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Andhra High Court · body

2001 DIGILAW 459 (AP)

Anam Venkata Anish Reddy v. Anam Venkata Reddy

2001-04-23

J.CHELAMESWAR

body2001
J. CHALAMESWAR, J. ( 1 ) THIS is a petition filed under Sections 73 and 74 of the Indian Trusts act, 1882 with a prayer as follows:" (A) for a declaration that respondents 1 to 3 are unfit to be Trustees of the 12th respondent and are therefore liable to be replaced by another competent Trustees preferably the 4th respondent Sri A. Prem Kumar reddy: (b) for a consequential direction appointing the 4th respondent or any other competent person as Trustee for the 12th respondent; (c) directing respondents 1 to 3 to render account of the 12th respondent to the Trustee to be appointed by the hon ble Court for effective management; (d) for costs; and (e) for such other and further reliefs as the Hon ble Court deems fit and proper in the circumstances of the case. "one Sri Anam Venkat Reddy, originally the first respondent in this proceedings, who died during the pendency of the proceedings, created a trust known as "anam Venkat reddy Family Trust" which is the 12th respondent herein by a registered trust deed dated 21-10-1982 marked as Ex. P3 in this proceedings. The first 3 respondents herein were the trustees. The 4th respondent herein is the son of late Sri Anam Venkat reddy, the deceased 1st respondent through the first wife of the said Mr. Venkat reddy. The second respondent is the second wife of the first respondent. Respondents 5 to 7 are the sons of the fourth respondent. The 8th respondent is the wife of the fourth respondent. Respondents 9 and 10 are the daughters of the fourth respondents. ( 2 ) THE petitioners herein (three in number) are the children of respondents 5 to 7 respectively. ( 3 ) THE 12th respondent trust acquired 81 /2 % of the shares of the 13th respondent- company sometime subsequent to the coming into the existence. The 14th respondent is a wholly owned subsidiary of the 13th respondent. Both the respondents 13 and 14 are limited companies. The above-mentioned shares were acquired by the 12th respondent trust from a partnership firm known as godavri Electrical Conductors (GEC ). The 14th respondent is a wholly owned subsidiary of the 13th respondent. Both the respondents 13 and 14 are limited companies. The above-mentioned shares were acquired by the 12th respondent trust from a partnership firm known as godavri Electrical Conductors (GEC ). ( 4 ) WHAT exactly are the terms on which GEC transferred the shares held by it to the 12th respondent is not very clear from either the pleadings or the evidence available on record except that it is pleaded in the petition as follows:"as already stated major part of the debt due to 14th respondent, an amount to a tune of Rs. one crore and 32 lakhs was cleared by Messrs. Godavary Electrical conductors, Firm, and a paltry balance of Rs. 18 lakhs is found due as on the date of shares transferred in favour of the Trust. " ( 5 ) PW1 in his evidence stated that gec acquired the shares of the respondent no. 13 of the year 1978 to the extent of about 81 1/2 % of the issued capital GEC borrowed money from the 14th respondent for acquiring the shares to the tune of 1. 55 crores and except to the extent of 18 lakhs, the remaining amount borrowed from the 14th respondent was discharged by gec itself. ( 6 ) IN the background of the above mentioned facts, the only thing that can be said on the basis of the record is that whatever be the other terms between GEC and the 12th respondent in connection with the transfer of the shares the 12th respondent agreed to discharge the balance amount of the debt owed by GEC to the 14th respondent to the extent of Rs. 18 lakhs. This fact is not in dispute. It is also an admitted fact that in the first year after the acquisition of the shares by the 12th respondent, the 13th respondent company declared a dividend on 31-3-1983 and an amount of rs. 8,85,000/- was paid to the 12th respondent as dividend on the shares held by the 12th respondent in the 13th respondent company. It is also an admitted fact, thereafter, an amount of Rs. 8,59,000/- was paid to the 14th respondent by the 12th respondent in partial discharge of its liability to pay Rs. 18,00,000/- as mentioned above. ( 7 ) SOME time subsequently the trouble started. It is also an admitted fact, thereafter, an amount of Rs. 8,59,000/- was paid to the 14th respondent by the 12th respondent in partial discharge of its liability to pay Rs. 18,00,000/- as mentioned above. ( 7 ) SOME time subsequently the trouble started. Company Petition No. 42 of 1990 was filed by respondents 5 to 7 herein in this Court complaining of oppression and mismanagement against the respondents 1 and 2 herein under Sections 378 and 379 of the Companies Act. Notices in the above- mentioned company petitions were served on the respondents 1 and 2 herein who are also the respondents 1 and 2 in the above