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Judgment
Alfred Henry Lionel Leach, C.J.—This reference embraces two questions, which may be stated as follows: - (1) Does Article 36 or Article
120 of the first schedule of the Indian Limitation Act, 1908, apply to a suit filed against a trustee or ex-trustee to make good loss sustained by the
trust by reason of his omission to collect moneys due to the trust? (2) If Article 120 is applicable, when does limitation commence to run?
Article 36 relates to suits for compensation for malfeasance, misfeasance or non-feasance independent of contract and not specially provided
for in the schedule of the Act. It fixes a period of two years from the date when the malfeasance, misfeasance or non-feasance takes place. Article
120 is the residuary article. It fixes a limitation period of six years in respect of suits for which no period of limitation is provided elsewhere in the
schedule and time begins to run when the right to sue accrues. It has been necessary to refer the questions set out above to a Full Bench because
there are conflicting decisions of this Court with regard to the first question, and: the second question follows if Article 120 applies, because in
some cases for more than six years there may be no one in a position to sue. In the case of Ranga Pai v. Baba ILR (1897) Mad. 398, Shephard
and Davies, JJ., applied Article 120. In the case of Subramania Aiyar v. Gopala Aiyar (1909) 20 M.L.R. 633 : ILR 33 Mad. 308, Sir Ralph
Section Benson, Officiating Chief Justice and Krishnaswami Aiyar, J., considered that Article 36 governed a suit of the nature of the one under
discussion. In Ranga Pai v. Baba ILR (1897) Mad. 398, the plaintiffs and the defendants, together with one Subbaraya Pai, were the trustees of a
temple. Subbaraya Pai died in 1884, but for some years before his death he was left in exclusive management of the temple affairs. He was
succeeded in the management by the defendants, who remained in management of the temple until 1891, when their co-trustees filed the suit to
exclude them from trust and to compel them to make good sums lost as the result of breaches of trust alleged to have been committed by them.
The question whether Section 10 of the Limitation Act applied was discussed and the Court was of the opinion that it did not. It was, however,
held that the defendants were liable for the loss occasioned by them within six years from the date when the suit was instituted. Article 120 of the
Limitation Act was not specifically referred to, but as the Court decided that the period of limitation was six years it follows that it considered that
this article applied. In Subramania Aiyar v. Gopala Aiyar (1909) 20 M.L.R. 633 : ILR 33 Mad. 308, the suit was instituted by the plaintiff as the
trustee of a temple for recovery of a sum of money representing the loss to the temple occasioned by breaches of trust committed by the father of
the defendant, he having been the preceding trustee. The suit was dismissed on the ground that it was barred by the law of limitation. On appeal it
was argued that Article 98 was applicable, but the argument was rejected as the Court was of the opinion that the suit against the father was time
barred under Article 36 and, therefore, no suit would lie against his son. Another case bearing on the first question embodied in the reference and
quoted to us is that of Shirinbai Dinshaw v. Navroji Pestonji AIR 1936 Bom. 30 where a Division Bench of the Bombay High Court held that a
suit against trustees for alleged breaches of trust was governed by Article 120 and time began to run from the date of the breach. In none of these
cases, however, was there any real discussion of the questions now under consideration. In Ranga Pai v. Baba ILR (1897) Mad. 398 and in
Shirinbai Dinshaw v. Navroji Pestonji AIR 1936 Bom. 30, the learned Judges took it for granted that Article 120 did apply and in Subramania
Aiyar v. Gopala Aiyar (1909) 20 M.L.R. 633 : ILR 33 Mad. 308 the discussion was limited to the application of Articles 36 and 98. I may here
mention that my learned brother Varadachariar, sitting alone, held in Krishna Kudva v. Muli Sri Venkataramana Temple (1934) 40 L.W. 275 that
a suit by a trustee of a temple against a previous trustee to recover moneys misappropriated by him was governed by Article 120 and not by
Article 61 or Article 62 of the Limitation Act and that no cause of action accrued to anybody as long as the defaulting trustee continued to be in
office. This decision really embodies the answers to the questions under reference.
Article 36 applies to torts not specially provided for and if it stood alone there would be little to indicate that it was not intended to apply to
breaches of trust of the nature of those we have now in mind. But there is Article 98 and when the two articles are considered together there are
strong indications that the legislature did not intend Article 36 to apply to trustees. In the first place, in Article 36, the word ""compensation"" is used,
which is the appropriate word to apply in connection with a suit to remedy an injury to a person or a person''s property. Article 98 speaks of suits
to make good"" the loss, which are more appropriate than the word ""compensation"" when the loss is not a personal one. Then it must be
remembered that when the prescribed period of limitation has commenced it continues until the sands have run out. Something may happen to start
a fresh period of limitation, but that is another matter. If Article 36 were to apply to an act of non-feasance on the part of the trustee, it would mean
that if the trustee lived he would be free from all liability in two years, but if he died before the two years had elapsed his estate would continue to
be liable for another three years. This could never have been the intention of the legislature and leads in itself to the conclusion that Article 36 does
not include wrongs committed by trustees in respect of trusts. As Article 36 does not apply, the only article which can apply to a suit like the one
out of which this reference arises is Article 120 and we answer the first question accordingly.
With regard to the second question, it will be observed that Article 120 declares that limitation shall start to run when the right to sue accrues.
There can be no cause of action until there is a party capable of suing and until there is a cause of action there can be no question of the law of
limitation coming into operation see Murray v. The East India Co. (1821) 5 B. & Ald. 204 : 106 E.R. 1167, Meyappa Chetty v. Supramanian
Chetty (1916) L.R. 43 IndAp 113 : 20 C.W.N. 833 (P.C.), Charu Chandra Pramanik v. Nahush Chandra Kundu ILR (1922) Cal. 49 and Mt.
Boh v. Mt. Koklan (1930) 59 M.L.J.621 : L.R. 57 IndAp325 : I.L.R.11 Lah. 657 (P.C.). It follows that if a sole trustee of a public trust commits
a breach of trust the loss cannot be made good, without voluntary action on the trustee''s part, until there is a new trustee. The right to sue in such a
case would have to in abeyance until a new trustee was appointed, in which case the period of six years limitation would not commence until a new
trustee had been appointed. If there are other trustees who are themselves not liable, the period of limitation will start running immediately the loss
is occasioned, because they will have in themselves the right to sue their co-trustee for the loss occasioned by him. Of course, if the co-trustees
nave also made themselves liable for the breach of trust the position would be the same as in the case of a defaulting sole rustee. In the case of a
private trust, the cestui que trust would ordinarily have the right to sue from the date of the breach of trust. It will, therefore, depend on the
circumstances when time will commence to run and we answer the second question in this sense.
JUDGMENT
Varadachariar, J.
Now that the Full Bench has held that Article 36 of the Limitation Act does not govern the present case, the decision of the lower Court
dismissing the suit on the ground that it was governed by Article 36 cannot stand. It is stage to deal finally with the existence and extent of the
possible bar under Article 120. It will be much more convenient to leave it to the lower Court to deal with that question in the light of the
observations contained in the judgment of the Full Bench after taking such evidence as may be relevant to that question. In view however of the
fact that it is about seven years now after the suit was instituted, the lower Court would do well to try the whole case instead of confining itself
again to the question of limitation. The decree of the lower Curt is set aside and the case remanded for disposal on the merits. Costs to abide the
result. The court-fee paid on the memorandum of appeal will be refunded.