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1975 Supreme(Mad) 129

High Court of Judicature at Madras
VEERASWAMI & NATARAJAN
C. Kalahasti & Other
Versus
R. Sukhantharaj & Others
O.S.A. Nos. 81 & 82 of 1974
Decided On :Decided on: 03-03-1975

Advocates Appeared:
For the Appellants:G. Vasantha Pai, B. Punyakoti Chetty & V. Shanmugham, Advocates.
For the Respondents:R1 to R3 - The Advocate-General, O. Radhakrishnan & Venkataramanjalu, R7 to R9 - Mohideen Ahmed Farooqui, A. Veeroppan & K. Gopal, Advocates.

The court held that the scheme settled by Stone, J. and modified by Panchapakesa Ayyar, J. under Ss. 35 and 36 of the Indian Trustees Act, was invalid, as the Act did not authorise settling such a scheme.

Headnote:

TRUST - SCHEME - VALIDITY - INDIAN TRUSTEES ACT, 1866, SS. 35, 36 - C.P.C., 1908, S. 92 - LOCUS STANDI - INTEREST IN TRUST - MISMANAGEMENT - BREACH OF TRUST - REMOVAL OF TRUSTEES - FRESH SCHEME.

Fact of the Case:

The suit was instituted by the plaintiffs, claiming to be old students of Sir Thiagaraja College, Madras, for a declaration that the scheme settled by Stone, J. and later modified by Panchapakesa Ayyar, J. under Ss. 35 and 36 of the Indian Trustees Act, was null and void and not in accordance with law, for settling a scheme, to remove defendants 2, 8 and 9 from the office of trustees, to appoint new trustees and vest the properties in them and for certain interlocutory directions.

Finding of the Court:

The court found that the plaintiffs had the locus standi to institute the suit under S. 92 C.P.C., that the scheme settled by Stone, J. and modified by Panchapakesa Ayyar, J. under Ss. 35 and 36 of the Indian Trustees Act, was invalid, as the Act did not authorise settling such a scheme, that the allegations of mismanagement, breach of trust, malfeasance, misfeasance, misappropriation, confusion, favouritism and the rest were not established, that the allegations of misconduct against defendants 2, 8 and 9 were also not established and that in view of the fact that he had found the earlier scheme to be void and without authority, it was necessary to frame a fresh scheme of management.

Issues: 1. Whether the plaintiffs had the locus standi to institute the suit under S. 92 C.P.C.? 2. Whether the scheme settled by Stone, J. and modified by Panchapakesa Ayyar, J. under Ss. 35 and 36 of the Indian Trustees Act, was invalid? 3. Whether the allegations of mismanagement, breach of trust, malfeasance, misfeasance, misappropriation, confusion, favouritism and the rest were established? 4. Whether the allegations of misconduct against defendants 2, 8 and 9 were established? 5. Whether it was necessary to frame a fresh scheme of management?

Ratio Decidendi: 1. The court held that the plaintiffs had the locus standi to institute the suit under S. 92 C.P.C., as they were old students of the college and had an interest in the trust. 2. The court held that the scheme settled by Stone, J. and modified by Panchapakesa Ayyar, J. under Ss. 35 and 36 of the Indian Trustees Act, was invalid, as the Act did not authorise settling such a scheme. 3. The court held that the allegations of mismanagement, breach of trust, malfeasance, misfeasance, misappropriation, confusion, favouritism and the rest were not established. 4. The court held that the allegations of misconduct against defendants 2, 8 and 9 were also not established. 5. The court held that in view of the fact that it had found the earlier scheme to be void and without authority, it was necessary to frame a fresh scheme of management.

Final Decision: The court allowed the appeals and directed the learned Advocate-General to look into the affairs of the administration of the trust, and if he felt advisable, himself institute a suit under S. 91, C.P.C. for settling a fresh scheme by the proper administration of the trust.

Judgment :-

VEERASWAMI

1. These appeals, arising out of a suit under S. 92, C.P.C., and by defendants 2, 5, 6, 8 and 9 who are trustees among others, one directed against a decree directing a scheme to be settled and asking for a draft scheme and other against a decree settling a scheme for Sir Thiagaraja College, Madras, and allied institutions. In a partition document, dated 19th May 1917, executed by Pitti Pedda Thyagaraja Chetti and Pitti Chinna Thyagaraja Chetti, the properties described in the C schedule thereto were set apart for charitable and other purposes. This trust has since grown considerably, the properties belonging to which are now estimated to be worth somewhere near half a crore of rupees. Originally what was a small school in the first decade of this century, developed by 1950 into Sir Theagaraja College, High School and an Elementary School. About 2000 students are studying in the day college, 1220 students in the evening college, 1900 students in the High School and 100 in the elementary school. These institutions provide for different courses of study and are recognised by the University of Madras. On 12th November 1931, Stone, J. on an application under Ss. 35 and 36 of the Indian Trustees Act, 1866, appointed additional trustees and by another order dated 26th November 1931, the same learned Judge settled a scheme and provided for filling up vacancies which may arise in the Trust Board, He directed that there should be a Board of Trustees consisting of 7 members, out of whom one to be elected by the teaching staff of the school, two to be elected by the Councillors of the Corporation, two to be co-opted by the Board of Trustees and two to be appointed by the adult male members of the family of the donors. The scheme fixed the tenure of office, made provision for eligibility, of re-election, and cessation of trusteeship. By another application under the said section the scheme was amended by an order of Panchapakesa Ayyar, J. dated 16th July 1953. As amended, the scheme provided for a Board of 12 members, who should be appointed in the manner prescribed, that is to say, two to be appointed by the adult male members of the family of the donors, two, of whom one to be elected by the teaching staff of the school and another by the College staff, two to be elected by the Councillors of the Corporation of Madras, one to be elected from among the old students by the old students of the Thyagaraja Educational Institutions, one to be nominated by the Syndicate of the University of Madras, two to be co-opted by the Board of Trustees and two ex-officio members, namely, Principal of the College and the Headmaster of the High School. The scheme further provided for the order of election, tenure of office, eligibility for re-election, cessation of trusteeship and also provided for the power of the Board of trustees to make such laws or by-laws not inconsistent with the scheme as were necessary for the administration and management of the college and school. Substantially, the scheme, as framed by Panchapakesa Ayyar, J. in modification of the earlier one, has been in force ever since, except for some minor alterations effected by orders of court later. Now, the plaintiffs claiming to be old students, instituted the suit with the consent of the learned Advocate General for a declaration that the scheme settled by Stone, J. and later modified by Panchapakesa Ayyar, J. as aforesaid, was null and void and not in accordance with law, for settling a scheme, to remove defendants 2, 8 and 9 from the office of trustees, to appoint new trustees and vest the properties in them and for certain interlocutory directions. The plaint, therefore, was based on the allegations that the scheme, which was in force before, was invalid and it was therefore, necessary to have a fresh one settled, that there was mismanagement, misfeasance, malfeasance including misappropriation and breach of trust and further that there was also favouritism an

















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