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Ram Chandra v. Jaith Mal
Structured Summary of the Opinion
Factual and Procedural Background
The suit underlying this second appeal was brought by the plaintiff-respondent for a declaration of right and for "absolute possession" of disputed property. The plaintiff alleged that he (and Badri Das) were the real mortgagees under a mortgage-deed dated 12 June 1872, which stood ostensibly in the name of Ganga Bishan. It was alleged that Ganga Bishan purchased the mortgaged property at an auction in 1875/1876 on behalf of the plaintiff (and Badri Das) and thereafter managed the property for them, paying the entire profits to them for a substantial period.
The immediate cause of action for the suit was the defendant's (son of Ganga Bishan) refusal to pay profits to the plaintiff. Both lower courts decreed the plaintiff's suit. The present matter is a second appeal from that decree. Relevant family and procedural facts found in the record and noted by the courts include:
- The mortgage-deed of 12 June 1872 was executed by one Chain Sukh ostensibly in favour of Ganga Bishan but in fact the mortgage-money belonged to the plaintiff and Badri Das.
- Ganga Bishan brought proceedings for sale under the mortgage and purchased the property himself in 1876; he died in 1879 and was succeeded by his son Param Sukh (a defendant who died during the suit and is represented by his adopted son Ram Chandar, the present respondent).
- Mutation of the property was effected in favour of Ganga Bishan and thereafter in favour of Param Sukh; the respondent's name now stands recorded.
- Both lower courts found that Ganga Bishan and Param Sukh paid all the profits of the property to the plaintiff and Badri Das after the auction sale down to the year 1899—approximately 23 years—during which the plaintiff's right was acknowledged.
- The plaintiff left for Calcutta in Sambat 1956 and resided there for 15 years; there is no finding that he received profits during that period.
Legal Issues Presented
- Whether the plaintiff's claim could succeed despite Section 66 of the Civil Procedure Code (CPC), which raises an irrebuttable presumption in favour of the auction purchaser.
- Whether acknowledgments and conduct by the auction purchaser (Ganga Bishan) — specifically, payment of profits to the plaintiff and management of the property on his behalf — could amount to the creation of a trust in favour of the plaintiff, thereby cutting across the presumption under Section 66 CPC.
- Whether the plaintiff could be said to have acquired title by adverse possession (enjoyment for more than 12 years) after the auction sale.
- Whether the account-book evidence (purported handwriting of Ganga Bishan) was admissible and sufficiently proved to support the findings of the lower courts.
- Whether it was fatal to the plaintiff's case that the plaint did not use the word "trust" explicitly, or employ particular phraseology to claim a trust.
Arguments of the Parties
Appellant's (Defendant) Arguments
- Reliance on Section 66 of the CPC: the auction purchaser's title is conclusive and the plaintiff's claim should be untenable in view of that provision.
- Challenge to the evidentiary basis: the key finding that profits were paid and the account-book entries were genuine depended on an account-book in handwriting said to be Ganga Bishan's; the handwriting was not proved by any witness other than the plaintiff (Jaithmal), who admitted he did not learn the Marwari characters until after Ganga Bishan's death — arguing that the plaintiff was not competent to recognize that handwriting.
- Emphasised that the plaintiff was not proved to have received profits during the last 15 years he lived away (in Calcutta), implying interruption of possession or non-receipt that could affect any claim of title by possession.
Respondent's (Plaintiff) Arguments
- Pleadings and factual claim that the plaintiff and Badri Das were minors at the time of the mortgage of 1872 and that Ganga Bishan managed their affairs and took a mortgage/purchase for their benefit.
- Allegation that, despite auction and mutation in Ganga Bishan's name, Ganga acknowledged the plaintiff's right, managed the property for them, and paid the entire profits to them—i.e., acted as manager/agent/benamidar, thereby recognizing the plaintiff's title.
- At partition between plaintiff and Badri Das, the property was allotted solely to the plaintiff (a fact not disputed by Badri Das, who is defendant 2).
