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C.T.V.E. Vairavan Chetty and ors. Vs. Chettichi Achi - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1936Mad876
AppellantC.T.V.E. Vairavan Chetty and ors.
RespondentChettichi Achi
Cases Referred and Annamalai Chettiar v. Muthukaruppan Chettiar
Excerpt:
- - he was certainly entitled to call upon the defendant to account for the proceeds of the hundi and in that view the present suit is clearly within the scope of section 10 after the inclusion in that section in 1908 of suits for accounts......to the defendant, there can be little difficulty in holding that section 10, lim. act, covers the present suit. the section requires that the property should have become vested in the defendant in trust for a specific purpose. as the trust in the present case relates to money, the issue of the hundi in favour of the defendant was sufficient to vest the amount in him, and there is no doubt that a trust for the payment of the debts of vellayappa and of the balance to vellayappa himself will constitute a trust for a 'specific purpose.' the only other requisite for the application of section 10 is that the suit must be one for the purpose of following the trust property or the proceeds thereof or for an account of such property or proceeds. it has been contended before us that the trust, if.....
Judgment:

Varadachariar, J.

1. (After setting out facts as above and after discussing the evidence, his Lordship proceeded.) We agree with the finding of the lower Court that the hundi was cashed by the defendant who had agreed to undertake the obligation cast upon him as per the terms of the arrangement alleged in para. 6 of the plaint. The only other question argued before us was the plea of limitation. The lower Court has held that the suit is covered by Section 10, Lim. Act, and there is accordingly no bar of limitation. In the view that the payment to Vellayappa himself of any balance that might remain after payment of his creditors was part of the arrangement under which the hundi was issued to the defendant, there can be little difficulty in holding that Section 10, Lim. Act, covers the present suit. The section requires that the property should have become vested in the defendant in trust for a specific purpose. As the trust in the present case relates to money, the issue of the hundi in favour of the defendant was sufficient to vest the amount in him, and there is no doubt that a trust for the payment of the debts of Vellayappa and of the balance to Vellayappa himself will constitute a trust for a 'specific purpose.' The only other requisite for the application of Section 10 is that the suit must be one for the purpose of following the trust property or the proceeds thereof or for an account of such property or proceeds. It has been contended before us that the trust, if any, was only for payment of Vellayappa's creditors, that in that view Vellayappa cannot be regarded as a 'beneficiary' and that Section 10 ought not to be applied to a suit whose object is not to compel payment of the debts. The section does not in terms say that the suit must be one by the beneficiary or his representatives, but the expression 'following' trust property practically implies that condition. Prior to the Limitation Act of 1908, the section did not contain any reference to a suit for 'accounts.' In that state of the law, it might perhaps have been possible to contend that the beneficiary alone could file a suit under the section and the suit must only be for the recovery of the trust property. We are not prepared to accept the contention that Vellayappa cannot be regarded as a beneficiary, but it does not seem to us necessary for the purpose of this case to express a definite opinion with reference to that contention. He was certainly entitled to call upon the defendant to account for the proceeds of the hundi and in that view the present suit is clearly within the scope of Section 10 after the inclusion in that section in 1908 of suits for accounts.

2. The case relied on in this connexion, Jasoda Bidi v. Parmanand (1894) 16 All 256, is not analogous to the present case. The suit there was instituted by one who claimed under the settlor. In the present case it does not appear that the arrangement in favour of the creditors had been communicated to them, The legal position will then be that Vellayappa would be the beneficiary for the time being: see Bill v Cureton (1835) 2 My & K 503: Garrard v. Lord Landerdale (1830) 3 Sim 1; Synnot v. Simpson (1851) 5 HLC 121; Ellis & Co. v. Cross (1915) 2 KB 654; Halsbury Laws of England Vol. 28, para. 71. In a sense both Vellayappa and his father were parties to Ex. A and the provision was made out of common funds. This may raise a question whether after the father's death Vellayappa alone could have revoked the trust in favour of the creditors: of. Priestly v. Ellis (1897) 1 Ch 489; see also In re Fritzgerald's Settlement: Fritzgerald v. White (1888) 37 Ch D18; but this is immaterial for the present purpose. Whether Vellayappa was a settlor jointly with the father or a settlor by himself, he could also be a beneficiary according to the above authorities. Even if, as indicated in some of them, see also Action v. Woodgate (1833) 2 My & K 492, the defendant is only to be regarded as an agent of Vellayappa and not as a trustee, the suit will be in time as will be presently shown. But as the legal title to the hundi and the proceeds thereof had undoubtedly vested in defendant 1, it seems right to regard the defendant as a trustee rather than as an agent: see Chhatrapat Singh v. Gopichand (1899) 26 Cal 750. Assuming, for the sake of argument, that the case does not fall under Section 10, Lim. Act, we are unable to accept the appellant's contention that the suit is governed by Article 62. The defendant's obligation is certainly an equitable obligation to account, and Vellayappa could not at the moment of the issue of the hundi or its realisation claim the money as money had and received: see Annamalai Chettiar v. Muthukaruppan Chettiar 1931 8 Rang 645. One suggestion on behalf of the plaintiff is that the suit may be regarded as governed by Article 60; but we are unable to accept that suggestion because it is difficult to find an agreement that the money shall be payable on demand. If the defendant is to be regarded as an agent of Vellayappa for the purpose of paying off his creditors, the suit will fall under Article 89; and as there was no demand and refusal prior to the notice, Ex. L, dated 10th August 1926, the suit will be in time, whether limitation runs from that date or from Vellayappa's death in September 1927. If this is not the correct view, the suit will be governed by Article 120; and even in that case limitation cannot be held to have commenced or the right to sue accrued prior to the date of Ex. L for, as observed in Mt. Bolo v. Mt. Koklan 1930 11 Lah 657, and Annamalai Chettiar v. Muthukaruppan Chettiar 1931 8 Rang 645, the defendant could not point to any prior date at which he had denied Vellayappa's claim or in any other manner infringed or threatened to infringe his right. The plea of limitation must accordingly be overruled. The appeal fails and is dismissed with costs.


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