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2006 Supreme(Cal) 426
High Court Of Calcutta
Arun Kumar Bhattacharya, J.
SHIBOPADA BHATTACHARJEE - Appellant
Versus
REKHA MUKHERJEE - Respondent
Suit 73 Of 1988
Decided On : 07/17/2006
The office of a trustee is vacated by death, and a trust is extinguished when its purpose is completely fulfilled or becomes impossible to fulfill.
Headnote:
SPECIFIC PERFORMANCE OF CONTRACT - TRUST - EXTINGUISHMENT - TRUSTEESHIP - PERSONAL IN NATURE - DEATH OF TRUSTEES - AGREEMENT FOR SALE - INJUNCTION RESTRAINING DEFENDANTS FROM TRANSFERRING PROPERTY - LEGALITY OF EXECUTION OF DEED OF CONVEYANCE - CONSTRUCTION OF DOCUMENTS - INTENTION OF AUTHOR.
Fact of the Case:
Plaintiffs entered into agreements with defendants to purchase portions of a building based on representations that defendants had absolute ownership and could sell the property. After paying earnest money, plaintiffs' advocate requested the defendants' advocate to answer requisitions on title and inform them of the status of a suit filed by a third party claiming that the trust created by the deed of settlement had not been extinguished. The defendants' advocate informed the plaintiffs that an injunction had been obtained restraining the defendants from selling the property. The plaintiffs filed suit for declaration, specific performance of contract, and permanent injunction, alleging that the suit was collusive and that the defendants had wrongfully failed to perform their obligations under the agreement. The defendants contended that the trust was still subsisting and that they had no right to dispose of the property except through the third party, who had been appointed as trustee.
Finding of the Court:
The court found that the trust created by the deed of settlement had extinguished upon the death of the trustees, Ramdas Chatterjee and his wife Jyotsna Chatterjee. The court held that the office of a trustee is vacated by death and that the trust is extinguished when its purpose is completely fulfilled or becomes impossible to fulfill. In this case, the purpose of the trust was to distribute the trust property among the beneficiaries, which had been completed upon the death of the trustees. The court also found that the judgments and decrees obtained by the third party in the previous suits restraining the defendants from transferring the property had become non est due to the death of the trustees and that there was no legal impediment to the defendants executing the Deed of Conveyance in favor of the plaintiffs.
Issues: 1. Whether the trust created by the deed of settlement had extinguished upon the death of the trustees? 2. Whether the defendants had any legal impediment to executing the Deed of Conveyance in favor of the plaintiffs?
Ratio Decidendi: 1. The court held that the trust created by the deed of settlement had extinguished upon the death of the trustees, Ramdas Chatterjee and his wife Jyotsna Chatterjee. The court relied on Section 70 of the Indian Trusts Act, 1882, which provides that the office of a trustee is vacated by death. The court also relied on Section 77 of the Act, which provides that a trust is extinguished when its purpose is completely fulfilled or becomes impossible to fulfill. In this case, the purpose of the trust was to distribute the trust property among the beneficiaries, which had been completed upon the death of the trustees. 2. The court held that the defendants had no legal impediment to executing the Deed of Conveyance in favor of the plaintiffs. The court relied on the fact that the judgments and decrees obtained by the third party in the previous suits restraining the defendants from transferring the property had become non est due to the death of the trustees.
Final Decision: The court decreed both suits in favor of the plaintiffs, directing the defendants to execute and register the Deed of Conveyance in terms of the agreement for sale dated June 8, 1980, in favor of the plaintiffs within a period of thirty days. The court also directed that if the defendants failed to execute and register the deed within the stipulated period, the learned Registrar, Original Side of the court, shall execute and register the deed within a period of four weeks thereafter for and on behalf of the defendants.
( 1 ) THE twin suits viz. C. S. No. 73/88 and c. S. No. 75/88 for declaration, specific performance of contract and permanent injunction have been heard together for the sake of convenience and brevity as identical questions of law and fact are involved with the difference that the plaintiff and consideration amount in the two suits are different and whereas the former relates to western part of the building, in the latter eastern part is involved.
( 2 ) THE miniaturised version of the plaintiff is that on the representation of defendant Nos. 1 to 5 in or about June, 1980 that under the terms of a deed of Settlement dated 21. 01. 50 created by their grandfather Kalidas chatterjee, since deceased, the entire beneficial interest of premises No. 110, keshab Chandra Sen Street, Calcutta vested in them and the Trust created thereby had come to an end and they became absolute owners of the said premises since June, 1973 and were entitled to sell their right, title and interest in the premises, the plaintiffs Shibopada and Rabindranath entered into agreements in writing with them on 08. 06. 80 whereby the said defendants agreed to sell the disputed property to them at a consideration of Rs. 85,000/- and Rs. 80,000/- respectively. In pursuance of the said agreements, the plaintiffs paid a sum of Rs. 2501/- each to the defendants towards earnest money. On the request of the defendants' Advocate, the plaintiffs' Advocate returned the documents on 23. 08. 80 to the defendants' advocate to enable him to answer the requisition-on-title sent by the plaintiffs' Advocate earlier followed by a request of the plaintiffs' Advocate through letter dated 22. 09. 80 to expedite answer the requisition-on-title intimating that the plaintiffs were ready and willing to complete the deed and to pay the balance consideration money. Instead of executing and registering a Deed of Conveyance, the defendants' Advocate by letter dated 13. 10. 80 informed the plaintiffs that defendant No. 6 Ramdas Chatterjee, as a Trustee of the said Deed of Settlement, had instituted T. S. 1948/80 (?) in the City Civil Court at Calcutta claiming that the said defendants were not entitled to sell, let or otherwise alienate the property as the Trust contained in the said Deed of Settlement had not extinguished and obtained an order of injunction against the said defendants from selling and/or alienating the property and that steps were being taken by the said defendants for vacating the interim order of injunction on reopening of the Court after the Puja vacation. The plaintiffs' Advocate requested the defendants', Advocate by a letter dated 01. 09. 83 to answer the requisition-on-title arid to inform the position of said T. S. No. 1948/80 followed by a further reminder dated 19. 01. 85 but to no effect. The said suit was ultimately decreed by the learned Judge, 3rd Bench, City Civil Court on 07. 08. 87 holding that the Trust created by the deed of Settlement is still subsisting and defendant Nos. 1 to 5 as beneficiaries of the Trust had no right to dispose of the disputed premises except through defendant No. 6 Ramdas Chatterjee. The said T. S. No. 1948/80 is a collusive suit where the material fact regarding the said agreement for sale was totally suppressed, the sole object being to defeat the right, title and interest of the plaintiffs under the said agreements. The above judgement and decree, which is not binding upon the plaintiffs as they were not parties to the suit, is wrong as defendant Nos. 1 to 5 are majors and soujuris and the learned judge failed to construe the purport and scope of the said Deed of Settlement. Despite reminders, defendant Nos. l to 5 wrongfully and illegally failed and neglected to perform specifically the obligation under the said agreement for sale and refused and still are continuing refusal and it is apprehended that they would sell, alienate and encumber the property in contravention of the agreement. In these ci
