# Cllat1Nlt.r I. /, lytJ~ v. Tf!, Dbnm•y1111 c

- **Citation:** [1963] 1 S.C.R. 85
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** J. L. KAPUR; K. C. DAs GUPTA, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/cllat1nlt-r-i-lytj-v-tf-dbnm-y1111-c-2650
- **Pages:** 14

## Headnote

O~mfKI.ny-Di,.eetor a truBtee and in a fiduciary pos"ion-
'frwt if could bt. created on anothera hand-Ucen_se-()f imtJo.
('..a/)le where there ll4!J been change of purpose -In-iian Basements.
Act 1882 (5 of1882), ~~. 60 (b), 62(/ ).
·
The t«!$pondent, a Company with charitable objects .
owned certain Jands and the appellant who was the Chairman
of the Board of Directors, was asked to construct a building on
the ~aid .land. It was !lubsequently found that the cost would
be more . than the estimated am.ount, which probably the
Company was not prepared to spend.. At t~t stage the
J96Z
Boottm'141
v.
Union D} India
Wanchoo J.
1162
1962
----
Cllat1Nlt.r I. /,
lytJ~
v.
Tf!, Dbnm•y1111
c., .. ,
86
SUPREME COURT REPORTS [1963]
appellant made an offer that he would finish the construction
of the building at his own cost and hand it over to the Company as trust property of which rhe Directors of the Company
would be the trustees and the Company will manage the
affairs in accordance with the conditions laid down in his
off(r. The offer was accepted, but for some reason or other
certain members of the Company were not prepared to stick
to the original arrangement and some of the memben filed a
suit and obtained an injunction against the appellant and the
company not to execute the trust deed as proposed by the
appellant. Thereafter the appellant resigned from Chairman·
ship and also ceased to be a Director, two days before his resignation the appellant registered a trust deed and made himself
the first trustee with powers to appoirrt other trustees. The
trust deed inter alia, recited that a rent of Rs. 88/- per annum
was to be paid t• the Company for the compound where the
building had been erected.
Thus the appeJJant created a
trust by which the trust b(came a tenant of the respondent
Company without any transfer from the Company to the
trust. The respondent Company called upon the appel1ant to
hand over the building :o the Company and filed a suit for
possession of properties, damages and mesne profit.
The respondent Company's case was that the appellant
had wilfully contravened· the terms of his offer, and the right
of the appellant therefore was only to recover the money from
the Company to the extent to which he may be entitled in
equity and the trust deed was inoperative.
The defence of the appellant inter alia was that the
respondent company was estop~d from claiming the building
after having accepted the aforesaid offer pursuant to which
the appellant had invested a large sum of money in construct··
in~ the building; and that as the offer of the trusteeship of
the property in dispute made by the appellant and accepted
by the Board of Directors had afterwards been cancelled as a
result of the resolution pauC(fby the general body of members,
the appelhLnt could not ~onstitute the respondent. company as
trustee and therefore he was entitled to implement his 'original
intention by executing the deed of trust. In the Supreme
Court, the appellant relied on the plea that he had been
granted a license and acting upon the license he had executed
a work of permanent character and incu~ed expenses in the
execution thereof and therefore under s. 60(b) of the Indian
Easements Act, t882, the license was irrevocable.
Hild, That a Director is also a Trustee of the assets of
the company and is ·in a fiduciary relationship with th e
~tnp~ny; therefore he CO\~ld not do .. nyt.hing in fC8&f ~
1 S.C.R.
SUPREME OOURT REPORTS
87
!O t~e assets of the Company which would prejudicially rurect
1ts nghts.
A person cannot create a trust in regard to land which
belonged to another person nor could he by an unilateral act
create a lease in his own favour in regard to the land over
which he has raised a super-structure.
The offer and the acceptapce of the terms of the trust
deed being wholly different from what had been executed by
the appellant and from ·the manner in which the new trust
had been constituted into a lessee of the company without the
company's ag

## Text

1 s.c.R.
SUPREME OOURT REPORTS
85
paying all the costs incurred by the respondent up·
to date irrespective of the result of the suit.
