Raja of Ramnad vs Ponnusami Tevar and Another

This is an appeal from the decree of the Temporary Subordinate Court of Madura, dismissing, as barred by limitation, the suit instituted in 1916

by the plaintiff, the present Raja of Ramnad, to recover from the defendants certain payments made by the trustee of the estate under a trust

created by the Raja''s father between the years 1898 to 1902 by way of interest on a mortgage of part of the estate created by the trustee in

favour of the first defendant, a transaction which may be taken to have been a breach of trust by the trustee of which the first defendant had notice.

It is said to follow that the payment by the trustee of interest on the mortgage was also a breach of trust and that the first defendant having taken

these payments with knowledge of the breach of trust, the suit is not barred by limitation as it comes within the provisions of Section 10 of the

Limitation Act. The learned Advocate-General cited several English cases to show that the bar of limitation would not be applied in a similar case

in England, but in my opinion those decisions have no application in this Court. In matters of equitable jurisdiction, such as trusts, the English

Courts have never regarded themselves bound by the statutes of limitation, and as regards trusts have refused to allow limitation to be pleaded as

regards breaches of express trusts, whilst following the analogy of the statute as regards constructive trusts. The application of this rule has been

discussed by Lord Justice Bowen in his well-known judgment in Soar v. Ashwell [1893] 2 Q.B., 390, where he distinguishes between express and

constructive trusts in the following passage:

An express trust can only arise between the cestui que trust and his trustee. A constructive trust is one which arises when a stranger to a trust

already constituted is held by the Court to be bound in good faith and in conscience by the trust in consequence of his conduct and behaviour.

Such conduct and behaviour the Court construes as involving him in the duties and responsibilities of a trustee, although but for such conduct and

behaviour he would be stranger to the trust. A constructive trust is therefore, as has been said, a trust to be made out by circumstances.

Here it may be observed that in our own Trusts Act constructive trusts are not treated as trusts, but in a supplemental chapter as ""obligations in

the nature of trusts"". The learned Lord Justice goes on to show that the English Courts have refused to apply the bar of limitation on the analogy of

the statute in certain cases which appear to come within his definition of constructive trusts, and this is the class of cases on which the learned

Advocate-General relied. That was a matter well within their powers, but in this country we are bound by the provisions of Section 10 of the

Limitation Act, which though founded no doubt on the equitable rule as to express trusts already cited, does not refer in terms to express trusts

except in the marginal note, but provide that:

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)

shall be barred by any length of time. It is in my opinion impossible to hold that the payments which in this case were made by the trustee of the

estate for interest due to the defendant as mortgagee under a mortgage of estate property created by the trustee became vested in the mortgagee

on trust, specifically for the beneficiaries of the trust of which the mortgagor was trustee. That was not the intention of either party to the

transaction. On the contrary, the payments were made as lawful debts due to the mortgagee and at the most he could only have incurred with

regard to them obligations in the nature of a trust under chapter IX of the Indian Trusts Act. Section 10 has clearly no application to such a case. It

has also been contended that the present plaintiff, as beneficiary under the trust deed, acquired a fresh cause of action on attaining majority. We

are unable to accept this contention. The causes of action, if any, accrued to the plaintiff on the dates of the payments and after attaining majority

he was bound to sue within the time limited by Section 6. The appeal fails and is dismissed with costs.