IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28-8-2008 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM AND THE HONOURABLE MR.JUSTICE M.VENUGOPAL O.S.A.Nos.294, 295, 298 and 299 of 2007 and MP Nos.1/2007, 1/2007 & 1/2008 in OSA 294/2007 and 295/2007 2 and 9/2008 in OSA 294/2007 and 1/2007 in OSA 298/2007 OSA 294/2007: 1.M.E.Devarajan 2.Sriram Educational Trust Represented by its Chairman M.E.Devarajan 3.Dr.K.Bakthavatchalu 4.M.D.Kasthuri .. Appellants vs 1.B.Adhikesavalu 2.L.Kesavalu Naidu 3.K.Venkatarathnam 4.Kasthuri Parthasarathy 5.V.Venkiateswaralu Naidu 6.V.Ellammal 7.K.Babu 8.G.V.Lakshminarayanan .. Respondents
OSA 295/2007:
1.M.E.Devaraj 2.Dr.K.Bakthavatchalu 3.M.D.Kasthuri .. Appellants vs 1.L.Kesavalu Naidu 2.K.Venkatarathnam 3.B.Adhikesavalu 4.V.Venkiateswaralu Naidu 5.Kasthuri Parthasarathy 6.G.V.Lakshminarayanan 7.V.Ellammal 8.K.Babu .. Respondents OSA 298/2007: K.Babu .. Appellant vs 1.L.Kesavalu Naidu 2.K.Venkatarathinam 3.B.Adikesavalu 4.V.Venkateshewaralu Naidu 5.Kasthuri Parthasarathy 6.M.E.Devarajan 7.G.V.Lakshminarayanan 8.Dr.K.Bakthavatchalu 9.M.D.Kasthuri 10.V.Ellammal .. Respondents OSA 299/2007: K.Babu .. Appellant vs 1.B.Adikesavalu 2.L.Kesavalu Naidu 3.K.Venkatarathinam 4.Kasthuri Parthasarathy 5.V.Venkateshewaralu Naidu 6.V.Ellammal 7.Sriram Educational Trust Rep. By its Chairman M.E.Devarajan Office at 18, Eening Bazaar Road Chennai 600 003. 8.M.E.Devarajan 9.G.V.Lakshminarayanan 10.Dr.K.Bakthavatchalu 11.M.D.Kasthuri .. Respondents Original side appeals preferred under Order XXXVI Rule 1 of the Original Side Rules read with Clause 15 of the Letters Patent against the judgment and decree passed by this Court dated 21.9.2007 in C.S.Nos.1620 and 2078 of 1995. For Appellants : Mr.T.V.Ramanujun Senior Advocate for Mr.T.V.Krishnamachari for appellants in OSA 294 & 295/2007 Mr.P.S.Raman, Senior Advocate for Mr.N.S.Nandakumar for appellants in OSA 298 and 299/2007 and 7th respondent in OSA 294/2007 and 8th respondent in OSA 295/2007 For Respondents : Mr.T.R.Rajagopalan Senior Advocate for Mr.Sathish Parasaran for respondents 1 to 3 and 5 in OSA 294/2007 and for respondents 1 to 4 in OSA 295/2007 and RR1 to 3 in OSA 298 and 299/2007 Mr.P.N.Prakash for Mr.M.Rajasekar for R6 in OSA 294/2007 and for R7 in OSA 295/2007 and for R6 in OSA 299/2007 Mr.T.Viswanatha Rao for R4 in OSA 294/2007 and for R5 in OSA 295/2007 Mr.R.Thiagarajan for R8 in OSA 294/2007 and R6 in OSA 295/2007 COMMON JUDGMENT (Judgment of the Court was delivered by M.CHOCKALINGAM, J.) This judgment shall govern these four appeals in OSA Nos.294, 295, 298 and 299 of 2007. They challenge a common judgment of the learned Single Judge made in C.S.Nos.1620 and 2078 of 1995 decreeing the suit in C.S.No.2078 of 1995 and dismissing the suit in C.S.No.1620 of 1995.
2.The plaintiffs in C.S.No.2078 of 1995 have sought for a declaration that the alleged meeting purported to have been held on 29.9.1995, and the resolutions said to have been passed at the meeting are non-est, ab initio void, illegal and invalid; that the meeting held on 11.10.1995 by the plaintiffs 1 to 4 and the resolutions passed thereat are valid and binding upon the defendants; that the first defendant ceased to be the chairman of the board of trustees of the suit trust; and that the plaintiffs 1 and 2 alone are the trustees of the suit trust and also for a consequential permanent injunction restraining the first defendant from functioning as Chairman of the board of trustees of the trust and defendants 3 to 8 from functioning or claiming to be the trustees of the board of trustees of the suit trust with the following allegations:
(a) Sri Ram Educational Trust was founded by the fifth plaintiff by a registered trust deed dated 20.10.1983, with the object of establishing, running and maintaining educational institutions. The founder Initially appointed three persons as permanent trustees namely M.A.Ethirajulu Naidu, L.A.Parthasarathy and M.E.Devarajan. The trust deed provided for a maximum of nine permanent trustees, and the three permanent trustees were given right to nominate the remaining six trustees. Any vacancy in the board will be filled up by co-option by the surviving or remaining trustees of the Board. The deed also provided for nominating the Chairman, Secretary and the Treasurer among the trustees. Till 15.4.1985, the first three trustees did not nominate any trustees. In the board meeting on 15.4.1985, the board of trustees nominated the plaintiffs 1 to 4 as trustees. They were informed about the same by a communication dated 17.4.1985, sent by the first defendant as chairman of the trust. From that time onwards, they were functioning so.
(b) The first defendant who is the son of Ethirajulu Naidu, and who did not evince any interest in the trust affairs, assumed for himself the post of Chairmanahip. His position as Chairman has been duly recognized by all. The said Ethirajulu Naidu died in the year 1987, and nobody was nominated in his place. The other trustee Parthasarathy died in the year 1988, and in his vacancy, his wife Kasthuri alias Kumudha Parthasarathy was nominated as a trustee. After the death of Parthasarathy, the fourth plaintiff Varadarajulu Naidu, who was nominated as trustee in the year 1985, was appointed as the Treasurer as per the resolution dated 13.5.1988.
(c) The first plaintiff was unilaterally removed from the post of Correspondent on 19.6.1986, without obtaining any approval from the board of trustees. The first defendant started acting arbitrarily. The fifth plaintiff addressed a letter dated 8.6.1995 to all the trustees calling for a meeting of the board to discuss the affairs of the trust. The first defendant did not convene any meeting. The plaintiffs 1 to 3 issued a notice dated 9.8.1995 to the fourth plaintiff and defendants 1 and 2 calling for a meeting of board of trustees on 26.8.1995. The first defendant for the first time came forward to state in his letter dated 16.8.1995, that the plaintiffs 1 to 3 had not been nominated as trustees since they did not fulfill the obligation to pay contribution of Rs.3 lakhs as decided in the meeting of the Governing Council dated 26.10.1989.
