Mr. c

Tht Advocate- Geiieral of Madras

Sinha J.

M'!Y B.

SUPREME COURT REPORTS [1957]

with clients who have to trust their legal advisers with moneys in the course of their fiduciary relationship.

These protracted proceedings against the appellant leading up to the summons under rule 30 of Order IV of the Supreme Court Rules have ended in the removal of the appellant's name from the roll of advocates of the High Court and of this Court, but only after the complainant has lost his good money.

It is clear, therefore, that the continuance of the appellant in the legal profession is a serious menace to the profession itself, which requires a high degree of integrity of character and sense of responsibility in which the appellant has been found singularly lacking.

In view of these considerations, the appeal must be dismissed and the rule made absolute with the result that the appellant's name shall stand removed from the roll of advocates of this Court.

Appeal dismissed.

BABULAL AMTHALAL MEHTA

THE COLLECTOR OF CUSTOMS, CALCUTTA

(S. R. DAS C.J., JAFER IMAM, s. K. DAS,

GovINDA MENON and A. K. SARKAR JJ.)

Sea Customs-Goods sei%ed in reasonable belief that they are 1muggled goods-Burden of proof-If violative of equal protection of law-Sea Customs Act (VII of 1878), as amended by Amending Act (XX! of 1955), 1. 178-A-Constitution of India, Art. 14.

Section 178-A of the Sea Customs Act which places the burden of proving that any of the goods mentioned in the section and reasonably believed to smuggled are not really so on the person from whose p:>ssession they arc seized, is not discrimin2tive in character and does not violate equal protcCtion of law guaranteed by Art. 14 of the Constitution.

Budhan Chaudhury and Others v. The State of Bihar, (1955) I S.C.R. 1045, applied.

Purushottam Govindji Halai v. Shri B. M. Desai, (1955) 2 S.C.R. 889 and A. Thangal Kunju Musaliar v. M. Venkitachalam Potti and another (1955) 2 S.C.R. 1196, referred to.

1 ...

William N. McFerland v. American Sugar Refining Co., (1916) 241 U.S. 79, W. D. Manley v. State of Georgia, (1929) 279 U.S. 1 and Tot v. United States, (1943) 319 U.S. 463, held inapplicable.

Consequently, in a case where the Collector of Customs on the failure of a person, from whose possession certain diamond pieces were seized, to prove that they were not. smuggled goods but were legally imported into India, confiscated the diamonds under ss. 167(8) and 167(39) of the Sea Customs Act, no violation of the fundamental right conferred by Art. 14 of .. the Constitution occurred.

ORIGINAL JuRISDICTION : Petition No. 98 of 1956.

Petition under Article 32 of the Constitution of India for enforcement of fundamental rights.

N. C. Chatterjee and S. C. Majumdar, for the petitioner. P. A. Mehta, R. Ganapathy Iyer and R. H. Dhebar, for the respondents Nos. 1, 2, 3 and 5 .

1957. May 8. The Judgment of the Court was delivered by ·

Babula! Amlhalol

.llehta

The Co/lerlor of Customs, Caku1111

GoVINDA MENON, J.-This application under Art. 32 Go,.indaMmonJ. of the Constitution raises the question of the constitutionality of s. 178-A, inserted in the Sea Customs Act, (VIII of 1878), s. 14 of the Amending Act XXI of 1955, and the chief ground on which it is sought to be struck down is that it offends Art. 14 of the Constitution. From the affidavits of both the parties to which there are annexures the following facts emerge : The petitioner carries on business as a broker in diamonds and precious stones in Calcutta and, according to him, he enjoys credit and reputation in the market as a well-known and respectable broker of such goods. On May 4, 1955, the Rummaging Inspector (Intelligence), Customs House, Culcutta, Respondent No. 3, armed with a search warrant from the Chief Presidency Magistrate, Calcutta, Respondent No. 4, searched the residential room of the petitioner, situated at No. 32, Sir Hariram Goenka Street, Calcutta, and after a minute search of the steel almirah in which according to the statement of the petitioner, he used to keep his stock in trade and finding none there questioned him as to where he had secreted the diamonds to which the

Babula[ Amihalal

Mehta

Tht Collector of Cw toms, Calcutta

Govinda Menon J.

reply given by him was in the negative. Thereupon a wall almirah, wherein washed clothes, and other articles were stored, was searched and therein in an old jacket 475 pieces of diamonds were discovered along with one piece of synthetic stone. A statement signed by him was taken from which we find that his explanation for the possession was that Rs. 10,000/- worth of diamonds were received by him from M/s. Ratilal Amritlal, of 89 Zaveri Bazar, Bombay, and the rest were purchased locally in Calcutta.

He did not remember the names and address of the parties from whom the local purchases were made, nor did ht have in his possession any documents covering the purchase.

Thereafter the Rummaging Inspector escorted the petitioner to the Customs House where the Assistant Collector, Customs, asked him to produce evidence showing that the goods were not smuggled goods hut were legally imported on payment of duty.

The Assistant Collector then permitted the petitioner to go and gave him time 'till May 7, 1955, to produce evidence showing that the goods were imported on payment of customs duty and under a valid import licence. On the same day, i.e., May 4, 1955, a notice was served on the pel'itioner by the Customs authorities stating that there were reasonable grounds to believe that the goods seized by the Rummaging Inspector had been illegally imported into India and, therefore, before further action was taken under ss. 167(8) and 167(39) of the Sea Customs Act, the petitioner should submit by May 7, 1955, any documents which might he in his possession showing that the goods in question were legally imported into India on payment of proper Customs duty and on production of a valid import trade control licence. It is also stated that if the goods were not imported by the petitioner, but were brought from another party he should submit by the same date any evidence in his possession showing the purchase of the goods. In answer to this, on behalf of the petitioner, Messrs. S. K. Sawdav and Company, a firm of Advocates, Calcutta, wrote

0 to the Assistant Collector, Customs, on May 7, 1955, reciting the circumstances under which the petitioner came to

be in possession of the seized articles alleging that in the circumstances the presumption of an offence having been committed in contravention of s. 86 of the Sea Customs Act attracting a punishment under s. 167(39) of the Sea Customs Act was unwarranted and requested to be furnished with a statement of the reasons for the seizure as soon as possible. The letter went on to request for ten days' time for . procuring and producing certificates etc., from the Bombay trade and Calcutta trade about the authenticity of the petitioner's business and also how he came to be in possession of the goods.

Another letter was written by the same firm of Advocates on May 9, 1955, the details of which it is unnecessary to refer. On May 16, 1955, a further letter was written enclosing two , certificates and containing further particulars.

This also reiterated the request for the supply of specific reasons for the seizure. On May 23, 1955, the Assistant Collector replied to the Advocates informing them that the diamonds in question were seized on reasonable suspicions that the same had been imported into India illegally and as such were liable to seizure under the Sea Customs Act.

Further correspondence followed by a letter dated June 20, 1955, to which there was a reply on June 25, 1955, wherein there was a detailed reference to everything that had taken place till then and especially with regard to the earlier denial of the petitioner about there being any diamonds with him and the discovery of the same later on in a used jacket in a wall almirah. This is a comprehensive letter containing the justification for the proceedings taken by the search officers and finally the Assistant Collector observed that if the petitioner failed to submit a written explanation in time or did not appear before him when the case was fixed for hearing, the case would have to be decided on the basis of the evidence on the record without any further notice.

On July 1, 1955, Messrs. S. K. Sawday & Company wrote a further letter on behalf of the petitioner reiterating their objections and showing why action should not be taken. This was followed by letters dated July 4 and 20, 1955. A personal hearing was. granted on July 21, 1955, followed by a letter from the Advocates 5-81 S.C. India/59

Babula! Amtha/al Mehta v.

The Colkctor of Customs, Calcutta

Govinda Menon J.

Ba!ulal Amlhai.l

MehltJ ...

