# OFFICIAL TRUSTEE OF WEST BENGAL v. STEPHEN COURT LTD

- **Citation:** [2006] Supp. 10 S.C.R. 996
- **Court:** Supreme Court of India
- **Decided:** 2006-12-14
- **Case number:** Civil Appeal No. 5042 of2000
- **Bench:** S.B. Sinha, Markandey Kat Ju
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/official-trustee-of-west-bengal-v-stephen-court-ltd-21382
- **Pages:** 26

## Headnote

Succession Act, J 925-Section 302-0fficial Trustees Act, 1913 -Section
26-0fficial Trustee appointed as Executor and Trustee under a Will executed
C by owner of immovable property-lease of that property-On being asked
by to extend lease period. Official Trustee telling lessee to approach High
.Court-Application by lessee to High Court for direction under Section 302
of Act of 1925 read with Section 26 of Act of 1913 for extension of lease
period-Jn response thereto, Official Trustee asking for increase in rent and
same allowed by High Court-Maintainability of application-HeldD Application of lessee to High Court was maintainable-Official Trustee could
have extended period of lease or entered into a new arra11ge111ent 'With lessee,
and dealt with property in any manner it thought fit. subject to direction
which could be issued by High Court-It being a statutOIJ' authority, was
pres11111ed lo be aware and understand provisions of Act of 1913-/nstead of
E
F
dealing with matter itself it asked lessee to file an appropriate application
and in response thereto, without questioning 111aintainability thereof. it asked
enhance111ent in quantum of rent-It was more so as it allowed order of High
Court enhancing rent to attain finality and took benefit thereof
Calcutta High Court Original Side Rules-Chapter X//1-0riginating
Summons-Maintainability and scope of-Held-High Court in exercise of
said jurisdiction cannot adjudicate as to whether an earlier order passed by
it was null and void and was, thus, liable to be set aside.
Estoppel, wail'er, acquiescence and res judicata-Application ofIncrease in rem ordered by Court acted upon by lessor by accepting it-Over
G a decade therec1fter. lessor taking out Originating Summons he/ore High
Court for determination of their relation with lessee and other issuesCorrectness of-Held-This was not per111issible-lessor questioned not only
the earlier order of Court blll also its own act which had attained finality,
raising contentions which had not been raised in the earlier proceedingH
996
-
J'
OFFICIAL TRUSTEE OF WEST BENGAL 1·. STEPHEN COURT LTD.
997
lessor could not alter its position and prevaricate its stand from time to A
time-They were estopped and precluded from doing so-In Originating
Summons they could not say that in earlier proceeding, they had raised other
contentions which were not considered by Court as their remedy was to move
the said court itself for appropriate directions-Principles of res judicata
and constructive res judicata were applicable in aforementioned fact B
situation-Chapter XIII of Calcutta High Court Original side Rules.
Transfer of property-Lease-Owner of immovable property executing
registered lease deed inf avour of L for 99 years and also executing a Will
appointing Official Trustee as Executor and Trustee in respect of said
property-I executing registered deed of assignment in favour AS, Managing C
Director of a company-He and thereafter the company acquired leasehold
rights of said premises for balance unexpired period, whereupon registered
Debenture Trust Deed executed by AS, company and Trustees referred to
therein-Company continuing to pay rent to Official Trustee who issued rent
receipts in respect thereof-Relationship between Official Trustee and
Company-Determination of-Held-Defect in agreement of sale between AS D
and company was cured by registered Debenture Trust Deed-As Official
Trustee had all aiong received monthly rent from Company, and also allowed
it to raise a huge structure, it acknowledged Company to be lessee in respect
of leasehold- Company for all intent and purport became a lessee under
Official Trustee and it was entitled to protect its possession either as an E
assignee of leasehold or as a monthly tenant-Section 53-A of Transfer of
Property Act.
Order-Reasons in support thereof not assigned-Setting aside of
order-Held-It could be set aside only by an appellate court-However,
when an order had attained finality, it cannot be set aside on th

## Text

_Characters 0–39,682 of 60,736. This is a partial read: ask again with offset=39682 for what follows._

A
OFFICIAL TRUSTEE OF WEST BENGAL
v.
STEPHEN COURT LTD.
DECEMBER 14, 2006
B
[S.B. SINHA AND MARKANDEY KAT JU, JJ.]
Succession Act, J 925-Section 302-0fficial Trustees Act, 1913 -Section
26-0fficial Trustee appointed as Executor and Trustee under a Will executed
C by owner of immovable property-lease of that property-On being asked
by to extend lease period. Official Trustee telling lessee to approach High
.Court-Application by lessee to High Court for direction under Section 302
of Act of 1925 read with Section 26 of Act of 1913 for extension of lease
period-Jn response thereto, Official Trustee asking for increase in rent and
same allowed by High Court-Maintainability of application-HeldD Application of lessee to High Court was maintainable-Official Trustee could
have extended period of lease or entered into a new arra11ge111ent 'With lessee,
and dealt with property in any manner it thought fit. subject to direction
which could be issued by High Court-It being a statutOIJ' authority, was
pres11111ed lo be aware and understand provisions of Act of 1913-/nstead of
E
F
dealing with matter itself it asked lessee to file an appropriate application
and in response thereto, without questioning 111aintainability thereof. it asked
enhance111ent in quantum of rent-It was more so as it allowed order of High
Court enhancing rent to attain finality and took benefit thereof
Calcutta High Court Original Side Rules-Chapter X//1-0riginating
Summons-Maintainability and scope of-Held-High Court in exercise of
said jurisdiction cannot adjudicate as to whether an earlier order passed by
it was null and void and was, thus, liable to be set aside.