mentioned company petition on 13-11-1990. Thereafter, a compromise was entered into between the parties on 19-11-1990. The compromise memo is marked as Ex. All herein. Pursuant to the said compromise cp No. 42 of 1990 was withdrawn on 23-11-1990. ( 8 ) ON 25-2-1991 the first respondent executed Ex. P9 purporting to be a document extinguishing the 12th respondent-trust. Thereafter, an entry in the membership register of the 13th respondent company was made (Ex. P6) to the effect that the shares till then by the 12th respondent trust were transmitted to the first respondent herein. The exact date of such an entry is not available on record but PW2 who was the Manager of the 13th respondent company at the relevant point of time stated in his chief-examination that he made the entry under Ex. P6 at the instance of the first respondent some time subsequent to the execution of Ex. P9. PW2 also happens to be one of the attestors of Ex. P9. ( 9 ) THEREAFTER, CP No. 22 of 1991 was filed by respondents 4 to 10 herein under section 155 of the Companies Act for the rectification of the membership register of the 13th respondent company. The said cp was allowed by an order of this Court dated 2-9-1995. Aggrieved by the judgment in the said CP, respondents 1 and 2 herein preferred OS A No. 13 of 1996 which was dismissed by an order of this Court dated 18-1-2001. The ultimate result of this litigation in CP No. 22 of 1991 is that the entry in the membership register of the 13th respondent company (Ex. Aggrieved by the judgment in the said CP, respondents 1 and 2 herein preferred OS A No. 13 of 1996 which was dismissed by an order of this Court dated 18-1-2001. The ultimate result of this litigation in CP No. 22 of 1991 is that the entry in the membership register of the 13th respondent company (Ex. P6) was directed to be rectified to the effect that the shares shown to have been transmitted in the name of the first respondent herein should be shown as being held by the 12th respondent trust. It is agreed that as a matter of fact such a rectification was affected. ( 10 ) IN the background of the above- mentioned facts the present OP 39 of 1992 came to be filed on the file of District judge, East Godavari, which was directed to be transferred to this Court by an order dated 3-4-1995 in the above-mentioned cp No. 22 of 1991 and consequently the op was transferred to this Court and renumbered as OP 2 of 1995. ( 11 ) ON behalf of the petitioners 2 witnesses were examined and one witness on behalf of the respondent. On behalf of the petitioner as many as 235 documents were marked (Exs. Pl to P235) and six documents were marked on behalf of the respondents (Rl to R6) in support of their respective claims. ( 12 ) IT may be stated at the outset that in sofar as the first respondent is concerned the petition abated as the first respondent died on 30-8-1997. In sofar as the third respondent is concerned it is an admitted fact that he ceased to be a trustee of the 12th respondent Trust by afflux of time as he was nominated to be a trustee for a specified period of time. The petition survives only insofar as the second respondent herein is concerned. ( 13 ) BEFORE I proceeded to examine the rival contentions of the parties, I deem it appropriate to briefly narrate the contents of trust deed Ex. P3 by which the 12th respondent Trust was brought into existence. The trust was created by the first respondent on 21st October, 1982. ( 13 ) BEFORE I proceeded to examine the rival contentions of the parties, I deem it appropriate to briefly narrate the contents of trust deed Ex. P3 by which the 12th respondent Trust was brought into existence. The trust was created by the first respondent on 21st October, 1982. From the tenor of the deed the predominant purpose of the trust appears to be to secure that safety of the properties in the 13th respondent company in which members of the family of the first respondent are the main shareholders. Admittedly, the 13th respondent company has huge assets. Clause 2 of the Trust deed reads as follows:"the trust shall be a private non discretionary trust and irrevocable in nature and substance. " ( 14 ) ONE of the objects of the trust is to achieve and maintain a controlling interest in the 13th respondent company by holding more than 66% of the shares of the said company, so that the trust would be in a position to control the affairs of the 13th respondent company. The other object is to make provision for some reasonable income to the members of the family of the first respondent from out of the probable income arising out of the holding of the above mentioned shares. It is also one of the objects of the trust to allocate a portion of the income of the trust to another body known as "anam Venkata Reddy Charitable trust" which is the llth respondent distribution of incomes to the various beneficiaries named in the trust deed. The beneficiaries being respondents 2 and 4 to 11. However, clause 4, which