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Judgment
Venkatadri, J.
(1) This appeal arises out of the suit, Original Suit No. 5 of 1958, instituted in the District Court, Tirunelveli by the appellant herein, for the
administration of the estate of one Joseph Costa (senior), and inter alia, to declare the alienation effected by the first defendant, as trustee of the
said estate in favour of the tenth defendant, who in his turn alienated it in favour of the eleventh defendant, who, again in his turn alienated the
properties in favour of the twelfth defendant invalid and not binding on the plaintiff, and for directions for the proper disposal of the properties
comprised in the suit estate, and alternatively to direct the alienees from the first defendant, that is defendants 10 to 14, or such of them as may be
liable, to pay over to the administrator to be appointed by Court the value of the mitta properties and to restore to the estate the benefits they had
unlawfully obtained as a result of the fraudulent breach of trust on the part of the first defendant.
(2) The learned Additional District Judge dismissed the suit, with a finding that the first defendant had been guilty of breach of trust, and the sale
executed by the first defendant in favour of the tenth defendant was a fraudulent breach of trust in which the purchaser, the predecessor of the tenth
defendant has participated, but they had acquired indefeasible title to the properties by adverse possession and that the claim of the plaintiff
including that of his father based on the Will had been satisfied and extinguished by reason of the partition and exchange arrangement exhibit B-28,
and that the plaintiff was represented by his father, the third defendant, as curator and that he was, therefore, estopped by deed from claiming any
further rights in respect of the suit properties.
(3) The main facts leading up to the suit are not in dispute and may be briefly stated. One Joseph Costa (senior) died in July 1913, at Manapad,
leavying behind him his last Will and testament, exhibit B-1 in the case, dated 30th May 1912, and considerable properties both in India and
Ceylon, which he disposed of by the said Will. Probate of the Will was obtained by the first defendant from the District Court, Tirunelveli, as well
as the Ceylon Court, as executor named in the Will. Under the said Will, the eldest son, Stanislaus Costa (the first defendant) was directed to sell
the mitta properties and convert them into cash within two years from the date of the testator''s death, and from and out of the sale-proceeds pay
certain legacies to certain ecclessiastical dignitaries, pay a further legacy of Rs. 2,000 to his third son, Joseph Costa (the plaintiff''s father),
purchase shop, buildings and godowns in Ceylon for Rs. 2000 each, to be held in trust, for his three daughters, and with the residue of the sale
proceeds, purchase shop, buildings and godowns or houses in Ceylon in his own name as executor, in trust, and pay the income therefrom to the
testator''s wife for life, and after her death to his three sons, to such of their sons equally as shall be alive at the time of the death of his son who
shall die last.
(4) At the time of the death of Joseph Costa (senior), the plaintiff''s father (Joseph Costa) and the first defendant were carrying on business under
the name and style of Joseph Costa Bros. Plaintiff''s father was in complete management and possession of the Ceylon properties. The plaintiff''s
father and the first defendant executed a promissory note for a sum of Rs. 20,000 under the name of Joseph Costa and Bros. exhibit B-5 dated
14th October 1929, in favour of the General Catholic mission, Trichinopoly, whose interest subsequently devolved on the present tenth defendant,
the Roman Catholic Diocese at Madurai hereafter called Mission authorities for convenience sake. In order to secure the payment of this amount,
the first defendant executed a letter of guarantee to the mission that the suit properties should be held as security for the said loan.
(5) According to the first defendant, he paid all the legacies named in the Will from and out of the monies received on loan in his own personal
capacity. When the mission authorities began to press for the repayment of the promissory note loan the first defendant executed a sale deed in
respect of the suit properties for a sum of Rs. 40,000 in favour of the Tiruchi Diocese, the consideration being in lieu of the discharge of the
promissory note debt which amounted by that time to Rs. 23,170 and the balance which was paid into the hands of the first defendant. There was
a controversy about this payment into the hands of the first defendant, namely that the mission did not pay this sum into the hands of the first
defendant but discharged the private debt of the first defendant which was covered by the promissory note exhibit B-3, dated 4th September
1959, executed by the first defendant in favour of one Manuel Anthony Rodrigues, who had advanced the amount at the instance of the
predecessor of the tenth defendant mission.
(6) Sometime after the sale, that is, 3 years after the sale, the plaintiff''s father started correspondence with the mission authorities informing them
that his brother, the first defendant, had committed breach of trust in selling away the suit properties to them, that he had still got a right to claim his
share in the suit properties sold to them and that he was ready and willing to settle the matter amicably without resorting to civil Court to establish
his claim. In a veiled threat, he apprised them that he had obtained legal opinion that the sale effected by the first defendant in their favour was not
valid in law, and also not binding on the beneficiaries including himself. Finally, he appealed to them to use their influence and good offices on his
brother, the first defendant, and settle the affairs of the family properties including the suit lands. The mission, in their turn, persuaded the first
defendant to come to some understanding with the plaintiff''s father, in respect of this claim in the suit properties and other estates in Ceylon. They
also arranged for a meeting of the three brothers (defendants 1 to 3), to iron out the differences in respect of their claims and disputes regarding the
family properties both in India and Ceylon.