Estoppel, wail'er, acquiescence and res judicata-Application ofIncrease in rem ordered by Court acted upon by lessor by accepting it-Over
G a decade therec1fter. lessor taking out Originating Summons he/ore High
Court for determination of their relation with lessee and other issuesCorrectness of-Held-This was not per111issible-lessor questioned not only
the earlier order of Court blll also its own act which had attained finality,
raising contentions which had not been raised in the earlier proceedingH
996
-
J'
OFFICIAL TRUSTEE OF WEST BENGAL 1·. STEPHEN COURT LTD.
997
lessor could not alter its position and prevaricate its stand from time to A
time-They were estopped and precluded from doing so-In Originating
Summons they could not say that in earlier proceeding, they had raised other
contentions which were not considered by Court as their remedy was to move
the said court itself for appropriate directions-Principles of res judicata
and constructive res judicata were applicable in aforementioned fact B
situation-Chapter XIII of Calcutta High Court Original side Rules.
Transfer of property-Lease-Owner of immovable property executing
registered lease deed inf avour of L for 99 years and also executing a Will
appointing Official Trustee as Executor and Trustee in respect of said
property-I executing registered deed of assignment in favour AS, Managing C
Director of a company-He and thereafter the company acquired leasehold
rights of said premises for balance unexpired period, whereupon registered
Debenture Trust Deed executed by AS, company and Trustees referred to
therein-Company continuing to pay rent to Official Trustee who issued rent
receipts in respect thereof-Relationship between Official Trustee and
Company-Determination of-Held-Defect in agreement of sale between AS D
and company was cured by registered Debenture Trust Deed-As Official
Trustee had all aiong received monthly rent from Company, and also allowed
it to raise a huge structure, it acknowledged Company to be lessee in respect
of leasehold- Company for all intent and purport became a lessee under
Official Trustee and it was entitled to protect its possession either as an E
assignee of leasehold or as a monthly tenant-Section 53-A of Transfer of
Property Act.
Order-Reasons in support thereof not assigned-Setting aside of
order-Held-It could be set aside only by an appellate court-However,
when an order had attained finality, it cannot be set aside on the premise p
that no reason had therefor been assigned.
Words and phrases-"Beneficiary under a trust" and ''person beneficially
interested in any trust property"-ln context of Official Trustees Act, 1913.
One PP, owning an immovable property, executed a registered deed of G
lease in respect thereof in favour of L for 99 years. He also executed a Will
appointing appellant- Official Trustee as Executor and Trustee in respect of
the said property. L executed a registered deed of assignment in favour AS
who was shareholder and managing Director of respondent-company. AS and
thereafter respondent purchased leasehold rights of said premises for balance
unexpired period. A registered Debenture Trust Deed was executed by AS, H
998
SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.
A respondent and three Trustees referred to in that Deed, stating that respondent
as entitled to said property for balance unexpired period. Respondent continued
to pay rent to appellant who issued rent receipts in respect thereof. When
they requested appellant for extension of period of lease for a further period
of sixty years, the latter suggested that they should apply to High Court.
Accordingly, respondent preferred an application before High Court under
B section 302 of Succession Act, 1925 read with Section 26 of Official Trustees
Act, 1913. In response thereto, appellant asked for increase in rent. High
Court directed the same to be paid for residuary period of existing lease. The
order of the High Court was accepted and acted upon by appellant, whereby
they executed a deed of lease in favour of respondent for a period of sixty years.
C Thereafter, appellant took out Originating Summons before High Court for
determination of their relation with respondent and other issues.
High Court held that (i) it had jurisdiction to entertain the application
for extension of lease (ii) respondent had locus standi to maintain that
application (iii) appellant having accepted judgment of High Court increasing
D the rent and the deed of lease having been executed in favour of respondent,
they were estopped and precluded from raising the question of its jurisdiction
in subsequent proceedings (iv) appellant having received rent fro~ respondent,
its possession was protected under Section 53-A of the Transfer of Property
Act. Hence the present appeal.
E
F
G
On the contentions of parties, following issues aroSe for determination
of Court as to whether (a) application of respondent for extension of lease
was maintainable (b) the Originating Summons filed by the appellant was
maintainable (c) the defect of unregistered document assigning lease of
immovable property stood cured by registration of Debenture Trust Deed.
