2010 Supreme(Del) 530
IN THE HIGH COURT OF DELHI AT NEW DELHI
MR. JUSTICE S. RAVINDRA BHAT, J.
SHISHIR BAJAJ & OTHERS ..... Plaintiffs
versus
INDIA YOUTH CENTRES TRUST & OTHERS ..... Defendants
CS (OS) No. 193/2010, I.A. Nos. 1407/2010 & 1408/2010
Decided on : 26.07.2010
Subject
TRUST - APPOINTMENT OF TRUSTEES
Act Referred
Headnote
B) Civil Procedure Code, 1908 - Section 92:- Powers and functions of public charitable Trustees is circumscribed by the provisions of Trust Deed. – Trustee cannot usurp any powers of appointment of new trustees individually which is contrary to the procedure laid down in the Deed.
Mr. Sudhir Chandra Aggarwal, Sr. Advocate with Sh. P.K. Mittal, Sh. Uday Kumar, Sh. Naveen Chawla and Ms. Roma Ahuja, Advocates.
Sh. Sanjay Jain, Sr. Advocate with Sh. Digvijay Rai, Advocate, for Defendant Nos. 1 and 2. Sh. V.P. Chaudhry, Defendant No.3 in person. Sh. G. Tushar Rao, Advocate, for Defendant Nos. 4, 5 and 6.
S.Ravindra Bhat, J. -- The plaintiffs seek declaration challenging the appointments of the fourth, fifth and sixth defendants as the trustees of the first defendant (hereafter referred to as "the trust"); directing their consequential removal from the Board of Trustees; further, declaration that the resolutions in the meetings held on 19.09.2009 are illegal and void and injunction against the defendants from holding or participating in any meetings of the Board of Trustees in relation to the trust.
2. The facts to the extent they are relevant and undisputed are that the Trust was originally incorporated as "WAY India Youth Centres Trust" through a Deed dated 10.08.1961 -its founder trust included Shri Morarji Desai, Smt. Indira Gandhi, Shri Naval Tata and Shri R.K. Bajaj etc. On 05.06.1973, through a supplementary deed, Trust’s name was changed to "Indian Youth Centres Trust"; the other terms of the Trust remained unchanged. The second and third defendants and the three plaintiffs are trustees. The manner of appointments as well as the appointment of 4th, 5th and 6th Trustees is challenged in the suit.
3. The plaintiffs rely upon some material terms of the Trust Deed, which are extracted
below: -
"Clause 13
The number of Trustees shall not be less than 5 and more than 11 provided however that if the number of Trustees become less than 5 the surviving or the continuing Trustees shall be entitled to act with a view to appoint new Trustees or Trustees, so as to bring the number of Trustees to the minimum as herein provided.
Clause 14
The Trustees shall be entitled to appoint not more than two persons from amongst themselves as the Managing Trustee or Trustees with such power and for such period and upon such terms as the Trustees may from time to time decide.
Clause 15
Whenever any Trustee shall resign, die or become insolvent or be convicted of a criminal offence involving moral turpitude or desire to be discharged from or refuse or become unfit or incapable to act, then and in every such case, the surviving or the continuing Trustees or trustee for the time being, shall be entitled to appoint a Trustee or Trustees in place of the Trustee or Trustees so resigning or dying, or becoming involvement or being convicted or refusing or becoming unfit or incapable to act as aforesaid. The surviving or continuing Trustees shall also be entitled to appoint additional Trustee or Trustees form time to time as they may consider proper but so that the number of Trustees shall not be more than eleventh.
Clause 17
Every new Trustee appointed as aforesaid shall as well before as after such transfer of the Trust fund or property, have the same powers, authorities and discretions and shall in all respects act as if he had been originally appointed a Trustee under these presents.
Clause 18
Every resolution of the Trustees and every decision by them, unless unanimous shall be taken by majority of the Trustee present and voting and in case of equality of voters, the Chairman shall have a casting vote. The Trustees may pass any resolution by circular if it is unanimous."
4. It is submitted that a joint reading of the above conditions mandates the prescribed
(i) The total number of trustees can be 11.
(ii) The surviving and continuing trustees have to ensure that at all times at least 5 trustees are there.
(iii) The power of appointing new trustees vests with surviving and continuing trustees.
(iv) The decision for appointment of new trustees has to be taken by all, either unanimously or by majority of such surviving and continuing trustees.
5. The suit contends that on 23.10.2007, a meeting of the trustees was held in which the third defendant proposed for fresh appointments on the basis of suggestions from existing trustees, to be made to the second defendant who was, at that time, Chairman of the meeting. It is stated that the procedure stated was that such suggestions would be considered by the second defendant who would consult with the f