JUDGMENT
(Delivered by Anantanarayanan, J.)
The appeal is instituted by the defendants in the Court below (the Court of the learned Subordinate Judge of Tiruchirapalli) in a suit for recovery of possession and future mesne profits, which was decreed as prayed for. In view of the interesting issue that has been raised in this appeal, by learned Counsel for the appellants (Sri K. Rajah Iyer) of the application of the principle of adverse possession to a person in a fiduciary capacity, who had not acquitted himself by re-delivering the property to the representative of the trust, it is important to proceed into the precise facts in some detail.
A certain Venkatarama Naidu had two sons, namely, Veerasami Naidu, who died in 1921, and Vengama Naidu, who died in 1924. Vengama Naidu had a son Govindaraja, who died in 1941, and a daughter, Seethammal, who died in 1943. This Govindaraja had a first wife, Jagammal, by whom he had a son, Venugopal, who died as a minor in January 1945; it will be pertinent to state that Venugopal was born in 1929. Thayarammal is the second wife of Govindaraja, and the two widows, namely, Jayammal and Thayarammal, were the plaintiffs in this suit. Seethammal, the sister of Govindaraja, had two sons, who are the defendants-appellants. These are the essential relationships between the members of this family.
On the first of September 1919, Veerasami Naidu, the brother of Vengama Naidu, who died without male issue in 1921, executed a deed of settlement Ex. A-1 by virtue of which, indisputably, he settled certain endowments for the discharge of a private religious trust, or charity. In this document, besides particularising the properties so endowed, the settlor states that the details of the charities were the performance at the sannadhi of Venkatachalapathi Swami in Tirupathi, and at Srilingam, of a charity of feeding bhagavatars on certain dates, and the construction of a new bhajanai matam, wherein bhajana with deepa, dhoopa, neivedyyam on specified occasions were to be performed. It is not in dispute that this settlor claims that his two wives, who had no male issue, were not properly attending to him, and that, hence, he was executing the document in favour of Vengama, imposing on his brother the obligations of the trust. It is further not in dispute that on 1st May 1935 Govindaraja, the son of Vengama, in his turn, executed another deed of settlement Ex. A-2. The moot point is whether this deed of settlement is an augmentation of the earlier trust, or a supersession of it by the creation of what is virtually a new trust. In any event, there can be no doubt that, though Ex. A-2 is related in determinate ways to the earlier trust Ex. A-1 it is an endowment of different properties for objects that have undergone some modifications. For instance, the objects are specified to be the construction of a Venugopalaswami Temple, and the performance of worship therein, in supersession of the bhajana madam referred to in Ex. A-1. The point whether this is an augmentation of the prior trust, or a supersession of it by the creation of a substantially new trust, is really academic, and not of great importance. In any event, after endowing the properties, the settlor, Govindaraja declared as follows:
“(Translation) Until my heirs are declared majors after my lifetime the aforesaid charities have to be performed by my elder sister, Seethammal, wife-of Sivayam Konagipatti Ramakrishna Naidu, from and out of the income derived from the afore-mentioned properties, and thereafter my heirs should perform the aforesaid charities. If my heirs as soon as they become majors stop performing the aforesaid charities, the aforesaid elder sister and her heirs should see that the charities are performed hereditarily. If there are no heirs in my own family the aforesaid Seethammal's heirs shall perform the aforesaid charities in perpetuity out of the income derived from those charity propertes. No one else has any right over those properties.”
One part of this appeal by defendants (appellants) is the construction of the crucial recitals that we have set forth above. As we have earlier stated, when Govindaraja died in 1941, under Ex. A.2, the trust really devolved upon minor, Venugopal. During his minority, the document itself recited that Seethammal, and, after her, her heirs (defendants-appellants) should conduct the charities on behalf of the minor. It was in this fashion that the properties came into the possession of the appellants, and the office also was held and fulfilled by them. Seethammal died in 1943, and the appellants were in possession and management of the endowments and the office, when minor Venugopal, unfortunately, died in January 1945. The argument of Sri Rajah Aiyar, is to express its pith and substance, that the word used in the vital context of Ex. A.2 is varsu. Further, this is qualified by the adjective Sontha (one's own). Learned Counsel presses the argument that this language was deliberately used, in order to make it clear that Govindaraja contemplated not merely his son succeeding him, with regard to the office and the administration of the trust, but the further male issue of that son coming into the succession. The idea was not that, if, unfortunately, the son never succeeded, the mere heirs-at-law, in the present case the two widows (plaintiffs) should be permitted to succeed to the office and the endowments. We have carefully considered this argument, and we have no hesitation in rejecting it as unsubstantial, for two important grounds. Firstly, under the very terms of Ex. A.2, the right of Seethammal or the appellants to be in possession of the trust, and to discharge the functions of the office, came to an end with the succession of minor Venugopal. The reason is that Govindaraja himself declares, in specific terms, that his heir (Varsu) should come into possession of the office and endowments, on attaining majority. The words “if there are no heirs in my own family” upon one clear interpretation, would not extend in connotation beyond the existence of Venugopal. Alternatively, the argument is equally valid that, in any event, the term Varsu, even if qualified by the adjective Sontha, cannot denote anything other than the heirs-at-law. This is clear from the paraphrase of this word, which is really derived from the Perisian word Waris, given in the Tamil Lexicon, Vol. 6 at page 3066. On this part of the case, there is really no room for any different interpretation of the respective rights of parties than that arrived at by the learned Subordinate Judge.
