# IHl Oct#nll. !06 SUPREME OOURT REPORTS (1962] SUPP. L. JANAKIRAHA IYER AND OTHERS v. P. M. NILAKANTA IYER AND OTHERS

- **Citation:** [1962] Supp. 1 S.C.R. 206
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Civil Appeals Nos. 62 and 77 of 1959
- **Bench:** B. P. Sm11, P. B. Ga.Jxndr4Ga.Diur, R.A.Gjiujiab Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ihl-oct-nll-06-supreme-oourt-reports-1962-supp-l-janakiraha-iyer-and-others-v-p-2415
- **Pages:** 36

## Headnote

'l'rwt-Dtblor1 cr.n"'lli11f P""]Wly to thru tnutu1 /or
repayment of ddi11--.A4minillraUon suit by debtor• dinniut4
o" 111ilhdra111<1/,-Sul>ltqiunt suit on bthal/ of gttural body of
crdilor1--I/ barred by res judicata-Limilalion claim /or
pos1twta-Mairil4'nability-Sak <lui tucuttd by llPO of tM
thm lruatu1-Validilg-A1Mrtdmtnl of ckcru by High Court
afttr admiuion of "'PpuU by S11prt- Court-A11>1Jrd of "''
projJt ID tnut utalt eflll intuut to morlgagtt-Adjuslmenl of
tquilit•-01111rl'• power-Validity of alit11ation in /aoour of
pt.1'809 inltrmtddli11g with tnut ulaft-Truslu de son tortlftdian Trust~ Act, 1882 (2 of 1882), u. 48, 63-Cod• of Civil
Proctd111·e, 1908 (Act Y of 1908), 88. 11, 161and162-lndian
Limi~1 Act, 1908 (IJC of 1908), Arta. JIU, 120.
ThCJC appeals arose out or a representative sult
filed on ~half of the crediton of defendants I to 6 who
had executed a trust deed on August 26, 1936, conveying
their properties to three trustees with authority to dispose
of the same and distribute the sale proceeds rateably
amongst the credlton. The tru1t deed required "the three
trustees to act accordfn~ to the decision arrived at either
unanfmonsly or by m&Jority." The trustees accepted the
trust and conveyed all the properties e•cept the family
house in admini1tralion of the trust. Two of the 'ale dteds
in favour of tt.>o of the creditors,. defendants 13 and I 4, a
mortgagee creditor, In the 111it were executed by only two
of the trustees.
In a suit bronght by the said defendants
I to 6 for adminiJtratlon of the trust, the trial court passed
a preliminary decree. The High Court on appeal remanded
the matter to the trial court (or a finding aa to the market
value of the lands sold. The trial court submitted its
finding.
At this stage defendants I to 6 withdrew the suit
which was dismisoed. The preoent suit under 0. I, r. 8 of
the Code of Civil Procedure was filed on October 29, 1947,
before such withdrawal. The claims made therein, inler
11/ia, were for a declaration that the properties In question
were still impressed with the trust, for the removal the
Rll'Vivin1 trustee and appointment of an admini.trator to
l'Cll!iae the amounts, recover possession of the properties and
re-sell them. Tbe trial Judge paued a decree in favour of
the plalntilra. The Hi1h Court In substance confirmed
that decree but modified It by awarding aimple interest
(I} s.c.R,
SUPREME COURT REPORTS
207
ins~ad of compound Interest decreed in favour of defend·
!\nt 14. The two sale deeds, executed by only two of the
trustees, were declared in valid and it was found that the
third trustee did not give his consent to it. The sale deed
in favour of defendant 12 was declared imalid on the ground
that he had intcrmeddled with the trust estate and had thus
became a trustee dt 1ou tort. The courts below also rejected
the picas of limitation and res j1'dicata raised on behalf of
the defendants. Some of the creditor defendants appealed.
After the appeals had been admitted by this Court the High
Court amended the decretal ·order by substimting the word•
'mesne profits' by 'net profits' under ss. 151 and 152 of the
Code of Civil Procedure.
Held, that the question whether Art. 120 or Art. 134
of Indian Limitation Act applied to a case bad to be
decided on the case made in the plaint, read as whole and
properly construed. Since the present suit was not one
for a mere declaration but for possession of property, having
been valued and framed as such, deliverable to the adminis·
trator, it was governed by Art. 134 and not by Art. 120 of
the Act and was thus within time.
It was not correct to say that 1. 63 of the Indian Trust
Act was exhaustive as to the remedies available to a beneficiary under a private trust or that a claim for constructive
possession, such as was made in the present suit, was prohibited under that section.
Rani Chhatm K umari Devi v. Prince Mohan Bikram
Shah, (1931) I. L. R. 10 Pat. 851, distinguished.
Subbaiya
Pandaram v. Mohammad M"stapha Mara·
chayar

## Text

_Characters 0–39,744 of 76,173. This is a partial read: ask again with offset=39744 for what follows._

IHl
Oct#nll.
!06 SUPREME OOURT REPORTS (1962] SUPP.
L. JANAKIRAHA IYER AND OTHERS
v.
P. M. NILAKANTA IYER AND OTHERS
(B. P. Sm11&, C. J., P. B. GA.JXNDR4GA.DIUR and
R.A.GJIUJIAB DAYAL, JJ.)
