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Life Insurance Corporation of India Vs. Smt. Iqbal Kaur and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Limitation
CourtJammu and Kashmir High Court
Decided On
Case NumberCivil First Appeal No. 20 of 1982
Judge
Reported inAIR1984J& K1,[1986]60CompCas204(NULL)
ActsJammu and Kashmir Code of Civil Procedure (CPC) , 1977 Svt. - Sections 20 and 21; ;Code of Civil Procedure (CPC) , 1908 - Sections 20 and 21; ;Jammu and Kashmir Specific Relief Act, 1977 Svt. - Setion 42; ;Jammu and Kashmir Court Fees Act, 1977 Svt. - Section 7; ;Specific Relief Act, 1963 - Section 34; ;Court Fees Act, 1870 - Section 7; ;Jammu and Kashmir Limitation Act, 1995 St. - Sections 9 and 10 - Schedule - Articles 57 and 145; ;Jammu and Kashmir Trusts Act, 1977 Svt. - Section 6
AppellantLife Insurance Corporation of India
RespondentSmt. Iqbal Kaur and ors.
Appellant Advocate V.S. Malhotra, Adv.
Respondent Advocate Joginder Singh, Adv.
DispositionAppeal allowed
Cases ReferredChambers v. Chambers
Excerpt:
- kotwal, j. 1. the appellant herein is the life insurance corporation of india, which as been directed by district judge, jammu, by a decree of mandatory injunction, to pay to the plaintiffs respondents, smt. iqbal kaur and her two daughters talwinder kaur and salvinder kaur, the amount covered by the policy, which the appellant had issued jointly in favour of one s. amar singh and his wife harbans kaur.2. put briefly, the respondents' case is that s. amar singh the husband of respondent iqbal kaur and the father of the other two respondents, had taken out a policy, being no. 6420679, jointly in his name and in the name of his wife harbans kaur on 28-12-1957, in terms whereof, on the death of one of the assured, the surviving assured would be entitled to get a sum of rs. 20,000/-from the.....
Judgment:

Kotwal, J.

1. The appellant herein is the Life Insurance Corporation of India, which as been directed by District Judge, Jammu, by a decree of mandatory injunction, to pay to the plaintiffs respondents, Smt. Iqbal Kaur and her two daughters Talwinder Kaur and Salvinder Kaur, the amount covered by the policy, which the appellant had issued jointly in favour of one S. Amar Singh and his wife Harbans Kaur.

2. Put briefly, the respondents' case is that S. Amar Singh the husband of respondent Iqbal Kaur and the father of the other two respondents, had taken out a policy, being No. 6420679, jointly in his name and in the name of his wife Harbans Kaur on 28-12-1957, in terms whereof, on the death of one of the assured, the surviving assured would be entitled to get a sum of Rs. 20,000/-from the appellant Corporation. Harbans Kaur having died on 10-6-1959, a claim for Rs. 20,000/- was preferred by S. Amar Singh to the appellant, but his claim was neither accepted nor rejected by it during his lifetime. He died on 18-8-1970, leaving behind the respondents as his only heirs and legal representatives, entitled to claim the aforesaid amount from the appellant. Ever since his death, this amount lay in trust with the appellant. The respondents laid a claim to this amount, but the appellant merely acknowledged the same and failed to make any payment to them. They, therefore, filed a suit for declaration that they were entitled to the aforesaid amount of Rupees 20,000/- with interest at the rate of 18% per annum, with the consequential relief of mandatory injunction that the appellant be directed to pay the aforesaid sum to them.

3. While not denying the fact that S. Amar Singh had taken out the aforesaid policy, the appellant resisted the suit on the grounds: firstly, that nothing was due to the assured S. Amar Singh from it; secondly, that Courts in the State of Jammu and Kashmir had no jurisdiction to try the suit, which was triable either by Courts in Bombay, where the Central Office of the appellant Corporation was situated, or by Courts in Jullunder, where the contract was made and where the insurance money was payable; thirdly, that the suit in its present form was not maintainable; fourthly, that the suit had not been filed against the proper person; and fifthly, that the suit was barred by time.

