Veena Duggal vs M.S. Vedi & Anr.
1999 Latest Caselaw 1257 Del

ORDER

Mukul Mudgal, J.

1. This is a suit on behalf of the plaintiff praying for passing a decree of declaration and permanent injunction.

2. The plaintiff and the defendants are only three trustees of "Group Benefit Trust" created in March, 1985, where beneficiaries are eight minor children. These beneficiaries are the children of Mr.K.K.Duggal (the late husband of the plaintiff bank).

3. It is stated in the plaint on behalf of the plaintiff that to look after the interest of Mr.Duggal's children, their mother, Mrs. Veena Dug-gal(the plaintiff in the present suit) was nominated as the Trustees and to look after the interest of Mr.Vedi's children, their uncle, Mr.M.S.Vedi, defendant No.1 was made the Trustee and to look after the interest of Mr.Kler's children, their aunt, Ms.Sahib Kaur, defendant No.2 was made the Trustee.

4. It is stated on behalf of the plaintiff that handsome donations were made into the Trust by the parents of the children enabling the Trust to purchase about 50 acres of agricultural land(as detailed in Annexure 'A'). It is further stated that Mr. K.K. Duggal (plaintiff's Husband) died on 26th May, 1985 and disputes arose between the plaintiff Trustee and former partners of K.K. Duggal because they had failed to pay the share of Mr. Duggal to his widow as per provisions of the partnership deed. It is, therefore, now the plaintiff's apprehension that after the death of her husband, the defendants wanted to sell the aforesaid land at the back of the plaintiff.

5. The plaintiff relies upon Clause 6 of the Trust Deed to contend that the trust is irrevocable and the Trust Fund and net income thereof shall be possessed and enjoyed by person beneficially entitled thereto by virtue of these presents to the entire exclusion of the settler; and that the Settler has no right to change the Trustee or Trustees. The plaintiff further relies upon Clause 10 to contend that the said Clause authorises the Trustees to accept gift of moneys/property for the Trust's benefit. The Clauses 6 and 10 of the Deed of Trust read as follows:

"6. The trust established hereby shall be irrevocable. The trust fund and net income thereof shall be possessed and enjoyed by the person or persons beneficially entitled thereto by virtue of these presents to the entire exclusion of the settler and of any benefit to him by contract or otherwise and no part of the trust fund or the net income thereof shall be paid to or be paid for the benefit of whatsoever. The settler has to right to change the trustee or trustees or to appoint any new trustee or trustees.

10. The trustees are hereby expressly authorised to accept gift of moneys and/or property (movable or immovable) for the benefit of this trust from the settler and/or other person or persons and any such gifts shall be held by the trustees as ascertain to or augmentation of the trust fund the money or other property re- ceived by way of such gift and future income thereof shall be held in like trusts in all respects as are herein contained and are applicable to the trust fund and the net income of the trust fund and shall be subject to the same trusts, powers and provisions as are contained in these presents and applicable thereof as if such money or property had formed part of the original trust funds."

6. In this regard, the plaintiff further avers that Mr.K.S.Kler along with certain persons visited the Farm Land, with an intention to sell the land.

7. The plaintiff relies upon Clauses 11 sub-clause (ii) of the Deed of Trust to contend that the majority of the Trustees can take decisions even to the prejudice of the beneficiaries. The plea of the plaintiff is that the defendants want to cause serious prejudice to the plaintiff's interest, by selling off the land. The Clause 11 sub-clause (ii) reads as follows:

"Should any difference of opinion at any time exist between the trustees for the time being in relation to the commission or omission of any act or otherwise however, in the execution of this deed the opinion of the majority of such trustee shall prevail."

8. It is the plaintiff's case that according to Clause (3) sub Clause (D) (i), the Deed of Trust would expire after a period of ten years and now that ten years have passed, the Deed of Trust stands expired and the assets of the Trust are to be distributed among the Trustees. It is further stated on behalf of the plaintiff that the powers contained in Clause 11 (ii) & Clause 12 (iii) do not give power to the Trustees to prejudice the interest of the beneficiaries in any other manner. The clause 12(iii) reads as follows: "A resolution in writing circulated among all the trustees and signed by a majority of them present in India shall be as valid and effectual as if it has been duly passed at a meeting of the trustees duly called and convened."

9. It is plaintiff's contention that under the garb of exercising power as per the aforesaid terms of the Trust Deed, any action on the part of the defendants to sell the land belonging to the Trust would seriously injure the interest of the beneficiaries.

10. The defendants were proceeded ex-parte as per this Court's Order dated 11th April, 1996. Thereafter the evidence by way of affidavit of Smt.Veena Duggal, the plaintiff was filed on 12th May, 1997 to prove her case. The averments made in the plaint have thus been supported by the said evidence on affidavit. There is no rebuttal to these pleas.

11. Accordingly, the plaintiff is entitled to a decree as prayed. The suit is decreed. A Decree of Declaration is passed in favour of the plaintiff and against the defendants, declaring that the defendants/Trustees as per the terms of the Trust Deed dated 16th March, 1985 (Annex.'B') are not entitled to sell/transfer/part with possession/alienate in any manner or encumber the land belonging to the Trust unless the price at which it is being sold is fixed unanimously by all the three Trustees and is to their satisfaction. A Decree of Permanent Injunction is also passed in favour of the plaintiff and against the defendants, restraining the defendants to act contrary to the Decree of Declaration Passed above.

12. In view of the above, the suit is accordingly stands disposed of. There shall be no orders as to costs.