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1922 Supreme(SC) 20
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT CAVE, LORD SHAW, SIR JOHN EDGE, AND MR. AMEER ALI.
SRINIVASA CHARIAR - Appellant
Versus
EVALAPPA MUDALIAR - Respondents
On Appeal from the High Court at Madras.
Decided On : April 6, 1922.
Solicitor for appellant:Douglas Grant. Solicitors for respondent: T. L. Wilson & Co.
When property is shown to be trust property in origin, the burden of proof lies heavily on the trustee to prove personal acquisition. Additionally, falsifying accounts and claiming trust property as private are grounds for the removal of a trustee.
Headnote:(A) Code of Civil Procedure, 1908 - Section 92 - Removal of trustee of a religious endowment - Onus of proof regarding ownership of trust property - Where the discoverable origins of property show it to be trust property, the onus is heavily upon the trustee to show by the clearest and most unimpeachable evidence the legitimacy of his personal acquisition. (Paras 15, 16)
(B) Trust Law - Position of a dharmakarta - A dharmakarta is the manager of a charity and his rights are not in a higher legal category than that of a mere trustee, as distinguished from a shebait or the head of a math. (Para 25)
(C) Removal of Trustee - Falsification of accounts and unfounded assertions of private ownership over trust property - Such conduct is seriously reprehensible and destroys the guarantee of trustworthiness required for the administration of a religious endowment, justifying the removal of the trustee from office. (Paras 31, 32)
Facts of the case:
A suit was filed under section 92 of the Code of Civil Procedure for accounts and the removal of a hereditary trustee of a temple on grounds of misappropriation of endowment lands, failure to maintain proper accounts, and mala fide alteration of ceremonies. The trustee claimed that a significant portion of the lands were his private property. The trial court ordered removal based on fabricated accounts and mala fide conduct, but the High Court set aside the removal, finding the title of the temple to the bulk of the properties not sufficiently established.
Findings of Court:
The court found that official survey and settlement records, along with subsequent deeds and statements, clearly established that the lands in question were temple properties. It was held that the trustee's claim of private ownership was unfounded and supported by concocted accounts.
Issues: Whether the lands in suit belonged to the temple or the private estate of the trustee, and whether the trustee's conduct in claiming trust property as his own and falsifying accounts warranted his removal from office.
Ratio Decidendi: The court ruled that when property is originally trust property, the burden of proof lies with the trustee to prove personal acquisition. Furthermore, the proven falsification of accounts and the attempt to misappropriate trust property constitute a grave breach of fiduciary duty, rendering the trustee unfit to continue in office.
Result: Properties restored to the temple; respondent removed from office; case remitted to the High Court to appoint a new trustee and frame a scheme for administration.
Appeal (No. 24 of 1919) from a judgment and decree of the High Court (March 6, 1917) varying a decree of the District Judge of Chingleput.
The suit was instituted by the appellant and another under s. 92 of the Code of Civil Procedure against the respondent, who was hereditary dharmakarta of a Hindu temple at Madavilagam in the neighbourhood of the City of Madras. The plaintiffs prayed for accounts, and for the defendants removal from his office, on the grounds that he and his ancestors had converted to their own use certain lands forming part of the endowment, that he had failed to keep proper accounts, and that he had mala fide altered the ceremonies of the temple. The respondent, by his written statement, claimed part of the lands referred to, and denied the other allegations.
The facts are fully stated in the judgment of their Lordships.
The District Judge, who tried the case, found that the title of the temple to the lands in question was not established, the records filed raising only a suspicion that the lands had originally belonged to the temple. But he found that the respondent had fabricated accounts for the purpose of the suit, and that his conduct as to alteration of the temple ceremonies was not bona fide, but was probably due to spite against the appellant and his friends. For these reasons he ordered that the respondent should be removed from being trustee, and that a scheme should be submitted.
An appeal to the High Court, and cross-objections, were heard by Sir John Walli’s C.J. and Seshagiri Ayyar J. who made a declaration that four of the properties belonged to the temple ; they agreed with the finding of the District Judge that the accounts put forward at the trial had been concocted by the defendant for the purpose of the suit. The learned judges were of opinion that the evidence merely raised a suspicion that the properties, other than the four above referred to, had belonged to the temple, and was insufficient to throw the onus upon the defendant except as to those four. The part of the decree removing the defendant from being trustee was set aside. The learned judges thought that in claiming the properties the defendant was merely asserting rights which his ancestors had asserted, and that, though his conduct in concocting the accounts and supporting them by his evidence was very reprehensible, he had spent more than he had received from the temple properties. They decreed the costs of the suit against the defendant.
1922. March 2, 3, 6, 7, 9. Sir George Lowndes K.C. and Kenworthy Brown for the appellant.
De Gruyther K.C., E. B. Raikes, and Palat for the respondent.
The arguments proceeded mainly upon the evidence. Reference was made to the following authorities as to removal of the trustee of a religious endowment, Peary Mohan Mukerji v. Monohar Mukerji (( 1921) L. R. 48 I. A. 258.), Tudors Charitable Trusts (ed. 1889), p. 194; as to the duty of a trustee to be ready with his account, cases cited in Lewin on Trusts, 12th ed., p. 887; as to the presumption against a trustee who mixes the trust fund with his own money, Lupton v. White ((1808) 15 Ves. 431, 436.); as to the position of a dharmakarta, as distinct from that of the head of a math or a shebait, to Vidyapurna Tirtha Swami v. Vidyanidhi Tirtha Swami (( 1904) I L. R. 27 M. 435.) ; generally as to the relation of " trustees " of Hindu religious institutions to the endowed property, to Prosunno Kumari Debya v. Golab Chand (( 1875) L. R. 2 I. A. 145, 152.), Vidya Varuthi
v. Balusami Ayyar (( 1921) L. R. 481. A. 302, 311.) and Maynes Hindu Law, para. 437 ; as to mirasi tenure, to the Chingleput District Manual ( 1879), pp. 222, 258, 288, 300, 301, to the Fifth Report, vol. iii., p. 159 (Places report), and the Mirasi Papers ( 1862), passim, more particularly to pp. 261, 365.
April 6. The judgment of their Lordships was delivered by
LORD SHAW OF DUNFERMLINE. This is an appeal against the judgment and decree of the High Court of Judicature