As a matter of fact, there was a meeting between the three brothers, in the presence of the mission authorities, and they arrived at a tentative
arrangement in and by which the suit properties were to be retransferred to the first defendant, on payment of the moneys due and payable to the
mission by the first defendant. But the first defendant did not comply with this arrangement nor did he make any serious attempt to pay back their
moneys and get back reconveyance of the suit properties, as promised by the mission authorities. The plaintiff''s father continued the
correspondence with the mission authorities re-iterating that the sale effected by his brother was not valid and binding on him, and he begged them
to settle his claim with the first defendant. The mission authorities did take a definite stand that they had taken legal opinion before they entered into
the transaction in respect of the suit properties from the first defendant. They renewed their offer to reconvey the suit properties, if the first
defendant paid back all the moneys due and payable to them. They also further informed the plaintiff''s father that they (mission) stood to lose a
considerable sum by way of interest when they had this transaction with the first defendant. They had not been benefited by the transaction, as they
did not realise any income from the suit properties. Nevertheless, they were ready and willing to use their good offices with the first defendant, to
settle the claim not only in respect of the suit properties but also in respect of the various other family disputes existing among them.
The mission authorities by their persuasion prevailed upon the first defendant to recognise the claim of the plaintiff''s father in respect of the sale
proceeds of the suit properties, and equally exhorted the third defendant to render a complete and correct account in respect of the income
received from properties in Ceylon, which were in his possession and enjoyment. The said arrangement was reduced into writing (exhibit B-9) by
which the plaintiff''s father (the third defendant) agreed to submit a statement of account showing the income due to his brother (the first defendant)
and to pay whatever that remained due and payable to him after giving credit to a sum of Rs. 6,000 which was calculated at four per cent and
estimated as the probable income of his share on the sale proceeds of the suit properties conveyed to the tenth defendant. Equally, the first
defendant wrote a letter, exhibit B10, acknowledging the sale effected by him in favour of the tenth defendant, as the sole executor of his father''s
estate, for a sum of Rs. 40,000 and agreed to pay a sum of Rs. 6,000 being the proportionate share of the income of the plaintiff''s father from the
date of the sale up to the date of the agreement (twelve years) on the sale consideration of Rs. 40,000 treating it as the corpus of the estate of the
deceased testator. It was further agreed that the first defendant should deposit in the hands of the mission authorities a sum of Rs. 6000 payable to
each of his brothers, the second defendant and the third defendant. The first defendant deposited a sum of Rs. 12,000 with the mission authorities
for payment as aforesaid. The third defendant, that is that plaintiff''s father did not render any account in respect of the monies he receive from the
family properties which was a condition precedent for the receipt of his share amount from and out of the income of the sale proceeds of the suit
properties. The mission authorities finally informed the third defendant that they could not retain indefinitely the said sum of Rs. 12,000 and
requested the plaintiff''s father to come to some sort of arrangement with the first defendant.
(7) It is not this material that the learned trial Judge gave a finding that the sale in favour of the tenth defendant by the first defendant was in breach
of trust to which the purchaser was a party. We have to consider whether this finding is correct in law. It is the admitted case that the first
defendant was a trustee to whom the trust property had been devised or conveyed with a power of sale, and his authority to sell is governed by the
terms of the trust deed. He had unfettered power to sell the properties. The price fetched for the suit properties was fair, reasonable and
proportionate to the value of the properties. The case of the plaintiff is that under the guise of a valid power in the instrument, the property was
conveyed under circumstances attended with fraud, misrepresentation and made for the private benefit of the first defendant. We have to consider
whether there is evidence to declare that the sale of the trust properties by the first defendant was attended with fraud and misrepresentation. It is
not the case of the plaintiff that the sale was not made fairly and regularly and for a fair and full price. The Court will not set aside a sale without
sufficient grounds therefore and will not also set aside a sale properly made. Further, the Court will not set aside a sale made in good faith and for
fair price, when it is honestly made. Learned Counsel for the appellant seriously contended before us that the first defendant sold the trust
properties in discharge of his private debts, and the tenth defendant, that is the mission authorities, were not only acquainted with the affairs of the
family but were also aware of the creation of the trust by the testator in his last Will and testament. it is true that the mission authorities were aware
of the Will executed by Joseph Costa (Senior). But the point is, when did they come to know of the contents of the Will. They might have known
or might have been acquainted with the members of the family, but there is no evidence on record to show that, when they advanced a sum of
Rupees 20,000 on a promissory note executed by the first defendant, they were aware of the terms of the Will. Further, it is specifically stated that
the first defendant as the sole executor was conveying the suit properties for the purpose of discharging the loans raised by him for the payment of
the legacies named in the Will and also for the purchase of properties as recited in the Will. Now the question for consideration is, how far the
tenth defendant will be liable and responsible for the misapplication of the sale proceeds by the first defendant, in the course eof the administration
of the estate. Lord Thurlow observes in Scott v. Tyler (1788) 2 Dick 712:
It is of great consequence that no rule should be laid down here which may impede executors in their administration or render their dispositions of
the testator''s effects unsafe or uncertain to a purchaser. His title is complete by sale and delivery; what becomes of the price is no concern of his.
