Pailoth vs Kunjuvareed

Thomas, J.—The Appellant and the first Respondent are brOrs. . Their father "Chacku" was conducting some trade in the building scheduled in the plaint. The owner of the building was somebody else and Chacku had only a tenancy right in the building. In 1959 when the Appellant was away in a distant place, some transaction took place between the first Respondent and his father. The suit arose from the aforesaid transactions.

The Appellants case is that the first Respondent created a trust by annexing an obligation on the property which his father had transferred to the first Respondent. On 2nd September 1959, the first Respondent executed Ext.A-2 agreement in favour of his father Chacku in which the first Respondent declared his willingness to part with half of the possession of the building to the Appellant "in case the Appellant returns and says that he wants to conduct a business". This declaration, according to the Appellant, amounts to creation of a trust in favour of the Appellant and the first Respondent is in the position of a trustee. After the death of Chacku, the Appellant returned and asked the first Respondent to part with one half of the possession of the shop room as the Appellant had decided to start a trade therein from June 1975 onward. The first Respondent repudiated the demand and hence the Appellant issued Ext.A-3 notice to the first Respondent on 29th October 1976 and formally demanded the first Respondent to fulfil the obligation. The first Respondent, through Ext. A-4 reply, rejected the appellant's demand. Hence the Appellant filed the suit for division of the plaint schedule shop-room into two equal halves and to give possession of one half to the Appellant.

The first Respondent was the first Defendant in the suit. The second Defendant is a firm of which the first Respondent is a partner and it is said that the firm is conducting business in the plaint schedule building now. The 3rd Defendant is the mother of the other two parties.

The first Respondent filed a written statement on his own as also on behalf of the 2nd Defendant firm. The contentions therein are, inter alia, that the furniture, stock in trade and the goodwill of the business conducted by Chacku in the plaint schedule building were assigned in favour of the first Respondent and thereafter Chacku had surrendered possession of the shop-room to its landlord. Subsequently, the first Respondent took the said shop-room on rent from the same landlord and started a business therein. A few years thereafter, a company, including the first Respondent, conducted business in the building. The 2nd Defendant firm started business in the building only from April 1976. The appellant's case regarding Ext. A-2 agreement has been totally denied by the first Respondent in the written statement. It is further contended that the right, title and interest of the landlord were purchased by the first Respondent as per Ext. B-2 sale deed dated 20th December 1963, for a sum of Rs. 21,000. Yet Anr. contention raised in the written statement is that the claims raised in the suit were relinquished by the Appellant on 1st June 1975 in the presence of the first Respondent and their mother and sisters. The last contention is that the right of the Appellant, if any, is barred by adverse possession and the suit is also barred by limitation.

The learned Sub Judge found that Ext. A-2 agreement was executed by the first Respondent in favour of his father and the same is a genuine transaction. But on the question of surrender of the tenancy right by Chacku the Court below found that the said case of the first Respondent is true. The further finding is that a fresh tenancy had been created between the landlord and the first Respondent and as such, the Appellant never had any right in the suit property. The Court below found that the rights of the Appellant, if any, in the suit property had been "clearly lost by adverse possession", and that the suit should have been filed within a period of three years from the date of the appellant's return from Bombay in 1959. Thus, the learned Sub Judge found that the appellant's claim is clearly barred by limitation. On the strength of the aforesaid findings, the Court below dismissed the suit with costs. Hence the Appellant has filed this appeal.

The first Respondent has filed a memorandum of cross objections contending that the Court below has gone wrong in finding that Ext. A-2 was executed by him.

Ext. A-1 is a sale deed executed by Chacku in favour of the first Respondent, which consists of a few items of immovable properties, but it does not include the plaint schedule propefty. Though that sale deed is, dated 1st September 1959, it was registered only on the next day, i.e., 2nd September 1959 as No. 3764. Ext. B-1 is Anr. sale deed executed by Chacku himself in favour of the first Respondent. That also appears to have been executed on 1st September 1959, but was registered only on 2nd September 1959 as No. 3765. So, those two deeds came into effect only on 2nd September 1959. We refer to those dates particularly because, Ext. A-2 agreement is also, dated 2nd September 1959. Two witnesses whose signatures appear in Ext. A-2, have been examined as P.Ws. 1 and 2 respectively. Both of them said in clear terms, in their evidence, that Ext. A-2 was executed by the first Respondent in favour of Ghacku. D.W. 1 is the first Respondent himself. He has admitted in clear terms that the signature against his name in Ext. A-2 had been put by him, but he put forward a case that he had handed over some signed stamp papers in blank to his father for the purpose of executing kychits in connection with the cultivation of the properties. The aforesaid stand of D.W. 1 was found to be false by the learned Sub Judge. No argument was in fact made by the learned counsel for the first Respondent challenging the reasoning of the learned Sub Judge in regard to the finding about Ext. A-2. At any rate, when the first Respondent admitted his signature in Ext. A-2, the burden is heavy on him to prove that he has not executed that document. That burden had not been discharged. We have no hesitation to hold that Ext. A-2 is an agreement executed by the first Respondent in favour of his father on 2nd September 1959 itself and the first Respondent now denies it with sinister motives.

