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1933 SCC OnLine Bom 99 : AIR 1934 Bom 1 : (1933) 35 Bom LR 1091
Bombay High Court
(BEFORE BAKER, A.C.J. AND DIVATIA, J.)
Jamshedji Pestonji Hodiwala and others … Appellants;
Versus
Dorabji Kuverji Charna and others … Respondents.
First Appeal No. 169 of 1929
Decided on June 22, 1933
The Judgment of the Court was delivered by
BAKER, A.C.J.:— This is an appeal from a decree of the First Class Subordinate
Judge of Surat dismissing the plaintiffs' suit. The plaintiffs, who are three in number,
sue as representatives of the Parsi Anjuman of Chikli. They sue to recover two houses
which have been mortgaged by defendant 1 to defendant 4, and, put very shortly,
their case is that originally the father of defendant 1 and two other persons, who were
the vahivatdars or managers of the old Agyari or fire-temple of Chikli and were
representatives of the Parsi Anjuman, purchased these two houses, which are on either
side of the Agyari, for the Anjuman, but subsequently defendant 1's father treated this
property as his own and mortgaged it to various persons and ultimately to defendant's
who is at present in possession. Defendants 1, 2 and 3 are brothers. The only
contending defendants are defendants 1 and 4. Defendant 1 is the son of Kuverji
Mancherji, who was one of the original vendees and the person who set up his own
title to the property. Defendant 4 is a mortgagee now in possession from defendant 1,
and defendant 5 is one of the trustees and is merely a pro forma defendant, and the
remaining defendants 6 to 10 are members of the Anjuman, who appear in response
to the notice, given under O. 1, R. 8, and some of them support the plaintiffs and
some support the defendants. The two principal points which arose in the case were
whether the purchase by Kuverji and his two covendees was in their capacity as
trustees
Page: 2
of the Parsi Anjuman of Chikli or in their individual capacity, and whether the suit was
barred by limitation or whether it was governed by Section 10 of the Lim. Act.
2. The Subordinate Judge found, after taking evidence, that Kuverji and his two co-
vendees were trustees of the Anjuman and that the purchase was made on behalf of
the Anjuman. But he held afterwards that they were not express trustees for the
purpose of this sale, and relying on the case of Vidya Varuthi v. Balusami Ayyar (1) he
held that Section 10 of the Lim. Act, would not apply and therefore the suit was barred
by limitation, the adverse possession of Kuverji having begun from 1891. The plaintiffs
have appealed against this decision. The details of the various transactions with regard
to the property have been set out by the learned Subordinate Judge in considerable
detail in his judgment, and I do not think it necessary to repeat them all as they are
not disputed. The essential facts in connexion with this appeal, put shortly, are that in
the year 1885 Kuverji Mancherji, who is the father of defendant 1, Dadabhai Dajibhai,
and Burjorji Bhikhaji purchased these two houses, which are now in dispute and which
stand close on either side of the old Agyari at Chikli, from a representative of the
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family of the founder of that Agyari. The Agyari was founded by a lady named
Sukhlibai. The exact date is not known, nor have we got the document by which it was
transferred to the Parsi community. At the time of this sale, which is Ex. 41 (at p. 70
of the record), dated 11th March 1885, the two houses belonged to one Dorabji
Rustomji Dhakmar, who was a descendant of Sukhlibai, and he sold these two houses
to these three persons on behalf of the Agyari for Rs. 1,201. Now, at is to be noted
that in this document these three persons, the vendees, described themselves as the
persons carrying on vahivat on behalf of the Anjuman of the Juni Agyari of Kasha
Chikli and at the close of the document it is stated that these two houses stand on
each side of a house
“which has been in former times given to you (meaning to vendees), that is, to
the Parsi Anjuman”
by the vendor's ancestors. The sale is subject to three conditions. The first is that
the houses are not to be sold because they stand on either side of the Agyari. The
second condition is that no obstruction should be offered to any charitable Parsi who
desires to build a large fire-temple on the site of all the three houses, and the third
condition is that if they are let they should only be let to Parsis. It has been argued
by the learned counsel on behalf of the respondents that the existence of these
conditions in the sale-deed indicates that the sale was not to these three persons as
trustees of the fire-temple but to them in their private capacity. But if that was so,
