Maulavi Kamiruddin Khan vs Badrun Nisa Bibi and Another

Harries, J.—This is a defendant''s second appeal against concurrent decrees of the Courts below decreeing the plaintiffs'' claim. The suit out of which the appeal arises was for rendition of accounts and payment to plaintiffs of any sum found due after taking such accounts. Various defences were raised, but it is only necessary to consider one of them in this appeal and that is the defence of limitation. Both the Courts below held that the suit was a suit for rendition of accounts as against a trustee and accordingly they found that the suit was not barred by time. On 12th December 1920, two brothers, namely Zamir and Zahir, executed what is called a deed of trust. By the terms of that deed defendant 1 was entrusted with the management of the property of Zamir and Zahir for a period of ten years ending on 12th December 1930.

It appears that defendant 1 managed these properties and in the year 1928 Zamir died. As I have stated, the period of the deed ended on 12th December 1930, and on 13th December 1933 the pre-sent suit was filed by the plaintiffs claiming an account from defendant 1.

Defendant 1 contended that the suit was one brought against an agent for accounts and was, therefore, governed by Article 89, Limitation Act. The plaintiffs, however, argued that this case was governed by Section 10, Limitation Act, as the deed in question constituted defendant 1 a trustee of the property. That being so, it was argued that a suit for rendition of accounts could not be barred by time. The question which has to be decided in this case is whether defendant 1 was a trustee or an agent with very wide powers of management. Certain evidence was adduced in the Courts below, to show what had in fact occurred during the period of management; but in my view this case must be decided upon the construction of the alleged deed of trust. The deed opens with a recital that the two brothers were unable to manage their property conveniently and were suffering a great loss thereby.

For that; reason, it is said that they were giving defendant 1 by the document the powers enumerated thereafter for the purpose of good management of the said properties. Thereafter are set out the various rights given to and duties imposed upon defendant 1. He was to transact all the business of the two brothers, appoint servants and agents, bring suits, realize rent and in short deal with the properties as a general manager. He was in fact given certain powers to sell though in some instances such powers could not be exercised without the consent of the two brothers.

However, it is significant to note that in para. 13 of the deed the executants of this deed were entitled to mortgage and sell the properties with the consent of defendant 1.

It has been argued that taking this document as a whole it transfers the property to defendant 1 and such is to remain vested in him for a period of ten years. On the other hand, it is argued by the appellant that the document is merely a power of attorney in very wide terms giving defendant 1 absolute power of management but of management only for a period of ten years. If this suit is a suit for rendition of accounts by an agent, then clearly it is barred by time. Article 89, Limitation Act applies to such suits and according to that article the period is three years from the termination of the agency. The agency undoubtedly terminated on 12th December 1930, and this suit was not instituted until 13th December 1933, that is one day over the period of three years. However, Article 89 will have no application if defendant 1 was in fact a trustee and not an agent. If he was a trustee, then Section 10, Limitation Act applies and this period of limitation would not bar the suit. Section 10, Limitation Act is in these terms:

Notwithstanding anything hereinbefore contained, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property or the proceeds thereof, or for an account of such property or proceeds, shall be barred by any length of time.

Can it be said that this document of 12th December 1920, vested the property of the two brothers in defendant 1 as trustee? In my view the document did not effect such a vesting. A trust contemplates that the trustee is the legal owner of the trust property. The word "trust" is defined in Section 3, Trusts Act, 1882, as follows:

A ''trust'' is an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another or. of another and the owner.

In short, it is an obligation annexed to the ownership of property and before there can be a trust the trustee must be the owner. The matter is made abundantly clear in Section 6, Trusts Act, 1882, which is in these terms:

Subject to the provisions of Section 5, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts an intention on his part to create thereby a trust, the purpose of the trust, the beneficiary, and the trust property, and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust property to the trustee.

In short, there must be a transfer of the property to the trustee before a trust is created. It is quite clear upon an examination of the various terms of the document of 12th December 1920, that no property was transferred to defendant 1. The recital to the document makes it clear that defendant 1 was given powers for the good management of the property which in the past had been badly managed by the two brothers.

It is true that he is given powers to deal with the property as if he was the owner; but it is clear that he is given such powers to deal with the property not as owner but as agent for the owners. If the property was transferred by this document, then the owners could never have the power of selling or mortgaging the property; yet, as I have stated, that power was reserved to the two brothers with the consent of defendant 1. In my view, upon a true construction of this document, defendant 1 was not made a trustee but was rather an agent of the two brothers with full powers of managing the property.

That being so, the present suit was one for rendition of accounts as between principal and agent and accordingly Article 89, Limitation Act applied. As the suit was not brought within a period of three years, the lower Court should have held that it was barred by limitation. In my view the suit was wrongly decreed by both the lower Courts and I would, therefore, allow this appeal, set aside the decrees of the lower Courts and dismiss the plaintiffs'' claim in its entirety. The appellant must have his costs in this Court and in the Courts below.

Rowland, J.

I agree.