We therefore allow the appeal and remand the
case to the trial· court for considering only the
question of limitation on the basis of the Displ~ced
Persons (Institution of Suit"s) Act, (No. XLVII of
1948) as amended by the Displaced Persons (Institution of suits an~ legal proceedings) Amendment
Act (No. LXVIII of 1950)" after giving· parties a
chance to laa.d evidence in this connection, if necessary. If the ·court comes to the conclusion that the
suit is within time on the basis of these two Acts, a.
decree for the amount claimed minus the costs
incurred upto ..this date by the respondent will be
passed in favour of the appellant. If on the other
hand the court comes to tho conclusion tha.t·the suit
is not within limitation even under these two acts
the suit will be finally dismissed. Costs incurred
hereinafter will be in the discretion of the court.
Appeal allowed .
. :: I \VALIER L J. IYYAPP,AN & ANOTHER
v.
THE DHARMODA.YAM COMPANY
(J. L. KAPUR; K. C. DAs GUPTA and
RAGHUBAR DAYAL, JJ.,
O~mfKI.ny-Di,.eetor a truBtee and in a fiduciary pos"ion-
'frwt if could bt. created on anothera hand-Ucen_se-()f imtJo.
('..a/)le where there ll4!J been change of purpose -In-iian Basements.
Act 1882 (5 of1882), ~~. 60 (b), 62(/ ).
·
The t«!$pondent, a Company with charitable objects .
owned certain Jands and the appellant who was the Chairman
of the Board of Directors, was asked to construct a building on
the ~aid .land. It was !lubsequently found that the cost would
be more . than the estimated am.ount, which probably the
Company was not prepared to spend.. At t~t stage the
J96Z
Boottm'141
v.
Union D} India
Wanchoo J.
1162
1962
----
Cllat1Nlt.r I. /,
lytJ~
v.
Tf!, Dbnm•y1111
c., .. ,
86
SUPREME COURT REPORTS [1963]
appellant made an offer that he would finish the construction
of the building at his own cost and hand it over to the Company as trust property of which rhe Directors of the Company
would be the trustees and the Company will manage the
affairs in accordance with the conditions laid down in his
off(r. The offer was accepted, but for some reason or other
certain members of the Company were not prepared to stick
to the original arrangement and some of the memben filed a
suit and obtained an injunction against the appellant and the
company not to execute the trust deed as proposed by the
appellant. Thereafter the appellant resigned from Chairman·
ship and also ceased to be a Director, two days before his resignation the appellant registered a trust deed and made himself
the first trustee with powers to appoirrt other trustees. The
trust deed inter alia, recited that a rent of Rs. 88/- per annum
was to be paid t• the Company for the compound where the
building had been erected.
Thus the appeJJant created a
trust by which the trust b(came a tenant of the respondent
Company without any transfer from the Company to the
trust. The respondent Company called upon the appel1ant to
hand over the building :o the Company and filed a suit for
possession of properties, damages and mesne profit.
The respondent Company's case was that the appellant
had wilfully contravened· the terms of his offer, and the right
of the appellant therefore was only to recover the money from
the Company to the extent to which he may be entitled in
equity and the trust deed was inoperative.
The defence of the appellant inter alia was that the
respondent company was estop~d from claiming the building
after having accepted the aforesaid offer pursuant to which
the appellant had invested a large sum of money in construct··
in~ the building; and that as the offer of the trusteeship of
the property in dispute made by the appellant and accepted
by the Board of Directors had afterwards been cancelled as a
result of the resolution pauC(fby the general body of members,
the appelhLnt could not ~onstitute the respondent. company as
trustee and therefore he was entitled to implement his 'original
intention by executing the deed of trust. In the Supreme
Court, the appellant relied on the plea that he had been
granted a license and acting upon the license he had executed
a work of permanent character and incu~ed expenses in the
execution thereof and therefore under s. 60(b) of the Indian
Easements Act, t882, the license was irrevocable.
Hild, That a Director is also a Trustee of the assets of
the company and is ·in a fiduciary relationship with th e
~tnp~ny; therefore he CO\~ld not do .. nyt.hing in fC8&f ~
1 S.C.R.
SUPREME OOURT REPORTS
87
!O t~e assets of the Company which would prejudicially rurect
1ts nghts.
A person cannot create a trust in regard to land which
belonged to another person nor could he by an unilateral act
create a lease in his own favour in regard to the land over
which he has raised a super-structure.