there was no necessity to describe themselves as vahivatdars of the Agyari. It is
quite clear that the purpose for which these two houses were acquired was to
prevent any building being erected on their sites which might prove inconvenient to
the Agyari which stood between them. That, is an object which was in the interests
of the temple, and the only persons to carry out that object were the trustees of
that temple, and that is, as a matter of fact, what has been done by the sale deed,
and the admissions in this sale deed are further confirmed by the mortgage deed on
the same day, Ex. 42 (at p. 76), which was passed by these three same vendees,
namely, Kuverji Mancherji and two others in favour of one Fakirji Ratanji to whom
the property was mortgaged on the same day that it was purchased for the
purchase money of Rs. 1,201. It seems that the Anjuman was not in a position to
pay the whole of the sale-price as will appear from what has been stated before. It
is obvious that the object for which these houses were purchased was to prevent
their going from Parsi to non-Parsi hands. They were not immediately wanted, and
therefore there was no objection to mortgage them to a Parsi. They were therefore
mortgaged on the same day that they were bought, but this mortgage deed
contains the same reference to the mortgagors being the persons carrying on
vahivat on, behalf of the Anjuman of the Juni Agyari, and then there is a very clear
statement:
“We have this day on behalf of the Anjuman of the Juni Agyari of the Parsis
purchased from Parsi Dorabji Rustomji Dhakmar of Naveari the two houses in
question.”
Page: 3
3. In view of these two very plain statements in the two documents, I do not think
that there can be the slightest doubt that these two houses were purchased by these
three persons acting as trustees of the Parsi Anjuman. They were purchased for and on
behalf of the Parsi Anjuman, and there is also an entry in the books of the shroff with
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whom the Anjuman kept their money, of Rs. 50, to be paid as earnest money to a
person living at Navsari for the purchase of their houses. That is in January, whereas
the purchase is in March. The entry is Ex. 183 (at p. 185) and is dated 4th January
1885, and says:
“Rupees 50 debited to the khata of the Parsi People's Panchayat. Rs. 50 (fifty) in
cash paid for giving as Bana (earnest money) at Navsari for building for the Agyari
in the bazar.”
4. It has been argued by the learned counsel on behalf of the respondents that
there is no evidence prior to this purchase that there had been any trustees of this
Anjuman and that anything had been done by them on behalf of the Anjuman. There
are certain accounts put in which show that small sums had been withdrawn by
various persons including Kuverji on behalf of the Parsi Anjuman from the moneys
which they had deposited with the witness. But in view of the plain statements
contained both in Exs. 41 and 42, and the repeated statements that the purchase was
made on behalf of the Agyari by these persons acting as vahivatdars of the Anjuman, I
do not feel the slightest doubt that the finding of the learned Subordinate Judge on
issue 2 is correct, and also on issue 3, that is, that the properties were purchased by
these three persons for the Parsi Anjuman of Chikli as alleged in para. 3 of the plaint,
and that the Parsi Anjuman of Chikli is the owner of the properties in suit. The
subsequent history of the property is rather complicated and I need not go into it in
detail. First of all the two co-vendees along with Kuverji sold their interest in the
property, such as they had to him by two deeds on the same day, by Ex. 43 (at p. 80),
Burjorji Bhikhaji, and on the same day the other purchaser sold his interest in the
property to Kuverji on 31st December 1890, and thereafter Kuverji began to treat the
property as his own. He mortgaged it again and again and in each instance as his own
property. Some of the mortgages have been redeemed. On his death, which happened
in 1914, he left three sons, defendants 1, 2 and 3. Defendants 2 and 3 relinquished
their interest in this property to defendant 1 who is the contending defendant. I do not
think it is necessary to go through all these documents which have been detailed by
the Subordinate Judge. It is quite clear that from 1891 Kuverji, the father of
defendant 1, treated this property as his own, and apparently no objection was raised
by the Parsi Panchayat. Ultimately, on 23rd August 1924, by Ex. 54 (at p. 108) and
Ex. 55 (at p. 111) on the same day, defendant 1 mortgaged both these houses to
defendant 4, the total amount of the two mortgages being Rs. 5,000.
