1962 Supreme(SC) 264

SUPREME COURT OF INDIA
P.B. GAJENDRAGADKAR AND K.C. DAS GUPTA, JJ.
1. Sheikh Abdul Kayum and others (In C. A. No. 406 of 1960) and 2. Mulla Alibhai and others {In C. A. No. 407 of 1960), Appellants
Versus
1. Mulla Alibhai and others (In C. A. No. 406 of 1960) and 2. Madrasai Hakimia and Coronation High School Society and others (In C. A. No. 407 of 1960), Respondents.
Civil Appeals Nos. 406 and 407 of 1960.
Advocates appeared
Mr. C. K Daphtary, Solicitor-General of India (Mr. T. S. N. Diwanji, Advocate and 310 M/s. J. B. Dadachanji, O. C. Mathur and Ravinder Naraian, Advocates of M/s. J. B. Dadachanji and Co. with him), for Appellants (In C. A. No. 406 of 1960) and Respondents Nos. 12 and 14 to 17 (In C. A. No. 407 of 1960); Mr. C. K Daphtary, Solicitor-General of India, (Mr. J. B. Dadachanji Advocate and M/s. Rameshwar Nath S. N. Andley and P. L. Vohra, Advocates of M/s. Rajinder Narain and Co. with him) for, Appellants (In C. A. No. 407 of 1960) and Respondents Nos. 1 to 3 (In C. A. No. 406 of 1960); Mr. B. Sen, Sr. Advocate, (Mr. I. N. Shroff, Advocate, with him), for Respondents Nos. 5 and 6 (In C. A. No. 406 of 1960) and Respondents Nos. 1 and 2 (In C. A. No. 407 of 1960).

Trustees cannot transfer their duties, functions & powers to some other body of men and create them trustees in their own place unless this is clearly permitted by the trust deed, or agreed to by the entire body of beneficiaries.

Headnote:

TRUST - Appointment of new trustees - Power of trustees to divest themselves of properties vested in them and vest them in another body of persons - Whether permissible - Delegation of functions by trustees - Whether permissible - Indian Trusts Act (2 of 1882), Ss. 46, 47.

Fact of the Case:

A school was started at Burhanpur by certain members of the Daudi Bohra Community in the year 1902. It was named Madrasal Faize Hakimia and its object was to impart religious and secular education to boys of the Daudi Bohra Community. In the year 1908 English classes were added to the school and in 1911 it was raised to the status of a High School under the name "Madrasai Hakimia and Coronation High School". Some time before this on May 24,1909 one Daudi Bohra of Surat of the name of Abdul Hussain Abdullali Faizullabhai Muchhala made a Waqf of certain properties in Bombay for the benefit and advantage of this school at Burhanpur. For the management of this trust he appointed as trustees 12 gentlemen whom he mentioned as persons who had already been appointed trustees of the school. Only a few months after this another trust came into existence for the benefit of the same school, by a deed executed by six persons, all Daudi Bohras and all belonging to Burhanpur describing themselves as managers of the school. They created by the deed "Waqf and trust of their properties" which were mentioned in detail in the body of the deed. Eighty persons, including themselves were named as the trustees. It is further stated by the executants of the deed that all movable and immovable properties connected with the school shall vest in these trustees. It is provided in the deed that the trustees shall been entitled to govern, manage and administer the affairs of the school and shall have the power of framing rules and regulations from time to time for the benefit and efficient running of the school; and also have the power to appoint new trustees from time to time in accordance with such rules and regulations. These trustees managed the school and also the properties belonging to the school including the properties of which waqf was made in its favour by the trust deed of September 15, 1909 without any trouble till March 1917. In the course of such management some of the original trust properties were converted into new properties by the trustees with the help of additional donations received from members of the Daudi Bohara Community. Trouble started in 1917 when some members of the Community started declaring that Mullaji Taher Saifuddin Saheb who, according to the main body of the community was the Dai-ul-Mutalaq was not a Dai-ul-Mutalaq. About the same time four out of the 18 who were appointed by the trust deed of September 15, 1909 joined three other members of the Daudi Bohara Community of Burhanpur to form a society by the name of "Madrasai Hakimia and Coronation Society", the main purpose of which was to run the Hakimia and Coronation High and Primary Schools at Burhanpur. Among other objects were mentioned the development of branches of the school at different places; opening library or libraries at suitable centres; conducting newspaper or newspapers; editing and compiling and publishing books. In the Memorandum of Association it was provided that 12 persons named there in would form the governing body to whom the management of the affairs of the society shall be entrusted. It was further provided that properties of each and every description acquired for or given to Madrasai Hakimia and Coronation High School shall be vested in this governing body. The 10 persons who have been impleaded as defendants 2 to 11 are members of the governing body of the Society. From the time they assumed the management of the Madrasai Hakimia & Coronation High School as members of the Society they have been administering the properties of which waqf was made in favour of the school by the six gentlemen who executed the trust deed of September 15, 1909.

Finding of the Court:

The Court held that the trustees appointed by the trust deed of September 15, 1909 did not have the power to divest themselves of the properties vested in them by the trust deed or to vest these properties in any society or its governing body, even though the society or the governing body might include some or all of the old trustees. The Court further held that the act of the trustees in handing over the management of the school of the Hakimia Society and the properties of the school to the members of the governing body of the Hakimia Society was illegal and void in law. The members of the Society or the members of the governing body did not therefore become trustees in respect of the properties which are covered by the Burhanpur trust.

Issues: 1. Whether defendants 2 to 11 were duly appointed trustees under the trust deed dated 15-9-1909? 2. Whether the governing body of the School used the trust properties (mentioned in the plaintiffs' list M) or any income therefrom for fighting out litigation in 1925 (C. S. No. 32 of 1925)? 3. Whether they misappropriated the trust property or income therefrom? 4. Was the litigation for the benefit of the school? 5. Is the admission of the students who do not belong to the Daudi Bohra Community inconsistent with the object of the trust?

Ratio Decidendi: 1. Trustees cannot transfer their duties, functions & powers to some other body of men and create them trustees in their own place unless this is clearly permitted by the trust deed, or agreed to by the entire body of beneficiaries. 2. A person who is appointed a trustee is not bound to accept the trust; but having once entered upon the trust he cannot renounce the duties and liabilities except with the permission of the Court or with the consent of the beneficiaries or by the authority of the trust deed itself. 3. Nor can a trustee delegate his office or any of his functions except in some specified cases.

Final Decision: The Court allowed the appeal and ordered that it be declared that the defendants 1 to 11 are not validly appointed trustees in respect of the trust properties mentioned in the list M annexed to the plaint; that the defendants be removed from the management of these properties and they be ordered to render an account of their administration of these properties and they be ordered to render. Necessary directions for the rendering of accounts will be made by the Trial Court and in doing so credit will be given to defendants 2 to 11 of Rs. 15,000 and odd already paid by them. The plaintiffs- appellants admit that it is not necessary to frame any scheme for the administration of the trust and we agree that this is not necessary-- at least for the present. It is necessary however that new trustees be appointed for the administration of the trust. Of the original 18 trustees all except one are dead and the sole survivor is admittedly too old to carry on the administration successfully. The very fact that for many years he has not discharged any functions as a trustee also makes it necessary, that new trustees should be appointed. We therefore direct that suitable persons be appointed by the Trial Court as new trustees after giving an opportunity to the plaintiffs and other responsible members of the Daudi Bohra Community place their recommendations and objections in this matter.