The offer and the acceptapce of the terms of the trust
deed being wholly different from what had been executed by
the appellant and from ·the manner in which the new trust
had been constituted into a lessee of the company without the
company's agreement it was not possible for a Court in equity
to ac~pt the new trust as
a
bar to . the respondent's
claim for possession and there are no equities in the appellant's
favour which he is entitled to enforce by way of defence to
the suit.
Held, further, that no case of license really arises but if
it does, the license was to construct the building and hand it
over to the respondent compan}' as trust property. There was
no license to create another kind of trust which has been
sought to be created. It cannot be said, therefore, that there
was an irrevocable license which fall under s. 60(b) of the
Indian Easements Act. Even such a license is deemed to be
revoked under s. 62(f) of the Act where the license is I!Tanted
for a specific purpose and the purpose is attained or abandoned or becomes impracticable.
G. E. By. v. Burner (1872) L.R . 8 Ch, App. 159, Manzoor
Ahmad v. Mukammad. Abdul Jamil, (1933) I. L. R. 56 All.
207 and Dominion of India v. B. B. Bohan Lal, A. 1. R. 1950
E. P. 40, referred to.
CiviL APPELLATE JURISDIOTION: Civil Appeal
No. 565 of 1960.
Appeal from the judgment and decree dated
September 26, 1956, of the former TravancoreCochin -High Court in A. S. No. 57 of 1954.
A. V. V i.twanatha Bastri, P. K. 8uhramania
lyer, R. Ganapathy Iyer, 0. 8. AnanthakriBhna Iyer
and G. Gopalakrishnan,. for the Appellants.
M •. K. Nambiyar, Ramuhwar Natk, S. N. Andley
and P. L. Vokra, for the respondent.
.
1962. March ·27. The Judgmen,t of the Collft
w~ delivered by
·.
1962
0/kval~r /.1.
l.»tJPJum
,,
TIN Dharmcd4_,.m
Company . ·
~961
cA.,•Iw r.r.
1.71¥1411
y,
~
Dltef7Ntlll.Jtllll
c.mpu_,
88
SUPREME OOURT REPORTS [1963]
KAPUR, J.-This is an appeal against the
Judgment and decree of the High Court of Travancore Coohin modifying
the decree of the
District Judge,
Trichur. The
appellant
was
defendant No. 1 in his personal capacity and
defendant No.2 in the capacity of a trustee of
a trust. Defendal)'t; No. 5 was a. tenant of the
building which is the subject matter of dispute
between the parties, defendant No.lO was its
successor. in-interest and the present respondent
was the pJaintHf in the suit.
The suit out of which this appeal ba.s aris~n
was filed in the Court of the District Judge,
Trichur, on October 31, 1945, The suit wa.s for
possession of properties described in schedules A· &
B and for damages and mesne profits with inter·
est. The defence was that the appellant wa.s not
liable to restore possession on the basis of a document
Exhibit X which. was a deed of trust
executed by. the appellant creating a trust and
constituting himself the trustee of the trust. The
5th defendant claimed Rs.20,000 and Rs.l019 as
value of improvements and extensions made on
the building. A large number
of issues were
framed by the tria] court and it pa~ed a decree
of which. the most important part was as follows:-
(a.) The plaintiff is allowed to recover
possession of A & B schedule items from the
defendants in poSBession and to utilise the
income from the- B schedule item according to
the terms mentioned in Exhibit II.
(b) The 5th &1Oth defendants are permitted
to remove within a. period of 2 months from
today the constructions and addition~ made
in the A and B schedule items by them .with·
out causing any damage to
tl_J.e
plaint
properties.
' Agai~ this decree three appeals were filed one
by the appellant, the other by the lOth defendant
1 S.C.R.
SUPREME OOURT REPORTS
80
anu the third by the plaintiff-respondent. '.rhe
High Court in appeal modified the decree of the
trial court and hold that the only claim which the
appellant could put forward was for compe.nsation
for the structure he had erected. The amount qf Compensation was &.46,686-2-0. The High Court also
held .that the respondent was entitled to recover
m~sne profits as against the appellant at the rate
of Rs.88/- per annum till the recovers . of property
mentioned in schedule A and B at the rate of
Rs.l500/~ per annum. "in · regard to schedule B
· buildings. It is against this
decree that · the
appellant has come in appeal to this court by
special leave.
In order to UT)derstand the points in controversy it will be helpful to give certain facta which
led up to this litigation. The respondent is a nonprofit sharing company, the main objec~ of which
seems to be to provide pecuniary assistance to the
poor for. educational. and other charitable purpose.
