Full Judgment Text
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PETITIONER:
OFFICIAL TRUSTEE OF TAMIL NADU
Vs.
RESPONDENT:
UDAVUMKARANKAL AND ORS.
DATE OF JUDGMENT29/01/1993
BENCH:
SAWANT, P.B.
BENCH:
SAWANT, P.B.
KULDIP SINGH (J)
CITATION:
1993 AIR 1472 1993 SCR (1) 380
1993 SCC Supl. (3) 509 JT 1993 (1) 592
1993 SCALE (1)566
ACT:
Official Trustees Act, 1913 :
Sections 15, 28-Powers and duties of Official Trustee-Action
taken bona fide-Breach of trust-Personal liability-Whether
arises.
HEADNOTE:
By a Court decree, schemes for administration of two estates
belonging to a couple were sanctioned. The subject matter
of the present appeal is the property comprised in the
estate of the wife. The said premises have been used as a
marriage hall.
The predecessor of the appellant made an application to the
High Court for permission to incur an expenditure of Rs. 6
lakhs for converting the tiled roof into RCC roof as also
for a modernisation plan involving about Rs. 17,500, so that
the marriage hall could fetch higher income. The High Court
accorded permission for the plan and the expenditure in-
volved. Thereafter some correspondence took place with some
Architects. But there was no further progress. In the mean
time the present appellant took charge of the trust and he
wrote to an Architect about the proposal and requested him
to inspect and report about its feasibility. The Architect
inspected the premises and reported that the building was
very old and in a dilapidated condition. He recommended the
demolition of the building and putting up of a new
construction. The appellant requested the Architect to
submit his estimates, plan and other details. Just prior to
these developments, the Deputy Official Receiver inspected
the premises belonging to both the trusts and submitted a
report that the buildings belonging to both the trusts be
demolished and reconstruction of the Marriage Hall and
construction of a shopping complex be taken up.
The appellant paid the scrutiny and demolition fee to the
Corporation as demanded by it and the building was
demolished. The Architect sent his estimate of Rs. 9.60
lakhs for the construction of the Marriage Hall. The
appellant riled an application before the High Court for its
381
permission to transfer a sum of Rs. 7 lakhs from the other
Trust to enable him to incur a total expenditure of Rs. 10
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lakhs and for ratification of the ,action taken by him. The
hereditary trustees and the residual beneficiaries
intervened and opposed the application. The matter was
heard by a Single Judge and he held that the appellant had
proceeded to demolish the marriage hall without getting
specific orders of the Court and in undue haste, in an
irresponsible manner and to the detriment of the trust. The
Single Judge rejected the application and directed the
appellant to construct the marriage hall within Rs. 6 lakhs
sanctioned earlier. He further directed that expenditure in
excess of Rs. 6 lakhs should be borne by the appellant
himself Being aggrieved by the said order, the appellant-
official trustee filed an appeal which was dismissed by the
Division Bench. Against this, the official trustee
preferred the present appeal by special leave.
Allowing the appeal, this Court,
HELD : 1. It is evident from record that out of the three
Architects who responded to the invitation of the
predecessor of the appellant for replacement of the tiled-
roof by R.C.C. slab, one architect did not even care to
visit the site and examine whether the old structure could
bear the weight of the R.C.C. slab. As regards the second
architect, he did not refer to the fact whether the old
structure was capable of bearing the weight of the R.C.C.
