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Mathuradas Damodardas and anr. Vs. Vandrawandas Sunderji and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation;Trusts and Societies
Decided On
Reported in(1907)ILR31Bom222
AppellantMathuradas Damodardas and anr.
RespondentVandrawandas Sunderji and anr.
.....i allude throughout to the first defendant, who alone contests the suit-the beneficiaries of the trust were varjivan and parbhu, sons of sundarji, varjivan being paralysed and parbhu being of weak intellect. defendant 1), who is at least an immeasurably better witness than kanji, then it is certain that the interest on these notes was in fact never paid to vaji, for it is admitted that her books contain no such entry. ' that is as clear a repudiation of responsibility as could well be made. the point has not been taken, but it seems to me distinctly arguable that such laches as this would by itself suffice to debar the plaintiffs from relief in a court of equity which, as the maxim goes, vigilantibm subvenit non dormientibus. first of all, he himself has sworn to it, and i cannot say..........notes were not vajibai's absolute property?(4) whether the plaintiffs became entitled to the said notes on vajibai's death?(5) whether the plaintiffs took the said notes by virtue of the gift-over under the will of the said vanmalidas as alleged in para. 8 of the plaint?(6) whether the gift-over was a valid gift?(7) can the plaintiffs take under the said gift over in view of the fact that both kesserbai and damodar predeceased vajibai?(8) whether the said notes wore not transferred to the names of defendants upon trust for varjivan sundarji and purbhudas sundarji and for their sole and absolute use and benefit?(9) whether plaintiffs' claim is not barred by limitation?(10) whether any decree can be made in plaintiffs' favour without letters of administration to vanmalidas, kesserbai,.....

Batchelor, J.

1. After summarising the pleadings, I read the issues which are as follows:

(1) Whether the transfer of the Government notes made to defendants 1 and 2 by Vajibai was on such trust as is alleged in para. 2 of the plaint?

(2) Whether Vajibai became entitled to the said notes under the will of her husband Vanmalidas, or whether the said notes were investments of savings of property bequeathed to her by her husband?

(3) Whether the said notes were not Vajibai's absolute property?

(4) Whether the plaintiffs became entitled to the said notes on Vajibai's death?

(5) Whether the plaintiffs took the said notes by virtue of the gift-over under the will of the said Vanmalidas as alleged in para. 8 of the plaint?

(6) Whether the gift-over was a valid gift?

(7) Can the plaintiffs take under the said gift over in view of the fact that both Kesserbai and Damodar predeceased Vajibai?

(8) Whether the said notes wore not transferred to the names of defendants upon trust for Varjivan Sundarji and Purbhudas Sundarji and for their sole and absolute use and benefit?

(9) Whether plaintiffs' claim is not barred by limitation?

(10) Whether any decree can be made in plaintiffs' favour without letters of administration to Vanmalidas, Kesserbai, Damodar and Vajibai, or any of them and which?

(11) The general issue.

(12) Whether, if the trust alleged in para. 2 of the plaint is not proved, the defendants 1 and 2 did not hold the said notes on a resulting trust for Vajibai?

2. Though twelve issues have thus been raised, the only questions argued have been (a) the question of fact as to who were the beneficiaries of the trust created by Vaji, and (6) the question of law as to the applicability or inapplicability of Section 10 of the Limitation Act.

3. The suit has led to an interesting argument on the ambit of Section 10 of the Limitation Act, but before discussing that question it is necessary to solve the not less difficult question of fact as to the objects of the trust. In the first place it is admitted that these notes for Rs. 7,000 were the subject of a trust created by Vaji, but there is direct conflict between the parties as to the terms of the trust. According to the plaintiffs, who arc admittedly the heirs of Vaji, the beneficiary of the trust was Vaji herself, and the object or purpose of the trust was that the two trustees might draw the accruing interest on behalf of Vaji and so save her from the necessity of appearing in the business. According to the defendant-by which term I allude throughout to the first defendant, who alone contests the suit-the beneficiaries of the trust were Varjivan and Parbhu, sons of Sundarji, Varjivan being paralysed and Parbhu being of weak intellect.