4. The trial Court raised a number of issues on these pleas and on taking evidence of the parties on them, eventually found all the issues against the appellant and decreed the respondents' suit as prayed for, hence the appeal.

5. Before us, Mr. Malhotra assailed the judgment and decree of the trial Court on three grounds only: firstly, that the trial Court had no jurisdiction to entertain and try the suit, which ought to have been filed either at Bombay or at Jullunder; secondly, that the suit in its present form was not maintainable and the respondents ought to have filed a suit for recovery of Rs. 20,000/-on payment of ad valorem court-fee on the sum claimed; and thirdly, that the suit was hopelessly barred by time. I now proceed to deal with these grounds one by one.

6. Admittedly, the suit is based upon a contract of insurance. It will be thus governed by Section 20, Civil P. C. Such a suit can, under Clauses (a) and (b) of this section, be tried by a Court within the local limits of whose jurisdiction the defendant or each of the defendants actually and voluntarily resides, or carries on business, or works, for gain at the time of the commencement of the suit, or if there are more than one defendants, where any of them so resides, or carries on business, or works for gain, provided either that the other defendants acquiesce in it, or the Court itself grants leave to institute the suit, or under Clause (c) of the section in the Court within the local limits of whose jurisdiction the cause of action wholly or in part arises. Explanation II to Section 20 reads as under:

'A corporation shall be deemed to carry on business at its sole or principal office in the State or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.'

7. According to this explanation, therefore, a corporation for the purposes of Clauses (a) and (b) shall be deemed to carry on its business even at a place where it is having its subordinate office, and a suit against the corporation may be instituted in a Court situated at such a place, provided the cause of action for filing the suit has wholly or in part, arisen within the local limits of its jurisdiction. A similar interpretation was placed upon Explanation II by a Full Bench of the Andhra Pradesh High Court in Central Warehousing Corporation v. Central Bank of India Ltd., AIR 1973 Andh Pra 387 wherein it was held (para 14):

'Explanation II has two distinct parts. (1) A corporation shall be deemed to carry on business at its sole or principal office in India; and (2) A corporation shall be deemed to carry on business in respect of any cause of action arising at, any place where it has also a subordinate office at such place. So far as the second part is concerned, if any cause of action arises at any p]ace where it has also a subordinate office, it shall be deemed to carry on business there and a suit could be instituted in the Court having jurisdiction over such place.. ... .'

8. Cause of action means every factwhich would be necessary tor the plaintiff, toprove, if traversed, in order to support, hisright to judgment. In other words, it meansand includes all those facts which it is necessary for the plaintiff to prove in order tosucceed in his suit. It is common groundthat the amount insured became, payable toS. Amar Singh, the surviving assured, themoment his wife Harbans Kaur died. IfAmar Singh were to file, a suit for the recovery of this amount of Rs. 20,000/- againstthe appellant, he had necessarily to provethat his wife Harbans Kaur bad died. Similarly, right of the respondents to claim thisamount arose only on the death of S. AmarSingh, the other assured, whose estate theyclaim to inherit as his heirs. They too were,therefore, required to prove the factum ofhis death before they could succeed in theirsuit. In any case, therefore, death of theassured did form part of the cause of actionfor the suit for the recovery of this sum ofRs. 20,000/-.

9. It is not disputed that Harbans Kaur died in the year 1959 at Doda, a place then within the local limits of the jurisdiction of the Court of District Judge, Jammu. It is also not in dispute that S. Amar Singh died in August 1970 at R.S. Pora, again a place within the local limits of the jurisdiction of the said Court. In each case, therefore, the cause of action partly arose at admittedly a place within the local limits of the jurisdiction of the Court of District Judge, Jammu. It is common ground that the appellant Corporation has its branch office at Jammu. The present suit was thus rightly instituted in the Court of District Judge, Jammu, which had jurisdiction to try it. A suit for insurance money will lie in a Court within the local limits of whose jurisdiction the assured dies, for, his death is undoubtedly a part of the cause of action for such a suit. A similar view was taken by a Division Bench of the Calcutta High Court in Peoples Insurance Co. Ltd. v. Benoy Bhusan Bhowmik, AIR 1943 Cal 199, withwhich I respectively agree. In that case it was held :

'Now, in the case of a life insurancepolicy the claimant must prove the death ofthe assured before he can enforce his claimagainst an insurance company; the death ofthe assured is thus a material part of thecause of action, the plaintiff is bound toprove the fact if traversed, and, if not provedthe defendant will have an immediate rightto judgment. A contract of insurance is acontingent contract, and the right to recovermoney payable under it depends upon thehappening of a particular event. It is thehappening of that event and not merely thefailure of the insurance company to pay themoney which gives rise to the cause ofaction... .....'