(8) The observations of Lord Mansfield C. J., in Whale v. Booth (1784) 99 ER 755 may also be quoted:
The general rule both of law and equity is clear, that an executor may dispose of the assets of the testator; that over them he has absolute power;
and that they cannot be followed by the testator''s creditors. It would be monstrous if it were otherwise; for then no one would deal with an
executor. He must sell, in order to effect the Will; but who would buy if liable to be called to account. It is also clear, that if at the time of alienation,
the purchaser knows they are assets, this is no evidence of fraud; for all the testator''s debts may have been already satisfied; or if he knows that
the debts are not all satisfied must he look to the application of the money? No one would buy on such terms.
(9) In Corpus Juris Secundum, volume XC, at page 485, the whole law has been summed up in the following words:--
In other words, the trustee is responsible for the proper application of the proceeds, which, after paying liens and expenses when authorised,
should be applied or disposed of as directed by the terms of the trust or decree of sale and in accordance therewith deposited, or invested for the
benefit of the parties beneficially interested in the trust or distributed to them. The duty of holding and applying the proceeds in a proper manner is,
however, confined to the trustee, it being a general rule, confirmed by statute in some jurisdictions, that the purchaser is not bound to see to the
proper application of the purchase money and that his title is not affected by mis-appropriation thereof, although under some circumstances a duty
may rest on the purchaser to see that the trustee applies the purchase price to trust purposes and he may be held liable for the trustee''s
misapplication, as where he colluded with the trustee or knew, at the time of purchase, of the trustee''s violation of trust, committed or intended, or
where, according to the distinction drawn by some authorities, the trust is of a defined and limited nature as distinguished from one of a general and
unlimited nature.
(10) The above mentioned principles have been adopted and followed by a Bench of this Court consisting of Rajamannar C. J., and Balakrishna
Ayyar J., in G.F.F. Foulkes and Others Vs. A.S. Suppan Chettiar and Another, where the learned Judges, while considering the question whether
the Succession Act conferred a right on the creditors to an equal and ratable payment of all the debts observed thus:
It is general rule of law and equity in England and that rule is followed in India--that an executor may dispose of the testator''s assets over which
he has an absolute power and they cannot be followed either by the creditors or by the legatees into the hands of the alienee. But neither
jurisdiction will permit the rule to be observed so as to protect a disposition founded on fraud or a transaction amounting to a breach of trust,
concerted between the executor or administrator and the purchaser. There is no duty cast on the purchaser to see to the application of the
purchase money. He is not obliged to ascertain whether the executor is discreetly exercising his power, but the purchaser will not be protected if he
is privy to a breach of trust and if the transaction of sale is in its nature incompatible with the legitimate administration of the testator''s estate. A
purchaser would not have the benefit of the general rule protecting a purchaser from an executor, if the purchaser concurs in any act which
manifests from the transaction itself that it is not the legitimate mode of administering the estate. If the nature of the transactions imports notice to
him that the executor is dealing with the assets otherwise than in due course of administration, then, he would have participated with the
administrator in an improper conversion and application of the estate of the deceased and the sale in his favour would be invalid.
(11) Bearing these principles in mind, we have to consider whether there was fraud and collusion by the mission authorities in dealing with the
executor and in purchasing the suit properties. We have also to consider whether there is any evidence that the trustee misapplied the sale
consideration. There is evidence to show that the mission authorities were interested in the family of the defendants in one of the letters addressed
by the third defendant (exhibit A-42) to the mission authorities, he acknowledged the valuable services and timely help rendered by them to his
family at a very critical moment. The third defendant carried on a lengthy correspondence with the mission authorities after the sale for a period of
twelve years. He could have charged the mission authorities in any one of the numerous letters that they had played a fraud. He never made any
such suggestions; nor did he charge them with having colluded with his brother with a view to conferring an advantage upon him; nor even that the
properties were sold for a inadequate price. On the other hand, he requested them to use their influence to settle his claim with the first defendant
not only in respect of the suit properties but also in regard to the various other disputes existing between himself and the first defendant. Though it
was not their concern to interfere in the family affairs, still the mission authorities with the zeal of missionary spirit, used their influence and prevailed
upon the brothers to come to an amicable arrangement which resulted in the exchange of letters, exhibit B-9 and exhibit B-10, thereby ratifying the
sale effected by the first defendant in favour of the tenth defendant.
