Special powers for trustees

Dinshaw Mehta has pointed out that in Hamazor magazine (Issue 3, 2008) I had stated: "A good trustee would respect the right of other board members and staff to differ/disagree and he/she would dissent, if necessary, but accept with grace the majority decision or step down.”

The question is, should I "accept with grace the majority decision or step down.” The answer is not so difficult, if seen in the right context.

There are over 65,000 public charitable trusts registered in Bombay. Poona has more than 30,000. How many among these have a system of electing trustees? Barring a small handful of trusts, trusteeship is by appointment/invitation and not via election. Typically, the surviving trustees appoint/invite new trustees to fill vacancies on the board as and whenever the need is felt.

What I had written in Hamazor and on my website many years ago (and I see no need to change that) was keeping in mind trusts where trusteeship is by appointment/invitation. Say, for example, I am appointed/invited by the trustees of the ABC charitable trust to join the board and later, after accepting the office, I find that I am not happy with the style of functioning, or more importantly, the policies adopted by the majority; I have the choice of either recording my dissent and allow the majority decision to prevail or stepping down.

Mehta seems to forget that I was elected to the board of the Bombay Parsi Punchayet by a few thousand Parsis and not appointed by Mehta and the rest of his team.

Mehta, who is otherwise fairly well versed in trust and property matters is probably aware of the fact that all the funds, assets and properties of the trust are jointly and severally vested in all the seven trustees and where any alienation of trust property is concerned the decision has to be unanimous and not by majority.

For that matter, in a trust where there is no scheme of election even appointment of a new trustee to fill a vacancy has to be unanimous. "The power to appoint new trustees is the joint act of all the trustees and if they do not agree, the matter becomes one where the court’s intercession must be called for (Mohommad Jaffar vs Mohammad Jan Mohammad, 46 Bom. L.R. 40: AIR 1944 Bom. 222: I.C. 210: I.L.R. 1943 Bom. 420).”

Justice Kania further adds, "The act of the majority does not bind the minority so far as the act is beyond the proper sphere of the duty of the trustees. Nor can a majority, in the absence of express statutory authority, pass the legal estate which is vested in all. And when a special power is given to trustees, it cannot be exercised by majority only but all must join.”

Hence I have every right in law not just to record my dissent but to even oppose, by due process of law, all acts and policy of my colleagues which I may deem detrimental to the interest of the trust and its beneficiaries.

NOSHIR H. DADRAWALA

noshir101@hotmail.com