1. This is an appeal preferred against the decree and Judgment of the learned Subordinate Judge of Tanjore in O. S. No. 15 of 1947.
2. The facts are:-- The plaintiff and defendants 1 to 3 are brothers. Defendants 4 to 11 aretheir sons. Defendants 12 to 17 are alienees. Thisfamily of four brothers was a leading Mirasdar family of Kunniyur. They own lands in several villages.The plaintiff was residing at Kunniyur andKumbakonam. The first defendant wasmanaging the lands at Perugavazhanthan.The second defendant was managing the landsin Kunniyur, Periakudi and Tiruventhurai. Thethird defendant was managing the lands at Agaram,Palayangudi, Manakud and Vikrapandiam. Theyused to send the net realisations to Kunniyur andinvest them in banks at Kumbakonam and they visedto lend out moneys also.
This family was also assessed to income-tax. These brothers were living amicably till 1940 and improving the patrimony left by their father and came to own 112 velis of land. In November 1940 on account of differences between the womenfolk, they agreed to become divided and prepared four lists. But as they could not proceed further as to how the allotment was to be made and they had also certain differences, they gave a muchalika to their sister's husband Sri P. S. Sivarama Ayyar, who was then aged about 60 and who was the President of the Bar Association, Negapattinam till 1930.
3. This muchalika Ex. B 102 runs as follows:--
'Whereas there is-no unity amongst us and we have decided to get a division effected amongst us, whereas taking into consideration the disunity amongst us, we think that it is impossible to discuss and settle amicably all the matters relating to us without an arbitrator, and whereas we have confidence in you, who are related in equal degree to all of us, that you would act as the arbitrator and settle all the matters amongst us, we have executed this muchalika, so that you will act as the sole arbitrator in the matter, consider all the matters relating to us and settle the same, and effect a division of all the common properties of our family, such as immovable, movable properties and the money-lending transactions, etc. We shall abide by the award which may be given by you.'
4. This Sivarama Ayyar kept a diary of his work as an arbitrator and this is Ex. B-60 (page 129 of the printed papers). The following two entries dated 11-12-1950 and 12-12-1950 are relevant;
'11-12-1950: Arbitration muchalika is executed by the parties. They are advised to discuss and try to agree to a division of the immovables.
12-12-1950: Parties have divided the immovables into four lots -- A, B, C and D -- and agree that the first choice may be given to Kalyanasun-daram Ayyar, the second to Rajagopala Ayyar and third to Panchapakesa Ayyar and that the list left over was t.o be taken by Mahadeva Ayyar. The A-list is taken by Kalyanasundaram Ayyar, the B-list by Rajagopala Ayyar and the D-list by Panchapakesa Ayyar. Mahadeva Ayyar therefore gets the C-list. Parties agree that possession of C and D lists may be taken at once arid at their request, copies of C and D lists are prepared, signed by me and handed over with a note that possession may be taken by the two parties concerned at once. Regarding the A and B lists, it is stated that the actual extent of the punjas, etc., has to be ascertained. This will be done during the Christmas holidays.'
5. Out of these lists Ex. B-162 (pages 134 to 137) is the C-list of properties that had fallen to the share of the second defendant. Ex. B-163 (not printed) is the list of properties that had fallen to the share of the first defendant and Ex. A-38 (pages 154 to 156) is the list of properties that had fallen to the share of the plaintiff. On each of these lists which contain merely an enumeration of the items of properties with a brief description and extents, there is an endorsement by Sivarama Ayyar who handed over the lists to each of them, e.g., in Ex. A-38 the endorsement runs as follows:
'The aforesaid properties inclusive of the deficiency for excess thereof, have been allotted to the share of Kalyanasundaram Ayyar. Since out of the properties vested in me in my capacity as the arbitrator at the instance of Kalyanasundaram Ayyar who is the managing member of the family, the A schedule shown herein has been previously allotted to your share, I have put you in possession of the aforesaid lands, inclusive of the kar crops, cultivation, and all the crops inclusive of samba crops and please treat this as the voucher for the same.'
6. This arbitration did not proceed further smoothly in regard to ancillary disputes which arose because the arbitrator, apparently on account his close relationship was unable to exercise, as his diary shows, any strong discipline and after O. P. No. 70 of 1941 was filed in the District Court of East Tan-fore for extension of time so that the arbitrator could give his award, O. P. 49 of 1942 was filed by the plaintiff in the District. Court of Nagapattinam for revocation of the submission to arbitration.
The learned District Judge of East Tanjore passed an order which was the subject-matter of A. A. O. No. 660 of 1943 (Mad) (A) in this Court and disposed of by Sir Lionel Leach, C. J. and Shaha-buddin, J. The relevant portion of the Judgment of the High Court (page 252 of the printed papers) shows the order made by the learned District Judge and the circumstances under which it was set aside by the High Court:
'The District Judge realised that it was not possible for the parties to proceed with the arbitration and relegated them to a suit. In the concluding paragraph of his order the District Judge said:--
'Short of the plaintiff showing valid grounds for re-opening any such matters in the proposed suits, I think it right that what has so far been secured to the parties with such trouble and time by the learned arbitrator should not be thrown away. I declare the arbitration as cancelled subject to the conditions that, what so far has been done by the arbitrator in lime, is affirmed subject to liberty as aforesaid.'
It is this part of the order which is objected to. There was no interim award and the District Judge had no power to give the directions which he gave in the concluding paragraph of his order. Whether the parties are bound by anything which has transpired in the course of the infructuous arbitration proceedings will have to be decided in the suit. The District Judge's directions are accordingly altered to this extent.'
7. There is no dispute that these four brothers have been in enjoyment and possession of the properties that had fallen to them in the division. and extensively alienating the said properties and acquiring properties and spending large sums for improving the properties fallen to their shares.
8. It is in these circumstances that the plain-tiff has filed this suit for partition and separate possession on the ground that what took place in 1940 was only a rough and tentative arrangement and, that a final partition has got to be made. It is seated that no actual partifion took place and that the lists that were given, being unregistered, are inadmissible in evidence and the partition also cannot be proved aliundc by the conduct of parties, offending as it would do Sections 17 and 49 of the Indian Registration Act and Section 91 of the Indian Evidence Act.
In regard to movables, it is stated that some movables were taken by each of the brothers tentatively and that in regard to outstandings Rs. 1,43,584 an account has to be taken and the collections made by the first defendant and the second defendant have to be taken into consideration. But the real grievance of this plaintiff seems to be, as would be presently shown, that the second defendant purchased items 67 to 96 mentioned in schedule A, part I of the plaint and that part of the consideration therefor was the discharge of a debt duo to tho family, the balance having been paid from out of the family funds kept either by the second defendant or his wife, and that the second defendant purchased items 97 to 118 for a sum of Rs. 5,000 and that the second defendant being in management of the properties along with the first defendant, he Occupied a fiduciary position and had abused the trust by attempting to enrich himself, & that therefore these properties must be made available for distribution amongst the brothers.
In regard to the first defendant, the grievance of the plaintiff is that the first defendant had purchased items 205 to 231 mentioned in A schedule, part I, of the plaint with family funds remaining in his hands, that the family had a mortgage right and on the foot of it a suit O. S. 25 of 1940 was laid in the Sub Court, Tanjore, and lest the mortgagor should be unreasonable an assignment of the decree-obtained against the mortgagors in O. S. 180 of 1934 on the file of the District Munsif's Court, Mannargudi, by one Alamelu Ammal, was taken in the name of one Vaidyanathaswami and the properties were purchased in his name benami for the family and with family funds, that the first defendant made Vaidyanathaswami to enter satisfaction of the decree but with a view to cause loss to the other co-sharers he made it appear that the Court sale had been set aside and the decree discharged by himself (first defendant) alone and that the properties thus Fraudulently got in the first defendant's name are liable to be partitioned.
9. The contentions of the defendants are reflected in the following issues and additional issues framed in the suit:
1. Whether the division of immovable properties effected between plaintiff and defendants 1 to 3 on 12-12-1940 is tentative and incomplete as alleged by the plaintiff or whether it is final and complete as contended by defendants 1 and 2?
2. Whether items 205 to 231 described in plaint A schedule, part I, were purchased by the 1st defendant out of joint family, funds for the benefit of the joint family and as such, they are joint family properties available for partition?
3. Whether items 84 and 88 of B schedule belonged to the joint family?
4. Whether items 67 to 118 of A schedule, part V are joint family properties, available for partition as alleged by plaintiff?
5. Whether the sale of items 2 and 3 in plaint A schedule, part VII by 3rd defendant in favour of the 12th defendant is binding on plaintiff and defendants 1 and 2?
6. Whether plaintiff is estopped from questioning that alienation?
7. Whether the alienation of items 1 to 11 in plaint A schedule, part XIV by defendants 2 and 9 in favour of the 15th defendant is binding on plaintiff and defendants 1 and 3?
8. Whether alienation of items 220 and 221 in A schedule, part I by the 1st defendant in favour of the 17th defendant is binding on plaintiff and defendants 2 and 3?
9. Whether items 90 and 99 mentioned in B schedule are true and whether 1st defendant is accountable for the same?
10. Whether 1st defendant is not liable for item 91 of B schedule?
11. Whether the agreement set up by the 2nd defendant, in respect of Rs. 15,000 spent for his daughter's marriage is true and binding on plaintiff and defendants 1 and 3?
