PETITIONER: OFFICIAL TRUSTEE, WEST BENGAL & ORS. Vs. RESPONDENT: SACHINDRA NATH CHATTERJEE & ANR DATE OF JUDGMENT: 13/12/1968 BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. SIKRI, S.M. BACHAWAT, R.S. CITATION: 1969 AIR 823 1969 SCR (3) 92 ACT: Trust-Settlor as trustee reserving power to alter terms by will-If, trustee could alter by deed inter vivos-Indian Trusts Act (2 of 1882), s. 34, Official Trustees Act (2 of 1913), s. 10(1) and Trustees and Mortgagees Powers Act (28 of 1866), s. 43-Scope of-Judge of High Court on Original Side of Calcutta High Court-Powers under Chap. 13 of the Original Side Rules-Inherent powers-Scope Official Trustee- Liability for accounting. HEADNOTE: The father of the first respondent executed a trust deed in 1930, in respect of properties owned by him. The deed provided inter alia, that the settlor would be trustee during his life time, that from and after his death, his wife should be paid Rs. 50 per mensem from the profits of the trust estate, that the balance of the income was to be paid in equal shares to the sons of the settlor, and that after the wife's death, the whole estate was to be made over to the settlor's sons in equal shares. The settlor reserved to himself the power to vary the quantum of interest, given to each of the beneficiaries after his death by will alone and in no other way. After administering the trust for some time he wanted to make some changes in the trust deed, and for this purpose took out an originating summons on the original side of the Calcutta High Court, under Ch. 13 of the Original Side Rules and prayed for two reliefs, namely, (i) to have the Official Trustee appointed as the trustee in his place, and (ii) to empower the settlor to alter the clause relating to variation of the 'quantum of interest by a deed inter vivos. The first respondent did not appear in those proceedings though notice was served on him. The High Court, in specific terms, granted the prayers. The settlor then executed another trust deed in 1938 under which the first respondent was deprived of all his interest in the corpus of the trust properties and was given a meagre allowance of Rs. 20 per mensem. The Official Trustee carried out the order of the High Court and disbursed the income to the various beneficiaries. In 1950, after the death of the settlor, the first respondent filed a suit and prayed : (i) that the power reserved to the settlor in the original trust deed for altering the quantum of interest by will alone, was irrevocable; (ii) that the order on the originating summons was null and void as having been made without jurisdiction; (iii) that the plaintiff was entitled to the benefits provided by the original deed; and (iv) that the Official. Trustee should render accounts since the time of the death of the settlor. The trial court decreed the suit but the first appellate court reversed the decree. In second appeal, the High Court restored the decree of the trial court. In appeal to this Court, on the questions : (1) Whether the settlor was entitled to execute the second trust deed; (2) Whether its validity was not open to challenge in view of the order on the originating summons, because, the Judge had jurisdiction to pass the order either under s. 34 of the Indian Trusts Act, 1882, or s. 10(1) of the Official Trustees Act, 1913, or s. 41 of the Trustees and Mortgagees Powers Act, 1866, or in 93 exercise of his inherent powers; and (3) Whether the Official trustee was liable to render accounts and if so for what period. HELD : (1) The stipulation in the trust deed that the variation can only be made by will and not otherwise is a binding condition. Being a material condition the settlor had no power to vary it and therefore had no power to execute the second trust deed., [98 F] Re : Anstis [1886] 31 Ch. D. 596; Reid V. Shergold (1805) 10 Ves. 370 and Molineux v. Evered, (1910) 2 Ch. 147, applied. Halsbury 3rd Edn. Vol. 30 p. 272, para. 518 and Hannbury Modern Equity (7 Edn. p. 56), referred to. (2) Before a court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try it but must also have the authority to decide the questions at issue and pass appropriate orders. It is not sufficient that it has some jurisdiction in relation to the subject-matter under the various provisions of law or under its inherent power. If the High Court had the power under those provisions of law or in its inherent jurisdiction the fact that they were not invoked by the petitioner in the originating summons would not invalidate the order even if it was wrong. But the order on the originating summons in the present case was outside the jurisdiction of the Judge. It was not merely a wrong order, or an illegal order; it was an order which he had no competence to make and was therefore a void order. [101 B-D; 106 C-D] Ittavira Mathai v. Varkey