(d) The first defendant convened a meeting on 20.9.1995 where the plaintiffs 1 to 4 also participated, and after obtaining the signature of the trustees and the members of the Governing Council, the first defendant abruptly left the meeting stating that he had some urgent work. In such circumstances, having no other alternative, the plaintiffs 1 to 3 convened the requisition meeting on 11.10.1995, after giving prior notice to the defendants 1 and 2 and to the fourth plaintiff. All the plaintiffs 1 to 4 attended the meeting; but, the defendants 1 and 2 did not attend. In the said meeting, the clause ‘c’ of the Trust Deed was amended invoking powers under Clause 21 of the Trust Deed by removing the phrase “above three Trustees” at the end of clause 3(c) and substituting in its place the phrase “Trustees holding office from time to time”. The said amendment was absolutely necessary; otherwise, new trustees cannot be nominated so as to increase the strength of the trustees to 9. Following the same, the present trustees nominated plaintiffs 5 to 7 as trustees of the trust board. As such, there are nine trustees including the plaintiffs 1 to 4 and the defendants 1 and 2, as on 11.10.1995. In the said meeting, the first defendant was removed from the post of Chairmanship and in that place, the first plaintiff was elected as Chairman. The founder of the trust, the fifth plaintiff herein, was elected as Secretary and the fourth plaintiff continued to be the Treasurer. The plaintiffs 1 to 4 as majority of trustees have validly nominated plaintiffs 5 to 7 as trustees.
(e) The second defendant Kasthuri Parthasarathy did not attend any of the meetings held ever since she was nominated as a trustee. In the meeting of the board of trustees purported to have been held on 29.9.1995, the defendants 3 to 8 who are the close relatives of the first defendant were nominated as trustees by the first defendant. The said meeting and the resolutions said to have been passed thereat are to be treated as non-est and the so-called trustees namely the defendants 3 to 9, cannot claim to be the trustees. There was no notice to any of the trustees for the said meeting, and hence the meeting dated 29.9.1995 is invalid, illegal and not binding on the plaintiffs.
3.The defendants 1 and 3 to 7 have filed written statements containing the allegations as found in the plaint in C.S.No.1620 of 1995 filed by them as plaintiffs.
4.The second defendant resisted the suit by filing a written statement stating that her husband Parthasarathy, one of the first permanent trustees, took enormous pains to develop the trust and trust properties spending his own huge moneys; that no allegations have been made against her in the plaint; that the conduct of M.E.Devarajan, the first defendant herein, in co-opting the other trustees who are the other plaintiffs in C.S.No.1620 of 1995, is nothing but arbitrary in and by which a public charitable trust is sought to be converted into a purely family concern; that when she became aware of the same, she sent a telegram to the first defendant on 15.10.1995 informing that the proposed meeting on 16.10.1995 is not valid; that she also sent a letter dated 15.10.1995 to the plaintiffs informing them that she had no notice of the alleged meeting of the trust board on 11.10.1995; that both the resolutions dated 29.9.1995 and 11.10.1995, are illegal and invalid; that while she is not concerned with the prayers 1 and 2 in C.S.No.1620/95 or the prayers a, b and c in this suit, the plaintiffs in CS 1620/95 have no justification to seek the extraordinary relief of injunction restraining her from in any way interfering with the administration and management of the trust; that she is a permanent trustee and hence, there is no justification to seek the relief of injunction against her from acting as trustee.
5.The plaintiffs in C.S.No.1620 of 1995 have sought for a declaration that the first plaintiff, plaintiffs 3 to 7 and the defendants 2, 6 and 9 continued to hold the office as members of the board of trustees under the second plaintiff trust; that the alleged meeting purported to have been held on 11.10.1995 and all other resolutions said to have been passed thereat, are ab initio void and illegal and that the first plaintiff continues as the Chairman of the board of trustees and for consequential injunction restraining the defendants 1, 3, 4, 5, 7 and 8 from in any way interfering with the administration and management of the second plaintiff trust by the first plaintiff as Chairman and plaintiffs 3 to 7 and defendants 2, 6 and 9 as trustees with the following allegations:
(a) Out of the three original permanent trustees, one M.A.Ethirajulu Naidu died in the year 1987, and in his place, K.Varadarajulu Naidu was co-opted in the year 1987. The other trustee L.A.Parthasarathy also died in the year 1988 and in his place Mrs.Kasthuri Parthasarathy was co-opted as member of the board of trustees. In April 1985, there was need for expanding the activities of the trust and to enlist various supporters or volunteers to help the administration of the board. To instill confidence in the mind of the donating public and other members of the Telugu community, letters were sent to individuals namely L.Kesavalu, Kothandapani Naidu, K.Venkatarathnam, R.Nagabushanam, Babu and M.Rajagopal nominating them as trustees. In fact, the said letter is sham. The letter reads as if there was a meeting of the board of trustees on 15.4.1985; but, no such meeting was ever held. A trustee becomes entitled to hold office only on his accepting the office. They have neither functioned as trustees ever since 1985, the date of such appointment, nor participated in the management of the trust or in the administration thereof. The entire management of the trust vested in the hands of the first plaintiff and two other permanent trustees namely K.Varadharajulu Naidu and Mrs.Kasthuri Parthasarathy. The first plaintiff alone was incharge of the entire management. For the purpose of record, the third plaintiff was appointed as Secretary; but, he was not functioning so.
(b) There was mix-up of the functions of the board of trustees as also the Governing Council. The Governing Council never interfered in the functions of the first plaintiff. There was acrimonious correspondence between some members, the prominent among whom are the defendants 1, 2, 4 and 5 and they purported to call a meeting as a requisitioned meeting. The deed of trust does not permit anybody to call a requisitioned meeting. Meetings are always called by the Chairman or under his authorisation by the Secretary and no one else. If any meeting is called by such persons, that will be ab initio void and no resolution could be validly passed. No such resolution passed by the illegally convened meeting, would bind the trust or the first plaintiff. A need arose for co-opting six more trustees, and at a meeting of the board where some of the defendants also participated, co-option of six more members was done on 29.9.1995. The defendants who attended the meeting, are estopped from questioning either the regularity or otherwise of such a meeting and they are not entitled to question the decisions taken thereat. One Varadarajulu Naidu, the 2nd defendant, particularly participated in the said meeting. Strangely those defendants claim to have conducted a meeting on 11.10.1995, wherein they purported to have passed a resolution removing the 1st plaintiff from the post of Chairman of the Board of Trustees and appointing M.Kothandapani Naidu as the Chairman, K.Varadarajulu Naidu as the Treasurer and N.Adhikesavalu, the original author of the trust, as Secretary. The said resolution purports to appoint Mrs.Kasthuri Parthasarathy, Chiranjeevalu, Venkatesalu, Kesavalu and K.Venkatarathinam as trustees. The said meeting held on 11.10.1995 and also the decisions taken thereon are null and void, ab initio and illegal and cannot operate against the plaintiffs and will not bind the trust. The purported removal is also bad in law.
