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2000 (10) TMI 979 - HC - FEMA

Issues Involved:
1. Whether the plaintiff in O.S. No. 36 of 1986 is entitled to be trustee and whether he can administer the properties mentioned in the settlement deed.
2. Whether the plaintiff in O.S. No. 36 of 1986 can ask for recovery of possession from the defendants.
3. Whether the second defendant in O.S. No. 36 of 1986 is fit to be trustee and maintain the properties.

Detailed Analysis:

Issue 1: Entitlement of the Plaintiff to be Trustee and Administer Properties
The properties in question were owned by late Sheik Ismail Maracaiar, who executed a registered settlement deed on 16.2.1931. According to the deed, the income from the properties was to be used for specified charities, with the remainder divided among the heirs. The male heirs were to administer the properties as trustees in succession. The plaintiff claimed to be the only living son of Sheik Ismail Maracaiar and had been managing the properties since 1971. However, the defendants argued that the plaintiff could not continue as trustee because he was no longer an Indian citizen and resided in London, thus failing to personally perform the charities and distribute income as required by the deed.

The court noted that under Section 31 of the Foreign Exchange Regulation Act, 1973, a non-citizen cannot hold immovable property in India without Reserve Bank of India's permission. The plaintiff admitted he was a British citizen, and there was no evidence he had obtained such permission. Furthermore, the deed required the trustee to personally perform the charities and maintain accounts, which the plaintiff, residing in London, did not do. Consequently, the court ruled that the plaintiff was not entitled to be trustee and could not administer the properties.

Issue 2: Recovery of Possession from the Defendants
The plaintiff sought to recover possession of the house property from the defendants, claiming they had initially vacated their residence and requested temporary accommodation in the suit house in May 1978, but later refused to vacate. The defendants contended they had been residing in the suit house for a long time, with the first defendant's husband born there.

Evidence, including letters, birth and death certificates, voter lists, and marriage invitations, indicated the defendants had been residing at 12, Mohaideen School Street and moved to the suit house in 1978. The court determined that since the plaintiff was not entitled to be trustee, he could not seek recovery of the house property from the defendants.

Issue 3: Fitness of the Second Defendant to be Trustee
The second defendant claimed his father had performed the trustee duties until his death, after which the plaintiff failed to perform the charities or render accounts. The second and third defendants in O.S. No. 112 of 1986 were citizens of Singapore and thus ineligible to be trustees. The fourth defendant, younger and residing in Saudi Arabia, was also ineligible. The plaintiff admitted the second defendant was the only male heir residing permanently in India, making him the most suitable candidate for trustee. The court concluded that the second defendant was fit to be trustee and could maintain the properties as per the settlement deed.

Judgment:
The appeals resulted in the following outcomes:
- A.S. No. 45 of 1988: Allowed, setting aside the judgment and decree in O.S. No. 36 of 1986, and dismissing the suit.
- A.S. No. 191 of 1988: Allowed, setting aside the judgment and decree in O.S. No. 112 of 1986, and decreeing the suit as prayed for.

To avoid further bitterness among family members, the court ordered no costs in the appeals.

 

 

 

 

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