JETHANAND HARKISHINDAS BHOJWANI v DEVIN JETHANAND BHOJWANI & 2 Ors

Facts

Jethanand Harkishindas Bhojwani (Sajan) was trustee of a testamentary trust created by the will of his father, Harkishindas, who died on 4 March 2007. Sajan's three sons, Devin, Dilip and Sandeep, and his former wife were the named beneficiaries. The trust held shares in the family Shankar's Group companies, including the founder's share in Shankar's Emporium (Private) Limited (SEPL), which carried entrenched rights such as control of the board and 10% of the company's net profits annually in perpetuity.

On 15 September 2008 Sajan and the other second-generation shareholders voted to remove the founder's share rights and treat the two founders' shares as ordinary shares. Several group companies were struck off in 2010, and for three of them the trust received far less than its shares were worth; on 18 February 2021 Sajan sold the trust's shares in SEPL and Liberty Merchandising Pte Ltd to his brothers. After the sons questioned the sale, he executed deeds excluding Devin and Sandeep as beneficiaries. In HC/S 521/2021 the High Court found multiple breaches of trust, surcharged the trust account by $9,522,731.92 for the founder's share and removed Sajan as trustee. Sajan appealed in AD/CA 3/2025 and the sons cross-appealed in AD/CA 4/2025.

Issues

1. Whether Sajan concealed the trust and owed a duty to inform the beneficiaries of it
2. Whether the exclusion deeds were executed in bad faith and therefore void
3. Whether removing the founder's share rights was a custodial breach and a breach of fiduciary duty
4. Whether the sale of the trust shares and realisation of the struck-off companies' shares were breaches, and how they should be valued
5. Whether pre-judgment interest and Sajan's removal as trustee were justified

Holding

The Appellate Division allowed the appeals in part. It allowed the sons' appeal in AD 4, holding that the treatment of the founder's share was a custodial breach and a breach of fiduciary duty to be remedied by falsification, and dismissed Sajan's appeal in AD 3 save for adjustments to the valuations. Sajan was held liable to reconstitute the trust in the total sum of $29,985,801.43 and ordered to pay costs of $120,000 all-in.

Reasoning

Sajan's appeal against the dismissal of an interlocutory summons failed because permission to appeal was required and never sought. The court upheld the finding that he concealed the trust until the Crawford Letter of 16 September 2016, rejecting his claim of a typographical error in his affidavit. Trustees must take reasonable steps to inform discretionary beneficiaries who have a realistic prospect of benefit. He admitted commingling trust money, and the absolute discretion in the will did not excuse it. The exclusion deeds closely followed the sons' questions about the sale and were void for bad faith.

On the founder's share, the court held that the resolution did not convert a share but extinguished valuable entrenched rights and replaced the share with a less valuable one, an unauthorised disposal of trust property. Neither the will nor a 2002 family shareholders' agreement empowered Sajan to do this, and as a shareholder he personally stood to gain, breaching the no-profit and no-conflict rules. Falsification required him to restore the value measured at the date of judgment: 10% of SEPL's equity value, giving $18,179,480.70, plus lost profits with interest of $8,775,468.31, after excluding the expert's director's-fee component and accounting for both founders' shares.

The sale of the trust shares lacked any credible justification, as the reports did not show a decline and Sajan never tried to sell his own shares. Discounts for lack of control and marketability were refused because falsification aims to reconstitute the trust, and the SEPL figure was adjusted to $1,191,015.00 while the $1,839,853.00 award for LMPL was affirmed. The findings on the struck-off companies, pre-judgment interest payable to the trust, and removal in favour of a professional trustee were upheld given Sajan's serious breaches.

From the judgment