Varkey, [1964] 1 S.C.R. 495, referred to. Hirday Nath Roy v. Ramchandra Barna Sarma, I.L.R. LXVIII Cal. 138, approved. (a) The facts stated and the nature of relief asked for in the originating summons, show that the matter did not come within the scope of s. 34 of the Trusts Act. The jurisdiction of the Court under the section is a limited jurisdiction. The statute has prescribed what the Court can do and inferentially what it cannot do. Under the provision, the Court could only give 'opinion, advice or direction on any presented question respecting the management or administration of the trust property' and not on any other matter arising under the trust deed. The relief prayed for by the settlor did not relate to the management or administration of the trust Property. [101 G; 102 A-D] (b) Section 10(1) of the Official Trustees Act, 1913, might have empowered the High Court to appoint the Official Trustee in the place of the settlor, as the settlor was not willing to continue as trustee. But it could not have granted the other reliefs asked; for. [102 G] (c) Section 43 of the Trustees and Mortgagees Powers Act, 1866, is similar to s. 34 of the Trusts Act. Under that provision, a Judge of a High Court could have only given opinion, advice or direction on any question respecting the management or administration of the trust property and therefore, the order on the originating summons could not be justified on the basis of the section. [103 D] (d) There is no rule in Ch. 13 of the Original Side Rules of the Calcutta High Court, under which the order on the originating summons could have been made. It is not as if the Judge, in passing his order on the originating summons, was merely interpreting the original 'trust deed in which case it might not have mattered whether his interpretation wag 'correct or not. [104 A-C] 94 It may be that a Judge sitting on the original side of the High Court has all the powers of a Chancery Judge in England, but the inherent powers of a Chancery Judge only relate to management and administration of trust property which powers are similar to those codified in s. 34 of the Trusts Act and s. 43 of the Trustees and Mortgagees Powers Act, and is therefore of a limited character. [105 G-H; 106 A] Chapman v. Chapman, [1954] A.C. 429 and Chapman's case, [1953] Ch. 218, referred to. (3) But for the order on the originating summons the settlor would have certainly altered by will the quantum of interest given to the first respondent. The first respondent did not challenge the second trust deed during the father's life-time and there was no knowing that he would have challenged it till he filed the suit. Since the Official Trustee merely carried out the order of the Court, he is not a trustee de-son-tort and his liability should not be greater than that of a trustee. Therefore, there is no Justification for directing him to account from the date he took charge of the trust estate, and the ends of justice would be met, if accounting was ordered as from the date of suit. [106 D-H] JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 168 of 1966.
Appeal from the judgment -and decree dated December 22, 1960
of the Calcutta High Court in Appeal from Appellate Decree
No. 701 of 1956.
B. Sen, P. K. Chatterjee and P. K. Chakravarti, for the
appellants.
N. C. Chatterjee and D. N. Mukherjee, for respondent No.
1.
The Judgment of the Court was delivered by
Hegde J. Two important questions of law arise for decision-
in this appeal, by certificate. It will be convenient to
formulate those questions after we set out the material
facts.
One Aswini Kumar Chatterjee (since deceased) executed the
Trust deed Exh. 1 on December 6, 1930 in respect of some of
the properties owned by him. It is provided therein (a)
that the settlor would be the trustee of the Trust Estate
and would enjoy the income and profits of the trust
properties during his lifetime, (b) after his death his wife
Sm. Santimoyee Devee and/or his sons as soon as they or any
of them attain the age of majority should be the sole
Trustee or Joint Trustees and (c) from and after his death
the said Trust Estate should be held to the use and for the
benefit of the said Sm. Santimoyee Devee and the said sons.
Santimoyee Devee to be paid from the income and the profits
of the said estate Rs. 50 monthly and the balance of the
income and profits of the Trust Estate to be held for the
use and benefit of each of the sons in equal shares and
after the death ‘of the said Santimoyee Devee to make over
the whole of the Trust Estate to each of the sons in equal
shares. He reserved to
95
himself the Power to vary the terms and conditions of the
Trust so far as they relate to the quantum of interest given
to each of the beneficiaries after the death of the settlor
“by his instrument by will alone and in no other way or
act”.
