Case Note & Summary
The appeal arose from a judgment and decree dated 1 September 1984 passed by the Assistant Judge, Nashik, in Trust Suit No.1 of 1972, whereby the sole trustee of Shri Maruti Deosthan, Agartakali, was removed from trusteeship. The suit was filed by the Charity Commissioner under Section 50 of the Bombay Public Trusts Act, 1950, alleging misconduct, gross negligence, breach of trust, and misappropriation against the defendant-appellant. Originally, the temple was managed by one Narayanbuwa, who executed a Will on 18 May 1951 appointing the defendant as his Shishya and naming five panchas to manage till the defendant attained majority. In 1965, an application was made to the Charity Commissioner for permission to sue the panchas for breaches of trust; a suit followed, and a receiver was appointed. The defendant later became major, and the panchas were relieved; the suit was eventually dismissed for want of prosecution. The defendant took over the trust properties on 18 August 1969, but complaints emerged regarding his management. The Charity Commissioner initiated a suo moto inquiry under Section 50A for framing a scheme after the defendant failed to comply with an undertaking to get a scheme framed. An inspection revealed the temple in a dilapidated state, the defendant frequently absent, and offering box unsealed. The defendant also encashed National Savings Certificates worth Rs.10,000 belonging to the trust but kept the proceeds instead of depositing them in a scheduled bank, causing a loss of interest. An enquiry under Section 39 concluded that the defendant’s negligence caused a loss of Rs.975 to the trust. The suit therefore sought removal, appointment of new trustees, rendition of accounts, and framing of a scheme. The defendant resisted, contending that the properties were his private properties, that a proceeding under Section 22A was pending, that he could not be removed because of customary succession, and that the suit was not maintainable. The trial court, after examining witnesses and evidence, held that the defendant was liable for removal and ordered accordingly. Aggrieved, the defendant filed the present first appeal before the High Court. The provided text does not contain the final decision of the High Court; it records the oral arguments and the trial court’s findings but stops before the operative part. (Paras 1-12 as in the judgment).
Headnote
A) Trust Law - Management of Trust Funds - Duty to Deposit Trust Money in Bank - Bombay Public Trusts Act, 1950, Section 35 - The defendant, as sole trustee, encashed National Savings Certificates worth Rs.10,000 belonging to the trust but did not deposit the proceeds in a scheduled bank; instead, he kept the amount with himself, causing loss of interest. Held that such failure constitutes a breach of trust and renders the trustee liable for removal. (Paras 8) B) Trust Law - Enquiry Against Trustee - Assessment of Loss - Bombay Public Trusts Act, 1950, Section 39 - An enquiry under Section 39 was conducted by the Assistant Charity Commissioner, who found that the defendant's negligence caused a loss of Rs.975 to the trust. The report was submitted for further action, leading to the suit for removal. Held that the enquiry under Section 39 provided a valid basis for alleging breach of trust. (Paras 8) C) Trust Law - Removal of Trustee - Grounds of Misconduct and Negligence - Bombay Public Trusts Act, 1950, Sections 50, 51 - The Charity Commissioner filed suit under Section 50 for removal of the sole trustee on grounds including mismanagement of trust properties, failure to maintain the temple, and misappropriation. The court observed that the defendant was mostly absent, the temple was in dilapidated condition, and he failed to comply with undertakings. Held that such facts justify removal of a trustee. (Paras 5-9, 12) D) Trust Law - Scheme for Administration - Framing of Scheme - Bombay Public Trusts Act, 1950, Section 50A - The defendant had undertaken to get a scheme framed under Section 50A but failed to do so; consequently, the Charity Commissioner initiated suo moto inquiry. Held that the court may frame a scheme for proper management and administration of the trust. (Paras 5, 6, 9) E) Trust Law - Trust Property - Determination of Status - Bombay Public Trusts Act, 1950, Section 22A - The defendant claimed that certain properties were his private and personal properties and not trust properties, and pointed to a pending enquiry under Section 22A. The court, however, proceeded on the basis that those were trust properties as per the suit schedule, and the defendant’s contention did not affect the maintainability of the suit. Held that pending enquiry under Section 22A does not bar a suit for removal. (Paras 10, 12) F) Trust Law - Succession and Removal - Customary Rights vs. Statutory Provisions - Bombay Public Trusts Act, 1950 - The defendant argued that as the adopted son and successor of the original trustee, he could not be removed by a civil suit, relying on custom and tradition. The court rejected this, holding that statutory provisions for removal of trustees override any customary mode of succession. (Paras 10, 12)
Issue of Consideration
Whether the defendant, as sole trustee, was liable to be removed from trusteeship on grounds of misconduct, gross negligence, breach of trust and misappropriation under Section 50 of the Bombay Public Trusts Act, 1950; and whether the suit was maintainable.
Law Points
- Trustee removable for misconduct
- gross negligence
- breach of trust
- misappropriation
- duty to deposit trust funds in scheduled bank (Section 35 Bombay Public Trusts Act)
- enquiry under Section 39 for loss
- scheme framing under Section 50A
- statutory provisions override customary succession