5. It has been found that the Anjuman is the owner of these properties and they
were purchased by Kuverji and the other two vendees for the Anjuman. The only
question which arises is whether there is anything which prevents the Anjuman from
recovering them from the defendants. The learned Subordinate Judge is of opinion
that Section 10 of the Lim. Act, which is the only section which could save limitation,
does not apply to the present case, and therefore the suit is barred by limitation, the
adverse possession of Kuverji having begun as long ago as 1891. The learned Judge
has relied on the principles laid down in the Privy Council case of Vidya Varuthi v.
Balusami Ayyar (1) , but that is a case which deals with Hindu and Mahomedan
endowments and has no application whatever to the present case which is a case
amongst Parsis. In the mofussil Parsis are governed by rules of justice, equity and
good conscience, as has been laid down in the cases of Mancharsha Ashpandiarji v.
Kamrunisa Begam (2) and Mithibai v. Limji Nowroji Banaji (3) , and the learned counsel
for the appellants has argued on the strength of a series of decisions, that this is
clearly a case in which the property has become vested in trust in Kuverji for a specific
purpose, and that it is an express trust, and in support of this proposition he has
quoted a number of cases beginning with Chintaman Ravji v. Khanderao
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Page: 4
Pandurang (4) . He has also relied on the cases of Soar v. Ashwell (5) , Secy. of State v.
Badhika Prasad (6) , Secy. of State v. Bapuji Mahadeo (7) , Moosabhai v. Yacoobbhai (8) ,
Mathuradas v. Vandrawandas (9) , Narrondas v. Narrondas (10) , Bhurabhai v. Bai
Ruxmani (11) , and on the case of Burdick v. Garrick (12) , which is a case of an agent
occupying a fiduciary position.
6. It has been argued by the learned counsel for the respondents that assuming
that we have a trust, the transaction is not incidental to the execution of the trust, and
at the most, even if the purchase by the three vendees was on behalf of the Anjuman,
it was a purchase merely as an agent, and it is only in very exceptional cases that an
agent could be regarded as a trustee for the purpose of saving limitation. I do not
know whether it is necessary to go through all the cases which have been quoted by
the learned counsel for the appellants. I think it is quite clear that in the present case
the vendees, i.e., Kuverji and his two associates, were acting on behalf of the
Anjuman, the purchase was for the Anjuman, and the purchase was made for the
express purpose of guarding against the danger of these two houses which adjoined
the fire-temple on either side from falling into non-Parsi hands and thereby causing
some annoyance or obstruction to the religious ceremonies to be performed there, and
I do not think that there could be a clearer instance of an express trust the property
having become vested in these three vendees for a specific purpose, namely the
maintenance of the fire-temple without interruption and avoidance of the possibility of
alienation of the houses on either side. The case of Chintaman Ravji v. Khanderao
Pandurang (4) , which has been relied on by the learned counsel for the appellants, was
a case where money was handed over by a widow to her brother for the benefit and
education of her two minor sons, and it was held that the money being given to the
brother for the boys—for their benefit and education—it was vested in him for a
specific purpose, in other words, he was an express trustee. That case is based on
Soar v. Ashwell (5) . Then in Secy. of State v. Prasad Bapuji (6) we have a case where
the East India Company and its successor, the Government of India, had become
trustees for a specific purpose for the discharge of certain bonds issued in respect of
certain liabilities, and it was held that the suit was not barred by limitation by reason
of Section 10 of the Lim. Act.
7. There are numerous cases of this Court, Secy. of State v. Bapuji Mahadeo (7) ,
Moosabhai v. Yacoobhai (8) , and there are two cases of Mathuradas v. Vandrawandas
(9) , and Narrondas v. Narrondas (10) . The effect of these cases—I need not go through
them all—is, as has already been stated, that where there is an express trust or a trust
for a specific purpose, Section 10 of the Lim. Act, will apply and a suit will not be
barred by limitation. I have already pointed out that this property was vested in the
purchasers for a specific purpose, a purpose which has been indicated, and I am of
opinion that Section 10 of the Lim Act, will apply to save limitation, and that the view
of the lower Court, which is founded upon a decision of the Privy Council which
expressly refers only to Hindu and Mahomedan endowments and not to Parsi
endowments as in the present case, should be set aside, and, therefore, the plaintiffs
are entitled to recover possession of the property in suit from the defendants.
