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Sayed Zakir Ali Vs. Musammat Umatul Habib Begum and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad
Decided On
Judge
Reported in1Ind.Cas.347
AppellantSayed Zakir Ali
RespondentMusammat Umatul Habib Begum and ors.
Excerpt:
trusts act (ii of 1882), section 78 clause (c) - revocation of trust--limitation act (xv of 1877). section 10--misappropriation by trustee limitation--time runs from the date of misappropriation. - - he clearly revoked it so far at least as the indigo is concerned by the subsequent document of the 9th of august 1886 by which he hypothecated the indigo, which was then being manufactured, and which is the indigo referred to in the earlier document, for the debt due to muhammad yusuf alone, secured by the later document......his widow, musammat amir begam, his sister, bibi begam and two nephews, wazir ali and farhat ali. muhammad yusuf was the son of bibi begam. itikad ali was heavily indebted and for the payment of some of his debts he made an arrangement under a document dated the 25th of july 1886. muhammad yusuf was alleged in that document to be one of his creditors and it was provided in it that the proceeds of the sale of certain indigo which was then being manufactured should be applied to the payment of the debts mentioned in the document. on the 9th of august 1886, he executed another document in favor of muhammad yusuf to secure an advance of rs. 7,000 and hypothecated in it among other property the indigo referred to above. muhammad yusuf, it has been found, appropriated the proceeds of the sale.....
Judgment:

1. This appeal arises out of a suit brought by the plaintiff appellant to recover from the defendants, who are the legal representatives of one Khwaja Muhammad Yusuf, a sum of Rs. 32,000, under the following circumstances. One Itikad Ali died on the 26th of August 1886, leaving him surviving as his heirs his widow, Musammat Amir Begam, his sister, Bibi Begam and two nephews, Wazir Ali and Farhat Ali. Muhammad Yusuf was the son of Bibi Begam. Itikad Ali was heavily indebted and for the payment of some of his debts he made an arrangement under a document dated the 25th of July 1886. Muhammad Yusuf was alleged in that document to be one of his creditors and it was provided in it that the proceeds of the sale of certain indigo which was then being manufactured should be applied to the payment of the debts mentioned in the document. On the 9th of August 1886, he executed another document in favor of Muhammad Yusuf to secure an advance of Rs. 7,000 and hypothecated in it among other property the indigo referred to above. Muhammad Yusuf, it has been found, appropriated the proceeds of the sale of the indigo, amounting to over Rs. 8,000, in the beginning of the year 1887. Among the creditors of Itikad Ali were his two nephews Wazir Ali and Farhat Ali, After Itikad Ali's death, they sold to his other heirs their own shares in the inheritance of Itikad Ali and in 1888 they brought a suit for recovery of the money due to them and for a declaration that the documents executed in favor of Muhammad Yusuf, to which we have referred above, were fictitious and not binding on them. On the 11th of May 1889, they obtained a decree for recovery of the debts from the assets of Itikad Ali but the remainder of their claim was dismissed. In execution of this decree they attached the proceeds of the sale of the indigo which had been appropriated by Muhammad Yusuf. This was in December 1893. In 1903 they caused the proceeds of the sale of the indigo so attached by them to be sold by auction and the plaintiff purchased them on the 21st of June 1903. He now claims to recover from the heirs of Muhammad Yusuf, who has since died, an amount representing the value of the indigo attached by Wazir Ali and Farhat Ali and interest thereon, and the total amount he claims is Rs. 32,000, although the price, for which he purchased what he calls a debt due by Muhammad Yusuf, was Rs. 2,125 only. The Court below has dismissed the claim on the ground of limitation, and on other grounds also which we need not consider for the purposes of this appeal.

2. We are of opinion that the decision of the learned Subordinate Judge on the question of limitation is correct. As we have said above, the indigo was sold and the proceeds of the sale were appropriated by Muhammad Yusuf in the early part of the year 1887. The right of the heirs of Itikad Ali to this indigo accrued at the date of the appropriation and unless Muhammad Yusuf can be regarded as a trustee on behalf of Itikad Ali, the right of the heirs of Itikad Ali to the amount appropriated by Muhammad Yusuf became time barred before the date of its attachment. This is so, whether the period of limitation is three years or 6 years, as contended for on behalf of the appellant. It is urged by the learned Vakil for the appellant that Muhammad Yusuf was a trustee and that under Section 10 of the Limitation Act, no limitation ran against the plaintiff. The decision of this question depends upon the construction of the two instruments, dated the 25th of July 1886 and the 9th of August 1886, mentioned above. Assuming that the document first mentioned is a deed of trust there is nothing to show that the trust, which purported to be a trust for the payment of the debts of the author of the trust, had been communicated to the creditors. We may mention that the debt due to the two creditors Wazir Ali and Farhat Ali was not mentioned in the document of the 25th of July 1886. Therefore, under Section 78 (Clause c) of the Trusts Act, No: II of 1882, the trust was revocable at the pleasure of the author of the trust. He clearly revoked it so far at least as the indigo is concerned by the subsequent document of the 9th of August 1886 by which he hypothecated the indigo, which was then being manufactured, and which is the indigo referred to in the earlier document, for the debt due to Muhammad Yusuf alone, secured by the later document. Therefore, at the time when Muhammad Yusuf appropriated the proceeds of the sale of the indigo, he had ceased to hold the character of trustee even if it be assumed that he was appointed trustee under the document of the 25th of July 1886. In this view it is immaterial whether the debt alleged to be due to Muhammad Yusuf was in reality due to him, or whether the document of the 9th of August 1886 was a fictitious document. It is clear that Muhammad Yusuf misappropriated the proceeds of the sale of the indigo, and, therefore, the right of the heirs of Itikad Ali to recover those proceeds from, him accrued at the date of misappropriation and that light had become time-barred before the date of the attachment placed upon it in December 1893. Consequently at the date of the Auction sale, at which the plaintiff purchased, there was no subsisting debt due by Muhammad Yusuf to the estate of Itikad Ali and the plaintiff by right of his purchase has acquired nothing. The Court below was fully justified in dismissing his suit and we dismiss his appeal with costs including fees on the higher scale.


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