The Colkctor of Cwtoms. Calcutlo

Goriinda Merwn J.

dated July 22, 1955. It is unnecessary for the present to elaborate the contents of these letters or to refer to the statement enclosed therewith from M/ s.

Ratilal Amritlal, Bombay .

The Collector of Customs thereupon, after considering the entire matter placed before him, passed an order dated September 12, 1955, which was despatched on November 5, 1955, containing an elaborate discussion of the various facts and circumstances and finally concluding that since the petitioner had failed to discharge the onus under s. 178-A of the Sea Customs Act in respect of the diamonds seized on May 4, 1955, orders had been passed confiscating the same under ss. 167(8) and 167(39) of the Sea Customs Act and that the confiscation would be absolute in terms of the provisions of ss. 3(2) and 4 of the Imports and Exports (Control) Act, 1947. The reasons given in the above order were that the subsequent statements were contrary to what had been stated in the first instance, that at the time of the raid, an attempt was made to. hide the diamonds in a suspicious manner and lastly that the petitioner was making statements which were in the nature of an afterthought, and not supported by facts.

On account of these and other reasons the Collector was of the opinion that the presumption under s. 178-A had not been rebutted. The order stated that an appeal against it lay to the Central Board of Revenue within three months of the date of the despatch and also contained information as to the court-fee stamps etc., which would have to be affixe_d.

Without availing himself of that remedy the petitioner has come up to this Court by way of an application for a writ under Art. 32 of the Constitution.

Though Mr.

Chatterjee faintly argued tpat the provisions of Art. 19(1)(f) and (g) and Art. 31 of the Constitution had been violated. he did not seriomlv

press those contentions. The main point of the attack was centered on the contention that s. 178-A was violative of the principles of equal protection of the laws guaranteed under Art. 14 of the Constitution.

Before we discuss the validity of s. 178-A, it would be . useful to consider the circumstances which led to

: ~

the enactment of that statutory provision and for that purpose a brief outline of t.1.e relevant sections of the Act would be necessary.

Section 19 of the Sea Customs Act, 1878, enables the Central Government by Notification in . the official Gazette to prohibit or restrict importation or exportation of goods into or out of India, and s. 20 enumerates the dutiable goods. When any person imports goods into India, the owner of such goods is required, after the delivery of the manifest by the master of the vessel in which they are imported, to make an entry of the goods for home consumption or warehousing by delivering to the Customs-collector a bill of entry containing particulars which shall correspond with the particulars given of the same goods in the manifest of the ship (s. 86). This is intended to give an idea to the Custoinscollector as to whether what the owner claims is different or the same as what the master of the vessel has intimated by the delivery of the manifest. On the delivery of such a bill, if any duty is payable on such goods, the same shall be assessed and it is only after payment of the duty so assessed that the owner may proceed to .clear the same (s. 87). Clearance of the goods after the payment of such duty is provided in s. 89 and if everything has been done according to law, the owner can take away the goods.

C!upter XVI deals with offences and penalties and s. 16/' of the same Chapter contains three columns in a schedule, the first of which mentions the offence, the second, which does not have the force of law, gives the section of the Act to which the offence has reference and the third lays down the penalty which may be imposed. \:Vith regard to the third column a distinction has to be rnade between the penalty to be imposed by the customs authorities and the punishment that can be imposed by a court of law for the infringement of certain provisions.

Offences mentioned in entries Nos. 26, 72 and 74 to 76 (both inclusive) have. reference to prosecution :md conviction before a Magistrate, whereas most of the others concern penalties imposed by the Customs authorities: This distinction will be important when referring to s. 182. We are in this

Babula/ Amlho/a/

Mehla

Thi Collettor of Ciutams, Cakutl•

rind11 Mmon J.

Ba!ulal AmlhalaJ

Mehta

"· The Collector of Customs, Calattta

Goouida Menon J.

case concerned with entries Nos. 8 and 39. The penalty of confiscation is provided in the third column of entry No. 8, if any goods, the importation or exportation of which is prohibited or restricted, are imported contrary to such prohibition or restriction. It lays down that in addition to the confiscation of the goods, the persons concerned shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees. This Court has held that the minimum is the alternative: see Maqbool Hussain v.

The State of Bombay( 1). Entry No. 39 also provides for a penalty not exceeding Rs. 500 and the confiscation of the goods if they are taken or passed out of any custom.house or wharf without an entry duly made.

Smuggled goods when traced and seized come under this category. Though the word 'smuggling' is not defined in the Act, it must be understood as having the ordinary dictionary meaning namely carrying of goods clandestinely into a colmtry.

Chapter XVII relates to searches and recovery of smuggled goods, as well as offences, appeals, etc.

Section 169 gives power to any customs officer, duly employed in the prevention of smuggling, to search anv person on board of any vessel in any part in (India) or any person who has landed from any vessel, provided that such officer has reason to believe that such person has dutiable or prohibited goods secreted about his person. A safeguard is provided under s. 170 by which any person about to be searched may require the said officer to take him, previous to search, before the nearest Magistrate or Customs-collector. The important factor in this case is that the person making the search or attempting to do it must have a reason to believe that such person has dutiable or prohibitecl goods. These two sections refer to the time at which a person brings dutiable goods into India but the later provisiom of the Chapter lay down the procedure to be followed where goods have been smuggled without being detected at the port or the wharf. Power to issue search warrants is given to any Magistrate under s. 172 which is to the following effect :

{I) [1953) S. C.R. 730,742. f

"Any Magistrate may, on application by a Customs-collector, stating his belief that dutiable or prohibited goods (or any documents relating to such goods) are secreted in any place within the local limits of the jurisdiction of such Magistrate, issue a warrant to search for such goods (or documents).

Such warrant shall be executed in the same way and shall have the same effect, as a search-warrant issued under the law .relating to Criminal Procedure".

The warrant, as will be noticed, may be issued only on the application of a Customs-collector who is a responsible senior officer and that is certainly a safeguard against indiscriminate issue of search warrants.

Section 178 speaks of the seizure of goods liable to confiscation in any place either upon land or water by any officer of customs or any other person duly employed for the pre•ention of smuggling.

The impugned s. 178-A comes next which is quoted below :

"178-A(l) : Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be . on the person from whose possession the goods were seized.

(2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigarettes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf."

The presumption under s. 178-A is equally applicable to seizure as a result of a search warrant under s. 172 or seizure made under s. 178. How the things seized are to be dealt with can be seen from s. 179, and s. 181 lays down that when a seizure or arrest is made, a statement in writing of the reasons therefor should be given to the person who is arrested or from whom goods are seized. When an article is seized under ss. 172 and 178, except in cases falling under entries Nos. 26, 72 and 74 to 76 of s. 167, the confiscation or penalty or duty may be adjudged by the officer mentioned therein, i.e., the person from whom the articles are seized 1s entitled to an adjudication

Babu/al AmJha/al Mehta v The Collector of Customs, Cai."utta

Govinda Menon J.

Bobola! .ilmlMI•

M1Ala

v The Coll1ct1r of Cutuns. Cakulta

GeuindtJ Menon.].

. ,/

regarding either confiscation or penalty or duty.

This gives the valuable right of having the adjudication of the claim made by a superior officer, and despite such adjudication if the confiscation is still made, under s. 188 an appeal lies from the subordinate to the Chief Customs-authority within three months from the date of such a decision.

In the present case the confiscation was made by the Collector of Customs and an appeal lay from him to the Central Board of Revenue.

Section 191 enables the Central Government on the application of any person aggrieved by any decision or order passed under this Act by an officer of Customs or Chief Customs-authority and from which no appeal lies, to reverse or modify such decision or order. The outline of the various provisions above made shows that successive remedies are provided to an aggrieved person from whom articles have been seized and confiscated and the Act is a complete Code in itself affording redress and relief m case of illegal or unjustified orders.

The genesis of s. 178-A may now be considered.

