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Pachiappa Chetty Vs. Sivakami Ammal - Court Judgment

LegalCrystal Citation
Decided On
Reported in91Ind.Cas.671
AppellantPachiappa Chetty
RespondentSivakami Ammal
Cases ReferredBhuranbhai v. Bai Rukmani
limitation act (ix of 1908), section 10 - trusts act (ii of 1882), section 5--funds entrusted to relation to carry on money-lending business for benefit of owner--trust, whether created--mortgage securities acquired with trust funds--registered-deed, whether necessary to create trust--change in purpose of trust--suit by beneficiary for account of trust funds--limitation. - .....the plaintiff sues him for an account and for payment over of the moneys which she alleges her father ponnambala chetty entrusted to his brother-in-law sadayappa chetty defendant's father which on his death passed into the hands of the defendant. defendant denied the entrustment and pleaded that pro-notes and mortgage-bonds in his name were his own property and raised several legal pleas and further contended that the suit was barred by limitation. in answer to the last plea plaintiff contended that her case fell within section 10 of the limitation act and no limitation applied to it. the subordinate judge overruling the defendant's pleas passed a decree in plaintiff's favour and the defendant has appealed to us.5. the only point raised in the appeal is the one of limitation, the.....

Phillips, J.

1. The plaintiff in this case is the daughter of one Ponnambala Chetty who with his brother, Periambala Chetty formed an undivided family. They carried on money-lending dealings and entrusted those dealings; to their brother-in-law Sadayappa Chetty, the lather of the present defendant, Sadayappa Chetty continued those dealings for sometime and maintained accounts for the monies in his hands. In 1906 the brothers Ponnambala Chetty and Periambala Chetty effected a partition and the latter removed his share of the property from the hands of Sadayappa Chetty who, however, continued to deal with the property of Ponnambala Chetty until the latter's death in February 1912, and even after that date remained in possession of all his property. The plaintiff now alleges that Sadayappa Chetty held all these properties in trust for her and has brought this suit against his son, the defendant for an account. These facts are not disputed; but it is contended that the plaintiff's suit for an account is barred by limitation. The Subordinate Judge has, however, found that Section 10 of the Limitation Act is applicable to this case, and has given a decree. In appeal we are only concerned with the question of limitation; it being contended for the appellant that Section 10 is not applicable because the property of Ponnambala Chetty had not become vested for any specific purpose either in Sadayappa Chetty or in the defendant. The main point relied on in appeal is that the property never became vested in Sadayappa Chetty for any specific purpose; and it is contended that as the property consisted of promissory-notes, bonds and mortgage-deeds, the provisions of Section 5 of, the Trust Act were not complied with, and no valid trust has been created. It is in evidence that shortly before his death Ponnambala Chetty directed Sadayappa Chetty to hold his property for the benefit of his wife and daughter; and there seems to be no reason to disbelieve the oral evidence on this point, for, many witnesses speak to the fact and the discrepancies in their evidence are merely on matters of detail which is due to the fact that the witnesses are deposing to events which took place nine years ago. It is also alleged that when Sadayappa Chetty died in December 1912 he informed the plaintiff and her mother that his son would continue to hold the property on their behalf. The arguments in appeal have been confined to the entrustment alleged to have been made by Ponnambala Chetty shortly before his death, and it is contended that, as some of the property consisted of mortgages which were immoveable property, no valid transfer was effected as there was no registered instrument of transfer and consequently, the property did not vest in Sadayappa Chetty, and a fortiori did not vest in him for any specific purpose. This argument, however, ignores the pleadings in the suit. The plaintiff alleged that the properties vested in Sadayappa Chetty and after him in his son, the defendant, and were held in trust for her. The defendant admitting that the properties vested in him contended that the properties vested in him absolutely and that the plaintiff had no interest therein. This contention of the defendant has been found against and this finding is not disputed in appeal. It was, therefore, the case of both parties that the properties actually vested in the defendant. Consequently no evidence was let in as to the manner in which such vesting was effected, and consequently it hardly lies with the defendant now to plead that the plaintiff has not proved an effective transfer of the properties.