'l'rwt-Dtblor1 cr.n"'lli11f P""]Wly to thru tnutu1 /or
repayment of ddi11--.A4minillraUon suit by debtor• dinniut4
o" 111ilhdra111<1/,-Sul>ltqiunt suit on bthal/ of gttural body of
crdilor1--I/ barred by res judicata-Limilalion claim /or
pos1twta-Mairil4'nability-Sak <lui tucuttd by llPO of tM
thm lruatu1-Validilg-A1Mrtdmtnl of ckcru by High Court
afttr admiuion of "'PpuU by S11prt- Court-A11>1Jrd of "''
projJt ID tnut utalt eflll intuut to morlgagtt-Adjuslmenl of
tquilit•-01111rl'• power-Validity of alit11ation in /aoour of
pt.1'809 inltrmtddli11g with tnut ulaft-Truslu de son tortlftdian Trust~ Act, 1882 (2 of 1882), u. 48, 63-Cod• of Civil
Proctd111·e, 1908 (Act Y of 1908), 88. 11, 161and162-lndian
Limi~1 Act, 1908 (IJC of 1908), Arta. JIU, 120.
ThCJC appeals arose out or a representative sult
filed on ~half of the crediton of defendants I to 6 who
had executed a trust deed on August 26, 1936, conveying
their properties to three trustees with authority to dispose
of the same and distribute the sale proceeds rateably
amongst the credlton. The tru1t deed required "the three
trustees to act accordfn~ to the decision arrived at either
unanfmonsly or by m&Jority." The trustees accepted the
trust and conveyed all the properties e•cept the family
house in admini1tralion of the trust. Two of the 'ale dteds
in favour of tt.>o of the creditors,. defendants 13 and I 4, a
mortgagee creditor, In the 111it were executed by only two
of the trustees.
In a suit bronght by the said defendants
I to 6 for adminiJtratlon of the trust, the trial court passed
a preliminary decree. The High Court on appeal remanded
the matter to the trial court (or a finding aa to the market
value of the lands sold. The trial court submitted its
finding.
At this stage defendants I to 6 withdrew the suit
which was dismisoed. The preoent suit under 0. I, r. 8 of
the Code of Civil Procedure was filed on October 29, 1947,
before such withdrawal. The claims made therein, inler
11/ia, were for a declaration that the properties In question
were still impressed with the trust, for the removal the
Rll'Vivin1 trustee and appointment of an admini.trator to
l'Cll!iae the amounts, recover possession of the properties and
re-sell them. Tbe trial Judge paued a decree in favour of
the plalntilra. The Hi1h Court In substance confirmed
that decree but modified It by awarding aimple interest
(I} s.c.R,
SUPREME COURT REPORTS
207
ins~ad of compound Interest decreed in favour of defend·
!\nt 14. The two sale deeds, executed by only two of the
trustees, were declared in valid and it was found that the
third trustee did not give his consent to it. The sale deed
in favour of defendant 12 was declared imalid on the ground
that he had intcrmeddled with the trust estate and had thus
became a trustee dt 1ou tort. The courts below also rejected
the picas of limitation and res j1'dicata raised on behalf of
the defendants. Some of the creditor defendants appealed.
After the appeals had been admitted by this Court the High
Court amended the decretal ·order by substimting the word•
'mesne profits' by 'net profits' under ss. 151 and 152 of the
Code of Civil Procedure.
Held, that the question whether Art. 120 or Art. 134
of Indian Limitation Act applied to a case bad to be
decided on the case made in the plaint, read as whole and
properly construed. Since the present suit was not one
for a mere declaration but for possession of property, having
been valued and framed as such, deliverable to the adminis·
trator, it was governed by Art. 134 and not by Art. 120 of
the Act and was thus within time.
It was not correct to say that 1. 63 of the Indian Trust
Act was exhaustive as to the remedies available to a beneficiary under a private trust or that a claim for constructive
possession, such as was made in the present suit, was prohibited under that section.
Rani Chhatm K umari Devi v. Prince Mohan Bikram
Shah, (1931) I. L. R. 10 Pat. 851, distinguished.
Subbaiya
Pandaram v. Mohammad M"stapha Mara·
chayar, (1923) L. R. 50 I. A. 295, A Subramania Iyer v.
P. Nagarathna Naick.r, (1910)20 Mad. L. J. 151
and
Masjid Shahid Ganj
v. 8hiromani Gurdwara Prabandhak
Committee Amrit~ar, (1940) L. R. 67 I. A. 251, referred to.
Nor could the suit be said to be barred by r.s j"dicata
since it did not fall within the scope of s. 11 of the Code
of Civil Procedure. The suit being one under 0. 1, r. 8 of
the Code, it could not be said that defendants l to 6, plain·
tiffs in the earlier suit, and the creditors, plaintiffs in the
present suit, were the same party or parties claiming through
each other.
Clause 23 of the trust deed, properly construed, con·
formed to the provision of s. 48 of the Trusts Act that where
there are more trustees than one, they must all join in the
execution of the trust, and did not provide for an exception
to that rule, even though it provided that decisions by the
trustees need not a ways be unanimous but could be by
majority aa well.
Such sale deed• a• had been executed by
IHI
L. J,111kirmw IJ't.'
••
P. M. Nilck•nra
l:1rr
L. ,flfltOkirau IJ"
..
P. JI. NiJak.,,1a
~rer
208 SUPREME COURT REPORTS (1962] SUPP.
two of the trustees only must therefore fail. The alterna·
tive case of consent given by the third trustee to the trans·
actions could be of no avail since it could not be substantiatc:l
by evidenc•.