The Central Government had appointed a commission known as the Taxation Enquiry Commission which by its report recommended the adoption of the principles underlying s. 178-A in order to minimize smuggling. In Vol. II of their report, Chapter VII

deals with administrative problems in regard to customs and Excise duties. At pp. 320 and 321 the Committee recommends the amendment of the Sea Customs Act, firstly to •. make smuggling a criminal offence and secondly empowering Customs officers to search premises etc. and the third recommendation is the one with which we are concerned. It is in the following terms :

"To transfer the onus of proof in respect of offences relating to smuggling to the person in whose possession any dutiable, restricted or prohibited goods are found." It is to implement this recommendation that s. 178-A has been enacted.

Section

178-A applies to diamonds and other precious stones and there has been no dispute about : .

the application of this provision to the present case.

On the facts mentioned above it is clear that the seizure has been under the Act in the reasonable belief of the Customs authorities that they are smuggled goods and, therefore, the burden of proving that they are not smuggled goods has been cast by this section on the persons from whose possession the goods are seized.

No doubt the content and import of the section are very wide. It applies not only to the actual smuggler from whose possession the goods are seized but also to those who came into possession of the goods after having purchased the same after the same has passed through many hands or agencies.

For example, if the Customs authorities have a reasonable beilef that certain goods in the possession of an innocent party are smuggled goods and the same is seized under the provisions of this Act, then the person from whose possession the goods were seized, however innocent he may be, has to prove that the goods are not smuggled articles. This is no doubt a very heavy and onerous duty cast on an innocent possessor who, for aught one knows, may have bona fide paid adequate consideration for the purchase of the articles without knowing that the same has been smuggled. The only pre-requisite for the application of the section is the subjectivity of the Customs-officer in having a reasonable belief that the goods are smuggled.

A careful examination of the contents of the' somewhat lengthy petition under Art. 32 of the Constitution does not show how the impugned section offends Art. 14, and no distinct and separate ground is taken about its unconstitutionality, but Mr.

Chatterjee argues that the burden of proof enunciated therein is opposed to fundamental principles of natural justice as it gives an unrestricted arbitrary and naked powe; to the customs authorities without laying down any standard O( norm to be followed for exercising powers uader the section. What is urged is that whereas

nder he. ordinary law the burden of proof in matters like this 1s on the party who sets up a particular case under the section that process is inverted and th~

Babula/ Amlholol

Mehta

The Collector of Customs, Calcutlo

Govinda Minon ].

Babula! Amthalal

Mehta

The Collector of Customs, Calcutta

Govinda Menon J.

burden is cast on the possessor of the article to show that it was imported into India with a prope1 bill of entry and after paying the proper custom duty due.

As stated already, it is a heavy burden to be laid upon the shoulders of an innocent purchaser who might have come into possession after the article has changed many hands and this, it is alleged, invokes discrimination between him and other litigants and deprives him of the equal protection of the law guaranteed by Art. 14 of the Constitution. A large number of cases have been cited at the Bar in support of. the. respective contentions of the parties.

The true nature, scope and effect of Art. 14 of the Constitution have been explained by different constitutional Benches of this Coun in a number of cases, namely, Chiranjit Lal Chowdhury v. The Union of India and Others(1 ), The State of Bombay and Another

v. F. N. Balsara('), The State of West Bengal v. Anwar Ali Sarkar('), Kathi Raning Rawat v.

The State of Saurashtra( 4 ), Lachmandas-Kewalram Ahuja and Another

v. The State of Bombay('), Syed Qasim Razvi v. The State of Hyderabad and Others('), Habeeb Mohammad

v. The State of Hyderabad(') and V. M. Syed Mohammed and Company v. The State of A11dhra(8 ), but it will not be necessary for us to enter upon a lengthy discussion of the matter or to refer to passages in those judgments, for the principles underlying the provisions of the Article have been summarised by a Full Bench of this Court in Bttd!ian Chaudhury and Others v. The State of Bihar(9) in the following terms :

"It is now well established that while Art. 14 forbids class legislation, it does not forbid reasonable cbssification for the purposes of legislation.

In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that

(1) [1950] S.C.R. HGg.

(2) [•951] S.C.R. GB,, (:l) [19,; o] S.C.R. "84. (.f) [19;,2] S.C.R. 435.

(9) (19'\5)

(5) [•952] S.C.R. 710

(6) [1953] S.C.R. 591

() [19;3] S.C.R. 661

(8) (1954] S.C.R. rn7

1 s.c.R. IO-J.5 at P. 1048-1049.

are grouped together from others left out of the group and (ii) that that differentia must have a rational' relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases, namely, geographical or according. to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Art. 14 condemns discrimination not only by a substantive law but also by a law of procedure."

The principle thus enunciated has been adopted . and applied by this Court in Purshottam Govindji Halai v. Shri B. M. Desai(1) and in A. Thangal Kunju Musaliar v.

M. Venkitachalam Patti and another(2).

Mr. N. C. Chatterjee appearing for the petitioner has referred us to several decisions of the Supreme Court of America, such as William N. McFerland v. American .Sugar Refining Co.( 3 ), W. D. Manley v.

State of Ceorgia(4) and Tot v. United States(•). It appears to us that these decisions really turn upon the due process clause of the American Federal Constitution and cannot help in the construction of the equal protection clause of our Constitution. The contentions urged by Mr. Chatterjee as to the unconstitutionality of s. 178-A of the Sea Customs Act, 1878, will, therefore, have to be tested in the light of the principles laid down by this Court in Budhan Chowdhury's case (supra).

A cursory perusal of s. 178-A will at once disclose the well defined classification of goods based on an intelligible differentia.

It applies only to certain goods described in sub-s. (2) which are or can . be easily smuggled. The section applies only to those . goods of the specified kind which have been seized under the Act and in the reasonable belief that . they are

(1) [1955] 2 S. C R. 889, 8g8·899.

(2) [1955] 2 S. C R 119~. 12296.

(3) (1916) 241 U S 79; 60 L. Ed. 899.

(4) (1929) 279 U.S. 1; 73 L. Ed 575.

(5) (1943) 319 U.S. 463; 87 L. Ed. 1519.

Babula/ Amthalal

Mehl a v.

The Col/:clor of Customs. Ca/£utta

Govinda Menon J.

Babu/al .Amlltalal

Metlio

T lu Collector of Customs, Cakutta

Ma7 IO.

smuggled goods. It is only those goods which answer the threefold description that come under the operation of the section. The object of the Act is to prevent smuggling. The differentia on the basis of which the goods have been classified and the presumption raised by the section obviously have - a rational relation t<> the object sought to be achieved by the Act. The presumption only attaches to goods of the description mentioned in the section and it directly furthers the object of the Act, namely, the prevention of smuggling, and that being the position the impugned section is clearly within the principle enunciated above, not hit by Art. 14. The impugned section cannot be struck down on the infirmity either of discrimination or illegal classification.

Confining as it does to certain classes of goods seized by the customs authorities on the reasonable belief that they are smuggled goods, there is only a presumption which can be rebutted.

In these circumstances, there can be no doubt whatever that s. 178-A does not offend Art. 14 of the

Constitmion and this petition 1s, therefore, to be dismissed with costs.

Petition dismissed.

MENAKURU DASARATHARAMI REDD!

ti.

DUDDUKURU SUBBA RAO

(S. R.

DAS C.J., fAFER

IMAM,

GAJENDRACADKAR and A. K. SARKAR JJ.)

Hindu [Aw-Charitable Endowment-Compromise decree- Corutruction-Trust or charge-Intention of the donor-Test.

A Hindu father executed a registered deed of trust giviug away his properties to public charities and appointed himself and two others as trustees.

The .son in assertion by his right to a moiety share therein started to alienate them.

There was litigation between the trustees and the son which ultimately ended in a compromise decree for .partition bet\\een the father and the !'011, the two other trustees having retired pending litigation.

A ftei

the death of both the father and the son a suit was brought under ~~

Geiieral

Mr. c

Tht Advocate- Geiieral of Madras

Sinha J.

