any declaration by a majority assembled at a public meeting that the school master should cease to act in that situation ; but five out of the trustees, not assembled in that formal manner, gave notice that the school-master should within a certain time retire from his office. In the first place, at the time when the notice was given there were ten trustees so that the persons who gave notice did not even constitute a majority of the whole body. In the next, even if they did constitute a majority of the whole body, it is the whole body that is to dismiss and not a majority of it. So that if there is a meeting and a majority are for dismissal, then the declaration of the majority is not merely the declaration of the majority but of the whole body, which whole body does in fact dismiss. Therefore, in a case of this description where there was no meeting and where five individuals gave their opinion or said that the dismissal should take place in a short time, or that the party should cease to act as school-master, we are of opinion that, that is not a valid dismissal within the meaning of this trust.' Without deciding that in every case of a transaction entered into by the majority of the trustees of a public and charitable trust, there should have been a meeting of all to validate it, we may safely hold that all the trustees should have had an opportunity of stating their opinion. As the plaintiff in the present case was never consulted about the particular renewal, we must hold that it was invalid. It was argued that as regards the mortgage, he had nothing to do with the meeting or consultation amongst the trustees but that he was justified in accepting the renewal granted by the majority as they must be deemed to have had authority to represent the whole body. The argument was rested on the principle of stopple. The Attorney-General v. Shearman 48 E.R. 1119, and Lindley on Companies, page 218, were relied on. As regards the case cited, we have already pointed out that it was not a case of a majority of the trustees having acted Without reference to the minority. In holding that the acts of the majority in the circumstances of that case were binding, the Master of the Rolls further pointed out that the lessee had no notice from the dissenting minority that they objected to the lease and that there was no pretence of fraud or concealment on the part of the majority. These observations do not carry the matter as far as the appellant wants. They do not amount to saying that so far as the validity of the transaction as regards the party dealing with the majority of trustees is concerned, it is established by the bare majority of the trustees concurring in it. As regards the rule, laid down in Lindley on Companies, that there is no necessity on the part of persons dealing with Companies to see that de facto directors are properly appointed nor to see that the directors exercise the powers they possess in the precise manner prescribed in the regulations of the Company, it is to be observed that the principle underlying it is different from what we have to apply to a case when a majority has no power to act for the whole body unless the whole body had been consulted about it. If prima facie the majority had power to act and it is a mere informality or a piece of irregularity in their not having consulted about the transaction, the position of the lessee or mortgagee would be different. This is not a case where the minority has permitted the majority to act for them subject to certain conditions, assuming it would be competent to trustees to confer such a power upon their fellows. The rule of the stopple by holding out certain persons as clothed with authority has no application when the majority has only a limited authority -within the limits of which a stranger dealing with it has to find the power to enter into the transaction.

5. Another contention of a formal nature was raised. It was said that the 6th defendant had surrendered his right in favour of his son, Sankaran, and likewise the 10th in favour of his nephew, Parameswaran and that they were urallars of the temple and should have been impleaded. This contention has been negatived by the Courts below. It is unnecessary to discuss it as the 11th defendant, who is the only appellant before us, did not raise any such plea in his written statement.

