CS (OS) No. 193/2010, I.A. Nos. 1407/2010 and 1408/2010. Case: Shishir Bajaj and Ors. Vs India Youth Centres Trust and Ors.. Delhi High Court

Case Number:CS (OS) No. 193/2010, I.A. Nos. 1407/2010 and 1408/2010
Party Name:Shishir Bajaj and Ors. Vs India Youth Centres Trust and Ors.
Counsel:For Appellant: Sudhir Chandra Aggarwal, Sr. Adv. with Sh. P.K. Mittal, Sh. Uday Kumar, Sh. Naveen Chawla and Roma Ahuja, Advs. and For Respondent: Sanjay Jain, Sr. Adv. with Sh. Digvijay Rai, Adv., V.P. Chaudhry, G. Tushar Rao, Adv.
Judges:S. Ravindra Bhat, J.
Issue:Indian Trusts Act, 1882; Religious Endowments Act, 1863; Civil Procedure Code - Section 92
Judgement Date:July 26, 2010
Court:Delhi High Court
 
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Judgment:

S. Ravindra Bhat, J.

  1. The plaintiffs seek declaration challenging the appointments of the fourth, fifth and sixth defendants as the trustees of the first defendant (hereafter referred to as "the trust"); directing their consequential removal from the Board of Trustees; further, declaration that the resolutions in the meetings held on 19.09.2009 are illegal and void and injunction against the defendants from holding or participating in any meetings of the Board of Trustees in relation to the trust.

  2. The facts to the extent they are relevant and undisputed are that the Trust was originally incorporated as "WAY India Youth Centres Trust" through a Deed dated 10.08.1961 - its founder trust included Shri Morarji Desai, Smt. Indira Gandhi, Shri Naval Tata and Shri R.K. Bajaj etc. On 05.06.1973, through a supplementary deed, Trust's name was changed to "Indian Youth Centres Trust"; the other terms of the Trust remained unchanged. The second and third defendants and the three plaintiffs are trustees. The manner of appointments as well as the appointment of 4th, 5th and 6th Trustees is challenged in the suit.

  3. The plaintiffs rely upon some material terms of the Trust Deed, which are extracted below:-

    Clause 13

    The number of Trustees shall not be less than 5 and more than 11 provided however that if the number of Trustees become less than 5 the surviving or the continuing Trustees shall be entitled to act with a view to appoint new Trustees or Trustees, so as to bring the number of Trustees to the minimum as herein provided.

    Clause 14

    The Trustees shall be entitled to appoint not more than two persons from amongst themselves as the Managing Trustee or Trustees with such power and for such period and upon such terms as the Trustees may from time to time decide.

    Clause 15

    Whenever any Trustee shall resign, die or become insolvent or be convicted of a criminal offence involving moral turpitude or desire to be discharged from or refuse or become unfit or incapable to act, then and in every such case, the surviving or the continuing Trustees or trustee for the time being, shall be entitled to appoint a Trustee or Trustees in place of the Trustee or Trustees so resigning or dying, or becoming involvement or being convicted or refusing or becoming unfit or incapable to act as aforesaid. The surviving or continuing Trustees shall also be entitled to appoint additional Trustee or Trustees form time to time as they may consider proper but so that the number of Trustees shall not be more than eleventh.

    Clause 17

    Every new Trustee appointed as aforesaid shall as well before as after such transfer of the Trust fund or property, have the same powers, authorities and discretions and shall in all respects act as if he had been originally appointed a Trustee under these presents.

    Clause 18

    Every resolution of the Trustees and every decision by them, unless unanimous shall be taken by majority of the Trustee present and voting and in case of equality of voters, the Chairman shall have a casting vote. The Trustees may pass any resolution by circular if it is unanimous.

  4. It is submitted that a joint reading of the above conditions mandates the prescribed procedure for appointment of trustees, i.e.

    (i) The total number of trustees can be 11.

    (ii) The surviving and continuing trustees have to ensure that at all times at least 5 trustees are there.

    (iii) The power of appointing new trustees vests with surviving and continuing trustees.

    (iv) The decision for appointment of new trustees has to be taken by all, either unanimously or by majority of such surviving and continuing trustees.

  5. The suit contends that on 23.10.2007, a meeting of the trustees was held in which the third defendant proposed for fresh appointments on the basis of suggestions from existing trustees, to be made to the second defendant who was, at that time, Chairman of the meeting. It is stated that the procedure stated was that such suggestions would be considered by the second defendant who would consult with the first plaintiff - the managing trustee and appointment two new trustees.

    This Resolution or proposal, say the plaintiffs, was not in conformity with the Deed of Trust.

    They accordingly allege to have expressed their unwillingness. It is alleged that the third defendant explained that the procedure was in accordance with the Trust Deed and in accordance with law, which the plaintiffs believed. On that date, i.e. 23.10.2007, the following Resolution was made:-

    2. Resignation letters of Shri P.T. Kuriakose and Dr. L.S. Kothari and appointment of new Trustees:

    The Board then discussed the resignation letters forwarded by Dr. L.S. Kothari and Shri P.T. Kuriakose. The Board placed on record its deep sense of gratitude to the services rendered by Shri Kuriakose and Dr. Kothari, and accepted their resignations.