Dismissing the appeal, the Court
HELD 1.1. The application under Section 302 of the Succession Act by
the Company was mai~tainable and, thus, the High Court was competent to
entertain the same. (1018-D)
1.2. Rightly or wrongly, the question of renewal of the said lease for a
further period of sixty years came to be mooted. The offer of the company was
that at the end o_f the period of lease, the property would vest in the Official
Trustee. It is again beyond any doubt or dispute. that the Official Trustee could
have granted a lease. It could have also extended the period of lease. It could
H have furthermore entered into a new arrangement with the lessee in
OFFICIAL TRUSTEE OF WEST BENGAL 1•. STEPHEN COURT LTD.
999
possession. It was, therefore, within the province of the Official Trustee to A
deal with the property in any manner, he thought it fit, subject, of course, to
any direction which could be issued by the High Court in exercise of its
jurisdiction under Section 302 of the Succession Act and Section 13 of the
1913 Act The Official Trustee being a statutory authority would be presumed
to be aware and understand the provisions of the said Act. It, therefore, instead B
of dealing with the matter itself asked the Company to file an appropriate
application, pursuant whereto the application was filed, no jurisdictional
question could be raised. [1012-F-H; 1013-A-B]
1.3. The Company's locus to maintain the application was not questioned.
True an affidavit in opposition had been filed, but it is equally true that therein C
certain suggestions were made; one of them being enhancement in the
quantum of rent The High Court passed an order enhancing the quantum of
rent, which was beneficial to the Official Trustee. It accepted the same without
any demur. Benefit of the order was, thus, taken. It was only at its suggestion,
a valuer was appointed. The recommendations of the valuer as regards the
quantum of monthly rent which would be payable at the end of the period of D
lease was not questioned. The High Court also accepted the same. The order
of the High Court dated 17.04.1984 must be judged in the aforementioned
factual backdrop. The High Court for all intent and purport accepted the
suggestions of the Official Trustee. (1013-C-D)
1.4. Indisputably, again no appeal was preferred therefrom. Even ifit is E
accepted that the said order being not a judgment within the meaning of Clause
15 of the Letters patent of the Calcutta High Court was not appealable, an
application before this Court under Article 136 of the Constitution of India
would lie. No such application was also filed. It was, thus, allowed to attain
finality. The parties acted thereupon. The Official Trustee accepted the said p
judgment and executed a deed oflease strictly in terms thereof. [1013-E-F]
2.1. An Originating Summons is maintainable under certain situations,
as provided for in Chapter XIIl of the Calcutta High Court Original Side Rules.
The High Court in exercise of the said jurisdiction could not adjudicate as to
whether an earlier order passed by it was null and void and was, thus, liable G
to be set aside. What was questioned by the Official Trustee by taking out an
Originating Summons was in effect and substance not only the order passed
by the High Court itself but also its own act which had attained finality.
2.2. In the Originating Summons which was filed after 17 years of
passing of the said order, the Official Trustee sought to raise contentions H
1000
SUPREME COURT REPORTS (2006] SUPP. 10 S.C.R.
A which had not been raised before it in the earlier proceeding. A plea of fraud
was raised, but the same was not pressed. The only contention, which had
been raised therein was that the application under Section 26 of the 1913
Act being not maintainable, the said order dated 30.05.1984 was a nullity.
Committee of Management of Pachaiyappa's Trust v. Official Trustee of
B Madras and Anr., (1994) 1 sec 475, distinguished
2.3. Even otherwise the Official Trustee could not have altered its
position. It could not have prevaricated its stand from time to time. It was
estopped and precluded from filing a fresh application. (1019-D)
C
Jai Narain Parasrampura (Dead) and Ors. v. Pushpa Devi Saraf and
Ors., (2006) 7 SCC 756, relied on
Cooke v. Rickman, (1911) 2 KB 1125, Humphries v. Humphries, (1910)
2 KB 53, referred to
D
2.4. It was also not a case where the parties were at issue in strict ser.se
of the term. The Official Trustee in his affidavit in opposition filed before the
High Court of Calcutta might have raised several contentions. Presumption,
however, would be that those contentions which had been accepted by the High
Court were put forward by it. If that be so, it does not lie in the mouth of the
E Official Trustee now to contend that it had raised other contentions also. If it
had raised any other contention, which had not been considered by the High
Court, the remedy of the Official Trustee was to move the said court itself for
appropriate directions. [1020-D-E)
2.5. Not only no such contention was raised, the order has been acted
F
upon. The principles of res judicata and in particular that of constructive res
judicata shall apply in the aforementioned fact situation. (1020-F)
Pawan Kumar Gupta v. Rachi Ram Nag Deo, [1999) 4 SCC 243, relied
on
G
Ferro Alloys Corporation Limited and Anr. v. Union of India and Ors.,
(1999) 4 sec 149, referred to
2.6. The principles of estoppel, waiver,. acquiescence or res judicata
provide to procedural matter. The said provisions are applied to put an end to
a subsequent litigation. If the 1984 order of the High Court was not a nullity,
H the same would apply. (1017-DJ
OFFICIAL TRUSTEE OF WEST BENGAL 1·. STEPHEN COURT LTD.