The settlor administered the trust property for sometime and
thereafter thought of effecting by deed inter vivos certain
changes in the trust. To enable him to do so he took out an
originating summons on the original side of the Calcutta
High Court under Chapter XIII of the Original Side Rules of
that Court seeking primarily two reliefs viz., (1) to have
the Official Trustee, Bengal appointed as the Trustee in his
place and (2) to empower him to alter the clause relating to
variation of the quantum of interest given to each of the
beneficiaries by a deed inter vivos. From the averments
made in the application, it is clear that relief was sought
under the provisions of the Indian Trusts Act (Central Act 2
of 1882) and the Official Trustees Act (Central Act 2 of
1913). In the body of the petition the settlor definitely
prayed for permission to revoke the clause in the trust deed
relating to his power to vary the quantum of interest of the
beneficiaries by will alone and in, its place authorise him
to make that variation “by deed inter vivos and not by will
alone”. The relevant reliefs asked for in the petition read
as follows
(1) “that the provisions contained in the
Deed of settlement dated the 6th December 1930
whereby the persons therein named were
appointed Trustees of the said Trust Estate
and whereby power was reserved to petitioner
to alter the said quantum of interest by will
alone and in no other way be revoked
and . . . .
(2) that the petitioner be empowered to
alter the said quantum of interest in such
manner as he may think proper, by deed inter
vivos and not by will alone.”
The aforementioned originating summons was taken out on
August 20, 1937. The matter came up for hearing before
Ramfry J. evidently after service of notices on the
respondents on August 25, 1937. On that date the learned
Judge passed the following order :
“It is ordered that the provisions contained
in the said Deed of Trust whereby the persons
therein named were appointed Trustees of the
said Trust Estate and whereby power was
reserved to the said applicant to alter the
quantum of interest of the beneficiaries by
,will and in no other way be and they are
hereby
96
revoked and it is further ordered that the
said applicant as such settlor as aforesaid be
at liberty to alter the said quantum of
interest in such manner as he may think proper
by deed inter vivos and not by will and it is
further ordered that the said applicant the
present sole trustee under the said Deed of
Trust be and is hereby discharged from further
acting as such Trustee and the Official
Trustee of Bengal be and is hereby appointed
the sole trustee of the said Deed of Trust.
And it is further ordered that the stocks and
shares and securities (both movable and
immovable) now comprised in the Trust
Estate… do vest in the said Official Trustee
of Bengal as such Trustee as aforesaid.”
At this stage it is necessary to emphasize that what the
settlor asked for was the court’s permission to revoke the
clause in the Trust deed empowering him to alter the quantum
of interest given to each of the beneficiaries “by will
alone” and in its place to confer upon him power to make the
said alteration by deed inter vivos. The court in specific
terms ordered the revocation and granted the authority
sought for. Acting under the power purported to have been
given by the order of Ramfry J., the settlor executed a
second Trust deed on March 22, 1938. Under that deed, in
the- place of the Trustees nominated under the original
deed, the Official Trustee was constituted as the sole
trustee. Sachindra, (the first respondent herein) one of
the sons of the settlor was deprived of all his interest as
a beneficiary in the corpus of the trust properties. He was
given a meagre allowance of Rs. 20 per month during his
life-time. The settlor died in 1946.
On December 18, 1950, the first respondent filed the suit
out of which this appeal has arisen praying for following
declarations :
(a) that the power reserved by the settlor in the original
Trust deed for altering the quantum of interest of the bene-
ficiaries ‘by will alone and by no other means was
irrevocable; (b) that the order passed by Ramfry, J. on
August 25, 1937 was null and void as having been made
without jurisdiction; and (c) the original Trust deed stood
unaffected by the second Trust deed and therefore he was
entitled to the benefits provided under the said deed. He
also asked for a decree directing the Official Trustee to
pay him 1/4th of the income of the Trust Estate, so long as
Santimoyee Devee was alive and on her death to make over
one-fourth of the corpus of the Trust Estate to him and
further render accounts to him of the profits of the Trust
Estate since the time of the death of the settlor. The
Official
97
Trustee as well as some of the other defendants resisted the
suit. They contended that the settlor was entitled to
execute the second Trust deed in exercise of the power
reserved by him under the original Trust deed and in any
event he could do so, because of the order of Ramfry, J.