slab. He merely stated that he had inspected the premises
and then proceeded to indicate his charges for preparing the
plan etc. It may, however, be presumed that since he had
not referred to the condition of the building, he was of the
opinion that the old building could bear the weight of the
R.C.C. slab. It is only the third architect, who stated
that it was worth demolishing the old building and
constructing a new one in its place as per the Development
Control Rules of the Madras Municipal Corporation. This was
the state of affairs on the files of the Official Trustee
when the appellant took charge. In the circumstances, there
was nothing unnatural on the part of the appellant to have
specifically addressed a letter to one more architect,
pointing out to him, that it was proposed to convert the
existing tiled-roof into RCC-roof, and requesting him to
inspect the premises and submit a report specifically on the
point as to whether the existing building could withstand
the conversion or whether it had to be demolished and a new
building constructed in its place. Anyone in his place
acting as a responsible and a reasonable man
382
would have done so. Since the new architect gave his report
after inspecting the premises that no matter however much
improvement was carried out in the building, the net result
would be neither appreciable nor would it yield maximum
returns for the investments made as the existing building
was very old and in a dilapidated condition, there was
nothing wrong if the appellant accepted the said report and
proceeded to take immediate steps in the interest of the
trust estate. The building was at least 76 years old, If
not more, in 1988. Therefore, it is difficult to doubt the
bona fides of the recommendations made by one of the three
earlier architects or by the new architect. In any case,
the bona fides of the appellant could hardly be questioned.
[389A-H, 390A-E]
2. The rapid steps taken by the appellant can only be
consistent with his intention to act as early as possible in
the interest of the trust since by the new construction, the
income of the trust was expected to be augmented. Further,
the delay in construction was also likely to increase the
cost of construction, apart from the loss of income that was
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to result from such delay. Hence, the so-called haste
cannot be looked upon only with suspicion or as contributing
only to the mala fide intentions on the part of the
appellant. It is also consistent both with a diligent and
responsible conduct, on his part and with the best of his
intentions to subserve the interests of the trust. [390F-H]
3.1. There is no doubt that the appellant knew that the
earlier sanction obtained was only for replacement of the
tiled-roof by R.C.C. slab. The sanction %*as also for
incurring only an expenditure of Rs. 6 lacks and some other
sundry expenses for providing minor facilities. Since the
new proposal which he sanctioned consisted of the demolition
of the entire building and of constructing a new one in its
place which also involved a further expenditure of Rs. 4
lakhs or so, the proposal was completely different and it
could not be acted upon on the basis of the old sanction.
It was, therefore, absolutely necessary for the appellant to
approach the Court before he embarked upon the new proposal,
even though in doing so he was acting in the interests of
the trust and no mala fides could be attributed to him.
This is the only error committed by the appellant In the
present case. However, in the facts and circumstances of
the case, the error could not be said to have been actuated
by any mala fide intentions on his part The expenses that he
had undertaken to Incur were also within reasonable bounds
looking at the proposal. His intention in promoting the
383
proposal was in the interest of the Trust. [391A-D]
3.2. To the extent that the appellant did not take
permission of the High Court before proceeding to demolish
the existing structure and to construct a new one in its
place, and before undertaking the expenditure of Rs. 4 lakhs
over and above that sanctioned earlier, he did commit a
breach of trust. But the appellant could not be made
personally liable for the breach of trust committed by him,
in view of the provisions of Section 15 of the Official
Trustees Act, 1913. [391-H, 392AB]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 491 of 1993.
From the Judgment and Order dated 5.10.90 of the Madras High
Court in O.S.A No. 271 of 1989.
K.K. Venugopal and P.P. Tripathi for the Appellant.
S. Muralidhar and Kailash Vasudev for the Respondents.
The Judgment of the Court was delivered by
SAWANT, J. Special leave granted.
By a decree in C.S. No. 363 of 1912, schemes for
administration of two trust estates were sanctioned. One
trust estate comprised Premises No. 246, R.K. Mutt Road,
Mylapore, Madras belonging to one Poonambalam Pillai and the
other trust estate comprised the adjoining Premises No. 247
belonging to his wife, Nagai Visalakshi Ammal. We are
concerned in this appeal with the premises bearing No. 246
belonging to the trust estate of Poonambalam Pillai. These
premises were being used as a marriage hall
[Kalyanamandapam].