12. Whether Rs. 6,000 received by the 2nd de-fendant for his varadakshinai was kept in trust with the family and whether the 2nd defendant is entitled to get back the same with interest?
13. Whether the plaintiff collected outstandings to the extent of Rs. 6,000 as contended by the 3rd defendant?
14. Whether the plaintiff had family cash to the extent of Rs. 15,000 in his hands as contended by the 3rd defendant?
15. Whether defendants 1 and 2 were managing the family cash and outstandings after disruption of the joint family in December 1940 as alleged by the plaintiff and if so, to what extent each of them is liable?
16. Whether the plaintiff was guilty of fraud or negligence in the course of his management and whether he is liable to account for such amounts and if so, to what extent?
17. Whether defendants 1 to 3 have made anyimprovements and whether they are entitled to any equity?
18. Whether the alienees are entitled to any equity?
19. What are the immovable properties and outstandings available for partition?
20. Whether the 3rd defendant is entitled to claim any compensation in respect of the movables already partitioned?
21. Whether the suit is properly valued and whether proper court-fee is paid?
22. To what relief is plaintiff entitled?
23. Who was in management of the family properties from date of Krishna Ayyar's death till the date of the disruption in December 1940?
24. Whether plaintiff and defendants 1 and 2collected any amount as alleged by the 3rd defendant?
25. If so, what did they do with those assets, which were traced to their possession?
10. The learned Subordinate Judge came to the conclusion that the suit claiming partition of the immovable properties which had been divided be- tween the brothers on 12-12-1940 should stand dis-missed; that so far as properties which have been purchased by defendants 1 and 2 in their names and the properties alienated by them and by their brothers would not be available for partition as they were the separate properties of those persons, that so far as other properties and outstandings arc concerned, there will be a decree for partition as per findings on issues 9 and 19. The finding on issue 9 was:
'The first defendant as D.W. 1 says that having purchased the property he has deposited into Court the share due to his three brothers after adjusting the amount due to himself. The amount, according to him, would be Rs. 12,000 and odd. I hold that the sale-deed in his favour was taken for his own benefit and as he has deposited the balance into Court, the other three brothers would be entitled to have their share of the sum. So far as item 99 which refers to the amount from the ryots are concerned, there is no evidence worth the name that the first defendant has collected the sum and is liable therefor.'
The finding on issue 19 was:
'Such of the properties that have not been the subject-matter of the partition of 12-12-1940 and the outstandings collected by the Receiver and monies in Court deposit and admitted outstandings would be available for partition subject to findings regarding properties purchased by defendants 1 and 2 and dealt with by them.'
The first defendant was made liable for Rs. 7,000 as per finding on issue 10 which was as follows:
''Ex. B-177 is a copy of the pronote executed by the defendant 1. His allegation is that as the daughter of the plaintiff was married previously, the parties had agreed that this sum should be given to him for the purpose of his daughter's marriage. He would have it that the pronote was not intended as a loan at all and so was even allowed to be time-barred. The plaintiff as P.W. 1 refutes this state-ment as wholly false. The pronote comes into existence after the partition of 12-12-1940. It is dated 9th May 1942. From the notice that has passed between the parties and between them and Sivarama Ayyar also it is difficult to believe that the parties had agreed to leave with him such a large sum of money as Rs. 7,000. He must certainly be held liable for that amount. This issue is answered against the defendant 1.'
The claim of the second defendant for varadakshi-nai was negatived as per finding on issue 12. The parties were given liberty to apply for appointment of a commissioner for division of the properties including outstanding as per findings in the Judgment. Each party was made to bear his own costs.
(10-a) Defendants 3 and 11 appeal. In this Court there is a quadrangular fight. The appellants want a re-opening of the partition and allotment of the acquisitions of defendants 1 and 2 amongst the four Brothers. The appellants do not seriously press before us about the outstandings and in fact nothing was placed before us to disturb the findings of the learned Subordinate Judge on that matter. The plaintiff now wants an affirmation of the partition of 1940 and supports the third defendant in regard to the acquisitions of defendants 1 and 2 being made available for division amongst the four brothers. The plaintiff also does not press any other point before us.
In regard to defendants 1 and 2, both of them contend that the acquisitions made by them are their own self-acquired properties and that the transactions do not attract the provisions of Section 90 of the Indian Trusts Act. But at the same time each of them is agreeable to the acquisition of the other being made available for partition amongst the four brothers and so long as his own acquisition is not disturbed he has no objection to the plaintiff's argument about the other's being either allowed or rejected.
11. Therefore the two points which fall for determination before us are (1) The scope and extent of the use to which the lists can be put to bearing in mind (a) how far they are hit by Sections 17 and 49 of the Indian Registration Act and Section 91 of the Indian Evidence Act and (b) by the revocation of the arbitration reference Sivarama Jyer in the High Court; (2) (i) whether the acquisitions made by the first defendant and (ii) whether the acquisitions made by the second defendant should be made available for partition amongst the brothers by reason of Section 50 of the Indian Trusts Act.
12. Point I: Section 17 of the Indian Registration Act dealing with a document of which registration is compulsory enumerates among them non-testamentary instruments purporting to create, declare any right, title or interest in immovable property of over the value of Rs, 100 and upwards. It is now well settled that a partition deed is such non-testamentary instrument creating, declaring right, title or interest in immovable property, provided it is over the statutory value. Section 49 states that no document required by Section 17 to be registered shall affect any immovable property comprised therein unless it has been registered.
The section contains a proviso that an unregistered document affecting immovable property and required by the Registration Act or the Transfer of Property Act to be registered may be received as evidence of a contract in a suit for specific performance under Ch. II of the Specific Relief Act or as evidence of part performance of a contract for- the purposes of Section 53A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by registered instrument.
Section 91 of the Indian Evidence Act states that when the terms of a contract or of a grant or any other disposition of property have been reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property or of such matter, except the document itself or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions of the Indian Evidence Act.
13. On account of the fact that though the Registration Act is a very useful and beneficent enactment, as it is extremely stringent, the Act has got to be strictly construed. To cite Sir John Edge in Ji-wan Ali Reg v. Basa Mal, ILR 9 All 108 (FB) (B): 'Now what construction sliouid be placed on these prohibitive and highly penal sections (viz., Section 17 as read with ,S. 49) which imposes such serious disqualifications for non-observance of registration? The only proper answer, to my mind, is that we must see that the strictest construction be placed on them, and that the document objected to comes within the four corners of these provisions'.
14. The Indian Registration Act unlike the Transfer of Property Act strikes, only at documents and not at transactions. As the Privy Council has pointed in M. E. Moolla & Sons Ltd. v. Official Assignee, Rangoon , 'the provisions of the Registration Act by themselves would not operate to render invalid a mere oral sale.' In the same way the Indian Registration Act does not require that a transaction affecting immovable properties should be carried out by a registered instrument.
All that it enacts is that where document isemployed to effectuate any of the transactions specified in Section 17 of the Act, such document must beregistered, notwithstanding that the transaction isone which the law does not require to be put intowriting. Imperial Bank of India v. Bengal NationalBank Ltd. : AIR1931Cal223 ,Rankin, C. J. (as he then was) (reversed on anotherpoint in Imperial Bank of India v. Bengal NationalBank , Bank of Upper India Ltd. v. Fanny Skinner : AIR1929All161 , affirmed in Fanny Skinner v. Bank of Upper India .
15. The principle is illustrated in numerous decisions relating to partitions, family arrangements and equitable mortgages by deposit of title deeds.
16. A partition of immovable properties between coparceners or co-owners is not required to be in writing at all. But it is a mixure of surrender and conveyance of rights in property and is a transfer of property within the meaning of the Transfer of Property Act. It partly extinguishes a right to the Joint property and partly creates a right to it. Under Section 18 of the Acts of 1866 and 1871, an instrument of partition was specifically mentioned as an optionally registrablo instrument. There was a difference of opinion as between the High Courts as to whether it was also to be regarded as a compulsorily registrable document and the matter was set at rest by the reference to instruments of partition being omitted in the Act of 1887 and the present Registration Act of 1908.
Consequently, an instrument effecting a partition is compulsorily registrable under Cl. (b) of Section 17. (S. 9, T. P. Act, Rewan Persad v. Mt. Radha Beeby, 4 Moo Ind App 13 (PC) (H); Kishanlal v. Lachmichand : AIR1937All456 Satyakumar v. Satyakirpal, 10 Cal LJ 503 (J); Katama Nachiar v. Rajah of Shivagunga, 9 Moo Ind App 539 (PC) (K); Alamelu Ammal v. Balu Ammal, ILR 43 Mad 849: AIR 1915 Mad 103 (L), Mayne on Hindu Law and Usage, eleventh edi-tion p. 544).
17. If the parties elect to reduce the transaction of partition into writing with the intention that the document itself should constitute the sole repository and this only appropriate evidence of the partition and to serve, so to speak, as a document of title, the writing must be regarded as the formal and operative deed of pariition and as such requiring registration under Section 17, Cl. (b), provided the property affected is of the value of over Rs. 100. It is not the less a pariition deed because its terms and contents were previously discussed and decided upon and then alone put into writings But if the document is drawn up only with the intention of reciting an already completed oral partition and is merely in the minutes or incidental recital of a fait-accompli it is not compulsorily registrable.
18. Thus documents so drawn up may fall under two heads viz., (a) a document may be drawn up with the intention of reciting an already com-pleted oral partition or (b) with that of superseding the oral bargain and formally reducing the terms of the partition to the form of a document. In the former case when the document itself does not effect any partition but which maintains a partition already effected, or which simply acknowledges, or makes an admission, as to a prior partition, or which merely gives a right to have a document of partition executed it is not an instrument of partition which is compulsorily registrable.