2. Apart from this, the whole of the appellant's argument has been confined. to the period dating from Ponnambala Chetty's death; but it is in evidence and it in not disputed now that the property entrusted to Sadayappa Chetty was entrusted to him many years before Ponnambala Chetty died; the alleged trust being at the time one for the benefit of Ponnambala Chetty himself. The bulk of the property originally entrusted was presumably money and, possibly promissory-notes and bonds; there is no evidence at all that at that time any mortgages existed. The transfer of the money and bonds, therefore, could be effected by delivery; and if it was the intention of the parties that Sadayappa Chetty should hold the properly as a separate fund to be accounted for by him to Ponnambala Chetty, undoubtedly an express trust would be created. There being no immoveable property, so far as it appears from the record, no registered instrument of transfer would be necessary; and the property would vent in Sadayappa Chetty by the mere transfer of possession coupled with the intention of the parties that such delivery of possession should vest the property in Sadayappa Chetty. The subsequent direction by Ponnambala Chetty that the property should be held for the benefit, of his wife and daughter was merely an alteration of the purpose of the trust; in both cases the property would have been held for a specific purpose. In this view of the case, undoubtedly an express trust within the meaning of Section 10 of the Limitation Act was created and, consequently, the plaintiff's present suit cannot be barred by limitation. I do not, therefore, think it necessary to ascertain in this whether the mortgage-deeds had become vested in Sadayappa Chetty inasmuch as there is nothing to show that, when the entrustment was made, any immoveable properties, such as mortgages, wore transferred. Their existence now can be explained by the fact that Sadayappa Chetty dealing with the monies of Ponnambala Chetty converted some of those monies into mortgages; and, if the money vested in him, the proceeds thereof would similarly vest. Even if it were necessary to prove vesting, it is possible that the view taken by the learned Chief Justice in Kistappa Chetty v. Lakshmi Ammal 32 M.L.T. 217 : A.I.R.(1933) (M.) 578 that the word 'vesting' means merely 'properly having control of the property' would be sufficient to dispose of the case; but, as I am of the opinion that the parties did not go to trial on this question of vesting, the defendant having admitted that the property vested in him, it is unnecessary to further discuss this question; and I need not refer to the various authorities, English and Indian, which have been referred to in the course of the argument, an argument which was largely beside the point with reference to the pleadings in the case.

3. The appeal, therefore, fails and dismissed with costs.

Krishnan, J.

4. The defendant, the appellant in this appeal, is the husband of the plaintiff. The plaintiff sues him for an account and for payment over of the moneys which she alleges her father Ponnambala Chetty entrusted to his brother-in-law Sadayappa Chetty defendant's father which on his death passed into the hands of the defendant. Defendant denied the entrustment and pleaded that pro-notes and mortgage-bonds in his name were his own property and raised several legal pleas and further contended that the suit was barred by limitation. In answer to the last plea plaintiff contended that her case fell within Section 10 of the Limitation Act and no limitation applied to it. The Subordinate Judge overruling the defendant's pleas passed a decree in plaintiff's favour and the defendant has appealed to us.

5. The only point raised in the appeal is the one of limitation, the learned Vakil for the appellant expressly stating that he gave up all other points. The question we have to decide is thus confined to whether Section 10 applies on the facts of this case. It is clear from the evidence that Ponnambala Chetty and his brother who, were carrying on a money-lending business in Thiruvannamalai but living in a small village near by, being apprehensive of the safety of their property purchased a house in Thiruvaimamalai, and gave it to their brother-in-law Sadayappa Chetty to live in, free of rent, and transferred their funds to' him and got him to transact their business on their behalf in his own name keeping' separate account for the same. He was to render accounts and hand over the moneys and profits when demanded. Ponnambala's brother subsequently divided off from him and obtained from Sadayappa his half share in those moneys and in the house. But Sadayappa continued to act for Ponnambala till the latter's death in 1912, There is a body of evidence which there is no reason to discredit that just before his death early in 1912 Ponnambala instructed Sadayappa to continue the business as before and hold the moneys for the benefit of his wife and daughter, the plaintiff, Sadayappa agreed to it and acted accordingly. Sadayappa also died at the end of the year 1912 and it is in evidence that just before his death, he told his son the defendant to continue the arrangement and pay the ladies the monies of plaintiff's father when wanted. Plaintiff's mother brought a suit against her son-in-law the defendant and got a decree for the transfer to her of a number of pro-notes and bonds standing in the defendant's name but found to have been taken with her husband's money. Plaintiff has brought this suit after her mother's death for an account of all moneys belonging to her father which the defendant collected and had not hitherto accounted for and for payment over.