Lala Man Mohan D<u v. Jallki Pr<Mad, (1944) L. R.
72 I. A. 39, referred to.
The High Court had jurisdiction under ss. 151 and 152
of the Code of Ci' ii Proctdure to correct the obvious error in
the decn:tal order even though the appeals from the said
decree had already been admitted by this Court.
Nor could
the amendment be challenged on merits.
Although a success·
ful plaintiff would not normally be entitled te> mesne profits
for more than three year; in view of Art.
109 of the Limita·
tion Act, the court had jurisdiction in tlie case of a tru•t to
make appropriate directions in the decree, while awarding
net
profits to the tru'it and interest to the mortgagee, in
adjustment of the equities between them.
Satgur l'ra•ad v. flar Narain Daa, (1932) L.
R.
59 !. A. 147, Rhagwat Dayal Singh v. Debi Dayal Sahu,
(1908) L. R. 35 I. A. 48 and ./aganna:h Prasad Siftgh
Clll>uvlhury v. 8urajmal Jalal, (1926) L. R. 54 I. A. I,
reforred to.
F.ven slight intermcddling with the trust estate
is
sufficient to make a person trustee dt aoft tori.
Since in the
instant case, the acts of intermeddling hy one of the defen·
dant covered a fairly long period, the courts below were
right in holdin~ that the sale in his favour must he '°t
aside as one in favour of a tmstee de "°n tor!.
CIVIL
APPELLATE
JURISDICTION :
Civil
Appeals Nos. 62 and 77 of 1959.
Appeals from the judgment and decree dated
March 25, 1953, of the Madras High Court in
A. S. Nos. 731 and 720 of 1950.
Jf. C. Setdvad, Atwrney-General for India and
M. S. K. Sastri, for the appellantll Nos. 2 to 8 1>nd
also for legal Representatives of appellant No. I
in C. A. No. 62 of 1959.
A. V. Viswanatha Sastri, ill. K. Ramammthi
and B. T. Venkataraman, for respondenta Nos. 2
and lO(in C. A. No. 62 of 59) and respondents
Noe. 2 and 15 (ID C. A. No. 77/59).
·
•
(1) S.C.R.
SUPREME COURT REPORTS
209
R. Ganapathy Iyer and G. Gopalalcrishnan,
for appellant No. 2 and also for legal Representative of appellant No. 1 (in C. A. No. 77 of 1961).
C. R. PaUabhi Raman and G. Gopalakrishnan,
for appellant No. 3 in (C. A. No. 77/59).
1961. October 26. The Judgment of the Court
was delivered by
1961
L. J anakirama Iyer
••
P. M. Ni/a/cant•
Iyer
GAJENDRAGADKAR, J.-These two appeals
Gajmdragadkor J,
have been brought to this Court by two sets of
defendants with a certificate of the Madras High
Court and they arise out of a suit instituted under
0. I, r. 8 on behalf of the genera.I body of creditors
for administration against the trustees and alienees
of the properties which belonged to their debtors.
Defendant 14 and his sons defendants 18 to 24
are the appellants in Civil Appeal No. 62 of 1959
while defendants 12, l3 and 16 are the appellants
in Civil Appeal No. 77 of 1959. Defendants 1 to 6
are the debtors. They were members of an undivided Hindu family known as Kalakkad Pannayar
family in Tirunelveli District.
The family was
doing commission agency business in petrol, kerosene ,
and crude oil. It had secured agency rights from
the Burmah-Shell Company. The members of the
family became heavily indebted by about June,
1936, and as a result there was a. pressure from
their creditors. In order to meet the said pressure
a deed of composition was executed (Ex. B. 2) on
July 8, 1936. As a result of this composition 56
out of the creditors of the family agreed to a
scheme for settlement of their debts. Under this
deed defendant 7 was constituted as a trustee and
as such was empowered to take over the assets of
the debtors, sell them to the best advantage and
distribute the proceeds ratea.bly amongst all creditors. It appears that before the scheme under the
composition could be successfully or effectively
worked out one of the creditors, Ayyah Ayy&r,
filed an insolvency petition, No. 25 of 1936, in the
Sub-Court at Tirunelveli on July 30, l ll36. By thia
1961
L. Janal·irawra l;·f"
v.
P. lf. Nilakanta
r.Jn
210 SUPREME COURT REPORTS [1962] SUPP.
petition the creditor wanted defendants I to 6 to be
adjudged insolvnnt.
Dmin1; tho pcndeney of these
proceedings, on August 2{i, I !:136, defendants I to tl
executed a deed of trnst, (Ex . .B. 7); by t.his document they com·c\·ed all their movable and immovable
properti~s incl11iling t.he outstandings due to them
to thrc<~ trustreg. These were defendant 7 Subbarayalu Reddiar, Vcernbahu Pillni and Narayana Pillai.
Tho trustePs wt re authorised to dispose of the
a~scts of defendants l to 6 ancl distribute the
proceeds r•1tcably amougst the creditors. Narayana
l'illai died in February, 1938.
Veerabahu Pillai
died sometime before the present suit was instituted.
Defc1Hlants 8, 9 and 10 are the undivided eons of
defendant 7, whereas defendant 11 is th(' widow
and defendants 12 and 13 are the stcp-brothns of
V eerabahu Pillai. The truiltccs accepted the trust
and entered upc.n their duties. They took poseession of the immovable properties covered by the
trust. They paid off tho secured creditors, and in
regard to unsecured creditors they arranged to pay
50% of their dues by selling the immovable properties either to the creditors themselves or to third
parties directing them to discharge the secured
debts, and the unsecured debts to the extent of
50% of their value. It is common ground that
except their family house in which defendants I to
6 resided all other immo,·able properties bclongi11!!
to them were conveyed under the trust deed.
