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Issues Involved:
1. Concluded Contract 2. Frustration of Contract 3. Exercise of Discretionary Power of Sale 4. Delegation of Powers by Trustees 5. Validity of Trustees' Actions 6. Reasonableness and Good Faith in Trustees' Actions 7. Judicial Control over Trustees' Discretionary Powers Issue-Wise Detailed Analysis: 1. Concluded Contract The primary issue was whether there was a concluded contract between the appellants and the Board of Trustees for the sale of 37 items of jewellery for Rs. 14.43 crores. The High Court found that there was no concluded contract, as the alleged acceptance of bids by four trustees on March 9, 1978, was not binding. The Supreme Court concurred, noting that "there was, in fact, no evidence that any binding contract came into existence." 2. Frustration of Contract The second issue was whether the ad interim injunction of March 14, 1978, frustrated the contract by making further performance impossible. The Court held that the injunction prevented the appellants from tendering 90% of the tender amount and taking delivery of the jewellery, thus frustrating the contract. The Court stated, "We are clearly of the opinion that there was a frustration of the alleged contracts, in the facts and circumstances of the present case." 3. Exercise of Discretionary Power of Sale The third issue was whether the trustees exercised their discretionary power of sale under Clause 13 of the trust deed reasonably and in good faith. The Court found that the trustees did not act with prudence and due care, as they sold the jewellery for Rs. 14.43 crores while an offer of Rs. 20.25 crores was available. The Court emphasized that "the trustees had not acted with prudence and due care or attention." 4. Delegation of Powers by Trustees The fourth issue was whether it was competent for four of the trustees to effect a sale in the absence of authorization by the Chairman. The Court held that all trustees must act together unless the trust deed provides otherwise. The Court stated, "where there are several trustees they must act unanimously in making a sale or a contract of sale, unless it is provided otherwise by the terms of the deed." 5. Validity of Trustees' Actions The fifth issue was the validity of the actions taken by the trustees on March 9, 1978. The Court found that no meeting of the Board of Trustees was held on that date, and the alleged acceptance of bids was a "complete myth." The Court noted, "The story of the alleged acceptance of bids by the remaining four trustees on March 9, 1978, appears to be a complete myth." 6. Reasonableness and Good Faith in Trustees' Actions The sixth issue was whether the trustees acted reasonably and in good faith. The Court found that the trustees did not act reasonably and in good faith, as they did not ascertain the actual value of the jewellery and sold it at a significantly lower price. The Court stated, "the trustees in the facts and circumstances of the present case, did not act reasonably and in good faith i.e., with due care and attention." 7. Judicial Control over Trustees' Discretionary Powers The seventh issue was whether the Court could control the discretionary power of the trustees under Section 49 of the Trusts Act. The Court held that discretionary powers must be exercised reasonably and in good faith, and the Court can control such powers if they are not. The Court stated, "when such discretionary power is not exercised reasonably and in good faith, such power may be controlled by a court." Conclusion: The Supreme Court upheld the High Court's judgment setting aside the alleged sale of 37 items of jewellery for Rs. 14.43 crores but set aside the High Court's order accepting the bid of Rs. 20.25 crores by the eighth respondent, Peter Jansin Fernandez. The Court directed a re-auction of the jewellery, emphasizing the need for transparency and fairness in the sale process. The appeals were disposed of accordingly, with the appellants bearing their own costs and paying one set of costs to the respondents.
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