10. The authority viz., Smt Kamla Chopra v. Life insurance Corporation of India, AIR 1975 Delhi 15, relied upon by Mr. Malhotra is clearly distinguishable on facts. In that case, jurisdiction of the Delhi Court, in which she had instituted her suit, was sought to be defended by the plaintiff on two grounds: firstly, that refusal to pay the insurance money was made by the defendant company at Delhi, and secondly, that the defendant company had also its Divisional Office in Delhi. So far as the first ground was concerned, it was held that refusal to pay did not constitute a part of the cause of action, for, to get such a claim, it was not necessary, to show as to whether the same was refused by the defendant Company. Sofar as the second ground was concerned, it was held that since no part of the cause of action had admittedly arisen in Delhi, as such, Explanation II to Section 20 did not apply to give jurisdiction to the Delhi Court. This authority is thus of no avail to Mr. Malhotra.

11. Even assuming for the sake of argument that the present suit could not have been filed in the Court of District Judge, Jammu, because the said Court did not have the territorial jurisdiction to try it, the decree assailed in the appeal, cannot still be upset. This is so because of Section 21, Civil P. C. which reads as under:

'No objection as to the place of suing shall be allowed by any appellate or revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement, and unless there has been a consequent failure ef justice:'

Section 21 says that no objection as to the place of suing shall be allowed by the appellate or the revisional Court, unless, it was taken in the trial Court at the earliest opportunity, and unless further that there has been a consequent failure of justice, a failure which is attributable to the reason that the suit was filed in a Court in which it ought not to have been filed due to want of territorial jurisdiction. This section along with Section 99, Civil P. C. and Section 11, Suits Valuation Act, came up for interpretation, before their Lordships in Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, wherein, it was held (para 7) :

'With reference to objections relating to territorial jurisdiction, Section 21, Civil P. C. enacts that no objection to the place of sitting should be allowed by an appellate or revisional Court, unless there was a consequent failure of justice. It is the same principle that has been adopted in Section 11, Suits Valuation Act with reference to pecuniary jurisdiction. The policy underlying Sections 21 and 99, C. P. C. and Section II, Suits Valuation Act, is the same, namely, that when a case had been fried by a Court on the merits and judgment rendered; it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the legislature has been to treat the objections to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court unless there has been a prejudice on the merits. The contention of the appellants, therefore, that the decree and judgment of the District Court, Manghyr, should be treated as a nullity cannot be sustained under Section 11, Suits Valuation Act.'

12. A similar view was taken, in Champalal v. Saligram, AIR :1961 Raj 235; Yogeshwar Raj Puri v. Yog Raj Puri, AIR 1967 Punj 163, Indermal, Tekaji Mahajap v. Ramprasad Gopilal, AIR 1970 Madh Pra 40.

13. In the present ease the appellant has failed to prove any consequent failure of justice. In fact no such plea has been taken by it in athe memo of appeal. The suit has been tried on merits. The parties have led all the evidence that they wanted to produce in the trial Court. Its judgment, cannot be over set merely en the ground that it had no territorial jurisdiction to try the suit. In any case, therefore, this ground must fail.