4. These are the rival theories; and I take first the plaintiffs' case, for I think that few words are required to show that it must be dismissed for want of proof. It rests mainly upon the so-called admission made by the second defendant, Kanji, in his letter of 24th September 1897 (Exhibit C) to the solicitors for Mr. Gagrat, the then guardian of the infant plaintiffs. There, no doubt, Kanji says that the notes were transferred by Vaji to the joint names of himself and the first defendant 'to make us to recover interest thereon for her.' But after Kanji had appeared in the witness-box it had to be conceded by the Advocate General that he was unworthy of credit, and for my own part I find him to be a witness whom no Court could believe for a moment: indeed that Kanji asserts a thing would be rather a reason for doubting it. Then, when this letter Exhibit C was written, Kanji was in the service of the plaintiffs' guardian, and is now in the plaintiffs' service. Moreover, it is now admitted that it was Kanji himself who instigated this litigation by suggesting the solicitors letter to which Exhibit C is a reply. Thus all that Exhibit 0 means is that one brother admits this trust in order that he may induce the plaintiffs to subject another brother to harassing litigation. In such circumstances whether the statement be called an admission or not, seems to be of little moment; what does matter is that the statement is entirely worthless. It is said that Kanji has not been questioned as to his relations with the first defendant; but the first defendant had said that he was not on speaking terms with Kanji, and was not cross-examined on the point. And in truth, unless a Court is to shut its eyes to the most obvious and apparent facts, there was no need to question Kanji further. It is impossible to deny that his only object was to bring trouble upon his own brother; that being so, I may safely infer, and 1 do infer, the existence of some bitter feud. It might be otherwise if by any stretch of imagination one could suppose that Kanji was partly acting from honourable motives, but that supposition is not reasonably possible. It is probable that in fomenting this dispute he was labouring under the belief that he himself would escape immune: now that he perceives that responsibility is likely to be fastened on him, he makes a pitiable effort to resile from his letter, and constantly breaks out into the despairing cry to me 'Saheb, there is my letter Saheb, there is my letter' of which the English is 'I' cannot tell the truth, whatever that may be, because I have already bound myself by my letter to the solicitors.' The whole story is a distressing example of the depths to which a Hindu of this class will fall in order to satisfy his revenge upon a family feud; but there is nothing new in it, and Kanji must suffer the common fate of having his sworn statements wholly dismissed from consideration as unworthy of credit.

5. So far as I can discover, there is no other circumstance which can be used as a support to the plaintiffs' version of the facts. And that version is exposed to many difficulties. It is denied on oath by the defendant (i. e. defendant 1), who is at least an immeasurably better witness than Kanji, Then it is certain that the interest on these notes was in fact never paid to Vaji, for it is admitted that her books contain no such entry. Again, it is abundantly proved that there could have been no occasion for the trust set up by the plaintiffs, inasmuch, as Vaji had agents of her own to whom she had given powers of attorney, and who were in the habit of drawing her interest for' her-see Exhibits Nos. 11 to 16.

