B. Muniswami Naidu vs The Official Trustee High Court and Others

M.M. Ismail, C.J.—This is an appeal against the order of Nainar Sundaram., J. dated 27th August, 1979, dismissing application No. 2664

of 1979 filed by the appellant herein The premises No. 877, Thiruvottiyu High Road, Madras-19, vested in the Official Trustee, Madras, under the

scheme decree in C.S. No. 363 of 1912 on the file of this Court. The Official Trustee granted a lease with reference to two portions of the

premises in question, in favour of second and third respondents herein. The front portion, known as pial portion, was granted on lease with effect

from 1st July, 1979 in favour of the second respondent herein on a monthly rent of Rs. 75 and the Official Trustee received an advance of three

months'' rent, namely, Rs. 225 on 22nd June, 1979 and the second respondent took possession of the same with effect from 1st July, 1979. The

back portion of the said property was leased on a monthly rent of Rs. 165 in favour the third respondent herein. The Official Trustee received an

advance of three months rent in a sum of Rs. 495 on 22nd June, 1979 and the third respondent took possession of the same with effect from 1st

July 1979, The appellant filed Application No. 2664 of 1979 praying that the leases granted by the Official Trustee in favour of respondents 2 and

3 be cancelled. The contention of the appellant was that the lease was for a very nominal and a low amount and he himself is prepared to pay a

rent of Rs. 500 per month and that the Official Trustee ought to have leased out the premises for a higher rent in the interest of the trust in question.

Nainar Sundaram, J., before whom the matter came up, held that the appellant herein was a third party, that there was no complaint of breach of

any obligation under the scheme decree and that he could not be said to be a party aggrieved under the terms of the scheme decree. In view of

this, the learned Judge held that the application filed by the appellant herein was not maintainable and, therefore, dismissed the same. It is against

this order the present appeal has been filed.

In view of one provision contained in the Official Trustees Act, 1913, it is not necessary to consider whether the application field by the

appellant herein was maintainable or not. Section 25 of the Act states that the High Court may make such orders as it thinks fit respecting any trust

property vested in the Official Trustee or in the income or produce thereof. Consequently, this section vests in the High Court, in the widest

possible terms, a supervisory jurisdiction over the functioning of the Official Trustee in respect of any trust property, and, therefore, even if the

application filed by the appellant herein was not maintainable, the facts contained in the application can be taken note of by the High Court for the

purpose of exercising its supervisory jurisdiction u/s 25 and for the benefit of the trust in question. So long as the property is vested in the Official

Trustee, it will be the duty of the Official Trustee to take such steps and conduct himself in such a manner as to make the trust get the maximum

advantage of any transaction without prejudice to the security and safety of the trust property itself. In this particular case, it should have been the

duty of the Official Trustee to lease out the property on the best terms possible from the point of view of the trust. Consequently, if a person like

the appellant has come forward with an offer to pay a rent of Rs. 500 and the Court is satisfied that such an offer is a bona fide one and not for the

purpose of harming or harassing the respondents herein, the Court is entitled to take note of this offer for fixing the real rent payable in respect of

the property in question. As soon as this position was realised, Mr. K. Parasaran, the learned Counsel who appeared for respondents 2 and 3

herein, represented to the Court that his clients are willing to pay the rent at the rate offered by the appellant herein and they are prepared to give a

bank guarantee for the advance covering two years'' rent. We asked the learned Counsel to file affidavits from his clients to that effect.

Accordingly, affidavits have been filed by respondents 2 and 3. As far as respondent is concerned, there, is no change in the rate of rent already

agreed, and the only condition he has to fulfil is to offer bank guarantee as and towards advance covering two years'' rent. As we have pointed out

already, he had already paid a sum of Rs. 225 by way of advance covering three months'' rent and therefore, he has undertaken to furnish a bank

guarantee for a further sum of Rs. 1,575 so as to make up the rent for two years and has also undertaken notwithstanding the advance and the

bank guarantee, he shall continue to pay the stipulated monthly rent of Rs 75 in accordance with law. As far as the second respondent is

concerned he is prepared to furnish the bank guarantee as undertaken by him within a month from this date and on his so doing, the lease granted

in his favour will stand affirmed. As far as the third respondent is concerned, it involves not only the increase in the monthly rent but also the

offering of bank guarantee by way of advance covering the rent for two years. As we have pointed out already, he has agreed to pay a rent of Rs.

500 per month and also to offer bank guarantee in a sum of Rs. 12,000 representing two years rent as and by way of advance Again, as

mentioned already, he has already paid an advance of Rs. 495 to the Official Trustee. Now he has undertaken to furnish bank guarantee in a sum

of Rs. 11,505 and he has also undertaken that notwithstanding the advance already made and the bank guarantee to be furnished, he shall continue

to pay the rent at the rate of Rs. 500 a month in accordance with law. Here again, the third respondent is given one month time from this date to

give the bank guarantee in a sum of Rs. 11,505 and on his so doing, the lease in his favour also will stand affirmed. The bank guarantees must be

from any one of the scheduled banks or nationalised banks. In view of this development that has taken place before us, it is not necessary to pass

any formal orders in the appeal. No costs.