M'!Y B.

with clients who have to trust their legal advisers with moneys in the course of their fiduciary relationship.

Madras

Order IV of the Supreme Court Rules

BABULAL AMTHALAL MEHTA

THE COLLECTOR OF CUSTOMS, CALCUTTA

S. R. DAS C.J.

JAFER IMAM

GovINDA MENON

A. K. SARKAR JJ.

Constitution of India

Art. 14

Section 178

Customs Act

Art. 14

(1955) 2 S.C.R. 889

(1955) 2 S.C.R. 1196

S. 79

S. 1

S. 463

India

ss. 167(8) and 167(39)

Customs Act

Art. 14

Article 32

Constitution of India

N. C. Chatterjee

S. C. Majumdar

P. A. Mehta

R. Ganapathy Iyer

R. H. Dhebar

Babula! Amlhalol

.llehta

GoVINDA MENON

Art. 32

s. 178

Customs Act

s. 14

Amending Act XXI of 1955

Art. 14

Calcutta

May 4, 1955

Chief Presidency Magistrate, Calcutta

Babula[ Amihalal

Mehta

Govinda Menon

Ratilal Amritlal

Bombay

May 7, 1955

ss. 167(8) and 167(39)

Customs Act

S. K. Sawdav and Company

s. 86

Customs Act

s. 167(39)

Customs Act

May 9, 1955

May 16, 1955

May 23, 1955

Customs Act

June 20, 1955

June 25, 1955

July 1, 1955

S. K. Sawday & Company

July 4 and 20, 1955

July 21, 1955

Ba!ulal Amlhai.l

MehltJ

Colkctor of Cwtoms. Calcutlo

Goriinda Merwn

s. 178

Customs Act

ss. 167(8) and 167(39)

Customs Act

ss. 3(2) and 4

s. 178

Art. 32

Chatterjee

Art. 19(1)(f)

Art. 31

s. 178

Art. 14

s. 178

Section 19

Sea Customs Act, 1878

Central Government

s. 20

s. 86

s. 87

s. 89

s. 16

s. 182

Mmon

Section 169

s. 170

s. 172

Section 178

s. 178

s. 178

s. 172

s. 178

s. 179

s. 181

ss. 172 and 178

s. 167

s. 188

Central Board of Revenue

Section 191

s. 178

s. 178

Customs Act

s. 178

Section

178

Art. 32

Art. 14

Art. 14

Art. 14

Art. 14

Art. 14

Purshottam Govindji

N. C. Chatterjee

Supreme Court of America

s. 178

Sea Customs Act, 1878

Budhan Chowdhury

s. 178

[1955] 2 S. C R. 889

[1955] 2 S. C R 119

S 79

S. 1

S. 463

Babula/ Amthalal

Mehl

Art. 14

s. 178

Art. 14

MENAKURU

DASARATHARAMI REDD

DUDDUKURU SUBBA RAO

R.

DAS C.J.

fAFER

IMAM

GAJENDRACADKAR


Babu/al .Amlltalal

Metlio

T lu Collector of Customs, Cakutta

Ma7 IO.

SUPREME COURT REPORTS

[1957J

smuggled goods. It is only those goods which answer the threefold description that come under the operation of the section. The object of the Act is to prevent smuggling. The differentia on the basis of which the goods have been classified and the presumption raised by the section obviously have - a rational relation t<> the object sought to be achieved by the Act. The presumption only attaches to goods of the description mentioned in the section and it directly furthers the object of the Act, namely, the prevention of smuggling, and that being the position the impugned section is clearly within the principle enunciated above, not hit by Art. 14. The impugned section cannot be struck down on the infirmity either of discrimination or illegal classification.

Confining as it does to certain classes of goods seized by the customs authorities on the reasonable belief that they are smuggled goods, there is only a presumption which can be rebutted.

In these circumstances, there can be no doubt whatever that s. 178-A does not offend Art. 14 of the

Constitmion and this petition 1s, therefore, to be dismissed with costs.

Petition dismissed.

MENAKURU DASARATHARAMI REDD!

ti.

DUDDUKURU SUBBA RAO

(S. R.

DAS C.J., fAFER

IMAM,

GAJENDRACADKAR and A. K. SARKAR JJ.)

Hindu [Aw-Charitable Endowment-Compromise decree- Corutruction-Trust or charge-Intention of the donor-Test.

A Hindu father executed a registered deed of trust giviug away his properties to public charities and appointed himself and two others as trustees.

The .son in assertion by his right to a moiety share therein started to alienate them.

There was litigation between the trustees and the son which ultimately ended in a compromise decree for .partition bet\\een the father and the !'011, the two other trustees having retired pending litigation.

A ftei

the death of both the father and the son a suit was brought under ~~

s. 92 of the Code of Civil Procedure for the framing of a scheme for the administration of the trust. The trial court held that the trust deed had been substituted by the compromise decree which itself created a trust and decreed the suit on that basis. On appeal by two of the defendants who were transferees in possession of some of the properties in suit, the High Court affirmed the decision of the trial court holding that the compromise decree created a trust for public charities in respect of the properties aJlotted to the third plaintiff, meaning the father.

The said defendants appealed to this Court.

The principal question for decision was one of construction of the compromise decree, whether it created a trust or a charge. The relevant terms of the compromise decree were as foJlows:-

"that as regards the aforesaid schedule property, the third plaintiff should be the 'sole trustee' tiJI his lifetime for the purpose of conducting the charities described in the trust deed, dated 17th March, 1919, and he should utilise the income derived therefrom for the charities according to the necessity and should enjoy the said property tiJI his lifetime without rights to gift, sale etc., therein ;

that after his death, the said entire property should pass on to his grandson Ramalingeswara Rao subject to the (performance of) the aforesaid kainkaryams (charities);

that if the third plaintiff should die before the expiry of the minority of the aforesaid Ramalingeswara Rao arrangement should be made fo have a guardian appointed through Court for the property made to pa.ss to the said Ramalingeswara- Rao, the said guatdian should take possession of th~ property and conduct the aforesaid charities and deliver possession of the same to the said Ramalingeswara Rao as soon as the minor attains majority ;

that, thereafter the said Ramalingeswara Rao should conduct the abovementioned charities and enjoy the properties :"

Held, that the courts below were in error in construing the compromise decree m the way they did and the appeal must succeed.

There can be no doubt from the terms of the compromise decree read as a whole that what was intended to be created was a charge and not a trust in respect of the properties allotted to the father which retained their private character.

The principles of Hindu Law applicable to questions relating to charitable trust are weJI settled.

Whether or not a dedication to charity is complete must depend on the intention of the donor which has to be gathered from the terms of the document in any particular case read as a whole. If the dedication is complete, a trust is created, if not, a charge follows.

The mere use of the word 'trust' or 'trustee' cannot by itself be conclusive as to the intention of the donor and the real test is whether private title

Mmakuru Dasaratharami Reddi

Duddukuru Subba RM

I957

Menakuru Dasara

tharami &ddi

Duddukuru Subba Rao

SUPREME COURT-REPORTS [1957]

over the property is sought to be extinguished by a complete transfer of it to the charity.

Maharani Hemanta Kuman' Debi v. Gauri Shankar Tewari,

(1940) L.R. 68 I.A. 53, fadu Nath Singh v. Thakur Sita Ramii,

(1917) L.R. 44 I.A. 187, Pande Har Narayan v. Suria Kumvari,

(1921) L.R. 48 I.A. 143, Sonotun Bysock v. Sreemuti fuggulsoondree Dossee, 8 Moo. L.A. 66 and Copa/ Lal Sett v. Purna Chanrlra Bosak. (1921) L.R. 49 I.A. 100, applied .

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 185 of 1952.

Appeal from the judgment and order dated December 15, 1948, of the Madras High Court in Appeal No. 155 of 1946 arising out of the decree dated October 27, 1945, in Original Suit No. 132 of 1944.

Alladi Kuppuswami and M. S. K. Sastri, for the appellants.

