• Personal liability of legal heir after death of trustee

Hi,

My late father was one of the trustees in a Private Trust along with 3 other trustees. Civil recovery suit has been filed against this trust by a company in Delhi High Court in 2004 and is still pending. In 2005 all the trustees that have been impleaded in this suit resigned from the abovestated private trust.
In this suit there is no allegation of breach of trust or any personal misconduct on part of any trustee. Further in the trust deed it is clearly stated that in case of any litigation against the trust, the trustees can indemnify themselves using the trust fund (also the abovestated private trust still exists as of today).

In 2004, a joint written statement has been filed by all 4 trustees/defendants in this suit and a common lawyer appeared for all 4 of them. In 2010, due to failure of this common defendants’ lawyer to appear on 3 consecutives dates- court declared all the defendants to be ex-parte. But after this order was passed from the next hearing date onwards the common defendants’ lawyer has appeared regularly and contested the suit for all the defendants. 

About 2 yrs back - this suit was at the stage of final arguments when my late father expired and the other defendants informed the court about this. Plaintiff then moved an application – seeking legal heir details of my late father from the other defendants. But on the last date of hearing (about 2 months back) the other defendants have filed an affidavit stating that they aren’t aware of any such details. 

My Queries:

1. Can the court exempt the Plaintiff from the necessity of substituting legal representatives of my late father as per CPC Order 22 Rule 4 (4) – due to the fact that my late father was declared ex parte in 2010 in this suit – although after this ex parte declaration, my late father’s lawyer has been appearing before court right till my late father’s death?

2. Can my brother - even before being impleaded in this suit as legal heir of my late father- move an application before the court for deletion of my late father’s name from this suit on the account that as per trust deed there was no personal liability of my father? Can he also attach supporting documents along with this application?

3. In case my brother gets impleaded in this suit - can he submit his written statement alongwith supporting documents – or because my father was declared ex parte at one stage of suit (though he filed the written statement), therefore my brother wouldn’t be given this opportunity and would be proceeded ex parte?

4. I read Section 30 of Indian Trusts Act 1882 and I think it states that the trustee can’t be held personally liable unless there is a question of breach of trust. Also as it is clearly mentioned in the Trust Deed that in case of any litigation against the trust, the trustees can indemnify themselves using the trust fund – can a trustee be still held personally liable for actions he took as part of his prudent duty towards the trust?
Asked 12 months ago in Civil Law

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6 Answers

1) trustee is not personally responsible for action taken 

 

2) application has to be made to set aside ex parte  order by other trustees 

 

3) brother can after being impleaded file his written statement 

 

4) brother cannot make an application for  deletion of father name as he is not party to the suit 

Ajay Sethi
Advocate, Mumbai
97432 Answers
7872 Consultations

1. Once a party to the suit is dead , he is to be substituted b legal heirs in default of which the suit may be abated against him.

2. Only after impleadment in suit one can apply for deletion/expunging of is name.

3. After recording of evidence there is no scope for filing WS.

4. It depends  merit of the suit about which I can not comment without seeing the respective pleadings or supporting documents. 

Devajyoti Barman
Advocate, Kolkata
23317 Answers
522 Consultations

1. Your father was a trustee of the trust and not a beneficiary.

Your father is not alleged to have misappropriated the trust funds.

He has been impleaded just as a trustee.

Therefore in the absence of any liability against the trustee, there's no necessity to implead the legal heirs of the deceased trustee to the suit

2. Your brother is not a party to the suit hence he cannot move any such application.

3. If your brother is impleaded as a party, he has to file a written statement, if he has any.

4. Since there was no breach of trust, the trustee cannot be held for the liability 

T Kalaiselvan
Advocate, Vellore
87628 Answers
2352 Consultations

Dear client,

  1. Following the ex-parte declaration, the court may take into account the situation and your late father's attorney's ongoing representation. The relevant legislation are outlined in CPC Order 22 Rule 4 (4).
  2. Your brother can submit a request to have the name of your late father removed, highlighting the trust deed's exclusion of personal culpability. Including legal counsel and accompanying documentation can improve the application.
  3. Your brother might be able to provide supporting documentation and a written statement if he is charged with a crime. It's possible that the ex-parte ruling against your deceased father won't stop your brother from making his case.
  4. Generally speaking, trustees' personal culpability is limited under Section 30 of the Indian Trusts Act 1882, unless a breach of trust occurs. The precise language in the trust deed that permits trustees to use the trust fund to defend themselves in court may be very important.

Hope this helps you.

Anik Miu
Advocate, Bangalore
10358 Answers
121 Consultations

For all the above questions the answer is yes you can proceed with necessary application to seek the above remedies from court 

Prashant Nayak
Advocate, Mumbai
32812 Answers
209 Consultations

1. No, court cannot deny the substitution of LRS only on the ground that the deceased has earlier declared ex-parte 

- Further , if the lawyer is appearing before the court , it means that the ex-parte has already set aside. 

2. Yes,

3. Yes, he can contest the case on behalf of other legal heirs, but cannot fie a fresh written statement on this stage. 

4. Yes, it is right. 

Mohammed Shahzad
Advocate, Delhi
14737 Answers
224 Consultations

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