(c) Under the trust deed, the first plaintiff holds office for life time, and he had been nominated as Chairman at the very inception and has been functioning as such. The deed of trust does not contemplate any removal by any body of any permanent trustee or the chairman. Moreover the removal of the first plaintiff ought not to be done without informing him. It is a case where the principles of natural justice have been flouted. The persons who attended the above meeting on 11.10.1995, are not duly appointed trustees and they are not members of the board of trust. They have no power either to remove a trustee or appoint a fresh trustee. The first plaintiff has been functioning as Chairman of the Board without any interruption or interference.
6.The defendants 2 to 5, 7 and 8 have filed written statements containing the allegations as found in the plaint in C.S.No.2078/95 filed by them as plaintiffs. The ninth defendant adopted the written statement filed by the defendants 4 and 5.
7.The sixth defendant filed a written statement containing the same allegations as found in the written statement filed by her in C.S.No.2078/95.
8.In both the suits, the issues originally framed were recast by the trial Court, and they were five in number. The parties went on trial. On the side of the plaintiffs in CS No.2078 of 1995, 3 witnesses were examined and 26 documents were marked. On the side of the defendants, 1 witness was examined and 103 documents were marked. The learned Single Judge after hearing the submissions made, took the view that the plaintiffs in CS No.2078/95 are entitled for the reliefs and hence decreed the suit. The other suit in CS 1620/95 was dismissed. The aggrieved plaintiffs 1, 2, 6 and 7 in CS 1620/95 and the aggrieved defendants 1, 6 and 7 in CS No.2078/95 have brought forth OSA Nos.294 and 295 of 2007, while the fourth defendant in CS 2078/95 and the fourth plaintiff in CS 1620/95 has brought forth OSA Nos.298 and 299 of 2007.
9.The learned Senior Counsel for the appellants in OSA Nos.294 and 295 of 2007 Mr.T.V.Ramanujun would submit that the main issue revolves upon the questions whether M.Kothandapani Naidu, L.Kesavalu Naidu, K.Venkatarathinam and K.Varadharajulu Naidu have been appointed as trustees as per the terms of the trust deed and whether there was a board meeting on 15.4.1985 attended by all the then existing three permanent trustees M.A.Ethirajulu Naidu, M.E.Devarajan and L.A.Parthasarathy; that in order to decide the questions, the relevant clauses in the trust deed are Clause 3(a) and 3(c); that the plea raised by the said four persons is that they have become trustees in view of the letter dated 17.4.1985 marked as Ex.D31; that according to them, M.E.Devarajan as Chairman of the trust has sent that letter to them, and in that letter, he has admitted that there was a trust board meeting held on 15.4.1985; but, Devarajan has clearly averred in the plaint that the said letter is sham and there was no board meeting on that date; that it would indicate that there was no board meeting on 15.4.1985, as alleged by them; that apart from that, the evidence both oral and documentary would go to show that there was no board meeting on that date; that the evidence also do not disclose that the then existing three trustees as stated above, jointly acted and appointed the other four persons as per Clause 3(c) of the deed of trust; that Devarajan has produced the original minutes book Exs.D4, D24 and D26; that Ex.D4 has been in the custody of Adhikesavalu till July 1986; that at this juncture, the minutes of the meeting dated 4.7.1986 is relevant for the purpose of deciding the issue on hand; that the minutes has been recorded to the effect that who ever wants to spoil the unity, action should be taken against them; that apart from that, from the evidence of P.W.1, it would be quite clear that the office of the trust was functioning at his residence and the records were kept in the premises of the polytechnic; that it is pertinent to point out that in Ex.D4, there is no minutes dated 15.4.1985; that as per clause 3(c), the then existing three trustees have to nominate the remaining six trustees; but, admittedly, there is no such nomination; that according to P.W.1, there was a meeting on 15.4.1985 in which Devarajan, Parthasarathy and himself were present; but, he does not say Ethirajulu Naidu was present and thus, there was no meeting on 15.4.1985, attended by all the three then existing permanent trustees.
10.Added further the learned Senior Counsel that P.W.1 has candidly admitted that there is nothing in writing signed by all the three permanent trustees nominating the plaintiffs 1 to 4 in CS 2078/95; that it is true that it is stated in Ex.D7 minutes dated 14.4.1985, that to discuss in detail, there will be a meeting on Sunday; but, according to the witness, he did not know whether any such meeting was held on Sunday; that apart from that, the evidence would go to show that no notice was sent to the board meeting held on 15.4.1985; that according to P.W.2, Venkatarathinam, he was appointed as a trustee at a meeting held in 1985 at Cosmopolitan Club, and he received a letter in that regard; that the witness would add that to his knowledge, Ethirajulu Naidu never attended any of the said meetings; that P.W.2 would further say that he does not have any receipt for having made any monetary contribution to the trust and he did not see any resolution appointing him as a trustee; that the evidence of P.W.2 would go to show that he attended the 7th meeting of the board on 14.4.1985 and he did not receive any letter dated 17.4.1985 calling upon him to contribute Rs.2.80 lakhs; that apart from that, Devarajan examined as D.W.1 has clearly stated that there was no board meeting on that date and the letter dated 17.4.85 was only a sham document; and that under the circumstances, it can be held that there was no board meeting on 15.4.1985.
11.Added further the learned Senior Counsel that it is pertinent to point out that the letter dated 17.4.1985, is only a format; that the fact that Devarajan is the Chairman from the inception cannot be disputed; that under the circumstances, the prayer that M.E.Devarajan, the first defendant, ceased to be the Chairman is not tenable; that had there been a board meeting on 15.4.1985, it would have been recorded in the minutes books; that the records consisting of the minutes books were in the custody of B.Adhikesavalu; but, the minutes book Ex.D4 do not contain any board resolution dated 15.4.1985; that the aforesaid four persons have not chosen to produce the original of the letter dated 17.4.1985; that no explanation was offered as to why original was not produced; that if the plaintiffs wanted to rely on the said document, they would not have lost the original, but would have preserved it; that in fact, in the said format, the name and address of the addressee is left blank; and that in Ex.D95 the address is filled up in ink by some one and not in the handwriting of Devarajan.
12.Relying on a decision of the Apex Court reported in AIR 1979 SUPREME COURT 861, the learned Senior Counsel would submit that it is settled law that the office of trustee is a joint one and therefore the said office should be executed in the joint capacity of the trustees; that in the instant case, all the three trustees have not acted jointly; that the decisions reported in AIR 1945 PC 23 and AIR 1944 BOMBAY 222 are relevant in this regard; that clause 3(c) of the trust deed says that three permanent trustees should act jointly; that in such circumstances, it can be well stated that there was no board meeting on 15.4.1985 attended by all the three permanent trustees; that there is no board resolution signed by all the three and the letter dated 17.4.1985 is a format and it is sham.
13.The learned Senior Counsel would further contend that in the trust board meeting dated 4.7.1986, there is no mention of trustees against the names of plaintiffs 1 to 4; that even in the meeting dated 15.7.1986 as against the names of the plaintiffs 1 to 4, there is no reference as trustees; and that in view of the above, the claim made by the plaintiffs 1 to 4 in CS 2078/95 falls to ground.