deals with the arrangements of the distribution of incomes in its various sub-clauses, provides that various percentages of the "the distributed income" of the trust shall be received by various beneficiaries mentioned therein. It is relevant to mention that nowhere in the trust deed the expression "distributed income" is defined nor there is any other guidance in the document and as to the construction of such an expression. It is also relevant to mention that the periodicity in respect of the payment such "distributed income" is also not mentioned. That being the tenor of the clause 4, apparently it is left to the trustees to decide as to what should be the "distributed income" and as to when such income should be distributed. It is also relevant to mention that the periodicity in respect of the payment such "distributed income" is also not mentioned. That being the tenor of the clause 4, apparently it is left to the trustees to decide as to what should be the "distributed income" and as to when such income should be distributed. ( 15 ) CLAUSE 5 deals with the tenors of the trust and as to when the trust should come to an end. Clauses 6 and 7 deal with the consequential arrangements on the extinguishment of the trust and the distribution of the corpus of the trust. The other parts of the trust deed may not be relevant for the present and they would be dealt with at the appropriate place in this judgment if need be. ( 16 ) IN the back ground of the above mentioned document, the case of the petitioners is that the act of the first respondent in executing the document Ex. P9 purporting to extinguish the trust and inaction of the second respondent who is also a trustee of the 12th respondent trust in not making any effort to protect the interests of the beneficiaries would render them unfit to continue as trustees. ( 17 ) IN view of the relationship existing between the various parties to the petition an allegation is also made in the petition that the "respondents 1 and 2 have embarked upon a grandiose scheme to knock away 81. 5% of the shares held by the 12th respondent in the 13th respondent this could be either out of spite or malicious ill- intention to deprive respondents 4 to 11 of the properties. " ( 18 ) ON the other hand it is pleaded and some evidence adduced on behalf of the respondents, more particularly on behalf of the second respondent that no such motive cold be attributed to the second respondent, as eventually the second respondent did not stand to gain by any one of these transactions, that is the purported extinguishment of the trust and the consequential transmission of the property held by the trust in favour of the deceased first respondent. Further the deceased first respondent executed a will marked as ex. Further the deceased first respondent executed a will marked as ex. R2, according to which all the personal properties of the first respondent are to be enjoyed by the second respondent only during her lifetime and thereafter all the properties shall be used for certain charitable purposes indicated in the will. ( 19 ) WHATEVER be the interest of the second respondent in the personal properties of the first respondent, as it depends on the out come of the legal proceedings for issuance of probate pertaining to the above mentioned will, in my view it makes no difference for deciding the present case on the question of fitness of the second respondent to continue as a trustee of the 12th respondent trust. In my view it is no answer for any trustee to say that the trustee did not benefit out of an alleged act or omission of the trustee which resulted in a determent or deprivation of the interests of the beneficiaries. ( 20 ) UNDER the scheme of the Indian trusts Act the office of the trustee is vacated either by the death of the trustee or by discharge. The various contingencies under which the trustee may be discharged are dealt with under Section 71 of the Act. It is worthwhile noticing that, the language of Section 71 indicates that the contingencies mentioned therein are the only contingencies under which a trustee could be discharged. Section 71 reads as follows:"discharge of Trustee :a trustee may be discharged from his office only as follows: (a) by the extinction of the trust; (b) by the completion of his duties under the trust; (c") by such means as may be prescribed by the instrument of trust; (d) by appointment under this Act of a new trustee in his place; (e) by consent of himself and the beneficiary, or, where there are more beneficiaries than one, all the beneficiaries being competent to contract; or (f) by the Court to which a petition for his discharge is presented under this Act. "the contingencies contemplated under subsections a to c of the Section 71 deal with the discharge of a trustee in terms of the trust deed. Sub-section e contemplates a voluntary act of the trustee with the consent of the beneficiaries whereas sub-section d and f contemplate the