Official Trustee Of West Bengal vs Jewish Girls' School And Anr

The Court : This is an application by the Official Trustee for a direction upon the respondent to make payment of Rs.17 lakhs towards fees in respect

of sale of the premises no.8A, Pollock Street, Kolkata â€" 700 001. This application appears to have been filed pursuant to an observation made by the

Hon’ble Division Bench while disposing of an appeal in relation to the sale of the trust property in which the beneficiary of the trust, namely, the

school has objected to the commission claimed by the Official Trustee initially in the sum of Rs.59.50 lakhs which has since been reduced to Rs.17

lakhs. The reason for reducing the claim on account of commission is that in view of the Rules applicable for commission in respect of the sale of the

said property, the applicable Rules would be Rules of 1914 instead of Rules of 1938. In view of the dispute raised at that point of time the Hon’ble

Division Bench observed that the school shall set apart a sum of Rs.1 crore and create a term deposit of the said sum and shall not encash the said

term deposit without the leave of the Court.

The parties were given liberty to approach the first Court and get the matter resolved with regard to the claim on account of commission. The school

did not file any application. The Official Trustee, however, filed an application on 20th December, 2012. The Official Trustees contend that the

petitioner has been acting as the Trustee to hold the properties on behalf of and for the benefit of the Jewish Girls’ School, the respondent no.1.

By an indenture dated 19th February, 1938 executed by and between the Governor of the Province of Bengal and the petitioner, premises no.8A and

8B, Pollock Street, Kolkata â€" 700 001 (hereinafter referred to as “the said premises’) was transferred absolutely to the petitioner to be held

by the petitioner for the benefit of the said Jewish Girls’ School. The petitioner since thereafter had been holding the said premises for and on

behalf of the respondent no.1.

In the year 1955, the said premises was let out by the respondents to the Superintendent, Foreign Post, P&T Department, Government of India on

monthly tenancy. The rent payable by the said tenant was Rs.4,000/- per month which was being paid by the said tenant to the said Jewish Girls’

School. The respondent no.1 had been paying the said commission on the said rent to the petitioner at the rate of 2% on the amount of rent collected in

the month of August, 2011. The said property was, however, ultimately sold in December, 2011 on the basis of an application filed by the school for

the sale of such property as the school was able to demonstrate that for the purpose of implementing the object of the trust it is necessary to sell the

said properties. Both the Courts were convinced with the necessity to sell the said properties in order to implement the object of the trust. The

properties were sold and only thereafter the dispute arose with regard to the payment of commission. Although the school is not represented but an

affidavit which appears to have been served upon the Official Trustee by the school has been placed before this Court by the learned counsel

representing the Official Trustee.

In the said affidavit, the respondent no.1 has contended that the Official Trustee of West Bengal is one of the trustees of the respondent no.1. The

respondent no.1 is being managed, run and functioned under trust and applicant is one of the trustees as appointed in the year 1912. The terms for

applicant to act as one of the trustees are limited and/or restricted within the ambit of the Trust Deed and the applicant is not entitled to enlarge its

scope and terms and power beyond the Trust Deed, 1912. The respondent no.1 has denied that the Governor of the Province of the Bengal has

transferred the right, title and interest of the said property absolutely to the applicant. The school authority has also denied that any commission has

been paid by the respondent no.1 to the petitioner. It is stated that the transaction was required to be made for the benefit of the Girls’ School for

its social benevolent activities. The legal status of the applicant is nothing but one of the trustees of the school. The applicant being one of the trustees

of the school cannot claim exorbitant commission under the veil of statutory provisions.

Mr. Indranil Nandi, learned counsel representing the Official Trustee has submitted that the Official Trustee is vested with the administration of the

property by reason of the Deed of Settlement executed by the Governor of the Province of the Bengal on 19th February, 1938. It is submitted that in

the petition the petitioner has disclosed some documents to show that some commissions were paid at least for some period to the Official Trustee for

managing the said property. Mr. Nandi has referred to Section 17 of the Official Trustees Act, 1913 and Rule 5 read with Schedule I of the Rules

relating to the Official Trustee of Bengal, 1914. It is submitted that since the Official Trustee has been appointed under Section 8 of the Official

Trustees Act, 1913 by reason of Schedule I of the 1914 Rules, the petitioner is entitled to a fee of 1% as the gross value of the trust property or fund

exceeds Rs.50,000/-. In order to appreciate the said submission, it is necessary to refer to Section 17 of the Official Trustees Act, 1913 and Rule 5

and Schedule I of the 1914 Rules. The said provisions are set out below :

Section 17

“17. Fees.- (1) There shall be charged in respect of the duties of the Official Trustee such fees, whether by way of percentage or otherwise, as

the Government may prescribed.

(2) The fees under this section may be at different rates for different properties or classes of properties or for different duties, and shall, so far as may

be, be arranged so as to produce an amount sufficient to discharge the salaries and all other expenses incidental to the working of this Act (including

such sum as Government may determine to be required to insure b[* * *] the Government c[ * * *] against loss under this Act).

[a] Proviso omitted by Act 48 of 1964, Section 11 (25-12-1964).

[b] Words ‘the revenue of’ omitted ibid.

