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High Court of Judicature at Madras
P. JYOTHIMANI, P. DEVADASS, JJ.
The Sathyanarayana Charitable Trust rep. by its Managing Trustee K.R. Purushotham
Versus
C.H. Mahesh Kumar Reddy & Others
O.S.A. No. 201 of 2012
Decided On : 16-08-2012
Charitable and Religious Trusts Act - Sale of Trust Property - Section 7 - [TRUST PROPERTY SALE] - [Charitable and Religious Trusts Act, 1920, Section 7] - The court discussed the provisions of the trust deed and the Will executed by the author, empowering the trustees to sell the trust property. The court found that the trustees had the power to sell the property if its value was deteriorating, and the trust had followed the necessary procedures for seeking permission to sell the property. The court also considered the issue of res judicata, holding that the dismissal of the earlier suit did not operate as res judicata as it was dismissed on the ground of maintainability. The court concluded that the respondents were neither proper nor necessary parties, and their presence was not helpful for deciding the issue.
Fact of the Case:
The appellant filed an Original Petition seeking sanction for the sale of a trust property under Section 7 of the Charitable and Religious Trusts Act, 1920. The property, a residue of the estate, was 80 years old, not fetching any rent, and lying waste. The trust sought permission to sell the property for better utilization and income for the trust.
Finding of the Court:
The court found that the trustees had the power to sell the property as per the trust deed and Will, and had followed the necessary procedures for seeking permission to sell the property. The court also held that the dismissal of the earlier suit did not operate as res judicata as it was dismissed on the ground of maintainability. The court concluded that the respondents were neither proper nor necessary parties, and their presence was not helpful for deciding the issue.
Issues: The issues included whether the trustees had the power to sell the trust property, whether the dismissal of the earlier suit operated as res judicata, and whether the respondents were proper or necessary parties.
Ratio Decidendi: The court held that the trustees had the power to sell the property as per the trust deed and Will, and had followed the necessary procedures for seeking permission to sell the property. The court also concluded that the dismissal of the earlier suit did not operate as res judicata as it was dismissed on the ground of maintainability. The court further held that the respondents were neither proper nor necessary parties, and their presence was not helpful for deciding the issue.
Final Decision: The appeal was allowed, and the impugned order passed by the learned Single Judge was set aside. No costs were awarded.
P.JYOTHIMANI,J.
1. This appeal is filed by the petitioner in the Original Petition against the impugned order passed by the learned Single Judge in the application filed by third parties, who are the grandchildren of the author of the trust, in impleading them as parties to the Original Petition.
2. The appellant has filed the Original Petition under Section 7 of the Charitable and Religious Trusts Act, 1920 before this Court seeking sanction for sale of a house and ground at No.58 (Old No.50), Poes Garden, Chennai -600 086, and to direct deposit of the sale proceeds in approved government securities fetching income.
3.1. A thumbnail sketch of the facts essential for disposal of the instant appeal is as under: Ch.Sathyanarayana by a deed of declaration of trust dated 5.6.1968 has created a public charitable trust for the relief of the poor, advancement of education, medical relief and other objects of general public utility by handing over a sum of Rs.5,000/-. He appointed (i) Ch.Balamoney (his wife); (ii) K.R.Purushotham (his son-in-law); and (iii) Mr.Ch.Sathyanarayana (himself) -being the author, as the first trustees. Admittedly, the said Ch.Balamoney and the author of the trust -Ch.Sathyanarayana left this vale of tears and even during the life time of the author he had three daughters and two sons and he has chosen to make his son-in-law, K.R.Purushotham, only as the first trustee.
3.2. The objects of the trust are charitable in nature, to wit, to establish, maintain, run, develop, improve, extend, grant donations for and to aid and assist in the establishment, maintenance, running, development, improvement and extension of general and technical education, industrial, technical or other art, craft and science, schools and institutions or seats of learning and of all kinds of educational institutions of general, technical, professional or of any other description. Apart from the above, the objects include to establish, maintain, run, develop, improve, extend, grant donations for and to aid and assist in the establishment, maintenance, running, development, improvement and extension of libraries, reading rooms, recreation centres; to provide medical relief in its most comprehensive sense, including maintenance and running of hospitals, nursing homes, etc.; and to do all such acts in addition to and in furtherance of the said objects.
3.3. It is in pursuit of the said objects, the author of the trust has empowered the trustees to borrow from time to time money at such interest for such period with or without security of the movable or immovable properties; to acquire, purchase, hold, take on lease or hire any property, buildings, lands, securities, shares and any other movable or immovable properties and to sell, mortgage, pledge, let on lease or hire or otherwise dispose of the said properties, etc. Ergo, under the said provision, the author has empowered the trustees to sell any of the properties of the trust in furtherance of the object of the trust.
3.4. In Clause 8(b) of the trust deed, in addition the author has empowered the trustees to sell or convert the property of the trust, if in the opinion of the trustees, the value of the property is deteriorating. Clause 8(b) of the trust deed is as follows:
"8(b). If, in the opinion of the Trustees, any property belonging to the Trust is deteriorating in value or is not yielding any reasonable income of if in their opinion a sale or conversion of such property into property of another kind would be advantageous to the Trust, the Trustees may sell such property and invest the proceeds in the manner herein provided."
3.5. The author of the trust - Ch.Sathyanarayana has also executed a Will dated 19.6.1968, in which he has appointed his son-in-law -K.R.Purushotham as his Executor, permitting him to take charge of all his properties; pay all taxes; and empowering him to sell and realise the properties. By the said Will, the testator has bequeathed one of the propertie
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