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Ramchandra Ramratan v. Ramgopal Onkarji And Others
Factual and Procedural Background
The appeal arises from probate proceedings following the death of Shrinarayan Jaideo on 10-11-1949, who left no issue. Prior to his death, on 20-8-1949, he executed a will appointing five trustees—Sitaram, Ramgopal, Ramkishan, Ramchandra, and Harnarain—to manage a charity for distributing alms and food to the poor and for religious purposes. Three trustees initially applied for probate, with the remaining two joining later. Meanwhile, Ragnunathdas took possession of valuable securities and movable property of the deceased. The trustees protested and, with consent, placed the properties in a safe under the custody of Mangilal. The trustees applied for appointment of a receiver, resulting in Mr. Thakkar being appointed and taking possession of the deceased’s property.
Ragnunathdas contested the probate, claiming the deceased had donated all his property to him after executing the will. The District Judge rejected this claim and granted probate to the trustees, but ordered the property to be returned to Ragnunathdas. On appeal, the Division Bench reversed this, directing the property be handed over to the trustees. However, the probate certificate was withheld by the District Judge who imposed two conditions: trustees must pay court-fee personally and furnish security of Rs. 98,167/13/-. The trustees challenged the requirement that court-fees be paid from their own pockets rather than the deceased’s estate, giving rise to the present appeal.
Legal Issues Presented
- Whether court-fees payable on the grant of probate must be paid personally by the trustees or can be paid out of the deceased’s estate.
- Whether the security amount of Rs. 98,167/13/- demanded by the District Judge should be required from the executors and on what basis.
Arguments of the Parties
Appellant's Arguments
- Court-fees for probate proceedings and related appeals should be paid from the deceased’s estate since the trustees act in a fiduciary capacity and not for personal benefit.
- The costs incurred by trustees in executing the will, including court-fees, are properly chargeable against the estate, as trustees’ interests are not beneficial but administrative.
- Reliance on English and Indian precedents supporting that executors and trustees are entitled to have their costs paid from the estate unless there is inequitable conduct.
- Contended that the District Judge erred in requiring personal payment of court-fees and in demanding an excessive security amount without proper valuation of the estate.
Respondent's Arguments
The opinion does not contain a detailed account of the parties' legal arguments from the respondent.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Deputy Commissioner of Lucknow v. Kali Charan, 8 Ind Cas 695 (Oudh) (A) | Section 19(I)(1) of the Court-fees Act does not bar hearing before court-fee deposit. | Used to establish that court-fee must be paid but hearing can proceed without prior deposit; court-fee can be paid from estate. |
| Cotterell v. Stratton, (1872) 8 Ch. A 295 (B) | Trustees’ costs are analogous to mortgagees’ costs and are chargeable to the trust estate unless misconduct occurs. | Supported the principle that trustees are entitled to costs and expenses from the trust estate, including court-fees. |
| Turner v. Hancock, (1882) 20 Ch. D. 303 (C) | Court does not discourage trustees by imposing costs if they have done their duty or committed innocent breaches. | Reinforced the entitlement of trustees to costs from the estate when acting properly. |
| Williams on Executors and Administrators (Vol 1-13th edn.) | Executors who successfully propound a will are prima facie entitled to costs from the testator’s estate. | Summarized the principle that costs are recoverable unless there is inequitable conduct. |
| Dayabhai Tapidas v. Damodardas Tapidas, ILR 21 Bom 75 (D) | Residuary estate is primarily liable for probate costs. | Supported the Indian position aligning with English law on costs borne by the estate. |
| Upendra Nath v. Bhupendra Nath, 21 Cal WN 280 : AIR 1916 Cal 110 (E) | Costs in will construction and estate administration suits ordinarily paid from estate absent special grounds. | Confirmed that costs should be paid from the estate in probate-related litigation. |
| Htin Gyaw v. Posein Gyi, AIR 1926 Rang 89 (P) | Grant of administration pendente lite requires court-fee but full grant may be free of payment on termination. | Discussed but not accepted as authority to exempt court-fees from payment out of estate. |
| Zubeida Khatoon v. Mohamed Zakaria, AIR 1938 Rang 67 (H) | Ordering security on grant of probate is discretionary with the Court. | Applied to emphasize discretion in security demands and appellate deference to reasonable exercise. |
| Hewson v. Shelley, (1914) 2 Ch. 13 (G) | Executor’s title derives from the will, not probate; executor can act before probate is granted. | Used to explain executor’s rights to manage estate and recover expenses prior to probate certificate issuance. |
Court's Reasoning and Analysis
The Court analyzed the nature of the trustees’ interest under the will as fiduciary rather than beneficial, which entitles them to have their costs, including court-fees, paid from the deceased’s estate. It relied on established English and Indian authorities that trustees or executors who properly perform their duties are entitled to reimbursement of expenses and costs from the estate, unless there is misconduct. The Court found that the District Judge erred in requiring the trustees to pay court-fees from their own pockets and in disallowing appeal expenses from the estate.
