Kannepalli Visweswara Dakshinamurthl Somayulu and Another vs Kannepalli Krishnamuithi and Others

Srinivasachari, J.—This appeal arises out of proceedings which were started u/s 19 of the Madras Agriculturists'' Relief Act. IV of 1938. Sriramavadhauulu, Kannepalli China Dakshinamurthl and Kannepalli Laxmi Narasimhavadhanulu were the sons of one Ramavadhanuhi. These belonged to one branch of the Kannepalli family while two others Kannepalli Dakshinamurthl Somayajulu and Venkata Narasimhavadhanulu belonged to another branch of the same Kannepalli family. All these owned jointly lands In six villages in Patha-Patnam Taluk, in Chicacole District, in the following shares:

Kannepalli Krishnamurthy ... l/8th share, do. China Dakshinamurthy ... l/6th share, do. Lakihmi Narasimhavadhanulu (Since depeascd by his widow Annapurnamma) ... l/6th share.

do. Visweswara Dakshinamurthy Somayajuhi ... l/6th share, do. China Dakshinamurthy Somayajulu ... l/6th share, do. Dakshinamurthy Somayulu ... l/6th share do. Venkatanarasimhavadhanulu ... l/6th share.

The co-sharers were receiving their respective share of the annual income either themselves or through their agents.

Kannepalli Visweswara Dakshlnamurthi and China Visweswara Dakshinamurthl were minors, and therefore, after the death of then-father, Kannepalli Dakshinamurthi Somayulu was appointed the guardian of their properties by the District Court, Berhampore, and he continued to act as guardian till 1933. At about this time a suit was filed in the Subordinate Court, Berhampore, as against the guardian and others for rendition of accounts by one Jagannatham, the maternal uncle of Visweswara Dakshinamurthi Somayajulu. A preliminary decree was passed in this suit which became final, the appeal therefrom having been withdrawn. Later on a final decree was also passed and a Commissioner was appointed. The final decree fixed the liability at Rs. 13,029-14-0 and in partial discharge thereof a sale-deed was executed for Rs. 11,000 and a sum of Rs. 10,000 paid in cash.

The Judgment-debtors applied to the Court for scaling down the debt under the provisions of the Madras Agriculturists'' Relief Act and prayed that it be declared that the whole of the decree debt had been wiped off. The Subordinate Judge applying Section 9 of the above Act, held that the liability including the costs of the suit and execution proceedings had been wiped out by reason of the payments made by the judgment debtors.

The decree holders have come up in appeal. The contention put forward by learned Counsel on behalf of the decree holders is that this debt could not be scaled down coming as it does u/s 4 (f) of the Act. ''Debt'' has been defined in Section 3 (iii) of the Act as "any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree pr order of a civil or Revenue Court........"

This debt in respect of which the relief for a scaling down is sought, is admittedly covered by the above definition.

Particular kinds of debts as have been mentioned in Section 4 of the Act have been declared to be not falling within the purview of the Act and as such, such debts could not be scaled down. Section 4 among such debts speaks of ''any liability arising out of a breach of trust. It enacts that if a liability had arisen by reason of a breach of trust having been committed by the trustee, such a liability would not be regarded as coming within the ambit of Section 3 of the Act. An agriculturist debtor would not get the protection of the Act where he is bound in fiduciary character, to protect the interests of another person such an agent, guardian or legal adviser.

The question, therefore, arises as to whether the liability of the judgment debtors against whom a decree has been passed is that of a trustee. If the position of the judgment-debtors is that of a person placed in a fiduciary capacity the next question to be determined is as to whether there has been a breach of trust. Where a person bound in a fiduciary character to protect the interests of another person, as a trustee, executor, partner, agent, guardian, commits a breach of trust, then he would become liable to the beneficiary in his fiduciary capacity and if under such circumstances he commits a breach of trust he will not receive the protection of this Act.