[c] The words ‘of India’ were omitted by the Official Trustee’s and Administrator General’s Acts (Amendment) Act, 1922 (21 of

1922), Section 4.â€​

Rule 5

“5. The fees mentioned in Schedule I to these rules shall be the fees prescribed under Section 17 of the Act, provided that they may be reduced,

compounded for, or remitted as provided in these rules.â€​

“Schedule-I

(See Rule 5.)

Capital Fees.

“A†In respect of duties of the Official Trustees where he has been appointed a Trustee under Sections 8, 9, 10, 11 and 12 of the Act. The scale

of fees chargeable shall be as follows:-

(1) Where the gross value of the trust property or funds does not exceed Rs.25,000 in value, a fee of 2(two) per cent.

(2) Where the gross value of such trust property or funds does not exceed Rs.50,000 in value, a fee of 1½ per cent.

(3) Where the gross value of such trust property or funds exceeds Rs.50,000 in value, a fee 1(one) per cent: Provided that- The minimum fee in each

case shall be Rs.10.â€​

Under Section 17(2) the fees have been prescribed at different rates depending upon the class of the property and/or for different duties to be

discharged. The Official Trustee is required to discharge its duty and the amount of fees to be realised should be sufficient to discharge salaries and all

other expenses incidental to the working of 1913 Act. The Official Trustee was appointed by virtue of Deed of Settlement of 1938. The original trust

deed of 1912 has referred to Nissian Issaq Sassoon of No.2, Harrington Street and Benjamin Moses Cohen of No.93, Park Street as trustees. The

original trust deed also refers to a committee who shall act with a trustee in implementing the object of the trust. There is no reference of any Official

Trustee in the original trust. The Official Trustee became the custodian of the said property by virtue of the 1938 deed of settlement executed by the

Governor which would be clear from the recital of the deed of settlement. It appears from the deed that prior to the commencement of Part III of the

Government of India Act, 1935, the Managing Committee of the Jewish Girls’ School, Calcutta applied to the Government of Bengal for the

acquisition of the said premises at their expense. On the basis of such request, the Government of Bengal has agreed to contribute Rs.100/- towards

the cost of the acquisition and the balance being borne by the Managing Committee. Thereafter, under Section 6 of the Land Acquisition Act, 1894,

the said premises was acquired and compensation was duly paid and the said property was totally vested to the Secretary of the State for India in

Council free from all encumbrances. On 11th November, 1936, possession of the said premises was made over by the Secretary of State for India in

Council to the Official Trustee. The Official Trustee as trustee was found to be the person entitled to the compensation money as awarded.

The said premises by virtue of the Government of India Act, 1935 legally vested in the Governor in trust for the Jewish Girls’ School and the

Official Trustee has requested the Governor to execute the deed for the purpose of vesting the said premises in the Official Trustee for the purpose of

the said Jewish Girls’ School. On the basis of such request, the Governor transferred, conveyed and assigned to the Official Trustee the said

premises free of revenue and free from encumbrances for the purposes of the Jewish Girls’ School. Since the Official Trustee is functioning as a

trustee for the Jewish Girls’ School, it is contended that the Official Trustees had been receiving some commission for discharging his duties by

the respondent no.1 and few documents have been disclosed which are quite vintage. The authority of the Official Trustee to realize any fees is only

for the purpose of discharging the salaries and all other expenses incidental to the working of the Act. Even if it is construed that the Official Trustee

would be entitled to the fees which would at least correspond to an amount sufficient to discharge the salaries and all other expenses incidental to the

working of the Act, in absence of adequate document to show that the Official Trustee had required such percentage to meet salaries and expenses

or the amount claimed would correspond to such an amount, it is difficult to accept that the Official Trustee would be entitled to 1% of the said

consideration. The Official Trustee did not approach the Court for sale of the trust properties although it appears that there was a legal necessity to

sell the said trust properties to implement the object of the said Act.

The transaction was made for the benefit of the Girls School and for educational purposes. It is one of the duties that Official Trustee is required to

discharge for which the Governor of the Province of the Bengal transferred, conveyed and assigned to the Official Trustee, the said property free

from revenue and free from encumbrances for the purpose of the Jewish Girls’ School. Some of the documents which are quite ancient, however,

shows that commissions have been paid by the school to the Official Trustee in discharging his function. Even if it is assumed that the Official Trustee

may be entitled to a fee on the basis of Rule 5 read with Schedule I of the 1914 Rules but keeping in mind that the Official Trustee, in fact, discharged

his function as a trustee for the Girls’ School having a benevolent object, in my view, the claim of such commission certainly does not fit into the

purpose for which the Official Trustee was appointed. The Official Trustee, accordingly, in my view will not be entitled to a commission as claimed

but however, the Official Trustee shall be paid a sum of Rs.10 lakhs out of the transaction amount as the commission which the Official Trustee was

receiving and apparently not being denied with any satisfactory evidence. The school is directed to encash the fixed deposit and remit the sum of

Rs.10 lakhs in favour of the Official Trustee.

Since the affidavit-in-opposition is not on record, a photostat copy of the affidavitin-opposition affirmed by Aline Mordecai Cohen dated 16th February,

2018 is kept with the record. This order shall be forthwith communicated to the respondent no.1 and the concerned bank. AOT No.2 of 2012 stands

disposed of. However, there shall be no order as to costs.