Decided on March 10,1992



Subhashan Reddy, J. - (1.)This Civil Miscellaneous Appeal is directed against the order dt. 31-10-91 passed by the Court of the II Additional District Judge, East Godavari in I A No. 674/91 in O P No. 521/91. The appellant is the 2nd respondent in OP No. 521/91 instituted by the respondent herein invoking the provisions contained under section 74 of Indian Trust Act seeking the relief of directions to the appellant to make over all the fruits of the Trust to her including the shares, monies FDRs which the trust is holding in the 3rd respondent a Company registered under the Companies Act, 1956. The parties are not strangers, but are closely related inasmuch as the appellant is no other than the paternal grandfather of the respondent herein. The respondent's father, Mr Prem Kumar Reddy, the respondent No. 4 in the main 0 P is the only son of the appellant, born through his first wife, who is no more. It seems that the misunderstandings in the family crept in as respondent's father suspects that the appellant was favouring Sent. Saraswati (Appellant's second wife) and had been secreting away monies to her.
(2.)The O P is filed by the respondent herein who is the Ccstui Que Trust waking allegations of breach of trust against the appellant, the author of Trust, in managing the 1st respondent Trust in O P. The acts of the said breach of trust, as stated by the respondent in O P, are enumerated hereunder :
a) the appellant trustee had transferred 60 shares out of 100 shares held by the trust without the permission of the court and the said transfer is not in the interests of the respondent and that there is every likelihood of the appellant making further transfer of shares by the time, the respondent attains the age of 25 years :

b) that the appellant at the instance of the 2nd wife, Smt. Saraswathi started acting against the interests of the family members and started usurping the shares of the family members with a view to make over all those shares and monies to his 2nd wife and in furtherance of the same, he has constructed a house in Jubilee Hills at a cost of Rs. 1 crore on a site procured in the name of the 2nd wife;

c) that the appellant has knocked away all the holdings of the seven other trusts amounting to Rs 65 lakhs held in the names of his daughters and daughter's children living abroad ;

d) that the appellant made similar attempts to knock away the major shares of about 81.1/2% of tha shares of the India Fruit Limited but the same was aborted in view of seeking remedies in the Company Law Court ;

e) that by a registered letter dated 29-5-1991 the respondent had requested the appellant to furnish full and accurate information regarding all the financial matters pertaining to the trust and that the appellant has neither replied the game nor furnished the information sought for;

f) that even though the Indian Fruits Limited was liable to pay the dividents to the Trust and the appellant being the Chairman of the said company as also the Trustee of the Trust in question, wilfully not paid over the dividends.

(3.)These acts mentioned above, according to the respondent herein, were not in the beneficial interests of the Trust and that, on the other hand it was detrimental to the Trust and as the appellant has acted to the detriment of the trust in collusion with the 2nd wife and that as she is a major and Sui Juris coatinuance of the appellant as a trustee is not necessary and that he should be relieved of his duties and instead, either the assets of the trust should be made over to ber or in the alternative her father in whom she reposes confidence should be appointed as the trustee on removing the appellant. She also claims that her father and the appellant were the members of the coparcenery and the appellant was the Kartha of the joint family and that the said joint family held the shares in India Fruits Limited and in view of certain exigencies, the shares were distributed among the members of the joint family. The investment in the trust is traced to the funds of the said joint family. The O P itself was instituted by the general power of attorney of the respotdcnt who is one of her brothers and he is the signatory of not only the petition, but also the affidavit sworn in support of injunction petition.

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