Trustees May Act by Majority if Trust Instrument Authorizes Delegation Without Requirement of Unanimity.

The Appellants are three registered societies (Hindustan Medical Institution, Eastern India Educational Institution, and Belle Vue Clinic) that hold significant shares in Birla Corporation Limited (BCL).

Following the death of Priyamvada Devi Birla, legal disputes arose regarding the control of these societies and the authority to vote their shares in BCL.

Rival factions claimed the right to issue voting authorizations for BCL's Annual General Meetings (AGM), leading the societies to file suits seeking injunctions to compel BCL to recognize authorizations issued by the majority of their respective Boards of Trustees based on resolutions passed on March 4, 2021.

A Single Judge of the Calcutta High Court denied ad-interim relief, and on appeal, the Division Bench affirmed the denial but held that under Section 48 of the Trusts Act, trustees must act unanimously ("in consonance") and directed the scrutinizer to count only the "first vote cast," regardless of whose authority it was cast under.

1. Whether the Division Bench was justified in holding that trustees must act in consonance and that a decision is invalid if any one trustee does not join, despite provisions in the societies' by-laws.

2. Whether the governing structure of the societies permitted the Board of Trustees and the Managing Committee to be treated as interchangeble for the purpose of voting authority.

3. Whether a judicial direction that the "vote cast first" prevails—irrespective of the source of authority—is sustainable under the Companies Act and relevant Rules.

Clause 24 of the societies' by-laws expressly permits delegation of authority via resolutions evidenced in writing by a majority of trustees.

Section 48 of the Indian Trusts Act, 1882, which requires trustees to act jointly, contains an express exception: "except where the instrument of trust otherwise provides."

The principles of interpretation established in Reserve Bank of India v. Peerless General Finance and J.K. Cotton Spinning & Weaving Mills emphasize that no part of a governing document should be rendered redundant (generalia specialibus non derogant).

Section 108 of the Companies Act, 2013, and Rule 20 of the Companies (Management and Administration) Rules, 2014, mandate that voting validity depends on lawful authorization and verification by a scrutinizer.

The Court found that the Division Bench erred by applying the general rule of trustee unanimity from L. Janakirama Iyer v. Nilakanta Iyer while ignoring the specific exception in Section 48 of the Trusts Act and the express language of Clause 24 of the societies' by-laws.

Clause 24 specifically empowers a majority of trustees to bind the society, rendering the requirement for "consonance" (unanimity) legally incorrect.

The Court analyzed the Memorandum of Association and Rules, noting that properties "vest in the Trustees" and the Managing Committee is a subordinate body; thus, the Division Bench erred by treating the two bodies as interchangeable.

The "first vote cast" rule was found to be a judicial invention contradicting the Companies Act, as priority in time cannot validate an act performed without lawful authority.

The Supreme Court allowed the appeals, set aside the Division Bench's judgment, and restored the suits and interlocutory applications to the High Court for fresh consideration on factual merits.