ATMARAM RANCHHODBHAI v. GULAMHUSEIN GULAM MOHIYADDIN,
1972-03-02
D.P.DESAI, M.U.SHAH, P.N.BHAGWATI
body1972
DigiLaw.ai
P. N. BHAGWATI, D. P. DESAI, M. U. SHAH, J. ( 1 ) THIS Special Civil Application under Article 227 of the Constitution has been placed before us on a reference made by J. B. Mehta J. Two questions have been referred to us. One is whether some only out of several cotrustees can effectively determine a tenancy by giving notice to quit and the other is whether a suit to evict a tenant can be filed by one or more cotrustees without joining other cotrustees in the suit Both questions are of frequent occurrence in cases arising under the Rent Act and even under the general law of landlord and tenant and it is therefore necessary that they be properly considered and the law on the subject should be finally settled by a Full Bench decision of this Court. ( 2 ) THE determination of these two questions must depend on the true nature and character of the office of cotrustees. The classic statement of the law describing what is the true nature and character of the office of is to be found in the following passage from Lewin on Trusts (Sixteenth Edition) page 181 :in the case of cotrustees of a private trust the office is a joint one. Where the administration of the trust is vested in cotrustees they all form as it were but one collective trustee and therefore must execute the duties of the office in their joint capacity. Sometimes one of several trustees is spoken of as the acting trustee but the Court knows of no such distinction; all who accept the office are in the eyes of the law acting trustees. If any one refuses or is incapable to join it is not competent for the others to proceed without him and. if for any reason they are unable to appoint a new trustee in his place under sec. 36 (1) of the Act the administration of the trust must devolve upon the Court. However the act of one trustee done with the sanction and approval of a cotrustee may be regarded as the act of both though such sanction or approval must be strictly proved.
36 (1) of the Act the administration of the trust must devolve upon the Court. However the act of one trustee done with the sanction and approval of a cotrustee may be regarded as the act of both though such sanction or approval must be strictly proved. THE Judicial Committee of the Privy Council pointed out in Man Mohan Das v. Janki Prasad A. I. R. 1945 Privy Council 23 that this was a correct statement of law applicable in England and that the same doctrine applies in India also. The trustees must act jointly in execution the duties of their office unless the instrument of trust otherwise provides. The instrument of trust may provide that one or more trustees shall be managing trustees entitled to act on behalf of the trust and where such provision is made those who are empowered to act as managing trustees would be entitled to execute the duties of the office without the concurrence of the other cotrustees. But in the absence of such provision all cotrustees must join in the execution of the duties of the office. ( 3 ) IT follows as a necessary corollary from the above proposition that save in certain exceptional cases to which we shall presently refer a trustee cannot delegate any of the duties functions and powers of his office to his cotrustee or to any one else. as that would be contrary to his obligation under the trust. This position of law is now well settled and there is high authority in support of it namely the decision of the Supreme Court in Abdul Kayum v. Alibhai A. I. R. 1963 S. C. 309. The following observations from the judgment of the Supreme Court in this case are very important and material in determining the controversy between the parties and they may be reproduced as follows :. . . TRUSTEES cannot transfer their duties functions and powers to some other body of men and create them trustees in their own place unless this is clearly permitted by the trust deed or agreed to by the entire body of beneficiaries.
