The main legal point established in the judgment is that a person in a fiduciary position is obligated to act in the best interest of the beneficiary, and the beneficiary may be entitled to a share in the properties acquired from the profits of the business carried on by the person in a fiduciary position. Additionally, the judgment clarified the provisions of the Trusts Act regarding the rights of transferees in good faith for consideration without notice of the trust.

Somayya, J.

1. In this case both the Courts have found that the first defendant, the brother of the plaintiff, took possession of the entire estate left by the father including a prosperous business which he was carrying on. The plaintiff was at the time of her fathers death an infant and she was living with the brother who was managing the properties. The properties in question were purchased by the brother, the first defendant, out of the profits of the business which he was carrying on. Both the lower Courts found that the first defendant was in a fiduciary position. On these facts, the decision in Kathoom Bi v. Abdul Wahab Sahib AIR1939Mad313 clearly applies. There the plaintiffs father died leaving a daughter, the plaintiff, who was entitled to a half share and three brothers. The plaintiffs uncles took possession of the entire properties including a business which the deceased was carrying on. Subsequently some properties were acquird from the profits of the business which they were so carrying on. The learned trial Judge, Lakshmana Rao, J., held that the plaintiff was not entitled to a share in the properties which were acquired after the fathers death as these were purchased from the profits of the business carried on. He held that the plaintiff was entitled to an account of the profits of the business and not a share in the properties. The matter was taken up on appeal. The appellate Judges, the learned Chief Justice and Abdur Rahman, J., held that if the uncles who were respondents 1 to 3 were to be regarded as beingiin a fiduciary position, the appellant was entitled to succeed in appeal in getting a share in the properties themselves. Reference was also made to an earlier decision of this Court in Abdul Rahim v. Abdul Hakim (1930) 61 M.L.J. 139 : I.L.R. 54 Mad. 543, where under similar circumstances a Bench of this Court held that where the business of a deceased was carried on by some of the heirs and some properties were acquired by the adult heirs, the minors would be entitled to a share in the properties so acquired. The view of the lower appellate Court that the plaintiff is not entitled to a share in the properties must therefore be rejected as untenable.

2. Then the only question is whether the 29th defendant who purchased the properties is entitled to escape the consequences of the first defendant having been in a fiduciary position towards the plaintiff. Section 96 of the Trusts Act provides that nothing in that chapter, i.e., Chapter IX, shall impair the rights of transferees in good faith for consideration. The provision is analogous to Section 64 of the Act which is an exception to Section 63. Section 63 of the Act says:

Where trust property comes into the hands of a third person inconsistently with the trust, the beneficiary may require him to admit formally, or may institute a suit for a declaration, that the property is comprised in the trust.

3. Section 64 of the Act is as follows:

Nothing in Section 63 entitles the beneficiary to any right in respect of property in the hands of (a) a transferee in good faith for consideration without having notice of the trust.....

4. This is in addition to the right which the beneficiary has to require the trustee to hold the money or other property which he has received in consideration for the transfer of the trust property as trust property. That is, the beneficiary has, in respect of the money or other property which the trustee has received, rights as nearly as may be to the rights which he had in respect of the original trust property. Thus the 29th defendant can escape only if it is proved that the purchas was made by him under circumstances which come within the exception recognised in the above two sections. There is no proof in support of the 29th defendant being a purchaser in good faith. In fact, the person who acted for the 29th defendant has not gone into the witness box, and there is no other evidence which would support such a finding.

5. In the r