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TMI Blog1959 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... nthing to do with the temple. Because of this contention of his a suit was instituted being suit No. 51 of 1937 against Gulabchand Hiralal. It, however, appears that sanction was not obtained from the Collector under Section 92 of the Code of Civil Procedure and the suit came to be dismissed. Thereafter a Miscellaneous aplication was ade by the present plaintiffs and four other members of the Community for registration of the Trust under the provisions of the Bombay Act No. XXV of 1935 - being Misc. Application No. 110 of 1949, under Section 6 of the Act. During the pendency of that application the father of the defendant No. 1 died. It was held threin that the temple was public trust and that its income exceeded ₹ 1,000/- and therefore, it was ordered to be registered. The defendant No. 1 was ordered to furnish several particulars required by the Act. It appears that the defendant No. 1 tailed to furnish those particulars. after the Bombay Public Trut Act, 1950 (Act No. XXIX of 1950) came into force the plaintiffs approached the Assistant Charity Commissioner for the registration of the Trust and also sought permission of the Charity Commissioner for instituting a suit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant and thereafter settle the accounts between the parties. He then made a fresh report at Ex. 74, finding a total sum of ₹ 10,088-10-3 for principal and ₹ 16853-6-0 for interest as being due to the temple from the defendant No. 1 up to the date of the suit. The plaintiffs admitted the report but the defendant No. 1 contended that under the rule of Damdupat interest exceeding the amount of the principal cannot be allowed. The learned Judge was of the view that the rule of Dam-Dupat applied to the case and he, therefore, made a ecree in favour of the temple for ₹ 20,177-4-6. It also appears that an agreed draft scheme prepared by the parties was filed. Accordingly the Court framed the scheme for the management of the temple and also passed a decree for ₹ 20,177-4-6 against the defendant No. 1 in favour of the management of the temple and by its order it continued the defendant No. 1 as one of the trustees. The plaintiffs have come to this Court in appeal against this judgment and the defendant No. 1 has filed cross-objections to the decree. (5) It was the contention of the plaintiffs that defendants father and after him the defendants used the funds of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge was of the view, and we think very rightly, that there ere changes and interpolations in the interest khata of the ledgers of some of these years. We have seen two of the Khata books which have been produced in the case and it does appearthat there is nothing to show that the amount belonging to the temple was in any manner kept separate and distinct from the other amounts belonging to the defendants. The facts connected with the se of moneys of the temple were within the knowledge of defendant No. 1 and could have been very well explained by defendant No. 1 by proper references to his books of account. But no attempt has been made to do so. The defendant has said that his Nakkal books are not available as they are lost. It must be remembered that on his own admission the defendant and his father before him, were carrying on this business, and that it is about 100 years old. It is unthinkable that any business man, who has got an old and established business, would at any time destroy any of his ccount books and if we reject his explanation that the books are lost then we would be entitled to infer that if these books were produced they couldnot have supported the case of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 302 at 311 : AIR 1922 PC 126 ). He must therefore be deemed to be in the position of a trustee vis-a-vis the temple. (7) The question then is as to whether or not the defendant and the estate of his father is liable for interest whether compund or simple. In support of his argument that his client is not liable to pay interest, Mr. Vaidya relies on the case of B. N. Rly. Co. Ltd. v. Ruttanji Ramji, and on the case of Thawardas Pherumal v. Union of India, . Now in the earlier of the cases cited it is said interest for the period prior to the date of the suit may be awarded if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provisions of any substantive law entitling the plaintiff to recover interest, as for instance, under Section 80 of the Negotiable Instruments Act, 1881, when the Court may award interest at the rate of 6 per cent per annum, when no rate of interest is specified in the primissory note or bill of exchange. and the judgment of the Supreme Court in the case of has also followed this principle. The Privy Council then referred in that case to the Interest Act XXXII of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the wrong person or (iv) fails to produce or account for it when lawfully demanded by the cestui que trust or ordered by the Court. Compond interest is charged where he employs it in trade or speculation for his own benefit. Hals. Laws of England Vl. 33 p. para (See also Lewin on rust 15th Edition page 246). (9) To the same effect are the provisions of theIndian Trust Act. Section 23 of the Indian Trust Act makes provision for he liability of a trustee for breach of trust. The second part of it says a trustee committing a breach of trust is not liable to pay interest except in the following cases: (a) where he has actuall recived interest. (b) where breach consists in unreasonable delay in paying trust money to the beneficiary. (c) where the trustee ought to have received interest, but has not done so. (d) Where he may have fairly presumed to have received interest. He is liable under case (a) to account for the interest actually received and in cases (b), (c) and (d) to account for simple interest at the rate of 6% per annum unless the Court otherwise irects. (e) where the breach consists in failure to invest trust money and to accumulate interest or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the latter several cases have been referred to. They are Cox v. Bateman, (1715) 2 Ves. Sen. 19; Venon v. Vawdry, (1740) 2 Atk. 119; Adey v. Arnold, (1852) 2 De G.M. and G. 432; Brereton v. Hutchinson, (1854) 3 Ir. Ch. 361 and Brittlebank v. Goddwin, (1868), 5 Eq . 545. In (1715) 2 Ves Sen 19 the Vice-Chancellor said: He could not follow the moeny and charge his real estate therewith.........It was a breach of Trust and must be a charge on his personal estate; but he would help it as far as he could; and therefore it any specialt creditors exhaust th personal estate, let simple contract creditors stand in their place, to have satisfaction out of the real estate. In (1740) 2 Atk 119 it was said: a breach of trust is considered but as a smple contract debt, and can only fall upon the personal etate of a trustee. and the particular circumstances of a case ought not to var the rule . In (1852) 2 De G. M. and G. 432 it was said: This Court will enforce a trust, but only qua trust, and only so far as to make it fall within the rule which constitutes the claim under3 it a simple contract debt. None of these cases goes to the length of saying that the debt is an outc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exist . The other members however did not decide this point. On the other hand there are decisions to the contrary also. In Ex parte Tayor: In re Goldsmid, (1886) 18 QB 295 Lindley LJ said in reference to the same section: A cestuie que trust is not a creditor of his trustee. nor is a trustee a creditor of his co-trustee. In neither case do parties stand in the relation of debtor and creditor . The dictum of Lord Halsbury in (1899) AC 419 has not gone unquestioned. (See In re, Lake; Exparte Dyer, (1901) 1 KB 710 Rigby LJ at p. 715). None of these cases therefore hold that the relationship is contractual. More often than not a trustee exists in spite of the will of the beneficiary. Even if a trustee be regarded a debtor in the larger sense the debt would be ex delicto and not one founded on lending or contracvt. (12) If this is so, then the next question to be considered is whether the rule of Dam Dupat applies. In the case of Hariram Serowagee v. madan Gopal, 31 Bom LR 710 : AIR 1929 C 77) the Privy Council says : The peculiar Hindu rule of damdupat as to interest, is applicable to matters of contract. That was a case of liability of an executrix and the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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