JUDGMENT
1. This is a defendant’s appeal against the order dated 20-2-1986 passed by the Civil Judge, Gadag, in O.S. No. 157 of 1985 allowing I.A.No. 3 and appointing the Receiver.
2. The appellant is the defendant in the suit. The respondents in the appeal are the plaintiffs. The parties have been referred to with reference to their position in the trial Court.
3. Plaintiff-1 is the son of Shamji and plaintiff-2 is the wife of Shamji. Shamji’s father had created a Trust known as ‘Shamji Karamsey Trust’ and he was the managing trustee himself during his lifetime. Plaintiff-2 who is the wife of Shamji, was also co-opted as a co-trustee. It is undisputed that on the death of Shamji’s father, Shamji and his wife plaintiff-2 were co-trustees of the Trust in question.
4. It is undisputed that the said Shamji leased out the suit trust property to the defendant initially in 1971 and thereafter the lease was again renewed by Shamji on 29-8-1980 which came to an end on 30th September, 1985. The plaintiffs contend that the lease created by Shamji in favour of the defendant is bad at law and is invalid and void ab initio and does not convey any right, title or interest to the defendant and that the defendant is a trespasser in possession of the suit property. So the plaintiffs filed the suit for a declaration that the lease created by Shamji in favour of the defendant was invalid and not binding on the trust and for possession of the property.
5. The defendant resisted the suit.
6.The plaintiffs filed an application I.A.No. 3 under Order 40, Rule 1, C.P.C for appointment of a Receiver alleging that the lease created in favour of the defendant by Shamji is illegal and void ab initio and that the defendant is a trespasser and that the defendant is intending to transfer the leasehold rights in favour of third parties and that the defendant was not at all paying rent and the injury was being caused by the defendant to the property and to the trust.
7. The defendant resisted the petition.
8. The trial Court appointed a Receiver. Hence the appeal.
9. It is undisputed that Shamji and the plaintiff No. 2 were co-trustees and at the time when the lease was created by Shamji in favour of the trust property. Admittedly there is no document to show that Shamji was the managing trustee. It is undisputed that there is nothing in the trust deed to show that Shamji should become the managing trustee after the death of the author of the trust. In the absence of any document to indicate that Shamji was the managing trustee, it cannot be inferred that Shamji was a managing trustee. Merely because Shamji might be stating at some time or the other that he alone was managing the trust, one cannot jump to the conclusion that he is a managing trustee of the trust in question.
10. The learned counsel Shri Narayana Rao relied on Sections 15 and 36 of the Trusts Act. Section 15 of the Trusts Act reads as : –
“A trustee is bound to deal with the trust-property as carefully as a man of ordinary prudence would deal with such property if it were his own; and, in the absence of a contract to the contrary, a trustee so dealing is not responsible for the loss, destruction or deterioration of the trust-property.”
Section 15, as extracted above, only demands of the trustee to deal with the property as if the property was his own and as if any reasonable person of ordinary prudence would deal with such property as if it was his own. Therefore Section 15 will not help the learned counsel Shri Narayana Rao for the appellant to show that the lease created by Shamji who was one of the co-trustees, was according to law.
11. Section 36 of the Trusts Act reads as :-
“In addition to the powers expressly conferred by this Act and by the instrument of the trust, and subject to the restrictions, if any, contained in such instrument, and to the provisions of Section 17, a trustee may do all acts which are reasonable and proper for the realization, protection or benefit of the trust property, and for the protection or support of a beneficiary who is not competent to contract.”
Section 36 only enables the trustee to do all acts which are reasonable and proper for the realization, protection or benefit of the trust property, and for the protection or support of a beneficiary. The word ‘trustee’ used in S. 36 though used singularly would include the body of trustees. Therefore Section 36 will not help Shri Narayana Rao in showing that any one of the trustees can deal with the trust property to the exclusion of the other trustees. On the other hand, Section 48 of the Trusts Act reads as:-
“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 wisdom behind enacting Section 48 is quite obvious, because the law requires that one trustee should not deal with the property to the exclusion of the other trustees.
12. In Janakirama Iyer v. Nilakanta Iyer, , it has been clearly laid down by the Supreme Court that if all the trustees do not join in execution of the conveyance of the trust property, the conveyance is invalid and such a conveyance passed no title to the alienees. All trustees form one collective trustee and must exercise powers in joint capacity and not separately (vide AIR 1918 Cal 810).
13. It is laid down in AIR Manual, Vol. 21, 3rd Edition, on page 385 as :-
“Two or more trustees appointed. They all form but one collective trustee and they must exercise jointly all these powers that call for their discretion and judgment unless the instrument of trust authorises a sole trustee to execute the trust and the powers thereof. The body of co-trustees can authorise one of them to perform acts which cannot conveniently be performed by them all, but the trustee who is so authorised is considered to be an agent of all co-trustees and not as an individual trustee” (vide ).
It is also laid down on page 386 as :–
“Co-trustees cannot act singly – Managing trustees have no power to create lease without concurrence of other trustees.” (vide ).