We cannot support the finding of the learned Sub Judge that Chacku had surrendered his tenancy right in respect of the suit property after the execution of Ext. A-l, and that the first Respondent had obtained a fresh lease on 1st October 1959. The recitals in Ext. B-l clearly show that the first Respondent took assignment of "the furniture, stock in trade, and the goodwill" of the business conducted in the shop-room and the transferor allowed the first Respondent to carry on the business therein. If actually Chacku had surrendered possession of the building to the landlord on 1st September 1959, it is extremely unlikely that on 2nd September 1959 a decument like Ext. B-l would have been registered. The burden is on the first Respondent to prove that Chacku surrendered the leasehold right to the landlord of the building. Such a case of surrender is not borne out from any of the documents produced. The first Respondent could have examined the landlord to prove that the possession of the building was in fact surrendered by Chacku and a fresh demise was effected in favour of the first Respondent. We therefore hold that the first respondent's case that Chacku had surrendered his tenancy right and that the first Respondent got a fresh tenancy, are untrue.

The suit was found to be barred by limitation on the groundthat Article 54 of the Limitation Act, 1963 applies to the facts of the case. The learned Sub Judge has observed that the first Respondent had openly asserted his exclusive title to the full knowledge of the Appellant and "therefore even if it is to be held that the Plaintiff is entitled to a share in this property, it lias been clearly lost by adverse possession". Learned counsel for the Appellant did not canvass for the proposition that the right claimed by him is only one for specific performance of a contract. But his contention is that the right of the Appellant in one half of the suit property is that of a beneficiary in respect of a trust of which the first Respondent is a trustee. This contention is based on the specific averment in paragraph 3 of the plaint that Ext. B-l sale deed was only a follow up of the confidence reposed by Chacku in the first Respondent, being his son on account of the assurance that half the right of the shop would be given over to the Appellant as and when demanded by him. Learned counsel for the Appellant pointed out that this aspect of the case has not been adverted to by the learned Sub Judge at all. It is further contended that no question of limitation or adverse possession arise in the event of a finding that a trust has been created in respect of one half of the shop-room in question.

Learned counsel for the first Respondent argued that the question of a trust does not arise for consideration in this case because, a trust could not be validly created without a registered instrument. Inasmuch as Ext. A-2 agreement is not a registered document, a valid trust could not have been created thereunder, contended the learned counsel. He referred us to Section 5 of the Indian Trusts Act, 1882. It reads thus:

No trust in relation to Immovable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or trustee.

A close reading of the above provision shows that one of the three conditions is necessary to create a valid trust in relation to Immovable properties, viz. (1) it must be declared by a non-testamentary instrument in writing and it should be registered, (2) it must be declared by the will of the author of the trust, and (3) it must be declared by the will of the trustee. It is clear that registration is not a sine qua non for the validity of a trust if it is created by "the will of the author of the trust or by the will of the trustee". What is meant by "the will" envisaged in Section 5? The words "trust", or "instrument of trust" or "author of the trust", or "trustee", and even the word "registered" are defined in Section 3 of the Act. But it has to be noted that the word "will" is not defined. The learned counsel for the first Respondent contended that the word "will" can only be understood to be a testament as envisaged in the Indian Succession Act, 1925. It is true that the Indian Succession Act, 1925 has repealed the Indian Succession Act, 1865 and as early as 1870, the Hindu Wills Act had come into force. Therefore it is contended that the idea which the word "will" would convey was not unknown to the framers of the Indian Trusts Act. In this context reference was made to the decision of the Supreme Court reported in Diwan Bros. Vs. Central Bank of India, Bombay and Others, to support the proposition that where legislature used an expression bearing a well-known legal connotation, it must be presumed to have been used it in the sense in which it is so understood.