1001
2. 7. The Official Trustee dealt with the property in exercise of its A
jurisdiction to administer the trust property, in respect whereof the High
Court could issue directions from time to time. Once it is held that the Official
Trustee either on its own or under the directions of the High Court could
grant extension of lease, its action can be subjected to challenge only in an
appropriate proceeding. The Official Trustee no doubt holds a position of trust B
but no finding of fact has been arrived that it had misused its position. The
High Court in passing its order took all precautions, which were required of
it. The High Court accepted all the contentions of the Official Trustee not
only by enhancing the quantum of rent payable by the Company, but also
appointing a valuer for the purpose of arriving at a reasonable quantum of
rent, which might become payable on the expiry of the period of lease.
C
2.8. It has not been suggested that the Official Trustee was not bound
by the said order. It could only take a different stand in the said proceeding.
3.1. PP owned merely a piece of land. It executed a deed of lease for a
period of 99 years. The lessor, therefore, was entitled to the only rent payable D
in terms of the said 1919 deed of lease.
3.2. It may be true that a registered deed of assignment was executed in
favour of the said AS, but the defect in the said agreement of sale between AS
and the respondents stood cured by reasons of the Supplementary Agreement,
namely, Debenture Trust Deed which was duly registered. In the Debenture E
Trust Deed AS was referred to as "The Transferor", respondent was referred
to as "The Company" and the three others referred to as "the Present
Trustees".
3.3. Broadly speaking the Supplementary deed provided for the issuance
of debentures by the appellant in favour of AS. Until and unless the appellant F
had paid off the debentures the scheme of trust was to continue.
Mitchell v. Mathura Dass and Anr., 12 Indian Appeals 150, relied on
Jamna Bai and Anr. v. Dharsey Takersey, (1902) IV Bombay Law Reporter
893 approved
G
3.4. Even the assignment was required to be made by reason of a
registered document, it is beyond any cavil of doubt that as the Official Trustee
had all along been receiving stipulated monthly rent from the Company, it
was, thus, admitted and acknowledged to be the lessee in respect of the H
1002
SUPREME COURT REPORTS [2006} SUPP. 10 S.C.R.
A leasehold. The Official Trustee not only accepted the rent, but also _allowed
the Company to raise .a huge structure. It, therefore, accepted the Company
as the lessee in respect of the said pmperty. The Company, therefore, for all
intent and purport became a lessee under the Official Trustee.
4. Although in a case of this nature, applicability of Section 53-A of the
B Transfer of Property Act may not be of much significance, but whether as an
assignee of the leasehold or as a monthly tenant, the Company was entitled to
protect its possession.
5. Even a suit for setting aside an order passed by a court having
C competent jurisdiction would be maintainable on limited grounds. Only
because the order passed by a court is otherwise erroneous or causes a
hardship, the same by itself may not be a ground to set aside an order that
was validly passed by a court of competent jurisdiction.
6. Even if Single Judge of High Court did not assign any reason in
D support of its order, it could have been set aside only by an appellate court.
When an order attained. finality, it cannot be set aside on the premise that no
reason had therefor been assigned.
7. A distinction indisputably exists between an order which is wrong or
void on the one hand, and which having been passed by a court lacking inherent
E jurisdiction and, thus, being a nullity on the other. (1017-E)
Chief Justice of Andhra Pradesh and Anr etc. v. L. V.A. Dilshitulu and
Ors. etc., AIR (1979) SC 193, relied on
Balvant N Viswamitra and Ors. v. Yadav Sadashiv Mule (Dead) Through
F L Rs., [2004) 8 SCC 706, Refique Bibi v. Sayed Waliuddin, (2004) 1 SCC 287,
Harshad Chiman Lal Modi v. DLF Universal Ltd and Anr., [2005] 7 SCC
791, referred to
8. In the 1913 Act two different expressions, namely, "beneficiary under
a trust" and person beneficially interested in any trust property" have been
G used. A distinction has, thus, been made in the statute itself between a
"beneficiary" and a "person beneficially interested. 11015-D)
H
'Advanced Law Lexicon' 3rd Edn 2005 by P. Ramanatha Aiyar,
'Bouvier's Law Dictionary Concise Encyclopedia' Third Revision by John
Bouvier, Stroud's Judicial Dictionary, 4th Edn. referred to.
OFFICIAL TRUSTEE OF WEST BENGAL i'. STEPHEN COURT LTD. (S.B. SINHA, J.) 1003
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5042 of2000.
A
From the Final Judgment and Order dated 2.12.1999 of the High Court
at Calcutta in APD/T No. 16/99 in Appeal No. 474of1999.
Tapash Ch. Ray, Tara Chandra Sharma and Miss Neelam Sharma for the
Appellant.
B
Jaideep Gupta, Anil Agarwalla, Jagdeep Anand. K.V. Vijaykumar for the
Respondents.
