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by sayum
21 December 2025 2:24 PM
“Clause 8(f) of the Trust Deed permits removal of a Trustee who acts detrimentally to the Trust, by two-third majority of Trustees present — such removal, when prima facie justified, can be sustained pending trial.” - In a significant judgment on trust law and internal governance, the Calcutta High Court ruled that trustees who act to the detriment of a Trust can be lawfully removed by a resolution passed by two-thirds of the present Trustees, in accordance with the terms of the Trust Deed. The Court held that prior judicial sanction is not required for such removal, provided the process is prima facie valid and compliant with the deed.
A Division Bench comprising Justice Sabyasachi Bhattacharyya and Justice Uday Kumar upheld a temporary injunction issued by the Alipore Civil Court, restraining the removed trustees from interfering in the Trust’s affairs or unilaterally operating its bank accounts, citing “sufficient prima facie evidence of misconduct and misappropriation.”
“A Trustee Can Be Removed for Detrimental Conduct Upon Board Resolution as per Trust Deed”: Court Validates Internal Mechanism for Expulsion
The crux of the legal issue centered on whether trustees could be removed solely based on a Board resolution under the Trust Deed, or whether judicial confirmation was a prerequisite. The High Court answered emphatically in favor of the Trust’s autonomous governance structure, observing:
“Clause 8(f) of the original Trust Deed provides that when a Trustee acts or does anything detrimental to the Trust, as may be decided by the Board, such member may be removed… by a two-third majority of the members present at the meeting, which was prima facie done in the present case.”
Dismissing the appeal by the ousted trustees, the Court further noted:
“We find sufficient materials disclosed in the plaint and injunction application… to raise apprehension as to criminal activities detrimental to the Trust being undertaken by the appellants.”
“Hijacking Emails, Changing Bank Signatories, Using Forged Documents for Affiliation”: Court Finds Misconduct Sufficiently Established at Prima Facie Stage
The allegations against the appellants included hijacking the Trust’s email, forging resolutions, fraudulently obtaining pharmacy course affiliations, and unilaterally removing other trustees from bank accounts, actions which the Court said threatened the integrity of the Trust’s mission.
“The appellants… arrogated to themselves the function of operating the bank account by retaining themselves as the sole signatories.”
The Court emphasized that these actions, pending final adjudication, warranted urgent intervention to prevent further misappropriation and disruption of educational services.
“Once Working Office of Trust Was Validly Shifted to Kolkata, Alipore Court Had Jurisdiction to Try Suit”: Territorial Objection Rejected
The appellants challenged the Alipore Court’s jurisdiction, citing the Trust’s original registration in Birbhum. The Court noted that a valid resolution dated 26 April 2014 had shifted the working office to Kolkata, and that the meeting which removed the appellants was also held in Kolkata.
“The primary elements of the bundle of facts which comprise the cause of action for the suit pertain to the jurisdiction of the Trial Court… the objection as to territorial jurisdiction has to be turned down.”
Holding that the Trust Deed’s removal clause (Clause 8) provided an adequate legal basis for expelling trustees who act detrimentally, and that the Board’s internal governance mechanisms must be respected, the Calcutta High Court concluded:
“There was sufficient prima facie justification for arriving at such conclusion… the learned Trial Judge found that the interest of the Trust and students required protection until final decision.”
Accordingly, the Court dismissed the appeal, affirming the injunction that barred the removed trustees from handling funds or interfering with the Trust’s administration.
Date of Decision: 1 May 2025