2. It appears that in both the said trusts, hereditary
trustees were appointed. It is not clear from the judgments
of the courts below as to when the Official Trustee in place
of or in addition to the hereditary trustees came, on the
scene. However, that is not relevant for the decision of
the issue involved in the present appeal.
3. The predecessor of the present appellant Official
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Trustee had made an application to the High Court being
Application No. 2043 of 1988,
384
for permission to incur an expenditure of Rs. 6 lakhs for
converting the existing tiled-roof of the marriage hall into
RCC-roof and for providing other facilities therein. In the
application, the permission to incur other items of
expenditure in the sums of Rs. 4,750, Rs. 9,620 and Rs.
3,161.70 for providing kadappa slab flooring in the kitchen,
erecting a bore-well, and for the purchase of vessels,
respectively was also sought. The report which was filed
along with the application stated that the marriage hall
would fetch a higher income if it was modernised by
converting the existing tiled-roof into RCC-roof and was
provided with the’ other facilities. The report further
gave an estimate of Rs. 6 lakhs prepared by the Assistant
Engineer attached to the office of the Official Trustee, in
respect of the said modernisation plan. Along with the
report, the estimate and the plan of construction were also
filed. From the report, it was seen that out of the total
plinth area of 3822 s.f., only 2145 s.f. were sought to be
covered with RCC-roof The Court by its order dated 3.5.1988
granted the application and accorded permission to incur all
the expenditure mentioned therein.
4. It appears that after the said sanction was given,
one Kanakraj filed an application in the High Court for a
direction to the Official Trustee to give a lease of the
marriage hall to him on certain terms. That application was
dismissed by the Court. While dismissing the application,
the Court directed the Official Trustee to get the blue
print and the approval of the concerned authorities and to
commence the work of modernisation without any delay as
ordered earlier on 3.5.1988.
5. Pursuant to the direction, the then Official
Trustee sent a communication dated 1.12.1988 to six
architects requesting them to give their quotations for
preparing the plan, estimate and design for conversion of
the tiled-roof into RCC-roof and for providing the other
provisions as sanctioned by the Court. Of the six
architects, only three responded. M/s C.R. Narayana Rao,
Architects and Engineers, by their letter of 9.12.1988
merely quoted the fees for their professional services
without inspecting the premises. M/s Madan Associates by
their letter of 30.12.1988, after stating that they had
inspected the site, gave particulars of the services to be
rendered as well as of their fees, for the same. The third
architect, Mr. C.H. Gopinatha Rao by his communication on
7.12.1988 stated that he had inspected the property on
6.12.1988 and that it was worth demolishing the structure
and constructing a new building as per the Development
Control Rules of the Madras Metropolitan Authority.
385
6. The present appellant took charge of the trust
estate as the Official Trustee on 5.1.89, and on 12.1.1989
wrote a letter to one Mohammed Ibrahim Sait, architect,
informing him that it was proposed to convert the existing
tiled-roof of the marriage hall into RCC-roof, and requested
him to inspect the premises and submit his report as to
whether the existing building could withstand such
conversion or whether it had to be demolished and
reconstructed. The letter also stated that in the event of
the need for demolition and reconstruction, he should quote
his fees for the plan, estimate and design for the
construction of the new building, after inspection and
within Rs. 6 lakhs. The architect, Shri Sait by his letter
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of 2.2.1989, replied [which reply was received on 3.2.19891
that he had inspected the premises and that no matter
however much improvement was carried out in the existing
building, the net result would be neither appreciable nor
would it yield maximum returns for the investments made, as
the existing building was very old and in a dilapidated
condition. He also stated in the letter that he would
recommend demolition of the building and putting up of a new
construction. He quoted his fees at 3-1/2 per cent of the
total cost of the work. On 6.2.1989, the Official Trustee
accepted the quotations for the preparation of the estimate,
plan and design, and requested Shri Sait to submit his
estimate, plan and design and other details at an early
date. On 10.2.1989 again, the Official Trustee addressed
another letter under the caption "very urgent" to Shri Sait
whereby he sent the site-plan and the plan of the existing
building along with a Xerox copy of the Will of Poonambalam
Pillai for further action.