But when the document is not intended by the parties to be merely the minutes or incidental reci-tal of a fait accompli, i.e., of a partition that had already taken place, perhaps by oral, arrangement, and was complete when the document was executed but forms an integral and essential part of the partition transaction i.e., of the process of dividing the property and was intended to be the only evidence of and to be the formal instrument of partition superseding and embodying the oral bargain and was intended to serve as the sole repository of the arrangement of partition arrived at by them; and to be the only evidence, the document would undoubtedly require registration. The question to be determined in effect is, does the document constitute a bargain between the parties i.e., is it a deed of partition effected in pracsenti or is it merely the record of an already completed transaction, i.e., partition or to put it shortly is it a speaking partition instrument as aptly observed in the course of the arguments by Govinda Menon J.?
19. In construing such documents for the pur-pose of determining whether or not there is a creation or declaration of a right or title in the sense contemplated by Section 17 of the Act, undue emphasis should not be laid on isolated words and phrases in the document. The Court must read the document as a whole and take a broad view of the circumstances in which and the purpose for which it was written.
Looking at tho substance of the transaction the Court must arrive at the conclusion one way or the other whether the parties in fact intended the document to be an instrument of partition and the sole evidence of partition and as actually effecting a division of the property. Subba Rao v. Maha-lakshmamma, ILR 54 Mad 27 : AIR 1930 Mad 883 (M) (Curgenven J.); Bhan-gaji v. Pandurang, 76 Ind Cas 158 : AIR 1924 Nag 395 (N); Rudragowda v. Basangouda, 40 Bom LR 202 : AIR1938Bom257 (O).
20. It is in the light of these principles that partition lists should be judged and the standard text books on the Indian Registration Act have laid down the following considerations relating thereto.
'Where lists are drawn up showing the properties that have 'fallen to the shares of the dividing co-owners, and have been signed by the parties, the question whether such lists require registration will depend upon the further question whether, such lists have, on the facts of the particular case, been intended by the parties to be the sole and formal record of the partition. If they are so in- tended then they would be compulsorily registrable as instruments of partition.
If they are, on the other hand, intended to be merely a memo of a partition that had already taken place or of the way in which a partition is intended to be effected later on by a formal document, they are not compulsorily rcgislrable. The degree of formality of the document is a factor that may be taken into consideration in deciding the question' (Chitaley and Annaji Rao's Indian Registration Act (2nd Edition) (AIR Commentaries) pages 228-229).
21. Whatever may be the form of the document, if it is to all intents and purposes and in substance a deed of partition it would require registration. Thus, documents though drawn up as familyarrangements, awards, partition-lists, share-lists, in-ventories, release, receipts, entries in account booksand so forth, have on numerous occasions been heldto be instruments of partition. But the question isundoubtedly one of construction in each individualcase; see Rustomji's Law of Registration (3rd Edition) page 75.
22. A mere list of properties allotted at a partition is not an instrument of partition and does notrequire registration; Mulla's Registration Act (5thEdition) page 55.
23. These principles are deducible from the following decisions. In Pothi Naickcn v. Nagama Naicker, 30 Mad LT 62: AIR 1917 Mad 77 (P), the document in question read as follows :
'As we have, in the presence of the undermentioned panchayatdars, divided, into equal moieties, the cash, movables, and immovables, Court decrees, etc., of which we are now possessed, valued at Rs. 80,000 our connection shall hereafter be only by relationship, but we shall have no monetary con-nection in respect of these properties.' It was held that the document in question did notcreate much difficulty on the face of it and it appeared more clearly to be a document effectingpartition than otherwise.
In Gopayya v. Kristnayya, 16 Mad LW 784: AIR 1923 Mad 160 (Q), it was held by Krishnan and Venkatasubba Rao, JJ. that if the parties had treated the 'share list' as final, it would be inadmissible in evidence without registration and that an oral agreement as to partition could be proved, and if proved, the written deed could be treated as the minutes of agreement between the. parties and not as a completed partition deed, and, even though unregistered, could, under these circumstances, be ad-mitted in evidence to prove the terms agreed in it.
In Gnanamuthu Nadan v. Veilukaoda Nadathi, 19 Mad LW 494: AIR 1924 Mad 542 (R), Odgers and Hughes, JJ., held that a partition list containing a list of the properties which fell to each sharer on a partition did not require registration even though signed by all the co-sharers and attested, when it contained no words which could be construed as creating a partition of status.
In this decision 16 Mad LW 784: AIR 1923Mad 160 (Q), was followed. In Shrinivasa-charlu v. Perindevamma, 30 MLJ 402: AIR 1917Mad 668 (S), the deed after detailing the distribution of property among the sharers concluded'In the presence of the witnesses named hereunderwe divided'. The Full Bench held that this re-quired registration but merely directed it and theevidence relating thereto be expunged from the re-cord.
In Veerappan v. Mylai Udayan : AIR1925Mad1097 , after an award direct-ing a partition was passed by the Panchayatdars a list was drawn up which contained the shares given to the different members and was signed by them and attested by witnesses. Jackson, J, held that the document was a deed of partition declaring an interest in the immovable property mentioned therein and if unregistered was inadmissible in evidence respecting any transaction affecting such property. Jackson, J. however thought that at the most it will be evidence of an intention to divide and receivable in evidence as proof of such intention.
In Saraswatamma v. Paddayya, ILR 46 Mad 349: AIR 1923 Mad 297 (U), the document was described as a 'list of shares of division'. Lands were divided in it, and then the residential house and it contained the statement 'both of us have agreed to the sa'id shares and effect settlement 'without any, dispute whatever'. Venkatasubba Rao, J. was of the opinion that this document afforded dear evidence of conduct from which an intention to divide on the part of the executants was deductible, but that, all the co-parceners not being parties to the document, it did not require registration. With this opinion Spencer, J. agreed.
In Bapayya v. Ramakrishnayya : AIR1938Mad568 , Venkatasubba Rao and Abdur Rahman, JJ. held that where unregistered partition lists are sought to be put in for the purposes of proving a partition between the parties, the question which the Court has to decide is whether those documents constituted the bargain between the parties or if they were merely therecord of an already completed transaction and that the question in such a case is whether there to sufficient dissociation of the transaction from the documents and that the matter will not depend on the interval of time, though, where the interval is long, the dissociation may be more readily inferred.
In Krishnappa Chettiar v. Kasiviswanathan : (1945)1MLJ222 , King and Bell, JJ., held that lists were mere memoranda and not intended to be title deeds and there-fore did not require registration and could be received in evidence. The relevant decisions of the other High Courts are: Kshetra Mohan Pal v. Tufani Talukdar : AIR1933Cal474 Uddab Nath v. Gokul Chandra : AIR1936Cal700 Abdul Haq v. Mohamed Hashim : AIR1946All200 Muhamud v. Muhammad Hamid, AIR 1917 Lah 122 (Z1); Nilkanth v. Hanmant, ILR 44 Bom 881: AIR 1920 Bom 86 (Z2); Ramlal v. Mt. Sita Bai, ILR 14 Lah 635: AIR 1933 Lah 648 (Z3); Subramanian v. Lutchman, ILR 50 Cal 338: AIR 1923 PC 50 (Z4); Bageshwari v. Jagarnath Singh Narayan Sakharam v. Co-operative Central Bank Malkapur, ILR (1938) Nag 604: AIR 1938 Nag 434 (Z6).
24. Partition deeds though unregistered, having regard to the combined operation of Section 49 of the Registration Act and Section 91 of the Evidence Act and though inadmissible to prove the terms of the parti-tion can however be admitted in evidence for the collateral purposes and secondary evidence given to that extent viz :
(i) To prove a change in status that is to say,a division or disruption of status among the partiesto the document. This is now the well setded fewin all the High Courts of India. To cite recentdecisions, Ramayya v. Achamma : AIR1944Mad550 GopinathSarma v. Hangsanath AIR 1950 Ass 129 (Z8);Motilal Fulchand v. Gita Rama : AIR1952Bom217 Girija v. Girdhari : AIR1951Pat277 Munshi Ram v. Thakar Dass,AIR 1951 Pepsu 87 (211); Ram Laxmi v. Bank ofBaroda Ltd. : AIR1953Bom50 Nagamma v. Madala : AIR1954Mad165 Karshan v. Harkha,AIR 1953 Sau 56 (214); Abraham Nadar v. RasuNadar (Chief Justice and Rajagopala Avyangar J.Appeal Nos. 581 and 789 of 1948 etc. D/- 10-2-1955 (Mad) (Z 15).
(ii) Then there is the well-known decision of Varada Pillai v. Jeevarathnammal, ILR 43 Mad. 244: AIR 1919 PC 44 (Z 16), though it did not relate to a partition deed, holding that an unregistered deed of gift may be looked at to show the nature and character of the possession thenceforth held by the donee under it. Applying the principle of these decisions and having regard to the well established rule that the fact of partition may be proved by oral evidence, although the deed embodying the terms of the partition cannot be proved for want of registration, it is' now well settled law that a party who claims to be the sole owner in exclusive possession of the property in dispute, basing his title on an un- registered deed of partition, may be allowed to prove aliunde that the, property in question has ceased to be joint and that he is the sole owner thereof.