·
Defendant 14 was a secured creditor in whose
favour a mortgage of the first schedule properties
had bern executed for a sum of Rs. 30,000 on .Jum•
3, l!l35 (Ex. B-95).
This mortgage carried
10~';,,
compound interest. It appears that he had also
lent a sum of Rs. 3,000 on a promiBSory note on
,July 17, 19:15 [Ex. B-95(a)J.
This note canie<l
interest at 12%. The promissory note was supported
bv the pledge of the mort1:age deed.
In ordrr to
pay off the debts thus duo to defendant 14 the
trustees conveyed to him schedule I mortgaged prouerties for Rs. 42,000 on !'lfay 22, 1937 (Ex. B.94).
•
(1) S.C.R .
SUPREME COURT REPORTS
211
Out of the said consideration the amount due under
the mortgage as well as the amount due under the
promissory note were satisfied leaving a balance
of Rs. 3,030 in the hands of the purchaser. He was
directed to utilise this balance for repaying 50% of
t.he dues of plaintiffs 2 and 3 who have brought the
present suit. The sale deed in favour of defendant
14 was executed by only two out of the three
trustees, defendant 7 and Veerabahu Pillai. Defendants 18 to 24 are the sons of defendant 14. As we
have already seen defendant 14 and his sons are
the appellants in Civil Appeal No. 62 of 1959.
Defendant 7 who was one of the trustees was
a creditor of the estate to the extent of Rs. 6,000.
His daughter-in-law was a creditor to the extent of
Rs. 2,000.
In satisfaction of 50% of the debt due
to these two persons the trustees conveyed schedule
III properties to defendants 8, 9 and 10 who are
the undivided sons of defendant 7 (Ex. B. 8).
TJ1is
document was executed on December 16, 1936, for
Rs. 4/'00. The purchasers in their turn sold tho
properties to defendant 17 on May 30, 1947.
Defendant 12 is the step-brother of the trustee
Veerabahu Pillai and he purchased schedule V properties on November 7, 1941, for Rs. 2,000 (Ex. B-90).
Defendant 13 who is the brother of defendant 12
purchased schedule II properties for Rs. 15,000 on
August 29, 1937, iEx. B. 37). This document was
executed only .by two out of the three trustees.
Another sale deed was passed in favour of defendant 13 in respect of schedule VIII properties
(Ex. B. 79) on February 6, 1942, for Rs. 2,000.
Defendant 16 who is the son-in-law of defendant 13
purchased two sets of properties schedule VII and
schedule VII-A on May 7, 1943, and June 4, 1943,
(Exs. B-10! and B-105) for Rs. 8,000 and Rs. 600
respectively. The properties thus conveyed to the
respective purchasers were put into their possession.
It is with the sale deed3 executed in favour of
defendant 14 and those executed in favour of
1911
L. Janakirama ly1r·
v.
P. M. Ntlakonta
Ip
Gaj~ndragatlkar J.
1961
L. JllNlltirama Ip
v.
P . .If. NilokanJa
l]·tr
Gajmd1•:a1/l:ar J.
212 SUPREME COURT REPORTS (1962] SUPP.
defendants 12, 13 and 16 that we are conoemtd in
the present appeal9. Defendants 12, 13 and 16 are
the appellants in Civil Appeal No. 77 of 1959.
In 1943 defendants I to 6 brought a suit, 0. S.
:N" o. 30 of I 943 in the Sub Court at Tirunel veli for
the administration of the trust creatccl by them,
for account from the trustees and for recovery of
the trust properties. To this snit they implca.ded
the surviving trustees and the alienee11 as defendants. In thid suit a preliminary decree for account
was paBBed by the Sub Court.
Their claim, however, for the recovery of immovable properties was
not granted. This decree gave rise to three
appeals before the Madras High Court, one by
defendants l to 6 and the others by the trustees
and the alienees respectively.
These appeals
were appeals A. S. Nos. 473, 510 and 544 of
1944. The three appeals were heard together
and on December 20, 1946, a common judgment was delivered. The High Court oonfimed
the finding of the trial court that the trustE:ea were
liable to rendtir account for the management of the
trust, and it remanded the suit for a finding a11 to
the market value of the lands covered by the respective sale deeds which had been challenged by
clefondants 1 to 6.
The High Court thought
that in determining the validity of the claim
made by defendants 1 to 6 it was neoeBSary
to find out the proper value of the properties
at the relevant time for that alone
would
enable the Court to decide whether ·the alienations
had been effected by the trustees for groBBly inadequate price as alleged by defendants I to 6.
In the course of ita judgment the High Court observed that it was not open to the authors of the
trust to challenge the validity of the transaction
which was permitted by them by the instrument
of trust, for it was clear that under the said trust
deed the trustees were empowered to convey properties to the creditors in the discharge of tl.eir
dutiea. After rem&Dd the Subordinate Judge took
.
•
i •
,.
(1) S.C.R.
SUPREME COURT REPORTS
213
evidence, made his findings and submitted them to
the High Court. It was at th1t stage that defendants l to 6 filed a petition for withdrawal of
the litigation. This petition was allowed on December 12, 1947, with the result that the suit filed
by defendants l to 6, O.S. No. 30 of 1943, was dismissed with costs throughout.