The Judgment of the Court was delivered by
S.B. SINHA, J : Interpretation and application of the provisions of
Sections 25 and 26 of the Official Trustees Act, 1913 (for short, 'the 1913 Act')
c
as also Section 302 of the Indian Succession Act, 1925 (for short, 'the
Succession Act') falls for consideration in this appeal, which arises out of a
judgment and order dated 21.12.1999 passed by a Division Bench of the D
Calcutta High Court in APD/T No.16of1999 in Appeal No. 474of1999.
The said judgment was rendered in the following fact situation :
One Peter Charles Earnest Paul also known as 'Peter Paul' was the
owner of a piece of land, measuring 3 bighas 17 kottahs 8 chittackas 21 sq.
ft. equivalent to 5408.93 sq. metre located on the junction of Park Street and E
Midleton Row, Kolkata having wide frontage on both the roads. He executed
a registered deed of lease in favour of one Francis Daniel Augustus Larmour
(for short, 'Larmour') in respect of the said premises for a period of 99 years
with effect from 01.06.1919 to 31.05.2018. He executed a Will on 16.06.1920
appointing the Official Trustee as its Executor and Trustee in respect of the F
said property. Beneficiaries of the said Will were his wife and sister. He died
on 01.08.1920. A probate was obtained by the Official Trustee on 07.10.1920.
Larmour executed a registered_ deed of assignment in favour of one Arathoon
Stephen, Stephen Court Limited (hereinafter referred to as 'the Company')
was constituted and incorporated under the provisions of the Companies Act,
1913 on or about 04.12.1923. Arathoon Stephen, who was a shareholder and G
first Managing Director of the said Company entered into an agreement for
acquiring the leasehold rights of Arathoon Stephen. Arathoon Stephen and
the Company thereafter agreed to purchase the leasehold rights of the said
premises for the balance unexpired period under the said lease on 10.12.1923.
On the same day a registered Debenture Trust Deed was executed by Arathoon H
1004
SUPREME COURT REPORTS [2006] SUPP. 10 S.C.R.
A Stephen and the Company and the three Trustees referred to in the said Deed,
stating that the Company was entitled to the said property for all the residue
of the term of 19 I 9 lease. As far back as in 1924, the Company constructed
a five-storied building. It continued to pay the rent to the Official Trustee
who had issued rent receipts to it. Sister of Peter Paul, Mrs. Hemingway, died
B leaving behind a Will in terms whereof the public trustee of the Public Trust
of London took over her estate and started receiving her share of income. On
10.10.1965, widow of Peter Paul died, whereafter half share of the income of
c
the trust property was remitted to the Public Trustee of the Public Trust,
London by the Official Trustee till 18.05.1993. Permission of the Reserve Bank
of India for the later period is said to be awaited.
The Company by a letter dated 09.02. I 984 requested the Official Trustee
for extension of the period of lease for a further period of sixty years to which
the Official Trustee by a letter dated 20.03. I 984 suggested that it should apply
to the High Court for obtaining grant of extension of the said lease. An
application was thereafter filed before the Calcutta High Court by the said
D Company under Section 302 of the Succession Act read with Section 26 of
the 1913 Act. The said application was entertained. The Official Trustee filed
E
F
G
H
an affidavit in opposition wherein, inter alia, it was stated :
"The Official Trustee as such Trustee can neither consent nor
object to grant by any lease or modification of the terms and condition
thereof. The Official Trustee, however, in the ends of justice is duty
bound to produce all the facts and circumstances relating to the said
property before this Hon'ble Court. The Official Trustee states and
submits that the following proposal would be beneficial to the Estate:
(a) Upon the lessee agreeing to enhance the current monthly rent
payable for the lease by at least 400% the head lease can be rectified
by giving the lease the option of renewal the lease on such terms and
condition as this Hon 'ble Court may deem fit and proper after expiry
of the head lease on May 31, 2018 by efflux of time.
(b) Competent valuer would be appointed by this Hon'ble Court
at the expenses of the petitioner for ascertaining the market value of
the property. The probable market value of the property as on June
I, 2018 should be estimated on the basis of the present trend of
increase in the value of land in Calcutta as well as the rate of inflation
and the amount of_ rent to be paid by the lessee for the extended
period would be determined on the basis of the said valuation."
OFFICIAL TRUSTEE OF WEST BENGAL 1·. STEPHEN COURT LTD. [S.B. SINHA, J .) l 005
Pursuant to or in furtherance of the said suggestions of the Official A
Trustee, the Company was directed to pay rent @ Rs.8,000/- per month to the
Official Trustee for the residuary period of the existing lease by the High
Court in terms of an order dated 17.04.1984. A valuer was appointed. The
valuer submitted its report recommending :
"Having regard to the results obtained under the above two method B
of calculations, it is perhaps, fair to fix up the proper monthly ground
rent payable for a period of 60 years lease after the expiry of present
lease as given below :
Rs.2,38,056 + Rs.2,21,933
2
Say
Rs. 2,29,995 per annum
Rs. 19,166 per month
Rs. 19,000 per month
Rupees Nineteen thousand Per month"
No objection thereto was field. The court, thus, acting on the basis of
c
the recommendations of the said valuer, by an order dated 30.05.1984, opined: D
"After reading the original report of Mr. A.K. De, the valuer and
upon hearing the parties it appears to the Court that the rent of the
lease is reasonable and beneficial to the Trust Estate. There will be
an order in terms of prayer (a). The rent payable under the proposed
lease will be Rs.19 ,000 (Rupees nineteen thousand) per month. E
Regarding the current lease the petitioner will pay rent at the rate of
Rs.8,000 (Rupees eight thousand) per month w.e.f. Ol.06.,1984."