In other words; for the purpose of proving that the contestant has prescribed title by adverse possession and limitation, the starting point may be proved from his unregistered partition deed. Appanna v. Venkataswami ILR 47 Mad 203 : AIR 1924 ad 292 (Z 17); Venkatakishnayya v. Rangayya : AIR1928Mad865 Narayanaswami v. Thangavelu, 82 Ind Cas 67: AIR 1924 Mad 800 (Z 19). Sayyapureddi Abbayya v. Sayam Appanna, 123 Ind Cas 195 (Z 20).
(iii) A compulsorily registrable but unregistered document may be used to prove an admission contained therein; Sailesh Chandra v. Bireswar Chatter-jee : AIR1930Cal559 . (Mitter J).
(iv) A compulsorily registrable but unregistered document is admissible to refresh the memory of a witness and not for the purpose of contradicting him. (See Indian Evidence Act, Sections 159 to 161).
25. To sum up it is well settled in a long series of decisions which have since received statutory recognition by the Amending Act of 1929 (vide the concluding words of the new proviso to Section 49 of the Registration Act) that a compulsorily registrable but an unregistered document is admissible in evidence for a collateral purpose that is to say, for any purpose other than that of creating, declaring, assign-ing, limiting or extinguishing a right to immovable property.
The expression 'collateral purpose' is no doubta very vague one and the Court must decide ineach case whether the purpose for which it is soughtto use the unregistered document is really a collateral one or is to establish directly title to the immovable property sought to be conveyed by thedocument. But by the simple device of calling it a'collateral purpose' a party cannot use the unregistered document in any legal proceedings to bringabout indirectly the effect which it would have hadif registered.
To quote Sir George Lowndes in James R. R. Skin-ner v. Robert Hercules Skinner ILR 51 All 771: AIR 1929 PC 269 (Z 22) the collateral purpose to which the document is put should be nothing else than an evasion of the statute and render almost nugatory the hitherto well-established rule relating to the limited uses to which an unregistered partition deed can be put to.
26. These principles are elaborately set out the following recent well known decisions cited before us; In Muruga Mudaliar v. Subba Reddiar : AIR1951Mad12 a Bench of five Judges held:
''Per Rajammannar, C. J.: Section 49(C) of the Registration Act prohibits the use of an unregistered instrument in any legal proceeding in which such a document is sought to be relied on in support of a claim to enforce or maintain any right, title or inte- rest to or in immovable property. So long as the document is, not sought to be relied on as evidence of any right, title or interest to or in immovable property, there is nothing to prevent the document being received in evidence.....
Per Satyanarayana Rao J.: The prohibition against admissibility enacted by Section 49 of the Registration Act is not an absolute one, but the section renders the unregistered document inadmissible only for the two limited purposes specified in clauses (a) and (c) and leaves it available to be used in evidence for other purposes'.
In : AIR1951Pat277 it was held:
'Although an unregistered partition deed and sale deeds are inadmissible in evidence to prove the terms of the partition or title to the Immovable property transferred thereunder they are admissible for a collateral purpose to determine the nature and character of possession, and other materials on the record can also be taken into consideration for the purpose of coming to a decision that the possession was referable to a division of properties between the parties concerned.
The word 'partition' involves two concepts, (1) change of status, (2) division of property. Severance of status does not require to be proved by any documentary evidence at all, nor is it necessary for the purpose of actual division of the property between the members of a joint family that a written instrument is essential. Where there is evidence that there was an actual division of the property between the parties and that they went into possession of their respective shares in accordance with that division, and there are also other circumstances to show that the conduct of the parties are inconsistent with anything except the factum of separation, a Court of law may very well hold, apart from any instrument of partition (which happens to be unregistered) that the parties had separated in status and effected a partition of the family properties.
This would be a perfectly legitimate course to adopt. Unregistered instruments, such as partition deed, sale deed, receipt etc. (which require to be registered) may be admitted and relied on for the purpose of proving the disruption of sta-tus and division of property, separate possession and separate dealings by the parties. Though not admissible to prove title to the immovable properties in question, they could be referred for the collateral purpose of showing that the parties were dealing with the properties in their separate possession on the footing that there had been a partition between the members of the family.
Unregistered sale deeds would also be admissible under the proviso to Section 49, Registration Act, tc prove part performance under Section 53A. Transfer of Property Act, besides being admissible for the collateral purpose of separate possession and separate dealing and enjoyment' (All relevant Madras decisions discussed). In : AIR1953Bom50 (Z-12) it was held :
'The expression 'collateral' transaction in the proviso to Section 49, Registration Act, is not used in the sense of an ancillary or a subsidiary transaction to a main or principal transaction. The transaction as recorded could be a particular or specific transaction. But it would be possible to read in that, transaction what may be called the purpose of transaction and what may be called a collateral purpose; the fulfilment of that collateral purpose would bring into existence a collateral transaction, a transaction which may be said to be a part and parcel of the transaction but nonetheless a transaction which runs together with or on parallel lines with the same.
A memo of partition of immovable property belonging to a Hindu joint family which is requir-ed to be registered but which is not registered would be inadmissible under the main provisions of Section 49 of the Registration Act as evidence of the terms or details of the partition. But the partition i. e., the severance of joint status which is not required to be effected by a registered instrument would be a collateral transaction, evidence of which would certainly be admissible under the proviso to Section 49 and the memo of partition though unregistered would be admissible to prove the fact of such partition.'
In Mt. Thekura v. Sukhraj Singh : AIR1953All350 it was held;
'A partition chitti which merely records that certain persons named therein have been allotted certain properties described therein at a private partition need not be registered under Section 17(1)(b). Even if it requires registration, it can be used for the collateral purpose of proving the nature of possession in view of Section 49, That latest decision is Appeals Nos. 581 & 789 of 1948 D/- 10-2-1955 (Mad) (Z-15) laying down that oral evidence of the terms of a document which is inadmissible in evidence for want of registration is not admissible as this would be a case of virtually admitting an unregistered partition deed to prove details of the partition and how the property was divided and to whom allotted amounting to an indirect (sic), as in of the statute.
27. Bearing these principles in mind, if ,we examine the partition lists in this case, set out above, they do not constitute compulsorily registrable instruments. These lists had been drawn up with the in-tention of reciting an already completed oral partition and were not intended by the parties to form an integral and essential part of the process of dividing the properties and to be the only evidence of and to be the formal instrument of partition superseding and embodying the oral bargain and were certainly not intended as the sole repository of the arrangement of partition arrived at by them & constituting the bargain between the parties.
This is evident from the language of the lists. The arbitrator Mr. Sivarama Ayyar who has handed over to the brothers these lists was a person who knew what the words and phrases used therein meant. He was the President of the Nagapattinam Bar Association and had been an Advocate for over three decades. This Mr. Sivarama Ayyar has clearly endorsed on these lists that he was handing them over as vouchers. It stands to common sense also that the partition could not have been arrived at between 11-12-1940 when this arbitrator was appointed and 12-12-1940 when these lists were handed over to the parties.
Obviously the partition must have been arrived at before the arbitrator was appointed. The oral evidence also is to the same effect. What happened was that the four brothers unequivocally expressed to one another that thenceforward they were not going to live in joint status and as a result thereof divided the joint family properties into four more or less equal portions. Then the brothers found themselves in a fix as to how these four portions were to be allotted to the four brothers.
It was at this stage that Mr. Sivarama Ayyar was appointed as an arbitrator and he has solved the problem for them by suggesting to them that the first brother should be given the first choice and so forth, until the fourth man had to take what was left. The brothers had adopted this suggestion and the lists have been formally handed over to the brothers by the arbitrator. The diary entries made by Mr. Sivarama Ayyar reproduced above bring this out and the lists do not contain any words showing that they superseded the oral bargain and formally reduced the terms of the partition to the form of a document. In fact this was also how the parties understood these lists.
In Ex. B-157 Kalyanasundaram Ayyar mentions how a tentative arrangement had been come to between the parties before the arbitrator regarding the immovable properties for the sake of convenience, that four lists were drawn up so that the parties might take the crops and arrange for separate cultivation pending the award, that each of the parties took possession of the properties allotted to him ia the list under that arrangement, that there were differences in the value in regard to which further adjustments have to be made and that other immovable properties not covered by the lists remained to be divided, that the matter was not closed then, that later the family movables were also divided and that owing to there being differences in value, fur-ther adjustments were postponed till the final division.
In Ex. B.61, in the notice Ex. A-3 and in the counter-affidavit Ex. A-4 and in the petition to the arbitrator Ex. B-148 the first defendant has taken up the position that this arbitration followed the division of the properties into four parts and that the arbitrator came into the picture only to solve the complications which arose thereafter. In his evidence in Court the first defendant takes up the same position. The third defendant has been taking up the following consistent position.
In O. P. 49 of 1952 he filed the following counter; 'The lists of properties were produced be-fore the arbitrator and it was the petitioner Kalyana-rama Ayyar or the first respondent Rajagopala Ayyar that did so. The lists themselves were prepared by the vocal efforts of petitioner and respondents 1 and 2. All the parties agreed to give first preference to the petitioner to select one of the four lists and he, of his own accord, selected one..... The entire division of the immovable properties was done by consent of the parties.
