Holding

The limitation period for a suit to recover trust property commences on the death of the settlor, and wrongful alienation or a deed of cancellation does not constitute a resignation of the trustee.

Summary

Muthammal, the absolute owner of certain lands, executed a deed of settlement in 1925 endowing the properties to a family temple and appointed herself as trustee for life. In 1930 she executed a registered deed of cancellation and later alienated the properties, selling them to the father of the appellants. After her death in 1960, the respondents (trustees) filed a suit in 1962 to recover possession of the properties. The principal issue was whether the suit was barred by limitation, and if so, whether the limitation period began from the settlor's death or from a deemed resignation caused by the cancellation deed and alienations. The Supreme Court held that the deed of cancellation was ineffective, the settlor remained a trustee despite wrongful alienation, and the limitation period under Art. 134B of the Limitation Act commenced on the date of her death, making the suit timely. Consequently, the appeal was dismissed.

Issues considered

Whether the suit for recovery of trust property is governed by Art. 134B of the Limitation Act (12 years from death of the settlor) or Art. 144 (adverse possession).
Whether the execution of a deed of cancellation and subsequent alienation by the settlor amounts to a deemed resignation as trustee, thereby starting the limitation period earlier.
Whether a trustee who wrongfully alienates trust property ceases to be a trustee.
Whether a deed of cancellation can effectively revoke a valid deed of settlement.

Legislation cited

Limitation Act, 1908s. Art. 134B, s. Art. 144

Subjects

trust lawlimitation perioddeed of settlementdeed of cancellationtrustee resignationwrongful alienationpublic religious institutioncivil procedure

Judgment

809

PERIA NACHI MUTHU GOUNDER AND ORS. A

v.
RAJA THEVAR (DEADJ AND ORS.
February 8, 1985
B
[V.D. TULZAPURKAR AND V. KHALID, JJ.J
Limitation Act, 1908, Art. f34 B-Creation of trust ofproperties endowed to
a diety by executing a Deed of Settlement-Revocation thereof by a registered i)eed
of Cancellation by Sett/or-Trust properties mortgaged and subsequently sold-
Wrongful alienation of trust properties 6ither partly or wholly by a Trustte does
not amount tO a deemtd resignation by the Tru.Jtee-Suit by heirs of the sett/or for c
recovery of alienated propertit.J-Limitation to commmce from the date of the
death of the s1tt/or--He_ld, suit within limit.tio11.

Muthammal, the abaolute owner of the suit properties, executed· a
Deed of Settlement dated May 17, 1'25 (fa. A-3) whereby she endowed
the suit properties to a temple of her family diety. She constituted herielf
as the first trustee for her life and after that, her hu!band and mother were D
to be the trustees and after their demise, the respondent!' heirs were to
be the trustees. Five years later i.e. on January 28, 1930, she purported to
cancel and revoke the trust (settlement), by getting the Deed of Cancella-
• tion registered. Thereafter, certain morta:aa:es were executed by her
in respect of the properties and later on the properties were sold by her to
the father of appellants No•. 1 and 2. She ~ied on October 7, 1960. The
respondents-plaintiffs, claiming to be the trustees of the endowment, filed E
a suit on August 29, 19f12 for possession of the properties challenging the
alienations that were made in favour of the appellants' father.

The appellants contested the suit and raised the plea of adverse
pOs'!'!ession and the suit being barred under Article 144 of the Act. Ibe trial
court held that the Deed of Settlement itself was not a genuine deed, but F
e1y·en if it were, the suit was barred under Article 144.

In the appeal by respondents-plaintiff, the Appellate Court held that
') Deed of Settlement was valid and genuine and in fact it effected a legal
endowment in favour of the diety, the original settler having disvested
herself of the ownership completely and con~equently the Deed of cancella..
tion was ineffective in law. rhe suit was regarded as one falling under G
Art. 134B of the Act and the suit having been filed within ,12 years from
the death of the settlor was held to be within time and the respond•nts-
Plaintiffs' suit was decreed.

