TMI Blog1936 (11) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... operty in suit, and not merely managers of the same, and that the applicants were entitled only to their out-of-pocket costs and a further sum in respect of their office expenses in the conduct of the suit. The matter has now come up before me on a review of the taxation. 2. The suit was filed by the plaintiffs with the sanction of the Advocate General for a declaration that the Bhuleshwar Tank, situate at Bhuleshwar Street in the vicinity of several temples, which was the subject-matter of the suit, was a public charity for the Hindus of all communities for religious and ceremonial purposes, that the defendants who were described as the trustees of the temples, charitable institutions and funds of the Gowd Saraswat community of Bombay had no right or interest in the tank and should be restrained from filling it up, and that a scheme may be framed by the Court, and for other reliefs. The suit was filed on August 18, 1928. It reached hearing in 1934, and on April 6, 1934, it was allowed to be dismissed by consent of parties, no order being made as to costs. The applicants thereupon lodged their bill of costs for taxation between attorney and client, to which objections were tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n defendants were ordered to hand over charge of all the properties and transfer the same to the newly appointed trustees and to render, accounts to them. No such transfer was made in respect of the Immovable properties belonging to the charity. A scheme was asked for in the suit, but none was framed. What happened thereafter was that in October, 1900, certain rules and regulations were passed at a meeting of the community, and the defendants say that the charity properties have been managed and administered by them and their predecessors in accordance with those rules and regulations. No vesting order was made in respect of the properties, nor was there any declaration by the trustees declaring that they held the Properties on trust. 5. I will deal with the rules and regulations framed at the meeting of the community in October, 1900, presently. The respondents claim to have been appointed trustees in accordance with those rules and regulations. The applicants, on the other hand, deny that the respondents were or are trustees as alleged. Under Section 3 of the Indian Trusts Act a 'trust' is defined as an obligation annexed to the ownership of property, and arising o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , according to arrangement, transferable on the signatures of any three of the seven persons. Mr. Sabnis has not endorsed any one of them, but he must have known that those particular securities were endorsed to his name as one of the seven. It is difficult to understand the Immovable properties belonging to the charity were not transferred to the trustees in spite of the order of the Court of January, 1898. It is still more difficult to understand how it can be said, as is stated by Mr. Nerurkar in his affidavit, and by Mr. B.S. Sabnis in his evidence, that the Immovable properties have vested in the trustees . The fact that they stand in the Collector's record or the Municipal record in the collective name of the trustees does not mean that the Immovable properties were vested in them. As a matter of fact the Bhuleshwar Temple and Tank stood in wrong names in the Collector's record for a long time until it was corrected in 1935. 6. Counsel for the respondents argued that there was no need for a vesting order to constitute the title of the persons who were declared trustees by the Court in 1898, that the appointment of a trustee and the vesting of the property in him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les were made and a new board came into existence in 1900. The rules were made at a meeting held on October 7, 1900, and In re according to the heading these rules were made for the management of temples, charitable institutions and funds of the said community . It was ladi down in Rule 1 that as regards the elections of the managers (trustees) and the auditors (auditors) for the management of the said temples, charitable institutions and funds, they shall be elected at a public meeting of the community to be held for the said purpose every year . The English word 'trustees' is put in the Balbodh characters in parenthesis after the word 'managers'; after that, throughout the rules, they are referred to as trustees . These rules were not submitted to the Court, but it was argued that that was unnecessary. The respondents claim to have been appointed trustees under these rules. The question arises, whether they were trustees in law, or merely managers, of the charity properties. The mere use of the word ' trustees' does not matter; what matters is the substance underlying the word. It is true that the plaint in the suit describes the defendants as truste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trustee within the meaning of Section 3 of the Indian Trusts Act : Ardeshir v.0 Manchershaw (1909) 12 Bom. L.R. 53. 