The preparation of the lists has been done carefully after due assessment of the value of the properties..... In any view, as the division was by consent, there has been a completed division of immovable properties.'' Then in Ex. B-37, the written statement filed by him in a litigation with a third party Rajagopala Mudaliar in O. S. 150 of 1945, the third defendant took up the position:
'Even on 1-7-1942 the plaintiff knew that thisdefendant had a good title to the lands (the negotiation related only to the lands in Manakkudi, andnot to Odacheri lands) and that the decision amongthe defendant and his three other brothers & allotment of the said lands was by consent of them all,so that this defendant's title was invulnerable. Theattempt made by the plaintiff in para. 6 to make itappear that his title was in dispute and that theHigh Court has somehow justified his apprehensions,is disingenuous.
The plaintiff knew that there was no registered partition deed among the brothers; but that the title was good. He was content to negotiate on that basis and he cannot be allowed to trot out that he had some justifiable reason for the position that he is assuming'. It is also common ground before us that the plaintiff, the first defendant and the second defendant are taking up the position that this partition cannot be disturbed.
28. To sum up, by agreement of parties there was a division in status between the brothers and a division of the properties into four lots before the arbitrator came into the picture and on account of difficulties of allotment owing to other factors, the arbitrator was appointed and on his suggestion the properties contained in these lists were taken by the respective brothers and the lists themselves have been handed over by the arbitrator as mere vouchers and in themselves contained no expression showing that they superseded the oral bargain and formally reduced the terms of the partition so that they could be looked upon as an integral and essential part of the partition transaction and were intended to be the only evidence and to be the formal instrument of partition superseding and embodying the oral bargain and were intended to serve as the sole repository of the arrangement of partition arrived at. Therefore these lists do not constitute a compul-sorily registiable instrument.
29. These lists constituting the memoranda of a partition already effected cannot be shut out on the ground that the arbitration reference has been revoked by the High Court. The revocation of the submission would only have the effect of nullifying any adjudication made by the arbitrator and relegating the parties to the position occupied by them as if there Were no adjudication. The partition had already been arrived at and of which these lists consti-tute the aide-memoire came into existence before the arbitrator was appointed and all that the arbitrator did was nothing more than to suggest to the parties the best way of allotting the shares to the four sharers. Therefore this revocation of submission would neither nullify nor invalidate either the partition or the admission of these lists in evidence.
(29-a) The net result of this analysis is that it has been established beyond all doubt that there was a general family partition in December 1940 and that the brothers have taken the properties which are embodied in the respective lists handed over to them by the arbitrator.
(29-b) Having come to that conclusion, partition once made cannot ordinarily be reopened, for the Shastras say 'Once is a partition of inheritance made, once is a damsel given in marriage arid once does a man say 'I give'; these three are by good men done once for all irrevocably'; Manu, IX 47. But this Rule has certain recognised exceptions.
Manu says: 'If after all the debts and assets have been duly distributed according to the rule, any property be afterwards discovered, one must divide it equally': Manu, IX, 218; Yajnavalkya is even more definite: 'The settled rule is that co-heirs should again divide on equal terms that wealth which being concealed by one co-heir from another is discovered after partition'. Yain., II, 126, Mandik, 218; Mit., 1, IX, 2. The smritichandrika cites a text of Katyayana to the effect that 'property of which an equal distribution has been made contrary to law should be re-distributed'; Smritichandrika, XIV, 7, 8; Dayabhaga, XIII, 1, 33, 5; Viramit; 11,1,14, p. 326; Digest, II, 484.
In Moro Vishvanath v. Ganesh Vithal, 10 Bom HCR 444 (Z-25) and other decisions -- Bishambhar Nath v. Amar Nath Lachman Singh v. Sanwal Singh, ILR 1 All 543 (Z-27), etc., it has been held that partition once effected is final and can be re-opened only in case of fraud or mistake or subsequent recovery of family property. But even here where at a partition intended to be final some part of the property has been-overlooked or fraudulently concealed, but is afterwards discovered, that part only will be the subject of a like distribution among the persons who were parties to the original partition, or their representa-tives: Kandum Venkataswamy v. Baligadu, 19 MLT 43: AIR 1917 Mad 761 (Z-28).
It is only where the whole scheme of distribution is fraudulent, whether as regards a minor or otherwise, it will be set aside absolutely and even then if the person injured has acquiesced in it after full knowledge that it had been made in violation of his rights, or where the unrivalling a partition on the ground of error or fraud would prejudice the rights of innocent third parties and in such cases the remedy of the injured party would be a mere compensation in money.
Ganesh Dutt v. Jewach, ILR 31 Gal 262: 14 M LJ 8: 31 Ind App 10 (Z-29), whether the prejudiced sharer will be entitled to re-opening of the partition or compensation will depend upon the facts of the case, the degree of prejudice, his conduct and the nature of the property with reference to which his loss was occasioned.
(29-c) In this case the re-opening of the parti-tion is not asked for on any of the grounds set out above except on the ground that the partition lists are inadmissible in evidence and that no evidence of partition aliunde can be given and that the partition, if any, was brought about by the arbitrator and that on the revocation of the submission to arbitration that division stood wiped out and that therefore a fresh general partition has got to be made and which all pretensions have been shown to be wholly unfounded.
(29-d) The final partition in this case cannot therefore be re-opened and a fresh general partition made.
30. Point (ii): The argument of the learnedAdvocate Mr. Kuppuswami Ayyar for the contentionthat the acquisition made by defendants 1 and 2should be made available for partition amongst thefour brothers is based upon (a) alleged utilisation ofjoint family funds by D-1 for financing the purchaseunder Ex. B-4 (b) and/or Section 90 of the Indian Trusts-Act which lays down that where a co-owner by availing himself of his position as such gains any advantage in derogation of the rights of the other personsinterested in the property, or where any such owner as representing all perspns interested in such property, gains any advantage, he must hold for thebenefit of all persons so interested, the advantageso gained but subject to re-payment by such personsof their due share of the expenses properly incurredand to an indemnity by the same persons againstliabilities properly contracted, in gaining such advantage.
This section is based on the principle of construc-tive trust, which has been defined in the standard English and American Text Books and is an extension of the principle that a trustee shall not be allowed to make profit out of the trust (E. B. Powell, The Indian Trusts Act, p. 388).
31. In Lewin on Trusts (15th Edn.) p. 155, the general doctrine of a constructive trust is set out as follows;
'A constructive trust is raised by a Court of equity wherever a person, clothed with a fiduciary character, gains some personal advantage by availing himself of his situation as trustee; for as it is impossible that a trustee should be allowed to make a profit by his office, it follows that so soon as the advantage in question is shown to have been acquired through the medium of a trust, the trustee, however good a legal title he may have, will be decreed in equity to hold for the benefit of his cestui que trust.'
32. 65 Corpus Juris 223 has the following to say: 'Constructive trust has been variously defined as a trust not created by any words either expressly or impliedly evincing a direct intention to create a trust but by the construction of equity in order to satisfy the demand of justice; one that arises when a person clothed with some fiduciary character by fraud or otherwise gains some advantage to himself. Constructive trusts are also called trusts ex maleficis, trusts ex-delicto, trusts in invitum or involuntary trusts.'
33. In the Restatement of the Law of Trusts as adopted and promulgated by the American Law Institute, Vol. 1, pp. 5-6, constructive trust is defined as follows:
'A constructive trust is a relationship with respect to property subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that his acquisition or retention of the property is wrongful and that be would be unjustly enriched if he were permitted to retain the property (see Restatement of Restitution and Unjust Enrichment)'.
In Perry on Trusts and Trustees, Sixth Edn., (Little Brown and Co., Boston), Vol. I, Section 27, p. 18, a constructive trusf has been defined as one that arises when a person clothed with some fiduciary character by fraud or otherwise gains some advantage to himself courts (sic) constructive to be an advantage for the cestui que trust or a constructive trust.
34. Before the benefit of this Section 80 is invoked it must be shown
1. that the party against whom relief is sought, javailed himself of his position;
2. that he gained an advantage by so doing;
3. that the advantage was gained in derogation of the right of the person interested in the property.
In other words, a person who is a limited owner by reason of his position must not utilise that position to obtain an advantage to the detriment of his co-owners. It is not necessary that the other persons should make out that the advantage was obtained fraudulently or by misrepresentation or by suppression of the true facts. All that the section Says is that if there is a person in a fiduciary relation to another, he cannot take advantage of his position so as to gain something exclusively for himself which otherwise he would not have obtained but for the position which he held; Dattatraya Sitaram v. Shankar : AIR1938Bom250 Aberdeen Town Council v. Aberdeen University, (1877) 2 AC 544 at p. 549 (Z-31); Punugu Subbiah v. N. Kami Reddi, 30 MLJ 331; 33 Ind Cas 326: AIR 1917 Mad 228 (Z-32); Govindarajan Pillai v. Alagappa Chet-tiar, AIR 1943 Mad 202 (Z-33). See also to the same effect Xavier v. Antha, AIR 1953 Trav-C 375 (Z-34).
35. In the language of Agnew in his Law of Trusts in British India (Tagore Law Lectures --1881), at p. 109:
'A constructive trust is one which the Court elicits by a construction put upon certain acts of parties. Such a trust is raised wherever a person clothed with a fiduciary character, as for instance, a factor, agent, partner, or mortgagee, gains some personal advantage, by availing himself of his situation as trustee; for, as it is impossible that a trustee should be allowed to make a profit by his office, it follows that so soon as the advantage in question is shown to have been acquired through the medium of a trust, the trustee will be decreed to hold for the benefit of his cestui que trust.'