6. Turning to the defendant's account 6f the trust, the first point that occurs to me is that it is the only other account before the Court. I do not mean that I must therefore believe it, for it may be that the terms of the. trust are at present undiscoverable; nevertheless the defendant is entitled to whatever credit may be obtainable from the fact that the only competing case has been rejected. The burden of proving. his theory of the trust rests upon the defendant, but I am of opinion that the weight of the burden ought not to be exaggerated. As long ago as 28th September 1897-see Exhibit D-the defendant by an attorney's letter categorically denied the assertions put forward for the plaintiffs at the suggestion of Kanji, and assorted that the trust was created 'for the sole and absolute use and maintenance of Varjivan and Parbhu,' that the plaintiffs' attorneys were being misled by Kanji out of private malice, and that the notes in question were and are in the possession 'of the said Varjivan and his wife.' That is as clear a repudiation of responsibility as could well be made. Yet the plaintiffs wait eight years before they file this suit, and no valid excuse is offered for the delay. The point has not been taken, but it seems to me distinctly arguable that such laches as this would by itself suffice to debar the plaintiffs from relief in a Court of Equity which, as the maxim goes, vigilantibm subvenit non dormientibus. But, waiving that, let us see how the defendant's case stands otherwise. First of all, he himself has sworn to it, and I cannot say that he is a bad witness. It is contended that the trust, which he alleges, absolves him from all responsibility, but that, I think, is not so; he would appear to be still liable at the suit of Parbhudas and the heir of Varjivan, Moreover it is in his favour that he acknowledges any trust at all, for without such acknowledgment the plaintiffs could not have got so far as to establish any trust. Nor do I think that any suspicion should be attached to him because the persons whom he names as having been present at the declaration of trust are mostly dead; the responsibility for this absence of evidence must rather be fastened on the plaintiffs, who have been so dilatory in filing their suit. The person whose evidence would be most valuable on these points is Varjivan Sundarji: unfortunately he is now dead, but he did not die till 1900, or three years after the plaintiffs had received the defendant's emphatic denial of their claim. Mr. Gagrat did not die till 1904, and I am thus constrained to hold the plaintiffs responsible for that moagrencss of evidence which is the weakest feature in the defendant's case. It is admitted by the defendant that Dr. Edalji, who is now too ill to attend the Court, was present at the creation of the trust, but, as no application is made by either side to obtain his evidence, I must infer that he would not materially assist either the plaintiffs or the defendant. The defendant is formally corroborated by Manibai, but as she is his sister, I cannot ascribe much importance to the corroboration. Passing to such circumstantial evidence as is available, I find several matters which support the defendant's story. It is not denied that Varjivan was paralysed or that Parbhu was, and is, of weak intellect, so that there is an antecedent probability that they should have been the special objects of Vaji's bounty. This probability is increased by the admitted fact that in 1884 Vaji paid on behalf of Sundarji, the father of Varjivan and Parbhu, the costs which had been incurred in the lunacy proceedings connected with Damodar Vanmali - see Exhibit 17. Again it is fairly proved that, at the time the disputed trust was created, Vaji gave Rs. 2,000 to Bai Mani ''just in the same way as the Rs. 7,000 notes were given to Varjivan and Parbhu'; but Mani has spent part of the Rs. 2,000 and has invested the balance, and no claim in respect of this sum has ever been made against her. It is also proved that, of the Rs, 7,000, one note for Rs. 500 was sold before the death of Vaji; but there is no entry in Vaji's books concerning this sum, and no claim has been made. It has boon contended that the absence of a written instrument is a circumstance making rather for the plaintiffs than for the defendant, but in my opinion there is very little ground for an inference either way. On the present state of the record it seems to me clear that the defendants were not constituted mere fiduciary agents to collect the interest for Vaji, and, that being so, the absence of a writing is as consistent with one kind of trust as with another. The explanation appears simply to be that in August 1894, when the trust was created, the parties had come to a plain understanding as to its objects, and that Vaji had confidence in her relatives, the trustees. Then the Advocate General has urged that if the defendant's case be traced through the early correspondence to the written statement and his present deposition, it discloses a change of ground and a gradual development; but upon examination of these materials, I cannot say that the defendant's present case differs at all substantially from the case which he formulated when first challenged. The words' for the sole and absolute use and maintenance' in the letter C may conceivably have been intended to denote as extensive an estate as the defendant now alleges. So in the written statement, though the whole case of the defendant is not particularly rehearsed, para. 6 sets out that reliance is placed on the early correspondence, and there the details of the defendant's version are to be found. Upon a general consideration of all the evidence, direct and circumstantial, and of such surrounding circumstances as are disclosed in the suit, I have come to the conclusion that I ought to hold that the defendant has succeeded in proving his account of the trust. For I am clear that the only rival version, that asserted for the plaintiffs, must be rejected. This leaves me with the defendant's version alone, and in the circumstances already stated I must find that that version is established. If this finding be correct, it follows that the defendant is not answerable on the present suit of the plaintiffs. The same result ought, I think, to follow in the case of the second defendant, Kanji, despite his so-called admission in his letter Exhibit 0. For I do not believe that admission to be true : I believe it to have been a false statement made solely to prejudice the first defendant, and I adopt Kanji's contrary statement in his 'deposition, namely, that ' Vaji said she gave the notes for the benefit of Varjivan and Parbhu.' The suggestion that the plaintiffs would be entitled to one-half of the fund by reason of the death of Varjivan appears to me unsustainable, inasmuch as Varjivan has admittedly left a widow.

