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O.M.P.L. Palaniappa Chettiar and anr. Vs. N.V.E.N.N. Nachiappa Chettiar Alias Annamalai Chettiar - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1941Mad841; (1941)2MLJ558
AppellantO.M.P.L. Palaniappa Chettiar and anr.
RespondentN.V.E.N.N. Nachiappa Chettiar Alias Annamalai Chettiar
Cases ReferredIn Krishtappa Chetty v. Lakshmi Ammal
Excerpt:
.....and the defendant well knew exactly the nature of the money and its source, and the purpose for which it was being deposited. consequently, if the matter rested there, the plaintiffs' claim would inevitably fail. it is convenient when considering this aspect of the case to bear in mind that the defendant well knew that the moneys which were deposited with him formed part of the cash provided by his own father and the father of the bride as her marriage presents or her stridhanam and that they were deposited with him in the name of the husband, the first plaintiff, for the purpose of earning interest and to be augmented for the benefit of the children of the bride and bridegroom and that whoever could demand payment from him, whether it was the maraldar(s. p-9, p-10, p-13 and p-14..........with the defendant and as she is a minor and the moneys deposited with the defendant were trust moneys he occupied a fiduciary position, and no question of limitation in regard to the claim for payment of the moneys together with interest in his hands arises.[after a discussion of the evidence his lordship arrived at the following findings of fact].5. i find as a fact, after considering all the oral and other evidence placed before me, the following : in may, 1919, at the time of the marriage between the first plaintiff and his wife, the bride's father s.a.a., provided a sum of money as her stridhanam property. out of this sum, rs. 2,045-2-0 was deposited in the name of the first plaintiff to the order of s. a. a., with the defendant and the defendant well knew exactly the.....
Judgment:

Gentle, J.

1. The parties to this suit belong to the Nattukottai Chetti community. The first plaintiff married the sister of the defendant and the second plaintiff is their minor daughter who is now represented by her husband as next friend, this marriage having taken place in 1939. The first plaintiff's wife died in 1939. Her father was S. A. A. Adaikalavan Chetti who died in the year 1926.

2. In the plaint it is alleged that two sums, Rs. 2,045-2-0 and Rs. 417-3-3, were deposited with the defendant at interest according to the Madras nadappu rate, on 22nd May, 1919 and 16th July, 1921 respectively. These amounts were credited to the first plaintiff in the defendant's books of account. According to the custom and usage prevailing in the community these deposits were repayable on demand, which, it is alleged, was made on 17th May, 1938. In the plaint claim is made for a sum of Rs. 2,462-5-3 as principal and Rs. 7,539-5-3, interest at the date of suit, totalling Rs. 10,001-10-6 to which sum the first plaintiff alleges he is solely entitled under the law and custom of the community.

3. In the written statement the defendant denies that he has had any transaction with the plaintiffs or he is in any way bound or liable to pay them on any account or there was any contract or agreement between them. He alleges that the account referred to in the plaint as O. M. P. L. stridhanam account relates to a transaction between himself and his natural father the late S. A. A. Adaikalavan Chetti (to whom it is hereafter convenient to refer as S. A. A.). The transaction between the defendant and his late father was by way of deposit by the latter of a certain sum for purposes known to S.A.A., and was payable to his order and subsequent to his death the account was closed and settled. It is further alleged that the suit is barred by limitation. It is of some significance to point out that neither the sum alleged to have been deposited by S. A. A., nor the purpose for which it was so deposited is mentioned in the written statement.

4. About a year after the written statement was filed, with the leave of this Court, the second plaintiff filed a supplemental pleading alleging that on the occasion of the marriage of the first plaintiff with the second plaintiff's mother presents were given to her amounting to about Rs. 8,500 and according to the custom of their community it was constituted a fund or asthi for the benefit of the children out of which Rs. 2,045-2-0 was entrusted to the defendant on 22nd May, 1919, for investment and accumulation in the name of the first plaintiff and to the order of the bride's father, S.A.A. Further on 16th July, 1921, an additional sum of Rs. 417-3-3 representing the share of kaluthuru of the first plaintiff's wife was also similarly entrusted to the defendant for the benefit of the children.

After the death of the second plaintiff's mother the second plaintiff alleges that she became solely entitled to the moneys deposited with the defendant and as she is a minor and the moneys deposited with the defendant were trust moneys he occupied a fiduciary position, and no question of limitation in regard to the claim for payment of the moneys together with interest in his hands arises.

