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2013 DIGILAW 133 (CAL)

Vijay Kumar Agarwal v. Ajoy Agarwal

2013-03-06

ASHIM KUMAR BANERJEE, MRINAL KANTI CHAUDHURI

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JUDGMENT Ashim Kumar Banerjee, J. These five appeals would relate to an order of injunction passed in the first two applications being GA No. 1336 of 2008 and GA No. 3330 of 2008 and dismissal of the other three applications being GA No. 3814 of 2008, 3234 of 2008 and 3814 of 2008. His Lordship dealt with and disposed of all the five applications by a common judgment and order that was impugned herein. We thus dispose of the five appeals arising out of those five applications by the fore-going judgment and order. The respondent No. 1 filed a suit being CS No. 83 of 2008 inter-alia praying for removal of the trusties of a private trust being Prayag Devi Trust. It was alleged, trust was not managed properly and the Trustees being the defendants No. 1, 2 and 3. Vijay Kumar Agarwal, Madhu Agarwal and Amit Kumar Agarwal were acting in detriment to the interest of the beneficiary. They committed breach of trust. Simultaneously with the filing of the suit, the plaintiff also made application for appropriate management of the trust properties. There were several applications that were disposed by a common judgment and order delivered by the learned Single Judge on August 16, 2010. The present appeals would however principally relate to the order passed in GA No. 3330 of 2008 pertaining to Allahabad property that the defendant would contend, outside the scope of the trust. The respective memorandum of appeal would however, relate to the orders passed by His Lordship in respect of all the applications. Mr. Pratap Chatterjee learned senior counsel, appearing in support of the appeals would contend, the respondent-plaintiff never asked for injunction in respect of the partition suit pending in the Allahabad Court. Trust, in any event, was not a party either in the Calcutta suit or in the partition suit. Hence, the observation of His Lordship with regard to not making the trust a party in the Allahabad suit was erroneous. The order of injunction passed in respect of Allahabad property could thus not be sustained. He would contend, the suit was in effect a suit for land as it would relate to Allahabad property situated admittedly outside the territorial jurisdiction of this Court. Elaborating his argument, Mr. The order of injunction passed in respect of Allahabad property could thus not be sustained. He would contend, the suit was in effect a suit for land as it would relate to Allahabad property situated admittedly outside the territorial jurisdiction of this Court. Elaborating his argument, Mr. Chatterjee would refer to various orders passed by the Allahabad High Court in the writ petition as also the civil suit filed at Allahabad inter-alia asking for partition of the Allahabad property that the learned Judge failed to appreciate. He prayed for setting aside of the judgment and order of His Lordship and dismissal of the applications made by the plaintiff before the learned Single Judge. Per contra, Mr. Reetobrata Mitra learned counsel referred to the prayers of the petition made under Section 34 of the Indian Trust Act made by the trusties for sale of the Allahabad property. The prayers appearing at page 73 of the paper book in Appeal No. 64 of 2011 are quoted below: a) “Leave be given to your petitioners as trustee of Prayag Devi trust of No. 7, Jatindra Mohan Avenueto sell premises Nos. 12, Chowk now known and numbered as 23, Chawk and 256 Chawk, Allahabad to the highest bidder either by public auction or by private treaty, by advertisement Amrit Patrika at Allahabad. b) Leave be given to your petitioners as such trustees to invest the sale proceeds of the said two premises firstly in payment to U.P. Government for renewal of loose of No. 20 Thornholl Road Allahabad and thereafter the balance in the purchase of Bonds issued by the Unit Trust of India and/or National Saving Certificate or any other Government security.” He would also refer to paragraph 12 of the said application appearing at page 70 thereof, wherein the appellant contended as follows: “They said premises No. 20 Thornhill Road, is a leasehold property granted by the Government of Uttar Pradesh and in order to renew the said lease a sum of Rs.40,000/-is required to be paid to the Government of Uttar Pradesh, the owner of the said land. The total money available in the trust and in the Bank account and certain deposits of the trust is not sufficient to enable the Trustees to deposit the said amount for renewal of the said lease, which is a very valuable property and as such it is very much difficult to retain the said premises No. 20, Thornhill Road, unless deposit of the premium towards renew 1 of the lease to the Government of Uttar Pradesh is made. This is only possible if the premises No. 12, chows and 256 Chawk are sold.” According to Mr. Mitra, the appellant himself prayed for sale of the Allahabad property before this Court under Section 34 of the Indian Trusts Act. Hence, they were precluded from contending otherwise. Referring to the memorandum of understanding relied on by the appellants before the Allahabad Court appearing at pages 158-161 of the paper book, Mr. Mitra would contend, the said agreement was entered into on September 19, 1994. He referred to the trust appearing at pages 41-51 particularly, Clause 14 and 15 to say, the trust would continue for twenty years after the death of the children of the settlor, i.e. Kali Prosad, Durga Prosad, Bhagawati Prosad, Krishna Kumar, Balaram Kumar, Vinayak Kumar and Binay Kumar. Since some of them were still alive the trust would still subsist. Referring to the writ petition Mr. Mitra would contend, the plaintiff was not a party to the said proceeding. He prayed for dismissal of the appeals. Mr. Amar Nath Das, learned Counsel appearing for the respondent No. 7 adopted the argument made by Mr. Mitra on behalf of the respondent No. 1. He would add, the office of the trust was situated at Calcutta. The application under Section 34 of the Indian Trusts Act was made before this Court. In the said application the appellant admitted, the Allahabad