The mission authorities, before they took the conveyance from the first defendant, obtained legal opinion that the instrument, i.e., the Will of Joseph
Costa (senior) authorised the executor to sell the suit properties for the purpose of administering the estate. The recitals in the sale deed state that
the first defendant had paid all the legacies as directed by his father in his Will, from and out of the moneys raised by him on loan, not carry out the
directions for payment of the legacies to the various beneficiaries excepting the fifth defendant who is one of the daughters of Joseph Costa (senior)
and also a legatee under the Will. Even the evidence of the fifth defendant who supported the case of the plaintiff is to the effect that thought she
has not been paid her annuity at the rate of Rs. 10 per mensem, she did not take any proceedings against the executor (first defendant). It is true
that at the time of taking the conveyance from the executors, the mission was aware that certain directions had been given to the executor to sell
the suit properties in order to carry out the obligations created by the Will, it was also informed that the first defendant had paid all the legacies. At
that time, it was not aware nor was it possible for it to know that the first defendant was not intending to purchase immovable properties in Ceylon,
from and out of the sale proceeds as directed by the testator. But an assurance was given by the trustee that he was selling the suit properties
under his unfettered power of sale not only for the purpose of discharging all the legacies but also to purchase immovable properties in Ceylon.
There is no evidence adduced to show that the mission authorities colluded with the first defendant in the misapplication of the sale proceeds.
We feel that in the transaction between the executor and the mission authorities, there is no strong, pregnant evidence to show a prima facie case
that, when the trustee sold the properties, he intended to misapply the funds for a different purpose or that the purchaser had reason to suspect any
such intent. There is nothing apparent in the numerous documents or the surrounding circumstances to indicate that the mission authorities were
aware of the intention of the executor to violate the trust vested in him or an intention to misappropriate the proceeds, so as to induce them to take
such action as would enable them to avoid becoming liable as particepis criminis. the purchaser cannot refuse to comply with a contract of sale or
even ask for rescission, on the ground of misapplication by the trustee of the moneys already paid. In this connection, we may refer to the decision
in N. Namberumal Chetti Vs. Veeraperumal Pillai and Others, , where a Bench consisting of Ramesam and Cornish JJ., had to consider whether a
mortgagee could claim priority over a legatee, when it was found that part of the moneys advances on the security of the immovable property was
not binding on the estate. The learned Judges held that thought the executor had power to dispose of the property for all purposes binding upon the
estate and even where the executor dealt with the property for purposes not strictly binding on the estate, the alienations such as a sale or mortgage
could not be questioned so as to defeat the bona fide alience who had no notice of the fact that the executor was using his powers for purposes not
binding upon the estate. The learned Judges held in that case that the purpose for which the document was executed was partly not for the benefit
of the estate, and on the fact of the document that fact was known to the mortgages. But that is not the case here. On the facts of the instant case,
we cannot say that the mission authorities were aware of any violation of the trust by the first defendant at the time of the sale to them. This is not a
case where the mission authorities concerted with the executor and obtain the trust property at a nominal price or at a fraudulent undervalue and in
order to extinguish the private debt of the executor. There may be breach of trust on the part of the first defendant, but we do not agree with the
learned District Judge that the mission authorities i.e., the predecessors of the tenth defendant were participants in the breach of trust.
(12) The next question for consideration is whether the subsequent purchasers from the tenth defendant, i.e., defendants 11 and 12, were liable to
answer the claim of the plaintiff, Mr. Gopalaswami Ayyangar, learned Counsel for the eleventh and twelfth defendants, contended before us, that
the first defendant had a dual capacity, viz., he was appointed as executor to sell the suit properties and he was also directed to invest the residue
of the sale proceeds in purchasing immovable properties in Ceylon. The first defendant might have failed to invest the surplus of the sale proceeds
in purchasing immovable properties in Ceylon. But the first defendant as executor, had an unfettered power to sell the suit properties, and he
exercised that power by conveying the properties to the tenth defendant, from whom his clients purchased the properties. It is true that there are
recitals in the sale deed that there was a Will executed by Joseph Cost (senior) appointing the first defendant as executor to sell the suit properties
and invest the surplus of the sale proceeds in purchasing properties in Ceylon. But, as subsequent purchasers from the tenth defendant, they should
not be charged as parties to the breach of trust, even if there was any. They are bona fide purchasers for valuable consideration. The plaintiff has
not alleged in his plaint not adduced any evidence to prove that defendants 11 and 12 had any mala fides in purchasing the suit properties. they had
no notice of any breach of trust excepting the existence of an instrument, viz., the Will of Joseph Costa (senior). The mere notice of an instrument,
viz., the Will of Joseph Costa (senior) in the sale deed could not be deemed to be notice of the breach of trust. Keeton in his law of Trusts (eighth
edition) at page 338, while dealing with the special rights of a beneficiary, says:
.......... a purchaser without notice from a purchaser with notice takes the legal estate free from the beneficiary''s interests for his own good faith
shelters him.