6. The appellant has then an alternative argument that if the 6th and 10th defendants are the urallars, they have not been consulted by the plaintiff as regards the institution of the suit. It is urged with much force that if a majority of trustees cannot enter into any transaction without consulting the minority, the institution of a suit by a single trustee without taking the opinion of the other trustees is bad and that the suit is on this ground liable to be dismissed. There has been considerable conflict of opinion on the question of joinder of co-trustees in this Court. It was held in Parameswaran v. Shangaran 14 M. 489; Paramathan, Samyajipad v. Sankaramenon 23 M. 82, that some of the trustees of a devaswom cannot institute a suit on its behalf making the other trustees defendants without having asked them to join as plaintiffs. An exception was made in cases where the other trustees perversely declined to cooperate and the suit was for the benefit of the institution. The last of these cases was doubted in Mariyil Raman Nair v. Narayanan Nanmbudripad 26 M. 461, but it was unnecessary to decide the question of the necessity for previous request to join as co-plaintiffs, as in that case the plaintiff impeached the renewal, which the co-trustee defendant granted and it was impossible to get one to impeach his own deed. The question, however, was referred to Full Bench in Karatali Edamana v. Unni Kannon 26 M.649. But as that was a suit for redemption by one trustee, it was held that Section 91 of the Transfer of Property Act enabled any person having an interest in the mortgaged property to institute a suit for redemption and that one of several urallars was a person having such interest and could, therefore, bring a suit for redemption. Savitri Antarjanan v. Raman Nambudri 24 M. 296 was-practically overruled. But the Court expressed no opinion about the correctness of, the decisions in Parameswarm v. Shangaran 14 M. 489 and Paramathan Somayajipad v. Sankaramenon 23 M. 82, which were suits in ejectment. The present case being one for redemption would apparently fall within the scope of the rule in the Full Bench case. But it is pointed out by Mr. Sundara Iyer that joint trustees have not a several interest in the property of the devaswom or any personal interest in it and that Section 91 does not contemplate the interest of one of several co-trustees or entitle him to institute a suit for redemption. It may be, as pointed out by him, that the question of the majority voting for redemption is different from that of the joinder of all as plaintiffs and that this view was not presented to the Court. It certainly does not appear to have been considered. But we cannot on that account whittle away the authority of that decision. However, apart from the authority of that case, which is binding upon us, we are not satisfied that a suit by one urallar in which co-urallars are impleaded as defendants for redemption from mortgagees or for recovery of decaswom property from trespasser is liable to be necessarily dismissed for the reasons that the co-urallars were not joined as co-plaintiffs or even consulted before the institution of the suit. It has been held in cases of joint-owners or joint-contractors that some of them may sue persons who infringe their rights, impleading co-owners or co-contractors as party defendants and without consulting them before the institution of the suit. See Peria Karmppan v. Velayathan Chetti 29 M. 302, Pyari Mohan Bose v. Kedarnath Roy 26 C. 409 and Bin Singh v. Nawal Singh 24 A. 226 : 31 A.W.N. (1902). Does it make any difference that the joint owners are trustees? There is a distinction that their interest is one and indivisible while in the other cases there is a separable beneficial interest. In cases where no remedial right accrues to the trustees until a majority after the mutual consultation have signified their will, it cannot be competent to some of the trustees or even the majority to institute an action without such consultation. It may also be that if the decision in such a case of the majority is adverse, the minority cannot institute an action as the remedial right has not come into existence. Take the case of a suit for the removal of an employee of a decaswom by some of the trustees making the remainder defendants. Here the employee was liable to be removed by the vote of the majority. If no such majority had concurred in dismissing the employee from office, a suit by some of them would be ineffectual and would be liable to be dismissed on the ground that the trustees who desired the renewal had not acted. It may also be when the removal of such employee is, in the interests of the decaswom, essential and the conduct of the majority of the trustees in upholding the misbehaving servant is open to exception, the minority is not without its remedy. But when the right to the relief claimed has accrued to joint trustees, the institution of a suit some only without having consulted the maining trustees, even when they have perversely refused to join, cannot, it appears to us, be a sufficient ground for dismissing the suit. Although the interest of the co-trustees is joint and indivisible, it is fully represented when they are all on the record on the one side or the other. Whatever question of costs may arise, misjoinder is not fatal to the suit. In Kakilasari Dasi v. Mohunt Rudranand Goswami 5 Cri.L.J. 527, while laying down the rule that all trustees should ordinarily be co-plaintiffs and that they must exercise the powers of their office in their joint capacity, the Court pointed out that it was unable to follow the Fall Bench ruling in Pyari Mohan Bose v. Kedarnath Roy 26 C. 409, in the particular circumstances of the case by trans. ferring the co-trustees to the ranks of the plaintiffs as the original plaintiff set up sole right in himself. In Luke v. South Kensington Hotel Company 11 Ch. D. 121 : 43.L.J. Ch. 361 : 40 L.T. 638 : 27 W.R. 514, where there were three trustees of a private trust and the renewed mortgage in favour of two of them was impeached by the third in a suit to foreclose the original mortgage, the Master of the Rolls, after disposing of the misjoinder as not made out in the circumstances of the case, proceeded to deal with an objection similar to that now raised in the following words: 'Then it is said that some of the mortgagees might not wish to foreclose and others might. We will deal with that case when it arises, as to whether one, without the consent as against the wish of the others, can foreclose. That is not the case here. The other two defendants do not oppose the foreclosure. They were not willing to be plaintiffs but they do not refuse to foreclose. If two out of three trustees decline to foreclose or to agree to any other remedy, it might be a reason for removing them from being trustees; but that is not the case here and we have not, therefore, to consider that case which may be dealt wish when it arises.' The Master of the Rolls did not think that the unwillingness of the trustee defendants to foreclose would be ground for dismissing the plaintiff's suit for foreclosure. Lord Justice James added: 'In the old Chancery practice there was this difficulty that the misjoinder of plaintiffs was fatal and that if you had any one person among the plaintiffs, who had done anything which might have amounted in equity to a release of his rights, the whole suit failed and there was no remedy for it and, therefore, as a general rule you selected, if you could, one person as plaintiff whom you knew to be free from any charge or imputation on his conduct and made all the others defendants. There never was any objection to that in practice. Now that is rendered unnecessary by the fact that the Courts may deal with misjoinder of plaintiffs, according to the justice and equity of the case.' In the present case, the right to redeem has long accrued. The plaintiff, as one of the joint trustees, is right in enforcing the claim of the devaswom to redeem. If defendants Nos. 5 to 10 are unwilling to join in the redemption, there may arise a question as to how they are to be dealt with. We see no objection to one trustee suing for redemption without on-suiting the others or making them co-plaintiffs. But Mr. Sundara Aiyer urged that the decree should have been one for redemption in favour of the plaintiff and defendants Nos. 5 to 10. They were not represented before us. The proper course in such cases, as pointed out by the Master of the Rolls in the case already referred to, is to order the trust property to be restored to all for the benefit of the cestui que trust. But the trustee-defendants have not asked for it. The decrees of the Courts below are in plaintiff's favour on behalf of the devaswom. There is no need to vary them. The second appeal is dismissed with. The time for redemption is extended to two months from this date.

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