Whilst the proceedings in the said three
appeals were pending in the High Court and before
defendants l to 6 were allowed to withdraw the
litigation the present suit was filed on October 29,
194 7, by the three plaintiffs who are the creditors
of defendants l to 6 and who purported to act on
behalf of the general body of creditors. Leave was
granted to the plaintiffs under 0. 1, r. 8 and the
suit has, therefore, been conducted as a representative suit. In the suit the plaintiffs ask for an
account from defendant 7 and defendants 11 to 13
who are the legal representatives of Veerabahu
Pillai on the allegation that the trustees have been
guilty of wilful default. They also claim a declaration that the properties described in schedules I to
VII-A and VIII are still impressed with the trust
and they ask for an order for the administration of
the trust by removing defendant 7 and appointing
an administrator to realise the amount due from
the trustees on such account and to recover possession of the properties mentioned in the said schedules, re-sell them and distribute the sale proceeds
rateably amongst the unsecured creditors.
Several defences . were raised to this suit by
the several defendants. It was denied that the
trustees were negligent in the matter of collecting
the outsta.ndings and that the alienations effec~d
by them were for inadequate considerations and
otherwise improper and unjustified. It was urged
that the present suit was barred by res judic.ata as
a result of the withdrawal of 0. S. No. 30 of 1943.
It was further alleged that the suit was not
maintainable, that it was bad for non-joinder of
1961
L. J anakirama Iyer
v.
P. M. Nilakant•
Iyer
GajenJragadkar J,
1961
l. Janakirama lyn
v.
P. M. Nilakan!a
!)·tr
Oajentiragadl;ar .} ,
214 SUPREME COURT REPORTS (1962] SUPP.
parties a.nd was barred by time.
Tho respectivo
aliences pleaded that the tran8fers in their favour
were valid and
bindin~. Dofl.'nd;;nt 7 specifically
urged that he was not guilty of any br<)ach of trust;
and a plea was also raised that the creditors who
had filed thu present suit bad acqui('seed in some
of the dealiHg.;. Defendant 12 resisted the plaintiffs'
case that he had intermeddled in tho management
of the trust csta.te and was therefore liable as a
trustee de sun tort.
An object.ion was raiBed about
the proper valuation of tho suit and it was urged
that the proper court fee ha.d not been paid. It
was denied that sale deeds executed by
only
two out of the three
trustees were
invalid.
On these pleadings twenty nine issues were
framed by the learned trial judge.
In substance the trial judge rejected the
plaintiffs' claim for account, but he passo<l a decree
declaring that the properties described in schedules
I to III, V, VII, VII.A and VIII continued to be
impressod with the trust imposed upon them
by the truatces.
The decree directed the removal
of defendant 7 and the appointment of two ad.
voeates inst(ad as administrators.
It
further
directed defendants 12, 13, 14, 16 and 17 to deliver
posseseion of the properties in their respective
poseessi<>n and asked the administrators to re-sell
the said properties and distribute the proceeds
amongst the creditors and to pay the surpluB, if
any, to defendants l to t3.
Under the decree defendants 12, 13, 14 and 16 were held entitled to
receive the respective consideration of the sales and
mortgages together with interest and they were
also liable to render accoWlt for profits of the properties in their poeseseion.
Thie decree gave rise to three appeals before
the High Court. Appeal A. S. No. 720 of 1949
was filed by defendant 14 and his sons defendants
18 to 24. Appeal A. S. No. 731 of 1949 was filed by
defendants 12, 13 and 16; and Appeal A. S. No. 21
f
(lJ S.C.R.
SUPREME COURT REPORTS
215
of 1950 by defendants 8,9,JOand 17. Insubstance the High Court has confirmed the decref'
passed by the trial court and dismissed all the
three appeals.
The High Court has, however,
modified the trial court's decree in regard to the
interest which the decree had ordered to be paid
to the alienees.
The High Court took the view
th1tt in adjusting equities between the alienees,
the alienations in whose favour were found to be
invalid, and the trust, the contract rate of interest
need not be awarded. Subject to the modifications
made in regard to the payment of interest thP rest
of the decree has been confirmed. Defendants 8,
9 and 10 and the legal representative of defendant
17 who died pending the proceedings before the
High Court have not challenged the decree passed
by the High Court in their Appeal A. S. No. 21 of
1950. Defendants 14 and 18 to 24 as well as defendants 12, 13 and l6 have, however, challenged the
decision of the High Court and have obtained a
certificate from the said High Court in that behalf.
It would thus be seen
that in t\10
two appeals before this
Court we are
concerned with six transactions-Ex. B-94 which is
executed in favour of defendant 14, Ex.
B-90
which is executed in favour of defendant 12, Exs.
B. 37 and B. 79 which are executed in favour of
defendant 13 and Exs. B-104 and R-105 which are
executed in favour of defendant 16. Broadly stated
both the Courts below have found that all these
alienations were effected for inadequate consideration. It has also been found that Exs. B-94 and
B-37 are invalid for the reason that they have been
executed by only two out of the three trustees,
whereas the transfers under Exs. B-12, B-13 and
B-Hl are held to be invalid as they are transfers in
favour of the relations of one of the trustees
Veerabahu. It has further been found that defen·
dant 12 intermeddled with the estate of the trust
and must therefore be regarded as trustee de son
tort and therefore the transfer made to him is
1961
L. J anakirama Iyer
••
P. ft!, Nilakanta
Iyer
Gajendraga.dkar J.