In addition to this, Sri Rajah Aiyar, raised the argument of adverse possession against the further representatives of the trust, beyond minor Venugopal, such as the present plaintiffs. The argument, for an appreciation of its true import, may be crystallised in this form. It is perfectly true that a person in a fiduciary capacity cannot prescribe for title by adverse possession against the cestui que trust or the beneficiary. That is a well understood and fundamental principle of equity, amply supported by authority. Further, it is true that the proper Article of the Limitation Act applicable to this suit is Art. 124, and the Third Column of the First Schedule shows that time (for 12 years) begins to run when the defendant takes possession of the hereditary office, adversely to the plaintiffs. After fully conceding that the appellants cannot prescribe against minor Venugopal, learned Counsel nevertheless stresses that, after the death of Venugopal in 1945, and when the plaintiffs did nothing whatever to recover the office and endowments, time began to run against them. Since the suit was filed in 1958, it was very much beyond the period of limitation prescribed. As regards an office of this character, the argument is that there can be no prescription against the trust, but there could very well be a prescription against a claimant, by persons like the appellants, who are not seeking to prescribe against the trust, but claiming the trust of the very rights flowing from it for themselves. This argument certainly merits careful consideration at our hands.
Nevertheless, after a careful study of the authorities cited by learned Counsel on both sides, we are very clear that the appellants cannot claim to have prescribed for title by adverse possession either as against Venugopal, which of course is not even claimed, or as against his heirs-at-law such as the plaintiffs. The real reason, to put it in a nutshell, is that the origin of the possession pleaded by the appellants was not merely lawful, but was an origin of trust, and the assumption of fiduciary obligations. Without terminating such possession, by re-delivering possession to the trust or its then representatives, no person shall be permitted to plead, in equity, that this possession, the foundation of which is an acknowledgment of a fiduciary obligation, has become adverse without re-delivery. The point was, if we may say so with respect, lucidly expressed by Knight Bruce V.C in Attorney General v. Munro(1) in the following terms:
“Where a person knowingly and expressly acquires the possession of property as a trustee merely, or being in possession, makes himself by a contract, expressly and without qualification, a trustee of it, he cannot be allowed effectively to assert against the trust, at least as a defendant in a suit seeking the performance of the trust, any title paramount and advance to the trust which he may himself have; he must assert it (if at all) without deriving he must assert it so as not to derive any advantage from the possession which he has as trustee, or had in that character.”
This equity concept has an ancient lineage, and dates back as early as Stone v. Godfrey(2):
“Where a party entered into possession under certain trust, and so acquiring possession, retained it later, it was held that he should not be permitted to base that possession as adverse to any representative of the trust, without first delivering up of possession of the estate and to have then set up his claim after he had re-delivered possession.”
In Halsbury's Laws of England, 3rd Edn., Vol. 38, page 873, S. 1470, the matter is expressed as follows:
“Where a trustee has as such taken possession of trust property, he cannot hold it adversely to a cestui que trust after his estate as trustee has determined; but his continuance in possession is deemed that of the cestui que trust.”
This, directly and indisputably, repels the argument sought to be put forward by learned Counsel for the appellants, that the trust per se determined with the death of Venugopal in January, 1945, and that, therefore, when the plaintiffs attempted to obtain possession back of the trust properties and the office, the possession by the appellants became adverse to those representatives of the minor.