T. V. R. Tatachari and T. M. Sen, for respondent No. 4.

1957. May 10. The Judgment of the Court was delivered by

GajenJ, agadkar J.

GAJENDRAGADKAR J.-This is an appeal by defendants 47 and 48 and the principal question which is raised for our decision in the appeal is whether the properties in suit are the subject matter of public charitable trust or are merely burdened or charged with the obligation in favour of the specified charities.

The suit from which this appeal arises was filed with the sanction of the Collector under s. 92 of the Code of Civil Procedure and the plaintiffs alleged that the properties in suit were the subject-matter of a public charitable trust and that a scheme may be framed for the administration of the said trust.

The present appellants who are in possession of a substantial portion of the properties in suit as alienees have resisted this claim. They conceded that the properties in their hands were subject to the charge in favour of the charities but they denied that the said properties were the subject-matter of a charitable trust.

Several other pleas were made by the parties but the principal question in dispute between them was in regard to the character of the properties in suit.

Both the learned

\ .

trial judge and the High Court of Madras have upheld the plaintiff's plea. lt has been declared that the properties in question are trust properties and a direction has been issued that a scheme of management should be framed in respect of the trust with a view to carry out the charitable intentions of the settlor. It is this decree which is challenged before us by Mr. Alladi Kuppuswami on behalf of defendants 47 and 48 and his argument is that the view taken by the Courts below about the character of the properties is based upon a misconstruction of the decree in question.

In the plaint, it was alleged that one Purushottam had been earning and purchasing large properties and endowing and dedicating them for public charitable purpose since 1896.

In about 1919 Purushottam who had then become old wanted to place the charities which he had been till then personally administering on a permanent and enduring basis. That is why he executed and registered a deed of trust on March 17,

1919. By this document, a trust in respect of his properties was created and three trustees were appointed to administer the trust.

Purushottam himself was one of these trustees and two Advocates, Mr. Reballa Subbarayudu and Mr. C. Viswana1iha Rao, were his co-trustees. It would appear , that -Purushottam's son Ramakrishnayya did not approve of this arrangement and he began to obstruct the administration of the trust.

As a result of this obstructive attitude adopted by Ramakrishnayya, two suits had to be filed by the trustees against Ramakrishnayya and his associates who interfered with the management of the trust. These two suits were O.S. No. 599 of 1919 and O.S. No. 68 of 1920 on the files of the District'' Munsiff's Court, Kavali, and the District Court, Nellore, respectively.

They were subsequently transferred to the Sub-Court, Nellore, and numbered as O.S. No. 39 of 1921 and O.S. No. 67 of 1921 in the said Court.

Pending the hearing of these suits, the two advocatestrustees withdrew from the suits leaving the conduct of the suits solely in charge of Purushottam. Ultimately the two suits ended in a compromise. According to the plaint in the present suit out of the which this

Menakuru Dasara.. _tharami Rtddi

Duddu!curu Suhha Rao

Gajendragadkar J,

Menakuru Dasaratharami FUdJi

v Duddukuru Subba Rao

Gajendragadkar 7.

1126 SuPREME COURT REPORTS [1957]

appeal has arisen, this compromise decree was fraudulent and collusive the object of the parties being to efface the character of the trust properties completely and to create individual rights in Purushottam, his son Ramakrishnayya and the other defendents who claimed to be alienees from Ramakrishnayya. The plaint even alleged that, in persuading the Court to pass the said compromise decree, the parties effectively played fraud on the Court and the trust. Since the compromise was thus null and void, it cannot affect the original trust created by Purushottam in 1919.

That is why the plaint alleged that the properties mentioned in sch. A which were covered by the original deed ot trust of 1919 were trust properties and asked in substance for the framing of a scheme for the administration of the said trust.

At the date of this suit both Purushottam and his son Ramakrishnayya were dead.

Ramakrishnayya's son Ramalingeswara Rao was therefore impleaded as defendant No. I. A large number of defendants fod to be impleaded to the suit because the properties had been alienated both by Ramakrishnayya and Ramalingeswara Rao _to several purchasers.

Defendants 47 and 48 were two of such purchasers. On June 7, 1942, an agreement of sale by defendant No. 1 in favour of

defendants 47 and 48 was executed and a decree for specific performance was ultimately passed in their favour. It was then that defendants 47 and 48 were impleaded to this suit on January 3, 1944.

These defendants substantially adopted the defence raised by the other contesting defendants who were already on the record. The principal contention raised on their behalf was that the compromise decree was not fraudulent or collusive, that it represented a fair and bona fide familv settlement between Purushottam and his son

Rmakrishnayya and as such the decree was binding

aginst Purushottam and tbe trust alleged to have been created by him in 1919.

On the pleadings of the parties, the learned trial judge framed ten issues. He found that the suit was competent, that the compromise decree was not shown

. '

to be collusive or fraudulent and it was binding on the -'

( "

trust.

Even so, the said compromise decree itself created a trust in favour of public charities and in respect of the properties which had been allotted by the compromise decree to the share of Purushottam. It would be noticed that according to the plaint the trust for the administration of which a scheme was claimed by the plaintiffs was the trust created by Purushottam in 1919. Since the learned trial judge held that this trust deed had been effectively substituted . by the arrangement evidenced in the compromise decree, he proceeded to consider the effect of this compromise decree and since he thought that this compromise decree itself created a trust in substitution of the original trust of 1919 he proceeded to pass a decree in favour of the plaintiffs in respect of the substituted trust. This decree was passed on October 27, 1945. The matter was taken to the High Court of Madras by defendants 47 and 48.

On December 15, 1948, the appeal preferred by defendants 47 and 48 w:i.s dismissed and the decree passed by the trial Court w:is confirmed. The learned Judges of the High Court of Madras dealt substanfr11ly with the question of the construction of the compromise decree and, since they came to the conclusion that the said decree constitutrd a publi.c charitable trust in respect 'of the propertie~ assigned to the share of Purushottam, they saw no reason to interfere with the decree under appeal. Two other points were raised before the High Court. They were, whether the obligation arising out of the trust is annexed to the property that fell to the sh:ire of Purushottam under the compromise decree and whether the said decree was collusive and not binding on the trust. The High Court took the view that, since the compromise decree itself created a trust and it was possible to give relief to the plaintiffs on that view, it "vas not necessary to consider the said two points.

Defendants 47 and 48 then preferred the present appeal to this Court.

By our interlocutory judgment on March 30, 1955, we sent the case back to the High Court of Andhra with the direction that they should record their findings on the two additional points which were urged before them but on which they thought it

Menak""' Dasaralharami &ddi

Duddukuro Subba Rao

Gaj1ndragadkar ].

Mtnakuru Dasara~

tharami Reddi

Duddukuru Subba Rao

Gajendragadkat

unnecessary to make findings.

In pursuance of this interlocutory judgment, the High Court of Andhra to whom the proceedings were transferred owing to the creation of the new State of Andhra have now recorded their findings on the two issues in question. They have held that the obligation in question is annexed to the property that felt to the share of Purushottam under the compromise decree and they have found that the said compromise decree was not collusive and was binding on the trust.

That is how the principal question which we have to consider in the present appeal is the construction of the compromise decree in question.

The principles of Hindu Law applicable to the consideration of questions of dedication of property to charity are well settled. Dedication to charity need not necessarily be by instrument or grant. It can be established by cogent and satisfactory evidence of conduct of the parties and user of the property which show the extinction of the private secular character of the property and is complete dedication to charity.

On the other hand, in many cases Courts have to deal with grants or gifts showing dedication of property to charity. Now it is clear that dedication of a property to religious or charitable purposes may be either complete or partial. If the dedication is complete, a trust in favour of public religious charity is created. If the dedication is partial, a trust in favour of the charity is not created but a charge in favour of the charity is attached to, and follows, the property which retains its original privote and secular character. Whether or not dedication is complete would naturally be a question of fact to be determined in each case in the light of the meterial terms used in the document. In such cases it is always a matter of ascertaining the true intention of the parties; it is obvious that such intention must he gather on a fair ancl rca,.on:ible construction of the document considered as a whole.