The respondent company owned survf'y No. 465
in the revenue estate of the village Trichur abutting
on the public road in 1944-45. It was 55 cents in
area. The r.espondent company erected buildings
on the South and which had be~n rented t.o the
then Imperial Bank of India, now the State Bank
of India, and in the middle portion there waR a
building which has been leased out to the Post
Office.
In the North there was a vacant plot
measuring 20 cents which has been described as
sch~dule A. A building was sought to be put up
and was ultimately put up on about 7 or 8 cents
out of this area which has been described in schedule B. Schedul~ A is the whole of the land.niea.suring 20 cents with the building on it on an area of
7 or ·8 cents which is schedule B. In 1942 the
appellant became the Chairman of the Board
of Directors of .the respondent company and w~
entrusted with the construction of the building
wl:lich the resp-9ndent company . wanted to put up
l !IGZ
Chavalier (. I.
f»II/J/JIIII
v.
The Dhmt11()1/•yt~•
Ctnllp!JIIy
Ka~UrJ.
191lt --
Ciulu.U, /, /.
l.»tJ?JI•n
v.
Tit, Dtt.nnOil,,_
Cof'l,tm.1
Ir-JJurJ.
90
SUPREME COURT REPORTS [1963]
on 7 or 8 cents out of schedule A property which
the appellant agreed to construct. The . cost of the
building at that time was estimated to oo
Rs.l2,000. It was also resolved to entrust to the
appellant the construction of a latrine, a kitQben
gate, compound and partition wall of schedule A
property which was constructed at a
cost or
Rs.2,000 expended by the respondent company.
At the meeting of the
Board of Directors of
January 9, 1944 the_ dir~ctors of the respondent
company were told· by the appellant that .Rs.l2,000
was insufficient for the completion of the building.
On April 1944t the appellant made an offer to the
Directors of the respondent company that he would
meet the entire cost of the oonstruction of the
building and hand over the building to the respondent company which would be a trust. This
ofFer is contained in Exhibit AB.
Tn this offer
he stated that the estimated expenditure of the
new building will be about Rs.30,000 and that he
would meet the expenses and then he stated:-
"! shall entrust this building with the
company as my trust property in accordance
with . the conditions mention~d below. and
the company shall ta.ke over the above trust
property and manage the affairs in accordance
with three conditions mentioned below''.
One of the conditions was that the minimum income of the property shall be oa.loulated at
Rs.l5()0/- per annum whioh would be spent for the
eduo&tion of poor students according to the rules
framed by the oompany and then he set out
certain rules. He also stated what the name of
the trust would be.
The dooument ended as
follows.
•'I shall execute at my own expen1e a
trust ·deed and sip and give the same to
the company, entenng therein, all the above
mentioned parti g Ian and oonditiODI. n.
-+
I
1 S.C.R. SUPREME OOURT REPORTS
91
company shall aecept the same and shall
mention the fact of acceptance in the deed
in writing and shall get the same registered".
On the same day the directors seem to have resolved as follows:-·
41lt is decided to accept this trust property in accordance with the
conditions,
mentioned in . it. Copies of this resolution
and the application, may be sent to the
applica-nt".
The company agreed to accept the trust and a sum
of Rs.7672-7-3 which had been given to the appellant by the respondent company was returned on
April 30,, 1944. On July 2, 1944, the appellant
placed before the Board of Directors a draft of
the truat deed which is Exhibit II. The draft of
the trust deed was approved by the company as
follows:-
••The compa.ny has accepted the properties
a.s 'TruBt' with all the above conditions. To
this eft'eot, the Directors (Trustees) who have
been authorised as per the _qecision of the
Director Board, on behalf of the Dharmo~
d~yam Company.
The draft o.f the •Trust deed' has bet>n
perused and accepted. Four 'Trustees have
been empowered to prepare the original
deed and present it in
the Registrar's
Office".
It appears that at a meeting of the General
Body of the Members of the. Company this trust
deed was
approved. Later on February 25,
1945 another meeting was held and certa.in changes
were suggested in the trust deed. On October 7,
1944, certain members of the respondent oampany
filed a suit in the court of District Munsif of
Trichur and obt~ined an injunction both again~tt
1968
Clutvoli~r f, I.
I.»#JP.,
v.
TAID~wa
c~
Ef~~UrJ.