The trial court decreed the suit as prayed for but the first
Appellate Court reversed the decree of the trial court and
dismissed the suit upholding the contentions advanced on
behalf of the contesting defendants. In second appeal the
High Court reversed the decree of the first Appellate Court
and restored the decree of the trial court.
Two questions that -arise for decision in the appeal are (1)
whether the settlor was entitled to execute the second Trust
deed in pursuance of the power reserved by him under the
original Trust deed and (2) whether in any event the
validity of the second Trust deed is not open to challenge
in view of the order made by Ramfry, J. on August 25, 1937.
Mr. B. Sen, learned Counsel for the appellant contended that
on a proper reading of the Trust deed it would be seen that
the settlor had reserved to himself the power to vary the
terms of the Trust, in so far as they relate to the quantum,
of interest given to each of the beneficiaries after the
death of the settlor. According to him the recital in the
deed that such a variation can be done only by an instrument
of will and not otherwise is not a ” matter of substance but
only a form. Therefore we must hold that the settlor had
the power to make the variation in question. He did not
dispute the proposition that a settlor is incompetent to
vary any of the terms of a Trust settled by him unless he
had reserved for himself the power to make the variation in
question. The real question for decision is whether the
stipulation in the Trust deed that the variation in question
can only be made by will and not otherwise is binding condi-
tion. If it is held to be a material condition then the
settlor must be held to have had no power to vary the same.
The law on the point is stated by Halsbury (1) thus
Defects not of the essence. Equity relieves
only against defects which are not of the
essence of the power; relief will not be
granted so as to defeat anything material to
the intention of the donor of the power. Thus
mere defects in the mode of execution will be
aided, and so will an appointment by will
made, under a power to appoint only by deed.
But no aid will be given to an appointment by
irrevocable deed made under a power to appoint
only by will or to an
3rd Edn. Vol. 30 p. 272 Paragraph, 518.
98
appointment which would result in -a fraud on
the power or aid a breach of trust. Moreover,
no aid will be given to the exercise by will
of a power of revocation by deed if it is
clear that a deed is of the essence, as where
the original power of appointment was by will
or deed and on its exercise a power to revoke
by deed only was reserved. Nor will the court
aid a lease containing unusual covenants
granted under a power to lease with usual
covenants, or a lease granted without consent
under a power to lease with consent, or a sale
of land reserving timber made under a power
not authorising such a reservation, or a sale
of land reserving the minerals under a power
not authorising such a reservation.” IV
Similar are the views expressed in Hanbury’s book on Modern
Equity (7th Edn. p. 56). Referring to the decision in
Tollet v.Tollet(1) the learned author observes
“The case brings out another important point.
The power was exercised by will, whereas it
should have been exercised by deed. Now a
Will is revocable at any time during the
testator’s life time, and so the defect is
treated as one of ,form only, and relief will
be granted. But the defect constituted by the
converse process, the attempted exer
cise by
irrevocable deed of a power which should have
been exercised by will is treated as a matter
of substance, and, in Reid v. Shergold(2) as
fatal to the objects of the power.”
The law is similarly stated in Molineux v.
Evered(3`).
From the above discussion it also follows that the settlor
had no power to appoint new trustees during his life time
nor designate persons other than those already designated in
the original Trust deed to act as trustees after his life
time.
Considerable arguments were advanced before us as to the
effect of the order made by Ramfry, J. on August 25, 1937.
On behalf of the appellant it was urged that Ramfry, J. had
jurisdiction over the parties to the application in question
as well as on the subject matter. Hence the validity of the
order made by him cannot ‘be challenged even if it is held
that that order is -not in accordance with law. To put it
differently it was urged -that what could be complained of
is not the lack of jurisdiction on the part of the court to
make the order in question but an illegal exercise of that
jurisdiction; but such an attack cannot -be made against
that order in a collateral proceedings. On the ,other hand
it was urged by Mr. N. C. Chatterjee, learned
(1) (1728) 24 E. R. 828. (2) [1805] 10, Ves. 370.