8. The defendants, therefore, cannot be said to be express trustees. Can it be said that they are constructive trustees? Counsel referred to Section 94 of the Indian Trusts Act which provides that in any case not coming under the preceding sections of Chapter IX of the Act, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands. It was argued that the defendants were in possession of the property, but that they had not the whole beneficial interest therein, as they along with the entire community had the whole beneficial interest in the same. What is the nature of the possession claimed by the defendants in respect of the Immovable properties. In order to be trustees, whether express or constructive, the trustees must be the legal owners of the property, for a trust is an obligation annexed to the ownership of property, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court, v. Committee of Rameshwar and another, being a judgment of the Appeal Court of Madras, Nethiri Menon v. Gopalan Nair I.L.R. (1915) Mad. 597 He has accordingly held that the provisions of the Indian Trusts Act should act as a guide by analogy in matters relating to public trusts, but I do not think that either of the two cases he relies on has laid down anything so broad as that. In my opinion, it is not correct to say that the provisions of the Indian Trusts Act should guide us by way of analogy in the matter of public trusts, for that would amount to doing that which the legislature has expressly prohibited. The correct position is that in matters relating to public charitable trusts the Courts in India would be governed by the principles and rules of English law and practice on the subject, unless, to use the words of the Appeal Court in Rege v. Vasantrao Ganpatrao I.L.R. (1934) Bom. 443 : 37 Bom. L.R. 39 the English law or practice is inconsistent with the rules or practice of this Court. For instance it was held in Dhanrajgirji v. Payne Co. AIR1933Bom317 following the English law, that a solicitor acting for a non-existent party was personally liable for costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rator shall have no allowance for his care and trouble. The reason given by Lord Talbot L.C. at p. 251 is that the trust estate may be otherwise loaded and rendered of little value; but it is more generally put on the ground of prudence that a trustee may not put himself in a position in which his interest and duty come in conflict : see New v. Jones (1833) 1 Mac. G. 668. The incapacity applies not only to the solicitor-trustee personally, but also to his firm who act as his solicitors. In the case of New v. Jones the solicitor-trustee was acting only for himself. A solicitor-trustee is not bound to act professionally also for his co-trustees. The applicants rely on another rule which modifies the general rule, and that was laid down in 1850 in Cradock v. Piper (1850) 1 Mac. G. 644. It was held by Lord Cottenham in that case, affirming Shadwell v. C, that the circumstance of a solicitor being a trustee will not prevent him from receiving his usual costs where he acts as solicitor in a suit for any of the beneficiaries or where he acts for himself and his co-trustees jointly, provided the costs are not increased by his being one of the parties for whom such joint appearance is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a charge contained in a letter that the respondent, whilst holding the fiduciary position of vice-chairman of the Council of the Yorkshire College, was making profit as its paid solicitor. Lord Herschell observes as follows (p. 51):- It is an inflexible rule of a Court of Equity that a person in a fiduciary position, such as the respondent's, is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. It does not appear to me that this rule is, as has been said, founded upon principles of morality. I regard it rather as based on the consideration that, human nature being what it is, there is danger, in such circumstances, of the person holding a fiduciary position being swayed by interest rather than by duty, and thus prejudicing those whom he was bound to protect. It has, therefore, been deemed expedient to lay down this positive rule. But I am satisfied that it might be departed from in many cases, without any breach of morality, without any wrong being inflicted, and without any consciousness of wrong-doing. Indeed, it is obvious that it might sometimes be to the advantage o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t against a trustee that it did not admit of any exception or extension except by deed or agreement, its application should also be restricted to those who were trustees in the strict legal sense of the term, and that the defendants not being trustees, the applicants should get their full costs. But it has been held that this general rule applies to all persons standing in a fiduciary position, though they may not be strictly trustees , e.g. see Bray v. Ford referred to above. Whether therefore the defendants were managers of the charity properties, in the position of trustees, for and on behalf of the community, as I have held, or whether they were trustees, either express or constructive, in law, I do not see why the applicants should not get the advantage of the modification of the general rule of English law as to payment of costs, embodied in Cradock v. Piper. 13. There is really no question of estoppel in this case, and the point has not been pressed. It appears, however, from the minutes of the resolutions passed by the community that Mr. Sabnis was willing in 1927 to resign on account of any embarrassment that may be caused to his co-trustees in the matter of his or his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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