14.It is the further submission of the learned Senior Counsel that the next issue is whether there was trust board meeting on 29.9.1995; that admittedly, Devarajan, the only permanent trustee, was alive and he nominated Varadharajulu Naidu and Mrs.Kasthuri Parthasarathy; that admittedly, there was a meeting on 29.9.1995; that the new minutes book was started on 17.7.1995 and not suddenly on 29.9.1995; that from 17.7.1995, minutes were signed by Varadharajulu Naidu and Mrs.Kasthuri Parthasarathy and thus, the minutes of the meetings dated 29.9.1995 and 3.10.1995 have been admittedly signed by all the three trustees and that is valid and binding upon the trust; that in the instant case, the non-examination of Varadharajulu Naidu and Mrs.Kasthuri Parthasarathy is fatal and adverse inference has got to be drawn; that the resolution passed on 29.9.1995 by the three permanent trustees appointing six other trustees is legal and valid; that Mrs.Kasthuri Parthasarathy has not questioned the same, nor has she filed any suit; that Varadharajulu Naidu has not chosen to enter the witness box, and thus, the resolutions dated 29.9.1995 and 3.10.1995 remain uncontroverted; that apart from that, the person who has convened the meeting on 11.10.1995 was not a trustee at all; that the so-called minutes of the meeting dated 11.10.1995 has not been produced; that what has been produced is only a xerox copy marked as Ex.P9, containing lot of erasures and over writings, and under the circumstances, the judgment of the learned Single Judge has got to be set aside in that regard.
15.Arguing for the respondents 1 to 3 and 5 in OSA 294/2007 and respondents 1 to 4 in OSA 295/2007 and respondents 1 to 3 in OSA 298 and 299/2007, the learned Senior Counsel Mr.T.R.Rajagopalan would submit that it is an admitted position that Varadarajulu Naidu was co-opted as a trustee in 1987; that it is true that there is nothing on record to show when he was appointed as trustee by the trust board; that Mr.Devarajan admits in the cross-examination that Varadarajulu Naidu was a trustee on 8.5.1988; that since there is no trust board resolution, it has to be presumed that he was a trustee from 15.4.1985; that it is pertinent to note that Kothandapani Naidu, Varadarajulu Naidu and Kesavalu Naidu were shown as trustees in the minutes of the board meeting dated 4.5.1985, and it has been signed by Devarajan; that in the minutes of the meeting dated 14.7.1985, Varadarajulu Naidu, Venkatarathinam, Kothandapani Naidu and Kesavalu Naidu have been shown as trustees; that likewise, in the minutes dated 21.7.1985, 25.7.1985, 31.7.1985, 7.8.1985 and 10.5.1986 they have been shown as trustees; that this would go to show that these four persons had already been appointed as trustees; that apart from that, Exs.P7, P17, P18, P20, P22, P23, P25, P13, D92 and D99 would indicate that these four persons have always been treated as trustees of the trust; that in view of the above documents and evidence and more particularly, the categorical admission made in paragraph 4 of the plaint, the letter dated 17.4.1985 ought to be taken as valid and binding; that it is pertinent to point out that the non-signing of the letter dated 17.4.1985 by all the three trustees and non-appointment as per clause 3(c) of the trust deed have not been pleaded anywhere and hence the appellants cannot be permitted to put forth this point at this stage; that Clause 3(c) does not indicate that the appointment of the other six trustees has to be done by the original three trustees only in a board meeting; that the said decision could even be by consent of all the three trustees with or without a board meting and it could also be the act of one trustee namely the Chairman himself with the sanction and approval of the other two permanent trustees; that the act of writing the letter of appointment is merely to give effect to the decision already taken by the trustees jointly; and that as far as the trust is concerned, all decisions of the trust board are taken only by the Chairman, collectively for all the trustees.
16.Added further the learned Senior Counsel that it is pertinent to point out that the appointment of Devarajan as Chairman and of Adhikesavalu as Correspondent and the appointment of the Governing Council were without a board resolution; that the same would clearly indicate that there was no need or necessity for the entire trust board to sign in the minutes or be present in the trust board meetings even for some very important decisions; that according to the appellants, the contribution of Rs.2.8 lakhs by a person was a precondition to become a trustee and only format letters were sent to the persons named in paragraph 4 of the plaint in C.S.No.1620 of 1995; that it has been clearly stated by Devarajan that the meeting held on 10.4.1985 was not a trust board meeting and that there was no resolution passed in the meeting dated 14.4.1985 adopting the minutes of the previous meeting dated 10.4.1985; that it has been admitted by Devarajan that the decision taken on 10.4.1985 will not bind the trust board and there is no resolution of the trust making it compulsory for a person to pay Rs.2.8 lakhs to become a trustee; and that if that be so, there is absolutely no merit in the contention that payment of Rs.2.8 lakhs was a precondition to become a trustee.
17.The learned Senior Counsel would further submit that in the meeting dated 28.9.1995, there is absolutely no indication that there will be a meeting on 29.9.1995; that there is no item of agenda for discussion; that D.W.1 Devarajan has casually stated that the notice for the meeting on 29.9.1995 was given orally in the meeting held on 28.9.1995; but, nothing was recorded; that the meeting dated 29.9.1995 commences in a new minutes book while all the meetings prior to that date ending with 29.11.1992 are available in Ex.D4; that the meetings dated 17.7.1985 and 28.9.1995 alone are recorded in Ex.D24; that a perusal of Ex.D24 would go to show that there are more than 100 blank pages left; that no reason has been given as to why a new minutes book has been taken for the meeting dated 29.9.1995; that in Ex.P24 letter, only the signature of Devarajan is found and not others; that the same would indicate that Devarajan is in the habit of getting signatures from persons in documents as it suits him; that Ex.P25 would indicate that no notice was given for the meeting on 29.9.1995 and 3.10.1995, and Varadarajulu Naidu and Kasthuri Parthasarathy did not attend both meetings; that Ex.P26, the letter from Pandeswaram Venkatesulu Naidu to the then five trustees of the trust excluding Devarajan, refers to the meeting dated 28.9.1995; that it has been categorically admitted by Devarajan in his cross-examination that Kasturi Parthasarathy did not attend a single board meeting prior to 29.9.1995 and there is no signature of Kasturi Parthasarathy in any minutes after 3.10.1995; that there is no reason why she must have signed all of a sudden only on 29.9.1995 and 3.10.1995; that it is pertinent to point out that Kasturi Parthasarathy had sent a telegram dated 15.10.1995 stating that a number of signatures were taken from her in her house by Devarajan without knowing the contents; that as regards the meeting dated 11.10.1995, it was duly conveyed by validly appointed trustees after giving due notice to the other trustees; that the non-production of the original minutes of that meeting is not fatal to the suit in CS 2078/95; that it has been stated by P.W.1 that the original of Ex.P9, the minutes dated 11.10.1995, is not available since it was with Kothandapani Naidu and he is no more; that under the circumstances, it was well established that there was a meeting on 11.10.1995, and hence OSA Nos.294 and 295 of 2007 have got to be dismissed.