Further, the eleventh and twelfth defendants purchased the suit properties from the tenth defendant, after twelve years from the date of the original
sale in the year 1932. The learned District Judge negatived the plaintiff''s claim on this ground, namely, that the plaintiff had no right to follow the
trust property in the hands of the defendants 11 and 12, as they had purchased the properties after the tenth defendant had perfected title by
adverse possession. We agree with and we hold that the eleventh and twelfth defendants are not in any way liable to the claim of the plaintiff.
(13) The next point for consideration is whether the plaintiff is estopped by the subsequent arrangement entered into by his father (the third
defendant) not only on behalf of himself but also on behalf to he plaintiff under exhibit B-28, dated 26th October 1953, in and by which all the
disputes existing in the family including the suit claim were settled by allotment of a substantial portion of the estate in Ceylon in favour of the third
defendant and his son the plaintiff herein. It is necessary now to state a few more facts that led to the settlement of the disputes including the suit
claim. After the sale, the mission authorities did their best to settle amicably the claim between the third defendant and the first defendant. They
succeeded in getting an acknowledgment from the first defendant that he was ready and willing to recognise the third defendant''s claim and agreed
to pay a sum of Rs. 6000 being his share of the sale consideration (estimated at 4 per cent on the sale price of Rs. 40,000); and equally the third
defendant agreed to render an account of all the immovable properties of which he was in possession and enjoyment in Ceylon.
The third defendant did not comply with this arrangement. Therefore, in the year 1947, the first defendant filed a suit in the District Court, Matale,
Ceylon (exhibit B-12) against the third defendant claiming his share of the third defendant claiming his share of the income in the immovable
properties in Ceylon for two years preceding 1947. The third defendant resisted the suit contending that the suit itself was not maintainable, that the
first defendant on the dissolution of the partnership which subsisted between them and in respect of money due to the first defendant by the third
defendant for debts of the first defendant discharged by the third defendant at his request and also in respect of the third defendant''s claim of his
share of the sale proceeds of the suit properties. During the pendency of that suit, the parties agreed to refer this matter to arbitration of one
Christian Gomez, whose award was to be final and conclusive and binding between the parties. The third defendant agreed to furnish particulars of
the amount of the claims in respect of Ceylon properties within ten days of the reference to the Arbitrator by the Court or within such extended
time as the Arbitrator might allow from time to time. The Arbitrator obtained a joint memo signed by both the first and third defendants exhibit B-
16 in and by which the first defendant undertook to withdraw his claims from the Court & to distribute his share of the properties to satisfy the
claims of the third defendant. He also undertook to bring his heirs to give effect to such a transfer of the portion of the properties to the third
defendant in full settlement of his claim. The Arbitrator put a further condition that in case the first defendant failed to comply with the directions, he
should pay a sum of Rs. 20,000 to the third defendant in full settlement of his claim. Accordingly, the District Court of Metale passed a decree in
the suit, in terms of the award of the Arbitrator, exhibit B-15, dated 7th April 1949.
As for the distribution of the properties according to the agreement between the parties, the Arbitrator estimated the Ceylon properties at Rs.
90,000. It was agreed between the brothers that whatever properties were acquired by the third defendant in his own name which was worth
about Rs. 13,500 should be left to him. He divided the Ceylon properties into three equal shares, A, B and C schedules, and allotted the A
schedule properties and also properties worth about Rs. 13,500 purchased in his own name, to the third defendant. He allotted the C schedule
properties to the first defendant which was worth Rs. 30,500 and also directed that from and out of his share of the properties allotted, the first
defendant should convey half of the extent of properties valued about Rs. 15,000 to the third defendant in lieu of his claim on the sale proceeds of
the suit properties in India. Thus the third defendant was allotted properties in all valued at Rs. 58,000 in full settlement of all his claims in respect
of the properties both in India and Ceylon and all the disputes then existing between them. In order to give legal effect to this arrangement, the
Arbitrator Gomez wrote a letter in terms of the award, but no action was taken by the District Judge to pass such a decree as he had already
disposed of the suit by passing decree in terms of the joint memo signed by both the first and third defendants. Therefore, the third defendant
himself filed an application in the District Court, Matale, praying that he might be appointed as curator for the estate of his minor son, to give effect
to the partition arrangement entered into already by the brothers. The District Judge of Matale appointed the third defendant as curator.
Subsequently the necessary documents were prepared and executed between the brothers in and by which property worth Rs. 58,000 was
allotted and set apart exclusively and absolutely to the third defendant to hold and enjoy for his lifetime and after his death to go to his children
including the plaintiff it was also further agreed that he should waive all claims and other matters in dispute existing between them, and thereafter not
to claim anything whatsoever, and the said arrangement was to be final and conclusive between the parties. This document was given effect to and
the parties entered into possession of their respective properties. The said document was executed and registered, exhibit B-28, dated 26th
October 1953.
