City Civil Court lacks jurisdiction in breach of trust suit; Plaintiff's appeal successful, costs pending.

Chatrabhuj Mavji Merchant Versus Sumati Morarjee and Ors.

Chatrabhuj Mavji Merchant Versus Sumati Morarjee and Ors. - 1991 (4) Bom. CR 289 Issues Involved:
1. Jurisdiction of the City Civil Court to try the suit.
2. Breach of Trust by the defendants.
3. Legality of the appointment of the fourth defendant as a trustee.
4. Validity of resolutions passed by the defendants regarding the lease and rent of the trust property.

Detailed Analysis:

1. Jurisdiction of the City Civil Court:
The primary issue debated was whether the City Civil Court (City Court) had the jurisdiction to try the suit filed by the plaintiff. The plaintiff, a co-trustee, alleged breach of trust by the defendants and sought declarations and injunctions. The City Court dismissed the interim reliefs, prompting the plaintiff to appeal. The court examined whether the City Court had jurisdiction over the suit, considering the trust was a private trust governed by the Trusts Act, which does not specify a forum for suits alleging breach of trust. Several sections of the Trusts Act imply that such matters should be addressed by a 'Principal Civil Court of original jurisdiction' (Principal Court). The court concluded that breach of trust suits must be instituted in the Principal Court, which, in this case, is not the City Court. The City Court is an additional civil court for Greater Bombay and does not have the status of a Principal Court.

2. Breach of Trust by the Defendants:
The plaintiff accused defendant No. 1 of misusing her position as a managing trustee with the support of defendants Nos. 2 and 3. The plaintiff alleged that defendant No. 1 had leased the trust property, Dhan Bhavan, to herself at a nominal rent and later reduced the rent to nothing through resolutions passed without the plaintiff's consent. The plaintiff claimed these actions violated the trust deed and the Indian Trusts Act, 1882.

3. Legality of the Appointment of the Fourth Defendant as a Trustee:
The plaintiff challenged the appointment of defendant No. 4 as a trustee, asserting that his consent was not obtained for the appointment, rendering it illegal. The court noted that the plaintiff sought declarations to nullify the resolutions related to the lease and the appointment of defendant No. 4.

4. Validity of Resolutions Passed by the Defendants:
The plaintiff sought declarations to nullify the resolutions granting the lease of Dhan Bhavan to defendant No. 1 and the reduction of rent to nothing. The court examined whether these resolutions were passed in accordance with the trust deed and the Trusts Act. The court highlighted that the plaintiff was not a party to these resolutions, and as a trustee, defendant No. 1 could not lease the trust property to herself or make decisions against the trust property without proper consent.

Conclusion:
The court held that the City Court did not have the jurisdiction to try the suit as it was not a Principal Civil Court of original jurisdiction. The impugned order was set aside on this ground, and the status quo was ordered to continue for eight weeks to allow the appellant to consider his position. The appeal was allowed with costs left to be decided in the suit.