[After a discussion of the evidence his Lordship arrived at the following findings of fact].

5. I find as a fact, after considering all the oral and other evidence placed before me, the following : In May, 1919, at the time of the marriage between the first plaintiff and his wife, the bride's father S.A.A., provided a sum of money as her stridhanam property. Out of this sum, Rs. 2,045-2-0 was deposited in the name of the first plaintiff to the order of S. A. A., with the defendant and the defendant well knew exactly the nature of the money and its source, and the purpose for which it was being deposited. On the death of S.A.A., in 1926 the first plaintiff was entitled to demand and receive payment, he could not utilise the money for his own purposes but he then became, if he was not already so, a trustee. Demand was made by the first plaintiff by letter Ex. P-12 and thereafter on frequent occasions oral demands were made, all of which met with non-compliance. I reject the story that the defendant has repaid this money either before or after the death of his father and I hold that it is still in his hands. I also find as a fact that an additional sum of Rs. 417 was deposited similarly and formed the wife's share in her mother's property. There has been no attempt on behalf of the defendant to distinguish between the first and the second deposits or as to the character or nature of them and the person entitled to receive them; the argument which has been addressed has been on the basis that both the sums were of a similar kind and nature. I also find as a fact that the custom which is pleaded in the supplemental pleading and upon which Vairavan Chetti gave evidence has been established.

6. The question which now arises is what follows from the facts which 1 have found. The defendant in his written statement pleads that the suit is barred by reason of the provisions of the statute of limitation. The money in the hands of the defendant according to the evidence was payable on demand. Article 60 of the limitation Act provides a period of three years from the date of demand in respect of moneys for which payment is to be demanded. The evidence of the first plaintiff is that he made oral demands and it is conceded that an oral demand is sufficient. On the date on which Ex. P-12 was written S. A. A., had died and the first plaintiff was the person entitled to demand payment. The limitation period expired from the date of the above letter long before the institution of the suit. Consequently, if the matter rested there, the plaintiffs' claim would inevitably fail.

7. It now becomes material to consider the plea put forward in the supplemental pleading that the moneys in the hands of the defendants are trust funds and consequently no period of limitation applies in respect of a claim for payment of these moneys. Section 10 of the Limitation Act provides, so far as it is material, as follows:

Notwithstanding anything hereinbefore contained, no suit against a person in whom property has become vested in trust for any specific purpose....shall be barred by any length of time.

8. In order that plaintiffs can avail themselves of the provisions of this section it must be shown that the moneys deposited with the defendant vested in him for a specific purpose. It is convenient when considering this aspect of the case to bear in mind that the defendant well knew that the moneys which were deposited with him formed part of the cash provided by his own father and the father of the bride as her marriage presents or her stridhanam and that they were deposited with him in the name of the husband, the first plaintiff, for the purpose of earning interest and to be augmented for the benefit of the children of the bride and bridegroom and that whoever could demand payment from him, whether it was the maraldar(S.A.A., in his lifetime) or the husband on the death of the maraldar, the fund and its accretions were not personal either to the maraldar or the husband but were the children's property. In other words the maraldar and or the husband were trustees of this fund of which the children were the cestui que trusts.

9. Reference has been made to a number of English authorities in which the question of trusteeship has been considered. In Spickernell v. Hotham (1854) 69 E.R. 285 the relevant facts were that in 1825 G.V. Drury borrowed from the executors of a will, a fund which was bequeathed to them in trust for himself for life and then for other persons. Sir W. Page Wood, V.C. said in the course of his judgment at page 289:

I think that Drury in this case must be taken to have received these moneys into his hands as trust moneys.

10. In that case the recipient knew when he obtained the loan that the moneys were trust moneys. In Dixon In re Heynes v. Dixon (1900) 2 Ch. 561 the trustees of a marriage settlement with the wife's consent lent trust funds in cash, to the husband who took with full notice that it was trust money and liable to investment on interest bearing securities. It was held that he was in the position of an express trustee. In the course of his judgment Webster, M.R., at page 574 said:

I think that the position of the husband, in taking the money and giving such a bond as this, brings him within the class of those persons who are regarded as bound to a great extent by the same rules as bind express trustees.