18.The learned Senior Counsel Mr.P.S.Raman appearing for the appellants in OSA 298 and 299/2007 and the 7th respondent in OSA 294/2007 and the eighth respondent in OSA 295/2007 would submit that in the duly constituted board of trust meeting held on 29.9.1995 by the three member full board, the appellant and five others were appointed as permanent trustees; that thereafter, the appellant conducted the meeting on 3.10.1995; taht two of the existing permanent trustees attended the said meeting; that the plaintiffs are not entitled to maintain a suit in CS 2078/95 against the appellant and other trustees; that in the light of the documentary evidence produced by the third respondent Adikesavalu, the learned Single Judge ought to have found that the third respondent is not a bona fide person and he has no interest in the suit trust; that the principle that a party who promised to do something cannot expect the other party to perform an obligation depending upon the parties promise should have been taken into consideration; that it is pertinent to note that as per the trust deed the Chairman is a permanent life trustee and he cannot be removed in the manner in which it has been done; that the interest of the institution has got to be considered; and that the learned Single Judge ought to have dismissed the suit in CS 2078/95 and decreed the suit in CS 1620/95.
19.The Court also heard the learned Counsel for the other respondents in the appeals.
20.The parties will be hereinafter referred to as plaintiffs and defendants as shown in the cause title in C.S.No.2078/95.
21.The admitted facts noticed are as follows:
Sri Ram Educational Trust with the object to establish, run and maintain educational and other institutions in professional subject for the sole object of catering to the benefit of Telugu Linguistic Minority in the State of Tamil Nadu, came into existence under a deed of declaration dated 20.10.1983. The trust deed marked as Ex.P1, a registered one, makes necessary provisions for the appointment or nomination of the permanent trustees three in number, and the other six who were to be nominated by the three permanent trustees, and thus, the total number of trustees should not exceed nine. The trustees could hold office during their life time or until they resign. Under the trust deed, three persons namely Sri.M.A.Ethirajulu Naidu, M.E.Devarajan and L.A.Parthasarathy were made as permanent trustees. The said Ethirajulu Naidu died in 1987 and in his place, K.Varadharajulu Naidu was co-opted in 1987. The other trustee L.A.Parthasarathy died in 1988 and in his place his wife Kasthuri Parthasarathy was co-opted. Insofar as the co-option of Varadharajulu Naidu or Mrs.Kasthuri Parthasarathy, it was admitted by all without any murmur. Though the trust had its desire for expansion of its scheme to bring forth number of educational institutions, the financial deficiency was found as a hurdle. Hence a meeting of the board of trustees was convened and conducted on 10.4.1985 at the Cosmopolitan Club as could be seen under Ex.D7. From Ex.D7, it could be seen that a person who came forward to contribute a donation of Rs.2,80,000/- to the trust could be nominated as trustee. The minutes of the proceedings incorporated that the plaintiffs 1 to 4 volunteered to contribute Rs.2.8 lakhs. No one else came forward to make the contribution. The meeting which was held on 10.4.1985, also continued on 14.4.1985 and the proceedings were minuted as found under Ex.D7 on 14.4.1985. Till the minutes recorded on 14.4.1985 as could be evidenced under Ex.D7, there is no controversy between the parties. The plaintiffs 1 to 4 claimed that there was a meeting of the board of trustees on 15.4.1985 that they were nominated. Accordingly, the same was intimated on 17.4.1985 by proper communications, and they participated in the proceedings of the trust as trustees, and hence they should be declared. Contrarily, the consistent stand of the defendants is that neither there was a meeting on 15.4.1985, nor was anybody nominated and hence the plaintiffs 1 to 4 were never trustees of the trust. Apart from that, there was a meeting convened thereby six other trustees were nominated by the already existing three trustees on 29.9.1995, according to the defendants, while the other trustees were nominated by the plaintiffs 1 to 4 in the meeting convened and conducted on 11.10.1995. In that regard, now they claimed respective declarations.
22.Elaborate deliberations though made by the learned Senior Counsel on either side which consumed number of hours, all these appeals concentrate on three questions namely:
(1) Whether the plaintiffs 1 to 4 can claim themselves as trustees nominated by the permanent trustees in the alleged meeting of the trust board on 15.4.1985?
(2) Whether the nomination of the six remaining trustees on 29.9.1995 as put forth by the defendants could be upheld?
(3) Whether the appointment of the plaintiffs 1 to 4 on 11.10.1995 as trustees and the remaining trustees and the amendment of the trust are valid?
23.Insofar as the claim made by the plaintiffs 1 to 4 that they were trustees nominated in the trust board meeting on 15.4.1985, before going to the question as to the factual controversy, it would be fit and proper to look into the legal position in that regard. In Halsbury’s Laws of England (Edn. 2), Vol. 33, the question of appointment of new trustees is considered at page 164. It is stated as follows:
“A new trustee is appointed either (1) under a power for that purpose conferred by the trust disposition; or (2) under the power for the purpose conferred by statute; or (3) by a Court of equity….”
24.The Law Lords of the Privy Council had an occasion to consider the question whether one of the trustees can appoint a co-trustee without the sanction or approval in a case reported in AIR (32) 1945 PRIVY COUNCIL 23 (LALA MAN MOHAN DAS V. JANKI PRASAD AND OTHERS) and held as follows:
“In England as well as in India in the case of co-trustees the office is a joint one. Where the administration of the trust is vested in co-trustees, they all form as it were but one collective trustee, and therefore must execute the duties of the office in their joint capacity. It is not uncommon to hear one of several trustees spoken of as the acting trustee but the Court knows no such distinction; all who accept the office are in the eyes of the law acting trustees. If any one refuse or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court. The act of one trustee done with the sanction and approval of a co-trustee may be regarded as the act of both. But such sanction or approval must be strictly proved. Therefore the transfer of the idol’s property executed by one only of the trustees of the idol cannot bind the idol.”
25.Considering the question whether the consent of all existing trustees is necessary for appointment of a trustee, the High Court of Bombay in a reported case in AIR (31) 1944 BOMBAY 222 (MAHOMED JAFFER HAJI NAZARALLI DEVJI V. MAHOMED JANMAHOMED AND OTHERS), has held as follows:
“Where a trust deed makes a provision for the appointment of a new trustee by the continuing trustees, the appointment of a new trustee cannot be validly made by some of the trustees only without the consent and concurrence of all the trustees; and hence an appointment of a new trustee by a meeting at which some of the existing trustees are not present is not valid and the newly appointed trustee cannot act as such.”
26.From the very reading of the above decisions, it would be quite clear that when the administration of a trust is vested in co-trustees, they should act collectively and in their joint capacity. There should exist a consensus of all the existing trustees in making appointment or nomination as the case may be, and in filling up the existing vacancy. In a given meeting an appointment of trustee even if done, absence of one of such existing trustees would suffice to declare the appointment or nomination as bad. If these settled legal principles are applied to the present factual scenario, this Court is afraid whether it could agree with the case of the plaintiffs 1 to 4 that they were nominated or appointed as trustees in the trust board meeting on 15.4.1985 even if such a meeting was held. It would be more apt and appropriate to reproduce Clause 3(a) and 3(c) of the trust deed which speak of the appointment of the trustees.
