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2008 Supreme(Mad) 3110

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. CHOCKALINGAM & THE HONOURABLE MR. JUSTICE M. VENUGOPAL
M.E. Devarajan & Others
Versus
B. Adhikesavalu & Others
O.S.A.Nos.294, 295, 298 and 299 of 2007 and MP Nos.1 of 2007, 1 of 2008 in OSA 294 of 2007, 2 and 9 of 2008 in OSA 295 of 2007, 1 of 2007 in OSA 298 of 2007 and 1 of 2007 in OSA 299 of 2007
Decided on : 28-08-2008

Advocates Appeared:
For the Appellants :T.V. Ramanujun, Senior Advocate T.V. Krishnamachari, P.S. Raman, Senior Advocate for N.S. Nandakumar, Advocate.
For the Respondents:T.R. Rajagopalan, Senior Advocate for Sathish Parasaran, P.N. Prakash, M. Rajasekar, T. Viswanatha Rao, R. Thiagarajan, Advocates.

Headnote:

TRUST - APPOINTMENT OF TRUSTEES - NOMINATION OF TRUSTEES BY PERMANENT TRUSTEES - CONSENT OF ALL TRUSTEES NECESSARY - MEETING ON 14. 1985 - NO CONSENSUS AMONG TRUSTEES - NOMINATION OF PLAINTIFFS 1 TO 4 AS TRUSTEES NOT VALID - MEETING ON 29. 1995 - ONLY TWO PERMANENT TRUSTEES ATTENDED - NOMINATION OF SIX TRUSTEES NOT VALID - MEETING ON 110. 1995 - CONVENED BY NON-TRUSTEE - AMENDMENT OF TRUST DEED - NOT VALID - TRUSTEES TO ACT IN JOINT CAPACITY - OFFICE OF TRUSTEE IS A JOINT ONE.

Fact of the Case:

Plaintiffs, claiming to be trustees of a trust, filed a suit for a declaration that the alleged meeting held on 29. 1995 and the resolutions passed at the meeting were non-est, ab initio void, illegal and invalid; that the meeting held on 110. 1995 by the plaintiffs 1 to 4 and the resolutions passed thereat were valid and binding upon the defendants; that the first defendant ceased to be the chairman of the board of trustees of the trust; and that the plaintiffs 1 and 2 alone were the trustees of the trust. The defendants filed written statements denying the allegations and claiming that the plaintiffs 1 to 4 were not 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 210. 1989.

Finding of the Court:

The court found that there was no consensus among the trustees for the nomination of the plaintiffs 1 to 4 as trustees in the meeting held on 14. 1985. The meeting on 29. 1995 was also not valid as only two permanent trustees attended the meeting. The meeting on 110. 1995 was convened by a non-trustee and the amendment of the trust deed was not valid. The court held that the office of trustee is a joint one and the trustees must act in their joint capacity.

Issues: 1. Whether the plaintiffs 1 to 4 were validly nominated as trustees in the meeting held on 14. 1985? 2. Whether the nomination of six trustees on 29. 1995 was valid? 3. Whether the appointment of the plaintiffs 1 to 4 on 110. 1995 as trustees and the amendment of the trust were valid?

Ratio Decidendi: 1. The court held that the nomination of the plaintiffs 1 to 4 as trustees in the meeting held on 14. 1985 was not valid as there was no consensus among the trustees. 2. The court held that the nomination of six trustees on 29. 1995 was not valid as only two permanent trustees attended the meeting. 3. The court held that the appointment of the plaintiffs 1 to 4 on 110. 1995 as trustees and the amendment of the trust were not valid as the meeting was convened by a non-trustee.

Final Decision: The court dismissed the suit filed by the plaintiffs and decreed the suit filed by the defendants. The court also appointed a retired District Judge as a trustee to act for a period of one year in consultation with the sixth defendant, who was the only permanent trustee active at the time of the judgment.

Judgment :-

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. 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 110. 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 14. 1985, the first three trustees did not nominate any trustees. In the board meeting on 14. 1985, the board of trustees nominated the plaintiffs 1 to 4 as trustees. They were informed about the same by a communication dated 14. 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 Chairmanship. 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 15. 1988.

(c) The first plaintiff was unilaterally removed from the post of Correspondent on 16. 1986, without obtaining any approval from the board of trustees. The first defendant started acting arbitrarily. The fifth plaintiff addressed a letter dated 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 8. 1995 to the fourth plaintiff and defendants 1 and 2 calling for a meeting of board of trustees on 28. 1995. The first defendant for the first time came forward to state in his letter dated 18. 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 210. 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, hav

































































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