In the meanwhile, on 2.2.1989, i.e., even prior to the
receipt of the reply from Shri Sait to the Official
Trustee’s letter of 12.1.1989 [which, as stated, was
received on 3.2.19891, the Deputy Official Trustee submitted
a report of his inspection of certain properties comprised
in the trust estate in which he also stated that marriage
hall was a choultry and was being let out for various
functions and that there was a proposal to demolish and
reconstruct that building and that the said proposal might
also be extended to the property bearing No. 247 belonging
to the other trust estate [viz., the trust estate of the
wife of Poonambalam Pillail, by taking up :the demolition
and reconstruction of both the buildings thus constructing a
shopping complex besides the marriage hall.
7. Thereafter, the Official Trustee by his letter of
10.4.1989 addressed to the Commissioner of the Metropolitan
Corporation of Madras,
386
sought permission to demolish the existing building of the
marriage hall. The Corporation by its letter of 3.5.1989
directed the Official Trustee to deposit a sum of Rs. 10,240
towards scrutiny and demolition fee. It does not appear
from this letter that the Corporation had in terms granted
permission to demolish the building as the fee so demanded
was only for taking further action on the application for
demolition made by the Official Trustee. On 5.5.1989, Shri
Sait sent an estimate of Rs. 9.60 lakhs for the proposed new
construction of the marriage hall on 8.5.1989., the Official
Trustee sent a cheque for Rs. 10,240 to the Revenue Officer
of the Municipal Corporation of Madras and informed Shri
Sait to the effect that the Corporation had sanctioned the
demolition of the marriage hall. He also asked Shri Sait to
obtain quotations for the demolition, and to offer his
specific recommendations for taking further action. On
10.5.1989, Shri Sait demanded payment of Rs. 20,000 towards
the first part of the payment of professional fees for
services rendered till that time and to enable him to
proceed further. On 12.5.1989, the Official Trustee sent a
sum of Rs. 15,000 to Shri Sait. By letter dated 15.5.1989,
one S.A. Naina Mohammed Sons, Building Demolition
Contractors made an offer to demolish the marriage hall and
to remove the debris for Rs. 15,000. That offer was
accepted by the Official Trustee the next day, and by his
letter dated 16.5.1989 addressed to the said Contractors he
requested them to pay a sum of Rs. 15,000 and take up the
work of the demolition. On 17.5.1989, the Official Trustee
informed, the persons who had booked the choultry for
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marriages earlier, that the allotments had been cancelled
owing to the demolition and asked them to receive their
refunds of the rent paid by them.
8. On 8.6.1989, a sum of Rs. 15,000 was collected from
Shri Sait on behalf of the contractor- S.A. Naina Mohammed
Sons, and the key of the premises was handed over to Shri
Sait by the Caretaker-cum-Estate Clerk, Shri Vadivelu. This
was approved of by the Official Trustee on 9.6.1989. The
work of the demolition of the marriage hall commenced on
8.6.1989 and the building was completely demolished.
9. On 13.6.1989, the Official Trustee filed an Application
No. 2592 of 1989 before the High Court. Along with the
application, he also filed a report prepared on 6.6.1989. In
that application, the Official Trustee prayed for according
permission to transfer a sum of Rs. 7 lakhs from the other
trust estate, viz. that of Nagai Visalakshi Ammal (wife of
Poonam-
387
balam Pillai) to the trust estate of Poonambalam Pillai, to
enable him to incur a total expenditure of Rs.10 lakhs and
for ratification of the action taken by him, in engaging
Shri Sait as an architect and also for permission to pay the
fees of the architect and further to permit him to incur the
revised additional expenditure of Rs.4 lakhs in addition to
the sum of Rs.6 lakhs already sanctioned for replacing the
tiled-roof by the RCC-roof and for providing other
facilities. In this report, the Official Trustee referred
to the earlier order of 3.5.1988 and stated that though a
sum of Rs. 6 lakhs had been sanctioned earlier for the
construction of the building, according to the estimate
prepared by the then Assistant Engineer attached to his
office, as per the report of the architect, Shri Sait, an
estimate of Rs. 9.60 lakhs was being submitted and thus an
additional sum of Rs. 4 lakhs was required to dismantle the
existing structure and to construct a new one in its place.