Admittedly in this case the lease is created by Shamji alone. Therefore in view of the said decisions and especially in the light of the principles laid down by the Supreme Court in the said case and in view of the clear provisions contained in Section 48 of the Trusts Act, it follows clearly that the lease created by Shamji alone to the exclusion of the co-trustee plaintiff-2, is bad at law and does not convey any title to the defendant-transferee. Therefore, the lease which is a transfer within the meaning of S. 105 of the Transfer of Property Act, created by one of the co-trustees viz., Shamji alone, is bad at law and does not convey any right, title or interest to the defendant.
14. The learned counsel Shri Narayana Rao urged that such a case had not been made out in the affidavit annexed to I.A.No. 3 filed under Order 40 Rule 1, C.P.C. It is clearly mentioned in I.A.No. 3 that the defendant is a trespasser. How he is a trespasser is only a matter of evidence and it can be substantiated by the material on record. A pleading is not expected to contain all the evidence which the party is expected to lead in the matter. Therefore, the said argument advanced by the learned counsel Shri Narayana Rao, only merits to be rejected.
15. Then the learned counsel Shri Narayana Rao submitted that there was no allegation of waste or damage made out by the plaintiffs and therefore the Receiver should not be appointed. He relied for this purpose on Aisamma v. Mohammad, (1967) 2 Mys LJ 586. Govinda Bhat, J. as he then was, stated in the said case as:-
“The expression ‘just and convenient’ in Order 40, Rule 1, C.P.C. means that the Court should make appointment of a receiver for protection of rights or prevention of injury. The Court has to consider whether special interference with the possession of the party to the suit is required, there being well-founded fear that the property in question will be dissipated or that irreparable mischief may be done, unless the Court gives its protection. The discretion of the Court has to be exercised for the purpose of promoting ends of justice.”
It is further stated on page 588 as:–
“The fact that the Court has the discretion to appoint a Receiver for the property in suit, where it appears just and convenient, does not mean that the Court has to appoint a Receiver merely because the Court thinks it convenient; the expression ‘just and convenient’ means that the Court should make the appointment for protection of rights or prevention of injury. The Court has to consider whether special interference with the possession of the party to the suit is required, there being well-founded fear that the property in question will be dissipated or that irreparable mischief may be done, unless the Court gives its protection.”
It has also been hinted in the said case that in the case of a joint property or a joint family property, if only one person is in possession to the exclusion of others, a Receiver may be appointed for the protection of the rights of the parties.
16. The learned author Shri Mulla in his C.P.C. 13th Edition, Vol. II, page 1535 has stated as:–
“The words ‘just and convenient’ do not mean that the Court is to appoint a receiver simply because the Court thinks it convenient; they mean that the Court should appoint a receiver for the protection of rights or for the prevention of injury according to legal principles. The order is discretionary and the discretion must be exercised in accordance with the principles on which judicial discretion is exercised. Hence, the Court should not appoint a receiver of property in the possession of the defendant who claims it by a legal title, unless the plaintiff can show prima facie that he has a strong case and a good title to the property.”
(Underlining is mine).
In this case it has been already shown above that the lease created by Shamji in favour of the defendant, does not convey any title to them. Therefore, the defendant can be said to be in possession of the property only as a trespasser. As against the plaintiffs who are the trustees, the defendant cannot be said to have any better title at all. Therefore as stated by the learned author Shri Mulla above, when the plaintiffs show a better legal title and the defendant has rather no title at all, it would be a clear case for the appointment of a Receiver. Not only that, in this case an affidavit has been filed on behalf of the defendant. It is dated 29-7-1986. It clearly shows that the defendant wants to contend that some amount has been given in advance to Shamji and that whatever rents fell due, it was being adjusted by them. Admittedly Shamji had been removed from trusteeship by the Bombay High Court in 1983. That order passed by the Bombay High Court removing Shamji from trusteeship is confirmed by the Supreme Court. Notwithstanding the same, the defendant wants to contend that they have been adjusting even the rental falling thereafter due towards that amount which they claim to have given to Shamji by way of advance. Not only that, the affidavit shows that in 1984 Shamji was again given Rs. 2,000/- and it was adjusted by them towards rent. Therefore this payment of Rs. 2,000/- to Shamji even after he was removed from the trusteeship by the Bombay High Court and the Supreme Court, would be clearly a case of causing injury to the trust property and it would be clearly a case of jeopardising the interest of the trustees and it is nothing but an act of dissipating the trust property itself. Notwithstanding the order passed by this Court directing the defendant to deposit the rent, the defendant has not deposited the rent at all. Shamji is dead long back. Notwithstanding his death, still the defendant has not chosen to deposit any rental in the Court. Therefore it is a clear case of causing injury or damage to the trust property in question.
17. According to the learned counsel Shri Sanghavi, one of the partners of the defendant-firm has filed a suit on the file of the Civil Judge, Hubli, in O. S. No. 232/1983 for dissolution of the partnership. He placed before me a letter sent by one of the partners to the plaintiffs. Shri Sanghavi submitted that the plaintiffs had made out a case about the filing of this suit for dissolution in one of the affidavits filed in this Court and that had not been denied by the other side. This very circumstance would go to show that the partners of the defendant firm have started quarrelling between themselves and that itself is an act sufficient to connote the damage or dissipation to the property that is likely to be caused by the defendant.