19''il
L. J onol:irama /;'tr
v.
P. M. Nilakc.n112
lyt'
Gajen.Jr12ttull:dr J.
216 SUPREME OOURT ItEPOHTS [1962) SUPP. 1
invalid as a matt-er of law.
Hoth the Courts have
rejected the plea of ru judicata and limitation
raised by the defendants.
There are some of tho
points of law which are common to both the a.ppea.18
and it would be convenient to deal with them in
the order in which they have been raised before us.
'l'he first point argued before us by the learned Attorney-Genera.I on behalf of the appellants in
Civil Appeal No.
62 of 1959 (defendants 14 and
I IS to 24) is one of Jimitatiou. He contends that
on a fair and reasonable construction the present
suit attracts the application of Art. 120 and is
therefore barre<l.
On the other hand, Mr. V iswanatha Sa.stri, for the plaintiffs, contends that the
plaint clearly shows that the plaintiffs arc not asking merely for a declaration but they are also
claiming that a new administrator should be
appointed and a direction should be issued that the
property in question should ho delivcre<l to him.
Such & claim, according to him, obviously attracts
Art. 134. It is common-ground that if Art. 120
applies the
suit is beyond time, whereas if
Art. 134 is applicable the suit is within time.
The decision of this question would n'lturally
depend upon the construction of the plaint. Is the
claim ma.de in the plaint one of declaration, or is it a
claim for posseB11ion of immovable properties? The
plaint sets out aJl the material facts which constitute
the background to the present litigation, marks
material alle~ations in respect of a.II the alienations
impeached m the plaint,
and by paragraph :J5 it
prays, inkr alia, that schedules I to VII-A and
VIII should be adjudged as still impressed as trust
imposed on them by the deed of August 26, 1936,
and direct their re.sale. That is cl. (c) of paragraph 35. By cl.
( d) it iR prayed that the Court
should order the administr"tion of the trust by removing defendant 7 if need be and appointing an
administrator or officer of court ( l) to realise the
•
I
-
(1) S.C.R. SUPREME COURT REPORTS
217
amounts mentioned in cl. (a), (2) to recover possession and re-sell the properties referred to in paragraph (c), (3) to distribute the proceeds rateably
amongst the unsi>cured creditors and perform such
other acts and functions as may be necessary to
eft'ectuate
the trust in question. The learned
Attorney General contends that cl. (c) asks for
adjudication or declaration that the properties in
question are impressed with the trust and that is no
more than a declaration, and according to him
cl.( d) prays for the appointment of an administrator
to realise the amounts and to recover possession of
the properties and re-sell them. He suggests that
on a fair construction of cl. ( d) all that the plaintiffs pray for is the removal of defendant 7 and the
appointment of an administrator with power to
realise the amounts specified and to recover posses·
sion of the properties indicated and to re-sell them.
This is not a claim that possession should be delivered to the administrator in the present suit.
It may be coneeded that if read by itself alone
cl.(d) may be capable of the construction which the
learned Attorney-General seeks to put on it; but in
construing the plaint we must have regard to all the
relevant allegations made in the plaint and must
look at the substance of the matter and not its form.
It is significant that the plaintiffs have valued the
suit for the purpose of court fee and jurisdiction at
Rs. 23, 745 and this valuation includes several items
in respect of different properties valued under
s. 7(5) of the Court Fees Act. The valuation made in
respect of the different items of propertiea under
s. 7(5) is obviously and clearly valuation made on the
footing that a claim for possession is made. In
fact the plaint specifically avers that the plaintiffs
va~ued the
suit for
possession covered
by
reliefs C and D-2 under s. 7(5) its indicated in
the plaint. Thus there can be no doubt that the
plaint has been valued on the basis
that a
claim for possession of the
properties covered
by the schedules is intended to be made. Besides,
19Sl
L. Jt1Mkir.,.. /ytr
••
P. It. N i/.Jcont•
lμr
G~mb.,.sklU J.
1961
L. Jan.akirama fJ·er
v
P. }.f. 1''itaka'fl:i
lyu
Gajnulr1gadkar J.
218 SUPREME COURT HEPORTS (1962] SUPP.
it is also significant that in regard to the claim
made by the plaintiffs in respect of the transfer in
favour of defendant 14 his sons <l<:fendant8 18 to 24
have been joined specifically on the ground that
since the plaintiffs clnim poss<:ssion of the said
property the said defendants arc necessary parties
as it is found that they arc in possession of the said
properties. In
other words, the
joindcr of
defendants 18 to 24 to the present suit. is based
solely on thn ground that a claim for possession is
made in tho plaint and defendants 18 to 24 being
in possession are necessary parties to the suit.
Therefore, in our opinion, reading the plaint as a
whole it would be unreasonable to construe cl. (d)
in paragraph 35 in the manner suggested by tho
learned Attorney-General. The prayer which tho
clause really purports to make is that an administrator should be appointed and that an order
should be passed against the re3pective defendants
asking them to deliver posession of the properties
to the said administrator. If that we so the plaint
cannot be construed as one in which a mere claim
for declaration is made. It is a plaint in which a
declaration is no doubt claimed but based on tho
said declaration or adjudication a further claim
for possession to the administrator is also made.
Tho result, therefore, is that the argument that the
prayer made in the pla.int attracts Art. 120 must
be rcjccred.
