The principle of Damdupat, which limits interest to the amount of the principal, does not apply to interest payable by a trustee on trust funds.

RAGHUBAR DAYAL J. - There is a temple known as Shri Chandraprabhu Khandelwal Jain Temple at Dhulia. Gulabchand Riralal, father of appellant Hukumchand Gulabchand Jain, a leading member of the Khandelwal Jain Community at Dhulia looked after the temple for over 40 years till his death sometime in 1950. The appellant looked after it after his fathers death. Two members of the community interested in the temple, held to be a public temple, instituted the suit against the appellant and the Charity Commissioner, Bombay, praying for the removal of the appellant from possession of the trust properties, for the rendering of true and faithful accounts of all the assets and income of the trust property and for the framing of the scheme for the administration of the trust. It was alleged in the plaint that the appellants father was maintaining all accounts of income and expenditure concerning the temple and that the funds of the temple were many times advanced at interest and that the temple had come to hold large properties, movable and immovable. It was further alleged that the temple had a large income from offerings, house -rent etc., but the appellant and his deceased father had not been maintaining the accounts properly and that the funds of the temple were being advanced at interest though no such income was shown as received recently by the appellant.

2. The appellant, in his written statement, denied that the amount was so advanced at interest as alleged by the plaintiffs and stated that his father had been keeping a ledger in the name of the temple in the accounts in which its income and expenditure had been duly entered since over 40 years and that the appellant himself had kept separate account books for the temple since October 30, 1951. He denied that any income recently received had not been shown in the accounts.

3. The trial Court held that the appellant had committed minor irregularities in the maintenance of the accounts, that he was liable to render accounts and that the Commissioner was to ascertain the amount due from the appellant on taking the accounts. It definitely held it not established that income, if any, derived by way of interest on loans advanced out of the funds of the temple had not been credited to the account of the temple and that no instance of fraudulent or dishonest misappropriation of temple funds on the part of defendant No.1 or his father bad been established. It found that the meeting of the community had passed a resolution on August 22,1958, by an overwhelming majority, sanctioning the accounts submitted by the appellant and that only two persons who opposed against the resolution were the two plaintiffs of the suit.

4. The Commissioner found that on the date of the institution of the suit, i. e. on February 17, 1954, Rs. 10,088 -10 -3 were due for principal and Rs. 16,853 -6 -0 were due for interest, from the appellant. The plaintiffs admitted the report to be correct but the appellant contended that under the rule of damdupat interest exceeding the amount of principal could not be allowed. The appellants contention was accepted and the trial Court passed a decree on April 23, 1955, for Rs. 20,177 -4 -6 against the appellant, with future interest at 6 per cent per annum. We are not now concerned with the other items of the decree and therefore we make no reference to them.

5. The appellant deposited the amount due under the decree on July 18, 1955. The plaintiffs appealed and claimed a larger amount oil various grounds, including the one that the principle of damdupat should not have been applied and that interest on the balance of the trust fund should have been calculated and compound interest allowed in place of simple interest on the amount of the trust fund in the hands of the defendant or his father.

6. The appellant filed a cross -objection against the allowing of interest on the balance of the trust funds with his father and himself.

7. The High Court agreed with