18. Shri Sanghavi then submitted that the said Shamji before the expiry of the lease for five years created under the lease deed dated 30th August, 1980, purported to create another lease deed dated 21-10-1981 renewing the lease from 1-10-1985 to 30-9-1990. He then placed before me a decision of the Madras High Court reported in Kenath Puthen Veettil Koppassa Menon Kenath Achan Avergal v. Karumathil Kalliani Amma, 1923 Mad WN 807: (AIR 1923 Mad 700). It has been stated in the said case as: –
“A renewal of a Kanom by a Karnavan before the expiry of its period when such renewal is to take effect from the date of expiry is not valid unless it is shown to be for necessity.”
19. Shri Sanghavi also placed before me another decision reported in Neelivathakathoot Lakshmi Amma v. Neelivathakathoot Kunhi Raman Nambiar, 1932 Mad WN 543 in which it has been clearly stated as:-
“Neither a karnavan nor a trustee can grant a fresh lease anticipatively with effect from the expiry of the lease at the time in force because that would tend to fetter the discretion of his successor. But both are entitled to obtain a surrender of a lease from a lessee before its expiry and thereupon to grant a fresh lease with effect from the date of surrender.”
Therefore in this case as Shamji has attempted to renew the lease even long before the expiry of the lease, it would be a case of causing injury to the trust property and it would amount to dissipation of the trust property itself. Therefore in this case the plaintiffs have not only shown that irreparable injury is being caused to the trust property but also they have shown that the acts of Shamji amount to dissipation of the trust property. Therefore it would be just and convenient, under the circumstances, to appoint a Receiver.
20. The learned counsel Shri Narayana Rao for the defendant submitted that even though the period of lease had expired, the defendant was a statutory tenant within the meaning of the Karnataka Rent Control Act and that he cannot be evicted except by due process of law. He relied for that purpose on the definition of the word ‘building’ given in Section 3(a) and on the definition of the word ‘premises’ given in Section 3(n) of the Karnataka Rent Control Act, 1961. According to him what has been leased out is the building or the premises and therefore he was entitled to the protection of the Karnataka Rent Control Act. If a running factory is leased out, it will not come within the meaning of the word ‘building’ or ‘premises’. What can be leased out and what is protected under the Karnataka Rent Control Act is the lease of a building for residential or non-residential purposes. If a running factory is itself leased out, it cannot be considered to be a lease of the building or the premises. Whatever it is, it has been already shown above that the lease purported to be created by Shamji in favour of the defendant, does not convey any right, title or interest to the defendant and that the defendant is thus a trespasser. Therefore the question of the defendant being a statutory tenant and the question of the defendant being entitled to the protection of the Rent Control Act as statutory tenant, does not crop up at all in the present case.
21. According to the learned counsel Shri Narayana Rao, the defendant is not going to sub lease the property. Except the bald affidavit, there does not appear to be any material, at this stage, to indicate that the defendant has been contriving to sub lease the property.
22. But whatever it is it has been already shown above that the defendant is a trespasser and he has no right, title or interest to remain in the property as against the plaintiffs who are the co-trustees of the trust which is the owner of the suit property. As already stated above, the fact that the defendant has not even chosen to pay the rent at all itself is an act of causing injury to the trust property. Therefore, under these circumstances, the trial Court rightly appointed the Receiver.
23. In the result, the appeal is dismissed.
24. No costs in this appeal.
25. Whatever observations have been made above by me are only for the purpose of disposing of the interim application filed under Order 40, Rule 1, C.P.C. The trial Court while disposing of the suit, should proceed to dispose of the suit on merits.
26. Shri Sanghavi submitted that it should be specifically stated that the stay order already granted has already come to an end. When the appeal itself is disposed of, the stay already granted automatically comes to an end and it has come to an end.
27. At this stage, the learned counsel Shri Narayana Rao submitted that his client wants to approach the Supreme Court. He wants to challenge this order by taking the matter to the Supreme Court. Normally, a view should not be thrust on the party. If he feels that he is not satisfied with the order passed by this Court, there should be a chance for him to approach the higher Court and normally in all such cases whenever the party desires to approach the Supreme Court, I have been granting stay of the operation of the order in order to enable the party to approach the Supreme Court. Hence, under these circumstances, in order to enable the defendant to approach the Supreme Court, the stay of the operation of this order till 6-2-1987 is granted. It is made clear that stay will not be continued thereafter.
28. The learned counsel Shri Shangavi submitted that the defendant has been attempting to remove the genuine parts of the machinery and has been attempting to substitute the fake parts and that atleast an inventory should be made in the meanwhile. He may move the trial Court for the purpose of making an inventory and I make it clear that the stay granted, at this stage, will not come in the way of making an order for inventory.
29. Appeal dismissed.