“Law relating to trusts had so many loopholes that the trustees could thwart any attempt to probe into their affairs”
“Today, public trusts are flooded with money. But unfortunately they do not have men of character to administer them. It has led to complete deterioration of the concept of trusts and law also does not help genuinely interested people to take control and regulate the affairs of such institutions,” Justice V. Ramasubramanian of the Madras High Court said in Madurai on Thursday.
Delivering the year’s first lecture organised by Madurai Law Academy, a private trust, on the law relating to private and public trusts, the judge recalled the words of British politician Sir Robert Atkins that “a trust had for its parents fraud and fear and for its nurse a court of conscience.” He said that the law relating to trusts had so many loopholes that the trustees could thwart any attempt to probe into their affairs.
Tracing the origins of the law on trusts since 636 A.D. when Muslim forces conquered Palestine, he said that the concept of entrusting one’s property with others began in the 12th century when English Christian soldiers called ‘Crusaders’ entrusted their properties to friends and acquaintances before proceeding to Palestine to fight a holy war for reclaiming the land.
When soldiers returned to their homes and reclaimed their properties, their friends turned foes and refused to oblige. “The problems which arose then, continues to persist even today with many of us facing similar issues with our friends turned foes. We are actually keeping up the tradition of the past,” the judge said in a lighter vein evoking laughter among the audience.
Further, stating that it was only out of religion that all laws were born, he said: “It is only out of religion that lawlessness was also born.” He pointed out that the principles of equity and good conscience began during the 12th century when the Lord Chancellor ordered reconveyance of properties belonging to the Crusaders by judging their cases on the basis of his conscience.
Stating that people began to explore ways of evading payment of property tax only after the declaration of human rights in the Magna Carta which came into existence in 1217, he pointed out that even today there was no substantive law in the country to govern public trusts of a secular and charitable nature and public trusts managed by the Christians.
Though Section 92 of the Code of Civil Procedure (CPC) seems to provide some relief, “it was only procedural in nature and does not codify the dos and donts for the trustees. It only creates hurdles than showing ways to solve problems. Resolution of problems under this Section is simply left either to the wisdom or lack of wisdom of the judges, lawyers and litigants,” he said evoking another round of laughter.
The object behind creation of hurdles in the law relating to trusts was to prevent the trustees, who were then men of eminence, from being harassed by impecunious and improper people. Utilising this, the subsequent trustees raised iron curtains around them. But after realising the misuse of such safeguards, the courts have watered down the law to some extent in the recent past, he added.
Yet, many illogical but legal provisions still continue to hold the field, “may be because law has nothing to do with logic,” the judge said. He pointed out that as per the Indian Trusts Act, 1920 private trusts must take prior permission of the court concerned to lease out their properties beyond a period of 21 years whereas no such permission was required to alienate properties belonging to public trusts.
Recalling a 32-year-long litigation fought by the trustees of a private trust for as trivial an issue as seeking the leave of the court to file a civil suit against it, the judge said: “This is a fit case to be referred to the National Law School for case study. It is a classic example of how to employ provisions of CPC to destroy a case. While dealing with that case, I wrote: By a well orchestrated CPC based plot, every attempt made to enquire into the affairs of the trust is destroyed by eminent jurists.”