Official Trustee liability for unauthorised reconstruction was limited: technical breach of trust found, but no personal burden for excess cost.

An Official Trustee who demolished a trust building and proceeded with new construction without fresh High Court sanction committed a technical breach of trust because the work went beyond the earlier limited approval, but the conduct was not mala fide as it was based on reports that the building was dilapidated and the project was intended to improve trust income. The Official Trustee could not be made personally liable for the excess expenditure, since the statutory scheme does not treat him like a private trustee and there was no finding of dishonest conduct or personal default justifying such burden. The impugned personal liability was therefore set aside.

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Issues: (i) Whether the Official Trustee's action in demolishing the existing trust building and proceeding with a new construction without prior sanction of the High Court constituted a breach of trust; (ii) whether the Official Trustee could be personally made liable to bear the excess expenditure incurred in that process.

Issue (i): Whether the Official Trustee's action in demolishing the existing trust building and proceeding with a new construction without prior sanction of the High Court constituted a breach of trust.

Analysis: The proposed demolition and reconstruction were materially different from the earlier sanction, which was confined to replacing the tiled roof with an RCC roof and incurring limited additional expenditure. The action taken without fresh permission therefore fell outside the authority earlier granted. At the same time, the material on record showed that the decision was taken on the basis of architectural reports indicating that the building was old, dilapidated, and unsuitable for the intended improvement, and the course adopted was aimed at enhancing the trust's income. The omission was thus a procedural and legal error, but not one motivated by mala fides.

Conclusion: The action amounted to a technical breach of trust for want of prior sanction, but it was not found to be mala fide.

Issue (ii): Whether the Official Trustee could be personally made liable to bear the excess expenditure incurred in that process.

Analysis: Liability for breach of trust is attracted only where a duty imposed by law has been breached, but the statutory scheme governing Official Trustees expressly provides that the Government is liable to make good sums for which the Official Trustee would otherwise be personally liable, and the Official Trustee is not personally liable in the manner of a private trustee. In the absence of any finding of dishonest conduct or personal default of the kind that would justify shifting the financial burden onto him, the excess expenditure could not be recovered from the Official Trustee personally.

Conclusion: The Official Trustee could not be saddled with personal liability for the excess expenditure.

Final Conclusion: The High Court's order was unsustainable and the appeal succeeded, with the trustee's impugned personal liability being set aside.

Ratio Decidendi: An Official Trustee who acts without prior sanction in a matter requiring High Court approval may commit a breach of trust, but absent mala fides or a statutory basis for personal liability, he cannot be personally burdened with the resulting expenditure.

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