(3) [1910] 2 Ch. 147.
99
Counsel for the respondents that Ramfry, J. had no
jurisdiction to pass the order in question. His grievance
was not that Ramfry, J. exercised his undoubted jurisdiction
illegally but that he had no jurisdiction at all to make the
order in question.
It is plain that if the learned judge had no jurisdiction to
pass the order in question then the order is null and void.
It is equally plain that if he had jurisdiction to pronounce
on the plea put forward before him the fact that he made an
incorrect order or even an illegal order cannot affect its
validity. Therefore all that we have to see is whether
Ramfry, J. had jurisdiction to entertain the application
made by the settlor.
What is meant by jurisdiction? This question is answered by
Mukherjee, Acting C. J. speaking for the Full Bench of the
Calcutta High Court in Hirday Nath Roy v. Ramachandra Barna
Sarma.(1) At page 146 of the report the learned judge
explained what exactly is meant by jurisdiction. We can do
no better than to quote his words :
A ” In the order of Reference to a
Full Bench in the case of Sukhlal v. Tara
Chand(2) it was stated that jurisdiction may
be defined to be the power of a Court to hear
and determine a cause, to adjudicate and
exercise any judicial power in relation to it
: in other words, by jurisdiction is meant the
authority which a Court has to decide matters
that are litigated before it or to take
cognizance of matters presented in a formal
way for its decision. An examination of the
cases in the books discloses numerous attempts
to define the term ‘jurisdiction’, which has
been stated to be ‘the power to hear and
determine issues of law and fact’,
‘the authority by which the judicial officer
take cognizance of and ‘decide causes’; ‘the
authority to hear and decide a legal
controversy’, ‘the power to hear and
determine the subject matter in controversy
between parties to a suit and to adjudicate or
exercise any judicial power over them;’ ‘the
power to hear, determine and pronounce
judgment on the issues before the Court’; ‘the
power or authority which is conferred upon a
Court by the Legislature to hear and determine
causes between parties and to carry the
judgments into effect’; ‘the power to enquire
into the facts, to apply the law, to pronounce
the judgment and to carry it into execution’.
(emphasis supplied).
(1) I.L.R. LXVIII Cal. 138.
(2) [1905] I.L.R. 33 Cal. 68.
100
Proceeding further the learned judge observed
“This jurisdiction of the Court may be
qualified or restricted by -a variety of
circumstances. Thus, the jurisdiction may
have to be considered with reference to place,
value and nature of the subject matter. The
power of a tribunal may be exercised within
defined territorial limits. Its cognizance
may be restricted to subject-matters of
prescribed value. It may be competent to deal
with controversies of a specified character,
for instance, testamentary or matrimonial
causes, acquisition of lands for public
purposes, record of rights as between
landlords and tenants. This jurisdiction and
jurisdiction of the subject matter is
obviously of a fundamental character. Given
such jurisdiction, we must be careful to
distinguish exercise of jurisdiction from
existence of jurisdiction : for fundamentally
different are the consequences of failure to
comply with statutory requirements in the
assumption and in the exercise of
jurisdiction. The authority to decide a cause
at all and not the decision rendered therein
is what makes up jurisdiction; and when there
is jurisdiction of the person and subject
matter, the decision of all other questions
arising in the case is but an exercise of
that,jurisdiction. The extent to which the
conditions essential for creating and raising
the jurisdiction of a Court or the restraints
attaching to the mode of exercise of that
jurisdiction, should be included in the
conception of jurisdiction itself, is
sometimes a question of great nicety, as is
illustrated by the decisions reviewed in the
order of reference in Sukhlal v. Tara Chand(1)
and Khosh Mahomed v. Nazir Mahomed(2) see also
the observation of Lord Parkar in Raghunath,
v. Sundar Das(3) … We must not thus overlook
the cardinal position that in order that
jurisdiction may be exercised, there must be a
case legally before the Court and a hearing as
well as a determination. A judgment
pronounced by a court without jurisdiction is
void, subject to the well-known reservation
that, when the jurisdiction of a Court is
challenged, the Court is competent to deter-
mine the question of jurisdiction, though the
result of the enquiry may be that it has no
jurisdiction to deal with the matter brought
before it : Rashmoni v. Ganada.(4)” (emphasis
supplied).