Regarding the security demanded by the District Judge, the Court noted that under Section 291(1) of the Succession Act, the requirement of security is discretionary. The Court observed that the District Judge failed to properly consider the diminished value of the estate and the existing encumbrances and auction proceedings. The Court directed a fresh valuation of the estate and reconsideration of the security amount to ensure it reasonably protects against potential malpractices without being excessive. The Court emphasized trust reposed in the executors and the need for judicial discretion exercised in a reasonable manner.
The Court also clarified that executors derive their title from the will itself and can act in managing the estate even before probate is formally granted, entitling them to recover expenses incurred in that capacity.
Holding and Implications
The appeal is allowed on the points concerning court-fees and appeal expenses. The Court held that the court-fees payable on the grant of probate and the expenses of the appeal against the decree in Civil Suit No. 7 of 1950 must be paid out of the deceased’s estate, which is currently under the receiver’s possession.
The Court set aside the District Judge’s order requiring trustees to pay court-fees personally and disallowing appeal expenses from the estate. The matter was remanded for reconsideration of the security amount with proper valuation and judicial discretion applied.
There is no indication that this decision establishes a new precedent beyond affirming established principles that trustees’ costs are chargeable to the estate and that security demands must be reasonable and based on current estate valuation.
Chaturvedi, J.:— This is an appeal from probate proceedings. The facts are that one Shrinarayan Jaideo died on 10-11-1949 leaving no issue. It transpired that on 20-8-1949 he had executed a will by which he made a bequest in favour of five persons Sitaram, Ramgopal, Ramkisihan, Ramchandra, and Harnarain for the management of the charity to provide for the distribution of alms and food to poor persons and for certain purposes of religious nature. Out of these five trustees, Ramkishan, Sitaram and Page: 32Ramchandra applied for the probate of the last will left by Shrinarayan Jaideo.
2. The remaining two trustees did not join first; but it appears they joined later on. Meanwhile, one Ragnunathdas had Obtained possession of the documents of valuable securities and other movable property belonging to the testator. The trustees protested and with the consent of Raghunathdas and the trustees, the properties and the valuable securities etc. were placed in a safe the keys of which were entrusted to one Mangilal for safe custody. The trustees, after applying for probate, put in an application for the appointment of a receiver for realisation of the outstandings. After some time, Mr. Thakkar was appointed receiver and came in possession of the property of the deceased. In the probate proceedings Raghunathdas had contested on the ground that the deceased had donated all his property to him after the execution of the will. The District Judge held that Raghunathdas had no title and the will was proved. An order for granting of the probate was made in favour of the trustees appointed in the will. The executors then applied for handing over the property to them, but the District Judge passed an order that the property be returned to Raghunathdas.
3. An appeal against this order came before a Division Bench of this Court. The appeal was allowed and it was directed that the properties mentioned in the will be handed over to the trustees in whose favour an order granting the probate had been made.