In the second appeal filed by the appellant&, Ill• HitJ1 C9urt conftr·
med the first Appellate Court's decree.
H.
8H'J StlPRl!ME COURT RllPORTS (1985) 2 s.c.11.
t
A On appeal to this Court, the appellants, relying on the decision in r
Srinivas v. Ramaswami, [1966] 3 S.C R. 120, contended that there was a
resignation on the part of the settler as a Trustee and such resignation, if •
not overt and express, must bC deemed to have takeri place by reason of the
fact that she herself had executed and registered the Deed of Cancellation
(Ex.B-1) on January 21, 1930 and thereafter she had alienated the proper-
ties in favour of the appellants' father and she even left the village for
B quite a few years and since the suit was filed in the year 1962, long after
the expiry of 12 years from such deemed resignation, it was barred.

The respondents-plaintiffs, however, contended that there was no plea
of limitation spe(;ifically raised on the basis that there was any deemed
resignation on the part of the settler and as the parties did not lead any
evidence focussing their attention on this aspect of the matter and if there
c be some evidence vaguely or generally led by the parties on this aspect the
same should be ignored. A.lternatively, it was contended that even other-
wise by the mere execution of a Deed of Cancellation and indulgence in
alienations of properties by the settler in favour of the appel1ants' father
no deemed resignation should be implied for a wrongful Cancellation Deed,
and a wrongful alienation cannot affect her character as a trustee of
the properties under the Deed of Settlement which was complete and
D under which she had divested herself of the ownership of the properties
irretrevably. The starting point of limitation for the suit must be held
to be the date on which the settlor died.
Dismissing the appeal,
HELD : 1. Limitation in the instant case, will have to be regarded
as having commenced on the date of the death of the settler and the
E respondents-plaintiffs' suit would be within time. [814E]

2. Where a trustee wrongfully alienates some trust property and
even if the entire trust property is alienated, he cloes not cease to be a
trustee. By wrongfully executing a Deed of Cancellation the settler cannot
effectively revoke the settlement and if such settler happens to be the
trustee he shall continue to be the trustee of the settlement. [813 B-F]
F
In the instant case, there is a clear finding recorded by the first
Appellate Court, and the High Court that the Deed of Settlement dated
May 17, 192S was valid and complete in all respects whereunder the sett-
ler bad divested herself of the properties which she had endowed to the

G
temple, and both the Cancellation Deed as well as the alienations were
ineffective and wrongful and, therefore, it could not be said that by indulg-
ing in these acts she had resigned her position as a trustee of the endow-
\
\
.
ment. [813 F-G]

(3) · The fact that the settlor had left the village for a few years is
neither here nor there. The facts regarding performing of Puja of the
diety in the temple by some other persons -and contribution towards the
H expenses of the temple by some devotees are really equivocal and would
not be conclusive of the matter on the point of the settler having resigned
_inasmuch as the temple which was a village temple was alread~ in existence,
P.N. Mtl11ro v. RAJU mEVAR (Tu!zapurkar, J.) Sit

to which only properties bad been endowed and the temple was a public A
religious institution to which the endowment had been made and as such
the fact that certain expense,s of the temple were contributed by devotees
or members of the public would bar dly be indicative of the fact that the
settlor bad resigned from the position as a trustee qua the endowed pro~
perty. Similar, would be the position with regard to the fact that some
persons were performing the Puja which \vould not be unnatural in the case
of a public religious institution. [813H; 814A-C] Il
There could conceivably be a deemed resignation or a deemed remo-
val but for inferring the same some additional facts would be required to
be proved. The facts on which reliance had been placed by the appe Uants
by themselves are insufficient to warrant the inference that there was a
deemed resignation. [814C·D]
c
SrinNas v. Ramaswam , [1966] 3 S.C.R. 120, referred to.

CIVIL APPBLL.\TB JURISDICTION : Civil Appeal No. 1517 of
1971.