It was further stated in the said report that as only a sum
of Rs. 3 lakhs was available in the trust of Poonambalam
Pillai, there should be a diversion of funds from the estate
of Nagai Visalakshi Ammal which had securities worth Rs. 15
lakhs available with it. The report also stated that the
Junior Engineer attached to the office of the Official
Trustee was only a technical officer not having the benefit
of the services of an technical assistant and, therefore,
the services of an architect were engaged. The report
mentioned the payment of Rs. 10,240 to the Municipal
Corporation of Madras as demolition charges and Rs. 15,000
to the architect, Shri Sait. Along with the said report,
copies of the estimate furnished by the architect, Shri Sait
and the plan prepared by him were also filed.
10. It appears that though notice of the said application
was no? given to the persons interested in the trust, the
hereditary trustees as well as the residual beneficiaries
intervened in the application, to oppose it. The learned
Judge held that the Official Trustee had proceeded to
demolish the marriage hall without getting specific orders
of the Court and that he had done so in undue haste and to
the detriment of the trust. The learned Judge further held
that the Official Trustee had not placed all the facts
before the Court and had also acted in an irresponsible
manner in demolishing the building, and hence the relief
prayed for could not be granted. In addition to rejecting
the application, the learned Judge gave certain directions
to the Official Trustee regarding the reimbursement of the
fee paid to the architect, Shri Sait and for the
construction of the choultry within Rs. 6 lakhs as
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sanctioned earlier. He further directed that expenditure in
excess of Rs. 6 lakhs for building the hall should be borne
388
by the Official Trustee himself
11. The appellant-Official Trustee preferred an appeal
against the said order to the Division Bench of the High
Court which confirmed the same by the impugned decision.
12. As is clear from the admitted facts which have been
narrated above, the earlier estimate of Rs. 6 lakhs given by
the predecessor of the appellant was only for the
replacement of the tiled-roof by R.C.C. slab. It was
admittedly not for the demolition of the old building and
construction of a new building in its place. It is not
necessary to have the benefit of an expert opinion to
appreciate that if for the replacement of the roof only, the
cost as sanctioned by the Court itself was Rs. 6 lakhs, the
cost for the demolition and construction of the new building
estimated at Rs. 9.60 lakhs could not be said to be
excessive. The estimate by all accounts appears to be
reasonable. It does not also appear from the judgments of
both the courts below that it was ever suggested by any
party before them that the said estimate was either
excessive or unreasonable. Nor is it argued even before us
that it was excessive. Hence, when the appellant accepted
the said estimate and sanctioned the demolition of the old
building and the reconstruction of the new one for the said
amount, it cannot be said that he was not acting bona fide.
In this connection, it must further be remembered that the
appellant came on the scene for the first time on 5.1.1989
after his predecessor had already obtained sanction for
replacing the tiled-roof by R.C.C. slab and for other
expenditure, and after he had invited the quotations from
the architects concerned. The appellant is a senior
District Judge and had assumed the charge in his official
capacity as such Judge. There is no whisper against his
integrity in the discharge of his duties as Judge and in
fact as it transpires, this was his last posting before he
retired in 1991.