“3(a) The First Permanent Trustees of this Trust are as under:
i)M.A.Ethirajulu Naidu, son of Abbaya Naidu, aged about 80 years and residing at No.39, Dhiwan Ramaiyengar Road, Purasavakkam, Madras.84,
ii)Mr.M.E.Devarajan, son of M.A.Ethirajulu Naidu, aged about 44 years, and residing at No.39, Diwan Ramaiyengar Road, Purasawakkam, Madras-84,
and iii)L.A.Parthasarathy, son of L.K.Ayyavoo Naidu, aged about 45 years, and residing at No.11, Jayammal Street, Shenoynagar, Madras-30.
(b)….
(c)The above Trustees shall constitute the Trust Board. The remaining 6 Trustees shall be nominated by the above 3 Trustees.”
27.The plaintiffs 1 to 4 have claimed that they were appointed as trustees in the meeting held on 15.4.1985. According to the defendants, no such meeting was held on 15.4.1985 at all. It is not in controversy that on 15.4.1985 there were three permanent trustees namely Ethirajulu, Devarajan and Parthasarathy. Applying the principles laid down in the above decisions and also Clause 3 of the trust deed referred to above, all the three permanent trustees should have acted jointly in making appointment or nomination of the plaintiffs 1 to 4, and only then, it could confer upon them the status as trustees. Even according to P.W.1, who has deposed that there was a meeting on 15.4.1985, he has not stated that M.A.Ethirajulu one of the permanent trustees, was present on that day. He has categorically admitted that there was nothing in writing sent by all the three permanent trustees nominating the plaintiffs 1 to 4, and there is a document signed by the Chairman alone, and upto 1985, Devarajan and Parthasarathy signed in all papers of the trust, and Ethirajulu signed in a consent letter which was given to Vysya Bank for accepting the office of the trust. P.W.1 has candidly admitted that Ethirajulu has not signed any other paper of the trust. Even in Ex.D31 letter dated 17.4.1984, much relied upon by the plaintiffs and alleged to have been issued by Devarajan, Chairman of the trust, there is nothing to indicate that Ethirajulu was present or has given his consent for the nomination or appointment of the plaintiffs 1 to 4. Even assuming that a meeting of the trust board was held on 15.4.1985, and the plaintiffs 1 to 4 were nominated as trustees, it could have been made only by the two permanent trustees namely Devarajan and Parthasarathy and in the absence of the third trustee namely Ethirajulu, it would indicate that there was no consensus among all the three trustees in making the appointment or nomination which would suffice to declare the same as bad in law.
28.Apart from the above, the following circumstances and evidence both oral and documentary, would indicate that factually, there could not have been a trust meeting on 15.4.1985 as contended by the plaintiffs. Concededly, no material is placed as to the minutes, or any resolution passed on 15.4.1985 is produced before the Court. The original minute books Exs.D4, D24 and D26 were produced along with their plaint. A perusal of Ex.D4 would indicate that it would cover the period from 1984 to 1992 and the crucial date namely 15.4.1985 would fall within the period covered under Ex.D4. As could be seen from the evidence, the said minutes books are in the custody of Adhikesavalu till July 1986. Had there been any meeting on 15.4.1985 and a resolution passed thereon, no doubt it could contain the minutes therefor. But, it did not contain anything. P.W.1 has categorically admitted that there was no minutes dated 15.4.1985 in Ex.D4.
29.It is admitted by all parties that there was a meeting on 14.4.1985 which was the continuation of the original meeting on 10.4.1985 that took place at the Cosmopolitan Club. P.W.1 admits that Ex.D7 is the minutes in that regard. Ex.D7 would indicate that the matters were to be discussed in detail in the next meeting on Sunday. The plaintiffs have marched three witnesses in order to prove that there was a meeting on 15.4.1985. A reading of their evidence would clearly indicate that the plaintiffs have miserably failed to prove that there was any meeting on 15.4.1985. According to P.W.1, he did not remember the time when the trust board meeting was held on 15.4.1985 whether in the morning or in the evening, and no notice was sent for the meeting held on 15.4.1985. According to P.W.2, he was appointed as a trustee by a meeting held in 1985 at the Cosmopolitan Club, and the said meeting was attended by all the Patrons who wanted to create Sri Ram Educational Trust and to his knowledge, the three persons have also not written any letter or acceptance, and Ethirajulu Naidu never attended any of the said meetings. According to P.W.2, it is true that there was a trust board meeting on 14.4.1985 as found in pages 1 to 6 of Ex.D7 and there was a discussion also; but, he did not know whether any decision was taken regarding the date for the next meeting, and he did not remember whether there was any trust board meeting on 15.4.1985 or not, and he has also not seen any board resolution of the said date. While the evidence of P.Ws.1 and 2 was like that, P.W.3 would contrarily state that he has seen a board resolution passed for appointing Kesavalu, Venkatarathnam and Kothandapani as trustees; but, he did not remember the date of the resolution. The said resolution was also written in a book. Based on the evidence of P.Ws.1 to 3, it cannot be stated that the plaintiffs have proved that there was any meeting on 15.4.1985 or any resolution was passed.
30.Much reliance was placed by the plaintiffs before the trial Court and equally here also on Ex.D31 dated 17.4.1985. The learned Senior Counsel for the respondents relying on a decision of the Apex Court reported in (2005) 5 SUPREME COURT CASES 784 (UNITED INDIA INSURANCE CO. LTD. AND ANOTHER V. SAMIR CHANDRA CHAUDHARY) to the principle that an admission was the best evidence that an opposing party can rely upon. Pointing to the averments made in paragraph 4 of the plaint, the learned Senior Counsel would submit that a letter was addressed by Devarajan on 17.4.1985, which was a fact admitted, and Ex.D31 is the letter. According to him, the contents in Ex.D31 when viewed from the averments made in paragraph 4 of the plaint, would certainly constitute an admission that there was a trust board meeting on 15.4.1985 and the plaintiffs 1 to 4 were also appointed as trustees at that time. Needless to say that an admission is the best evidence that an opposite party can rely upon; but, it is always open to the opposite party to show or explain to be wrong or incorrect. It has got to be borne in mind that the weight of an admission depends on the circumstances under which it is made and it is rebuttable. A perusal of Ex.D31 dated 17.4.1985, would make it clear that it was only a format. It is not signed by all the trustees who were the permanent trustees at that time. It is pertinent to point out that despite the notice served upon the plaintiffs, they have not produced the original of the said letter. Had it been true that such a letter of any nomination or appointment was served upon the plaintiffs as trustees of the trust as one in question, one would naturally expect the persons so appointed or nominated to preserve the same. The explanation now put forth that the original was misplaced has got to be discountenanced. A perusal of Ex.D31 would clearly indicate that the name and address of the addressee is left blank. Ex.D95 is another letter dated 17.4.1985 requesting donation of Rs.2.8 lakhs. A perusal of Ex.D95 would clearly indicate that the address has been filled up by ink by someone and not by Devarajan. The defendants have explained the circumstances in which the said communication dated 17.4.1985 was prepared and sent.