discharge of a trustee by the operation of law and judicial process. "the contingencies contemplated under subsections a to c of the Section 71 deal with the discharge of a trustee in terms of the trust deed. Sub-section e contemplates a voluntary act of the trustee with the consent of the beneficiaries whereas sub-section d and f contemplate the discharge of a trustee by the operation of law and judicial process. Section 73 contemplates the various other situations where an existing trustee may be replaced by a new trustee. The case does not fall under any one of the situations contemplated under sub-sections a to c and e of Section 71 of the Act, such as the trustee being declared as insolvent etc. One of such contingencies is the Principal civil court of original jurisdiction opines that the existing trustee is un-fit and personally incapable to act in the trust or accepted as an inconsistent trust. ( 21 ) THE language of Section 74 is important in this context. It speaks of either vacancy or disqualification, though the expression disqualification is not defined under the Act and no specific provision is made stipulating the disqualifications. From the scheme of Sections 73 and 74 it can only be inferred that some of the contingencies contemplated under Section 73 like absence of the trustee from India for a continuous period of six months or a departure of the trustee permanently from india or declaration that the trustee is insolvent or the declaration of the opinion of the civil Court that a trustee is unfit are the disqualifications contemplated under section 74. ( 22 ) IT is always a question of fact where a particular trustee incurred any one of those disqualifications and such a fact is required to be established in accordance with the procedure established by law. In the normal course such disputes are required to be resolved by the ordinary civil Courts in a suit. But Section 73 of the Trusts Act creates a special remedy, whereunder a petition to the Principal civil Court could be made. However such a remedy is available only to the beneficiaries of the trust. ( 23 ) HERE is a case where the petitioners are praying this Court to declare the second respondent unfit to act in the trust for the reason already mentioned above. However such a remedy is available only to the beneficiaries of the trust. ( 23 ) HERE is a case where the petitioners are praying this Court to declare the second respondent unfit to act in the trust for the reason already mentioned above. ( 24 ) TO decide the question whether the second respondent incurred any such disqualification as to be declared un-fit to act as trustee, it is required to be examined whether the second respondent in fact committed any breach of the obligations imposed on her in her capacity as a trustee by Law or the trust deed. It is a settled principle and needs no elaboration or authority to say that a trustee must, to the best of his or her ability, protect the trust property and the interests of the beneficiaries. It goes without saying that such a protection must be against illegal acts affecting the properties of the trust, for no trustee can be blamed for any act which is authorised or required by law but has the effect of diminuating the trust property or the interests of the beneficiaries. For example, a trustee cannot be blamed as not having protected the property of the trust or interest of the beneficiaries on the ground that the trustee paid some tax or other legal due under the law, though no doubt as a matter of fact both the property of the trust and interests of the beneficiaries are diminuated in the above-mentioned instance. ( 25 ) THE next question would be: what exactly is the illegal act or omission against which the second respondent did not protect the property of the trust or interests of the beneficiaries? That act is said to be the act of the first respondent purporting to extinguish the trust by the execution of ex. P9. The answer to this question depends on the inherent legality of the act of the first respondent in executing Ex. P9. ( 26 ) SECTIONS 6 and 7 of the Indian trusts Act deal with the creation of the trusts and as to the persons who could create the trusts. P9. The answer to this question depends on the inherent legality of the act of the first respondent in executing Ex. P9. ( 26 ) SECTIONS 6 and 7 of the Indian trusts Act deal with the creation of the trusts and as to the persons who could create the trusts. Section 77 deals with the extinction of the trusts, which reads as follows:"trust How Extinguished :a trust is extinguished (a) when its purpose is completely fulfilled; (b) when its purpose becomes unlawful; or (c) when the fulfilment of its purpose becomes impossible by destruction of the trust-property or otherwise; or (d) when the trust, being revocable, is expressly revoked. "the first three sub-sections deal with the extinction of the trust for reasons other than the revocation of the trust. Sub-section