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Sir S. Subramania Aiyar and anr. Vs. Sri Mahant Prayag Dossjee Varu - Court Judgment

LegalCrystal Citation
Decided On
Reported in33Ind.Cas.677
AppellantSir S. Subramania Aiyar and anr.
RespondentSri Mahant Prayag Dossjee Varu
trust charitable trust - investment of trust money--renewal of deposits in bank--breach of trust--trusts act (ii of 1882), sections 15 and 20 civil procedure code (act v of 1908), section 92--duty of court to give proper directions. - .....temple, for the appointment of a new trustee, for accounts, and for certain other reliefs.2. the learned judge who tried the suit dismissed it finding on the main points against the plaintiffs. in the appeal three points were taken before us, of which the most important relates to the action of the defendant in leaving a certain sum, over two lakhs of rupees, in deposit with messrs. arbuthnot & co., a banking firm of madras, with the consequence that all but a very small amount was lost. it is claimed by the appellants that in leaving this, amount in fixed deposit with messrs. arbuthnot & co. the defendant acted contrary to the direction of the high court contained in paragraphs nos. 6 and 7 of the decree passed by this court on 10th february 1905 it is also contended that this was an.....

1. The suit was instituted by the appellants before us, two Hindu gentlemen interested in the temple of Tirupatti, under Section 92 of the Civil Procedure Code, for the removal of the defendant from the office of vicharanakartha of the temple, for the appointment of a new trustee, for accounts, and for certain other reliefs.

2. The learned Judge who tried the suit dismissed it finding on the main points against the plaintiffs. In the appeal three points were taken before us, of which the most important relates to the action of the defendant in leaving a certain sum, over two lakhs of rupees, in deposit with Messrs. Arbuthnot & Co., a banking firm of Madras, with the consequence that all but a very small amount was lost. It is claimed by the appellants that in leaving this, amount in fixed deposit with Messrs. Arbuthnot & Co. the defendant acted contrary to the direction of the High Court contained in paragraphs Nos. 6 and 7 of the decree passed by this Court on 10th February 1905 It is also contended that this was an improper investment which he, as the trustee of the charity, was prohibited from making under the general law.

3. There is no Statute governing charitable trusts in this country, and we are asked on behalf of the appellants to act upon Section 20 of the Trusts Act, II of 1882, though in terms it does not apply to a charitable trust but is limited to private trusts. The contention is that this Act really lays down what is under the general law the rule for guidance of all trustees and not merely of trustees of private trusts. There is another section of the same Act which enunciates the general principle as regards the way in which a trustee ought to deal with the trust property in his hands. That is Section 15. That section says that 'A trustee is bound to deal with the trust property as carefully as a man of ordinary prudence would deal with such property if it were his own; and, in the absence of a contract to the contrary, a trustee so dealing is not responsible for the loss, destruction or deterioration of the trust property'. There can be no doubt that the rule of conduct laid down by this section would be applicable to the defendant. But as regards Section 20, that only enumerates certain specific investments which are authorized for the purposes of that Act and prohibits investments in any other form of security. All that can be said is that the Legislature, in dealing in Section 20 with the question of investments of proceeds according to the principle laid down in Section 15 of the Trusts Act, thought that in India the securities mentioned in the former section were the proper forms of investment and that no other form of investment should be authorised in the case of private trusts.