7. The above finding of fact suffices for the disposal of the suit, and any further observations must necessarily be obiter. Such observations I make with reluctance, but out of respect for the arguments which have been addressed to me on the only other point which has been argued I think it right briefly to state my present opinion upon the legal point which would arise if my finding on the facts were other than it is. If, that is to say, I had disbelieved the defendant's story as to a trust for Varjivan and Parbhu, then the question would be whether this suit is within the period allowed by the law of limitation. In the case supposed, since the plaintiffs' account of the trust is certainly not, made out, the result would be that the object of the trust would be uncertain or undiscoverable from the circumstance that the Court has not before it for its guidance the whole intention of the settlor in reference to the object. There would therefore be admittedly a resulting trust in favour of the settlor, Vaji, or her legal representatives, of Sections 81 and 83 of the Indian Trusts Act. Then arises the question which has been much debated before me, namely, would such a trust suffice to save the suit under Section 10 of the Limitation Act? Now this section saves any suit for the purpose of following trust property in the hands of trustees where they have become vested with the property 'for any specific purpose.' In Vundravandas v. Cursondas (1897) 21 Bom. 646, Farran, C.J. and Tyabji, J., have held that the 'trust for a specific purpose' of the Indian Act means the same thing as the 'express trust' of the English law: this view is binding on me, and has not been questioned in argument. It will suffice to say, therefore, that the words of the Indian Act are certainly not wider than those of the English statute. I must take it that the phrases are synonymous, but I think it important to call attention to the language held by Garth, C.J., in Kherodemoney Dossee v. Doorgamoney Dossee (1878) 4 Cal. 455; there, after expressing a wish that the scope of the section had been considerably extended, the learned Chief Justice goes on to say that the words refer to cases where a trust has been 'created expressly for some specific purpose or object, and property has become vested in a trustee upon such trust (either from such person having been originally named as trustee, or having become so subsequently by operation of law).' And as to the limits of the section the Chief Justice continues: 'It seems to me that the language of the section is specially framed so as to exclude implied trusts, or such trusts as the law would infer merely from the existence of particular facts or fiduciary relations.' At first sight, no doubt, the distinction here drawn would seem to assist the plaintiffs, for it might be said that the defendants became their trustees by operation of law. It is true that on the facts I am supposing, the defendants, who are the present trustees, are also the original trustees expressly appointed; but they are not now trustees upon the original trust. What that original trust was, we know not; but it was not this trust, for this trust originates solely by virtue of a legal implication. Unfortunately we have here no instrument of trust, and the assumption is that the object of the trust is unknown; but none the less the plaintiffs' title rests upon a resulting trust implied, by the law, and in pro tanto different from and opposed to the terms of the trust. It is here, I think, that this case is distinguishable both, from Kherodemoney's case and from Salter v. Cavanagh (1838) 1 Dr. & Wal. 668, which appears to be the foundation of the doctrine invoked for the plaintiffs and which proceeded upon the principle that a trust in favour of the next of kin way to be inferred from the particular instrument then before the Court. That case was followed in Patrick v. Simpson (1889) 24 Q.B.D 128, but there again the ratio decidendi was that the Court was able to find on the face of the will an express trust in favour of the heir at law. The same principle has been followed in this Court in Cowasji N. Pochkhanawalla v. R.D. Setna (1895) 20 Bom. 511, and in the Appeal Court's decision in Vundravandas v. Cursondas (1897) 21 Bom. 646. Reference may also be made, in elucidation of the more general principles, to Rochefoucauld v. Bonstead [1897] 1 Ch. 196, and Soar v. Ashwell [1893] 2 Q.B, 390. This latter, case seems to carry the principle as far as it has hitherto been carried; but I do not think that it bears directly upon the point now before me. In that case the solicitor Ashwell was held to be an express trustee because he had received the money in a fiduciary relation and as trustee for his clients, the trustees under the will of Joseph Soar; there was no question of a resulting trust but the relation of trustee and cestui que trust was constituted directly by the acts and position of the parties. On the other hand what I have to consider is the limits of the doctrine whore the relation between trustee and cestui que trust is established dehors the terms of the original trust and by virtue only of a certain implication of law. Those limits seem to me to be illustrated by the decision of Mr. Justice Kekewich in Churcher v. Martin (1889) 42 Ch, D. 312 , where the learned Judge, after observing upon Lister v. Pickcford (1865) 34 Beav. 576 that the possession of trustees is undoubtedly the possession of their cestui que trust, remarks that the doctrine, though indisputable, is inapplicable to the case before him inasmuch as the possession of trustees cannot enure to the benefit of him whose title was intended to be defeated by the deed which created the trust. 'How' he asks, 'can the grantor be their cestui que trust? Because, it is urged, there is an express trust in his favour, an express trust necessarily resulting from the failure of those declared. It would suffice to reply that such a resulting trust is implied by law, and that whatever else it may be, it is not an express trust.' In the same way hero the trust upon which the plaintiffs sue is a resulting trust, which comes into existence precisely because the trusts declared, whatever they may be, cannot take effect. And here there is no such support for the plaintiffs as the Court was able to discover in Salter v. Cavanagh (1838) 1 Dr. & Wal. 668; not only is there nothing to suggest an inference in favour of an intention to create a trust for the heirs, but the claim of the heirs assumes the defeat of the original trust as a condition precedent. I should conclude, therefore, that while the trustees held on behalf of the heirs by virtue of the implication of law, they were not holding upon a 'trust for a specific purpose' within the meaning of Section 10 of the Limitation Act. The plaintiffs' claim is grounded on the failure of the original trusts, and in ,my opinion it is those original trusts which are the 'trust for a specific purpose' contemplated by the section. This opinion receives support from analogous decisions in Manickavelu Mudali v. Arbuthnot & Co. (1882) 4 Mad. 404 and Muhammad Habibullah Khan v. Safdar Husain Khan (1881) 7 All. 25 and though Churcher v. Martin (1889) 42 Ch. D. 312 is the only case of its kind I can find in England, the principle of that ruling has been followed, as I have shown, in the Courts of India,, and has also been accepted and adopted in America : see p. 1205 of Vol. XV or the American and English Encyclopedia of Law (2nd edn,) and the cases there cited.

