1961 (10) TMI 84 - SC - Indian Laws

Court dismisses appeals, deeming alienations invalid due to inadequate consideration and improper execution. Equitable adjustments affirmed.

L. Janakirama Iyer and Others Versus P.M. Nilakanta Iyer and Others

The court dismissed both appeals (Civil Appeal Nos. 62 and 77 of 1959) with costs, upholding lower court findings. The alienations were deemed invalid due ... - Issues Involved:1. Limitation2. Beneficiaries' Right to Sue for Possession3. Res Judicata4. Validity of Alienations by Trustees5. Amendment of Decretal Order6. Equitable Adjustment of Profits and Interest7. Trustee de son tortIssue-wise Detailed Analysis:1. Limitation:The primary contention was whether the suit attracted Article 120 or Article 134 of the Limitation Act. The court concluded that the plaint was not merely for a declaration but also for possession of immovable properties. The plaintiffs had valued the suit under Section 7(5) of the Court Fees Act, indicating a claim for possession. Therefore, Article 134 applied, making the suit within time.2. Beneficiaries' Right to Sue for Possession:The court held that beneficiaries under a private trust could apply for the removal of trustees, appointment of new trustees, and delivery of trust properties improperly alienated by previous trustees. Section 63 of the Indian Trusts Act was not exhaustive of the remedies available to beneficiaries. The court emphasized that a claim for constructive possession, as made in the present suit, was not prohibited by Section 63.3. Res Judicata:The argument that the present suit was barred by the dismissal of the earlier suit (O.S. No. 30 of 1943) was rejected. The court noted that Section 11 of the Code of Civil Procedure did not apply as the current suit was filed by creditors in their representative capacity, unlike the earlier suit filed by the debtors.4. Validity of Alienations by Trustees:The court analyzed Clause 23 of the trust deed and Section 48 of the Indian Trusts Act, concluding that all trustees must act together in executing the trust. The alienations executed by only two out of three trustees were invalid. The court also found that the third trustee, Narayana Pillai, did not consent to the transactions, further invalidating the alienations.5. Amendment of Decretal Order:The High Court's amendment of the decretal order to replace 'mesne profits' with 'net profits' was upheld. The court found that the original use of 'mesne profits' was an inadvertent error and that the High Court had jurisdiction to correct it under Sections 151 and 152 of the Code of Civil Procedure, even after the appeals were admitted.6. Equitable Adjustment of Profits and Interest:The court held that the direction to account for net profits from the date of possession was part of an equitable adjustment between the trust and the alienees. This adjustment was necessary to balance the interests of both parties, allowing the alienees to recover amounts due to them while ensuring the trust received net profits from the properties.7. Trustee de son tort:Defendant 12 was found to be a trustee de son tort due to his significant intermeddling with the trust estate. Evidence showed that he issued directions to the trust's clerk, entered into compromises with creditors, and took possession of trust properties before the sale deed was executed. This conduct made the sale deed executed in his favor invalid.Conclusion:Both appeals (Civil Appeal Nos. 62 and 77 of 1959) were dismissed with costs. The court upheld the findings of the lower courts, confirming the invalidity of the alienations due to inadequate consideration, improper execution by trustees, and intermeddling by certain defendants. The equitable adjustments made by the High Court regarding profits and interest were also affirmed.