Trustee omission claims follow the residuary limitation rule, with time running only when a competent person can sue.

A suit against a trustee or ex-trustee to make good loss caused by failure to collect trust moneys is governed by the residuary limitation article, not the article for compensation for malfeasance, misfeasance or non-feasance independent of contract. The analysis reasons that trust-related claims are better captured by the specific trust context and that applying the other article would create an artificial distinction depending on whether the defaulting trustee lived or died within time. Under the residuary provision, limitation begins when the right to sue accrues to a person competent to sue: on appointment of a new trustee in the case of a sole defaulting trustee, immediately where non-liable co-trustees exist, and ordinarily from breach in a private trust.

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Issues: (i) Whether Article 36 or Article 120 of the Indian Limitation Act, 1908 applies to a suit against a trustee or ex-trustee to make good loss caused to the trust by omission to collect trust moneys. (ii) If Article 120 applies, when limitation begins to run.

Issue (i): Whether Article 36 or Article 120 of the Indian Limitation Act, 1908 applies to a suit against a trustee or ex-trustee to make good loss caused to the trust by omission to collect trust moneys.

Analysis: Article 36 is a provision for compensation for malfeasance, misfeasance or non-feasance independent of contract, but the scheme of the Limitation Act shows that it was not intended to govern suits against trustees for loss to trust property. Article 98, which specifically speaks of making good loss, points in the direction of trust-related claims, and the use of Article 36 would produce an artificial distinction depending on whether the defaulting trustee lived or died within the limitation period. The proper residuary provision for such a suit is Article 120.

Conclusion: Article 36 does not apply; Article 120 applies.

Issue (ii): If Article 120 applies, when limitation begins to run.

Analysis: Under Article 120, limitation begins when the right to sue accrues. There can be no cause of action until there is a person capable of suing. In the case of a sole defaulting trustee, the right to sue remains in abeyance until a new trustee is appointed. Where there are other non-liable co-trustees, limitation begins immediately when the loss is occasioned because they can sue the defaulting trustee. In a private trust, the cestui que trust ordinarily may sue from the date of breach.

Conclusion: Limitation under Article 120 begins when a person competent to sue comes into existence and the right to sue accrues.

Final Conclusion: The decree dismissing the suit on Article 36 was set aside and the matter was remanded for disposal on the merits, with the limitation question under Article 120 left to be determined by the lower court in light of the Full Bench ruling.

Ratio Decidendi: A suit to make good loss to a trust caused by a trustee's omission is governed by the residuary limitation article, and limitation starts only when the right to sue accrues to a person competent to sue.

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