2016 (9) TMI 1275 - SC - Indian Laws

Supreme Court affirms plaintiff's nomination as Donor Trustee & marriage validity, upholding State Government approval.

The Supreme Court upheld the High Court's decision that the plaintiff was validly nominated as the Donor Trustee by B.S. Narayan. The court confirmed the ... Donor Trustee - whether it is the plaintiff who was validly nominated Donor Trustee or the State Government? - Held that:- From the para (IV)(i) of the original Trust Deed dated 02.12.1957, it is clear that B.S. Narayan was to continue as Donor Trustee during his life time where after he was to be succeeded by his lineal descendant, and if the mode of succession fails then, power of the appointment of the Trust Deed was to vest with the State Government. Amendment of 1978 as shown in the chart quoted earlier, makes it clear that name of Minnie Narayan was added in para (IV)(i) as nominee to succeed from B.S. Narayan, and thereafter senior most of the lineal descendant, and if the mode of succession fail, the powers were to be exercised by the State Government. It appears that after Minnie Narayan was divorced by B.S. Narayan, and he (B.S. Narayan) got married to Ragini Narayan (plaintiff) where after further amendment was proposed and passed through Resolution dated 10.12.1994 (as mentioned in amended deed registered on 30.01.1995) and by this amendment i.e. of 1994 name of Minnie Narayan was deleted, and it was mentioned that after the life time of B.S. Narayan, his senior most lineal descendant or a member of his family or his wife was to succeed, and if mode of succession fails, then powers of Donor Trustee were to be exercised by the State Government. There is concurrent finding of fact of the courts below that Ragini Narayan was the wife of B.S. Narayan Donor Trustee, at the time of his death, as such it cannot be said that mode of succession mentioned in para (IV)(i) failed. Whether it is amendment of 1978 or 1995 the expression 'or his wife' is there. In our opinion the words-’or his wife' in the amendment of 1978 to which the appellants admittedly approved refer to wife of the Donor Trustee. Same expression is retained in the 30.01.1995 amendment. The amendment of 1978 was, admittedly, approved by the State of Karnataka. Insofar as the amendment of 1994 is concerned, we have already held that by virtue of Ex.A-7 dated 13.8.1995, the recital contained therein and in view of the letter of the State Government dated 7.11.1995 the consent of the State Government to the amendment of 1994 can be readily inferred. Therefore, we do not find any error in the impugned order passed by the High Court. However, we clarify that any nominee appointed by the State Government as Trustee will be entitled to function as ordinary trustee in the Council of Trustees as provided in the Trust Deed but not as the Donor Trustee till the succession as mentioned in the Trust Deed (as amended) fails. Issues Involved:1. Validity of the plaintiff's marriage with B.S. Narayan.2. Authority of B.S. Narayan to nominate his wife as Donor Trustee.3. Approval of the 1994 amendment by the State Government.4. Validity of the nomination and delegation of powers to the plaintiff.5. Role and authority of the State Government in appointing a Donor Trustee.Issue-wise Detailed Analysis:1. Validity of the plaintiff's marriage with B.S. Narayan:The trial court and the High Court both decided in favor of the plaintiff regarding the validity of her marriage to B.S. Narayan. The courts found that the plaintiff was legally married to B.S. Narayan on 21.05.1984, after he divorced his first wife, Smt. Minnie Narayan. This finding was crucial as it established the plaintiff's standing in the case.2. Authority of B.S. Narayan to nominate his wife as Donor Trustee:The original Trust Deed dated 02.12.1957, and subsequent amendments, particularly the one approved in 1978, allowed B.S. Narayan to nominate his wife as Donor Trustee. The Trust Deed provided that B.S. Narayan and his successors had the right to appoint trustees, and the amendment in 1978 included the provision that his wife could be a successor. The courts found that B.S. Narayan had the authority to nominate his wife, and the delegation of powers to the plaintiff did not suffer from any illegality.3. Approval of the 1994 amendment by the State Government:The 1994 amendment to the Trust Deed, which was registered on 30.01.1995, was a point of contention. The defendants argued that the amendment was not approved by the State Government, making it inoperative. However, the Supreme Court found that documents on record, including a 'Deed of Appointment' dated 13.08.1995 and a letter from the Government of Karnataka dated 07.11.1995, indicated that the State Government had approved the amendment. The court held that the State Government's approval could be inferred from these documents.4. Validity of the nomination and delegation of powers to the plaintiff:The plaintiff claimed that B.S. Narayan, exercising his powers under the Trust Deed, nominated her as the Donor Trustee on 16.01.1995. The defendants contended that this nomination was invalid as the amendment was not registered until 30.01.1995. The Supreme Court referred to Section 47 of the Registration Act, 1908, which states that a registered document operates from the time of its execution, not from the time of its registration. Therefore, the court upheld the validity of the nomination and delegation of powers to the plaintiff.5. Role and authority of the State Government in appointing a Donor Trustee:The original Trust Deed and its amendments provided that if the mode of succession failed, the State Government would have the power to appoint a Donor Trustee. The defendants argued that the State Government appointed M.R. Sreenivasa Murthy as Donor Trustee after B.S. Narayan's death. However, the court found that the succession did not fail as the plaintiff, being the wife of B.S. Narayan, was a valid successor. The court clarified that any nominee appointed by the State Government would function as an ordinary trustee, not as the Donor Trustee, until the succession as mentioned in the Trust Deed failed.Conclusion:The Supreme Court dismissed the appeal, upholding the High Court's decision that the plaintiff was validly nominated as the Donor Trustee by B.S. Narayan. The court found no error in the High Court's order and clarified the roles of the trustees as per the Trust Deed.