(1) [1905] I.L.R.33 Cal.68. (2) (1905) I.L.R.33Cal.352.
(3) [1914] I.L.R.42 Cal.72. (4) [1914] 20 C.I.J.213.
101
Finally the learned judge quoted with approval the decision
of Srinivas Aiyangar, J. in Tuljaram v. Gopala(1) wherein
Aiyangar, J. laid down that “if a Court has jurisdiction to
try a suit and has authority to pass orders of a particular
kin#, the (,act that it has passed an order which it should
not have made in the circumstances of the litigation,, does
not indicate total want or loss of jurisdiction so as to
render the order a nullity” (emphasis supplied).
From the above discussion it is clear that before a Court
can be held to have jurisdiction to decide -a particular
matter it must not only have jurisdiction to try the suit
brought but must also have the authority to pass, the orders
sought for. It is not sufficient that it has some
jurisdiction in relation to the subject matter of the suit.
Its jurisdiction must include the power to hear and decide
the questions at issue, the authority to hear and decide the
particular controversy that has arisen between the parties.
Therefore the fact that Ramfry, J. had jurisdiction to pass
certain orders either under the Indian Trust Act, 1882 or
under the Official Trustees Act, 1913 or under the Trustees
and Mortgages Powers Act, 1866 or under his inherent power
is not conclusive of the matter. What is relevant is
whether he had the power to grant the relief asked for in
the application made by the settlor. That we think is the
essence of the matter. It cannot be disputed that if it is
held that the learned judge had competence to pronounce on
the issue presented for his decision then the fact that he
decided that issue illegally or incorrectly is wholly beside
the point. See Ittavira Mathai v. Varkey Varkey and A nr.
(2). Therefore we have now to see whether the learned judge
had jurisdiction to decide the issue presented for his
determination. The relief prayed for, as seen earlier, was
to Permit the settlor to revoke particular clauses in the
Trust deed and to authorise him to alter the quantum of
interest given to each of the beneficiaries by a deed inter
vivos. Had the learned judge jurisdiction to entertain
those pleas ?
Reliance was placed on s. 34 of the Indian Trusts Act, 1882
as conferring power on the judge to make the order in
question. That section reads
“Any trustee may, without instituting a suit,
apply by petition to a principal Civil Court
of original jurisdiction for its opinion,
advice or direction on any present questions
respecting the management or administration of
the trust property other than questions of
detail, difficulty or importance, not proper
in the opinion of the Court for summary
disposal.”
(2) [1964] 1 S.C.R. 495.
102
Under this provision the court could have only given
“opinion, advice or direction on any presented question
respecting the management or administration of the trust
property” and not on any other matters. The relief prayed
for by the settlor did not relate to the management or
administration of the trust Property but on the other hand
it asked for authority to alter the quantum of interest
given to each of the beneficiaries by a deed inter vivos.
The jurisdiction confrere on the court under s. 34 is a
limited jurisdiction. Under that provision, the court has
not been conferred with overall jurisdiction in matters
arising under a Trust deed. The statute has prescribed what
the court can do and inferentially what it cannot do. From
the fact that the court has been conferred power to grant
only certain reliefs it follows as a matter of law that the
court has been prohibited from granting any other relief.
The jurisdiction of the court is circumscribed by the
provisions of s. 34 of the Trusts Act. The court had no
jurisdiction to pronounce on the pleas put forward by the
settlor. From the facts stated in the petition and from the
relief asked for, it was obvious that the case did not come
within the scope of s. 34 of the Trust Act. Therefore when
the learned judge granted the relief asked for, he did
something which he was not competent to do under s. 34 of
the Trusts Act.
Next we were told the learned judge had jurisdiction to pass
the order in question under s. 10(1) of the Official
Trustees Act, 1913 which reads :
“If any property is subject to trust other
than a trust which the Official Trustee is
prohibited from accepting under the provisions
of this Act, and there is no trustee within
the local limits of the ordinary or
extraordinary original civil jurisdiction of
the High Court willing or capable to act in
the trust, the High Court may on application
make an order for the appointment of the
Official Trustee by that name with his consent
to be the trustee of such property.”