- Plaintiff contended that facts pleaded made out a case on the footing of a trust or, alternatively, of adverse possession for over 12 years; that it was not necessary to use the word "trust" in the plaint so long as facts establishing a trust were pleaded.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 4 IA 198 | Privy Council authority that acknowledgments and conduct by holders of an exclusive grant (talukdars) may amount to a trust in favour of former co-sharers despite statutory or procedural presumptions of exclusive title. | The court relied on the reasoning in this Privy Council decision by analogy to hold that an auction purchaser who, after acquiring title, acknowledges and acts for the benefit of the person who supplied the purchase money may be deemed to have constituted himself a trustee in favour of that person. |
| 3 Cal. 522 | Privy Council authority (cited along with 4 IA 198) supporting the principle that acknowledgments by grantees/talukdars can create trusts binding on the grantee despite apparent indefeasible title. | The court cited this decision to support the proposition that acknowledgments and conduct giving effect to an acknowledged right can be treated as creation or affirmation of a trust in favour of the person whose rights were recognized. |
Court's Reasoning and Analysis
The court began by recognising the force of Section 66 CPC, which creates an irrebuttable presumption in favour of an auction purchaser. It accepted that, if nothing else appeared, the plaintiff's claim would be untenable under that provision. The court then analysed whether exceptions or alternative bases of title could nonetheless support the plaintiff's claim.
Two principal remedial avenues were identified and applied by the court:
- Trust/Equitable Recognition by the Auction Purchaser:
The lower courts had found that the purchase money actually belonged to the plaintiff and Badri Das and that, after purchasing at auction, Ganga Bishan recognised their rights, managed the property for them and paid all profits to them continuously for about 23 years (down to 1899). On these findings the court treated Ganga Bishan as having constituted himself a trustee for the plaintiff immediately after becoming the auction purchaser. The court drew an analogy from Privy Council decisions (notably those reported at 4 IA 198 and 3 Cal. 522) concerning talukdars in Oudh where, despite statutory grants and irrebuttable presumptions, acknowledgments and conduct by grantees were held to create trusts in favour of former co-sharers. By parity of reasoning an auction purchaser may create a trust in favour of the person who supplied the purchase money.
The court noted the temporal context: the Indian Trust Act (No. 2 of 1882), which later required a registered instrument to create a trust, had not been passed when the events occurred. The court observed that even if the formal statutory requirements for a trust were not in place, long enjoyment (twelve years) by a beneficiary would, in general, confer a prescriptive right.
- Adverse Possession:
Alternatively, the court held that the plaintiff could establish title by proving adverse possession for more than twelve years after Ganga Bishan acquired title at auction. The factual finding that the plaintiff had been allowed to assert his ownership and to enjoy rents and profits, with Ganga Bishan acquiescing and acting as manager, supported a finding of adverse possession by the plaintiff (or at least constructive possession) for the requisite period.
On evidentiary challenges the court considered the objection to the account-book relied on to show payments of profits. The account-book was said to be in the handwriting of Ganga Bishan and was proved only by the plaintiff Jaithmal, who admitted he had not learned Marwari characters until after Ganga Bishan's death. The court accepted the view of the lower appellate court that it is possible, although rare, for a person unable to read particular characters to recognise another's handwriting in those characters if he had occasion to see that person write. The court declined to disturb the subordinate judge's finding on this point in a second appeal.
The court also rejected the appellant's contention that the plaintiff's failure to use the word "trust" in the plaint was fatal. It held that so long as the facts establishing a case of trust were pleaded, it was not necessary to employ specific vocabulary.
Finally, the court addressed the contention that the plaintiff had not received profits during a 15-year residence in Calcutta. It held that the plaintiff, having acquired title under the trust or by more than 12 years' adverse possession prior to 1899, could have lost it only if the defendants had resumed possession and held it adversely during the subsequent 15 years. There was no evidence that the defendants had so resumed possession, nor a case made on that basis.
Holding and Implications
Holding: The court upheld the decree of the lower courts and dismissed the appeal. The cross-objection by the plaintiff regarding costs was also dismissed. The opinion concludes: "Appeal dismissed."
Implications and direct consequences:
- Direct effect on the parties: The plaintiff's declaratory relief and claim to "absolute possession" (as particularised in the suit) were sustained by the court. The decree in favour of the plaintiff as entered by the lower courts is affirmed.
- On legal principles: The court applied and endorsed the principle that an auction purchaser who, after acquiring title, acknowledges and acts for the benefit of the person who supplied the purchase money may be treated as having constituted himself a trustee in favour of that person. The court also reaffirmed that more than twelve years' enjoyment can give rise to prescriptive/adverse-possession rights, especially where trusts were not required to be created by registered instrument (in the period before the Indian Trust Act, 1882).
- Precedential status: The opinion applied existing Privy Council authorities by analogy and did not purport to set a novel or broader precedent beyond the application of those principles to the facts of this case.