d provides that a trust is extinguished if it is expressly revoked provided it is a revocable trust. Section 78 deals with the revocation of trust. The first part of Section 78 deals with revocation of trust created by a will with which we are not concerned in this case. The later part of Section 78 deals with revocation of trust created otherwise than by way of a will. The relevant portion of section 78 reads as follows: (A) "where all the beneficiaries are competent to contract-by their consent;" (b) where the trust has been declared by a non-testamentary instrument or by word of mouth-in exercise of a power of revocation expressly reserved to the author of the trust; or (c) where the trust is for the payment of the debts of the author of the trust, and has not been communicated to the creditors at the pleasure of the author of the trust. " ( 27 ) AS it is already noticed from Ex. P3, the author described in clause 2, the trust to be a "irrevocable in nature and substance", therefore, the right to revoke the trust is not reserved by the author. On the other hand it is already noticed earlier that Ex. P3 makes positive provisions for the tenure of extinguishment under clauses 5 and 6 of the trust deed. P3, the author described in clause 2, the trust to be a "irrevocable in nature and substance", therefore, the right to revoke the trust is not reserved by the author. On the other hand it is already noticed earlier that Ex. P3 makes positive provisions for the tenure of extinguishment under clauses 5 and 6 of the trust deed. Therefore, both from the express language of clause 2 and by implication from the scheme of the trust deed, more particularly in the context of clauses 5 and 6 it must be held that the trust is an irrevocable trust in which case it could only be revoked and thereby extinguished with the consent of all the beneficiaries who are competent to contract. On the other hand Ex. P9 reads as follows:"i Anam Venkata Reddy, son of late Shri a. Sesha Reddy, residing at Kadiyam, east Godavari District, Andhra Pradesh, author and trustee of Anam Venkata Reddi family Trust, created by the Trust Deed executed on 21-10-1982 at Kadiyam, East godavari District, Andhra Pradesh and registered with the Sub-Registrar of rajahmundry on 30-11-1982 and bearing entry Number as Book IV-1982, page 263 D. No. 263 do hereby declare that the trust stands extinguished by its corpus becoming completely exhausted, and in fact of nil value to the beneficiaries, and consequently attracting the provision of section 77 of the Indian Trusts Act, putting an end to the continuance of the trust. It is therefore declared that the Anam venkata Reddi Family Trust no longer has existence, and its trust deed stands cancelled and this document is a confirmation of this fact of the trust s extinguishments. " ( 28 ) THE substance of the document is that the author of Ex. P9, who also is the author of trust makes a declaration that the trust stood extinguished by virtue of the fact that the corpus was completely exhausted and in fact of nil value the beneficiaries and therefore, attracts the provisions of Section 77 of the Trusts Act. The only reference if at all could be to clause (c) of Section 77. It is worthwhile mentioning that even in Ex. P9, the author does not mention that it is a revocable trust but claims that by virtue of application of section 77 (c) the trust stands extinguished. The only reference if at all could be to clause (c) of Section 77. It is worthwhile mentioning that even in Ex. P9, the author does not mention that it is a revocable trust but claims that by virtue of application of section 77 (c) the trust stands extinguished. One more significant distinction between sections 77 and 78 of the Trusts Act is that while Section 77 deals with the extinguishment of the trust Section 78 deals with the revocation of the trust. While in the case of extinguishment which occurs by virtue of the happening of certain events contemplated under Section 77 without reference to any act of the author, in case of revocation under Section 78, a positive act of revocation on the part of author or beneficiaries is required, whether a trust stood extinguished by virtue of the operation of Section 77 or not depends on the existence of certain facts. On the coming into existence of such facts whether anybody makes such a declaration of extinguishments or not the trust stands extinguished automatically. Where both the trustees and beneficiaries agree on the question of the existence of such facts no intervention of the individual bodies is required. In the absence of such an agreement the doctrine of the rule of law requires that the existence of such facts must be made by the Judicial bodies in accordance with the appropriate law but not otherwise and by only one of the interested parties. No doubt, even the author or trustee can seek the determination of such facts by resorting to appropriate proceedings in a given case, but