From the Judgment and Order dated 8-2-71 of the High Court
D
of Judicature at Madras in S. A. No. 887 /66.

K. Ram Kumar and Mrs. J. Ramachandran for the Appellants.

K. S. Ramamurthi and M. K. D. Namboodri for the Respon·
• dents . E

The Judgment of the Court was delivered by

TULZAPURKAR, J. The only quostion that arises for consi-
deration in this Appeal is whether the Respondents-Plaintiffs' suit
was barred by Limitation under Art. 134-B of the Limitation Act. F
J
'
One Muthammal, who was the absolute owner or the suit
properties executed a deed of settlement dated 17th May 1925 (Ex.
A3) whereby she endowed the suit properties to a temple in the
r ) village, the diety therein being her family diety. She constituted her
/ self as the first Trustee for her life and after that her husband and G
mother were to be the trustees and after their demise, respondent's
heirs were to be the trustees. Five years later, i.e. on 21st January
!930, she purported to cancel and revoke the trust (settlement), by
getting the Deed of Cancellation registered. Thereafter certain
mortgages were executed by her in respect of the properties and later
on the properties were sold by her to the father of the appellants
Nos. 1 and 2. She died on 7th Octobhr 1960. The plaintiffs claiming
u
812 SUPRBME doURt RePORts [!985] 2 s.c.lt.
I
A to · be the . trustees of the endowment, filed a suit on ....
22-8-1962, claiming possession of the properties challenging the
alienations that were made in favour of the appellants' father. The •
appellants raised a plea of adverse possession and the suit being
barred under Art. 144 of the Limitation Act. On merits the Trial
Court came to the conclusion that the deed of settlement itself was
.B not a genuine deed, but even if it were, the suit which had been·
filed on 22nd August 1962 was barred under Act 144. When the
matter was taken in appeal, the Appellate Court took the view that
the deed of settlement was valid and genuine and in fact it effected
a legal endowment in favour of the diety, the original settlor having
divested herself of the ownership completely. In other words, the
c deed of c~nce!lation was in effective in law. The suit was regarded
as one falling under Art. 134 B of the Limitation Act and since the
suit had been filed thin 12 years from the death of the settlor,
Muthammal, it was held to be within time, and the plaintiffs' suit
was decreed. The' appellants appealed to the High Court and in
D
Second Appeal, the High Court confirmed the first Appellate Courts
decree. That is how the appellants have come up in appeal to this
Court.

Though initially the parties were at variance on the question
as to whether it was Art. I 44 or Art. 134 B of the Limitation
Act, 1908 that was applicable to the suit, in the High Court at the
stage of the second appeal it was common ground that the suit was
governed by Art. 134 B. Before us also counsel for both the paries
agreed that the suit would be governed by Art I 34 B but a question
raised was as to when did the period of 12 years under that Art.
commence ? Whether it commenced from the date of the death of
the settlor or her deemed resignation as a trustee ?
F x•
Counsel for the appellants conceded before us that if the period
for the suit is regarded as commencing from the death of Mutham-
mal which occurred on 7-10-1960 the suit would obviously be within
time but he contended that there was a resignation on the part of , ,
Muthammal as a Trustee and such resignation, if not overt and
G express, must be deemed to have taken place by reason of the fact
that she herself had executed and registered the Deed of Cancellation
(Ex. B-1) on 21-1-1930 and thereafter she had alienated the proper- '"'
ties in favour of the appellants' father and she even left the vill.igo
for quite a few years. And since the suit which was filed in the year
!962 was filed long after the expiry of 12 yeaJIS from such deemed
.1\ . resignation it was barred. In this behalf counsel re.lied ·upon a
i>.N. Mi:JTBU v. RAJu THEVAll (Tulzapurkar, J.) 81~