14. The respondents have attempted to bring their suit within the four corners of Clause 7 (iv) (c), Court-fees Act by styling it as a suit for declaration of title with, consequential relief of mandatory injunction, and their attempt has also succeeded in the trial Court. Mr. Malhotra, however, contended that its present form was given tothe, suit by the respondents with a view toevading payment of ad valorem court-fee onthe main, rather the only relief of recovery,of Rs. 20,000/- claimed in it. According tothe learned counsel, the respondents ought tohave brought a suit for the, recovery ofRs. 20,000/- simpliciter without asking for adeclaration that they were entitled to thisamount on the death of S. Amar Singh,through whom they claimed it. I find considerable force in this contention. Section 42, Specific Relief Act, provides that aplaintiff may seek a declaration that he isentitled to any legal character, or to anyright to any property, if the defendantdenies, or is interested in denying his titleto such character or sight, and the provisoto this section further lays down that theCourt shall refuse such a declaration, wherethe plaintiff fails to ask for further reliefwhich is available to him. The object of thissection is obviously to provide a perpetualbulwark against adverse attacks on the titleof the plaintiff, where a cloud is cast uponit, and to prevent further litigation by removing the existing cause of controversy.The threat to his right has to be real and notimaginary. In the present case the declaration sought by the respondents was clearlyuncalled for. Nowhere in the plaint it is tobe found that the appellant had denied orwas even, interested in denying their legalcharacter as the heirs of S. Amar Singh. Onthe other hand, they have clearly averredthat the appellant failed to pay to them thesum claimed despite service of notice on it,eyen though it had always acknowledgedtheir right to get it. It is a different matterthat there is not even an iota of evidence toshow that the appellant had at any timemade any such acknowledgment.

15. Even assuming that the respondentscould have asked for such a declaration, thequestion still remains as to whether theycould have brought their suit within the purview of Section 7(iv)(c). Before Clause (c)may apply, it has to be shown that the substantive relief claimed in the suit is declaration and the consequential relief flowsdirectly from it, which cannot be claimedindependently of it. In other words, it mustbe shown that a suit for the relief claimed asa, consequential, relief will not lie, unless therelief of declaration is also sought in it.Seeking a declaration of the right and notproof of it should be essential for bringinga suit within the purview of Clause (c). Where grant of the declaration is merely incidentalto the grant of the consequential relief claimed in the suit, it will not fall under Clause (c). To illustrate it by giving examples, where the plaintiff claims recovery of possession of the suit property as its owner, it will not be necessary for him to seek a declaration that he is the owner of the property and to claim its possession only by way of a consequential relief. He can file a suit for possession simpliciter and may have to prove his ownership, if traversed by the defendant, to get a decree for possession. On the other hand, Where a plaintiff seeks possession of the suit property, which the defendant has occupied on the basis of a sale deed executed by the person through whom the plaintiff claims the property, and which the plaintiff alleges is vitiated by fraud or undue influence, he cannot bring a suit for possession simplicity, and shall have to seek a declaration to the effect that the sale deed is void on that account, claiming its possession by way of consequential relief only, for, so long as the sale deed stands in his way, he will not be entitled to possession of the suit property, and shall have to get rid of the sale deed by a decree of the Court. Furthermore, the fact whether the declaration of right is a substantive relief, must appear from the substance of the claim, and not from the bold averments made in the plaint, which has been artistically drafted to evade payment of the requisite court-fee. The law to this extent is well settled. In Sri Krishna Chandraji v. Shyam Behari Lal, AIR 1955 All 177, for instance, the declaration sought in the suit that plaintiff 2 was the Sarbarkar of plaintiff 1 was not considered necessary for granting him the consequential relief of possession of the temple and the movables therein. In that case it was held fat pp. 179-80) :--

'......... We are of opinion that this fourth ingredient, means that it is necessary for a relief to be a consequential relief that that relief be not capable of being claimed in the absence of a claim for declaration, as a substantive relief, that is to say, no suit for that relief can lie unless the suit also contemplates a declaratory relief. It is only in such suits that it can be said that the relief sought is so linked with the declaratory relief that it should be considered a relief consequential to the declaratory relief.'