Admittedly the position of the judgment-debtors is that of co-owners and nothing more, being in possession and enjoyment of not only their share of the property but also those of the other co-owners. The ownership of the judgment-debtors is a qualified ownership (on behalf of the rest) as envisaged by S. 90 of the Indian Trusts Act. Section 90 of the Trusts Act says that if such qualified owner of any property gains an advantage in derogation of the rights of others interested in the property he must hold it for the benefit of those interested persons. The principle underlying this section is that no person who is in a fiduciary capacity or position can make a profit to the detriment of those interested.

He must not utilise his position to obtain an advantage. In order to invoke this section it is essential that it should be proved that the person is placed in fiduciary capacity and secondly, that he gained an advantage by virtue of such position. The relationship of one co-owner towards another is not strictly of a fiduciary character in the sense that there is an obligation on the part of the co-owner to protect the interest of the other co-owner. The liability ordinarily of one co-owner in possession of the share of all is only to make over the share of the profits of the others to them. He is accountable only for the rents and profits actually received and not what lie ought to have received.

If he fails to pay the share it can only amount to a breach of the agreement to pay the share whenever it fell due. The possession of a co-owner of the share of the other co-owner cannot be regarded to be ''in derogation'' of the rights of the other co-owners within the meaning. of Section 90 of the Trusts Act. That a co-owner does not stand in a fiduciary position towards the other co-owner is well established since Kennedy v. Trafford, (1897) AC 180 (A). Tire same view; was taken by the learned Judges of the Madras High Court in Ramaswamy Iyer v. Subramania Iyer, ILB 48 Mad 47 : AIR 1023 Mad 147 ) (B). It is only in a case where it is established on the facts that the co-owner by his dealings derived a benefit or advantage to himself, that Section 90 of the Trusts Act would apply and he would be regarded as being in a fiduciary position.

In Peer Mohideen Rowther Vs. Asia Bivi and Others, (C), on the evidence it was held that the co-owner was in the position of a trustee. The case of Soudagar Muhammad Abdul Rahim Baig Saheb Vs. Soudagar Muhammad Abdul Hakim Baig Saheb and Others, at p. 557) (D), was a case where on the facts the Court came to the conclusion that the co-owner assumed a position much more of a trustee in a fiduciary relationship than that of a mere co-owner. In another case the stridhanam of a bride was deposited with, a Nattukottai Chetty firm and interest was allowed to accumulate. The proprietor failed to pay back the amount. A suit was filed and decree passed. The judgment debtor became an insolvent.

On an application by the official receiver for scaling down the debt, it was held that the position of the recipient of the deposit and that of his successor was analogous to that of a trustee and the deposit was held in a fiduciary capacity and when he refused to pay the amount there was a breach of trust. The debt was not allowed to be scaled down. Vide V. Subramania Ayyar on behalf of and in the name of Official Receiver, East Tanjore Vs. Sivakami Achi and Another, (E).

The question came up for consideration as to whether the liability to pay interest realised by a co owner by investment of the common funds, would be exempt from the operation of Act IV of 1938 and it was held that such a liability could not be regarded as a ''debt'' within the meaning of the Act. Mottai Meera alias Sheik Abdul Kadir Rowther Vs. Chinna Sheik Abdul Kadir Rowther and Others, (P). The test, therefore, would be as to whether the co-owner utilised the common funds or common property and derived a benefit there from. It is evident that in this case, no such ''allegation has been made much less proved. Our attention was invited to the case of Syed Abdul Wajid Sahib and Others Vs. Oosman Abdul Rubb, (G). This was a case where the Co-owner was the de facto guardian and as such placed himself in a fiduciary capacity and by the combined operation of the provisions of Sections 94 and 95 of the Trusts Act he became a trustee. This case cannot help the Appellants in view of the test enunciated above.

9 The liability, In our opinion, is not a liability of a trustee in a fiduciary capacity and, therefore, it cannot come u/s 4 (f) of the Act and as such the liability is not exempted from the operation of the Act. The Order of the Subordinate Judge is confirmed and this appeal dismissed with costs. Advocate''s fee Rs. 50.