4. Now, the first question that arises is, did the act of the defendant in renewing the deposits with Messrs. Arbuthnot & Co., on the various dates set out in the judgment of the learned District Judge, amount to investing of the money within the meaning of the law? The learned District Judge on a careful consideration of the evidence on the point has found that in the beginning of 1906 the trustee would have to incur an expenditure at about 4 lakhs of rupees or more. All the money that he had in hand was Rs. 40,000, except Rs. 2,34,000 and odd, the amount in question which was in fixed deposit with Messrs. Arbuthnot & Co., and another sum of Rs. 77,000 and odd in deposit with the Bank of Madras. The income of the temple consists mainly, if not solely, of the offerings which are received every year. Those offerings amount to a very large sum and the evidence shows that the current expenditure each month is about Rs. 15,000 i.e. Rs. 1,80,000 a year. But it appears that a large sum of money amounting to several lakhs of rupees belonging to the temple had been invested in a mortgage of Tiruttani Taluq belonging to the Karvetnagar Zemindari; and the circumstances in connection with that mortgage were such that, as found by the learned District Judge, the defendant would have been well advised to pay off the prior encumbrances which amounted to about Rupees two lakhs. Then there was a demand from the Court of Wards, which had taken possession of the Karvetnagar Zemindari, for Rs. 40,000 and odd on account of the excess expenditure incurred during the period of management. Further, the peishcush amounting to over one lakh of rupees had to be provided for, and Rs. 80,000 would be wanted in order to start certain schemes directed by the High Court. All these amounted to over 4 lakhs of rupees. The evidence, which is practically unrebutted, on the point is that of the defendant who says that in view of the probable expenditure he thought it best to renew the deposit with Messrs. Arbuthnot and Co. for another year and also to transfer the amount of Rs. 77,000 and odd from the Bank of Madras to Messrs. Arbuthnot & Co. to be placed in deposit with them, as he would thereby receive a higher rate of interest. Now, ordinarily no doubt this being a case of a fixed deposit the money would not be available except at the end of the year, but the evidence shows--and that evidence has been accepted by the District Judge, there being nothing to rebut it-that it would be open to the defendant to withdraw such deposits or any portion thereof on foregoing the interest that would be otherwise due either wholly or in part. Proceeding on that basis what was done by the defendant was that he kept the money in a condition in which it would be easily available to him whenever it might be wanted and at the same time he would be receiving interest on what was not withdrawn. That was prima facie a prudent course to adopt, and it is difficult to understand why we should say that there was anything wrong in what the defendant did. No improper motive, so far as this point is concerned, is imputed to the defendant. All that may be said is that in what he did he was guilty of a mistake of judgment. It is, however, contended that he failed to carry out the injunction of the High Court as he ought to have done and must, therefore, be held liable for the consequence. What the decree of this Court enjoined was that whatever money was not required for immediate expenditure was to be invested in a particular way, that is to say, in Government securities. But as is found by the lower Court--and correctly so found the defendant had good reasons to believe that all this amount might be required to meet what would be the probable expenditure in the year 1906. That being so, there would be no question of investment in the proper sense of the word. It should also be pointed out that the Rs. 2,34,000 and odd which was deposited with Messrs. Arbuthnot and Co., was not all available in the beginning of 1906. They were available in different sums throughout the year; for instance on the 25th January a sum of Rs. 7,000 and odd only was available; on the 3rd February, a sum of Rs. 25,000 and so on. It was not possible for the defendant to be certain what the income of the temple would be during the course of the year, as the income mainly consisted of offerings, and that is not capable of an exact estimate. As it so happened there was an unexpectedly large income that year. But the defendant cannot be blamed or in any way made liable for not having anticipated it. The facts being as I have stated, there is no ground for saying that the defendant was guilty of breach of trust with respect to the moneys left in deposit with Messrs. Arbuthnot & Co. As is well known, that firm enjoyed a high reputation, and its ultimate collapse was not expected by any one. It is a misfortune no doubt that such a large sum of money has been lost to the temple; but that loss can in no way be attributed to any negligence on the part of the defendant and was not due, as argued by the learned Vakil for the defendant, to any disobedience on his part of the decree of this Court.

5. The next question argued refers to certain offerings in the nature of prasadams. The case of the plaintiff is that these prasadams, which are in the shape of food offered to the temple, by right belong to the servants of the temple, otherwise called mirasidars, and that the defendant has no right to appropriate them as he admittedly has done. In justification of his action it is argued by the learned Advocate-General who appeared for him that he has been taking the prasadams since 1884, and the mirasidars or the servants of the temple have lost whatever right they had to these prasadams We do not think there is really any case of prescription. The defendant receives the prasadams in his capacity as trustee of the temple, and he is not entitled to plead that the right of the servants to these prasadams has been lost because since 1884 he has been appropriating them to himself. That the defendant has no right to the prasadams is, I think, clear upon the evidence. The learned District Judge in deciding against the trustee's claim has proceeded on the basis that the question was concluded by certain previous judgments which operated as res judicata, so far as this matter was concerned. It is contended on behalf of the respondent that the judgments in the suits of 1867 and 1907 would not he res judicata, inasmuch as the present suit is one under Section 92 of the Civil Procedure Code and that the procedure prescribed therein was not in force in 1867. But the relief prayed for in the previous suit was substantially what is claimed in the present suit. Apart from the question of res judicata whatever evidence there is on the subject is against the defendant's claim. The learned Judge, however, refused to give any relief to the plaintiffs on this point, holding that no loss was caused to the temple inasmuch as the temple would not derive any benefit from these prasadams and if there was any loss suffered by the mirasidars they did not come forward to complain. But that is not the correct view. The Court dealing with the case under Section 92 is entitled to give any directions that may be necessary and proper with reference to the property and income of the temple. It was within the competence of the District Court, apart from any suit which might or might not be instituted by the mirasidars, to lay down that the prasadams should not be appropriated by the defendant trustee and that he should administer them for the benefit of the mirasidars i.e., the servants of the temple. The plaintiffs are entitled to a declaration to the effect, and in view of the fact that the defendant has disobeyed previous decrees with reference to this matter it is necessary that he should be made to pay damages. The learned Vakil for the appellants would, however, be satisfied with nominal damages as that would suffice to mark the fact that the defendant's conduct was not justifiable. We fix the damages at Re. 1, to be credited, when paid, to the Devastanam.

6. The third question which has been argued relates to the site of certain stables, which were situated opposite to the Devastanam called 'Gurralapaga' and which the respondent, who is also the head of a neighbouring mutt called Hathiranjee Mutt claimed as belonging to the mutt and not to the Devastanam. The District Judge says that the materials placed before him with regard to this matter are not sufficient to enable him to come to a satisfactory conclusion. It seems to us that he is right. On behalf of the appellants it is stated that the entries in the Municipal Register show that for a long time this land was treated as the property of the temple. But as found by the learned District Judge these entries do not, disclose any such thing. The learned Advocate-General stated that his client would be quite willing to abide by any decision of this Court on the question of title to this land. We agree, however, with the District Judge that the materials for a proper adjudication are not available in this case.

7. The result will be the decree of the lower Court will be modified so far as the question of prasadams is concerned in the way indicated. Otherwise the appeal is dismissed with costs.

8. The memorandum of objections is also dismissed.

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