    Shri Viresh Pratap Chaudhary stated that it would be in the fitness of things if the two vacancies that have occurred in the Board of Trustees, consequent to the resignation of Shri P.T. Kuriakose and Dr. L.S. Kothari, were filled as early as possible. After some deliberations, it was decided that the Trustees might recommend suitable names to the Chairman within a month and the Chairman, in consultation with the Managing Trustee, might then induct two more Trustees in the Board of Trustees.

  6. The plaintiffs next say that on 11.10.2008, Board of Trustees, including them and defendant nos. 2 and 3 again met; however, the appointment of trustees was kept in abeyance. The plaintiffs contend that despite lack of considerable time, the second defendant could not communicate the fate of recommendations made by the surviving trustees and in these circumstances, the first two of them (the plaintiffs) met him, i.e. the second defendant on 26.02.2009 when request for filling vacancies was made. The plaintiffs next advert to a letter dated 03.04.2009 by the second defendant where he nominated four persons to act as Trustees, i.e. Dr. Bhishma Narain Singh, Shri Gopal Krishan Gandhi, Shri Anil K. Shastri and Shri R.N. Anil. These nominations, according to the suit, are illegal as the appointments were not in conformity with the procedure prescribed with the Trust Deed dated 05.06.1973, as there was no unanimity or majority backing of the existing and continuing trustees. The relevant extract of the said letter (produced with the suit, and which is not in dispute) reads as follows:-

    Shri Shishir Bajaj

    Managing Trustee, Indian Youth Centres Trust

    C/o Bajaj Hindustan Ltd.

    Bajaj Bhawan, 226, Nariman Point

    Mumbai - 400 021.

    Dear Shri Shishir Bajaj

    As you are kindly aware, the Board of Trustes of the Indian Youth Centres Trust at its Meeting held in October, 2007 had decided that the Trustees might recommend suitable names to fill the vacancies, to the Chairman and the Chairman in consultation with the Managing Trustee, might then induct the new Trustees. Since no names were received, the Chairman urged the Trustees to send the nomination for the three vacancies that had arisen.

    I had received the recommendations from all the Trustees. I before taking decision, consulted the Managing Trustee, and as well as other Trustees. Keeping in view the recommendations received and the consultations held, I decided that I should take the consent of the following four eminent persons to become Members of the Trust:

    1. Dr. Bhishma Narain Singh

    2. Shri Gopal Krishna Gandhi

    3. Shri Anil K. Shastri

    4. Shri R.N. Ani.

    Accordingly, I wrote to each one of them. Only Shri Gopal Krishna Gandhi declined to send his consent, due to heavy burden of his work, as he is a Governor. The other three persons have sent their consents.

    Accordingly, I have nominated the following as Trustees of the Indian Youth Centres Trust, with immediate effect:-

    1. Dr. Bhishma Narain Singh

    2. Shri Anil K. Shastri

    3. Shri R.N. Anil

  7. The plaintiffs talk about a reply to the above communication, by letter dated 09.04.2009 (by the first plaintiff), which after extracting the Board Resolution of 23.10.2007 went on to state as follows:-

    From the above it is clear that both your goodself and me were jointly given the responsibility by the present Trustees to only appoint 2 Trustees and not 3 Trustees, with mutual consent, in view of the resignation of Shri Kuriakose and Dr. Kothari.

    As you may recall I and Rajat had met you at the Kendra's office on 26th February 2009 and we had a discussion about the names of Trustees who could be considered for this August Body. In fact, I had discussed the names of Mr. Justice Chandrasekharji Dharmadhikari and Smt. Usha Gokhani, Chairman of Mani Bhavan, Mumbai, where Mahatama Gandhi had stayed for many years. She also happens to be the granddaughter of Mahatma Gandhi (daughter of Shri Ramdas Gandhi).

    I also remember Rajat discussing the name of the candidate which he had proposed and few other names including that of Shri Gopal Gadhi. However, we frankly did not get a chance to discuss other recommended names given by the other present Trustees of the Indian Youth Centres Trust. In view of the same no two categorical names of the Trustees were finalized between yourself and me. In the history of this August Body there has never arisen any dispute over the appointment of Trustees. Hence I would humbly request you to immediately put in abeyance the appointment of the above 3 Trustees.

  8. The plaintiffs rely upon a similar correspondence by one of them with the second defendant. It is stated that in reply to their protest - a letter of the first plaintiff dated 09.04.2009 - the second defendant responded by his letter dated 15.04.2009. The relevant portion of that letter reads as follows:-

    I find that some of the facts in your letter, as also the letter of Shri Rajat Narainji have not been correctly set out. The correct facts, so far as I know, are as under:-

    You have in your letter under reference, set out correctly the relevant...

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