36. What is the position of a co-owner in a mortgage in regard to which a sale is taken by one of the several mortgagees, has been the subject-matter of a careful investigation in two well-known English decisions. In Kennedy v. De Trafford, 1896 1 Ch 762, affirmed in 1897 AC 180 (Z-35), it was held:
'In the case of a mortgage by several tenants- . in-common, the mortgagee is at liberty, under his power of sale, to sell to any one of the mortgagors for his own benefit, without any notice to or consent of his co-mortgagors provided the sale is made under a proper and bona fide exercise of the power of sale. Nor is the mere circumstance that the sale is for the amount due for principal, interest and costs a ground for impeaching it as being, in effect, a redemption for the benefit of all mortgagors.
Neither is the validity of the sale affected by any fiduciary relation subsisting between the purchasing mortgagor and his co-mortgagors such as may have arisen from his having, as their agent, received the rents, paid thereout the interest on the mortgage, and generally managed the property.' In Biss v. Biss, 1903 2 Ch 40 (Z-36), it was held as follows:
'There is no authority for the general proposition that if a person only partly interested in an old lease obtains from the lessor a renewal, he must be held a constructive trustee of the new lease, whatever may be the nature of his interest or the circumstance under which he obtained the new lease.
A person renewing is only held to be a constructive trustee of the new lease if, in respect of the old lease, he occupied some special position by virtue of which he owed a duty towards the other persons interested; as, for example, in the cases of a renewal by a tenant for life of settled lease-holds, or by a partner of a partnership lease, or by a mortgagee of a mortgaged lease. In all such cases the new lease is treated as engrafted on or as forming part of the original lease.
A lessor granted a lease for seven years of a house in which the lessee carried on a profitable business. On the expiration of the term, the lessor refused to renew, but allowed the lessee to remain as tenant from year to year at an increased rent. During that tenancy the lessee died intestate, leaving a widow and three children, one being an in-fant.
The widow took out administration to her husband's estate, and she and the two adult children, one of whom was a son, continued to carry on the business under the existing yearly tenancy. The widow and son each applied to the lessor for a new lease for the benefit of the estate, which he refused to grant, but having determined the yearly tenancy by notice, he granted to the son 'personally' a new lease for three years at a still further increased rent.
In an action which had in the meantime been instituted by the three children, including the infant, against the administratrix for administration of the intestate's estate, the administratrix applied to have the new lease treated as having been taken by the son for the benefit of the estate, and for an account of the rents and profits received by him:--
Held, by Bucktey, J., on the authority of Ex parte, Grace, (1799) 1 Bos & P 376 (Z-37), that the son was a trustee of the new lease for the benefit of the estate, and an account was directed accordingly:
But held by the Court of Appeal, that the evidence took the case out of Ex parte, Grace (Z-37), in that it showed that the right or hope of renewal had been determined by the lessor himself before the son intervened, so that the new lease could not be treated as an accretion to the estate of the deceased, and also that the son had in no way abused his position nor stood in any fiduciary relation towards nor owed any duty to the other persons interested in the estate; and that he was therefore entitled to retain the lease for his own benefit.'
37. To sum up, in the language of classical English and American text books On the subject (Lewin on Trusts, 15th Edn., p. 166), it is settled law that there is no fiduciary relation between ten-ants-in-common of real estate prohibiting one of them from buying or getting in, for his own benefit, an outstanding incumbrancc or estate therein.
'A joint tenant or a joint lessee is not under a personal incapacity to take a benefit and he is entitled to show that the renewal was not in fact an accretion to the original term. He is only a constructive trustee when he occupies some special position, and owes a duty by virtue of that position, towards the other persons interested' (Godefroi on Trusts and Trustees, 5th Edn., p. 151). Halsbury's Laws of England (Hailsham Edn., Vol. Trusts, p. 139), has the following to say:--
'The principle does not apply when a person without fraud takes a ntew lease or acquires the reversion on a lease which he holds on trust or in a fiduciary capacity, where such lease is not renewable by contract or custom, Randall v. Russel, (1817) 3 Mer 190 (Z-38); Longton v. Wilsby, (1897) 76 LT 770 (Z-39); Bevan v. Webb, (1905) 1 Ch 620 (Z-40).
Where a person partly interested in an old lease takes a new lease to himself on the surrender or at the expiration of the lease he is not a constructive trustee of the new lease unless, in respect of the old lease, he occupies some special position by virtue of which he owed a duty towards the other persons interested, as, for instance, as tenant for life in respect of settled lease-holds, or as partner in respect of a partnership lease, or as mortgagee in respect of a mortgaged lease, 1903-2 Ch 40 (Z-36), distinguishing (1799) 1 Bos & P 376 (Z-37); and considering.
Palmer v. Young, (1684) 1 Vern 276 (Z-41). 54 American Jurisprudence, Section 288, pp. 175-176, states;
'The rule of constructive trust does not however prevent a confidant or fiduciary from making a fair purchase of the subject-matter of the confidence or fiduciary relationships, and it does not give rise to a constructive trust in gains, such as accretion in value of the property, resulting to the confidant or fiduciary from the transaction, where it is fair and in good faith.
It certainly does not prevent a former confidant or fiduciary forever from acquiring the property subject or related to the confidence or fiduciary relationship. Persons with a community of interest under such circumstances that there is a community of duty between them as well, in any subject of property, or business, are prohibited in equity from individually acquiring interest therein antagonistic to the other, and any such acquisition by one of them inures, on tile theory of a constructive trust, to the other. It has been said that for the purpose of the rule a community of interest produces a community of duty;'
For similar observations see J. W. Perry's classic, Trusts and Trustees, Vol. I, Section 195, p. 313. Transactions will be protected if there is fair consideration and no fraud, no concealment, no advantage taken by the tenant-in-common of information acquired by him in that character.
65 Corpus Juris, p. 546: one cestui que trust may purchase the interest of another so long as no advantage is taken and the transaction is in good faith.
38. The application of the rule of constructive trust and its limitations in the case of tenants-in-common, are well brought out in the following Indian decisions. In Babani Soiroo v. Dulba Govind, : AIR1932Bom240 (Z-42), it was held:--
'The terms of Section 90 are not exhaustive. Where the acquisition of certain benefit depends upon the holding of a certain position and that position is in reality held not by one but by several persons and yet only one of these several persons comes to acquire that benefit through holding that position the person acquiring that benefit may be held to bo a constructive trustee for those several persons.
In the case of a trustee there is an absolute ir-rebutiable rule that he is not to derive any benefit by reason of his position as a trustee; but other persons may be placed in a position resembling to a greater or less extent the position of a truste'e. In their cases, the presumption may be rebuttable and the strength of the presumption depends upon the degree to which their position approximates to that of a trustee.'
In : AIR1938Bom250 , it was held that there is nothing to prevent a member of a joint family from obtaining a grant from Government for his own benefit. Whether such a grant enures for the benefit of the family of which he is a member must depend upon the terms of the grant. It is also open to a person to treat, what initially was his separate property, as joint family property; and it is equally possible for the family or the members of the family, to prove that the consideration paid to Government for the grant originally proceeded from the family funds.
In either of these cases though initially the grant was the separate property of the grantee, the property would acquire the character of joint family in which according to Hindu Law the other coparceners would be equally interested, In this case, one L held a lease of certain Sheri lands from the Government. On his death there was a disruption of his family and his sons became the tenants-in-common of the joint family property.
On the termination of the original lease, one of the sons M obtained a renewal of the lease not as heir of anybody, nor for benefit of the family but to himself eo nomine. The consideration for the renewal did not come from the common chest nor the lands were thrown into the hotchpot. On M's death his sons on payment of occupancy price obtained the Sheri lands on occupancy tenure. It was held that the sons of M could not be regarded as trustees holding the property in a fiduciary capacity and for the benefit of the family. Section 90 therefore did not apply.
In ILR 1943 Mad 418: AIR 1943 Mad 202 (Z-33), it was pointed out;
'The only limitations, apart from fraud or collusion, which fetter the power of a mortgagee to purchase the mortgaged property are those contained in Order XXXIV, Rule 14, of the Code of Civil Procedure, and in Section 90 of the Indian Trusts Act. The former statutory provision aims at affording to the mortgagor a measure of protection against the mortga-ged property being sold at a disadvantage, while the latter is much wider in scope preventing persons standing in fiduciary relationship to certain others from taking advantage of their position to secure a benefit to themselves in derogation of the rights of those others. There is no other rule of equity or rule of good conscience which prevents a mortgagee purchasing the mortgaged property otherwise than through the medium of a sale in execution of a dec-ree on the mortgage.'
In Muhammadkhan v. Kedarmal Rudmal, ILR 1943 Nag 656: (Z-43), the principle of the application of Section 90 has been exhaustively discussed by Niyogi, J., as follows:
There is ordinarily no fiduciary relationship between co-owners so as to impose an obligation on one co-owner to protect the interest of the other co-owner.
Section 90 of the Indian Trusts Act does not apply unless one co-owner is placed by the other in such a relation by his act or consent and becomes interested for him and with him in any subject of properly or business and being in that position he, acting for himself or as representing the other, gains an advantage in derogation of the other's rights.'
In Sitharamamurthi v. Guruswami, ILR 1949 Mad 849: AIR 1949 Mad S80 (Z-44), wherein Sections 88 and 90 of the Indian Trusts Act and the case-law relating thereto have been discussed by the learned Chief Justice and Somasundaram, J., a distinction between presumption of law which arises in the case of a trustee and a rebuttable presumption of fact in the case of joint tenants was once again emphasised and reference was made to Ramalinga Reddy v. Ramalingam Setty : AIR1938Mad929 , wherein Varadachariar, J., who delivered the Judgment of the Bench, discussed the (sic)ding authorities in England and observed that the statute law in India had not substantially deviated from the rules of the English Law.