8. As regards defendant 4, it has been 5 contended at some length by his learned
counsel that he was for very many years a tenant of these houses from defendant 1
and defendant 1's father, that he had no reason to believe that defendant 1 was not
the true owner of the property, and that he is, therefore, entitled to claim the benefit
of Section 41 of the Transfer of Property Act. He also contends that having invested
the whole of his life's savings in this mortgage, he would be without a remedy after
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possession was taken away from him inasmuch as his personal claim against
defendant 1 would now be barred.
Page: 5
As to that, the consideration for the mortgage would only fail when the decree of the
lower Court is reversed, that is from today, and as regards his right to rely on Section
41 of the Transfer of Property Act, it does not appear that he enquired into the title of
his mortgagor as carefully as he ought to have done. Defendant 1 has admitted in his
evidence that at the time when these mortgages of 1924 were written, the previous
documents connected with this property were there with the writer. Now, although the
writer's knowledge may not be defendant 4's knowledge, I find it difficult to believe
that defendant 4 was not aware of the existence of those documents, at any rate, at
that time, and the first two documents which are Exs. 41 and 42, which have been
dealt with at some length at the beginning of this judgment, clearly show that the
father of defendant 1, Kuverji, was not the owner of this property but was merely a
trustee in respect of it. In these circumstances, I would agree with the view which has
been taken by the learned Judge at the close of his judgment that had he held that
there had been an express trust as contended by the plaintiffs, then defendant 4
would not be entitled to the protection of Section 41 of the Transfer of Property Act.
9. In these circumstances, the decree of the lower Court must be set aside and a
decree passed for the plaintiffs for the recovery of possession of the property with
mesne profits, and costs throughout against defendants 1 and 4. The other defendants
should pay their own costs. Mesne profits to be determined in execution.
10. DIVATIA, J.:— I agree. The learned Judge below has found all the issues in the
plaintiffs' favour except one with regard to limitation, and even that issue, really
speaking, turns upon the construction of the recitals in Exs. 41 and 42. The learned
Judge rightly held that under the sale-deed, Ex. 41, all the interest had been conveyed
by it to the Parsi Anjuman through the three vahivatdars, but although he thus held
that the interest conveyed was to the Anjuman still he went on to hold that the
property had not been vested in trust in those three persons for an express purpose,
and that the sale-deed did not so vest all the property conveyed under it in those
three vahivatdars for a specific purpose. In holding so the learned Judge fell into the
double mistake of holding that the trust was created only by the document, Ex. 41,
and secondly that even if the trust could be held to be created, the trust was not for a
specific purpose. There is no doubt whatever that the original trust was created when
the Juni Agyari was made the subject-matter of the trust and handed over to the Parsi
Anjuman of Chibli, and although there is no definite evidence as to the date of the
creation of the trust or its exact terms, there is no doubt that there is sufficient
evidence, especially the intrinsic evidence contained in Exs. 41 and 42, that a specific
trust had been created and that the sale-deed, Ex. 41, had been entered into only as
an incidental transaction in the administration of the trust. That being so, it is clear
that not only was there a preexisting trust before the date of Ex. 41, but the property
which was purchased under that deed was specifically vested in those trustees for the
purpose of that trust. In that view, apart from the authorities that have been relied
upon, it would be clear that there was an express trust, and Section 10 of the Lim.
Act, would therefore apply and the suit would not be barred by any length of time.
11. As regards the case of Vidya Varuthi v. Balusami Ayyar (1) , relied upon by the
learned Judge, the learned counsel for respondent 1 has very fairly and rightly not
relied upon the same here, as it is obviously an authority with regard to Hindu and
Mahomedan religious institutions, and the trust in this case is a trust relating to a
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Parsi charity to which the principles laid down in that authority could not possibly
apply. Those being the only two points on which the learned Judge decided against the
plaintiffs, I think it is quite clear that the three original persons being express
trustees, there is no bar of limitation for the present suit. With regard to defendant 4,
either he knew about the previous title-deeds or be did not. If he knew about the
previous title-deeds, he ought to have known, especially from the two earlier
documents, Exs. 41 and 42, that the persons who purchased thereunder and
mortgaged were vahivatdars of Agyari. If he did not, then it was a case where he did
not exercise reasonable care in tracing the title to the property.
