( 1 ) THIS is a petition filed under Sections 73 and 74 of the Indian Trusts act, 1882 with a prayer as follows:" (A) for a declaration that respondents 1 to 3 are unfit to be Trustees of the 12th respondent and are therefore liable to be replaced by another competent Trustees preferably the 4th respondent Sri A. Prem Kumar reddy: (b) for a consequential direction appointing the 4th respondent or any other competent person as Trustee for the 12th respondent; (c) directing respondents 1 to 3 to render account of the 12th respondent to the Trustee to be appointed by the hon ble Court for effective management; (d) for costs; and (e) for such other and further reliefs as the Hon ble Court deems fit and proper in the circumstances of the case. "one Sri Anam Venkat Reddy, originally the first respondent in this proceedings, who died during the pendency of the proceedings, created a trust known as "anam Venkat reddy Family Trust" which is the 12th respondent herein by a registered trust deed dated 21-10-1982 marked as Ex. P3 in this proceedings. The first 3 respondents herein were the trustees. The 4th respondent herein is the son of late Sri Anam Venkat reddy, the deceased 1st respondent through the first wife of the said Mr. Venkat reddy. The second respondent is the second wife of the first respondent. Respondents 5 to 7 are the sons of the fourth respondent. The 8th respondent is the wife of the fourth respondent. Respondents 9 and 10 are the daughters of the fourth respondents.

( 2 ) THE petitioners herein (three in number) are the children of respondents 5 to 7 respectively.

( 3 ) THE 12th respondent trust acquired 81 /2 % of the shares of the 13th respondent- company sometime subsequent to the coming into the existence. The 14th respondent is a wholly owned subsidiary of the 13th respondent. Both the respondents 13 and 14 are limited companies. The above-mentioned shares were acquired by the 12th respondent trust from a partnership firm known as godavri Electrical Conductors (GEC ).

( 4 ) WHAT exactly are the terms on which GEC transferred the shares held by it to the 12th respondent is not very clear from either the pleadings or the evidence available on record except that it is pleaded in the petition as follows:"as already stated major part of the debt due to 14th respondent, an amount to a tune of Rs. one crore and 32 lakhs was cleared by Messrs. Godavary Electrical conductors, Firm, and a paltry balance of Rs. 18 lakhs is found due as on the date of shares transferred in favour of the Trust. "

( 5 ) PW1 in his evidence stated that gec acquired the shares of the respondent no. 13 of the year 1978 to the extent of about 81 1/2 % of the issued capital GEC borrowed money from the 14th respondent for acquiring the shares to the tune of 1. 55 crores and except to the extent of 18 lakhs, the remaining amount borrowed from the 14th respondent was discharged by gec itself.

( 6 ) IN the background of the above mentioned facts, the only thing that can be said on the basis of the record is that whatever be the other terms between GEC and the 12th respondent in connection with the transfer of the shares the 12th respondent agreed to discharge the balance amount of the debt owed by GEC to the 14th respondent to the extent of Rs. 18 lakhs. This fact is not in dispute. It is also an admitted fact that in the first year after the acquisition of the shares by the 12th respondent, the 13th respondent company declared a dividend on 31-3-1983 and an amount of rs. 8,85,000/- was paid to the 12th respondent as dividend on the shares held by the 12th respondent in the 13th respondent company. It is also an admitted fact, thereafter, an amount of Rs. 8,59,000/- was paid to the 14th respondent by the 12th respondent in partial discharge of its liability to pay Rs. 18,00,000/- as mentioned above.

( 7 ) SOME time subsequently the trouble started. Company Petition No. 42 of 1990 was filed by respondents 5 to 7 herein in this Court