To the same effect are the observations made by a Full Bench of the Mysore High Court in H.R. Patel v. Mrs. C.G. Venkatalakshmma, AIR 1955 Mys 65, which read as under (para 2):--

'The main relief sought by the plaintiff in the plaint is injunction. The said relief canbe said to be a consequential relief only if it cannot be granted except on a declaration of the right of the plaintiff and not merely on proof of that right. The plaintiff in a suit for recovery of possession of land, if entitled to possession on proof of title and there is no cloud on the title occasioned for instance by a sale either by himself or through Court which has to be removed by a declaration before possession can be given is bound to pay court-fee on the basis that it is a suit for possession only though as a matter of fact there is a prayer in the plant for a declaration of his title. The Court in such a case should be guided by the substance of the case of the plaintiff as set out in the plaint and treat it as if he had not prayed for the superfluous, and unnecessary prayer for declaration. To hold otherwise would result in the plaintiff evading payment of legitimate court-fee under Clause (v) of Section 4, Mysore Court-fees Act by merely adding an unnecessary prayer for declaration of title

16. Apart from the fact, therefore, that the appellant bad never disputed the right of the respondents to claim the estate of S. Amar Singh as his heirs before such a dispute in its written statement to the suit still the respondents could have and should have brought a suit for the recovery of Rs. 20,000/- simplicity, as the declaration that they were entitled to inherit the estate of S. Amar Singh would not be essential, but merely incidental to the main relief of the recovery of the aforesaid sum. The same would be true even if the two reliefs of declaration and mandatory injunction were to be treated not as inter-dependent, but independent on each other, for, in that case also, the relief of mandatory injunction would not be a proper substitute for the relief of the recovery of the insurance money, which the respondents could have claimed only by paying ad valorem court-fee on the sum claimed. An issue could have been raised to that effect in the suit, and this fact could have been proved by the respondents by producing evidence on it, in order to get the decree prayed for. The frame of the suit, I am convinced, was a clumsy attempt on the part of the respondents to evade payment of ad valorem court-fee on Rs. 20,000/-in terms of Section 7(i), Court-fees Act, which must be condemned.

17. This brings me to the third and the last contention that the suit is barred by limitation. Whereas the respondents based their suit on Section 10, Limitation Act, thelearned District Judge held that it was governed by Art. 145 of the Limitation Act. Contrary to all this, Mr. Malhotra contended that it was governed by Art. 57, Limitation Act. All the three provisions to the extent they are relevant for the present discussion, are reproduced as below:

'10. Suits against express trustee and their representatives.--Notwithstanding anything hereinbefore contained, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof or for an account of such property or proceeds, shall be barred by any length of time.' xx xx xx xxDescription of suitPeriod of LimitationTime from which period begins to run.57. On a poli-cy of Insuran-ce, when the sum assured is payable immediately after proof of the death or loss lias been given to or received by the insurers.Three Years.When proof of the death of loss is gi-ven to or received by the insured, whether by or from the plaintiff or any other person.X X X X145. Against a depositary or pawnee to reco-ver movable property depo-sited or pawned.Three Years.The date of the deposit or pawn.'

18. What is being claimed in the suit is money. There is difference of opinion in different High Courts as to whether money is included in movable property of which Art. 145 speaks. One view is that it is not included in movable property (Mohini Mohan v. Rabmat Ullah Khan, AIR 1944 All 241; Srinivasa v. Rangaswami, AIR 19J5 Mad 717; Dalipa v. Labhu Ram, AIR 1919 Lah 322; Shah Ahmed v. Shah Yehiya Alum, AIR 1950 Hyd 52; and Joseph Annamma v. Kora Thressiamma, AIR 1912 Ker 170. The other view is that movable property includes money. (Union of India v. Gangadhar Mimraj, AIR 1962 Pat 372; Lala Gobind Prasad v. Chairman of Patna Municipality, (1907) 6 Cal LJ 535; Asghar Ali Khan v. Kurshed Ali Khan, (1901) 28 Ind App 227 (PC); Union of India v. Vazir Sultan and Sons, (1964) 2 Andh WR 144: (AIR 1966 Andh Pra 218); and Dhanraj Mills Ltd. v. Laxmi Cotton Traders, AIR 1960 Bom 404).

