Krishna Pattar and Another vs Lakshmi alias Ammu Ammal and Others

This second appeal arises from a suit brought by the plaintiff to recover certain lands with mesne profits for 25 years. No objection was raised

by the defendants to the plaintiff''s claim for the lands, and they have been decreed to her and there is no appeal about them. But as regards the

profits'', defendants denied their liability and pleaded limitation. To avoid the plea of limitation plaintiff''s case was that defendants 1 and 2 were

holding the lands and collecting the profits as her trustees and she relied on Section 10 of the Limitation Act.

The Subordinate Judge who tried the case held that no express trust was made out, that defendants were only constructive trustees and that

three years limitation was applicable to the claim for profits, apparently under Article 109. He further held that, as pleaded by the 2nd defendant,

the profits for the last 9 years had been accounted for to the plaintiff and dismissed her claim in to to for past profits. The District Judge reversed

that decree holding that an express trust was made out, and that Section 10 applied and that even if it did not. the defendants were plaintiff''s

agents in law, and under Article 89 the plaintiff''s claim was in time as the demand for accounts was only made just prior to the suit. He gave a

decree as sued for, without passing a preliminary decree for accounts under Order 20 Rule 16, C.P.C. and without taking any notice of the plea

that the profits had been accounted for. Defendants 1 and 2 have appealed to us.

The first question for decision is whether an express trust is made out or not, as it is material to decide it in considering the application of Section

The only facts from which we are asked to find an express trust are these. The plaint lands were purchased with plaintiff''s money and in the

sale deed taken by defendants 1 and 2 in their own names there is a recital that the purchase was on behalf of the plaintiff, Defendants were

receiving the rent of the lands subsequently and it is the 2nd defendant''s case that he gave credit to the plaintiff for them in the accounts. From

these facts it is difficult to infer the existence of an express trust or of anything other than a constructive trust. To create a trust with reference to

immovable property the Indian Trust Act II of 1882 which applies to this case requires a registered instrument signed by the author of the trust or

the trustee, where no question of a will or of fraud arises, and there must be a clear indication of an intention to create a trust--See Sections 5 and

6 of the Act- The only registered instrument we have in the case is Ex I, the sale deed. It is signed only by the vendors and cannot therefore be

used to support a case of express trust by declaration by defendants 1 and 2, nor can it be relied on to show that the vendors created the trust, as

was argued before us, because there is nothing to show that they intended to create any trust. The words in Ex. I, do not support any such

contention; in fact after reciting that the purchase was on behalf of the plaintiff Ex. I, goes on to say that the lands should be enjoyed by the plaintiff

and her heirs; it says nothing about defendants managing the lands and paying ever the profits to the plaintiff- It is extremely improbable that

strangers like the vendors under Ex. I would intend to create any trust for plaintiff Though no doubt it is possible to take a conveyance in the form

of a deed of trust, there is nothing to show that that was done here. Ex. I is an ordinary deed of benami purchase which recites its benami

character. To constitute a benami purchase, it is not necessary, as the District Judge thinks, that there should be anything secret about it; and unless

it is intended for a fraudulent purpose there is no reason why the deed should not disclose the character of the transaction.

There is a further difficulty in holding that Ex. I amounts to a trust created by the vendors as one of them is a minor who cannot create a valid

trust u/s 7 of the Act,

It was next argued by the plaintiff''s vakil that even if the defendants 1 and 2 were not made express trustees at the outset they must be held to

have become such because they acted as trustees for over 12 years and they cannot be heard to aver the contrary. It is difficult to see how any

question of adverse possession or estoppel arises. A sufficient answer to the argument is that the defendants at no time did anything to change their

legal position with reference to these lands. As constructive trustees they would be bound to account for the profits u/s 95 of the Act, and their

doing so cannot make them express trustees; and they did nothing else.

The learned vakil for the plaintiff cited some English cases Soar v. Ashwell L.R. 1893 (2) Q.B. 390 Rouchefoucald v. Boustead L.R. 1897 I

Ch. 196 Burdick v. Garrik (1870) L.R. 5 Ch. App. 233 and Lyell v. Kennedy (1889) L.R. 14 A.C. 437 as showing that the term ""express

trustee"" in English Law included not only persons expressly appointed trustees but also persons standing in various fiduciary relations who were

incapable of pleading limitation. In the first case cited a Solicitor acting for the trustees and holding trust moneys in his hands was held to be in the

position of an express trustee and he was not allowed to plead limitation. Lord Justice Bowen enumerates the cases where such extension of the

term ""express trustee"" has been made in England but the defendants here fall under none of those categories. It is doubtful how far such extensions

can be considered to be cases of express trustees in this country, for, as remarked by the learned Chief Justice in Rajah of Ramnad v. Ponnusami

Thevar ILR (1920) Mad. 277 the Indian Trusts Act which governs us restricts the scope of the term ""trustee"" more closely than in England and

considers constructive and resulting trusts as not trusts but as obligations in the nature of trusts. See Chapter IX.

The case in Rochefoucald v. Boustead L.R. 1897 I Ch. 196 cited above was the case of an express trust created by certain letters and it was

held that it satisfied the Statute of Frauds but that even if it were otherwise, parol evidence could be allowed to make up the deficiency in proof in

spite of Section 7 of the Statute, on the ground that the statute should not be allowed to be used to perpetuate a fraud, the defendant there claiming

the property himself as his own. No such case arises here, and the two other English cases cited are equally beside the point'' here. The case of

Bhusabhai v. Bai Rukmani ILR 32 Bom. 394 refers to a sum of money, to create a trust with reference to which a registered instrument was not

necessary. It is thus distinguishable from the present case and it is unnecessary for us to consider whether we should follow it or not.

For the above reasons it seems to us that the contention that there was an express trust in this case must be rejected. The case is one of a

constructive trust or of an obligation in the nature of a trust as the Trusts Act calls it, falling under Chapter IX. Now Section 10 of the Limitation

Act has never been held to apply to such cases. It is true that in Section 10, the term ""express trustee"" is not used in the section itself but only in the

marginal note, but the language of the section referring as it does to ""persons in whom property has become vested in trust for any specific

purpose"" is explicit enough to show that if refers only to express trustees. It is not contended before us that it would cover the case of a

constructive trustee. The plea that Section 10 saves limitation in the present case must therefore be rejected.

The District Judge has also held that the case of express trust failing the parties may be looked upon as holding the position of principal and

agents, and Article 89 may be applied, in which case he thinks the suit is in time, because the account was demanded and refused only shortly

before suit. He overlooks the facts that there is another starting point for limitation under the Act, viz, the termination of the agency, and it has been

argued before us that if there was any agency created in the case it was terminated long prior to the suit and the claim for profits would be barred

under that article and that the defendants were not able to show it because no plea of agency was set up in the case. It is clear from the pleadings

that no such case was set up by the plaintiff, there was no issue about it and there was no reference to it in the first Court. In these circumstances

the question of agency should not have been allowed to be raised in the Appellate Court for the first time. To allow it now will require a fresh trial

on facts, and we are therefore of opinion that the plea should be excluded from consideration.

In the result we must hold that bar by limitation is a proper plea in the case with regard to the profits claimed. It is not necessary to decide

whether the 3 years rule or the 6 years'' rule applies to it, as in either case the plaintiff fails as the finding by the Subordinate Judge that profits for

the last 9 years have been accounted for has not been displaced by the District Judge and we have not been addressed any argument about it.

In the result, the decree of the Lower Appellate Court must be reversed and the decree of the First Court restored with appellant''s costs here

and in the Court below to be paid by the plaintiff.