This provision has no relevance as regards the controversy
with which we are dealing. That provision might have
empowered the court to appoint the Official Trustee in the
place of the settlor as the settlor was not willing to
continue as the trustee. But it could not have granted the
other reliefs asked for.
Reliance was next placed on s. 43 of the Trustees and
Mortgagees Powers Act, 1866. There is no reference to this
Act in the application made by the settlor. Obviously he
did not rely on any of the provisions in that Act. But then
if the court could
103
have acted on the basis of any of the provisions in that
Act, the fact that it did not purport to act under that
provision is, immaterial. Therefore we have to see whether
the court could have acted on the basis of any of the
provisions in the said Act. The only provision of that Act
on which reliance was placed on behalf of the appellants is
s. 43(1). The portion of that section relevant for our
present purpose reads :
.lm15
” Any trustee, executor or administrator shall be at
liberty, without the institution of a suit, to apply by
petition to any Judge of the High Court for the opinion,
advice or direction of such Judge on any question respecting
the management or administration of the trust property or
the assets of any testator or intestate.. . ”
This provision is more or less similar to s. 34 of the Trust
Act. Under that provision a judge of a High Court could
have only given opinion, advice or direction on any question
respecting the management or administration of the trust
property. Therefore the order made by Ramfry, J. cannot be
justified on the basis of s. 43 of the Trustees and
Mortgagees Powers Act.1866.
It was then said that the order in question could have been
made by Ramfry, J. in the exercise of his inherent powers as
a judge sitting on the original side of the Calcutta High
Court. It was argued that a judge sitting on the original
side of the High Court of Judicature at Calcutta has all the
powers of a Chancery Judge in England as that power has been
conferred on him by the Letters Patent granted to that High
Court. We shall assume it to be so. We may note that the
settlor did not invoke the inherent jurisdiction of the
Court nor did the judge purport to exercise that power.
But, still, that cannot invalidate the order made if the
court had the inherent jurisdiction to make that order.
Hence the real question is had he that inherent
jurisdiction? Chapter XIII of the Calcutta High Court Rules
prescribes what orders can be obtained in an originating
summons proceedings. The jurisdiction of the judge acting
under that Chapter is a summary jurisdiction. Rule 1 of
that Chapter empowers the judge to entertain an application
in respect of matters enumerated in clauses (a) to (g) of
that rule. Admittedly cls. (a) (b), (f) and (g) are not
relevant for our present purpose. Under cl. (c), the court
could only decide -about furnishing of any particular
accounts by trustees and vouching (where necessary) of such
accounts. Under cl. (c) it could direct the trustees to pay
into court ‘any monies in his hands and under cl. (e) direct
him to file an account and vouch the same to do or abstain
from doing any particular act in his character as a trustee.
The orders under
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Ch. XIII are made in chambers. As mentioned earlier the
proceedings under, that Chapter are summary. proceedings.
No rule in that Chapter was brought to our notice under
which the ,order in question could have been made.
Different questions might have arisen for consideration if
an ,application under rule 9 of Chapter XIII had been made
requesting the High Court to interpret the original Trust
deed in ,a particular manner, Such a plea was not taken in
the application filed by the settlor before Ramfry, J.
Further it was not the ,case of the appellant either in the
High Court or in the courts below or even in this Court that
Ramfry, J. merely purported to interpret the original Trust
deed whether his interpretation is ,correct or not.
Let us now proceed to the question whether the Chancery
Court in, England had jurisdiction to pass an order similar
to that made by Ramfry, J. This question was elaborately
considered by the House of Lords in Chapman and Ors. v.