11. Collins, L.J., who delivered a concurring judgment, at page 583 referred to the case of Spickernell v. Hotham (1854) 69 E.R. 285 and observed that that case was undistinguishable from the matter then before him. The respondent was aware and knew at the time he received the moneys that they were trust funds. In Coxwell v. Franklinski (1864) 11 L.T. 153 the trustees of a marriage settlement advanced a portion of the trust moneys to the husband. The Vice Chancellor at page 154 observed:

It was a trust fund, known, of course, by the husband to be a trust fund, received by him as part of the trust fund, in his hands as part of the trust money, and, until it was repaid, retaining the character of trust money.

12. In Parker v. Complyz 55 Sol. Journal 76, the executors were not in terms appointed trustees but such duties were imposed upon them, and it was held that the executors although not trustees under the provisions of the will may become express trustees by reason of entries in their accounts earmarking certain funds as held for or on account of the persons interested. Warrington, J., as he then was, in the course of his judgment said that the executors put in their books of account explanations indicating that these sums of money were held for individual persons interested under the will to which he referred; in some cases they used the words 'in trust' and in others 'for the account of'; and, in the learned Judge's view it made no difference whichever expression was used. The important characteristic of these entries was that the sums of money set apart from the rest were by these entries earmarked and held by the persons who did hold them for or on account of the persons interested. It was equivalent to saying that they were trustees for the other persons. In the present case the Chittas Exs. P-9, P-10, P-13 and P-14 which I am satisfied as I have already said were given by the defendant to his father refer to the investment being stridhanam property. According to the written statement the account was in the name of the first plaintiff and the defendant in his evidence admitted that the account was in the name of the first plaintiff and to the order of the defendant's father. This account is similar to the account referred to in the last authority to which I have referred. Consideration of the provisions of Section 10 of the Limitation Act came before a Bench, of this Court in Krishtappa Chetty v. Lakshmi Ammal : AIR1923Mad578 in which it was held by Sir Walter Schwabe, C.J., and Wallace, J., that the phrase in Section 10 'trust for a specific purpose' is merely a more expanded mode of expressing the same idea as that conveyed by the expression 'express trust' in English law; and in so holding the Court approved of the decision in Bhurabhai v. Bai Ruxmani I.L.R.(1908) 32 Bom. 394. the learned Chief Justice observed as follows:

I do not think that the word 'vested' in Section 10 means anything more than properly having control of the property.

13. The defendant had control of the fund which was placed with him for the specific purpose of interest being earned and the total fund being increased or augmented for the benefit of the children of the first plaintiff and his wife. According to the English authorities to which I have referred, having accepted both the deposits--Rs. 2,045 and Rs. 417--with knowledge that they were trust moneys he became an express trustee. In Krishtappa Chetty v. Lakshmi Ammal : AIR1923Mad578 it was laid down that the phrase in Section 10 of the Limitation Act 'trust for a specific purpose' is merely a more expanded mode of constituting express trust in English law.

14. Following the authorities and by reason of the facts to which I have referred I hold that the defendant was and remains still a trustee of this money, that it vested in him for a specific purpose and that the provisions of Section 10 of the Limitation Act apply. Consequently no period of limitation will run to defeat the claim which has been put forward by the second plaintiff to recover moneys in the defendant's hands and I hold that she is entitled to succeed. There is no distinction as I have already pointed out between the two sums which were deposited with the defendant.

15. The first plaintiff admitted in his evidence that he was not entitled to the benefit of this fund and it was the second plaintiff who was the rightful person to receive it. The claim which he put forward that he alone was entitled to receive it was abandoned. There will be a decree in favour of the second plaintiff for the amount of the claim together with interest which is set out in the plaint. There has been no dispute that the amount claimed for interest upto the date of suit is the correct sum. The total amount will bear interest from the date of suit until today at six per cent. per annum. Hereafter, the decretal amount will carry interest at the same rate.

16. The question of costs is one which requires a little attention. The original claim for payment to the first plaintiff alone has been, as I have mentioned, abandoned, but the second plaintiff has recovered the total amount for which the suit was instituted. I hold that she is entitled to her costs to be ascertained on the decretal sum. I make no special order, but if the inclusion of the first plaintiff has increased the amount of costs of the suit I direct that they will not be recoverable from the defendant. The amount of costs will bear interest at the rate of six per cent. per annum from the date of taxation.


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