(14) Now the plaintiff filed the present suit in the year 1955, against the first defendant and the subsequent purchasers of the suit properties in
India, questioning the conduct of the first defendant in respect of the management of the trust properties and the validity of the sale executed by him
in favour of the tenth defendant. The first defendant contended that the plaintiff could not claim the suit properties, as the matter had already been
settled with his father not only on behalf of himself but also on behalf of the plaintiff and that, therefore, the plaintiff was estopped by the deed and
conduct of his father from claiming the suit properties. Learned Counsel for the appellant seriously contended before us that in the arrangement
entered into by the brothers in respect of the Ceylon properties, the dispute in regard to the sale proceeds in India was not at all taken into
consideration. He also urged that whatever properties that were conveyed by the first defendant from and out of his share of the properties to the
3rd defendant it was only in settlement of the third defendant''s claim in respect of moneys due and payable by the first defendant in regard to the
dealings in Ceylon. We are neither satisfied nor convinced with the arguments of learned Counsel for the plaintiff-appellant. It is clear from the
terms of the settlement, exhibit B-14, referred to the Arbitrator that the disputes set out in paragraph 6(b) of the written statement filed in that case
(exhibit B-13) included also the properties in India. The Arbitrator did take into consideration all the claims of the 3rd defendant including the sale
proceeds of the suit properties in India, at the time he effected the division between the brothers in respect of the Ceylon properties.
Another contention put forward by learned Counsel for the appellant was that the third defendant could not be the guardian of the minor plaintiff;
that the Ceylon Court could have no jurisdiction to appoint the third defendant as curator for the properties of the minor''s estate in India. Learned
Counsel apparently overlooks the fact that there were no immovable properties as such in India, at the time the third defendant filed the application
for the appointment of himself as guardian for his son''s estate in Ceylon. Certainly the District Court of Matale had jurisdiction to appoint the third
defendant as guardian to represent his minor son in respect of the Ceylon properties. Therefore, we are not convinced with the argument that the
third defendant could not represent the minor plaintiff, at the time when the brothers entered into the arrangement in regard to the division of the
Ceylon properties in full settlement of the claims existing between them. The plaintiff was represented by his father, at the time when the Ceylon
properties were divided between the brothers. The third defendant agreed to receive properties worth about Rs. 15,000 from and out of the
properties allotted to the first defendant, in full settlement of his share of the sale proceeds in respect of the suit properties in India, as he had
already ratified the sale by his letter, dated 25th January 1944 (exhibit B-9). Now having settled all the disputes between himself and the first
defendant in respect of the claim in the suit properties, the third defendant set up his son, the present plaintiff, to get something more from the tenth
defendant and the other subsequent purchasers. Even assuming that there was a breach of trust committed by the first defendant in not purchasing
immovable properties in Ceylon with the sale proceeds of the suit properties in India in terms of the Will, the plaintiff''s father had settled the
disputes and got his share of the sale-proceed in the form of immovable properties worth Rs. 15,000 with the life interest for himself and thereafter
to his children including the plaintiff. The plaintiff cannot, therefore, charge the first defendant for committing the breach of trust, nor follow the
alleged trust properties in the hands of the tenth defendant or the other subsequent purchasers. We agree with the learned District Judge that the
plaintiff is estopped from putting forth any claim in respect of the suit properties now in the hands of the 11th and 12th defendants.
(15) The next point for consideration is one of limitation. The facts regarding the same are few and not in dispute. The first defendant, as trustee,
sold the trust properties in the year 1932. The plaintiff''s father was aware of the sale at any rate from 1935, when he wrote a letter to the tenth
defendant informing them that the first defendant had no right to sell the suit properties and that the sale was not binding on him. The plaintiff was
born in 1935 i.e. three years after the sale to the tenth defendant. plaintiff''s father finally settled the matter with the tenth defendant in the year
1953, and the suit was instituted in the year 1955 by the plaintiff against defendants 1, 10 and others, within two years after he attained majority.
According to the terms of the Will, the first defendant was appointed as a trustee, with a direction to sell the suit properties and invest the sale-
proceeds, after payment of certain legacies, in the purchase of immovable properties in Ceylon. The first defendant committed breach of trust in
not purchasing properties with the residue of the sale-proceeds in Ceylon. Plaintiff''s father and the second defendant according to the terms of the
Will are entitled to the income during their lifetime from and out of the immovable properties to be purchased by the first defendant in Ceylon. But
neither the father of the plaintiff nor the second defendant ever took any proceedings against the first defendant for enforcing him to purchase
immovable properties; nor did they dispute the validity of the sale made in favour of the tenth defendant.
But the plaintiff contended that the right to sue accrued to him only from the date of his birth in 1935 and that after the period of disability he filed
the suit within the period of limitation prescribed in article 134 of the Limitation Act. On the other hand, the tenth defendant contended that the suit
was barred by limitation under article 144
Description of suit (1)
To recover possession of immovable property conveyed or bequeathed in trust or mortgaged and afterwards transferred by the trustee or
mortgagee for a valuable consideration.
(16) What is the interpretation to be given to the words when the transfer becomes known to the plaintiff? Lord Parker in Meyappa Chetty v.