. . TRUSTEES cannot transfer their duties functions and powers to some other body of men and create them trustees in their own place unless this is clearly permitted by the trust deed or agreed to by the entire body of beneficiaries. A person who is appointed a trustee is not bound to accept the trust; but having once entered upon the trust he cannot renounce the duties and liabilities except with the permission of the Court or with the consent of the beneficiaries or by the authority of the trust deed itself. Nor can a trustee delegate his office or any of his functions except in some specified cases. The rules against renunciation of the trust by a trustee and against delegation of his functions by a trustee are embodied in respect of trusts to which the Indian Trusts Act applies in secs. 46 and 47 of that Act. . . . . . . It is true that sec. 1 of the Indian Trusts Act makes provisions of the Act inapplicable to public or private religious or charitable endowments; and so these sections may not in terms apply to the trust now in question. These sections however embody nothing more or less than the principles which have been applied to all trusts in all Countries. The principle of the rule against delegation with which we are concerned in the present case is clear: a fiduciary relationship having been created it is against the interests of society in general that such relationship should be allowed to be terminated unilaterally. That is why the law does not permit delegation by a trustee of his functions except in cases of necessity or with the consent of the beneficiary or the authority of the trust deed itself; apart from delegation in the regular course of business that is all such functions which a prudent man of business would ordinarily delegate in connection with his own affairs. THESE observations clearly show that whether the trust is a private trust governed by the Indian Trusts Act or is a public charitable or religious trust a trustee cannot delegate any of his duties functions and powers to a cotrustee or to any other person unless the instrument of trust so provides or the delegation necessary or the beneficiaries competent to contract consent to the delegation or the delegation is in the regular course of business.
These are the only four exceptional cases in which delegation is permissible and save in these exceptional cases the trustees cannot even by a unanimous resolution authorize one of themselves to act as managing trustee for executing the duties functions and powers relating to the trust and every one of them must join in the execution of such duties functions and powers. ( 4 ) THE first question which arises for decision is whether one cotrustee can determine a tenancy by giving notice to quit to the tenant or whether it is necessary that all cotrustees must join in giving such notice. Now there can be no doubt that unless the power and function to determine a tenancy by giving notice to quit is delegated by all cotrustees to a particular cotrustee the notice to quit given by such cotrustee alone would be insufficient to determine the tenancy and even if such delegation is made it would be ineffective unless it falls within one of the excepted categories of permitted delegation. If the instrument of trust provides or all beneficiaries being competent to contract consent that any one particular cotrustee may give notice determining a tenancy the delegation of the power and function to give notice to quit would be valid and the notice to quit given by the particular cotrustee would be effective to determine the tenancy. But even if the instrument of trust does not so provide and the beneficiaries being competent to contract do not so consent the question would still remain whether the delegation of the power and function to give notice to quit determining the tenancy can the said to be necessary or in the regular course of business. There may be conceivable cases where the delegation of the power and function to give notice to quit determining a tenancy may be considered necessary for the execution of the trust but such cases would be very rare and ordinarily it would be difficult to regard such delegation as necessary though of course this question would always depend in the last analysis on the facts and circumstances of each case. But whatever might be the position in regard to the question whether such delegation is necessary or not it is clear that such delegation cannot be said to be in the regular course of business.
But whatever might be the position in regard to the question whether such delegation is necessary or not it is clear that such delegation cannot be said to be in the regular course of business. There are at least two decisions one of the Privy Council and the other of the Calcutta High Court which clearly show inferentially that such delegation cannot be sustained as a delegation in the regular course of business. ( 5 ) THE first decision is the decision of the Privy Council in B. S. Banerjee v. Sitanath Das A. I. R. 1922 P. C. 209. This was a case where a lease granted by a power of attorney holder of a trustee was challenged. The Judicial Committee of the Privy Council held that the lease was executed by a person without authority and was therefore void. Lord Buckmaster delivering the opinion of the Judicial Committee gave the following reason for taking this view :it was said that he was not in the strictest language a trustee; but be it so his position was nonetheless a representative one and it being plain that he never negotiated nor considered nor knew of the lease until after it had been executed if what was done was done by virtue of a power of attorney it could only have been because the Dower had delegated the representative authority that he possessed to a third party. The duties of Pratap however they may be defined were in their nature fiduciary and fiduciary duties cannot be made the subject of delegation If therefore the document had been before their Lordships it would have been impossible to have supported the contention that it conferred the power to negotiate and execute the document upon which the whole of the defendants case rest. IT would seem from this decision that the power to grant a lease of trust property cannot be delegated by the trustee to anyone else. It is a power coupled with a fiduciary duty and fiduciary duty cannot be made the subject of delegation. Any attempted delegation would be ineffective and exercise of delegated power would be invalid. ( 6 ) THIS decision of the Privy Council was followed by the Calcutta High Court in Gopal Sridhar Mahadev v. Sashi Bhusan Sarkar A. I. R. 1933 Calcutta 109.
