1922 Supreme(Mad) 134
IN THE HIGH COURT OF MARAS
S Aiyar, Napier, F Oldfield, V Rao
T. Ramaswami Aiyar
Versus
T. Subramania Aiyar And Ors.
Decided On : 20 April, 1922
The main legal point established in the judgment is that in the absence of a fiduciary relation and in accordance with established legal principles, the 2nd defendant was not liable for interest on profits and rents.
Headnote:
Interest - Trusts - Section 94, Section 95 of the Trusts Act - Order XXI, Rule 89 - Interest on Profits - Fiduciary Relation - Interest on Rents - Trustee's Liability for Interest - Interest on Arrears of Income
Fact of the Case:
The court addressed issues related to properties in possession of the 2nd defendant, plaintiff's share of net profits, and the liability for interest on profits and rents. The court analyzed the fiduciary relation between the parties and the liability for interest on profits and rents.
Finding of the Court:
The court found that the 2nd defendant was not liable for interest on profits and rents, considering the absence of a fiduciary relation and established legal principles regarding the liability for interest on arrears of income.
Issues: The issues involved the possession of properties, accounting for plaintiff's share of profits, and the liability for interest on profits and rents.
Ratio Decidendi: The court held that the 2nd defendant was not liable for interest on profits and rents, citing legal precedents and principles regarding fiduciary relations and the liability for interest on arrears of income.
Final Decision: The court decided in favor of the 2nd defendant, holding that he was not liable for interest on profits and rents. The appellant was awarded costs based on the amount in which they succeeded in the court.
Francis Oldfield , J.
1. The first issue remanded relates to the properties in the possession of 2nd defendant. Some attempt has been made to argue that certain properties to be referred to as mortgaged items, have since their delivery to plaintiff, to which reference will be made, been re-gained by 2nd defendant, wholly or in part. But that rests only on references to allegations to that effect in the Subordinate Judges order on Execution Petition No. 154 of 1919 and Execution Appeal No. 194 of 1920 on which no finding was reached, and is not supported by any evidence taken, on the remand.
2. In fact, there is no indication that this matter was ever submitted to the lower, Court at the remand hearing or had been mentioned to the learned Judges, by whom the remand was ordered. Similarly, as regards the suggestion that some properties were for a time in the possession of the father of plaintiff and 2nd defendant after the institution of the suit. No other objection to the finding on the first issue remanded has been made. We, therefore, accept it.
3. On the second issue remanded, relating to plaintiffs share f the net profits received by 2nd defendant and to be accounted for by him from plaintiffs share of the lands, or rather from the lands assigned to the latter, we have been unable to ascertain and the learned Vakils concerned cannot say how the total found payable to plaintiff has been reached. We, therefore, can only, with the assistance of the materials now available, and accepted by the lower Court, indicate the lines on which the account must be taken. The 2nd defendant was in possession as manager of the family, until on the date of the plaint the joint family became divided and a tenancy-in-common replaced It, 2nd defendant continuing in possession as one of the co-tenants. It is, therefore, possible to say at once that he has from the date of plaint (22nd August 1895) been accountable for plaintiffs share of the produce of all the lands with the exception for the present of Survey Nos. 228-B (representing items Nos. 1 and 2), 233 (item No. 3) and items Nos. 4 to 6, because the special considerations applicable to these require separate treatment.
4. The question is, next whether plaintiff is entitled to interest on his share of the profits for each year from the time when 2nd defendant received it. As a co-owner in possession of the co-ownership property, he was, it may be conceded, a constructive trustee with reference to Section 94 of the Trusts Act and was subject to the same liabilities as a trustee with reference to Section 95. But it does not follow that he is liable for interest on the profits. For it has not been shown how a trustee can ordinarily be so liable in the absence of any breach of trust established against him in the special circumstances enumerated in Section 23. There is no imputation on 2nd defendants realization of profits as fraudulent or inefficient; and, when the suit might at any moment during the long period of its suspension have been resumed and it might have been necessary for 2nd defendant to produce the funds in his hand, we are not prepared to hold that he was bound by Section 20 to invest them. Authority is, as my learned brother has shown, against the duty of a trustee ordinarily to pay interest on profits. We accordingly cannot hold 2nd defendant liable for it, and, taking this view, we need not consider whether the learned Judges in holding him liable for profits, not mesne profits, in the order of remand, intended, as has been argued before us, to deal with the matter.
5. Of the mortgaged properties, Survey No. 233 (item No. 3) was subject to a simple mortgage and was, it has been found, throughout in 2nd defendants possession, Survey No. 228-B and item Nos. 4 to 6 were under usufructuary mortgage and returned to his possession only on his redeeming in 1908. The fact that he advanced the monies by which Survey No. 233 was retained under Order XXI, Rule 89 and by which the oth