Applicability of the provisions of Sections 47, 48, 52, 53, 62 and 63 of Trusts Act, 1882.

I have had the advantage of perusing my learned brother’s Judgment and merely wish to add some observations without any unnecessary repetition of anything he has said.

In 1936 the joint family of defendants 1 to 6, a respectable and substantial one in Tirunelveli District, who owned considerable property, got into serious financial difficulties. To avoid the ignominy of adjudication, they entered into a composition with creditors and later executed a trust deed Exhibit B-7 in 1937 vesting all their property in three trustees for sale and payment of creditors. They avoided approaching a regular lawyer for advice, regarding his service as only required in the event of litigation or Court proceedings. They had recourse instead to legal quack advice and obtained the services of one Piramanayakam Pillai, who not only wrote the trust deed Exhibit B-7, but also all the thirty-eight documents of alienation including the sale deeds now challenged as breaches of trust in this representative suit by creditors. This person, who has kept out of the witness box, and one Pichandi Ayyar, the 15th defendant, described as a clerk in the employ of the family of defendants 1 to 6, appear to have done most of the clerical and conveyancing work. In the background was the twelfth defendant one S.R. Koothanainar Pillai, actually and somehow strangely a civil Court amin at the time working at Ambasamudram. He was the brother of one of the three trustees.

Veerabahu Pillai, a retired Inspector of Police, with substantial monies to invest. There can be no doubt that the twelfth defendant was a trustee de son tort. No less than thirteen sales of property were effected to the twelfth defendant his undivided brother Sivagurunatha Pillai the thirteenth defendant, and other relations of theirs. A common characteristic of these and several other sale deeds was the absence of any cash consideration, the vendee being merely charged with the responsibility of paying certain specified creditors at eight annas in the rupee. In some cases, where the vendee was himself a secured creditor, after the discharge of his debt a similar responsibility was placed upon him of paying unsecured creditors at this rate. The active part played by the twelfth defendant, who said he retired from service as amin three years before he gave his evidence as D.W. 2, is demonstrated by his negotiations with a secured creditor, the Travancore and Quilon National Bank. The discharge of this debt was a duty imposed on his undivided brother the thirteenth defendant by the sale deed Exhibit B-37, dated 29th August, 1937, in his favour alienating 20.32 acres of land for Rs.16,000. The twelfth defendant embarked on correspondence with the Bank as evidenced by Exhibits A-42, A-69 and A-107 and it was not until the Bank filed a suit, which was compromised, that this debt was finally paid on 6th August, 1941. A lawyer’s notice Exhibit B-109 sent on behalf of one creditor to the trustees on 21st July, 1937, was not replied to till 17th January, 1938, by an unsigned letter Exhibit A-58 admittedly in Piramanayakam Pillai’s writing. Apart from one or two lawyer’s notices on behalf of creditors, no regular lawyer was consulted about any of these complicated transactions. The result is that in every conceivable direction, there appear to have been grave irregularities and breaches of trust in flagrant contravention of the Trusts Act.

I would like first to make some comments on what appears to me to be not merely a gross irregularity in the execution of this trust, but a grave breach not urged in the course of very elaborate arguments, and that is the alienations by the trustees with a direction to the alienees to pay specific creditors at eight annas in the rupee Clause 7 of the trust deed authorise the trustees to sell the property “with authority to impose conditions and to sell them either by public sale or by private sale for the highest price according to your discretion.” Clause 8 authorises