The said order of the Calcutta High Court was accepted and acted upon
by the Official Trustee and it executed a deed of lease in favour of the
Company for a period of sixty years on a monthly rent of Rs.19,000. The p
monthly enhanced rent paid by the Company in favour of the Official Trustee
@ Rs.8,000/- in terms of the High Court's order had all along been accepted
wherefor the Official Trustee had been issuing due receipts. An Originating
Summons was, however, taken out by the Official Trustee before the Calcutta
High Court on or about 21.07 .1997 for determination of the following questions:
"(a) Determination of the relation between the Official Trustee and
Mis Stephen Court Limited prior to 31.5.2018 AD, as the relation
between them was not determined.
(b) On the basis of such determination of relation, is Mis Stephen
G
H
1006
SUPREME COURT REPORTS [2006] .SUPP. 10 S.C.R.
A.
Court Limited entitled to execute any lease deed with any party in
respect of premises No. 18 Park Street, Calcutta or any part thereof
prior to 31.5.2019 AD. If not then in that event, what will be the fate
of such lease, if any made prior to 31.5.2018 AD?
(c) Is the order dated 30th May, 1984 passed in Matter No. 432
B
of 1984 null and void?
(d) Is the Deed of Lease executed by Official Trustee on 25th July
1984 valid and binding?
(e) Whether any leasehold right in respect of the premises No. 18,
C
Park Street, Calcutta has legally vested in Messers Steph Court Limited
in the absence of any registered deed conveying, transferring and/or
assigning the unexpired period of lease by Mr. Aratoon Stephen in
favour of Mis. Stephen Court Limited and whether Messers Stephen
Court Limited had any legal right to make application before this
Hon'ble Court in 1986 praying for extension of the period of Head
D
Leaseofl3.9.1919.
E
(t) Whether the High Court at Calcutta had jurisdiction to pass the
order 30th May, 1984 in Matter No. 432 of 1984 directing the Official
Trustee to execute the Indenture of lease for renewal/extension of the
Head Lease dated 13 .9 .1919 in favour of Mis Stephen Court Limited,
who was not the lessee. Besides that, the Head Lease did not contain
any covenant for extension/renewal."
Inter alia, a prayer was also made that the said deed of renewal of lease
dated 25.07.1984 be directed to be delivered upon cancellation.
F
A learned Single Judge of the
High Court by an order dated
G
28.06.1999, opined that the order dated 30.05.1984 was passed without
jurisdiction. It also recorded other findings wherewith we are not concerned.
An appeal preferred thereagainst in terms of clause 15 of the Letters Patent
of the said Court was accepted by reason of the impugned Judgment.
A large number of issues fell for consideration before the Division
Bench of the High Court. It, inter alia, opined : (i) the High Court had
jurisdiction to entertain the said application under Section 302 of the Succession
Act; (ii) The Company had the requisite locus standi to maintain the
application; (iii) The Official Trustee having accepted the said judgment and
H the deed of lease having been executed in favour of the Company, it was
OFFICIAL TRUSTEE OF WEST BENGAL 1•. STEPHEN COURT LTD. (S.B. SINHA, J.) } 007
estopped and precluded from raising the question of the Court's jurisdiction A
in subsequent proceedings; (iv) The jurisdiction of the High Court was not
excluded by reason of the provisions of City Civil Court; and (v) The Official
Trustee having received rent from the Company, its possession was protected
under Section 53-A of the Transfer of Property Act.
Mr. Tapas Ray, the learned Senior Counsel appearing on behalf of the B
appellant, in support of this appeal would contend :
(i)
The company being not a person beneficially interested in the
trust property, an application under Section 302 of the Succession
Act was not maintainable.
(ii) The High Court in its order dated 30.05.1984 having not taken
into consideration the objections filed by the Official Trustee,
the Division Bench of the High Court must be held to have
failed/or neglected to apply its mind in regard thereto and, thus,
the same being a nullity the impugned judgment cannot be
c
sustained.
D
(iii) The Division Bench failed to notice that it was obligatory on the
part of the High Court while entertaining an application under
Section 302 of the Succession Act to satisfy itself: (a) as to who
had come with the application for directions; (b) and in what
capacity; and (c) what right or interest is claimed in respect of E
the direction; and (d) whether the court would have jurisdiction
to entertain the same.