13. However, both the courts below have held two factors as
going against his conduct. The first is that he had not
obtained the permission of the Court for demolition of the
old building and construction of a new one in its place
before he ordered the same, and the second is that he had
sanctioned the proposal with haste. There is no doubt that,
as the facts disclose, the earlier sanction granted by the
Court by its order of 3.5.1988 was only for replacement of
the tiled-roof by R.C.C. slab and for other minor
provisions. The sanction was not for demolition of the
entire building
389
and for construction of a new one. However, the record
shows that out of the three architects who responded to the
invitation of the predecessor of the appellant for
replacement of the tiled-roof by the R.C.C. slab, one
architect did not even care to visit the site and examine
whether the old structure could bear the weight of the
R.C.C. slab. As regards the second architect, he did not
refer to the fact whether the old structure was capable of
bearing the weight of the R.C.C. slab. He merely stated
that he had inspected the premises and then proceeded to
indicate his charges for preparing the plan etc. It may,
however, be presumed that since he had not referred to the
condition of the building, he was of the opinion that the
old building could bear the weight of the R.C.C. slab. It
is only the third architect, viz., Shri Gopinatha Rao who
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stated that it was worth demolishing the old building and
constructing a new one in its place as per the Development
Control Rules of the Madras Municipal Corporation. This was
the state of affairs on the files of the Official Trustee
when the appellant took charge. In the circumstances, there
was nothing unnatural on the part of the appellant to have
specifically addressed a letter to one more architect, viz.,
Shri Sait pointing out to him, as he did, that it was
proposed to convert the existing tiled-roof into RCC-roof,
and requesting him to inspect the premises and submit a
report specifically on the point as to whether the existing
building could withstand the conversion or whether it had to
be demolished and a new building constructed in its place,
as suggested by Shri Gopinatha Rao. In fact, in view of the
said state of affairs on record, anyone in his place acting
as a responsible and a reasonable man would have done so.
Since Shri Sait, the new architect gave his report after
inspecting the premises that no matter however much
improvement was carried out in the building, the net result
would be neither appreciable nor would it yield maximum
returns for the investments made as the existing building
was very old and in a dilapidated condition, there was
further nothing wrong if the appellant accepted the said
report and proceeded to take immediate steps in the interest
of the trust estate. The courts below have no doubt made
much of the fact that there was no other evidence except the
report of Shri Sait to show that the building had become
"very old" and was in a "dilapidated condition". That was
certainly not the fault of the appellant. As stated above,
out of the three earlier architects, one had not even
inspected the site, the second did not refer to the state of
the building in his quotations and the third had very much
suggested the demolition of the old building and
construction of a new one.
390
It is true that the third architect while suggesting the
demolition of the old and construction of a new one, did not
say as to why he was making such a recommendation, viz.,
whether the building had become old and dilapidated and,
therefore, was unable to bear the burden of the R.C.C. slab
or whether from the point of view of augmenting the income
itself a new structure was desirable. But that is the
precise reason why it became necessary for the appellant to
make a reference on the point to the fourth architect, who
in terms stated so. If, according to the courts below there
was no evidence except Shri Sait’s report that the building
had become old and dilapidated, there was equally no
evidence to show that it was not dilapidated or was strong
enough to bear the burden of the R.C.C. slab. The courts
further forgot to take into consideration the fact that the
building was in existence at least from 1912 if not from an
earlier date, since the order of the Court creating the
trust schemes refers to the said building. The courts below
have also unfortunately not brought on record which it was
possible for them to do, as to when the said building was in
fact originally constructed. The building was thus at least
76 years old, if not more, in 1988. In the circumstances,
it is difficult to doubt the bona fides of the
recommendations made by one of the three earlier architects,
viz., Shri C.H. Gopinatha Rao or by the new architect, Shri
Sait. In any case, the bona fides of the appellant who
acted on the said facts on record could hardly be
questioned.
bona fides of the appellant are, as stated earlier, also
influenced by the fact that the appellant had acted hastily
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in ordering the demolition of the old building and
construction of the new one on the site. But, if for the
reasons pointed out earlier, the bona fides of the appellant
could not be doubted, the rapid steps taken by the appellant
can only be consistent with his intention to act as early as
possible in the interest of the trust, since by the new
construction, the income of the trust was expected to be
augmented. Further, the delay in construction was also
likely to increase the cost of construction, apart from the
loss of income that was to result from such delay. Hence,
the so-called haste cannot be looked upon only with
suspicion or as contributing only to the malafide intentions
on the part of the appellant. It is also consistent both
with a diligent and responsible conduct on his part and with
the best of his intentions to subserve the interests of the
trust.