The next contention urged is that the plaintiffs cannot suo for poBBession but must confine
themselves only to a claim for declaration. It is
not disputed by the le;une<l Attorney-General that
in rngard to public charitablo trusts tho beneficiaries are entitled to sue for setting aside alienations
of the trust properties improperly effected by the
trust.cos, and to ask for the restoration of possession of ttie said trust properties to the trustees
'1.owly appointed.
Indeed, there is ample judicial
1
-
(I) S.C.R.
SUPREME OOURT REPORTS
219
authority in support of this position. In A. Subramania Iyer v. P Nagarathna Naicker (1), it was
held
by the Madras High
Court that in a
suit by the worshippers of a temple to have the
alienation of the trust property by some of the
defendants, trustees, to the other defendants declared invalid and for possession to the trustees,
the proper decree to be made if the Court be of the
opinion that the alienation is invalid is to decree
possession to those defendants who are trustees.
It was further held that the trustees need not be
referred to a separate suit for the purpose. In
llfasjid Shahid
Ganj v.
Shiromani
Gurdwara
Parbandhak Committee, Amritsar (2),
the Privy
Council has recognised this right in these words:
"The right of a Muslim worshipper may be regarded
as an individual right, but what is the nature of the
right? It is not a sort of easement in gross, but an element in the general right of a beneficiary to have
the waqfproperty recovered by its proper custodians
and applied to its proper purpose. Such an individual may, if he sues in time, procure the ejectment
of a trespasser and have the property delivered into
the possession of the Mutawali or of some other
person for the purposes of the waqf".
The argument, however, is that in regard to
private trusts which are governed by the Indian
Trusts Act such a course is not open to the beneficiary
because of the provisions of s. 63 of the
Trusts Act. Section 63 provides that where truotproperty comes into the hands of a third person inconsistently with the trust, the beneficiary may
require him to admit formally, or may institute a
suit for a declaration, that the property is comprised in the trust. The learned Attorney-General
contends that the only remedy available to a beneficiary under a private trust is that prescribed by
s.63 and no other. He can either require the alienec
to admit that the property is comprised in the trust,
or if the alienee refuses to make the admission the
(I) ( 19IO) 20 Mad. L. 1. 151.
(2) (194-0) L. R. 67 I. A. 251, 267,
1961
L. J a11akirama /ytr
v.
.
P . .\1. Nitakanla
IJ'tr
OajendragadkO.r ·J.
IHI
L. J 111Ukir.nt4 lytr
v.
P. M. NilW.ot•
1y,,
GejtnJra1.ak4r ,T.
220 SUPREME COURT REPORTS [1962) SUPP.
benficiary m'.iy bring a suit for a declaration in that
behalf.
In support of this contention strong re-
. Hance has been placed on tho deci~ion of the Privy
Council in Rani Chhatra
Kuroori Devi v. Prince
Mohan Bikram Shah('). In that case the respondent
had claimed title to the properties as owner in
various ways and had sued as the proprietor of the
properties covered by the aotion.
All these
grounds were rejected and it was held that
the respondent could claim no title as a proprietor
at all. Even so, while dealing whith the question
of limitation the Privy Council made certain ob·
servations and it is those observations which are
pressed into service by the learned Attorney·
General.
Article 144 on which the respondent
relied in that case, it has been held, is applicable
only to a poseeseory suit by the owner of the pro·
perty claimed against a per~on holding adversely
to him without title, and the plea made by the
respondent that he was the
°'vner on several
grounds was rejected; hut in the course of its
judgment the Privy Council assumed that by reason
of the contract pleaded by the respondent the
properties wore impressed with the continuing tmst
in favour of the respondent, and observed that
even so their Lordships were unable to hold that
"this would entitle him to sue for poseession as
owner". Sir Georg6 Lowndes, who delivered the
judgment of the Board, referred to the faot that
"the Indian
law does not recognise legal and
equitable estates. By that law, there can be but
one owner, and where the property is vested in a
trustee, the owner must, their Lordships think, be
the trustee, and so the right of a beneficiary is, in
a proper case, to ea.II upon the trustee to convey
to him". It is in that connection that Sir George
Lowndes further observed that "the enforoAment
of this right would, their Lordships think, be barred
after six yea.rs under Art. 120 of the Limitation
Act, and if the beneficiary has allowed this period
(l) (1931) I. L. R. lOPat. 851.
't
\
(1) S.C.R.
SUPREME OOURT REPORT
221
to expire without suing he cannot afterwards file
a posseesory suit, as until conveyance he is not the
owner. It is clear that such a trust as is relied
upon in the present case would not fall within
s.10 of th6 Limitation Act as it would be impossible
to hold that the properties which vested in the
appellant under the terms of the wills which have
been proved were so vested for the specific purpose
of making them over to the respondent". It would
thus be seen that these observations mean no more
than this that the beneficiary under a private trust
cannot claim to recover possession of the property
from the trustee so as to attract the application of
Art. 144 of the Limitation Act. He can make the
claim for a declaration which would be governed by
Art. 120. It is quite clear that the question as
to whether in a proper case the beneficiary cannot apply
for the removal of the trustee, for
for the appoinment of a new trustee, and for
the delivery to the new trustee of the property
improperly alienated by the previous trustee did
not fall to be considered in that case.
All that
the Privy Council was called upon to consider
was whether a beneficiary can bring a suit for
possession against a trustee and whether such a
suit can be governed by art. 144; and in holding
that such a suit cannot be brought by the beneficiary the Privy Council pointed out that Art. 144
postulates a suit by the owner and a beneficiary
is not an owner under the Indian Law of Trusts.
