1936 (11) TMI 27 - HC - Indian Laws

Court Awards Solicitors' Profit Costs in Trust Litigation

Shivramdas and Ors. Versus B.V. Nerurkar

The Court set aside the Taxing Master's decision and ruled that the applicants, a firm of solicitors, were entitled to profit costs for defending the suit ... - Issues Involved:1. Entitlement to profit costs for the applicants.2. Status of the defendants as trustees.3. Applicability of the Indian Trusts Act to public charitable trusts.4. Application of the rule in Cradock v. Piper in India.Issue-wise Detailed Analysis:1. Entitlement to Profit Costs for the Applicants:The applicants, a firm of solicitors, claimed both out-of-pocket and profit costs for defending the suit on behalf of the defendants. The Taxing Master initially ruled that the applicants were only entitled to out-of-pocket costs and office expenses, not profit costs. The Court reviewed this decision, considering the principle that trustees generally must administer trusts gratuitously, as laid out in Section 50 of the Indian Trusts Act. However, the Court also noted the rule in Cradock v. Piper, which allows a solicitor-trustee to receive usual costs if acting for himself and co-trustees, provided costs are not increased by his being a party. The Court concluded that the applicants were entitled to profit costs limited by this rule.2. Status of the Defendants as Trustees:The defendants were described as 'trustees of the temples, charitable institutions, and funds of the Gowd Saraswat community of Bombay.' The Court examined whether they were express or constructive trustees. It was found that there was no trust instrument, endowment, or specific trusts declared by a decree or order of the Court. The Court concluded that the defendants were not express trustees as they did not have legal ownership of the immovable properties. They were managing the properties on behalf of the community and stood in a fiduciary relationship, analogous to trustees, but were not trustees in the strict legal sense.3. Applicability of the Indian Trusts Act to Public Charitable Trusts:The Indian Trusts Act expressly excludes public or private religious or charitable endowments from its operation. The Taxing Master had applied principles from the Act by analogy, but the Court clarified that this was incorrect. Instead, the Court should be guided by the principles and rules of English law and practice unless inconsistent with Indian law or practice. The Court emphasized that applying the Indian Trusts Act by analogy to public trusts would contradict legislative intent.4. Application of the Rule in Cradock v. Piper in India:The rule in Cradock v. Piper allows a solicitor-trustee to receive usual costs when acting for himself and co-trustees, provided costs are not increased by his being a party. The Court found that this rule, though criticized, is still good law in England and should be applied in India unless inconsistent with Indian law or practice. The Court noted that the applicants had previously been allowed profit costs for a notice of motion in the same suit, indicating consistency with this rule. The Court concluded that the rule in Cradock v. Piper was not inconsistent with Indian law or practice and applied it to allow the applicants their profit costs.Conclusion:The Court set aside the Taxing Master's judgment, order, and certificate, directing that the applicants' bill of costs be taxed as between attorney and client, allowing both out-of-pocket and profit costs, except for costs incurred by Mr. Sabnis as a party defendant. The applicants were also awarded costs for their appearance before the Taxing Master and the hearing before the Court, to be taxed as on a long cause scale, with costs coming out of the charity estate in the hands of the respondents. The respondents' costs for their appearance before the Taxing Master and the hearing before the Court were also to come out of the estate, taxed as between attorney and client.