19. Even assuming that money is included in movable property, the present suit on the averments made in the plaint is still not governed by Art. 145, which provides for thirty (three?) years period for filing a suit to recover movable property deposited or pawned. The deposit of which this section speaks is in the nature of an entrustment, made by the depositor with the depositary on the specific understanding that the property deposited shall, as far as possible, be returned to him by the depositary in specie, the ownership in it always remaining in the depositor. In this sense, it is not a trust of which either Section 6, Trusts Act, or Section 10, Limitation Act, speaks, where the ownership of the trust property vests in the trustee. Such an entrustment may be a bailment, voluntary or involuntary (Promoth Nath Mullick v. Prodymno Kumar Mullick, AIR 1921 Cal 416), or may be by way of security for a debt, or by way of security for the due performance of a contract provided it does not amount to part payment, or it may be for safe custody simpliciter (Dhanraj Mills Ltd. v. Laxmi Cotton Traders, AIR 1960 Bom 404). The word deposit occurring in Article 145 was interpreted by Chagla, C.J. in Dhandraj Mill's case (AIR 1960 Bom 404) (supra) in these words (para 4):

'........ Now, the expression 'depositary' must take colour from the expression that follows viz. 'Pawnee'. In the case of a pawn, an article or a movable property is entrusted to the pawnee as security for a debt The property in the article or the goods continues to remain in the pawner. In our opinion, the deposit contemplated by Article 145 is a deposit which must as far as possible be approximated to a pawn. In other words, the deposit to which Article 145 applies is only that deposit where there is an element of entrustment. Whereas in the case of a pawn, entrustment is as security for a debt; in the case of a deposit it may be for safe custody; and no question of security or debt may arise, but still the dominating factor in that transaction is the element of entrustmeut .........'

And, again (para 6) :

'But, there is another important circumstance in this case, to which attention must be drawn and that is the nature of a deposit when the deposit is made for the performance of a contract We had occasion to consider this in Abdul Gani and Co. v. Trustees of Port of Bombay, 54 Bom LR 273 : (AIR 1952 Bom 310) and at page 275 (of Bom LJ) : (at p. 311 of AIR) we relied on the observations of Lord Justice Fry inHowe v. Smith, (1884) 27 Ch D 89, in orderto point, out the dual role that a depositmade for the performance of a contractplays: and the observations of Lord JusticeFry were these :

'It (that is a Deposit for the performance of a contract) is not merely a part payment, but is then also an earnest to bind the bargain so entered into and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract.' If the deposit made by the plaintiffs was merely an earnest or merely a security for the performance of the contract, then there could have been some force in Mr. Shah's argument. It may then have been contended that the money was entrusted to the other party to the contract as security and if the contract was performed or if the contract could not be performed for no fault of the other side, that security was to be returned. But when the deposit takes on a different complexion when it is not merely a security but also a part payment, then the argument of Mr. Shah completely loses its validity ........'

20. In terms of this Article, therefore, what is sought to be recovered from the defendant must have been initially deposited with him by the plaintiff by doing an overt act, on the express understanding that it shall be returned to him. Deposit cannot include a sum which the plaintiff has not in fact deposited with the defendant, but which has fallen due to him from the latter under the terms of a contract. Applying these tests to the facts of the present case, it is impossible to hold that what the respondent had claimed in their suit was a deposit made with the appellant. This amount of Rs. 20,000/-had fallen due to S. Amar Singh under the contract of insurance on the death of as wife Harbans Kaur, without the same being actually deposited by him with the appellant. The appellant was not holding this amount as a bailee, nor had S. Amar Singh deposited this amount with it by way of security for a debt, or for the due performance of a contract, or even for safe custody. Even the small premium that he had to pay before the death of his wife Harbans Kaur did not fall under any of these categories. No such entrustment could be implied from the mere fact that the appellant had withheld this amount without accepting or rejecting the Claim of S. Amar Singh. One fails to understand as to why after all S. Amar Singhshould have deposited this amount with theappellant, when it would not earn even interest on it I am, therefore, cleanly, of the opinion that by no stretch of logic can the present suit fall under Article 145.