KopUf' J.
92
SUPREME OOURT REPORTS fl963]
the appellant and the company uot to execute
the trust deed as had been proposed by the
appellant as contained in the draft (Exhibit II).
Thereafter the appellant resigned his Chairmanship
of the respondent company on May 25, 1945 and
also ceased to be a Director on May 28, 194:5.
Two days before i.e. on May 23; 1945 the appellant
registered a trust deed in regard to the property
which is Exhibit X. It is there stated that he had
constructed the building at his own expense at a
cost of Rs 75,000/·and it was to be named
Dharmodayam
Company
S~lver Jubilee I. I.
Iyyappan Trust Building. The first trustee was
the appellant with power to appoint other trustee
or trustees.
The estimated income of the property
was Rs. 3600/- out of which a rent of Rs 88/- :ver
annum was to be paid to the appellant company
for the compound where the building had been
erected and then provision was made in regard to
the income and how it was to be spent. This was
registered and thus a trust was created of the
properties in schedule A & B in which the trust
became a tenant of the respondent company without .
any transfer from the respondent Company to the
trust.
The suit for injunction which had been filed
by Rome of the members was dismissed for default
on March 25, 1946, 1'he respondent company on
August 13, 1945, calJed upon tho appellant to hand
over the building to the respondent company and
it is stated that on August 22, 1945, during some
holid&ys the appellant inducteu the 5th defendant
as a tenant. The respondent thereupon filed the
suit out of which this appeal has arisen.
The plaintiff in his plaint, after reciting the
facta which have been above set out, statE-d that.
the appellant as an agent of the respondent
company had misconducted himself by tho breach
ofhis duties and hf0 thereby lost any right hu had
regardi,ng the building described ·in schedule B ·
I S.C.R.
SUPREME COURT REPORTS
93
that he ha.d wilfully contravened t.he terms of his
offer ; that the right of the appellant therefore was
only to recov<"r the money from the company .to the
extent to whjch he may be entitled in equity and
the trust deed (Exhibit X) was inoperative. The
respondent further stated that it ·was ready and
willing to pay such s.um of money as the court may
find the_ appellant to be entitled to.
The defence of the appellant was that the
offer df the appellant to construct the build~ng and
to constitute the company as trustee to carry out
the trust according to the terms and conditions
detailed in his offer dated 2, 1944 having been
accepted by the Board of Directors, it put an end
. to any previous t"elationship which might have existed between the appellant and the respondent
company and could not therefore be enquired into.
It was also submitted that the respondent com:.
pany was estopped from claiming the building
after having
accepted the
afore~id
offer
pursuant to which the appellant had invested a
large sum of money in constructing
the building; that as the offer of the trusteeship of
the property in dispute made by the appellant and
accepted by the Board of Directors of the respondent company had afterwards been 9ancel1ed as a
result of the resolution. passed by the General Body
of Memb~rs the appellant could not constitute the
respondent company as trustee and therefore he was
entitled to implement his original intention by executing the deed of trust (Exhibit X.). He therefore
pleaded that the deed of trust was perfectly valid:
that the rental value of the site in schedule A was
not even Rs. 10/- a year and that he ha.d not become a tenant and the word "verumpp.ttom" had
been used for the want of a better word and that
the trust had undertaken the liability to pay to the
respondent company Rs. 88/- a year. On· these
grounds it was submitteg that the respondent com·
. pa.ny was not entitled to allY relief. These then are
the Iaot. of the eue.
·
11162
Ch«oalifr I. /,
1-qoppan
••
TM DhamtiXIay•m
Complln.J
11~1
Cl!.lllfilier I. J,
l:J.J4PPilll
v.
T/1, Dhrllfl1tl•,.m
Comp•raJ
KtJ/1111 J,
94
SUPREME OOURT REPORTS {196aJ
The appellant in this Court has mainly relied
on the plea that he had been granted a licence and
acting upon the license he had executed a work
of a permanent character and incurred expenses in
the execution thereof and therefore under s. 60{b)
of the Indian Easements Act, 1882 (5 of 1882),
hereinafter referred to as the #Act', which
W!!.B
applicable to the area where the property is situate
and therefore the license was irrevocable. Now in
the trial court no plea of licens~ or its irrevooability
was raised but what was pleaded was the validity
of the trust in Exhibit X. In the judgment of
the trial court no such question was discussed. In
the grounds of appeal in his appeal to the High
Court which the appellant took against the decree
of the trial court the relevant grounds are 9 to 13.