Any attempted delegation would be ineffective and exercise of delegated power would be invalid. ( 6 ) THIS decision of the Privy Council was followed by the Calcutta High Court in Gopal Sridhar Mahadev v. Sashi Bhusan Sarkar A. I. R. 1933 Calcutta 109. There a contract for giving lease of certain debater property was entered into with the plaintiffs by defendant No. 3 acting on behalf of defendant No. 2 who was the she bait. Defendant No. 2 on coming to know of the contract of lease repudiated it and that led to the filing of a suit for specific relief by the plaintiffs. The suit was resisted by defendant No. 2 and one of the defences raised by her was that even if defendant No. 3 had authority to enter into the contract of lease on behalf of defendant No. 2 such authority was ineffectual since granting of lease was a matter of fiduciary obligation and it could not be delegated by defendant No. 2 to defendant No. 3 This defence was upheld by a Division Bench of the Calcutta High Court consisting of Mukherjee and Bartley JJ. The learned Judges referred to the decision of the Privy Council in K S. Banerjee v. Sitanath Das (supra) and applying the ratio of that decision to the facts of the case before them observed:it is open to a trustee or a she bait to appoint a sub-agent but such appointment must only be as a means of carrying out his own duties himself and not for the purpose of delegating those duties by means of such appointment. . . . It cannot be denied that the granting of a lease of this character was a matter with regard to which defendant 2 as she bait was bound to exercise her judgment and when it is found that defendant 3 under a supposed authority which must have purported to delegate that exercise of judgment to him made the contract and when defendant 2 repudiates the contract at the earlier opportunity available to her it is impossible to uphold this delegation which is a good deal more than the mere employment of a machinery for carrying out the duties which attach to defendant 2 in the fiduciary character she occupies. . .
. . THIS decision also therefore shows that granting of a lease is not a matter which can be delegated by a trustee to any other in the regular course of business ( 7 ) NOW if the granting of a lease is a matter which cannot be delegated by a trustee it must follow as a necessary corollary that the determination of a lease also cannot be regarded as a matter which can be delegated by a co trustee to another cotrustee or to any one else. The power and function to determine a lease is of the same nature as the power and function to grant a lease and if one cannot be delegated equally the other cannot be. Both functions are affected with a fiduciary duty with respect to which all cotrustees are bound to exercise their judgment and no one cotrustee can abdicate the exercise of his judgment by delegating these functions to his cotrustee or to any other person. ( 8 ) IT is therefore clear that one cotrustee cannot give notice to quit determining the tenancy. The decision to determine the tenancy by giving notice to quit must be taken by all cotrustees unless of course the instrument of trust otherwise provides or the beneficiaries being competent I to contract consent or in any particular case it is established that on the peculiar facts obtaining in that case the delegation of the power to determine the tenancy was necessary But when we say that the tenancy must be determined by all cotrustees we must make it clear that what we mean is that the decision terminate the tenancy must be taken by all the cotrustees. The formal act of giving notice to quit pursuant to the decision taken by all the cotrustees may be performed by one co trustee on behalf of the rest. The notice to quit given in such a case would be a notice given with the sanction and approval of all the co trustees and would be clearly a notice by all cotrustees. ( 9 ) TURNING now to the second question which arises for consideration it is clear that all cotrustees must join 48 filing a suit to recover possession of the property from the tenant after determination of the lease.