(iv) An application for renewal of lease, 34 years prior to the expiry
of the original lease, for a period of sixty years was not bona
fide and no directions, thus, could have been issued by the High F
Court.
( v) The judgment of the High Court being wholly without jurisdiction
and, thus, being a nullity, the principles of estoppel and res
judicata would have no application;
(vi) If the judgment dated 30.05.1984 was a nullity and non est in the G
eye of law, an appeal thereagainst was not necessary to be filed.
(vii) The deed of assignment executed by Larrnour in favour of
Arathoon Stephen being not a registered document, the same
was wholly inadmissible in evidence.
H
1008
SUPREME COURT REPORTS [2006] SUPP. IO S.C.R.
A
Mr. Jaideep Gupta, the learned Senior Counsel appearing on behalf of
B
c
D
the respondent, on the other hand, would submit :
(i)
The Official Trustee never raised any objection as regards the
purported inherent lack of jurisdiction of the Calcutta High Court
under Section 302 of the Succession Act and, thus, at this distant
time cannot be permitted to turn around and raise the said
question.
(ii) The judgment of the High Court having been acted upon and the
Official Trustee being bound thereby, it cannot now be permitted
to approbate and reprobate at the same time.
(iii) The order dated 30.05.1984 being an appellable one and no appeal
having been preferred therefrom, it attained finality and, thus, a
clear case of estoppel and acquiescence has been made out.
(iv) ISsues raised in the Originating Summons were barred by the
principle of constructive res judicata.
(v) Unregistered deed of assignment having been followed by the
registered Debenture Trust Deed, the title to the lessee passed
on to the company on the basis thereof.
(vi) Assuming that the said registered assignment deed was not valid
E
in law, the Official Trustee having accepted rent from the Company
from 1923-1924 onwards, a fresh monthly tenancy had come into
being and, thus, on that premise, the High Court's judgment
cannot be said to be a nullity or void, specially when the same
was passed in accordance with law and on the terms and conditions
suggested by the Official Trustee.
F
G
H
(vii) The originating summons for the reliefs claimed was not
maintainable in law.
The principal questions which in view of the rival contentions of the
parties arise for consideration are :
(a) Whether the application made by the respondent under the Official
Trustee Act, 1925 to the Calcutta High Court was maintainable?
(b) Whether the defect of unregistered document assigning lease of
immovable property stood cured by registration of subsequent
document i.e. Debenture Trust Deed?
OFFICIAL TRUSTEE OF WEST BENGAL 1•. STEPHEN COURT LTD. [S.B. SINHA, J.) 1009
(c) Whether the Originating Summons filed by the appellant was A
maintainable?
The 1913 Act was enacted to consolidate and amend the law constituting
the office of Official Trustee. An Official Trustee is appointed by the
Government. Rights, powers, duties and liabilities of the Official Trustee are
governed by Part III of the 1913 Act. Under Section 10 of the said Act, the B
High Court has power to appoint an Official Trustee to be trustee of property.
In this case, he was, however, appointed by a Will.
The accounts of the Official Trustee is liable to be audited once annually.
It exercises powers under the Code of Civil Procedure.
Section 22 of the Act enables every beneficiary under a trust to make
inspection and take copies of the accounts. Section 23 provides for transfer
c
to Government of accumulations in the hands of Official Trustee, while any
moneys payable to a beneficiary under a trust have been in the hands of any
Official Trustee for a period of twelve years or upwards. Section 25 empowers D
the High Court to make such orders as it thinks fit respecting any tru~
property vested in the Official Trustee, or the income or produce therefrom.
Section 26 authorizes filing of an application for an order under the said Act
by any person beneficially interested in any trust property or of any trustee
thereof.
Section 302 of the Succession Act empowers the High Court on an
application made to it to give to the executor or administrator any general or
special directions in regard to the administration thereof, where probate or
letters of administration in respect of any estate has or have been granted
thereunder.
Peter Paul owned merely a piece of land. It executed a deed of lease
for a period of 99 years. The lessor, therefore, was entitled to the only rent
payable in terms of the said 1919 deed of lease.
E
F
It may be true that a registered deed of assignment was executed in
favour of the said Arathoon Stephen, but the defect in the said agreement G
of sale between Arathoon Stephen and the respondents stood cured by
reason of the Supplementary Agreement, namely, Debenture Trust Deed which
was duly registered. In the Debenture Trust Deed Arathoon Stephen was
referred to as 'The Transferor', Respondent was referred to as 'The Company'
and the three others referred to as "the Present Trustees". It was stipulated: H
1010
SUPREME COURT REPORTS (2006] SUPP. IO S.C.R.