property would belong to the trust hence, they would not be entitled to contend otherwise. He also added, the Trustees did not render any account that would make their position vulnerable. While giving reply, Mr. Chatterjee contended, Allahabad property was not a free hold property. It was subject to a lease granted by the State of UP. The lease expired by efflux of time. Hence, the trust did not have any interest at all in the said property in question. While giving reply, Mr. Chatterjee contended, Allahabad property was not a free hold property. It was subject to a lease granted by the State of UP. The lease expired by efflux of time. Hence, the trust did not have any interest at all in the said property in question. The appellant applied for a fresh lease being entered into in the name of his branch that was pending for consideration at the end of the State of U.P hence, the said property could no more be said to be a trust property. We have considered the rival contentions. From the application made under Section 34 of the Indian Trusts Act we would find, the appellant group admitted, Allahabad property was part of the trust estate. While giving reply, Mr. Chatterjee also admitted it to be so. Once the lease had expired by efflux of time the Trustees were entitled to apply for renewal of the same. The appellant, being a Trustee, was not entitled to act contrary to the interest of the trust. A Trustee is a legal owner of the trust property and would hold the same for the benefit of the beneficiary. Acting contrary thereof, would make his position vulnerable. The decision of the Apex Court in the case of W.O. Hol’sworth and others –Vs-The State of Uttar Pradesh reported in 1957 Volume 44 All India Reporter, Supreme Court page- 887 would make it clear, the legal estate is vested in the Trustees and they held it for the benefit of the beneficiaries. The learned Judge rightly allowed the application for interim protection including the protection of Allahabad property that could not be called in question. Lot of emphasis was on the contention, it was a suit for land. We have examined the prayers of the plaint. The suit was for removal of the Trustees and for effective management of the trust. The trust would include many properties both within and outside the jurisdiction of this Court. Hence, the suit could not be said to be a suit for land. The prayers of the suit being relevant herein, are quoted below: a) “Decree for removal of the respondents Nos. 1, 2 and 3, or such of them as this Hon’ble Court deems fit and proper, as trustees of the Prayag Devi Trust. b) The respondent Nos. Hence, the suit could not be said to be a suit for land. The prayers of the suit being relevant herein, are quoted below: a) “Decree for removal of the respondents Nos. 1, 2 and 3, or such of them as this Hon’ble Court deems fit and proper, as trustees of the Prayag Devi Trust. b) The respondent Nos. 1, 2 and 3 be directed to render true and faithful accounts of “Prayag Devi Trust” and to pay such amount as may be found due on accounts being taken. c) An investigation be made into the accounts of the estate of “Prayag Devi Trust” by an independent and fit person to be appointed by this Hon’ble Court. e) Two trustees of “Prayag Devi Trust” are appointed by this Hon’ble Court in terms of Clause 9 of the Deed of Trust. f) Decree for mandatory injunction be passed directing the respondents Nos. 1,2 and 3 to disclose all information’s regarding the investment of the sale proceeds of premises No. 23 (formerly 12) Chawk and 256 Chawk (subsequently numbered as 247 Chawk), Allahabad, 58, Wellington Street, Kolkata, and other immovable properties of the said Trust mentioned in paragraph 9 hereof. g) A decree be passed restraining the respondents from withholding and/or suppressing any information regarding the sale and investment of the sale proceeds of the immovable properties of the said Trust Estate mentioned in paragraph 9 hereof. h) Investigation into dealings of the respondents Nos. 1, 2 and 3 with the assets, both movable and immovable, of the said Trust and such decree for payment of compensation to the said Trust Estate by the defaulting trustee/trustees. i) Receiver, j) Costs, k) Such further order and/or other order or orders as this Hon’ble Court may deem fit and proper.” The appellants filed a supplementary affidavit placing on record various orders passed by the Allahabad Courts relating to the Allahabad property. We would find, the appellant filed a writ petition before the Allahabad High Court with regard to the expired lease. The Allahabad High Court asked the authority to consider the said application upon hearing the parties. Accordingly, a reasoned order was passed. The facts would, however, depict, step taken by the appellant was detrimental to the trust as he wanted to have the lease in the name of his family members to the exclusion of the trust. The Allahabad High Court asked the authority to consider the said application upon hearing the parties. Accordingly, a reasoned order was passed. The facts would, however, depict, step taken by the appellant was detrimental to the trust as he wanted to have the lease in the name of his family members to the exclusion of the trust. In GA No. 1336 of 2008 His Lordship granted an order of injunction restraining the appellant and the other two trustee respondents being Madhu and Amit, from dealing with the affairs of the trust. His Lordship also confirmed the interim order passed in GA No. 3330 of 2008 by protecting the interest of the parties in Allahabad property. His Lordship dismissed the other three applications in view of the order of injunction passed in the first two applications. We do not find any scope of interference. The appeals fail and are hereby dismissed. There would be no other as to costs. Before parting with we would say, the learned Judge could have avoided the unpleasant remarks on the orders of the Allahabad Courts. It would have been nice, if His Lordship would deliberate on the issue interpreting the orders in the present context without making any comment that would be otherwise hurting the Courts of Allahabad. Urgent certified copy of this judgment, if applied for, be given to the parties on their usual undertaking.