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Chintaman Raoji Naik Vs. Khanderao Pandurang Thakur - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 296 of 1926
Judge
Reported inAIR1928Bom58; (1928)30BOMLR45
AppellantChintaman Raoji Naik
RespondentKhanderao Pandurang Thakur
DispositionAppeal dismissed
Excerpt:
.....was vested in the brother in trust for a specific purpose and the suit was for an account of the trust property or the proceeds thereof.;bhurabhai v. bai ruxmani (1908) i.l.r. 32 bom. 394, s.c. 10 bom. l.r. 540, and soar v. ashwell [1893] 2 q.b. 390, followod.;article 98 of the indian limitation act, 1908, applies to an ordinary breach of trust and not to one covered by section 10 of the act. - - was ho, in other words, an express trustee ?. clearly lie was. 7. then it was said the proper article to apply was article 93 of the indian limitation act, and that thereunder the period of limitation for making good out of the general estate of a deceased trustee the loss occasioned by a breach of trust 'was three years. but that is the case of an ordinary breach of truat and not one..........facts of this case as found in the lower court it must be taken that raoji applied part of this trust moneys for that purpose, but put the balance amounting to rs. 1,600 and upwards into his own pocket. he died in 1918, his representatives are called on to refund this balance and to account, and they set up limitation. in other words an apparently fraudulent trustee who has put trust money into his own pocket is thus to escape by reason of lapse of time.2. it is clear, however, that section 10 of the indian limitation act 1908 prevents a suit brought against such a trustee, (provided he is a trustee for a specific purpose), from being barred by lapse of time. the section provides:-notwithstanding anything hereinbefore contained, no suit against a person in whom property has become.....
Judgment:

Amberson Marten, Kt., C.J.

1. This is a very simple case though it raises points of general importance. One Pandurang died in 1904 leaving a widow and two sons, plaintiff No. 1 and plaintiff No. 2. His assets consisted in part of certain moneys coming under a provident fund and certain other moneys, Pandurang's widow and natural guardian of the children handed over the moneys to her brother Raoji for the benefit and education of the two boys. On the facts of this case as found in the lower Court it must be taken that Raoji applied part of this trust moneys for that purpose, but put the balance amounting to Rs. 1,600 and upwards into his own pocket. He died in 1918, His representatives are called on to refund this balance and to account, and they set up limitation. In other words an apparently fraudulent trustee who has put trust money into his own pocket is thus to escape by reason of lapse of time.

2. It is clear, however, that Section 10 of the Indian Limitation Act 1908 prevents a suit brought against such a trustee, (provided he is a trustee for a specific purpose), from being barred by lapse of time. The section provides:-

Notwithstanding anything hereinbefore contained, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or asaigus (not being assigns for valuable consideration), for the purpose of following in his or their hands such property or the proceeds thereof, or for an account of such property or proceeds, shall be barred by any length of time.

3. It was said, to start with, that the property was not vested in Raoji. That, on the facts, is a hopeless argument. It was based on one answer which the widow gave in cross examination, but as the learned appellate Judge points out the answer has been an outcome of the ingenuity of the cross-examining pleader in putting the words of the section into the mouth of the witness. The answer just previous to this one was that the money was entrusted to Raoji for the boys. The word actually used in the subsequent answer was malik, and as my brother Crump has pointed out, no doubt the lady thought that she was being asked whether she constituted Raoji the absolute owner of the moneys. Of course she did not. She had given it to him on trust for the boys. It is clear, therefore, that the money was 'vested' in him.

4. Then was it vested for a specific purpose? Was ho, in other words, an express trustee ?. Clearly lie was. The moneys were given to him for the boys-for their benefit and education. In this respect the case resembles that in Bhurabhai v. Bai Rux-mani I.L.R. (1908) 32 Bom. 394 10 Bom. L.R. 540, where a sum was handed over by a husband's father to the keeping of the wife's father as a fund constituting her pallet, or dowry in accordance with the usual practice prevailing in the caste. That fund was misappropriated by the lady's father, and an action was brought to recover the same. It was held that the property was vested in him for a specific purpose. I may also refer to Soar v. Ashwell [1893] 2 Q.B. 390. where a solicitor to a trust got certain trust moneys into his own hands and misappropriated them. It was held there that he was in the position of an express trustee, and that under the English law no lapse of time would bar a suit against him.

5. Then it was argued that this suit was not one for following trust money. It is unnecessary for us to consider the rulings in India as to the precise meaning of the expression, 'following trust property', and as to whether a different meaning ought to be give to what is usually understood in England by that espression, for the decision I have just referred to in Bai Ruxmani was on Section 10 of the Indian Limitation Act of 1877, and as my brother Crump has pointed out, that section did notthen contain the words which we have in the present section, viz., 'or for an account of such property or proceeds', So we may eliminate the words in Section 10 as to following the trust property, and confine ourselves to the question of an account of the trust property or the proceeds thereof.

6. Then if I understood the argument of the learned pleader for the appellant correctly, he urged you can only get an order for an account, and not for payment of what is found due on taking that account. That again is an argument which cannot for one moment stand. It is quite erroneous to suggest that the Court has power to direct an account, but at the same time has not power to direct payment. Otherwise the whole object of the account would be frustrated.

7. Then it was said the proper Article to apply was Article 93 of the Indian Limitation Act, and that thereunder the period of limitation for making good out of the general estate of a deceased trustee the loss occasioned by a breach of trust 'was three years. But that is the case of an ordinary breach of truat and not one covered as here by Section 10, Section 10 expressly says 'Notwithstanding anything hereinbefore contained'. Consequently, before you can apply Article 98 you must first get rid of Section 10. Here Section 10 clearly does apply. That being so, this suit was not barred by time.

8. In the result the appeal fails, and is dismissed with costs.


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