G.A
1. The suit, which has given rise to this appeal, was brought by the plaintiff-respondent for declaration of right and for “absolute possession” of the property in dispute on the allegation that the plaintiff was the real mortgagee under a deed, dated 12th June 1872, which stood ostensibly in the name of Ganga Bishan, and that the purchase of it by the latter in 1875 in enforcement of that mortgage was on behalf of the plaintiff, who has ever since been in adverse possession thereof. The cause of action, on which the plaintiff's suit is founded, is refusal by the defendant, the son, of Ganga Bishan, to pay profits to the plaintiff. Both the lower Courts have decreed the plaintiff's suit. The plaintiff has preferred the present second appeal. The following pedigree will explain the position of the parties and other persons whose names occur in the narrative of the case:
2. It has been found by both the Courts below that the mortgage-deed, dated 12th June 1872, executed by one Chain Sukh ostensibly in favour of Ganga Bishan, was in favour of the plaintiff and Badri Das, to whom the mortgage money in fact belonged. It is however not denied that Ganga Bishan brought a suit on foot of the mortgage for sale of the mortgaged property and purchased it himself in 1876. Ganga Bishan died in 1879, leaving his son Param Sukh, who was impleaded in the present suit as defendant 1. He died during the pendency of the litigation and is now represented by his adopted son, Ram Chandar, the respondent. Mutation of names was effected in favour of Ganga Bishan, and, after his death, in favour of his son Param Sukh Das. Ram Chandar's name now stands recorded in place of his father and grandfather.
3. If there had been nothing else in the case, the plaintiff's claim would have been clearly untenable in view of Section 66 of the CPC, which was pleaded by the defendant and has been strongly relied on before me. The plaintiff however pleaded that he and Badri Das were minors at the time when the mortgage deed of 1872 was executed and their affairs were managed by Ganga Bishan who took a mortgage deed for the benefit of the plaintiff and Badri Das. It is also alleged that, in spite of the auction sale and mutation of names following it, Ganga Bishan acknowledged the right of the plaintiff and Badri Das, for whom he had purchased the mortgaged property and paid the entire profits to them. In other words, according to the plaintiff's allegations, though Ganga Bishan was declared to be the auction purchaser, he managed the property for the plaintiff and Badri Das, and paid the entire profits of the property to them, treating himself as a mere manager on their behalf. At a partition between the plaintiff and Badri Das this property was allotted solely to the plaintiff, a fact which is not denied by Badri Das, who is defendant 2 in the case. According to the plaintiff, this state of things continued for a considerable length of time, and his right was not questioned till three years before the institution of the suit, when profits were withheld from him. On these allegations the plaintiff, who claims to be in possession at least constructively, seeks a declaratory relief coupled with what he calls “absolute possession,” which I take to mean that he is in possession but mutation of names stands in the name of the defendant, who for that reason is entitled to collect rents.
4. Both the lower Courts decreed the plaintiff's suit and found that Ganga Bishan, who was the uncle of the plaintiff and Badri, managed their property during their minority and that the money advanced under the mortgage deed of 1872 belonged to them. It has been definitely found by both the Courts below that Ganga Bishan and Param Sukh paid to the plaintiff and Badri all the profits of the property after the auction sale down to the year 1899, i.e, for nearly 23 years, during which time their right was acknowledged unconditionally. In Sambat 1956 the plaintiff left for Calcutta, where be resided for 15 years. There is no finding that during this period the plaintiff received profits from the defendants.
5. The finding noted above has been impugned by the learned advocate for the defendants-appellants on the ground that it is based on a certain account-book purporting to have been written partly by Ganga Bishan, whose handwriting has not been proved by any witness other than the plaintiff Jaithmal. The latter admits that he did not leam the Marwari characters till after the death of Ganga Bishan. It is argued that the plaintiff cannot be considered to be one recognizing the hand-writing of Ganga Bishan. This argument was addressed to the lower appellate Court, but was not accepted on the ground that it is not impossible for a person unable to read and write certain characters to know the handwriting of another person in those characters, if he had the occasion to see the latter write. If this had been a first appeal, I would have hesitated to take the view which found favour with the lower appellate Court; but I do not think the finding of the learned Subordinate Judge can be questioned in second appeal. I think it is possible to conceive a case in which a person knows the handwriting of another in certain characters, though he himself cannot read those characters. Such an instance is rare: but I am unable to say that it is impossible. In this view, the finding of the learned Subordinate Judge, already referred to, must stand.
