R SATHYAMURTHY Vs. R RUKMANI

JUDGEMENT

(1.) THIS petition is filed to review the earlier order passed in C.R.P.334 of 1987 on 28-11-1988. The learned counsel appearing for the petitioner mainly submitted that the decision referred to in the said C.R.P. namely, Official Trustee, West Bengal v. Sachindra (1969 (3) S.C.R. 92 = A.I.R. 1969 S.C. 823), is not applicable to the facts of this case. According to the learned counsel, in the above quoted decisions, diversion of the object of the trust was asked for and in the circumstances, the Supreme Court held 'The stipulation in the trust deed that the variation can only be made by will and not otherwise is a binding condition. Being a material condition the settler had no power to vary it therefore had no power to execute the second trust deed'. Further, even in the above quoted decision, it was held that in view of S.34 of the Trust Act which is analogous to S.43 of the Trustees and Mortgagees Powers Act 1866 a Judge of a High Court could have only given his opinion, advice or direction on any question respecting the management or administration of the trust property and therefore, the order on the originating summons could not be justified on the basis of the section. The learned counsel for the petitions also relied on the decisions reported in In re D.V. Gundappa (A.I.R. 1951 Mys.6 = 1950 2-DLR. Mys.90, and Shabzadi Amina v. Syed Md. Hussain (A.I.R. 1981 A.P. 340), with regard to powers of Court in permitting sale in certain circumstances. He would submit that in the instant case, the building in question belonging to the trust is in a dilapidated condition. The landed properties are not fetching proper income. The tenants are in possession of the lands for a long time. According to the learned counsel in view of the present market price, the interest secured on the sale price would be more beneficial to the trust. The petitioners are not interested to take away the sale price. They want to reserve the same by depositing in any Bank and realize the income for meeting the expenses incurred for implementing the objects of the Trust and also various performances.

(2.) S.34 of the Indian Trusts Act 1882 reads as follows-'Any trustee may, without instituting a suit, apply by petition to a Principal Civil Court of original jurisdiction for its opinion, advice or direction on any present question respecting the management or administration of the trust property other than questions of detail, difficulty or importance, not proper the opinion of the Court for summary disposal.'In re D.V. Gundappa (1950-5-DLR. Mys.90), is an authority for the proposition that if there arises an emergency or a state of circumstances which rendered it desirable in the interests of beneficiaries that trust property should be sold, the court may direct the trustees to sell the property even though there is no provision in the trust deed expressly authorizing the trustees to sell the property. Such power should however be exercised with the greatest caution. In the said decision it was pointed out that in that case the trust was for the benefit of the poor students and the beneficiaries were not particular individuals whose objection could be ascertained. The trust property was in a dilapidated condition. Hence the trustees were directed by the court to sell the property even though the trust deed did not provide for a power of sale. In the above quoted case, it was also pointed out that the observations in In re Shiribai v. Merwaanji (I.L.R. 43 Bom.519), have been reaffirmed in De Souza v. K.R. Daphtary (A.I.R. 1924 Bom. 252 at 255), and they are as follows-'That the High Court of Bombay has this jurisdiction (to sanction a sale of the trust property by trustees where no power of sale is given by the trust deed) is beyond all doubt. This jurisdiction was recognized in In re Manilal v. Horgovan (25 Bom. 353), where Sir Lawrence Jenkins sanctioned the sale of a minor's interest in Hindu joint family property. It was also recognized.'.

(3.) IT is brought to my notice that the tenants who are in possession, are willing to purchase the property for Rs.9.25 lakhs. They have got a right of preemption by virtue of the agreement in their favour. IT is submitted that the price offered by the tenants is fair and reasonable in the circumstances of the case. IT is to be noted that when the trustees have no right to alienate the properties, the alleged preemption in favour of the tenants without permission of the court is not valid and the agreement cannot prevail. The mere fact that tenants are in possession of the properties is not a ground that the properties should be sold to them. IT can only be said that they are also entitled to take part in the public auction by tendering their offer. Further, no materials were placed before the court below in respect of the fair and reasonable price of the properties. In the circumstances, the trustees are directed to keep the offer made by the tenants at Rs.9.25 lakhs as upset price, and invite offers from intending purchasers, by publication, through lower court and sell the properties to the highest bidder. The entire sale proceeds should be deposited by the purchaser to the credit of O.P.No.301 of 1985 on the file of the District Court, Erode, and the District Court is directed to deposit the amount in fixed deposit for a period of three years in the State Bank of India, Erode, in the name of the Trust for its use. The petitioners are permitted to withdraw interest accrued thereon once in six months. The sale proceeds should not be withdrawn on any account except for investing the same in any better security and that too with the approval of the court. The review is ordered accordingly. No costs.