4. The probate certificate has not yet been granted, for, the District Judge has laid down two conditions: the first, that the trustees must pay court-fee from their own pockets, and secondly, that they must furnish securities to the extent of Rs. 98,167/13/-. The trustees made an application that the property being in the possession of the receiver, the court fees must be paid from the estate left by the deceased. This contention has been rejected by the Court below and the first point in this appeal is about the court-fees.
5. Now, it has been held in Deputy Commissioner of Lucknow v. Kali Charan, 8 Ind Cas 695 (Oudh) (A), that Section 19(I)(1) of the Court-fees Act (corresponding to Section 24(1) of the Court-fees Act) is no bar to the hearing of the applicant previous to the deposit of the court-fees. It is true that court-fee has to be paid. The simple question before us is whether it should be paid out of the estate of the deceased. Now from the facts narrated above, it will be clear that the interest taken by the appellant under the will is not a beneficial interest, but it is merely the interest of a trustee.
6. If a trustee's costs can be directed to be paid from the estate of the deceased, certainly court-fees on probate proceedings or necessary expenses in connection with an appeal therefrom can also be directed to be paid from his estate. In ‘Cotterell v. Stratton, (1872) 8 Ch. A 295 (B) the claim of trustees for costs was put on the same footing as that of mortgagees. In that case Lord Selborne observed:
“The right of a mortgagee in a suit for redemption or foreclosure to his general costs of suit, unless he has forfeited them by some improper defence, or other misconduct, is well established, and does not rest upon the exercise of that discretion of the Court, which in litigious causes is generally not subject to review.
7. The contract between the mortgagor and mortgagee, as it is understood in this Court, makes the mortgage a security not only for principal and interest, and such ordinary charges and expenses as are usually provided for by the instrument creating the security, but also for the costs properly incident to a suit for foreclosure or redemption.
8. In like manner the contract between the author of a trust and his trustees, entitles the trustees, as between themselves and their, cestus que trust, to receive out of the trust estate all their proper costs incident to the execution of the trust. These rights resting substantially upon contract can only be lost or curtailed by such inequitable conduct on the part of a mortgagee or trustee as may amount to a violation or culpable neglect of his duty under the contract. Any departure from these principles in the general course of the administration of justice in this Court would tend to destroy, or at least very materially to shake and impair the security of mortgage transactions and the safety of trustees.
9. In fact, such a departure instead of being beneficial to those who may have occasion to borrow money on security or to repose confidence as to property in their friends or neighbours, would, in the result, throw the former class of persons into the hands of those who indemnify themselves against extraordinary risks by extraordinary exactions, and would deprive the latter class of the assistance of all who cannot afford, or are not inclined, to bestow upon the affairs of other persons their money as well as their trouble and time.”
10. These observations were adopted by Jessel, M.R in Turner v. Hancock, (1882) 20 Ch. D. 303 (C), who, quoting the above, added:
“It is not the course of the Court in modern times to discourage persons from becoming trustees by inflicting costs upon them if they have done their duty, or even if they have committed an innocent breach of trust.”
11. The rule of the English law on the point has been succintly summarised at pages 127-128 of Williams on “Executors and Administrators” (Vol 1-13th edn.) in the following words:
“Prima facie an executor who successfully propounds a will is entitled to have costs as between solicitor and client out of the testator's estate. His right, resting substantially upon contract, can only be lost or curtailed by such inequitable conduct on his part as may amount to violation or culpable neglect of his duty under the contract. Persons named executors who have failed to establish the will naming them have no contractual or quasi-contractual rights to costs out of the testator's estate”.
12. The Indian law on the point is not different. It was held in Dayabhai Tapidas v. Damodardas Tapidas, ILR 21 Bom 75 (D), that the fund primarily liable to the costs of probate was the residuary estate. In Upendra Nath v. Bhupendra Nath, 21 Cal WN 280 : (AIR 1916 Cal 110 (E)), it was laid down that in a suit for the construction of a will and for the administration of the estate left by the testator, the costs, in the absence of grounds established in favour of a departure should ordinarily be paid out of the estate.
