Judgment

SHINGHAL, J. :- This appeal by a certificate of the Madras High Court is directed against it judgment and decree dated Feb. 20, 1969.

2. One Manikka Sankaranarayana Iyer, father of defendants 1 and 3 and grandfather of plaintiffs 1 to 5 and defendants 2, 4 and 5 and father-in-law of plaintiff No. 6 constituted an Annadanam Trust and he and his sons executed a registered deed of settlement for that purpose on June 3, 1908. By that document Sankaranarayana Iyer became the first trustee for life, and it was provided that after him the seniormost member would be the trustee, by turns. Sankaranarayana died and defendant No. 1 became the managing trustee of the trust. There was a suit for partition of the family properties including house No. 48A, and it was settled by a compromise under which a preliminary decree dated Sept. 12, 1956 was drawn up for the sale of the properties amongst the members of the family. Defendant No. 1 pruchased the suit property for Rs. 21,500 for the aforesaid trust on April 19, 1959. A final decree was drawn up on Nov. 29, 1959 in which house No. 48A was shown as the property of the trust. Defendant No. 1 however sold that property soon after, to his son defendant No. 2 on July 14, 1960, for Rupees 25,000 under sale deed Ex. B-13. Chithambaram Chettiar (P. W. 2), who was a tenant of that property from 1949 onwards, came to know of the intended sale and sent a registered notice to defendant No. 1 on July 21, 1960, offering to purchase it for Rs. 35,000. Defendant No. 1 however went ahead with the sale of the property to his son and registered the sale deed on July 22, 1960. The plaintiffs thereupon filed the present suit on Sept. 15, 1960, challenging that sale and asking for its restoration to the trust. The defendants resisted the claim in the suit on the ground that the sale price was fair and adequate and that the sale had to be made because of the disputes which had arisen between the second defendant as the owner of the adjacent house and the trust in regard to the easementary rights of drainage, light and air etc. The suit was decreed by the Subordinate Judge of Madurai on September 10, 1962. The High Court of Madras however allowed the appeal against that judgment and decree and dismissed the suit with costs of both the courts holding that Rs. 25,000 was quite adequate and fair price for the suit property and that defendant No. 1 acted with perfect bona fides and no ulterior motive can be attributed to him". That is why the plaintiffs have come up in appeal to this Court.

3. It is not in dispute before us that the Indian Trusts Act, 1882, hereinafter referred to as the Act, applied to the trust in question and that it was necessary for the plaintiffs to prove that defendant No. 1 did not exercise his discretionary power of selling the suit property "reasonably and in good faith" and that he indirectly purchased it for himself, in the name of his son (defendant No. 2), within the meaning of Sections 49 and 52 of the Act.

4. There is some controversy on the question whether defendant No. 1 made an outright purchase of the suit property for and on behalf of the trust for Rupees 21,500 on April 19, 1959, or whether he intended to purchase it for himself and then decided to pass it on to the trust, for defendants have led their evidence to show that the property was allowed to be sold for Rs. 21,500, which was less than its market value, as it was meant for use by the trust and that defendant No. 1 was not acting honestly when he palmed off the property to his son soon after by the aforesaid sale deed Ex. B-13 dated July 14, 1960. The fact however remains that defendant No. 1 was the trustee of the property, and it was his duty to be faithful to the trust and to execute it with reasonable diligence in the manner an ordinary prudent man of business would conduct his own affairs. He could not therefore occasion any loss to the trust and it was his duty to sell the property, if at all that was necess