The use of the vvord "trustn or "trustee" is no douht of some help in determining such intention ; but the mere use of such words cannot be treated as decisive of the matter. Is the private title over the property intended '

to be completely extinguished ? Is the title in regard to the property intended to -be completely transferred to the charity? The answer to these questions can be found not by concentrating on the significance of the use of the word "trustee" or "trust" alone but by gathering the true intent of the document consider, ed as a whole. In some cases where documents purport to dedicate property in favour of public charity, provision is made for the maintenance of the worshipper who may be a member of the family of the original owner of the property himself and in such cases the question often arises whether the provision for the maintenance of the manager or the worshipper from the income of the property indicates an intention that the property should retain its original character and should merely be burdened with an obligation in favour of the charity. If the income of the property is substantially intended to be used for the purpose of the charity and only an insignificant and minor portion of it is allowed to be used for the maintenance of the worshipper or the manager, it may be possible to take the view that dedication is complete. If, on the other hand, for the maintenance of public charity a minor portion of the income is expected or required to be used and a substantial surplus is left in the hands of the manager or worshipper for his own private purposes, it would be difficult to accept the theory of complete dedication. It is naturally difficult to lay down a general rule for the solution of the problem. Each case mmt be considered on its facts and the intention of the parties must be determined on reading the document as a whole.

In Maharani Hemanta Kumari Debi v.

Gauri Shankar Tewari and Others(1 ), Sir George Rankin, who delivered the judgment of the Board has observed, "In the usual case of complete dedication made to an idol, for example, the property ceases altogether to belong to the donor, and becomes vested in the idol as a juristic person. Complete relinquishment by the owner of his proprietary right is, however, by no means the only form of dedication known to Hindu law, and is

. (1) (1940) L. R. 68 I. A. 53, 63.

6-81 S. C. India/ 59

Mmakuru Dasaralharami Reddi

Duddukuru Subba Rao

Gajtndragadkar J.

Menakuru Dasaralharami Reddi

V, Dwidukuru.

Suhba Rao

eGojtndragadkar J.

very different from anything that could ordinarily be inferred from the public user of a highway. From the standpoint of the Hindu law 'it is not essential to a valid dedication that the legal title should pass from the owner, nor is it. inconsistent with an effectual dedicarjon that the owner should continue to make any and all uses of the land which do not interfere with the uses for which it is dedicated' per Mookeriee J. in Chairman of the Howrah.

Municipality v.

Khetra Krishna Mitra(')". The learned Judge has further added that when the dedication is only partial the property in some parts of India might none the less in common parlance be described as debotter, but whether it be charged with a sum of money for the worship of an idol, or be subjected to a right of limited user on the part of the public, it would descend and be alienable in the ordinary way. The only difference, as Mr. Mayne ohserves, is that it passes with it a charge upon it.

In fadu Nath Singh v. Thakur Sita Ramji(') the Privy Council was dealing with a deed of dedication which prpvided that after the death of the grantor certain female members of his family should succeed him as managers, that half the income should be enjoyed by the managers without power of alienation, that upon the death of the named managers the Government should become manager and the whole net income should then be applied to the expenses of the temple. The Privy Council held that the deed was a valid endowment of the whole property to the temple and that the donor had no rights in it against either the idol or the managers. Dealing with the argument hat in the hands of the female members of the ;:ranwr's family liberty was given to the said members to en1oy half the income, Lord Haldane observed that "If the income of the property had been brge, a question might have been raised, in the circumstanc<:s, as throwing some doubt upon the integrity of the settlor's intention, but, as the entire income is only 800 rupees, it is obvious that the payment to these ladies is of the most trifling kind, and certainly not an amount which one would expect in a case of that kind." Lord

(1) (19o6) 4 Cal. L. J. 343, 3¥J,

(•) (1917) L. R. 44 I. A, 187, 190.

Haldane then emphasized the clear expression of the initial intention of the donor to apply the whole estate of the donor to the benefit of the temple and he added that the rest is only a gift to the idol sub modo by a direction that of the whole which had already been given part is to be applied for the upkeep of the idol itself and the repair of the temple and the other is to go for the upkeep of the managers. That is how in the end it was held that the document showed complete dedication in favour of the idol.

In Pande Har Narayan v. Surja Kunwari( 1 ), the Privy Council has observed that in determining whether the will of a Hindu gives the testator's estate to a11 idol subject to the charge in favour of the heirs of the testator or makes the gift to the idol a charge upon the estate, there is no fixed rule depending upon the use of particular terms in the will. The question depends upon the construction of the will as a whole.

In this particular case, thougli the will had provided that the property of the testator shall be considered to be property of a certain idol, there were further provisions which showed that the residue after defraying the expenses of the temple shall be used by the testator's legal heirs to meet their own expenses and it appeared that only a small proportion of the total income could be utilised for the idol whereas a large balance was available to the heirs. On these facts, it was held by the Privy Council that the intention disclosed by the document was that the heirs should take the property subject to the charge for the performance of the religious purposes named in the will.

Lord Shaw, who delivered the judgment of the Board, cited with approval the earlier observations of Turuer L. J. in Sonatun Bysack v.

Sreemuti Juggutsoondree Dossee( 2 ). Turner L. J. had stated: "although the will purports to begin with an absolute gift in favour of the idol, it is plain that the testator contemplated that there was to be some distribution of the property according as events might turn out; and that he did not intend to give this property absolutely to the idol seems to their Lordships to be clear from the directions •·

(t) (1921) L. R. 48 I. A. 143.

(2) 8 Moo. I. A. 66.

Menakuru DaJaratharami Reddi v.

Duddukuru Subba Rao

Gajendragadkar ].

M1nakuru Dasarath4'ami &ddi

DuJdulauu Subba Rao

Gafendragailkar ].

which are contained in the various clauses of the will."

Similarly, Gapal Lal Sett v. Purna Chandra Basak('), the Privy Council held that the will of the Hindu testatrix with which they were concerned in this case conferred the properties specified on the grandson charged with the maintenance of the worship but that no shebaitship was created. The will in question had provided that out of the income of the specified property, her grandson should perform the worship of certain family idols and that he should be in charge of the worship. The will contained no gift, express or implied, to the idols, and there was no provision for the worship after the death of the grandson. It is in the light of these decisions that we will have to construe the compromise decree in the present case.

Before considering the terms of the compromise decree, however, it would be relevant to mention some more facts, After Purushottam had executed a deed of trust in 1919, troubles arose in his own family.

His son apparently began to assert his share in the property which was the subject-matter of the said trust and he actually started to alienate his alleged undivided share in the said property. That indeed was the genesis of the two suits initially filed by the three trustees in 1919-1920.

In O.S. No. 39 of 1921 itself, an alternative claim appears to have been made by Purushottam when he was left in sole charge of the suit after the withdrawal from the suit bv his co-trustees. He claimed a declaration that hewas entitled to recover the possession of the property as mentioned in sch. A and A-1 of the claim, or, in the alternative, that he should be declared to be entitled to the title of the property jointly with his son Ramakrishnayya and the partition in the two shares of the same may be directed and he may be put in possession of such property as would fall to his share.