6. On these facts the plaintiff contends that Sadayappa was an express trustee in whom moneys were vested by her father for the specific purpose of carrying on his money-lending business, improving the estate and handing over the capital and profits to him on demand, a purpose which afterwards changed by her father into a similar one in favour of herself and her mother; she, therefore, pleads Section 10 applies. The defendant pleads that there is no proof that any funds of the plaintiff's father were vested in his father and even if so vested he says they were not vested for any specific purpose and Section 10 could not apply. According to him his father was only an agent of the plaintiff's father and as such an agency came to an end with his death in 1912 the suit is barred by limitation.

7. Although the evidence on the point is somewhat meagre as to what actually took place when Sadayappa was installed in the newly purchased house in Thiruvannamalai there is evidence to show that the funds of the plaintiff's father's money-lending business were thereafter kept by Sadayappa and were lent out by him on bonds and mortgages taken either in his own name or in the name of his son the defendant. Exhibit KKK the account produced and the other documents referred to by the Subordinate Judge in his judgment prove this. It is true that some bonds were taken in Ponnambala's name and Ponnambala at times sent chits to Sadayappa for loans to be given to borrowers. But these circumstances do not interfere with the inference that Sadayappa was made a trustee and was not a mere agent. If he was only an agent he should not have taken bonds in his own and in his son's name for moneys got from Ponnambala. The near relationship of the parties, the fact that Sadayappa dealt with Ponnambala's moneys as if they were his own and took bonds in his and in his son's name for such moneys when lent; the fact that he kept a separate account for these funds, the evidence as to what took place at Ponnambala's and Sadayappa's deaths all point to the fact that Sadayappa was not a mere agent but was in reality a trustee. There is no force in the argument that the properties were never properly vested in the defendant's father by Ponnambala. In fact the defendant's case in the lower Court was not merely that the properties were vested in his father and after his death in him but that they were actually his own properties. The plea now taken that the properties were not vested in his father is not consistent with that position. The funds were all apparently in the shape of moneys which had only to be handed over to the defendant's father with the intention of passing the property to him to vest them in him. If there were any pro-notes or bonds in Ponnambala's name at the time which required endorsement or assignment in writing to transfer, they were evidently subsequently realized and converted into moneys and taken by Sadayappa as no such notes or bonds exist now. Such taking with Ponnambala's consent would vest those funds in Sadayappa, The contention that a registered instrument was required to create a trust with reference to immoveable property like a mortgage interest is of no avail here as it is not shown that at the time the funds were vested in Sadayappa any portion of them consisted of mortgage securities. The mortgage-bonds that now exist were taken in defendant's name by his father for moneys lent out by him which were already vested in him though they were originally part of Ponnambala's estate. I have no doubt that Ponnambala's money was legally vested in Sadayappa in trust. The evidence also shows that the specific purpose of the trust was to carry on money-lending with those moneys and to increase the estate by addition of profit's by way of interest and hand over when called on to Ponnambala. It was clearly open to Ponnambala, the funds being already vested in Sadayappa, to alten the propose of the trust by merely directing him to hold them for the benefit of his wife and child as; he did just before his death. It seems to me that all the conditions necessary for the application of Section 10 of the Limitation Act exist in this case and the Subordinate Judge was right in overruling the plea of limitation, as under Section 10 the defendant as the legal representative of the trustee is equally barred from pleading the Statute.

8. As this case turns in the facts proved here which clearly bring it within the section, it is not necessary to refer to any authorities on the exact meaning of the section. The case cited in Krishna Pattar v. Lakshmi 42 M.L.J. 119 : 15 L.W. 886 to which I was a party is clearly distinguishable as that was a case of a constructive trust. The case in Bhuranbhai v. Bai Rukmani 10 Bom. L.R. 510 is more in point.

9. I agree that the appeal fails and should be dismissed with costs.

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