Page: 6
Therefore in any view of the case, he is not entitled to the protection of Section 41 of
the Transfer of Property Act, even assuming that section applies here. Therefore the
learned Judge was right in holding that he is not entitled either to the possession of
the property or to be indemnified for the mortgage, especially as his remedy against
defendant 1 is still presumably open. For these reasons I agree that the appeal should
be allowed with costs throughout.
12. BAKER, A.C.J.:— (23rd June). After the delivery of this judgment the learned
counsel for the respondents has raised a point that the property should not be ordered
to be restored to the plaintiffs without requiring them to pay Rs. 1,201 possibly with
interest, namely, the original purchase-price. It is argued by the learned counsel that
the plaintiffs' Anjuman having paid nothing at all towards the purchase price, they
have been getting the property for nothing, and therefore on equitable principles they
should be ordered to pay the purchase-money to defendant 1. This point was not
taken in the written-statement or in the memorandum of appeal, nor was any issue
framed on it in the lower Court. Evidence would be necessary on the point as to the
manner in which the original mortgage and the subsequent mortgage, Ex. 45 (at p.
86), in which the first mortgage was merged, were paid off. Moreover, it seems rather
curious that a trustee, whose conduct has been nothing short of fraudulent and who
has been in possession of the trust property as against the real owners for nearly forty
years or more, should appeal to equity in order to compel payment by the real owner.
As far as appears from the record in this case, nothing was ever paid in actual cash by
the original vendee Kuverji and his descendants.
13. The purchase-price was raised by the mortgage, Ex. 42, which is with
possession, and presumably his mortgagee entered into possession of the property
and received profits.
14. That mortgage was merged in the fresh mortgage of 1891, Ex. 45 (at p. 86),
which is also a mortgage with possession. Part of the consideration of that mortgage is
cash paid by the mortgagee for Kuverji in order to buy out the two co-vendees as
already stated in an earlier part of this judgment. What appears to have happened is
that Kuverji treated this property as his own and has been raising money for his own
purposes by succession of mortgages on it, and the purchase-price was never paid; at
least there is no evidence to that effect, by Kuverji or his co-vendees in actual cash to
the vendor, but it was raised by the mortgages and those mortgages were paid off out
of the profits of the property. Even if there had been a payment by Kuverji and his co-
vendees, it may be pointed out that Kuverji, in whom the rights of the other co-
vendees merged, has been in possession of this property for at least forty years. Since
1890 he has been treating this property as his own and has been raising money for his
own purposes by a succession of mortgages. In these circumstances, the real owners,
the Anjuman, have been deprived of the possession of their own property for nearly
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half a century, and as far as I can see, if the transaction had been bona fide from the
beginning and the property had been handed over to the Anjuman, they would
presumably have done the same as Kuverji did, namely, paid the purchase-price by
means of a mortgage, the mortgage being afterwards extinguished by receipt of the
profits. In these circumstances I do not think that there is sufficient reason for
disturbing the order which has already been made, and I would therefore decline to
review the judgment which was delivered yesterday.
15. DIVATIA, J.:— I agree.
K.S.
16. Appeal allowed.
———
1. AIR 1922 P.C. 123 : 65 IC 161 : 48 IA 302 : 44 Mad 831 (PC).
2. (1868) 5 BHC (ACJ) 109.
3. (1881) 5 Bom 506.
4. AIR 1928 Bom 58 : 107 IC 705 : 52 Bom 184.
5. (1893) 2 QB 390 : 69 LT 585 : 42 WR 165.
6. AIR 1923 Mad 667 : 74 IC 785 : 46 Mad 259.
7. AIR 1915 Bom 282 : 31 IC 277 : 39 Bom 572.
8. (1904) 29 Bom 267 : 7 BLR 45.
9. (1906) 31 Bom 222 : 8 BLR 828.
10. (1907) 31 Bom 418 : 9 BLR 287.
11. (1908) 32 Bom 394 : 10 BLR 540.
12. (1870) 5 Ch 233 : 39 LJ Ch 369 : 18 WR 387.
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