31.Apart from the above, from the minutes of the meetings on 10.5.1985 and 14.5.1985, it would be quite clear that there was a long discussion for rising the finance, and the plaintiffs 1 to 4 have volunteered to contribute Rs.2.8 lakhs. It is true that it was also agreed that whoever paid the said contribution could be made as a trustee and when the plaintiffs 1 to 4 volunteered to make such payment, on the fond hope such a communication was addressed to the plaintiffs. It should not be forgotten at this stage that the meeting was convened and conducted on 10.4.1985 and 14.4.1985 only with the sole object of rising the fund. The communication addressed on 17.4.1985 and that too in a format which was not followed by a resolution or a meeting was intended to congratulate the plaintiffs 1 to 4 since they offered to contribute the donation and on the fond hope that they would contribute also. The plaintiffs do not dispute that they participated in the meeting on 14.5.1985 and the minutes undertaking that they were willing to contribute Rs.2.8 lakhs for raising the sheds for the educational institutions. P.W.2 would claim that he has made the contribution by way of supplying bricks and one of the four who was made as the treasurer, has also made contributions. Ex.D31 reads as follows:
" Dated 17.4.1985 Sir, The Board of Trustees of "Sriram Educational Trust" Madras at their meeting on 15.4.1985 at 39, Dewan Rama Iyengar Road, Purasawalkam, Madras-7 have decided to nominate you as member of Board of Trustees of Sriram Educational Trust. This nomination takes effect from 15.4.1985. I offer my felicitations to you on the nomination and earnestly hope that you will extend your co-operation in furtherance of Educational facilities under Sriram Educational Trust."
32.The preparation of the letter dated 17.4.1985 as could be seen under Ex.D31, should have come into existence following the assurance given by the plaintiffs 1 to 4 to make contribution of Rs.2.8 lakhs in the meeting conducted on 14.4.1985. But, there was actually no meeting on 15.4.1985 as referred to in Ex.D31 factually for the reasons discussed above. That apart, the letter was prepared in format and also it did not contain the name and address of the addressee, which would indicate that the letter should have been prepared reposing confidence on the plaintiffs 1 to 4 that they would contribute according to their assurance made on 14.4.1985; but, they have failed to do so.
33.It is true that even as per the minutes for the meeting on 14.4.1985, it was made clear that those who are willing and came forward to contribute Rs.2.8 lakhs, should be made as trustees. At this juncture, it is pertinent to point out that when Ex.D31 letter was issued, it accompanied the letter requesting the plaintiffs 1 to 4 to make the contribution also. Thus, it would be quite clear that the plaintiffs who have not actually contributed, taking advantage of the said letter, have come forward to claim that they were nominated as trustees on 15.4.1985 itself which, in the opinion of the Court, cannot be done. Besides that, though Varadharajulu has produced the original of the letter dated 17.4.1985, he has neither filed the written statement nor examined himself to speak about the same.
34.Admittedly, there was a trust board meeting on 4.7.1986. But, it is pertinent to point out that there was no mention of the names of the plaintiffs 1 to 4 as trustees or any reference to the alleged meeting or the resolution on 15.4.1985. In the absence of any acceptable evidence that there was any trust board meeting on 15.4.1985 or any reference to that meeting in the subsequent meetings or the nomination or the appointment of the plaintiffs 1 to 4 as trustees, the plaintiffs 1 to 4 could not claim that they were nominated as trustees by a resolution dated 15.4.1985.
35.The learned Senior Counsel for the respondents brought to the notice of the Court that without there being any trust board resolution signed by the three permanent trustees, the appointment of Devarajan as Chairman and Audikesavalu as Correspondent, the appointment of Governing Council by Devarajan and the nomination of K.Varadarajulu Naidu as trustee and also as treasurer, the authorisation of the joint operation of bank account by two trustees, and the starting of Engineering College and Hotel Management and MBA by Devarajan have been made, and all would clearly indicate that there was neither board resolution, nor it was signed by all the three trustees. The learned Senior Counsel would further add that equally the plaintiffs 1 to 4 were nominated as trustees on 15.4.1985; that merely because there was no trust board resolution on 15.4.1985, it could not be stated that the plaintiffs 1 to 4 were not nominated; and that on number of occasions, the appointments of trustees, chairman and treasurer all have taken place even without a board resolution. According to the learned Senior Counsel, the trust board meetings dated 4.5.1985, 14.7.1985, 21.7.1985, 25.7.1985, 31.7.1985, 10.5.1986 and subsequent meetings would clearly indicate that these plaintiffs have been not only shown as trustees in the minutes, but also recognised, and they also participated as trustees. The learned Senior Counsel would submit that in view of all the above, it would be quite clear that the plaintiffs 1 to 4 without a nomination could not have been recognized or could not have acted all along the years. The said contention put forth by the learned Senior Counsel for the respondents cannot be countenanced for the reasons that there is nothing to indicate that there was any resolution on 15.4.1985 in which the three permanent trustees who were then alive, participated nor was there any consensus among them or the nomination had taken place. Mere participation of the plaintiffs in the meetings subsequent to 15.4.1985 as trustees cannot by itself confer them the status of trustees of the trust. As pointed out supra, even assuming that there was a meeting on 15.4.1985 as contended by the plaintiffs, their nomination or appointment cannot have the sanction of law and hence, they are not entitled to get a declaration that they are the trustees of the suit trust.
36.Consequent upon the finding recorded by the Court above that the plaintiffs 1 to 4 could not claim or could not be accorded with the status of trustees of the suit trust, there cannot be any impediment in declaring that the meeting convened and conducted on 11.10.1995 and the resolution passed thereon is void, illegal and invalid. The person who convened the meeting on 11.10.1995 namely Kothandapani Naidu by his letter dated 7.10.1995, was not a trustee. The agenda was signed by Kesavalu, Kothandapani and Kesavalu Naidu who were also not trustees. Thus, the meeting was convened by one who was not competent to do so. When Ex.P23 letter dated 7.10.1995, was received, it brought forth a reply under Ex.D27. A perusal of Ex.D27 would indicate that all the three permanent trustees have signed wherein they have disowned. Though the plaintiffs wanted to get a declaration on the strength of a meeting convened on 11.10.1995, they have not produced the original minutes of the meeting, but only a xerox copy under Ex.P9. P.W.1 has candidly admitted that Ex.P9 was written by the daughter of Kothandapani Naidu. It contained number of corrections and erasures. No explanation was offered for the non-production of the original of the minutes as contained in Ex.P9 xerox copy. It is curious to note that according to P.W.2, the original of Ex.P9 was with his lawyer. According to the witness, the minutes were also written in a note book; but, the same was not produced in Court. Thus, the meeting itself was convened and conducted by the persons who were neither trustees nor competent to do.
37.The crowning circumstance was the amendment introduced in Clause 3(c) of the trust deed by introducing the words “trustees holding office from time to time” by removing the already existing words “above three trustees”. The very reading of the relevant clauses in the trust deed would clearly indicate that such an amendment cannot be made without the intervention of Court. The introduction of the said amendment would be indicative of the fact that the plaintiffs who could not claim as trustees either factually or legally, have gone to the extent of making an amendment in the trust deed itself to suit their convenience and in order to include the plaintiffs 6 and 7 as trustees of the trust board. Needless to say that consequent upon the finding that the meeting convened and conducted on 11.10.1995 is illegal, the resolutions passed thereon including the amendment of the trust deed and nomination of the new trustees have got to be set aside.