In other words, the first claim was based on the validity of the original trust deed created by Purushottam and the second was based on the assumption that the trust was not valid, that the property, the subject-matter of the said trust was liable to be divided between

(1) (1921) L. R. 49 I. A. JOO-

Purushottam and his son and a prayer was made that Purushottam should be allotted his share by a partition of all the property by metes and bounds. As a result of the compromise decree passed in this suit, the property over which Purushottam had created a trust in 1919 was divided between himself and his son Ramakrishnayya and some of the property which was not included in the trust deed of 1919 but which was also the subject-matter of the suit itself was allotted to the share of Purushottam. The property thus allotted to the share of Purushottam formed part of sch. I and it is in respect of this property that a public charitable trust has been created according to the findings of the Courts below. For the appellants, it is urged before us that this view is erroneous. We will now consider the relevant terms of the compromise decree. Clause ( 1) of the decree provides that the property described in sch. I attached to the decree should go to the share of the third plaintiff, viz., Purushottam. It appears that four items included in sch. I had been sold by defendant 1 to defendants 13 and 14; These alienees, however, agreed to give up their claim in respect of these properties. Clause

( 1) then reads as follows :

"that as regards the aforesaid schedule property, the third plaintiff should be the 'sole trustee' till his lifetime for the purpose of conducting the charities described in the trust deed, dated 17th March, 1919, and he should utilise the income derived therefrom, for the charities according to the necessity and should enjoy the said property till his lifetime without rights to gift, sale etc., therein; that after his death, the said entire property should pass on to his grandson Ramalingeswara Rao subject to the (performance of) the aforesaid kaink; iryams (charities) ; that if the third plaintiff should die before the expiry of the minority of the aforesaid Ramalingeswara Rao arrangement should be made to have a guardian appointed through Court for the property made to pass to the said Ramalingeswara Rao the . said . guardian should take possession of the property

Mena!cuTu Da1aralharami Reddi

Duddukuru SrdJba R01.10

Gajmdragadkar J,

Menakuru DtUara

tlsarami Reddi

Dudduku.ru Subba Rao

Gajendragadkar J.

and conduct the aforesaid charities and deliver possession of the same to the said Ramalingeswara Rao as soon as the minor attains majority; that, thereafter the said Ramalingeswara Rao should conduct the abovementioned charities and enjoy the properties;"

Then els. (2) and (3) deal with the claims of defendant 1 and defendants 10, 11 and 12.

Clause (4) directs that the properties allotted to the share of the third plaintiff should be immediately delivered to him by the defendants; and cl. (5) provides that the third plaintiff should give up all other claims in respect of the suit and the parties should bear their own respective costs.

At this stage it may be relevant to refer to the particulars of charities for whose benefit admittedly the decretal provision in cl. (1) has been made.

These particulars are mentioned m para. 6 of the original deed 'of trust and it 1s not disputed that the burden imposed by cl. ( 1) of the decree ts m favour of the same charities. These charities are nme m number and they are thus enumerated m the deed of trust :

"(1) In the choultry constructed m the land m Survey No. 81, all persons who pass to and fro m Doranala Road, should be given drinks to quench thirst, everyday two brahmin travellers should be given food at noon.

(2) For the purpose of Mahanaivaidyam (food offering) taking place every night to Sree Malleswaraswami Varn enshrined m the aforesaid Damaramadugu village, 12 tooms of paddy and Rs. 6 m cash should be given to the trustee of the said Devasthanam.

(3) During the time of Brahmotsavam of Sri Malleswaraswami and Sri Kamakshi Thayi Garn, m Jonnavada which 1s taking place every year, Rs. 10

(rupees ten) should be paid every year m respect of the Ravana Seva Ubbavam that is being conducted by the Darnaramadugu villagers. ( 4) During the Brahmotsavam time of Sri Jonnavada Kamakshi Thayi that takes place every year, ill

Rs. 40 (rupees forty) should be spent for 'Ekanthaseva' and the trustees should be present and see that the said Ubbayam is properly conducted.

(5) Rs. 12 should be paid every year towards Deeparadhana expenses during nights to Sri Veeranjaneyaswami Varu enshrined m Pata Santhapeta, Nellore, to the trustee of the said Devasthanam.

(6) From out of the said fund, Rs. 42 per year should be paid to poor Brahmin boys reading in classes commencing from fourth form and upward m the High School, towards the school fees. Now, this amount shall be paid to Amperayani Venkatakrishnayya who is reading in the Kurnool School, till he stops his study; and after he stops his study, the then trustees are hereby empowered to give the money to a poor Brahmin boy whom they consider as the suitable recipient.

(7) If there should be difference of opinion, on any. matter relating to the management of the aforesaid charities, the opm1on of the majority trustees shall prevail and it will be given effect to.

(8) The trustees shall exercise all powers in the matter of the management of these charities, viz., to appoint the necessary staff~ to remove them; to suspend them; to impose fine; and to make all arrangements for the staff to discharge their duties efficiently.

(9) The trustees are fully empowered to now and then grant cowles in respect of the schedule-mentioned property to individuals and to have muchilikas executed and m the event of any disputes arising at any time through any person, in respect of the said property, to institute and conduct suitable proceedings in proper Courts, to get over such disputes; and also to incur the necessary expenditure from out of the income from the aforesaid endowments." It would be clear that cl. ( 1) of the compromise decree is the foundation of the theory that a public

trust had been created m respect of the properties allotted to the share of Purushottam. In dealing with this clause; the High Court of Madras appears to have attached considerable importance to the fact that

Menakuru Dasaratharami Reddi

v, Duddu/curu Subba Rao

Gagendragadkar J.

Mtnakun1 D01ara

lharami &Jdi

Duddulc""' Subba Rao

Gagtndragadkar ].

Purushottam had already, m unequivocal terms, expressed his intention to create a trust of his own properties in 1919. There is no doubt that the document of 1919 creates a public charitable trust. In construing cl. (1) of the compromise decree, the learned Judges of the High Court of Madras appear to have assumed that this clause was really intended to confirm the earlier creation of the trust though in respect of different properties.

With respect, in making this assumption, the learned Judges appear to have overlooked the sharp distinction between the words used in the trust deed of 1919 and in cl. ( 1) of the compromise decree.

The trust deed had appointed three trustees and by cl. (12) had specifically provided that the amounts described in the schedule and the income that will increase and accrue in future shall be utilised for the above charities onlv and it shall not be used for private purposes.

In oiher words, cl.

(12) emphatically prohibits the use of the income from the proprty for any private purpose and in terms dedicates entirely the whole of the property and its income for public charitable purposes. Clause (3) of the trust deed had appointed three trustees, had provided for the management of the trust' and the keeping of the accounts.

Under this clause, all the trustees should join together and hold a meeting once a month in the choultry and examine the accounts and consider the other details of management. The deed has further provided for the appointment of other trustees in case of vacancy occurring either by death or resignation.

Now let us look at cl. ( 1) in the compromise decree. It is true that the third plaintiff is described in this clause as the sole trustee till his lifetime. It is also true that, as the sole trustee, he is allowed to enjoy the said property till his lifetime "without rights to gift, sale etc., in the same." The use of the word "sole trustee" is no doubt relevant and its full effect must be taken into account but its significance cannot be exagger'ated.

It is really difficult to understand how a sole trustee could enjoy the property. The enjoyment of the property inevitably suggests the right to enjoy the property in one's right and this notion is not easily

reconcilable with the theory of complete dedication of the property in favour of charity. Even so, we will assume that the use of the word "sole trustee" is a factor in favour of the plaintiffs. In the same clause, there is, however, another indication which is inconsistent with this theory of complete dedication.

The income of the property has to be utilised for charities according to the necessity. The contrast between this provision and the provision in cl. (12) of the earlir.{ deed of trust is obvious. Whereas, under the earlier deed the whole of the income had to be utilised only for the purpose of charity, under cl. (1) of the decree a part of the income is to be utilised according to the need of the charity. Then, after the death of Purushottam, the clause provides that the property should pass on to his grandson Ramalingeswara Rao subject to the purpose of the aforesaid charities. The notion that the property has to pass from Purushottam to Ramalingeswara Rao is consistent with Purushottam's title to the property and is inconsistent with the title of the idol in the said property. This clause about the <levolution of the title in favour of the grandon clearly and unequivocally suggests that all that Purushottam wanted to achieve by this clause was to leave his private title unimpaired except with the burden or charge in favour of charity. This clause can be contrasted with cl. (4) of the tru, st deed which

provi<les for the subsequent appointment of trustees.