In his opinion, there was no absolute rule of law or irrebuttable presumption in respect of the renewal of a partnership lease by one of the partners, and in India a constructive trust can be held to arise only if the conditions of Section 88 or Section 90 of the Trusts Act-were satisfied. The learned Judge proceeded to examine the evidence in the case to decide whether the partner availed himself of his character to obtain the new lease, and held that he did not. The evidence showed that, far from imagining that the old lease gave any particular claim for renewal, the landlords started negotiations with others for a new lease, and even after A approached them for a new lease, they had no hesitation in entertaining a stranger's offer to negotiate a lease for himself.
The negotiations were carded on by A openly and no advantage was clandestinely obtained. There was also nothing in the evidence to suggest that A was in the position of a managing partner. In view of these and other circumstances, the learned Judge agreed with the lower Court that B was not entitled to claim an interest in the new lease.
In Balabhadra v. Nirmala Sundari Devi : AIR1954Ori23 , Narasimham, J. (as he then was), has pointed out that for granting equitable relief under Section 90 a co-sharer who purchased the property in the revenue sale must be guilty of some kind of sharp practice which would be inconsistent with any relation of mutual confidence between co-sharers and that where there can be no question of one co-sharer being misled by the other and the latter is not guilty of any sharp practice, the equitable principles of Section 90 cannot be invoked.
In all these cases where one of the co-sharers purchases the joint property at a revenue sale held for arrears of revenue, a sharp distinction is made between those cases where the purchasing co-sharer designedly brings about the accumulation of the arrears and arranges for the sale being held and knocks it off for himself by sharp practices overreaching the other co-sharers and a co-owner purchaser purchases in good faith at a revenue sale without in any way intentionally procuring the default or scheming for the sale to be held or buying it in circumstances over-reaching the others by lulling them into a sense of security and abusing their confidence.
This distinction is brought out in the Privy Council decision in Deo Nandan Prasaad v. Janki Singh, AIR 1916 PC 227 (Z-47) and the Calcutta decision in Kurshed Ali v. Dinanath Surma, : AIR1919Cal431 (Z-48) and Akshaykumar v. Ahmad Ali : AIR1932Cal434 and Anath Nath v. Dwarka Nath . (See also Madras decision, Renga Srinivasachari v. Gnanaprakasa, ILR 30 Mad 67 (Z-51) and Nagaswami Iyer v. Ramaswami Aiyar, AIR 1925 Mad 288: 47 MLJ 755: 85 Ind Cas 212 (Z-52).
The learned Judge (Narasimham, J.) concluded therefore that where there can be no question of one co-sharer being misled by the other and the latter is not guilty of any sharp practice, the equitable principles of Section 90 cannot be invoked.
This analysis of case-law can be concluded with two decisions of the Travancore-Cochin High Court in Arokia v. Sowrivaru, AIR 1953 Trav-C 305 (Z-53) and AIR 1953 Trav-C 375 (Z-34). In both these cases it was laid down that the principle underlying Section 90 is that no person who is in a fiduciary capacityor position can make a profit out of that positionto the detriment of persons who are actually interested with himself in the property held, by them all.Before the benefit of this section is invoked itmust be shown that the party against whom reliefis sought availed himself of his position, that hegained an advantage by doing so and that the advantage was gained in derogation of the rights of persons interested in the property. See S. K. Aiyar,Commentaries on the Indian Trusts Act, p, 268;Aggarwalla, The Indian Trusts Act, 2nd Edn. (1954),pp. 626 and 626; E. B. Powell, Govt. Pleader, HighCourt, Madras, The Indian Trusts Act, 1882 (1908)pp. 338-340).
39. Bearing these principles in mind, we shall examine the acquisition made by the first defendant under Ex. B-4 dated 29-6-1941 and find out whether the acquisition was made with J. F. Funds and secondly whether Section 90 applies. This acquisition has been made after the division in status in December 1940 and the brothers had become divided in status and were only tenants-in-common.
It is common ground that by this time ill-feelings developed between the brothers and each looked upon the other as an enemy without any trust or confidence between them. It should also be borne in mind that by the time this acquisition came to be made by the first defendant he had three years' income amounting to more than 3,000 kalams of paddy per annum. It is in these circumstances that he has taken the conveyance Ex. B-4.
40. How this conveyance came to be executed was as follows: The properties constituting the subject-matter of Ex. B-4 originally belonged to Ra-manuja Ayyangar and others. They had mortgaged the said properties and other properties of (sic) acres to the family of the plaintiff. The mortgagors wanted to sell the properties as they wanted to save a portion of them for themselves and entered interne-gotiations with this family. But the family members did not want to purchase the properties and in fact the plaintiff insisted upon a suit being filed on the mortgage.
O. S. 25 of 1940 on the file of the Sub Court, Tanjore, was filed by this family against the mortgagors and others and a decree was obtained on 23-12-1940. The preliminary decree was passed for Rs. 10,574-8-0 with subsequent interest and proportionate costs, etc.; see Ex. B-2. One Alamelu Am-mal of Urnayalpuram had obtained a simply money decree against these mortgagors in O. S. No. 180 of 1934 on the file of the District Munsif's Court, Mannargudi, and she had attached and was proceeding to sell the equity of redemption in these mort-gaged properties. By this time the properties In the village in which these mortgaged properties are situate had fallen to the share of this D. I.
41. At that stage this first defendant appears to have done two things. First of all he seems to have arranged to get the money decree in O. S. No. 180 of 1934 assigned in the name of Vaidyanatha-swami, a former Overseer at Vikrapandiam, a nearby village, and later employed at Calcutta, under Ex. A-20 for a sum of Rs. 500. This Vaidyanatha-swami has purchased the equity of redemption in Court sale. Secondly, this first defendant entered into negotiations with the mortgagors and they conveyed the properties under Ex. B-4 dated 29-64941 to the first defendant.
The sale-deed states that in pursuance of an agreement entered into on 26-6-1941 the sale price had been fixed at Its. 17,600 and that this amount was made up of as follows, viz., (a) payment to Vaid-yanathaswami the assignee decree-holder in O. S. 180 of 1934 or to deposit into Court in tho District Munsif's Court, Mannargudi, Rs. 3,280 within 30-6-1941 and get the auction sale in respect of tho said decree in O. S. 180 of 1934 set aside and (b) Rs. 14,320 clue to the family of the purchaser. Then this first defendant deducting his one-fourth share in the amount of the mortgage decree in O. S. 25 of 1940 deposited the balance into Court and then paid and discharged the other Havala also.
42. The net result of this transaction was that the mortgagors had saved about 40 acres of land, selling only 50 acres of the hypotheca; the mortgage decree in O. S. 25 of 1940 was discharged; the decree in O. S. 180 of 1934 originally held by Alamelu Ammal was also discharged; and this first defendant had acquired the properties adjoining to his own and fallen to his share in the family partition.
There is no dispute that subsequendy the first defendant has been enjoying these properties exclusively. In fact even subsequent to this transaction the brothers have not been treating these lands acquired by the first defendant as joint family, properties. In their income-tax returns they have shown the mortgage decree in O. S. 25 of 1940 as an outstanding due to the family. It is also admitted in O. S. 5 of 1943 that the plaintiff and defendants jointly used to prepare income-tax returns.
43. In fact it was only after difficulties arose after the brothers got divided and the ill-feelings had mounted up that the brothers started making a claim and when this first defendant had given notice to them that the amount due to them under the mortgage decree had been deposited in Court and that they could withdraw that they were entitled to shares in the lands purchased by the first defendant under Ex. B-4, in order to harass him. This not-withstanding that in Ex. B-1S9 it has been shown that the decree was subsisting and it was shown as an outstanding in O. P. 49 of 1942 and not that these properties purchased by the first defendant under Ex. B-4 had become joint family assets.
44. The case of this first defendant finally is that this transaction was financed by him out of the three years' income of Rs. 10,000 per annum which he was getting and from borrowings. It is also found that this first defendant has a wealthy wife with mo-ncys of her own. The only point of substance urged by the appellants as against this evidence is that the amount for getting the assignment in favour of Vaidyanathaswami and for depositing in Court came from joint family funds.
In regard to the former there is no reliable evidence that the sum of Rs. 500 with which Vaidyanathaswami had taken the assignment came out of the joint family funds. This Vaidyanathaswami himself was a P. W. D. Overseer at Vikrapandiam and later employed in Calcutta and there is no reason to think that this Vaidyanathaswami could not have found this Rs. 500 Or even that this first defendant could not have found for him this sum of Rs. 50 from out of his own separate funds. This Vaidyanathaswami has not been examined. No voucher was taken from Vaidyanathaswami that he was a be-namidar. Nor was any notice given to him to return the money which he got from the Court deposit.
In fact this story of benami rests, upon hearsay information spoken to by P.W. 1 and Sivarama Ay-yar and others which cannot be treated as admissible evidence at all. The first defendant as D.W. 1 swears as wholly false the allegation that the assignment in favour of Vaidyanathaswami was financed from out of family funds. It is unnecessary to multiply these details to show that though Vaidyanathaswami might have happened to be a friend of this first defendant and it is quite possible that the first defendant arranged with Vaidyanathaswami on some understanding which we do not know the agreement with Vaidyanathaswami put forward by plaintiff was not probabilised and was rightly rejected by the lower Court as unacceptable to take an assignment of the decree in O. S., 180 of 1934 and then bring the equity of redemption to sale, this is a far cry from saying that Vaidyanathaswami was financed from joint family funds.