At first blush, the above argument appeared to be attractive. But on a further scrutiny, there is considerable force in the contention of the learned counsel for the Appellant as well, that the word "will" used in Section 5 of the Trusts Act can also be understood as a declaration of the desire or wish of the person making the trust.

If the meaning of the word "will" in Section 5 of the Act is to be confined to testamentary dispositions alone, the last limb of Section 5 viz. "the will of the trustee" would become otiose. How can a trustee create a testament? A testament comes into effect only on the death of the testator. If a trust is created only on the death of the testator, how can the testator become its trustee? The learned counsel for the first Respondent could not give any satisfactory answer to the above question. It is to be borne in mind that an instrument as such is not an imperative requirement for the creation of a trust, though very often trusts are created by means of instruments. "Instrument of trust" is defined in Section 3 of the Act as "the instrument, if any, by which the trust is declared". The words "if any" in the definition clause postulate a situation where a trust can be created without an instrument. A trust may be either express or implied. A.N. Mukharjee in his commentary on the Indian Trusts Act, 1882, (1983 edition) at page 64 has stated as follows:-

A trust may be created even without any instrument. As has been said by Maitland in his Lectures on Equity page 56 ''subject to one section of the Statute of Frauds and to the Wills Act, a trust can be created without deed, without writing, without formality of any kind by mere word of mouth, and subject to certain established rules of construction no parti-cular words are necessary''. So the words ''if any have been used in the definition of instrument of trust. If at all an instrument is prepared for formation of a trust, the declaration of the trust must be in it. So it is not only evidence of the trust but the trust itself mu9t be dxlared in it.

We have to understand the real import of the word "will" in Section 5 of the Act, in the aforesaid context. Resort to the meaning given to that term in the dictionaries is permitted by law. (Vide Halsbury's Laws of England Vol. 44, p. 529, para 868.) The dictionary meaning of the word "will" includes among Ors. , "the declaration of one's desire, the act or process of exercising the faculty of choice, wish or desire". Unless the abovd meanings are also attributed to the term "will" in Section 5 of the Act, the consequence may be, that the last limb of Section 5 may be rendered meaningless.

The upshot of the above discussion discloses that (1) a valid trust can be created without an instrument, and (2) a declaration of the desire or wish of the maker of a trust may be sufficient to create a valid trust, in which case the need for registration of the instrument does not arise. The matter requires deepef analysis.

Learned counsel for the Appellant contends that the will of the first Respondent creating a trust in favour of the Appellant is discernible clearly from the circumstances in this case, such as the execution of Exts. A-l and B-l sale deeds and Ext. A-2 karar. It is now a settled proposition that when more documents than one are executed between the same parties on the same day, they must all be considered together, in order to understand the real scope of the intention of the parties thereto. [Vide Chattanatha v. Central Bank of India (A.I.R. 1965 S.C. 1866)].

The difficulty in this case is that the trial Court has not at all pointedly adverted to the question regarding the creation and/or continuance of a trust, though such a case has been specifically put forward by ihe Plaintiff in the plaint. Though the lower Court has considered the question of trust, all vital aspects germane to the issue have not been borne in mind nor considered, from a proper perspective or angle. In such circumstances, the proper course open to us is to remit the case to the trial Court for a decision on the above issue, after considering the entire evidence in this case in the light of the observations made above.

The learned counsel for the Appellant has lastly contended that if Section 5 of the Trusts Act is found to be a hurdle in establishing the appellant's case regarding trust, for any reason whatsoever, the Appellant will be able to show that the obligation undertaken by the first Respondent is in the nature of a trust as envisaged in Section 94 of the Trusts Act. As we remit the case to the Court below, it is open to the Appellant to urge the above point also before the trial Court, if need be.

We accordingly allow this appeal and set aside the judgment and decree under attack. The memorandum of cross objections is dismissed. We remit the case to the trial Court for fresh disposal of the case in the light of the observations made above. We also direct the learned Sub Judge to dispose of the case within three months from the date of receipt of records in that Court. The office is directed to despatch the records expeditiously. Parties are directed to appear before the lower Court on 2nd September 1986. The Appellant is entitled to refund of the full Court fee paid on the memorandum of the appeal.