We are, therefore, satisfied that the observations
on which reliance is placed by the learned'AttorneyGeneral cannot be said to amount to a decision
that in no case C!ln a beneficiary claim that the
trustee appointed under the trust should be removed anti new trustee should be appointed anQ. the
trust properties
improperly
alienated by the
previous trustee should be ordered to be delivered
into the possession of the new trustee.
Section. 63
no doubt provides for the two remedies which
are avaliable to the benetlciary, but in our opinion
lllfJ
L, J anakir""'4 ly"
v.
P. M. Nil•k..,ta
1,,,
IJ'fientlra:dku J,
IllOI
!.. JanukiT111n~ lnr
v.
P .• \1. Nit11kanta
/;·tr
Gajt"IJra.rodkar .T.
222
SUPREME OOURT REPORTS [1962) SUPP.
s. 63 ca.nnot bo treated as exhaustive on tho l'Ubject and so it cannot be urged that a claim for constructive possession like the one made in the
present suit is prohibited bys. 63.
Prima facie
s. IO of the Limitation Act seems to contemplate
an action by a beneficiary under a true.t to which
s. 10 applies and provide• that in such an action
the beneficiary may follow the property and ask
for a proper order as to the delivery of the said
property to the new trustee. If that be so, the
provisions of s. IO would suggest that the remedies
pr<'.seribcd by s. 63 are not exhaustive.
Besides, it would be relevant to observe
that if s. 63 is held to be exhaustive 11s to the
remedies
available to r. beneficiary it would
lead to very anomolous result,<i. If a trustee improperly alienates the trust property the only
remedy which would on that view be available to
the beneficiarv is to obtain a declaration. How
wou Id this declaration be effective to bring back
to tho trust the property improperly alienated?
Strictly and literally contsrued s. 63 docs not refer
to the remrdy for tho appointment of a new trustee
either, so that on a litenl construction of s. 63
even that remedy may be outside its purview; but
assuming that a beneficiary can ask for a declaration that the property alienated is comprisecl in
the trust and also add a prayer for the appointment of a new trustee that only means that after
the new trustee is appointed he will have to sue
the alienee for possession and very often this suit
would be <ll'foa.ted by the alieneo's plea of adverse
posses~ion. It is hardly neceBSary to emphasise
that wh•~n the beneficiary sues for a declaration as
required by s. 63 and the alieneo resists the said
suit the adverse possession of tho alieneo is emphatically brought out and the pendency of the beneficiary's suit wonld not affect that position so that
on tho view that s. 63 is exhaustive more often
than not tho beneficiary's claim would in subetanco
be defeated by the adverse posse88ion of the ahenee.
(l} S.C.R. SUPREME COURT REPORTS
223
In Subbaiya Pandaram v. MahamadMustapha Mara·
wyar (' ),
this is
exactly what happened. In
the presence of the purchaser it was declared that the
trust had been valirlly created and that the property was in fact a trust property.
Their Lordships pointed out that "at the moment when the
said decree. was passed the possession of the property was adverse and the declaration that the
property had been properly made subject to the
trust disposition, and therefore ought not to have
been seized, \lid not disturb or affect the quality
of hie poaaession; it merely emphasised the fact
that it was adverse. No further step was taken
in consequence of that declaration until the present
proceedings were instituted when it was too late."
We would like to add that if for bringing back to
the trust the properties improperly alienated by
the trustees two suits are required to be filed we
apprehend that the second suit by the newly
appointed trustee for obtaining possession of the
properties would almost always be too late, and
so s. 63 cannot be read as exhaustively dealing
with all the remedies available to the beneficiary.
We must, therefore, reject the argument that the
suit for possession in the form in which the prayer
has been made by the phintiffs is incompetent.
That takes us to the question of re.• judiwta.
The argument is that on general grounds of res
judicata the dismissal of the .suit (0. S. No. 30 of
1943) filed by defendants
1 to 6 should 'preclude
the trial of the present suit. It has been fairly
conceded that in terms s. 11 of the Code cannot
apply because. the present suit is filed by the creditors defendants 1 to 6 in their representative
character and is conducted as a representative suit
under O. 1, r. 8; and it cannot be said that defen.
dant~ 1 to 6 who were plaintiffs in the earlier suit
and the creditors who have brought the present
suit are the same parties or parties who claim
(I) [1923] L.R
SO I.A. 295.
1961'
L .. Jan'lkirama Iyer
••
P. M. Nilakan:..
l_rtr
Gajtnd .. egatlkar J.
,.,
L.J-"0--{1«
••
I'. N. Nil•bnt•
,,.,
224
SUP)E~IE COURT REPORTS [1962) SUPP.
through each other. Where 11. 11 is thus inapplicable it would not be penniseible to rely upon the
general doctrine of res judicata. We are dealing
with a suit and the only ground on which res jwUcata can be urged against such a suit can be the
proTiaions of 11. 11 and no other. In our opinion
therefore, there ill no 1ub11t&nce in the ground that
the present auit i1 barred by re1 jwlicata.
The next question which falls to be considered is the most important question in these appeals.
We have already seen that three trustees were
appointed under the trust deed executed by
defendants l tQ 6 and two of the impugned sale
deeds hr.ve been executed by only two out of the
said three trustees. The Courts below have held
that two out of the three trustees could not convey
a valid title and so on that ground alone the two
transfers are invalid.
It is urged before us that
this conclusion is not justified on a fair and reasonable construction of cl.