The same principle has been recognised in Courts of this country also, and the decisions on this aspect are explicit and clear. We may, firstly, refer to the Bench decision of this Court in Manisami Chetti v. Maruthammal(3). The principle has been stated in most unambiguous and unqualified terms, and a trustee, while retaining the emoluments or the benefit of the trust, and without re-delivery, is estopped from claiming any title hostile either to the trust or to its representatives. In Srinivasa Moorthi v. Venkatavarada Aiyangar(4), the same principle has been affirmed in the form that no one who is in the position of a trustee and has acquired property in that capacity could be permitted to assert an adverse title on his own behalf, until he has obtained a proper discharge from the trust with which he has clothed himself.
We do not think that it makes any essential difference that it is not cestui que trust against which the plea of adverse possession is being raised, but against the heir-at-law or successor of that beneficiary. The principle, in this form, was affirmed in Sheo Prasad Misir v. Karim Bux and another(5), for, upon the facts, that was a case of a claim of adverse possession against the heir or successor. It is obvious that the principle of Art. 142 of the Limitation Act has really no application herein. A person in such possession which had its foundation in a fiduciary obligation, without discharge of it by re-delivery to the trust or its representative, cannot plead that it is for that representative to show that, within 12 years of his suit, jewels to auction after due notice to the respondent. The amount due and payable to the petitioner was about Rs. 1316-50 nP as on 17th June 1957. He realised by the sale of the pledged jewels Rs. 989 on 17th June 1957. After giving credit to that amount, the petitioner filed the suit for recovery of the balance of Rs. 327-50 nP with interest at 12 per cent per annum on that amount up to the date of suit.
The defence to the suit was that it was barred by limitation on the ground that when the loan itself was based on the promissory note dated 19th June 1954, the suit should have been filed within three years from that date and that inasmuch as it has been filed on 23rd January 1960, it is barred by limitation.
It was contended by the petitioner in the Courts below that the starting point of limitation in respect of the loan was not the date of the promissory note, viz., 19th June 1954, but it was 17th June 1957, when the jewels given by the respondent as security for the said loan were sold and when it was found that the sale proceeds were not enough to discharge the entire loan. He relied on S. 176 of the Indian Contract Act. He further reiterated that Art. 57 of the Limitation Act is not applicable but only Art. 120. The Court below repelled the contentions of the petitioner and dismissed the suit. It is against that dismissal that this revision petition has been filed.
The only question for consideration is, whether the suit is barred by limitation, or in other words, whether Art. 57 applies or Art. 120 of the Limitation Act read with S. 176 of the Indian Contract Act applies to this case.
Art. 57 of the Limitation Act is a general Article applicable for suits for recovery of money payable for money lent. This Article is applicable only when the suit is based on the loan. Therefore, a suit to recover personally from the debtor the amount of the loan advanced or the balance of the amount due after crediting the proceeds realised by sale of the pledged articles, is governed by Art. 57 and time begins to run from the date of the loan. The earliest authority for this proposition of law is Saiyid Ali Khan v. Debi Prasad. The facts in that case are similar to the facts in the instant case. The learned Judges relying on Madan Mohanlal v. Kanhailal, made the following observations at page 252:
“It has been held by this Court that a suit to recover personally from the debtor the amount of a loan for which moveable property is pledged is governed by Art. 57 of the Sch. II of the Limitation Act: Madan Mohanlal v. Kanhailal. It was also held in that case that the six years limitation prescribed by Art. 120 applies to a claim to enforce the pledge. This is admittedly not a suit to enforce a pledge. In our opinion the claim is one to recover the unpaid balance of a loan, that is to say, it is a suit for money payable to the plaintiff for money lent by him, a suit which is specifically provided for by Art. 57.
Similarly, Jenkins C.J made a short ruling in Yellappa v. Desayappa, in the following words:
“This is a suit for money lent and nonetheless so, because the money lent was secured by a pledge. The period of limitation for such a suit is three years from the time the loan is made.”
We have also got a Full Bench ruling of this Court in Mahalinga Nadar v. Ganapathi Subbian. There the question arose whether the plaintiff can enforce the pledge by bringing an action against pledger for recovery of the amount by sale of the jewels. Subramania Aiyar and Benson JJ. observed at pages 529-530 as follows:
“It is obvious that a right to sue for the sale of the property exists even in the absence of a right to sue for a personal decree against the debtor for the money lent. It would be clearly so if it had been agreed between the parties that no personal liability for the debt was to accompany the pledge of the jewels.
It would follow therefore that in a case where both rights exist they are concurrent rights and the right to proceed against the property pledged is not merely accessory to the right to proceed against the debtor personally.”
Therefore, following these rulings, it is clear that the petitioner's suit is barred by limitation as only Art. 57 of Sch. II of the Limitation Act applies to it. The civil revision petition is dismissed. There will be no order as to costs, throughout.
V.C.S