T'he111 the provision about the appointment of the guardian of Ramalingeswara Rao during his minority is also inconsistent with the theory of complete dedication. It is difficult to appreciate how a guardian of a minor trustee can be appointed in this way in respect of properties which do not belong to the minor but are trust properties. It is, however, urged that Purushottam as the sole trustee is positively prohibited from making the gift of the property or selling the property by the first part of cl. (1) and that prima facie indicates that Purushottam was not an absolute owner of the property; but in judging the effect of this prohibition, we cannot lose sight of the fact that a similar prohibition is not included in the decree when the decree deals

M111akuru Dasaratharami ReJdi

v, Duddukuru

.Subba RlllJ

Gajendragadkar J.

Mmnlr:uru DaJara~ tharami Reddi

v, Dw/dukuro

Subba Rao

Gajmdragadkar J.

with the rights of the grandson of Purushottam.

Reading the clause as a whole, it seems to us fairly clear that Purushottam wanted the property to devolve on. his grandson and treated the property as his private property in that behalf. Since that was the intention of Purushottam no restraint has been imposed on the absolute title of Ramalingeswara Rao and he has been apparently given full liberty to deal with the property

QS he likes except that he was under an obligation to the charity in question. The last portion of the clause authorises Ramalingeswara Rao to conduct the abovementioned charities and to enjoy the property. This clause again is wholly inconsistent with the theory of complete dedication and merely suggests that in the hands of Ramalingeswara Rao as well as in the hands of his successors or transferees the property would stand burdened with the obligation to perform the charities in question.

We have carefully considered the terms of cl. (1) of this decree and we are satisfied that it is difficult to hold on these terms that the property allotted to the share of Purushottam under the decree was intended to be completely dedicated in favour of charities. In our opinion, the learned Judges of the High Court of Madras were in error in construing this clause as evidencing the creation of a public charitable trust. We are satisfied that the properties continue to be the properties of Puruhottam until his death and on his death they devolved upon his grandson Ramalingeswara Rao subject always to the burden of performing the charities mentioned in the earlier deed of trust.

For the Advocate-Gen.era! of Andhra who has been allowed to represent charities in the present case after the death of the original plaintiffs, Mr. Tatachari has urged that even though the compromise decree may not indicate the creation of a public trust that would not necessarily defeat the plaintiffs' claim. He contends that the trust of 1919 which had been validly created by Purushottam cannot be effectively effaced by the subsequent compromise decree between Purushottam and his son and the alienees from his son. Mr. Tatachari has referred us to the material allegations in the

. '

plaint where it has been suggested that in agreeing to the compromise decree Purushottam was in substance guilty of breach of trust. We do not propose to consider the merits of this interesting argument because, in our opinion, it is too late for the plaintiffs to raise such a point.

We have already mentioned that one of the issues specifically raised between the parties in the present litigation was in regard to the nature and effect of the compromise decree.

In fact we have already indicated that, when we found that the learned Judges of the High Court of Madras had not considered this issue, by our interlocutory judgment we invited the High Court to consider this issue along with another.

The position now is that both the Court below have found that the compromise decree was not collusive or fraudulent and it binds the trust. The respondent has not filed any objection to the finding submitted by the High Court of Andhra in pursuance to our interlocutory judgment.

Indeed, if the plaintiffs had adhered to their original case they should have insisted upon obtaining a decree for a scheme of the original trust of 1919.

It is true that a decree for a scheme was passed in favour of the plaintiffs but this decree was passed on the assumption that a subsequent compromise decree had. created a public trust. It is clear from the plaint that the plaintiffs had not alternatively asked for a scheme of the subsequent trust.

That being so, it was really necessary for the plaintiffs to have preferred an appeal against the trial Court's decree and urged that the original trust deed had not been effaced and that it was still subsisting notwithstanding the compromise decree and that a scheme should be framed in respect of the said original trust.

It appears that the plaintiffs were content to acquiesce in the finding that the subsequent compromise decree bound the original trust deed and, as matters then stood, it did not make any practical difference to the plaintiffs case because they got a scheme for the administration of the trust though new properties were substituted for the old to constitute the subject-matter of the trust; but in law the conduct of the plaintiffs amounted to an admission that the compromise decree

Mimakuru DnsMalharami Reddi v.

Duddukuru Subba ROD

Gajerufragadkar J.

Menalcuru Dasara

thorami &ddi

DUt/Jlukurw Subba Rao

Gt/jmdragodkar J ·

effaced the original trust in that the properties of the trust were changed in the manner indicated in the decree.

Before the High Court of Madras, the only point which the plaintiffs urged was that the compromise decree created a trust.

It is true that this compromise decree was intended for the benefit of the charities covered by the earlier deed of crust and the argument was that the properties which were allotted to the share of Purushott<1m by the compromise decree should be deemed to have been substituted for the original properties of the trust.

Having adopted this attitude it is now not open to the plaintiffs to contend that the terms of the compromise decree do not bind the trust, that the decree per se constituted a breach of trust and that the original trust is wholly unaffected by whatever Purushottam did in the subsequent litigation.

In our opinion, therefore, it is unnecessary to consider the merits of the contention which Mr. Tatachari attempted to raise before us.

Since we hold that the compromise decree had not created a public trust, it is unnecessary to consider

- 1 any other point. We wish to make it clear that Mr. Alladi Kuppuswami expressly told us that his clients have always agreed that the properties in their hands are burdened with the obligation to discharge the charities mentioned in the deed of trust executed by Purushottam in 1919. We accordingly declare that the properties' in the hands of the appellants are subject to the charge in favour of the said charities. However, since the plaintiffs' case for a scheme has failed the appeal must be allowed and the plantilfs' suit dismissed.

As the Advocate-General has appeared before us to support the case of the charities, we direct that the parties should bear their costs throughout.

Appeal allowed.

Art. 14

s. 178

Art. 14

dismissed.

MENAKURU DASARATHARAMI REDD

DUDDUKURU SUBBA RAO

DAS C.J.

IMAM

A. K. SARKAR JJ.

s. 92

the Code of Civil Procedure

17th March, 1919

Ramalingeswara Rao

Ramalingeswara- Rao

Mmakuru Dasaratharami Reddi

Duddukuru Subba

Menakuru Dasara

(1940) L.R. 68 I.A. 53

(1917) L.R. 44 I.A. 187

(1921) L.R. 48 I.A. 143

(1921) L.R. 49 I.A. 100

CIVIL APPELLATE JURISDICTION

Alladi Kuppuswami

M. S. K. Sastri

T. V. R. Tatachari

T. M. Sen

GajenJ

GAJENDRAGADKAR

s. 92

the Code of Civil Procedure

High Court of Madras

Alladi Kuppuswami

Purushottam

Purushottam

March 17,

1919

Reballa Subbarayudu

C. Viswana1iha Rao

-Purushottam

Ramakrishnayya

District Court, Nellore

Sub-Court, Nellore

Menakuru Dasara

tharami Rtddi

Gajendragadkar

7, 1942

January 3, 1944

Rmakrishnayya

October 27, 1945

December 15, 1948

March 30, 1955

High Court of Andhra

tharami Reddi

George Rankin

(1940) L. R. 68 I. A. 53

Mmakuru Dasaralharami Reddi

Gajtndragadkar

Menakuru Dasaralharami Reddi

Suhba Rao

eGojtndragadkar

Mookeriee

India

Mayne

Haldane

Shaw

Turuer

Turner

(1921) L. R. 48 I. A. 143

Gajmdragadkar

Sree Malleswaraswami Varn

Devasthanam

Malleswaraswami

Kamakshi Thayi

Jonnavada Kamakshi Thayi

Veeranjaneyaswami Varu

Nellore

Amperayani Venkatakrishnayya

Kurnool School

Menakuru Dasaratharami Reddi

Gagendragadkar

lharami

Ramalingeswara

.Subba RlllJ

uru DaJara~ tharami Reddi

Puruhottam

Andhra

Tatachari

jmdragodkar