6. The next question is whether, on the facts found by the lower Court, the plaintiff's suit was rightly decreed. In my opinion it was. Ganga Bishan's right arising from the auction sale in his favour cannot be questioned by the plaintiff, having regard to the provisions of Section 66 of the CPC. It is however permissible for the plaintiff to claim title, not on the ground that he was the real auction purchaser, Ganga Bishan being his “benamidar,” but on the ground that, after Ganga Bishan acquired title under the auction-sale, he subsequently transferred it to the plaintiff or that the latter acquired the same otherwise. For example, the plaintiff can show that he acquired a right by adverse possession for more than 12 years after Ganga Bishan became the owner at the auction sale. Both the lower Courts have found that Ganga Bishan acknowledged the title of the plaintiff and year after year paid all the profits of the property to him. This was obviously due to the fact that the purchase money belonged to the plaintiff and Ganga Bishan was then honest enough to recognise the plaintiff's title. Ganga Bishan should be deemed to have constituted himself a trustee immediately after he became the auction purchaser in 1878. He gave effect to the trust in favour of the plaintiff by payment of the entire profits arising from the property. The Indian Trust Act (No. 2 of 1882), which requires a registered instrument for creating a trust had not been passed. The position would not have been materially different if Ganga Bishan had made a verbal gift of the property to the plaintiff and defendant 2. This view is supported by a series of cases decided by their Lordships of the Privy Council. To appreciate the ratio decidendi of those cases it should be noted that in Oudh all rights in the soil had been confiscated by the famous proclamation of Lord Canning issued in 1858. Subsequently grants were made on behalf of the Crown to certain individuals, in most cases to the former talukdars. In some cases the estates were granted to named individuals without express recognition of the rights of their cosharers who had an interest before the confiscation. The grants were made first by the Summary Settlement of 1859, which itself did not confer any title but was followed by a letter of the Governor-General, dated 10th October 1859, which declared that the talukdars with whom the aforesaid Summary Settlement had been made, thereby acquired an indefeasible title to the estates settled with them. Subsequently sanads were granted which also conferred absolute titles on the grantees to the exclusion of every one else, whatever might have been his right before the confiscation. Lastly, the names of such talukdars were entered in a list appended to the Oudh Estates Act (No. 1 of 1869), S. 10 which declared that the title of such talukdars shall be unassailable at the instance of any claimant and that the presumption that they are the talukdars shall be absolute and irrebuttable. The Privy Council held in the under-noted cases that, in spite of the irrebuttable presumption as regards their rights to the estates claims based on acknowledgments made by the talukdars of the rights of their cosharers must be upheld on the ground that such acknowledgments which had been given effect to amounted to trusts in favour of those whose rights had been acknowledged. The claimants were allowed to succeed not on the ground that they had previously an interest in the estates or that the grants made by the Government directly conferred any right on them, but because the talukdars, after acquisition of an exclusive title under the grants in their favour should be deemed, by their acknowledgment and conduct, to have created a trust in favour of their former cosharers, See 4 IA 198(1) and 3 Cal. 522(2). Other similar cases are noted in Chhail Behari Lal's Talukdari Law, notes under Section 3 of the Oudh Estates Act (No. 1 of 1869). Similarly, though Section 66 of the CPC, raises an irrebuttable presumption in favour of the auction purchaser, there is nothing to prevent the latter from creating a trust in favour of the person who supplied the purchase money. Such a course is not possible after the passing of the Indian Trust Act, which requires a registered instrument for creation of a trust. But twelve years' enjoyment by the beneficiary will in general confer a prescriptive right even in the absence of a registered instrument.
7. It was urged by the learned advocate for the appellant that the plaintiff did not allege a case of trust in his plaint. It may be true that trust is not specifically mentioned in the plaint, but all the facts, which entitle him to relief on that footing are stated in the plaint; and it is pleaded in view of those facts that the plaintiff is entitled to the property. I think that it was not necessary for the plaintiff to use the word trust or to employ any particular pharaseology so long as all the facts on which a case of trust can be founded are alleged in the plaint.
8. The case may be approached from another point, of view. In spite of the auction sale in favour of Ganga Bishan, the plaintiff was allowed to assert his right as owner and to enjoy all the rents and profits arising therefrom. Far from contesting the plaintiff's right, Ganga Bishan acquiesced in it, managed the property for him and handed over all the profits of the property. Ganga Bishan's possession was only that of an agent of Jaithmal, who should be considered to have been in adverse possession for over twelve years. The learned advocate for the defendant-appellant lays stress on the fact that the plaintiff is not proved to have received any profits during the last 15 years. The plaintiff having acquired title under the trust already mentioned or by more than 12 years' adverse possession before 1899 could have lost it only if the defendants resumed possession and held it adversely to the plaintiff during the 15 years referred to above. This is not the case of the defendants, nor is there any evidence in support of it. There is a cross-objection by the plaintiff as regards costs; but it has no force. For the reasons stated above, I am satisfied that the decree appealed from is right. Accordingly I uphold it and dismiss the appeal and the cross-objection with costs.
G.A
9. Appeal dismissed.
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