391
15. There is no doubt that the appellant knew that the
earlier sanction obtained was only for replacement of the
tiled-roof by the R.C.C. slab. The sanction was also for
incurring only an expenditure of Rs. 6 lakhs and some other
sundry expenses for providing minor facilities. Since the
new proposal which he sanctioned consisted of the demolition
of the entire building and of constructing a new one in its
place which also involved a further expenditure of Rs. 4
lakhs or so, the proposal was completely different and it
could not be acted upon on the basis of the old sanction.
It was, therefore, absolutely necessary for the appellant to
approach the Court before he embarked upon on the new
proposal even though in doing so he was acting in the
interests of the trust and no mala fides could be attributed
to him. We find that this is the only error committed by
the appellant in the present case. However, in the facts
and circumstances of the case, the error could not be said
to have been actuated by any mala fide intentions on his
part. The expenses that he had undertaken to incur were
also within reasonable bounds looking at the proposal. His
intention in promoting the proposal could not be said to be
other than honourable, and in any case it could not be said
that it was not in the interests of the trust. In view of
this, it was wrong on the part of the courts below to make
the appellant himself pay for the excess expenditure
involved in the proposal.
16. Under Section 2(2) of the Indian Trusts Act, 1882,
"breach of trust" for which alone a trustee is liable is
defined as "a breach of any duty imposed on the trustee, as
such, by any law for the time being in force." Section 28(b)
of the Official Trustees Act, 1913 states that :
"28. General Powers of administration. The
Official Trustee may in addition to and not in
derogation of any other powers of expenditure
lawfully exercisable by him, incur
expenditure-
[a]............................................
[b] with the sanction of the High Court on
such religious, charitable and other objects
and on such improvements as may be reasonable
and proper in the case of such property".
It is, therefore, true, as stated earlier, that to the
extent that the
392
appellant did not take permission of the High Court before
proceeding to demolish the existing structure and to
construct a new one in its place, and before undertaking the
expenditure of Rs. 4 lakhs over and above that sanctioned
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earlier, he did commit a breach of trust. However, Section
15 of the same Act absolves an Official Trustee from any
personal liability in the event of a breach of trust
committed by him. The said section reads as follows:
15. Lability of Government. (1) The
Government shall be liable to make good all
sums required to discharge any liability which
the Official Trustee, if he were a private
trustee, would be personally liable to
discharge, except when the liability is one to
which neither the Official Trustee nor any of
his officers has in any way contributed or
which neither he nor any of his officers could
by the exercise of reasonable diligence have
averted and in either of those cases the
Official Trustee shall not, nor shall the
Government be subject to any liability.
(2) Nothing in subsection (1) shall be
deemed to render the Government or any
Official Trustee appointed under this Act
liable for anything done by or under the
authority of any Official Trustee before the
commencement of this Act.’
In view of these provisions, it is clear that the appellant
could not be made personally liable for the breach of trust
committed by him. Although it is disputed on behalf of
respondent No. 3 that this point was urged before the
Division Bench, it is stated on behalf of the appellant that
the point was very much canvassed before the Bench but was
unfortunately not noticed by it. Whatever the controversy,
we are of the view that in view of the clear provisions of
the Act, the legal question cannot be ignored by us. This
is particularly so when no further evidence is necessary to
answer it.
17. In the circumstances, we are of the view that the
impugned order of the High Court cannot be sustained. The
appeal is accordingly allowed and the decision of the High
Court is set aside. In the facts and circumstances of the
case, there will be no order as to costs.
G.N. Appeal allowed.