Case: Official Trustee, West Bengal &amp; Ors Vs. Sachindra Nath Chatterjee &amp; Anr

2. One Aswini Kumar Chatterjee (since deceased) executed the Trust deed Exh. I on December 6, 1930, in respect of some of the properties owned by him. It is provided therein (a) that the settlor would be the trustee of the Trust Estate and would enjoy the income and profits of the trust properties during his lifetime, (b) after his death his wife Smt. Santimoyee Devee and/or his sons as soon as they or any of them attain the age of majority should be the sole Trustee or Joint Trustees and (c) from and after his death the said Trust Estate should be held to the use and for the benefit of the said Smt. Santimoyee Devee and the said sons. Santimoyee Devee to be paid from the income and the profits of the said estate Rs. 50/. monthly and the balance of the Income and profits of the Trust Estate to be held for the use and benefit of each of the sons in equal shares and after the death of the said Santimoyee Devee to make over the whole of the Trust Estate to each of the sons in equal shares. He reserved to himself the power to vary the terms and conditions of the Trust so far as they relate to the quantum of interest given to each of the beneficiaries after the earn of the settlor "by his instrument by will alone and in no other way or act"3. The settlor administered the trust property for sometime and thereafter thought of effecting by deed inter vivos certain changes in the trust. To enable him to do so he took out an originating summons on the original side of the Calcutta High Court under Chapter XIII of the Original Side Rules of that Court seeking primarily two reliefs viz., (1) to have the Official Trustee, Bengal appointed as the Trustee in his place and (2) to empower him to alter the clause renting to variation of the quantum of interest given to each of the beneficiaries by a deed inter vivos. From the averments made in the application, it is clear that relief was sought under the provisions of the Indian Trusts Act (Central Act 2 of 1882) and the Official Trustees Act (Central Act 2 of 1913). In the body of the petition the settlor definitely prayed for permission to revoke the clause in the Trust deed relating to his power to vary the quantum of interest of the beneficiaries by will alone and in its place authorise him to make that variation "by deed inter vivos and not by will alone. The relevant reliefs asked for in the petition read as follows :(1) "that the provisions contained in the Deed of settlement dated the 6th December,1930, whereby the persons therein named were appointed Trustees of the said Trust Estate and whereby power was reserved to petitioner to alter the said quantum of interest by will alone and in no other way be revoked; and(2) that the petitioner be empowered to alter the said quantum of interest in such manner as he may think proper, by deed inter vivos and not by will alone."4. The aforementioned originating summons was taken out on August 20, 1937. The matter came up for hearing before Ramfry, J., evidently after service of notices on the respondents on August 25, 1937. On that date the learned Judge passed the following order :"It is ordered that the provisions contained in the said Deed of Trust whereby the persons therein named were appointed Trustees of the said Trust Estate and whereby power was reserved to the said applicant to alter the quantum of interest of the beneficiaries by will and in no other way be and they are hereby revoked and it is further ordered that the said applicant as such settlor as aforesaid be at liberty to alter the said quantum of interest in such manner as he may think proper by deed inter vivos and not by will and it is father ordered that the said applicant the present sole trustee under the said Deed of Trust be and is hereby discharged from further acting as such Trustee and the Official Trustee of Bengal be and is hereby appointed the sole trustee of the said Deed of Trust. And it is further ordered that the stocks and shares and securities (both moveable and immovable) now comprised in the Trust Estate ............ do vest in the said Official Trustee of Bengal as such Trustee as aforesaid."At this stage it is necessary to emphasise that what the settlor asked for was the Courts permission to revoke the clause in the Trust deed empowering him to alter the quantum of interest given to each of the beneficiaries "by will alone" and in its place to confer upon him power to make the said alteration by deed inter vivos. The Court in specific terms ordered the revocation and granted the authority sought for. Acting under the power purported to have been given by the order of Ramfry, J., the settlor executed a second Trust deed on March 22, 1938. Under that deed, in the place of the Trustees nominated under the original deed, the Official Trustee was constituted as the sole trustee. Sachindra, (The first respondent herein) one of the sons of the settlor was deprived of all his interest as a beneficiary in the corpus of the trust properties. He was given a meagre allowance of Rs. 20 per month during his life time. The settlor died in 19465. On December 18, 1950, the first respondent filed the suit out of which this appeal has arisen praying for following declarations :(a) that the power reserved by the settlor in the original Trust deed for altering the quantum of interest of the beneficiaries by will alone and by no other means was irrevocable;(b) that the order passed by Ramfry, J. on 25-8-1937 was null and void as having been made without jurisdiction, and(c) the original Trust deed stood unaffected by the second Trust deed and therefore he was entitled to the benefits provided under the said deed.He also asked for a decree directing the Official Trustee to pay him 1/4 the of the income of the Trust Estate, so long as Santimoyee Devee was alive and on her death to make over one-fourth of the corpus of the Trust Estate to him and further render accounts to him of the profits of the Trust Estate since the time of the death of the settlor. The Official Trustee as well as some of the other defendants resisted the suit. They contended that the settlor was entitled to execute the second Trust deed in exercise of the power reserved by him under the original Trust deed and in any event he could do so because of the orders of Ramfry, J6. The trial Court decreed the suit as prayed for but the first Appellate Court reversed the decree of the trial Court and dismissed the suit upholding the contentions advanced on behalf of the contesting defendants. In second appeal the High Court reversed the decree of the first Appellate Court and restored the decree of the trial Court.