A
"(a) WHEREAS the Company is entitled to the property set forth and
described in the first Schedule hereto for all the residue of the term
of 99 years from the first day of June 1919 granted by an indenture
of lease dated l3rd day of September, 1919 made between Peter Charles
Ernest Paul of the one part and Francis Daniel Larmour of the other
B
part and registered at Calcutta in Book I Vol. III being no.; 4493 for
1919 subject to an Indenture dated the 15th day of August 1923 made
between the Official Trustee of Bengal of the one part and as such
the sole ex.!cutor and Trustee of the will of the said Peter Charles
Ernest Paul of the one part and the Transferor of the other part and
registered at Calcutta in Book I Vol. 102 being No. 9712 for 1923 being
c
an Indenture of Rectification of the tenns of the said Indenture of
lease regarding payment of the owner's share of taxes in respect of
the said demised premises AND WHEREAS the said property is at
present vested in the Transferor and Trustee for and on behalfof the
company and he has agreed at the request of the company to join in
D
these presents in manner hereinafter appearing AND WHEREAS the
company being duly empowered in that behalf has determine to raise
a sum not exceeding Rs. 7 ,00,000 (Rupees Seven Lacs) by the issue of
Debentures for that amount bearing interest of the rate of 5 112 per cent
per annum and frame in accordance with the form set forth in the
second schedule hereto and has agreed to secure the principal moneys
E
.· togethe.r. with ·interest for the time being payable in respect of such
. ;:
· · I>ebefi~res in mamier hereinafter providedAND WHEREAS the present
trustees have consented to act as Trustees of this Indenture upon
the terms herein contained.
(b) For the purpose of further securing the principal money and
F
interest and all costs and other moneys payable under the Debentures
or these presents the Transferor by the direction of the company
hereby transfer and assigns and the company hereby transfers assigns
and confirms unto the Trustees and singular the hereditaments land
•
and premises specified and referred to in the first Schedule hereto and
G
all buildings erected on the land or any part thereof and all easements
privileges and on the tenancies whatsoever to the same and therewith
held used occupied and enjoyed and !ill the estate right title interest
. property claim and demand whatsoever of the Transferor and the
Company and to the same to have and to hold the same unto the
present Trustees as joint tenants with right of survivorship for all the
H
residue now to come and unexpired of the term of ninety nine years
OFFICIAL TRUSTEE OF WEST BENGAL r. STEPHEN COURT LTD. [S.B. SINHA, J.J 1Q11
granted by the said lease upon and for the trusts intents and purposes A
hereinafter expressed of land concerning the same."
Broadly speaking the Supplementary deed provided for the issuance of
debentures by the appellant in favour of Aratoon Stephen. Until and unless
the appellant had paid off the debentures the scheme of trust was to continue
~:
B
"Upon proof being given to the reasonable satisfaction of the
Trustees that all the debentures entitled to the benefit of the trusts
herein contained have been paid off or satisfied and upon payment
of all costs charges and expenses incurred by the Trustees in relation
to those presents the Trustees shall at the request and cost of the C
Company ....... release the charged premises from this security."
The effect of such an unregistered deed vis-a-vis a Supplementary Deed
by way of Debenture Trust Deed came up for consideration before the Privy
Council in Mitchell v. Mathura Dass and Anr., [12 Indian Appeals 150], D
wherein it was opined :
" ... The Registration Act was not passed to avoid the mischief of allowing
a man to be in possession of real property without having a registered deed
but as a check against the production of forged documents, and in order that
subsequent purchasers, or persons to whom subsequent conveyances of E
property were made, should not be affected by previous conveyances unless
those previous conveyances were registered ..... "
In that case William Mitchell was indebted to Mathura Dass. The latter
sought to attach a property on the basis that it belonged to the former.
William's father Alexander, claimed that the property belonged to him. In the F
proceeding, two documents came to be filed, namely : one purporting to be
a deed of conveyance of the property to himself and the other a confinnation
bond executed by the same parties as the conveyance in the subsequent
deed.
The Judicial Committee held that the second deed being registered was G
a valid conveyance of the property to Alexander.
A Division Bench of the Bombay High Court followed the said decision
in Jamna Bai and Anr v. Dharsey Takersey, [ 1902 (IV) Bombay Law Reporter
893}, stating :
H
A
B
c
D
1012
SUPREME COURT REPORTS [2006) SUPP. 10 S.C.R.
"The settlement between Ruttonbai and Tersey on the terms on
which the plaintiffs base their claim, is dated the 3rd February 1869.
It is a document which was drawn up in Guzerati but I have not
received it in evidence, as it affected immovable property of the value
of more than Rs. I 00 but was not registered. Mr. Lowndes for the
plaintiff then rendered two indentures called releases, dated the 13th
and 16th September 1869 respectively, one executed by Ruttonbai in
favour of Tersey and the other by Tersey in favour of Ruttonbai, in
which, after reciting the terms of the agreement of the 3rd February
1869, the parties say that their claims against each other in respect of
the agreement are satisfied. These two indentures, Exs. A and B, are
registered.
But Mr. Raikes for the defendant objected to their
admissibility on the ground that they were merely secondary evidence
of the contents of the agreement on which the plaintiffs sue and that,
ifthe original agreement was inadmissible, these two indentures could
not supply its place. I have, however, admitted them in evidence on
the authority of the ruling of the Judicial Committee of the Privy
Council in Mitchell v. Mathuradas and Anr ...