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TMI Blog2019 (8) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... rust is not like a body corporate, which has a legal existence of its own and therefore can appoint an agent - thus trust is not a body corporate. Whether the trust is an association of individuals or not? - HELD THAT:- A mere combination of persons or coming together of persons, without any intention to have a joint venture or carry on some common activity with a common understanding and purpose to achieve some common benefit, would not convert two or more persons into a body of individuals/association of persons - it is clear from section 3 of the Act that the trustees do not get any benefit out of the trust-property and the benefit will be obtained individually by the beneficiaries or the beneficiaries and the author of the trust. Therefore, it cannot be said that the trustees are persons join together for a common action to achieve some common benefit. It is true that the beneficiaries get the benefit. However, the beneficiaries do not become the beneficiaries by their own volition. Since the common purpose of the trust is not to achieve benefit to the trustees, the trust cannot be said to be an association of persons/body of individuals . The trust is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners in the above said case. 3. Considering the nature and importance of the question of law involved in these Crl. MCs., this court appointed advocate Sri Jamshed Hafees as Amicus Curiae. 4. Heard learned counsel for the petitioners, learned counsel for the second respondent, the learned public prosecutor and the learned Amicus Curiae. 5. Learned counsel for the petitioners advocate Sri Shaji Chirayath has argued that since trust is not an association of individuals , no successful prosecution against the petitioners, invoking the provisions under section 141 of the N. I. Act, can be sustained. Per contra, the learned standing counsel for the second respondent advocate Sri Salil Narayanan K. A. has argued that the trust is an association of individuals and hence the petitioners, who are the trustees, are vicariously liable under section 141 of the N. I. Act. 6. The learned Amicus Curiae has submitted that the trust will not come within the ambit of association of individuals and hence the provisions of section 141 of the N. I. Act cannot be made applicable to prosecute the trustees under section 138 of the N. I. Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Act, 1881 (for short the Act ) to ascertain as to whether the trust is a juristic person or not. 9. A juristic person is also known as a legal person or a legal entity. A juristic person is one to which law attributes legal personality. The legal personality is an artificial creation of law, conferred upon entities other than individual human beings. A juristic person is capable of suing and being sued in a court of law. A body corporate is undoubtedly a juristic person identified by a particular name. Body corporate is also called corporation, corporate body or corporate entity. There can be no dispute that a company is a body corporate. The corporate veil is a legal concept which separates the identity of the company from its members/shareholders. 10. Section 3 of the Act provides that a trust is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. The person who reposes or declares the confidence is called the author of the trust, the person who accepts the confidence is called the trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. The next question to be considered is as to whether the trust is an association of individuals or not. The three judge Bench of the apex court in CIT v. Indira Balkrishna [1960] 39 ITR 546 (SC) ; AIR 1960 SC 1172 construed the meaning of the expression association of persons in the context of the Income-tax Act and held that an association of persons must be one in which two or more persons join in a common purpose or common action. 17. The apex court in Ramanlal Bhailal Patel v. State of Gujarat [2008] 5 SCC 449 held that an association of persons/body of individuals is one in which two or more persons join in a common purpose and common action to achieve some common benefit. 18. The apex court in Ramanlal Bhailal Patel v. State of Gujarat [2008] 5 SCC 449, 464 observed in paragraph 28 thus : The terms 'association of persons' and 'body of individuals' (which are inter-changeable) have a legal connotation and refer to an entity having rights and duties. They are not to be understood literally. For example, if half a dozen people are travelling in a car or a boat, or standing in a bus stop, they may be a gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association of persons/body of individuals . 22. The proposition that a trust is not an association of persons gains support from the decision of the apex court in Pratibha Pratisthan v. Manager, Canara Bank [2017] 2 KHC 420 ; AIR 2017 SC 1303. The apex court held in Pratibha Pratisthan v. Manager, Canara Bank [2017] 2 KHC 420 ; AIR 2017 SC 1303 that a trust is not a person as defined in the Consumer Protection Act, 1986. Section 2(m) of the Consumer Protection Act defines a person as follows : (m) 'person' includes,- (i) a firm whether registered or not ; (ii) a Hindu undivided family ; (iii) a co-operative society ; (iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not. 23. The apex court, after considering the definition of the term person in section 2(m) of the Consumer Protection Act, held that the trust is not a person, which means that the trust is not an association of persons . It is thus clear from the ratio of the apex court in Pratibha Pratisthan v. Manager, Canara Bank [2017] 2 KHC 420 ; AI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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