• Private trust dispute

Dear Sir, we (4 trustees) have formed a private trust with an intention to start a school in Kerala.  One of the trustees had a dispute with other trustee and he decided not to co-operate with the trust activities.  All four trustees have already invested on the land and building construction which is 95% completed. How can the trustees who wanted to take the project further proceed when two other trustees wanted to sell the trust. Opposing trustees are brothers and supporting trustees are brother as well. what could be the solution to settle this dispute and make the project happen as per the defined objectives in the bylaw.  Will indian trust act supersede the trust bylaw?
Asked 10 months ago in Civil Law from United Arab Emirates
1) those trustee who dont  want to continue can file petition to be discharged as trustee 

72. Petition to be discharged from trust

Notwithstanding the provisions of Section 11, every trustee may apply by petition to a principal Civil Court of original jurisdiction to be discharged from his office; and if the Court finds that there is sufficient reason for such discharge, it may discharge him accordingly, and direct his costs to be paid out of the trust-property. But where there is no such reason, the Court shall not discharge him, unless a proper person can be found to take his place.

2) under section 73 of indian trust act new trustee may be appointed by the person nominated in the trust deed in place of trustees who stand discharged 

3) under section 74 court can appoint new trustee
Ajay Sethi
Advocate, Mumbai
23153 Answers
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1) make application to court under section 34 of indian trust act 

2)4. Right to apply to Court for opinion in management of trust-property

Any trustee may, without instituting a suit, apply by petition to a principal Civil Court of original jurisdiction for its opinion, advice or direction on any present questions respecting the management or administration of the trust-property other than questions of detail, difficulty or importance, not proper in the opinion of the Court for summary disposal.

A copy of such petition shall be served upon, and the hearing thereof may be attended by, such of the persons interested in the application as the Court thinks fit.

The trustee stating in good faith the facts in such petition and acting upon the opinion, advice or direction given by the Court shall be deemed, so far as regards his own responsibility, to have discharged his duty as such trustee in the subject matter of the application.

The costs of every application under this section shall be in the discretion of the Court to which it is made
Ajay Sethi
Advocate, Mumbai
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1216 Consultations
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Hi 
You need to check the contents of your MOA (trust deed) for removal of trustees. 
Your MOA will provide you answers for enrollment and removal of members, procedure for formation of the Governing Body, conduct of meetings, election and removal of office bearers, procedure for conducting annual General Body meetings, etc. 

In addition to above , the beneficiary can file suit for removal of a trustee if the trust property is not held and administered by a proper trustee. The Indian trusts Act marks out the following individuals as not proper to under take duties of a trustee

1) a person domiciled abroad
2) an alien enemy
3) a person having an interest inconsistent with that of the beneficiary
4) a person in insolvent circumstances

Where the administration of the trust involves the receipt and custody of money, a beneficiary can file suit to the improper trustees ejected and another trustee appointed in his/ her place. 

In the event of a suit being filed, first the issues will be decided based on bylaws of the trust and in the event of byelaws of trust being inconsistent with Indian Trust Act, Indian Trust Act will override the bye-laws of the trust. 
Rajgopalan Sripathi
Advocate, Hyderabad
868 Answers
43 Consultations
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1.  Trust is formed for a philanthropist purpose and it is not for earning any profit,

2. In the Trust Deed there should be clauses specifying terms of resigning form the Trust,

3. There should be a clause for dissolving the Trust also in the said Trust Deed,

4. There should be procedure for expelling a member from the Board of the Trust and normally there should have been odd number of members of the Board for arriving at a decision,

5. Based on the Trust Deed, ask the said two erring members to resign from the Board though they can not claim any share of the trust property,

6. Call a meeting of the members of the Board of Trustees and expel the erring members if you have the majority number.
Krishna Kishore Ganguly
Advocate, Kolkata
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228 Consultations
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1. This is the reason why odd nos. of members are inducted as members in the Board of Trustees,

2.This is the reason why clauses are kept in the Trust Deed specifying how members can resign or expelled or how the Trust can be dissolved and its properties can be utilised,

3. So, you shall have to either ask those two members of the Trust Board to resign or get them expelled by passing a resolution the meeting of the Board of Trustees.
Krishna Kishore Ganguly
Advocate, Kolkata
12082 Answers
228 Consultations
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The trust deed would be having a provision to remove the trustee(s), the grounds for removal and procedure for removal. There must also be a provision to increase and decrease the number of trustees and who will be managing trustee and other office bearers to be appointed or elected so as to carry out the objective of trust are to be detailed. In accordance with the procedure laid down in the trust deed the remaining trustees can file a lawsuit for the removal of these trustees in the civil court.  In matters of trust, the provisions of deed of trust are of prime importance and any advice is dependent on proper knoweldge of the provisions of the trust deed. So show the trust deed to a lawyer to get comprehensive legal advice.
Ashish Davessar
Advocate, Jaipur
18070 Answers
447 Consultations
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