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TMI Blog1940 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... duce his claim to ₹ 600. It was also agreed that defendant 2 should transfer to the first a part of her immovable property in full satisfaction of this ₹ 600. The third term in this tripartite agreement is the one which concerns us here. It is recorded by the Debt Conciliation Board in the following terms and is to be found in Ex. P-2: Mohmad Husain (defendant 1) undertakes to pay these instalments for the debtor and to execute an agreement to that effect in her favour. 2. The instalments were fixed at ₹ 75 payable on 15th March 1935, and ₹ 100 payable on 15th March 1936. The first instalment appears to have been paid and apparently ₹ 25 was paid on the second. At any rate, the plaintiff admits that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the plaintiff urges that his suit is not founded in contract but in trust. He argues that the plaintiff is a stranger to the consideration and so there can be no contract between the plaintiff and defendant 1. Under the transaction before the Board defendant 1 received property from the second on the understanding that he would do something for the benefit of the plaintiff, namely pay him the money which defendant 2 owed him. This the learned counsel states constitutes a trust which the plaintiff who is the beneficiary can enforce so long as defendant 1 retains possession of the property, and he refers me to Iyer's Law of Contracts, Edn. 3, p. 618. I am clear that the rule to which Iyer refers has no application here. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other to carry out his part of the bargain neither reposes confidence in the other in the sense in which the term is used in the law of trusts. To put it in another way there is always a fiduciary relationship between trustee and beneficiary, but none between creditor and debtor as such. The following examples culled from the American Law Institutes Volume on Trusts, p. 41, S. 12 under the heading A debt is not a trust will illustrate the difference, (1) A transfers to B a bond to hold in trust for C. That creates a trust which gives C an interest in the bond and entitles him to sue should B act to his (c's) detriment. (2) A transfers to B a bond, and in consideration of the transfer B agrees to pay ₹ 1000 to C. There is no trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the tripartite agreement which we are considering gave the plaintiff-applicant any interest in the property transferred and still less that it gave him a right to compel defendant 1 to transfer the property to him. That brings me to a third test. No trustee can use trust property for his own benefit. He is bound to hold for the benefit of the beneficiary and is liable to account to him for it. It can hardly be contended here that, so far as the property is concerned, there was not a sale out and out to defendant 1. It can scarcely be pretended that he was not the sole owner of it and that he could not for example sell or mortgage it for his own benefit. Still another test is this. Lewin in his Law of Trusts and Maitland in his Equity bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice referred to there relates to rights to which a party has a legal as opposed to a purely moral claim. The rule applies when owing to some technical rule of procedure or to some stupid blundering the claim is likely to fail whereas had the proper rule or remedy been applied, it would have succeeded. It does not refer to cases where whatever the plaintiff had done his claim could not in any event have succeeded. If a plaintiff's suit is barred by time on the date on which it is instituted there is nothing that he can do to remedy the defect and consequently the rule referred to is not attracted. 7. The application is allowed. The decree of the lower Court is set aside and the plaintiff's claim is dismissed against both defe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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