Subramanian Chetty, 43 Ind App 113 = AIR 1916 PC 202 observed (at page 120 (of IA) = (at p. 205 of AIR):
For the purpose of the English Statutes of Limitation time runs from the accruer of the cause of action, but a cause of action does not accrue
unless there be some one who can institute the action.
(17) Abbott C. J., observed in Murray v. The East India Co., (1821) 106 ER 1167 thus:
..................independently, of authority, we think that it cannot be said, that a cause of action exists, unless there be also a person in existence
capable of suing.
(18) Lighwood in his book on the Time Limit on Actions observes at page 205:
If at the time when a cause of action would arise there is no person capable of suing upon it, the statute does not commence to run. Until there is a
person to sue, the cause of action does not fully accrue, and the operation of the statute is postponed accordingly.
(19) Thus, it has been held that unless there is a completed cause of action, limitation cannot run and there cannot be completed cause of action
unless there is a person who can sue and a person who can be sued. Now, on the date of the sale in the year 1932, the plaintiff''s father, that is the
third defendant and the second defendant as also his sons defendants 8 and 9 were living and in existence for the purpose of limitation, to start
action against the first defendant or the tenth defendant. But nobody took any action either against the first defendant or against the 10th defendant.
On the other hand, the plaintiff''s father from the of the Act, as he had perfected title by adverse possession for twelve years from the date of the
sale and that when he sold the properties to the eleventh defendant, he had an indefeasible right to deal with the properties as absolute owner of
the same. The learned District Judge upheld the contention of the tenth defendant, and applying article 144 of the Act held that the suit was barred
by limitation. Thus, the substantial question for our consideration is whether article 134 or article 144 of the Limitation Act applied to the case and
whether the suit was in time. Article 134 of the Act runs as follows:--
Period of limitation Time from which period begins to run (2) (3)
Twelve years When the transfer becomes known to the plaintiff
date of the sale started a quarrel with his brother, the first defendants, commenced correspondence with the mission authorities for the settlement of
the dispute, carried on negotiations with his brothers through the mission authorities (tenth defendant) and finally effected a compromise with the
first defendant in respect of the suit properties. In such circumstances can the plaintiff file the suit to set aside the sale of the year 1932, while his
father could have avoided the sale by instituting the suit within twelve years of the date of the sale.
It will be useful in this connection to refer to a decision of the Privy Council in AIR 1940 116 (Privy Council) a mosque built in Lahore was
dedicated by a deed in which provision was also made for the appointment of mutawalis. The building was demolished by the Sikhs in 1935. A suit
was instituted in October, 1935, for a declaration that the building was a mosque in which the plaintiffs and all followers of Islam were entitled to
worship. Their Lordships of the Judicial Committee held that the suit was barred by limitation. It was observed by them that the right of an
individual Muslim worshipper to use a mosque for the purpose of devotion was not a sort of easement in gross, but an element in the general right
of a beneficiary to have the wakf property recovered by its proper custodians and applied to its proper purpose; but if the title conferred by the
settlor had come to an end by reason that for the statutory period no one had sued to eject a person possession adversely to the wakf and every
interest thereunder the rights of all beneficiaries were gone and the land could not be recovered by or for the mutawali and the terms of the
endowment could no longer be enforced. In the instant case, the father of the plaintiff had knowledge of the sale of the year 1935, and the words in
the third column of article 134, when the transfer becomes known to the plaintiff refer only to the plaintiff in existence at the time of the transaction.
In Mitra''s Law of Limitation and Prescription (seventh edition), volume II, the learned authors while commenting upon article 134-A observe at
page 817:
The knowledge referred to is the knowledge of the actual plaintiff ''Plaintiff'' in column 3 must in the case of a representative suit be understood to
refer only to the plaintiffs Eo nomine on record. In the case of a plaintiff who derives his title as beneficiary from the deed of wakf and not as the
son of the last mutawali, he has an independent right of suit. The Legislature in having fixed a subjective starting point seems to have overlooked the
difficulty of different beneficiaries getting knowledge at different dates. Even if a single beneficiary gets knowledge within three or twelve years of
suit, he may have the sale or transfer set aside, even if a similar suit by other possible plaintiff will be barred.
(20) Therefore, when the cause of action of the suit arose, viz., when the trust properties were alienated by the first defendant to the tenth
defendant, plaintiff''s father was in existence and he was a proper person capable of suing to set aside the sale, and limitation did begin to run from
the date of sale. When once time has begun to run owing to the right to sue having accrued to the person who was not labouring under any legal
disability, the subsequent disability of himself or of his son or other representative is not a ground of exemption from the operation of the ordinary
rule. To quote the maxim of Banning; it is almost universal rule in the law of limitation that when once time has begun to run, nothing stops it.
Therefore, it is reasonable to assume on the facts of the instant case, that the words in the third column, when the transfer becomes known to the
plaintiff refer only to the person who is alive and is also capable of suing to recover the immovable properties conveyed or bequeathed in trust.