In the 9th ground it was pleaded that the first defendant's case of lease should have been upheld; in
any event s.60 of tbe Aot should have been applied.
In Ground No. 10 it was stated that Rs. 88/- 'was a
reasonable compensation. GrouD.ds 11 to 13 dealt
with the question of trust. Thus it is for the first
time in his grounds of appeal that a. 60 of the Aot
was sought to be raised as an alternative plea. At
the time of the argument before the High Court the
appellant abandoned his ·case in regard to the lea.ae
and relied on the irrevocability of the licenae and
insisted that the trust deed (Exhibit X) was a. valid
document. Now it is not open to a. party to change
his case at t4e appellate stage because at the most
the oaae of the appellant in the tria.l court was what
was contained in paragraph 11 of the Written Statement where the question of estoppel was raised and
the plea taken was that the 'respondent company
was estopped from clainting any right to the building after accepting the oft'er of the appellant pursuant to which the appellant had expended a large
amount of money. That was not a. plea. of license
at that stage. It is not for us to say what the
cue of the pariies would have been U' the cue of
~-
1 S.C.R.
SuPREME OOtmT REPOR'fS
96
license had been speoifioally raised but the fact remains that the plea. of license was not raised in the
trial court nor was it adjudicated upon there.
The appellant was a Director of the company
and it is now impossible to dispute the proposition
. that the Directors are in some sense, trustees-a. proposition which ha3 been established by a long series
of oases. See Palmer's Company Law p. 168, Ed.
19th. This two fold oha.raoter of directors is, per·
haps, best expressed in Lord Belborne's words in
G. E~ Ry. v. Rurner(1) where he said:-
The directors are the more trus~s or
agents
of
the
company-trusees of the
company's money and property; ~gents in
the transactions wbich they enter into on
behalf of the company. And this is the way
in which it is put by Sir George J easel in
the case of Re Forest of Dean etc., Oo. ( J 878)
10 Ch. D. 450. Directors are called trustees.
They are no doubt trustees of assets which
have com& into their hands, or which are
under their control".
tl'hus when the appellant was making the offer for
ore'l.ting a trust he was not ~erely an agent of the
company; he was also a trustee of the assets of the
. company and was in-a fiduciary relationship with
the respondent. "Therefore the appellant could not
d<1 anything in regard to the assets of the company
"hich would prejudicially aft"ect ita rights. '.rhe appellant made an oft'er that he would en·ect the bull·
diJlg on the land belonging to the respondent which
is in schedule A, the building being schedule B. He
alao oft'ered that it would be a trust property i.e.
the super structure would be the trust propel'tJ. He
could not oreate a trust in regard to land whioh
belonged to the company nor could he by a unilater~~ol act oreate a leaee in his own favour in regard to
<•> (1172> L.a. a aa. App. 149, 152.
1962
CA4tlalt.T I. I.
~
v.
Til# Dllar1Mfill.1t~m
~:I
1961
CA•vali11 /, /.
lyyaJ'f'rm
v.
'[Ire JJharmodaJam
Compar!)l
_..,...._
liafJu"' J.
96
SUPREME COURT REPORTS [I963j
the land ,:vhich is in ~:~chedule A. Thus when a complaint is made that the appellant ha.s unilatera1Jy
aetcd to deprive the company of some of its right
t.hc complaint is not wholly without foundation,
although the company also may not be enthcJy
without blame. But the fact comes to this the ap·
pellant was asked to construct the building at a cost
of Rs. 12,000; it wa:s subsequently found that the
cost would be more than the estimated amount
which probably the company was not prepared
to spend. It is not that the building had not yet
commenced, it had commenced and probably not
completed. At that stage the appellant made an offer
which was accepted but the offer was that he would
finish the construction of the building and hand it
over to the respondent company as trust property
of which the trustees would be the Directors of the
company. The transaction therefore was confined
to the offer as
contained in Exhibit AB and in
Exhibit II. It is true that for some reason or
another certain members of the company were
not prepared to stick to the original arrangement
and wanted certain modifications but in spite of
that it was not open to the appellant to ignore his
offer altogether and create a wholly new trust
which he has done. His right, if any, if they
could be enforced would only be in Exhibit II
which the appellant himself has abandoned. He
cannot now lJe heard to.say that because the company after accepting his offer had · refused to abide
by the agreement, he was entitled to appropriate
by means of the trust created by him the land in
schedule A by constituMng the trust a tenant and
deprive the company of which he was at that
time a. Director and therefore a trustee. In these
circumstances it is impossible to say that there
were any equities in his favour whic~ he is entitled
to enforce by way of defence· to the suit of the
re•pondent.
