- (1.) Interpretation and application of the provisions of Sections 25 and 26 of the Official Trustees Act, 1913 (for short, 'the 1913 Act') as also Section 302 of the Indian Succession Act, 1925 (for short, 'the Succession Act') falls for consideration in this appeal, which arises out of a judgment and order dated 21.12.1999 passed by a Division Bench of the Calcutta High Court in APD/T No.16 of 1999 in Appeal No.474 of 1999.
(2.) The said judgment was rendered in the following fact situation : One Peter Charles Earnest Paul also known as 'Peter Paul' was the owner of a piece of land, measuring 3 bighas 17 kottahs 8 chittackas 21 sq. ft. equivalent to 5408.93 sq. metre located on the junction of Park Street and Midleton Row, Kolkata having wide frontage on both the roads. He executed a registered deed of lease in favour of one Francis Daniel Augustus Larmour (for short, 'Larmour') in respect of the said premises for a period of 99 years with effect from 01.06.1919 to 31.05.2018. He executed a Will on 16.06.1920 appointing the Official Trustee as its Executor and Trustee in respect of the said property. Beneficiaries of the said Will were his wife and sister. He died on 01.08.1920. A probate was obtained by the Official Trustee on 07.10.1920. Larmour executed a registered deed of assignment in favour of one Arathoon Stephen, Stephen Court Limited (hereinafter referred to as 'the Company') was constituted and incorporated under the provisions of the Companies Act, 1913 on or about 04.12.1923. Arathoon Stephen, who was a shareholder and first Managing Director of the said Company entered into an agreement for acquiring the leasehold rights of Arathoon Stephen. Arathoon Stephen and the Company thereafter agreed to purchase the leasehold rights of the said premises for the balance unexpired period under the said lease on 10.12.1923. On the same day a registered Debenture Trust Deed was executed by Arathoon Stephen and the Company and the three Trustees referred to in the said Deed, stating that the Company was entitled to the said property for all the residue of the term of 1919 lease. As far back as in 1924, the Company constructed a five-storied building. It continued to pay the rent to the Official Trustee who had issued rent receipts to it. Sister of Peter Paul, Mrs. Hemingway, died leaving behind a Will in terms whereof the public trustee of the Public Trust of London took over her estate and started receiving her share of income. On 10.10.1965, widow of Peter Paul died, whereafter half share of the income of the trust property was remitted to the Public Trustee of the Public Trust, London by the Official Trustee till 18.05.1993. Permission of the Reserve Bank of India for the later period is said to be awaited.
(3.) The Company by a letter dated 09.02.1984 requested the Official Trustee for extension of the period of lease for a further period of sixty years to which the Official Trustee by a letter dated 20.03.1984 suggested that it should apply to the High Court for obtaining grant of extension of the said lease. An application was thereafter filed before the Calcutta High Court by the said Company under Section 302 of the Succession Act read with Section 26 of the 1913 Act. The said application was entertained. The Official Trustee filed an affidavit in opposition wherein, inter alia, it was stated : "The Official Trustee as such Trustee can neither consent nor object to grant by any lease or modification of the terms and condition thereof. The Official Trustee, however, in the ends of justice is duty bound to produce all the facts and circumstances relating to the said property before this Hon'ble Court. The Official Trustee states and submits that the following proposal would be beneficial to the Estate : (a) Upon the lessee agreeing to enhance the current monthly rent payable for the lease by at least 400% the head lease can be rectified by giving the lease the option of renewal the lease on such terms and condition as this Hon'ble Court may deem fit and proper after expiry of the head lease on May 31, 2018 by efflux of time. (b) Competent valuer would be appointed by this Hon'ble Court at the expenses of the petitioner for ascertaining the market value of the property. The probable market value of the property as on June 1, 2018 should be estimated on the basis of the present trend of increase in the value of land in Calcutta as well as the rate of inflation and the amount of rent to be paid by the lessee for the extended period would be determined on the basis of the said valuation.";