( 9 ) TURNING now to the second question which arises for consideration it is clear that all cotrustees must join 48 filing a suit to recover possession of the property from the tenant after determination of the lease. That must follow as necessary and logical consequence from the nature and character of the office of cotrustees to which we have referred in the opening part of the judgment. Sec. 48 of the Indian Trusts Act provides that when there are more trustees than one all must join in the execution of the trust except where the instrument of trust otherwise provides. The principle embodied in this section must apply equally to a public religious or charitable trust as pointed out by the Supreme Court in Abdul Kayum v. Alibhai (supra ). Since all cotrustees must join in the execution of the trust and recovery of possession of the property from the tenant after determination of the lease would be a duty arising in the execution of the trust all cotrustees must join in filing a suit to recover possession of the property from the tenant. The only exception to this rule would be where the instrument of trust otherwise provides. If the instrument of trust provides that one cotrustee may institute a suit to recover possession of the property from the tenant he would be competent to institute such a suit and it would be no answer on the part of the tenant to say that the other cotrustees have not joined in such suit. But where the instrument of trust does not so provide all cotrustees must join in the suit to recover possession of the property from the tenant for their office is a joint office and they all form as it were but one collective trustee. This position in law is now well settled and there is complete unanimity of opinion amongst the High Courts about it. We may mention only a few of the decisions which have taken this view: Vedakannu v. Annadana Chatram A. I. R. 1938 Madras 982: and Ramesh Chandra v. Hemendra Kumar A. I. R. 1949 Calcutta 519. ( 10 ) THERE was however one decision cited on behalf of the landlord to which we must refer before we part with this question.
( 10 ) THERE was however one decision cited on behalf of the landlord to which we must refer before we part with this question. That was the decision of the Supreme Court in Ishwardas v. Maharashtra Revenue Tribunal A. I. R. 1968 S. C. 1364. This case arose out of an application made by the managing trustee of a public charitable trust for possession of a certain portion of the land leased out to a tenant under the provisions of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act 1968 The ground on which possession was sought was that the managing trustee bona fide required the land for cultivating it personally. Sec. 2 (12) defined the expression to cultivate personally to mean to cultivate on ones own account. The tenant resisted the application on a twofold ground. One ground was that the managing trustee was not a landlord entitled to obtain possession of the land since the land was not vested in him and the other was that the managing trustee could cultivate the land only of account of the beneficiaries and not on his own account and it could not therefore be said that he bona fide required the land for cultivating it personally. Both these grounds were negatived by the Supreme Court. The Supreme Court held that in view of sec. 2 (18) of the Bombay Public Trusts Act 1950 the properties of the trust which included the land in question vested in the managing trustee and the managing trustee was therefore a landlord within the meaning of that expression as used in the Act and since the land vested in the managing trustee cultivation by him in the manner set out in sec. 2 (12) could be considered to be cultivation on ones own account and the managing trustee was therefore entitled to obtain possession of the land from the tenant. We fail to see how this decision can be of any assistance to the plaintiff so far as the present contention is concerned. It is apparent from the decision that no contention was advanced before the Supreme Court that the managing trustee alone was not entitled to maintain the application for obtaining possession of the land from the tenant and that the other trustees were necessary parties to the application.
It is apparent from the decision that no contention was advanced before the Supreme Court that the managing trustee alone was not entitled to maintain the application for obtaining possession of the land from the tenant and that the other trustees were necessary parties to the application. It is quite possible that such a contention was not advanced because under the instrument of trust the managing trustee was empowered to maintain suits and applications on behalf of the trust without joining other cotrustees. But whatever be the reason it is clear that no question as to the competency of the managing trustee alone to maintain the application was raised before the Supreme Court nor did the Supreme Court have occasion to consider any such question and the decision of the Supreme Court cannot therefore be regarded as an authority on the point that a managing trustee can maintain an action on behalf of the trust without joining the other trustees. ( 11 ) WE are therefore of the view that unless the instrument of trust otherwise provides all cotrustees must join in filing a suit to recover possession of the property from the tenant after determination of the lease. No one single cotrustee even he be a managing trustee unanimously chosen by the cotrustees can maintain such a suit against the tenant without joining the other cotrustees. All cotrustees must be joined in the suit and if any one or more of them are unwilling to he joined in the suit as plaintiffs or for some reason or the other it is not possible to join them as plaintiffs they must be impleaded as defendants so that all cotrustees are before the Court. ( 12 ) WE therefore answer the questions accordingly and send the Special Civil Application for hearing and final disposal by a single Judge of the High Court in the light of the answers given and the observations made in this judgment. .