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1987 Supreme(Kar) 3

Karnataka High Court
Karnataka Trader, Hubli - Appellant
Versus
Hiren Shamji Karamsey - Respondent
Decided On : 01-06-87
M.F.A. : 391 of 1986

Advocates:
K.S.Desai, M.S.SANGHVI, U.L.NARAYANA RAO

All trustees must join in the execution of the trust, and a renewal of a lease before its expiry without necessity is invalid.

Headnote:

Trust Property - Lease - Sections 15, 36, 48 of the Trusts Act - Shamji Karamsey Trust - The court held 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. The court referred to Sections 15, 36, and 48 of the Trusts Act and emphasized that all trustees must join in the execution of the trust, and a renewal of a lease before its expiry without necessity is invalid.

Fact of the Case:

The plaintiffs filed a suit for a declaration that the lease created by Shamji in favor of the defendant was invalid and not binding on the trust and for possession of the property. The trial Court appointed a Receiver. The defendant resisted the suit.

Finding of the Court:

The court found 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. The court also found that the defendant was causing injury to the trust property and jeopardizing the interest of the trustees.

Issues: Validity of the lease created by Shamji, appointment of a Receiver, and the defendant's claim as a statutory tenant under the Karnataka Rent Control Act.

Ratio Decidendi: The court held that the lease created by Shamji alone is invalid and emphasized the need for all trustees to join in the execution of the trust. The court also emphasized that a renewal of a lease before its expiry without necessity is invalid. The court further held that the defendant's claim as a statutory tenant does not apply as the lease did not convey any right, title, or interest to the defendant.

Final Decision: The appeal was dismissed, and the court granted a stay of the operation of the order to enable the defendant to approach the Supreme Court.

P. A. KULKARNI, J.

( 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 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 lease hold 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 tease 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 rea




















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