21. I now turn to Section 10. The law is well settled that before Section 10 may apply, the plaintiff must prove the creation of an express trust, and for a specific purpose. It neither applies to an implied, resultant or constructive trust, nor to a trust created by operation of law. Authorities on the point are legion. In Brahmayya & Co. v. V.S. Ramaswami Aiyar, AIR 1966 Mad 247 (at pp. 254-55), for instance, it was held :

'Section 10, Limitation Act, could in terms apply only to 'trust for any specific purpose', that is, to cases of express trusts and could have no application to implied trust, that is such trust as law implies from the existence of particular facts or fiduciary relationship. Section 10, Limitation Act, applies to cases of what in English law are called express trusts and not to constructive trusts. The doctrine of the well known case of Soar Ashwell, 1893-2 QB 390, namely, that the rule of limitation will not be applied to certain kinds of constructive trusts has no applicability to India. 1 have already referred to the decision in 60 Mad LJ 280: (AIR 1931 Mad 58) cited by the learned advocate for the respondents in support of his contention that the directors of the company are not express trustees. In Kathiawar Trading Co. v. Virchand Dipchand, (1894) ILR 18 Bom 119, it was held that the directors were liable to replace the moneys of the company which they had misapplied by applying them to a purpose which was ultra vires; but that the claim against them could not be saved by invoking Section 10, Limitation Act, as they were only quasi-trustees and that it would be unduly straining the language of Section 10, Limitation Act, to say that they are persons on whom the property of the company is vested as contemplated by that section .......'

22. In Joseph Annamma's case, AIR 1972 Ker 170 (supra), the plaintiffs had filed a suit for recovery of Rs. 4,000/-, which the second plaintiff had paid to the father of the defendants by way of customary Shridhan on the marriage of his daughter, the first plaintiff in the suit. The suit had been brought eighteen years after the amount had been paid, and on behalf of the plaintiffs it was urged that it was a suit for breach of trust to which Section 10 applied. This contention was repelled by the Court with these observations (para 8).

'Now I will consider the question of limitation. That Section 10, Limitation Act, 1908, would not apply to this case is quite clear. That section applies only to a suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof, or for an amount of such property or/and proceeds. There is no case that the Stridhanam amount paid to Korah by the first plaintiff became vested in Korah for any specific purpose. Stridhanam. apparently, is not intended to be a trust for a specific purpose. Implied trusts or obligations in the nature of trusts are not within the scope of Section 10, Limitation Act, 1908. Therefore, it cannot be said that this section applies to the case.'

Needless to multiply the authorities, a similar view was taken in K.R. Kumaraswami Chettiar v. Krishnaswami Chetty, AIR 1956 Mad 96; and Ramchandra Jivaji Kanago v. Laxman Shrinivas Naik, AIR 1945 PC 54. In Kripa Nath v. Ganga Prasad, AIR 1962 All 256, it was held that Section 10 had no application to trusts created by operation of law.

23. Section 3, Trusts Act, defines trust as an obligation annexed to the ownership of property, which arises out of confidence reposed in and accepted by the owner, and accepted by him for the benefit of another, or for his own benefit and the benefit of someone else. According to this definition, therefore, the ownership of the trust property has to vest in the trustee. Section 6 of the Act, which deals with the creation of express trust reads as under :

'6. Subject to the provisions of Section 5, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts (a) an intention on his part to create thereby a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust property, and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust property to the trustee.'

On the plain language of this section, intention to create the trust, the purpose of itscreation, the beneficiary under it, and thetrust property must be indicated by theauthor of the trust with reasonable certainty.In Patel Chhotabhai y. Gian Chandra Basak,AIR 1935 PC 97, its view on the creation ofa trust was expressed by the Privy Councilin these words:

'........ In the first place it is material toascertain the author or authors of the alleged trust. Next the intention to create a trust must be indicated by words or acts with reasonable certainty. The purpose of the trust, the trust property, and the beneficiaries must be indicated and in such a way that the trust could be administered by the Court if the occasion arose.'

24. To the same effect are the following observations contained in Chambers v. Chambers, AIR 1944 PC 78:

'......... There is no non-testamentary instrument in writing signed by the author of the trust or the trustees declaring the trust. The letter of 6-8-1919 which Gentle, J. held to amount to a declaration of trust expressly states the contrary. The two lakhs placed to the credit of Mrs. Chambers are therein described as 'entirely in the nature of personal gift from Mr. Chambers' to her. Mr. Chambers' never indicated with reasonable certainty by any words or acts an intention on his part thereby to create a trust. His acts were throughout inconsistent with any such intention. As to the trust property, it has already been pointed out by their Lordships that there was no such ascertainment and appropriation as the law requires. Their Lordships in reaching their conclusion adverse to the appellant have proceeded upon the terms of the Trusts Act, put the general principles of trust law applicable to the case, as the learned Chief Justice points out are the same in India us in England and the English authorities which he cites fully justify the view taken by him and his colleague. In the present case there was nothing tantamount to a declaration of trust at all and there was never any absolute parting by Mr. Chambers with the alleged subject matter of the trust ......'