38.What is now left is the meeting alleged to have been conducted on 29.9.1995. Equally, the Court has to declare the meeting on 29.9.1995 and the resolutions passed thereon as urged by the defendants/appellants as invalid. According to the said appellants in OSA 294/2007, a meeting was held on 29.9.1995 by the three permanent trustees appointing its trustees. Admittedly, there was a meeting on 28.9.1995. When the minutes of that meeting is looked into, it would be quite clear that there was no further agenda to be discussed or resolved, and thus, there was nothing left open to be discussed or a decision to be taken on the very next day namely 29.9.1995. A new minute book is brought forth for the meeting on 29.9.1995. Another minute book under Ex.D4 was upto the period ending with 29.11.1992. But, the meetings dated 17.7.1995 and 28.9.1995 were recorded in Ex.D24, minute book. Ex.D24 would make it clear that there were number of blank pages left. If really a meeting was conducted on 29.9.1995, there could not have been any impediment in recording the minutes in Ex.D24 itself. But, a new minute book is introduced for recording the minutes for the said meeting on 29.9.1995. One of the permanent trustees and the signatory under the minutes on the meeting dated 29.9.1995 i.e., Mrs.Kasthuri Parthasarathy, has issued a telegraphic message stating that her signatures were obtained later. It is true that she has not filed any suit, nor has she examined herself in box. But, she has filed a written statement to the effect that her signatures were obtained at a later point of time. Even on 14.10.1995, Varadharajulu Naidu one of the trustees, has issued a communication under Ex.P25 stating that no notice was given for the said meeting on 29.9.1995 and thus, it would be quite clear that out of the three permanent trustees, two trustees namely Mrs.Kasthuri Parthasarathy and Varadharajulu Naidu, did not attend the meeting. But, M.E.Devarajan has not replied the communication addressed by both the permanent trustees to him as per his admission made in the evidence. D.W.1 has candidly admitted that Mrs.Kasthuri Parthasarathy did not attend any board meeting prior to 29.9.1995. As could be seen from the records that Mrs.Kasthuri Parthasarathy has not signed any minutes after 3.10.1995. Hence there was no reason why she should come all of a sudden on 29.9.1995.
39.It is true that no notice is necessary for the trust board meeting to the persons who are not trustees. But, when there were only three permanent trustees, in the absence of two trustees, a meeting could not have been conducted on 29.9.1995 either, or any resolution nominating the other trustees could have been made. Equally clause 3(c) of the trust deed Ex.P1, has got full application. As far as this meeting is concerned, there was no consensus among the trustees for making any appointment of the trustees. From the telegraphic message issued by Mrs.Kasthuri Parthasarathy on 15.10.1995, it could be seen that she informed the first defendant that infight between the two sets of trustees was causing damage to the trust and requested the first defendant to convene a meeting of the entire trust board as it stood before the disputes, to sort out all the matters. This would indicate that she has taken a neutral stand and also indicate that her signature has been obtained later. Hence it would be quite clear that it was an act of the first defendant in nominating the other six trustees without the consensus of the other two permanent trustees which was against the provisions of the trust deed and also provisions of law and hence, the said meeting and all the consequential proceedings thereon have got to be declared as illegal and invalid.
40.For the reasons stated above, this Court is of the view that the plaintiffs in C.S.No.2078 of 1995 are not entitled for a declaration that the plaintiffs are the trustees of the suit trust and they are also not entitled for a declaration that the first defendant ceased to be the Chairman of the board of trust of the suit trust. In view of the same, they are not entitled to have the consequential permanent injunction asked for. However, they are entitled for a declaration that the meeting held on 29.9.1995 and the resolutions said to have been passed in that meeting are non-est, ab initio void, illegal and invalid. Hence the judgment of the trial Court in C.S.No.2078 of 1995 is set aside in respect of the reliefs granted in their favour namely reliefs b, c, d and e, and the suit is dismissed in that regard. Insofar as the relief (a), the judgment of the trial Court granting declaration that the meeting held on 29.9.1995 and the resolutions passed thereon are non-est, ab initio void, illegal and invalid is affirmed.
41.Insofar as CS 1620/95, a declaration is granted in favour of the plaintiffs that the meeting held on 11.10.1995 and the resolutions passed thereon are ab initio void and illegal. The plaintiffs are also entitled for a declaration that the first plaintiff continues to be the Chairman of the board of trust of the second plaintiff and consequential injunction as asked for restraining the defendants 1, 3, 4, 5, 7 and 8 from in any manner interfering with the administration and management of the second plaintiff trust by the first plaintiff as Chairman and the sixth defendant as a permanent trustee. The plaintiffs are entitled to have declaration that the first plaintiff and the sixth defendant continue to hold office as members of the board of trustees under the second plaintiff. The judgment of the trial Court dismissing the suit in that regard is set aside and the suit is decreed to that extent. The plaintiffs are not entitled to have declaration that the plaintiffs 3 to 7 and the defendants 2 and 9 continue to hold office as members of the board of trustees of the second plaintiff trust. The judgment of the learned Single Judge in that regard is affirmed.
42.Before concluding the judgment, this Court is of the considered opinion that under the existing state of affairs and circumstances, it would be fit and proper to make the following arrangement to protect the interest of the trust at present.
43.It is brought to the notice of the Court that out of the three permanent trustees, two trustees namely the first plaintiff Devarajan and the sixth defendant Mrs.Kasthuri Parthasarathy, are alive. Out of these two permanent trustees, Mr.Devarajan is hospitalized, who according to the parties, could not participate in the activities of the trust, and also in view of the treatment being undergone at present, he could not even be consulted by the other permanent trustee. Hence the sixth defendant who is the only permanent trustee active at present, has been acting pending the appeals. But, certain allegations were made by the parties. Under such circumstances, in order to avoid the arbitrariness and have a check and control, it becomes necessary to nominate a person who could act as a trustee for the present and the interest of the trust would also require so.
44.Therefore Mr.K.Jayaraman (a retired District Judge), residing at F4, New No.43 (Old No.18, 19), 1st Avenue, Indira Nagar, Chennai 600 020, is appointed by this Court to act as a trustee for the present. The sixth defendant who is now active and the above person appointed by this Court would carry on the affairs of the trust in consultation with each other and strictly follow the provisions of the trust deed. If any clarification is required, they should approach the Court. This arrangement shall continue for a period of one year. Thereafter, they can move the Court for necessary directions. The remuneration for the above trustee appointed by the Court is fixed at Rs.20,000/- (Rupees twenty thousand only) per month which is directed to be paid by the trust.
45.In the result, all these original side appeals are disposed of leaving the parties to bear their costs. Consequently, connected MPs are closed.
(M.C.,J.) (M.V.,J.)
28-8-2008
Index: yes
Internet; yes
nsv/
M.CHOCKALINGAM, J.
AND
M.VENUGOPAL, J.
nsv/
OSA Nos.294, 295, 298
and 299 of 2007
Dt: 28-8-2008