the author or trustee cannot himself make a declaration to that effect and purport to extinguish the trust. The extinguishment, accruing under the first three sub-sections of Section 77 does not depend only on the declarations or understanding of either the author or any other person connected with the trust be as beneficiaries or the trustees. ( 29 ) A lot of evidence is adduced on either side to protect the respective cases of the parties on one hand to the effect that the trust property is destroyed and therefore the fulfilment of the purpose of the trust became impossible by the respondents and on the other hand the trust property was not so destroyed and therefore, it is still possible to give effect to the purpose of the trust. In my opinion such an enquiry is not permissible in a proceeding under section 74 and therefore not necessary for deciding the legality of the act of the first respondent in executing Ex. P9. The scope of enquiry under Section 74 is limited to the extent indicated therein at the instance of only the beneficiaries and it would be inconsistent with the scheme of the Trusts act and the obligations attached to the trustees to permit them to raise such pleas in defence. ( 30 ) FOR the above-mentioned reasons it must be held that Ex. P9 is without any legal efficacy and also the act of the first respondent in executing Ex. p9 and consequently seeking to have the property of the trust transmitted in his name must be held to be illegal and I fail to understand as to why would anybody acquire the property in his name if really the same is of nil value as declared by the 1st respondent that very act of transmission relies the declaration and makes the conduct of 1st respondent illegal and unfit for being a trustee. In which case the second respondent being a trustee is necessarily under obligation to protect the trust property and the interests of the beneficiaries. ( 31 ) BEFORE deciding what would be the effect of such an inaction on the part of the second respondent, I must necessarily deal with the 2 objections raised by the learned Counsel for the second respondent. The first objection is that when the petitioners are aware of the existence of Ex. P9, by which in the language of the learned Counsel for the respondent a cloud is created on the right of the petitioner, the petitioners could not ask for a relief such as the one prayed in the present petition without first seeking the declaration to the effect that the document ex. P9 is a void document. The second objection is that the petitioners herein being the ultimate beneficiaries of the trust but not the immediate beneficiaries, cannot maintain the present petition as they have no immediate cause of action. ( 32 ) THE first submission of the learned counsel for the respondent which is stated to be based on Section 34 of the Specific relief Act, 1963. ( 32 ) THE first submission of the learned counsel for the respondent which is stated to be based on Section 34 of the Specific relief Act, 1963. Section 34 reads as follows:"any person entitled to any legal character, or to any right as to any property may institute a suit against any person denying, or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief: provided that no Court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so. " ( 33 ) THE emphasis of the learned counsel for the second respondent is on the proviso to the section. In my view Section 34 has no application to a petition presented under Section 74 of the Indian Trusts Act. Section 34 deals with the scope and the limits of the jurisdiction of a Court in a suit of the nature contemplated under section 34, as it can be seen from the language of Section 34 categorically states "may institute a suit. " "and the proviso declares that no Court shall make. " No doubt, section 74 of the Trusts Act requires a petition to be filed to the civil Court but then it is only a petition and not a suit, more particularly the very section seeks to emphasise that "the beneficiary may without instituting a suit apply by petition. " I am therefore, of the opinion that the objection raised under Section 34 of the Specific Relief act is not tenable. The Legislature obviously thought that the beneficiaries should not be burdened with the technicalities of an ordinary civil suit. However, in support of the submission, the learned Counsel sought to rely on the decisions rendered in Pratap narain v. Sri Krishna Chandra, AIR (35) 1948 Pat. 28, R. Mathalone v. Bom. Life assure, Company, AIR 1953 SC 385 , and k Nadar v. S. Subbier, AIR (20) 1948 mad. 420. I do not propose to go into the ratio decidendi of the above-mentioned three judgments. 