'
I.
...
I
1 S.C.R.
SUPREME OOURT REPORTS
97
In our opinion no case of license really arises
but i( it does what is the license · which the appellant obtained and what is the license, which he is
seeking to plead as a. ba.r. The license, if it was
a license, wd.s to construct the building and hand
it over to the respondent company. as trust property. There was no license to create another kind
of trust which the appellant has sought to cre!lte,
It cannot be said therefore that there was an irrevooa.ble license which falls under s. 60 (b) of the Act.
Even suoh a license is deemed to be revoked under
tt. 62 (f) of t.hat Act where the license is granted
for a speoifio purpose and the purpose is attainc d
or abandoned or becomes impracticable.
In the
present case the purpose for which the license wa.s
granted has either been. abandoned or has become
impracticable because of the action of the a.ppe--
lla.nt.
In these circumstances the oases which were
cited on behalf of the appellant are of little a.ssista.noe. The appellant relied on M anzoor Ahmad
v. Muhammad Abdul Jam!li1{1) which was a. case under
•· 60 (b) of the EaHt'mente Act where. a. license had
become irrevocable under s. 60 (b) ana it was held
that·it could not be revoked on ,·payment of compensation. The East Punjab case. Dominion of ·
India v. B . B. Sohan Lal C1) again is not of much
assistance of the appellant. It was there stated
that in every case the terms of the license have
t.o be examined and the law applied to such· terms.
It ~as also observed by Das, C. J. (as he then was)
that in order to be irr~vooah}e under s. 60 the
license has to be coupled with a transfer of property
whereas under the. English law it was enough if
it wu coupled with a. grant. or interest in the
' nature of profit and in every ease the irrevooa.bility whether under the English law or under the.
Indian statute w-ill give way to the special
(l) (193$) I; L. R. 56 All.107,
(2} A.I.R. 19$0 E.P. 40, f7.
116!
Chat~t~lief' I. I.
IvoH~n
v.
Tk DhmnodaydiTI
Compt~~~j
Kt~ftur J.
196~
Ch••tMHtr ]. [.
I;~yappan
v.
The DltatmorJO;Jall!
Ct1nJpany -
1962
March zs.
98
SUPREME COUR'r REPORTS [1963)
agreement if any of the parties but it is unnecessary
to go into these cases because the offer which was
originally ~ade by the appellant and accepted by
the respondent company has not been adhered to
and the appellant is now proceeding on an entirely
new basis.
In our opinion the offer and the acoeptence
of the terms of the trust deed being wholly different from what has now been executed by the
appellant and from the manner in which the new
trust has been constituted into a lessee of the company without. the company's agreement it is not
possible for a court in equity to accept the new
trust as a bar to t.he respondent's claim for posses·
sion. In this case the appellant has suffered no
loss. The amount which he has expended has been
returned to him.
In our opinion the judgment of the High
Court wM right and we therefore dismiss this
appeal with costs.
Appeal clismisstd.
THE COLLECTOR OF MONGHYR AND OTHERS
v.
KE~HAV .PRASAD GOENKA AND OTHERS
(And connected appeals)
(B. P. SINHA, C.J., K. SuBBA R.Ao, N. RAJAGOP.ALA
AYYANG.AR~ J. R. MuDHOLKAR and T. L.
VENXATARAMA AIYAB, JJ.)
Privare Irrigation Work,_Repaira to WtWb-Notice to
landlord-Collector's power to direct repairs willaout noticeStatute requiring reasons to be recorded by Oolkct!Jr-lf mandatOT'!J-Demand on landlord for share of cosls-Ltgatity-Bikar
Privale Irrigation Works Act, 1922(Bihar and Orissa 5 of1922),
88. 3, 4, 5, 5A, 5B, 11, 12-0onBtitvtion of India, Art. 226.
The Bihar Private Irrigation Works Act, 1922, was
enacted to provide, inter alia, for the repairs and improvements
'