HC appoints administrator to verify Raheja family trust
Suit filed by Sandeep Raheja alleges mismanagement and inflation of liabilities, reports Urvi Jappi.india Updated: Nov 16, 2006 22:54 IST
Raheja family, known for its constructions and property development business, is embroiled in a dispute over trust property - named Raj Trust - in south India.
The Bombay High Court on Thursday appointed retired Justice RG Vaidyanatha as administrator of the trust in order to verify the allegations made by Sandeep Raheja, son of Gopal Raheja, and director of K Raheja Constructions and K Raheja Hospitality.
Alleging mismanagement of trust funds, Sandeep had approached the HC seeking that two of the three main trustees - Chandru Raheja and Arjun Menda - be removed from the office and also be restrained from acting as trustees. He has alleged that the Balance Sheet of the trust was manipulated to show more liabilities.
The administrator would verify the genuineness of the liabilities shown in the Balance Sheet of the trust, observed Justice SJ Vazifdar. The HC has granted powers to the administrator to sell part of trust's property through auction to meet the administrative expenses of the trust.
The trust was established on September 11, 1985 with three main trustees - Arjun Menda (brother-in-law of the Rahejas), Gopal Raheja and Chandru Raheja. It was to expire after 18 years wherein the trust fund was to be distributed among the beneficiaries.
The trust called as the Raj Trust had a net trust fund of about Rs 65.91 lakh as per its Balance Sheet for the year 1998-99.
Suit filed by Sandeep alleged that two trustees - Chandru Raheja and Arjun Menda - excluded a co-trustee, Raj Menda (Arjun's son) and took control of the trust and are mismanaging the trust funds.
Chandru and Arjun have opposed the suit stating that the trust property was mortgaged to wipe out the trust liabilities. Also, the development of property through loan money would only enhance the trust value.
The trust having its head office at Khar in suburban Mumbai has invested and undertaken major construction work in south India, mainly in Bangalore, Chennai and Coimbatore.
One of the major property development work undertaken by the trust is called Jade Garden in south.
Nearly 18 acres of the property in Jade Garden situated in two villages (Shettigere and Sadahalli) was mortgaged by Chandru and Arjun property with M/s Infrastructure Leasing and Financial Services Limited in 2001 against loan forwarded by it. This is against the trust deed, states Sandeep in his suit.
Further, in order to recover the dues M/s Infrastructure sold the property to Asiatic Properties Limited.
Sale of trust property is illegal, as the trust deed does not permit the trustees to mortgage any movable or immovable property belonging to the trust, states Sandeep's suit.