28, R. Mathalone v. Bom. Life assure, Company, AIR 1953 SC 385 , and k Nadar v. S. Subbier, AIR (20) 1948 mad. 420. I do not propose to go into the ratio decidendi of the above-mentioned three judgments. It would be sufficient to say of all the three decisions were rendered in appeals arising out of suits filed in ordinary civil Courts and not in any petition filed under Section 77 of the Trusts act. ( 34 ) THE second submission of the learned Counsel for the respondent is that the petitioners are not immediate beneficiaries but ultimate beneficiaries therefore they have no cause of action. I am of the opinion that Section 74 does not make any such distinction between the immediate beneficiaries and ultimate beneficiaries. The fact remains that the petitioners do have an interest in the preservation of the property of the trust, whether they are entitled to receive any immediate benefit from the properties of the trust or not ? If the trust is either destroyed or mismanaged or some other way made un-available for the ultimate benefit to the petitioners, the petitioners, in my view do have the necessary cause of action and the locus standi to maintain the present petition in this respect. The language of Section 74 insofar as it says. "the beneficiary may" apply by petition is wide enough to include both immediate and ultimate beneficiaries. In this context a judgment of the Bombay High Court reported in Ahmed Asmal v. Bai Bibi, ILR 44 Bom. 727, dealing with a question whether a reversionary who is entitled to succeed the property after the life time of the life estate holder to maintain an application for the appointment of receiver a division Bench of Bombay High Court held that such an application is maintainable to protect the interest of the reversionary though they might not have any immediate interest of the property that might be the subject matter of the dispute. ( 35 ) COMING to the question of relief, there is no evidence on record to establish that the second respondent was in any way responsible for the execution of the Ex. P9 except an allegation in the pleadings. The mere fact that she did not prevent the execution of Ex. ( 35 ) COMING to the question of relief, there is no evidence on record to establish that the second respondent was in any way responsible for the execution of the Ex. P9 except an allegation in the pleadings. The mere fact that she did not prevent the execution of Ex. P9 and the consequential transmission of the property of the trust to the first respondent by itself in my view may not render the second respondent unfit for acting as a trustee in the absence of. . . . . . . . . . . . . . . . . . . . More particularly in view of the fact that she is also one of the beneficiaries under the trust deed and by virtue of the extinguishment of the trust she would also loose the beneficial interest, which is created in her favour by the trustee. However, having regard to the above-mentioned factual back ground, and the availability of only one trustee as against the requirement of the trust deed to have a minimum of five trustees and the impracticability of new trustee being appointed under the provisions of the trust deed as the appointment procedure contemplated under clause 10 pre supposes the existence of "board" of trustees which implies the existence of more than one trustee and having regard to the language of Section 74 of the Trusts Act which empowers this Court to appoint trustees in such a situation respondents 4 and 5 are appointed as trustees along with the second respondent. ( 36 ) ON 12-4-2001 this Court dictated a substantial portion of the order in the open court, this Court felt having regard to the facts and circumstances, it is desirable to have a Trust Board consisting of five members for the 12th respondent trust and in view of such a decision with due regard to the scheme and language of the trust deed, this Court expressed that in all five trustees should be appointed, of whom three trustees should be from among the members of the family of the author of the trust, who are parties before this Court in the present op and two persons who are not members of the family of the author of the trustee. However, for making a choice of the outsiders this Court adjourned the matter as it required some examination and identification of the suitable persons for this purpose. At that stage on 15-4-2001 when the matter was listed, the learned Counsel for the petitioner made a representation that on the question of the number of outsiders who are not members of the family to be appointed as trustees the petitioners have further submission to make. Therefore, the matter was directed to be listed on 20-4-2001 on which date the matter was adjourned at the request of the learned counsel for the petitioners. ( 37 ) TODAY when the matter is taken up, the learned Counsel for the petitioners submitted that in view of the fact that it is a private trust meant only for the benefit of the family of the author and further in view of the fact that all the ultimate beneficiaries are the petitioners before this court and also in view of the fact that except the second respondent rest of the members of the family of the author of the trust for whose benefit the trust was created, which members include both the immediate and ultimate beneficiaries of the trust, are of the opinion that it is not really necessary to have two outsiders as members of the trust board and as the trust deed is elastic enough enabling the appointment of either one or two outsiders as trustees. The learned counsel submitted that the Court may consider the appointment of only one outsider as a trustee. It is further submitted by the learned Counsel that the main asset held by the 12th respondent trust happens to be the shares of the 13th respondent company. Apart from the shares held by the 12th respondent Trust, the interest of the second respondent in the 13th respondent company is only 0. 