Court's reasoning:
12. It is plain that if the learned Judge had no jurisdiction to pass the order in question then the order is null and void. It is equally plain that if he had jurisdiction to pronounce on the plea put forward before him the fact that he made an incorrect order or even an illegal order cannot affect its validity. Therefore, all that we have to see is whether Ramfry, J., had jurisdiction to entertain the application made by the settlor15. From the above discussion it is clear that before a Court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought but also have the authority to pass the orders sought for. It is not sufficient that it has some jurisdiction in relation to the subject-matter of the suit. Its jurisdiction must include the power to hear and decide the questions at issue, the authority to hear and decide the particular controversy that has arisen between the parties.Therefore the fact that Ramfry, J., had jurisdiction to pass certain orders either underthe Indian Trusts Act, 1882 or underthe Official Trustees Act, 1913 or under the Trustees and Mortgagees Powers Act 1866 or under his inherent power is not conclusive of the matter.What is relevant is whether he had the power to grant the relief asked for in the application made by the settlor. That we think is the essence of the matter. It cannot be disputed that if it is held that the learned Judge had competence to pronounce on the issue presented for his decision then the fact that he decided that issue illegally or incorrectly is wholly besides the point18. This provision has no relevance as regards the controversy with which we are dealing. That provision might have empowered the Court to appoint the Official Trustee in the place of the settlor as the settlor was not willing to continue, as the trustee. But it could not have granted the other reliefs asked for20. This provision is more or less similar to Section 34 of the Trusts Act. Under that provision a Judge of a High Court could have only given opinion, advice or direction on any question respecting the management or administration of the trust property. Therefore the order made by Ramfry J., cannot be justified on the basis of Section 43 of the Trustees and Mortgagees Powers Act, 1866Admittedly clauses (a), (b), (f) and (g) are not relevant for our present purpose. Under clause (c) the Court could only decide about furnishing of any particular accounts by trustees and vouching (where necessary) of such accounts. Under cl. (c) a could direct the trustees to pay into Court any monies in his hands and under clause (e) direct him to file an account and vouch the same to do or abstain from doing any particular act in his character as a trustee. The orders under Chapter XIII are made in chambers. As mentioned earlier the proceedings under that Chapter are summary proceedings.No rule in that Chapter was brought to our notice under which the order in question could have been made27 and 28.From whatever angle we may examine the validity of the order made by Ramfry, J., it a clear to us, that the said order was outside the jurisdiction of the learned Judge. It was not merely a wrong order, or an illegal order, it was an order which he had no competence to make. It is not merely an order that be should not have passed but it is an order that he could not have passed and therefore a void order29. The circumstances of the case call for certain modifications in the decree of the High Court. On the facts of this case we see no justification for treating the Official Trustee as a trustee de-son-tort and to require him in account as such. In the proceedings before Ramfry, J., the plaintiff did not choose to appear and contest. It is not his case that he was not served in that proceeding. But for the order of Ramfry, J., the settlor would have certainly altered the quantum of interest given to the plaintiff under the original Trust deed by means of a will. As it now turned out the plaintiff has benefited by the wrong step taken by the settlor.The Official Trustee has merely carried out the order of the Court it was not open to him to go behind that order. That being so we see no justification to treat him as a trustee de-son-tort.Equity requires that he should be made to account as if he was trustee. In other words his liability should not be greater than that of a trustee. It is also proper to permit him to reimburse himself all the costs incurred by him in all the Courts from out of the trust funds in his hands30. We see no justification for allowing accounting in this case from the date the Official Trustee took charge of the trust estate. Till the institution of the present suit from which this appeal has arisen there was no knowing that the plaintiff would challenge the second Trust deed executed by his father. He did not challenge it during his fathers lifetime. On the faith of the order of the High Court, the Official Trustee must have been disbursing the trust income to the various beneficiaries. It will be inequitable to reopen all those transactions. We think the ends of justice will be met if accounting is ordered as from the date of the institution of the present suit. The plaintiff respondent is entitled to his costs in all the Courts. But he shall get the same from out of the Trust Estate.