GOWRISHANKAR AND ANR. versus JOSHI AMBA SHANKAR FAMILY TRUST AND ORS.

Citation: [1996] 2 S.C.R. 949 · Decided: 22-02-1996 · Supreme Court of India · Bench: A.M. AHMADI, M.K. MUKHERJEE, SUJATA V. MANOHAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

GOWRISHANKAR AND ANR. 
v. 
JOSHI AMBA SHANKAR FAMILY TRUST AND ORS. 
FEBRUARY 22, 1996 
[A.M. AHMADI, CJ, M.K. MUKHARJEE AND 
SUJATA V MANOHAR, JJ.) 
A 
B 
Charitable Tmst-Set up for the benefit of poor relations and for other 
charitable and pious pwpose;,~Paucity of funds to cany out the pur-
poses-Application to High Cowt for modification of the tenns so as to em-
C 
power the Tmstees to sell the properties-Granted by the High Cowt subject 
to pennission of the Court and concwTence of 3/4th of the total no. of tmstees 
in office-Highest offer of Rs. 9 lakhs-Permission to sell granted by the 
Cowt-All tenants intimated-Notice by the appellant-Alleging that the Tmst 
and purchaser played fraud on the Cowt-Suppressed highest off er by appel-
lant-Application for setting aside the sale-High Court granting it and order- D 
ing the sale of the property to appellant for Rs. 14,20,000 and retwning the 
money paid by the earlier purchaser-On appeal, held Tmstees obtained the 
pennission to sell the prope1ty to the purchasers by practising fraud upon the 
Cowt-Matter remitted to the Division Bench of the High Cowt to call for 
fresh offers not less than the appellant's offer of Rs .. 14,20,000 and to grant E 
pe1mission to sell the prope1ty on such te1ms as law and equity may demand. 
S.P. Chengalvaraya Naidu v. Jagannath, [1994) 1 SCC 10, relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3684 of 
1996. 
F 
From the Judgment and Order date 11.7.95 of the Madras High 
Court in O.S.A. Nos. 52 and 61/95 and application No. 432/95 in CS. No. 
530 of 1979. 
Soli J. Sorabjee, G.P. Srivastava, Mahesh Agrawal and E.C. Agrawala G 
for the Appellants. 
K.J. John for the Respondent No. 7. 
P.P. Rao, M.V. Chandra, M.A. Chinnasamy for the Respondent Nos. 
10-15. 
II 
949 
950 
SUPREME COURT REPORTS 
[1996] 2 S.C.R. , 
A 
The following Order of the Court was delivered : 
Special leave granted. Heard the learned counsel for the parties. 
This appeal is directed against the judgment and order dated July 
11, 1995 rendered by the Madras High Court disposing of two original side 
B 
appeals. Facts leading to this appeal and relevant for its disposal are as 
under. 
By a deed of declaration dated January 15, 1939 ,one Ambasankar 
Joshi created the respondent No. 1-trust in relation to his three immove-
C able properties, one of which is house and ground No. 429 (new No. 162) 
at Mint Street, Madras (hereinafter referred to as the 'property') for the 
benefit of his poor relations and for other charitable and pious purposes. 
A'S the trustees were finding it difficult to carry out the purposes of the 
trust for paucity.of funds they moved the High Court in 1979 for modifica-
tion of the terms or the trust deed so as to empower them to sell the above 
D properties. By its order dated November 28, 1983 the High Court granted 
such power subject to the condition that it would be exercised only with 
the permission of the Court and the concurrence of 3/4th on the total 
number of trustees in office. 
E 
Armed with the above order the trustees invited offers for purchase 
of the property and on receipt of some offers sought permission of the 
High Court to sell the same at the highest price offered which was granted 
on February 9, 1984. However, inspite of the permission so granted, the 
trustees did not sell the property at the highest price offered, which was 
Rs. 3,15,000 till then, and instead thereof invited, and received, fresh offers 
F 
including one from the respondent Nos. 10 to 15 (hereinafter referred to 
as the 'purchasers') who are brothers and members of a joint family, for 
Rs. 9,00,000. By a resolution dated December 7, 1989 the trustees accepted 
the offer of the purchasers and entered into a formal agreement for sale. 
with them on Decembet ·15, 1989, after receiving a sum of Rs. 1,50,000 as 
G earnest money. Then on January 15, 1990, the trustees applied for the 
clearance certificate required under the income tax Act for sale of the 
property. A week thereafter-on January 23, 1990 to be precise the appel-
lants herein sent a letter to the trustees which reads as under : 
H 
"By an order dated 9th February, 1984 in application No. 68 of 
1984 in C.S. No. 530 of 1979 on the Original side of the High Court 
GOWRISHANKAR v. JOSHI AMBA SHANKAR FAMILY TRUST 
951 
at Madras His Lordship Mr. Justice Sangottuvelan was pleased to A 
permit the Trust, the applicant in the above Application to sell the 
immovable property togeth
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