25. In the present case, there is no pleading, much less any proof, to show that S. Amar Singh ever declared his intention to create any trust qua the aforesaid sum of Rs. 20,000/-. It is neither pleaded nor proved as to who were the beneficiaries under this trust and who was the trustee. Everything is sought to be inferred from the silence on the part of the appellant in accepting or rejecting the claim of S. Amar Singh during his lifetime. The least that can be, therefore, said about this inference is that it is patently absurd, and is no better than the figment of the respondents' imagination. There is not an iota of evidence to establish a trust, express or implied. The learned counsel for the respondents was unable to draw our attention to any provision of law, under which a trust under these circumstances could be implied.

26. In terms of the insurance policy, S. Amar Singh, the surviving assured, became entitled to the recovery of Rs. 20,000/- from the appellant on 10-6-1959, when his wife Harbans Kaur died. It is in the evidence of D.W. Naresh Kumar that S. Amar Singh had brought this fact to the notice of the appellant on or about 10-3-1960. Even earlier to it, the father of Harbans Kaur had written a letter to the appellant on 15-6-1959, informing it that Harbans Kaur had died, but that she had not died a natural death. This suit, is clearly governed by Article 57, which is undoubtedly the specific article for such suits. It ought to have been instituted by S. Amar Singh within three years from the date he had brought the fact of his wife's death to the notice of the appellant. He in stead kept on waiting for ten long years, and himself died in an accident on 18-8-1970, before he could actually file the suit. His own remedy to claim this amount having been lost to him, there was nothing left which his heirs, the respondents, could have possibly claimed on inheriting his estate. Had he died even before the expiry of the aforesaid period of three years, his heirs were still bound to file the suit within those three years, for the time that had once begun to run could not as provided by Section 9 of the Limitation Act, have stopped running by any subsequent inability or disability on their part to bring the suit. Even the minority of the two respondents in that case would have been inconsequential. Viewed thus, the suit was hopelessly barred by time, which the learned District Judge instead of declaring ought to have dismissed.

27. In the result, the appeal is allowed, the judgment and decree of the learned District Judge is set aside and the respondents' suit is dismissed. In the peculiar circumstances of the case, the parties are left to bear their own costs throughout.

Mufti Baha-Ud-Din Farooqi, C. J.:

28. I have had the advantage of going through the judgment prepared by my learned brother. I would however like to say a few words of my own in support of the contention that the District Judge, Jammu had power and jurisdiction to hear and dispose of this suit. In this connection, it would be necessary to say a few facts. Sardar Amar Singh, the predecessor-in-title of the respondents-plaintiffs and his wife Harbans Kaur had a joint policy of insurance in terms whereof the death of one entitled the other to get the sum assured from the appellant-Corporation. Harbans Kaur died on 10-5-1959 at Doda. S. Amar Singh laid a claim with the appellant-Corporation which was still pending when he died on 18-8-1970. The suit was originally instituted in the Court of District Judge, Jammu. The District Judge returned the suit for presentation to the proper Court on the ground that the valuation exceeded his pecuniary jurisdiction. It may be noted that the suit valued at Rs. 20,000/- for purposes of jurisdiction and as such it was cognizable by the High Court. The plaintiff presented the suit in the High Court and the High Court in its turn transferred it back to the District Judge, Jammu. By virtue of this order of transfer the District Judge, Jammu acquired jurisdiction to try the suit and the trial cannot be defaulted on the ground that Doda, where the right to sue accrued to S. Amar Singh and, in his absence, to his successors-in-interest was not included in his territorial jurisdiction on the date of the institution of the suit. On this premises I am inclined to agree with my learned brother that District Judge, Jammu had power to hear and dispose of this suit. In other respects I have nothing to say as regards the judgment of my learned brother with which I fully agree. In this view I also agree with the order proposed by him.


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