decision of this Court in Srinivas v. Ramaswami,(1) where a view A
has been taken that deemed resignation or deemed removal of the
prior manager could be the commencement or the starting point of
limitation. On the other hand counsel for the respondents-plaintiffs
urged that there was no plea of limi ta ti on specifically raised on the
basis that there was any deemed resignation on the part of Mutha-
mmal and, therefore, parties did not lead any evidence focusing B
their attention on this aspect of the·matter and even if there be some
evidence vaguely or generally led by the parties on this aspect the
same should be ignored, for in the absence of a plea being raised in
that behalf such evidence has to be ignored and would be of no
avail. Alternatively counsel for the respondents plaintiffs contended
that even otherwise by the mere execution of a Deed of Cancellation c
and indulgence in alienations of propetties by Mutbammal in favour
of the appellants' father no deemed resignation should be implied
for a wrongful cancellation deed and a wrongful alienation cannot
affect her character as a trustee of the properties under the Deed of
Settlement which was complete and under which she bad divested
herself of the ownership of the properties irretrievably; therefore the D
starting point of limitation for the suit must be held to be the date on
which Muthammal died.
It can not be disputed that where a trustee wrongfully alienates
some trust property, and for that matter even if the entire trust
property is alienated he does not cease to be a trustee. On parity of E
•
reasoning it stands to reason •!lat by wrongfully executing a Deed of
Cancellation the settlor cannot affectively revoke the settlement and
if such settlor happens to be the trustee be shall continue to be the
trustee of the settlement. In the instant case there is a clear finding
recorded by the first appellate court and the High Court that a Deed
of Settlement dated 17th May 1925 was valid and complete in all F
respects whereunder Mutbammal had divested herself of the
.> properties which she had endowed to the temple and both the can
cellation Deed as well as the alienations were ineffective and
wroagful and therefore, it could not be said that by indulging in
these acts she had resigned her position as a trustee of the endow-
'/ ment, One more aspect was relied upon by the counsel for the
appellants that Muthammal had left the village for quite a few years G
and that there was evidence to show that the Puja of the diety in the
temple was done by some other person and even some devotees had
contPibuted to the expenses of the temple. The fact tliat the Mutha-
mmal had left the village for few years is neither here not there. And

(I) [1966] 3 S.C.R.120.
H
l!i4 stJi>tulMB couRt RBP<iRts (1985] 2 s.c.R.

the other two aspects, in our view, are reclly equivocal and would not I
'Y
be conclusive of the matter on the point of Muthammal having resign-
ed inasmuch as the temple which was a village temple was already in •
existence to which only properties had been endowed by Muthammal
and the temple was a public rdigious institution to which the endow·
ment had been made by Muthummal and as such the fact that
n certain expenses of the temple were contributed by devotees or
members of the public would hardly be indicative of the fact that
Muthammal bad resigned from the position as a turstee qua the
endowed property in question Similar would be the position with
regard to the fact that some persons were performing the Puja which
would not be unnatural in the case of a public religious institution.
c It is true, as has been observed by this Court in· Srinivas's case
(supra) that there could conceivably be a deemed resignation or a
deemed removal but for that purpose some aditional facts would be
required to be proved. In our view the aforesaid facts on which
reliance has been placed by counsel for the appellants by t!iemselves
are insufficient to warrant tho inference that there was deemed
D
resignation on her part.

Having regard to the above discussion we are clearly of the
view that in the instant case limitation will have tci be 1egarded as
having comenced on the date of the death ·of Muthammal and the
respondents-plaintiffs suit would be within time.
E
As a last attempt counsel for the appellants made a faint
request that if the materials were insufficient an opportunity should
be given to the appellants to lead evidence on that aspect of the
matter and the matter should be remanded back to the Trial Court.
r We do not think that at this distance of time we could consider this
request favourably especially when there was no specific plea raised
by the appellants in the written statement based on this aspect of the
matter.
In the result we confirm the decisions of the first appellate
court and the High Court. The appeal is dismissed. No costs. ·
G \ '•

A. P. J. Appeal dismissed. ·