Turning to the paying off of Vaidyanathaswami and the deposit of the mortgage amount due to the other brothers, the glib assertion that these amounts also came from out of joint family funds cannot be accepted. It is in evidence that whatever collection were made, were remitted to the Kumbakonam bank or Kunniyur. There is not a tittle of evidence to show that there was any lessening of the joint family cash asset by reason of these transactions. It will be re-membered that though it was stated that Rs. 1,40,000 represented the outstandings, still in this Court the question of outstandings was not pressed at all.
It is legitimate to say that there is not an iota of evidence correlating joint family funds with this purchase under Ex. B-4. This first defendant says that he had been borrowing moneys as evidenced by subsequent documents Exs. B-176 and B-177 and had with him the income of the properties for a period of three years, of no less than Rs. 9,000 per annum. To sum up, none of the ingredients under Section 90 of the Indian Trusts Act has been made out in this case. The purchase was made when this first defendant was a tenant-in-common and he did not stand in a fiduciary capacity vis-a-vis his brothers. There was no feeling of trust or confidence between the brothers then. Consequently the brothers could not have been lulled into a false security and over-reached and their ignorance exploited. The members of the family did not want the lands at all and in fact insisted upon a suit being filed on the mortgage.
It was only after the lands in the village, where the hypotheca is situate, fell to the share of this first defendant that the first defendant had started making arrangements for Vaidyanathaswami to take an assignment of the decree in O. S. 180 of' 1934 and bring the equity of redemption to sale and then started negotiations with the mortgagors. The mortgagors were anxious to deal directly with this first defendant and there has been an agreement of sale in his favour. The mortgagors were negotiating by then to sell the properties to others. The properties were therefore in the open market for all willing purchasers to purchase them.
This first defendant had no particular special position which he could exploit; nor can it be said that the brothers lost anything legitimate by this transaction. Their right under the mortgage decree was only to the amount due under that decree. This they have got. In fact until ill-feelings have arisen, as a result of the complications that arose after partition and which reached a crescendo by this time the brothers were not anxious to get the properties. Even as late as 1942 in their income-tax returns this purchase has not been treated as a joint family asset and I have already referred to the position taken by the plaintiff to the contrary.
It is nobody's case that the properties were then worth far more than what was paid as purchase price. The mortgagors had excluded 40 acres and sold only 50 acres. It is only in subsequent years and as a result of extensive improvements which are said to have been made by the first defendant for over Rs. 10,000 that the properties have gained in value and the brothers arc casting their covetous eyes upon the first defendant's vineyard, Therefore, this is not a case where the first defendant availed himself of his position and gained an advantage by so doing and that the advantage so gained was in derogation of the rights of the persons interested in die property.
45. To conclude, the purchases made by D-1 are not found to have been made with the aid of joint family funds or in violation of any constructive trust embodied in Section 90, I. T. Act, and are his separate properties and cannot be made available for partition amongst his brothers.
46. Turning to the acquisitions made by the second defendant, viz., purchase on 6-1-1941 under Ex. B-23 of the properties described in plaint schedule A, part 5, items 67 to 95, for Rs. 12,500 and pur- chase on 16-8-1941 under Ex. B-28 of lands described in A schedule, part 5, items 97 to 118 for Rs. 5,000 from P. Mahadeva Ayyar, it will be borne in mind that these purchases had been made by the second defendant after the division in status and he and his brothers had become tenants-in-common.
In regard to these two transactions, the claim of the plaintiff was that these purchases were made with family funds. On the other hand, the case for the second defendant was that these purchases were made by him from out of his own funds and acquired without detriment to the family funds at all. Therefore the only point which falls to be considered is whether these purchases made by the second defendant with the aid of joint family funds constitute accretions thereto or whether they constitute separate properties of the second defendant acquired without detriment to the joint family funds.
47. The second defendant has shown how the purchases after partition were made by him. He stated:
'I was not in charge of family Outstandings. No document for moneys due to the family stood in my name. I purchased house under Ex. B-19 for Rs, 800 from Rajagopala Ayyar. I wanted a house to live in as misunderstandings arose. My wife had Rs. 4,000 or Rs. 5,000 and purchase was with her funds. Ex. B-20 is a pro-note executed by me in favour of Pattammal. Amount was borrowed for purchasing a house. Ex. B-21 is a sale-deed in my favour for one acre of land for Rs. 450. It is after partition. Ex. B-23 is sale-deed from Sambasiva Ayyar (D.W. 7) for consideration.
I executed Ex. B-25 id his favour and discharged it later. The debt due to the family under Ex. B-64 was not adjusted towards the sale price. I borrowed under Ex. B-25 for purchasing lands and again under Ex. B-26 from Mr. Visvanatha Sastri (now Judge of High Court) for purchasing lands. Ex. B-28 is the sale-deed in iny favour from Mahadeva Ayyar. Ex. B-30 is pro-note by vendor of Ex. B-28 which I had undertaken to discharge. I borrowed under Ex. B-32 to dischage that debt. It is not true to say I have secreted any family funds.' This evidence of the second defendant is corroborated by the documents filed by him and which have not been in any way impeached as untrue. It is abundantly clear that these purchases were made by the second defendant (a) by borrowings and (b) with moneys of his wife who is admitted even by D.W. 3 as a woman of substantial means who had lent moneys to D.W. 9.
48. On the other hand, there is no evidence contra worth mentioning about the utilisation of joint family funds for these purchases made by the second defendant. The trump card of the other side was Sambasiva Ayyar examined as D.W. 7 who wanted to support the case of the plaintiff and the third defendant D.W. 7 testified that he was indebted to the plaintiff's family in whose favour ho had executed Ex. B-64 for a sum of Rs. 1,100 The sale in favour of defendant 2 under Ex. B-23 is for Rs. 12,500.
D.W. 7 says that towards the sale price the sum due under the promissory note was adjusted. But in cross-examination he had to confess that the recitals in Ex. B-23 are true and correct and that Ex. B-24 was executed in his favour by the second defendant who had purchased the property. In fact lie was reduced to the position of having to guess that the second defendant must have paid from family funds and of whose affairs he has no personal knowledge.
He stated that he does not even know if the second defendant and his brothers were divided prior to the date of Ex. B-23, though in the recital in the schedule of property this partition has been referred to specifically. When this witness's attention was drawn to the fact that Ex. B-23 does not recite that the promissory note debt stood wiped out by reason of the execution of the sale-deed and that the endorsement of payment on the promissory note is to the effect that it was discharged by cash payment, he had no explanation to offer.
In fact it is seen that he has come to depose on the side of the plaintiff and Others on account of the fact that after his sale of the properties to the second defendant, the properties have gone up in value by three times and he now naturally feels very irritated for having parted with his properties for Rs. 12,500. There was no evidence also that the joint family funds got lessened to the extent of the purchases made by the second defendant and which would naturally be the case if the second defendant had not borrowed for financing these transactions.
It has already been pointed out before that the practice in this family was to remit all surplus either to the Kumbakonam Bank or to the headquarters at Kunniyur and there could be no question of unaccounted large sums of money being in the hands of the second defendant. Though the plaintiff started with the story of outstandings of Rs. 1,40,000 it has also been mentioned how this point was not pressed.
49. It is unnecessary to multiply these details to show that in regard to these transactions, whereas the second defendant has shown how these transactions were financed by him by borrowing etc., without any recourse to the joint family funds, the plaintiff has not been able to show that any portion of the joint family funds went towards the financing of these transactions.
50. But even assuming that a small amount of joint family funds went towards the purchase of these properties by the second defendant after division in status, he can be asked only to account for the moneys misappropriated by him and he cannot be asked to place the entire properties purchased by him at the disposal of his brothers. This prin-j ciple has been recently laid down by this Court in cases where insurance premia are paid out of the joint family funds and in such cases the joint family is not entitled to a share in the policy amounts but only for the restitution of premia amounts paid out of the joint family funds.
51. To conclude, the purchases made by the second defendant are his separate properties and cannot be made available for partition amongst his brothers.
52. In the result, the lower Court having correctly decided all the issues its decree and judgment merit no interference. This appeal is dismissed and, inasmuch as all parties have on their own clear admissions been guilty of gross prevarications from stage to stage arid systematically abusing the process of Court, without costs.
Govinda Menon, J.
53. I agree.
54. Though I am not, perfectly satisfied that the purchase under Ex. B-4 should not be held to belong to all the four brothers I do not think that the appellant has placed sufficient materials before the Court to induce me to differ from the finding of fact arrived at by the trial Court which has received the concurrence and approval of my learned brother. The one fact which impels me to agree with the conclusion is that the brothers did not evince any intention to purchase the properties at all but wore anxious to realise the mortgage amount by filing O. S. 25/40.
55. Another factor is that Ex. B-4 specifically directsthe vendee to pay the sum of Rs. 14,320 towards thedecree amount in O. S. 25/40 without stating thatthe amount should go in discharge of the decree debt.In addition there is clear evidence that the otherbrother did not evince any desire until at a verylate stage to have these items. I am therefore, notwithout hesitation in agreement with the conclusionthat the acquisition under Ex. B-4 should be considered as the private property of the 1st defendant.