13. Mr. Barjatia, learned counsel for the appellant, places reliance on Htin Gyaw v. Posein Gyi, AIR 1926 Rang 89 (P), for the proposition that grant of administration pendente lite requires court-fee but the person in whose favour the full grant is subsequently ordered is, on termination of proceedings, entitled to such grant free of payment. No authority has been quoted in this case except an extract from Kinney's Law relating to Estate Duty in India”.
14. No other ruling in support of this proposition has been cited, and we do not think it will be proper for us to go to this extent. But the proposition is well established that the costs of an executor who successfully propounds a will must be paid out of the testator's estate. We, therefore, this that the appellant is entitled to get his costs, including Page: 33court-fees from the estate of the deceased which is as yet in the possession of the receiver.
15. Clearly, the District Judge's order in this respect was wrong. Obviously, he has not gone through the provisions of Section 211(1) of the Succession Act, which state that:
“The executor or administrator, as the case may be, of a deceased person is his legal representative for all purposes, and all the property of the deceased person vests in him as such”.
16. The executor represents the estate (and can collect the assets or sell property) even before he had taken out probate, for the executor derives his title from the will, and not from the probate. He can, therefore, dispose of the property of the testator without taking probate (See cases cited at page 270 of B.B Mitra's Indian Succession Act 1956 edition). The grant of probate does not give the executor his title; it makes his title certain. Hewson v. Shelley, (1914) 2 Ch. 13 (G). Even without obtaining the probate he may do most things that appertain to his office; thus, he may take possession of the testator's property, he may pay or take releases of debts owing from the estate, he may receive or release debts which are owing to it. For all these he is entitled to get his expenses from the testator's estate. In the present case, the learned District Judge seems to have fallen in error in disallowing the expenses of appeal against the decree passed in Civil Suit No. 7 of 1950 against the testator's property. These expenses, in our opinion, must be allowed from the testator's estate.
17. The next point urged in this appeal is about security to the extent of Rs. 98,167/13/- demanded by the learned District Judge. Under Section 291(1) of the Succession Act, the ordering of security to be furnished by the executor on the grant of the probate is purely a discretionary matter with the Court. The Court has power, if it so desires, to issue probate without any security at all Zubeida Khatoon v. Mohamed Zakaria, AIR 1938 Rang 67 (H). Where the discretion is exercised in a reasonable and judicial manner, the appellate court will not interfere with it unless very strong reasons are shown to persuade the Court that the result is incorrect.
18. Such securities are taken with a view to secure the proper administration of the estate of the deceased. It is contended before us in this case that the value of the property of the deceased testator has considerably dwindled down. Both the houses Nos. 28 and 49 have gone out of the hands of the receiver; all the cash amounts and other valuables have been attached and auctioned; and all the proceeds have been taken away by one Motilal in realisation of his decree in execution case No. 49 of 1953.
19. Thus it will appear that very small property belonging to the deceased is left with the receiver now. The receiver in his written statement before us admits the correctness of these facts. Besides, the suits that are pending in Civil Courts and that had been decreed, the only property left in the hands of the receiver amounts to Rs. 800/- only. He also points out that a cash balance of Rs. 2377-3-0 is lying in the Court. He values the suits pending as well as those decreed at 25244-2-0. The learned District Judge never applied his mind to these facts. In our opinion he should consider all these facts and should see what can be the valuation of the property that may be actually handed over by the receiver to the executors and what security should be demanded from the executors for the due administration of the estate.
20. Security in such cases is required only to guard against malpractices and that amount should be deemed sufficient which may afford reasonable protection against malpractices which require time to be carried out. The learned District Judge should also consider the trust re-posed in the executors by the testator in his will. Fresh valuation of property which comes in possession of the executors should also govern the amount of court-fees to be levied on the grant of a certificate of probate. For reasons stated above, we allow the appeal on the first two points and order that the probate fee should be paid from the testator's estate and the expenses of appeal against the decree passed in Civil Suit No. 7 of 1950 should also be paid to the executors from that estate. As regards the amount of security and the amount of court-fees. We send the case back for disposal according to law, in the light of the observations made above.
Shinde, C.J:— I agree.
21. Order accordingly.
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