73% whereas the respondents 4 to 10 who are sailing with the petitioners herein, among themselves hold approximately about 14% of the shares in the 13th respondent company. Therefore, the decisions of the Trust Board assume great importance in the matter of the management of the 13th respondent company. The learned counsel therefore, prayed that this Court may limit the induction of outsiders into the trust Board to only one person. Therefore, the decisions of the Trust Board assume great importance in the matter of the management of the 13th respondent company. The learned counsel therefore, prayed that this Court may limit the induction of outsiders into the trust Board to only one person. In fact two affidavits given by the mother and next friend of the 3rd petitioner and the 6th respondent who is the father of the second petitioner are filed in support of the submission. ( 38 ) ON the other hand, the learned counsel for the second respondent argued that limiting the number of trustees who are not members of the family of the author, to only one in the context of the Trust Board which consists of five members would be contrary to the scheme of trust deed, more particularly clause 13 of the trust deed and it virtually amounts to the amendment of the trust deed. Clause 13 reads as follows:"the members of the Board of Trustees shall be three or four from the family of the author, where the trustees are five and four or five where the trustees are seven. The duration of the office of the family member shall be for life, unless he or she resigns, or is removed. The duration of the office of the non-family member (trustee) shall be for a period of three years at a time, and he is eligible to be reappointed as a trustee. " ( 39 ) IT is clear from the language of clause 13 of the trust deed it is clear that where the total membership of the Trust board is to be 5 members, the deed contemplate the appointment of one or two outsiders and therefore, the submission of the learned Counsel for the second respondent cannot be accepted. The other submission made by the learned Counsel for the second respondent is that the respective percentage of the shares held in the 13th respondent company is an irrelevant consideration for the purpose of deciding the number of outsiders who are not members of the family of the author. In my view though the respective share holding strength of the parties may not be the only consideration in deciding the number of trustees who are not members of the family, it is one of the relevant considerations in deciding the issue. In my view though the respective share holding strength of the parties may not be the only consideration in deciding the number of trustees who are not members of the family, it is one of the relevant considerations in deciding the issue. As eventually the substantial assets held by the 12th respondent trust appears to be only the shares of the 13th respondent company and the decisions of the Trust Board would certainly have a great bearing on the management of the 13th and 14th respondent companies. ( 40 ) IN the circumstances, I am of the opinion that only one person who is not a member of the family of the author of the trust should be appointed as the trustee. In such case apart from the members already indicated earlier on 12-4-2001 one more member from the family of the author of the trust deed is required to be appointed. In the circumstances, Smt A. Uma Reddy who is the mother and next friend of the third petitioner is appointed to be the 4th trustee and Sri D. J. Jagannadha Raju, a former judge of this Court is appointed to be the 5th trustee. The term of Sri D. J. Jagannadha raju to act as trustee of the first respondent trust is for a period of three years from the date he receives a copy of this order. He would be entitled to claim reimbursement of the amount actually incurred by him in connection with the discharge of the duties as the trustee of the 12th respondent trust. Apart from that, both the learned Counsel agreed to a suggestion of the Court that Sri d. J. Jagannadha Raju be paid sitting fee of rs. 5,000/- for each meeting of the Trust board. ( 41 ) THE said payment of the sitting fee should be made by the remaining members of the Trust Board.