8. But the Advocate General has sought to distinguish between trusts which result because the original trust was bad in law and trusts which result merely because the original trust cannot be ascertained : the former, it is admitted, would not be express trusts, but it is contended that the latter should be regarded as express trusts, the law supplying the specific purpose which is not otherwise ascertainable. Clearly this is a visible distinction, but I think it is a distinction without substance inasmuch as it does not appear to me to be countenanced either by the words of the section or by the effect of the cases which I have mentioned. A resulting trust in such a case may or may not be to some extent identical with the trust created by the settlor: of that we know nothing, and the region of speculation must be avoided. The thing is a resulting trust, and, as such, is other than, that is, different from, the trust which the settlor may have declared. Whether the resulting trust flow from the invalidity of the declared trust or from the impossibility of ascertaining the declared trust, it is, I think, equally a substituted trust, that is, a trust which is created by the law faut de mieux, that is, as the best arrangement winch the law regards as possible in difficult circumstances. That, I take it, is the general rule, and it' further illustration be desired, it may be found in Dickenson v. Teasdale (1862) 1 D.J. & S. 52 where Lord Westbury C. said: 'The words ' express trust' in the statute are used by way of opposition to trusts arising by implication, trusts resulting or trusts by operation of law.' And this general rule appears to me to be affected by Salter v. Cavanagh (1838) 1 Dr.& Wel. 668 and Patrick v. Simpson (1889) 24 Q.B.D. 128 to this extent only, that where you have a trust covering the whole estate, and the bequests do not exhaust the estate, the trustees are express trustees of the residue for the heir of the testator-a modification which, I take it, is collected or inferred from the terms of the instrument itself. But I can find no sufficient reason for extending this modification of the rule to the different case where, as here, the Court has before it no instrument at all, nothing but a trust of which the terms are undiscoverable. In the former case there is the instrument itself which suggests the claim of the heir; but in such a case as this there is nothing but a trust which is artificially-created by an implication of law irrespective of the unknown intentions of the settler. I am consequently of opinion that this argument also fails, and that the trust here is outside the scope of Section 10.

9. The result, is that the plaintiffs' suit must be dismissed with costs. The Receiver and the injunction are discharged.

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