1926 (8) TMI 5 - HC - Indian Laws

Summary

Issues Involved:
1. Terms of the trust.
2. Prematurity of the suit.
3. Excess interest received by the plaintiff.
4. Removal of defendants from trusteeship and payment of Rs. 10,000.
5. Reliefs entitled to the parties.

Issue-wise Detailed Analysis:

1. Terms of the Trust:
The plaintiff alleged that Rs. 10,000 was deposited in trust with Tawker & Sons to be invested at 9% interest and paid to the plaintiff upon reaching 21 years. Defendants 1 to 8 admitted to being trustees but claimed absolute discretion in investing the money and stated the plaintiff could not claim the money before attaining 21 years. The court found that all terms and conditions required for a valid trust were complied with when the money was handed over to Tawker & Sons, who were to pay 9% interest.

2. Prematurity of the Suit:
Defendants argued the suit was premature as the plaintiff had not yet attained 21 years. However, the court noted the defendants' insolvency and the danger of the trust money being lost, justifying the plaintiff's suit to safeguard his interests.

3. Excess Interest Received by the Plaintiff:
The plaintiff's witness, Sivasankar Bhat, admitted that Rs. 535 was received in excess of the interest due on the date of the plaint. The court ruled that this amount should be credited towards interest from the end of 1923 to the present date, with the balance to be paid to the plaintiff.

4. Removal of Defendants from Trusteeship and Payment of Rs. 10,000:
The court determined that Defendants 1 to 8, being insolvents, were unfit to continue as trustees under the Trust Act. Consequently, they were removed from trusteeship, and a new trustee was to be appointed. The court also found that Rs. 10,000 was still due to the plaintiff, and the plaintiff was entitled to this amount with interest.

5. Reliefs Entitled to the Parties:
The main question was whether the plaintiff had a preferential claim to the Rs. 10,000. The court concluded that the plaintiff was entitled to a charge on the sale proceeds of the goods purchased with the trust money. The evidence showed that the trust money was used by Tawker & Sons to purchase showroom goods, and the proceeds from the sale of these goods by the Official Assignee amounted to Rs. 22,000, which was more than sufficient to cover the plaintiff's claim. The court held that the plaintiff was entitled to be paid in full out of these proceeds.

Judgment:
The court decreed Rs. 11,940 (Rs. 10,000 principal and Rs. 1,940 interest) with 6% interest per annum from the date of the judgment to the date of payment. The plaintiff was entitled to this sum from the Rs. 22,000 held by the Official Assignee, representing the sale proceeds of the showroom stock. The Official Assignee was allowed to deduct his costs from the estate and pay the plaintiff's costs from the said sum. The court certified costs for two counsel for the plaintiff.