Otherwise it would lead to anomalous position as observed by the learned District Judge that as and when a son is born either to the second or the
third defendant, they could start litigation after the period of disability against the first defendant or the tenth defendant endlessly in this connection,
it will be useful to refer to the decision in Sir Veerabhadraswami and Another Vs. Maya Kone and Others, where Patanjali Sastri J., observed that
the plaintiff in column 3 of Art 134-A must in the case of a representative suit be understood to refer only to the plaintiffs eo nomine on record;
otherwise, the article would become unworkable, for, if plaintiff was taken to mean every individual member of the community, which was the only
alternative view possible, it would be practically impossible to prove knowledge on the part of such a large number of persons.
(21) Learned Counsel for the appellant contended that in any event the 10th defendant could not plead adverse possession by availing of article
144 of the Limitation Act, as the suit was not by an owner but by a beneficiary and he was not claiming possession of the trust properties but only
seeking the help of the Court to appoint an administrator and to direct him to take possession of properties improperly alienated by the tenth
defendant. In support of this argument, he cited a decision of the Supreme Court in L. Janakirama Iyer and Others Vs. P.M. Nilakanta Iyer and
Others, . Learned Counsel for the tenth defendant also relied on certain observations in this case as supporting the case of the defendants. The
facts of the case are these. Some members of a Hindu undivided family known as Kalakadu Pannayar family were doing commission agency
business in kerosene, petrol and crude oil. In the course of the business, they became heavily indebted to a number of creditors, the members of
the Hindu joint family executed a deed of trust thereby conveying all their movable and immovable properties, with a direction to dispose of their
assets and distribute the proceeds rateably among the creditors in whose favour a mortgage had been executed by the members of the Hindu
undivided family in the course of their business. The trustees in the course of the administration of the business conveyed to him some of the trust
properties in due discharge of the mortgage. Some of the members of the Hindu undivided family started litigation against the trustees and alienees
for the administration of the trust created by them, for accounts from the trustees and for recovery of the trust properties from the alienees. One of
the contentions urged by the alienees was that the suit itself was not maintainable and that it was barred by limitation. It was in the connection their
Lordships of the Supreme Court observed that in a proper case the beneficiary was entitled to sue for the removal of the trustee appointed under
the trust, for the appointment of a new trustee and for delivery to the new trustee of the property improperly alienated by the previous trustee, that
such a suit for constructive possession was not prohibited by section 63 of the Trusts Act, that prima facie, section 10 of the Limitation Act
seemed to contemplate an action by a beneficiary under a trust of which section 10 applied and provided that in such an action the beneficiary
might follow the property and ask for a proper order as to the delivery of the said property to the new trustee and if that was so, the provisions of
section 10 would suggest that the remedies prescribed by section 63 were not exhaustive. It is these observations of the Supreme Court that made
learned Counsel for the appellant put forward his argument that the suit was not barred by limitation. But on a close reading of the judgment we
find that their Lordships of the Supreme Court have also made certain observations that may support the case of the tenth defendant. At page 641
of the reports, their Lordships have observed:
We would like to add that if for bringing back to the trust the properties improperly alienated by the trustees two suits are required to be filed we
apprehend that the second suit by the newly appointed trustee for obtaining possession of the properties would almost always be too late, and so
S. 63 cannot be read as exhaustively dealing with all the remedies available to the beneficiary.
(22) In that connection, they referred to a decision of the Privy Council in Subbaiya Pandaram v. Mahammad Mustapha Maracayar, ILR (1923)
Mad 751 = AIR 1923 PC 175 where in the presence of a purchaser it was declared that the trust had been validly created and that the property
was in fact trust property. At the time when the decree was passed the possession of the property was adverse, and no further step was taken in
consequence of the declaration immediately, and when they filed the suit after some time, it was too late. Relying on the above observations,
learned Counsel for the tenth defendant contended that even though there is a declaration and even though the appellant succeeded in getting a new
administrator appointed and even if the new administrator would take steps for recovery of the properties, still his client would be entitled to avail
himself of article 144 of the Limitation Act. In any event, u/s 10 of the Limitation Act, the 10th defendant would be protected, as he was a bona
fide purchaser for valuable consideration. We have already held that the mission authorities did not concert with the executor by obtaining the trust
property at a nominal price or at a fraudulent value or in extinguishing the private debt of the executor or in any other manner contrary to the duty
of the office of the executor. Therefore, whether article 134 or article 144 applied, the plaintiff''s suit must fail, on the ground that the sale in favour
of the tenth defendant was valid and binding on him, as his father (third defendant) on behalf of himself and his son (plaintiff) settled the disputes,
adjusted the claims and agreed to receive some portion of the immovable properties belonging to the first defendant in full and final discharge of the
suit claim.
(23) In the result, the appeal is demised. In the circumstances, there will be no order as to costs.
(24) Since we have dismissed the main appeal itself without costs and as the trial Judge only exercised his discretion in not awarding costs to the
sixth and tenth defendants, their cross-objections are also dismissed. No costs.
(25) Appeal and cross-objections dismissed.