Chapman and Ors.(1). The leading judgment in that case was
delivered by Lord Morton of Henryton. In his speech he
elaborately considered the -various decisions rendered by
the English courts. The broad question that he posed for
decision was -whether the court could permit the settlor to
alter the terms of a trust and if so in what respect. It
was urged before him on behalf of the appellants in that
case that the court had jurisdiction to permit the
alteration of any of the terms of a trust. Negativing that
contention his Lordship observed at p. 456
“Striking instances of cases which negative
the existence of the alleged, unlimited
jurisdiction are In re Crawshay,(2) In re
Morrison(3) (Buckley, J.) and In re Montagu(4)
‘(Court of Appeal). In the first of these
cases North, J. said: ‘I should not be
administering the trusts created by ‘the
testator if I consented to this scheme. I
should be altering his trusts and substituting
something quite outside the will. On the
assumption that the scheme would be beneficial
to the estate, I cannot decide that I have
jurisdiction to authorise it’ ” In the last
mentioned case the Court of Appeal held that
it had no jurisdiction to allow the trustees
of a settlement to raise money by mortgage of
the settled estate and to apply it in pulling
down and rebuilding some of the houses on the
property. Lindley, L. J. said ‘We none of us
see our
(3) [1901]1 Ch. 701. (4) [1897] 2Ch.8.
105
way to hold that there is jurisdiction to make
an order in this case. It is very desirable
that the court should have jurisdiction to
deal with such a case; but Parliament has
never gone so far as to give it that jurisdic-
tion. No doubt it would be a judicious thing
to do what is wanted in this case, and if the
persons interested were all ascertained and of
age, they would probably concur, and then it
might be done; but they are not all
ascertained nor of full age; and unless the
court can authorize the trustees to do it, it
cannot be done.’ Lopes, L.J. said: ‘I have no
doubt that what is proposed is beneficial and
would increase both the income and the capital
value of the property. The question is
whether the court has jurisdiction to sanction
it. There is no provision in the settlement
which would authorize the works in question,
nor do they fall within any of the
improvements sanctioned by the Settled Lands
Act.”
From the above observations it is clear that the learned
judge proceeded on the basis that the court has no
jurisdiction to permit the alteration of any of the terms in
a trust deed excepting as regards the following matters
(a) Changes in the nature of an infant’s
property e.g. by directing investment of his
personality in the purchase of freeholds;
(b) Allowing the trustees of settled
property to enter into some business
transaction which was not authorized by the
settlement;
(c) Allowing maintenance out of income which
the settlor or testator directed to be
-accumulated; and
(d) Approving a compromise on behalf of
infants and possible after-born beneficiaries.
It will be noticed that the power given under those four
heads are those relating to management and -administration
of trust property. That power is similar to the power
conferred on courts by S. 34 of the Trusts Act and 43 of the
Trustees and Mortgagees Powers Act, 1866. In fact in this
country we have codified the very powers that were exercised
by the Chancery Courts in England under their equitable
jurisdiction. The Court of Appeal in Chapman’s case(1)
Evershed, M.R. and Romer, L.JJ., Denning, L.J. dissenting
stated the law on the point thus :
(1) [1953] Ch. 1 218.
L 7 Sup. CI/69-8
106
The inherent jurisdiction of the Court of Chancery is of a
limited character. It is a jurisdiction to confer upon the
trustee, quoad items of trust property vested in them,
administrative powers to be exercised by them where a
situation has arisen in regard to the property creating what
may be fairly called an ,emergency’. The inherent
jurisdiction does not extend to, sanctioning generally the
modification or remoulding of the beneficial trusts of a
settlement.
Hence we are not persuaded that the Chancery Court in
England had jurisdiction to pass orders similar to that
passed by Ramfry, J.
From whatever angle we may examine the validity of the order
made by Ramfry, J., it appears clear to us, that the said
order was outside the jurisdiction of the learned judge. It
was not merely a wrong order, or an illegal order, it was an
order which he had no competence to make. It is not merely
an order that he should not have passed but it is an order
that he could not have passed and therefore a void order.
The circumstances of the case call for certain modifications
in the decree of the High Court. On the facts of this case
we see no justification for treating the Official Trustee as
a trustee de-son-tort and to require him to account as such.
In the proceedings before Ramfry, J. the plaintiff did not
choose to appear and contest. It is not his case that he
was not served in that proceeding. But for the order of
Ramfry, J. the settlor would have certainly altered the
quantum of interest given to the plaintiff under the
original Trust deed by means of a will,. As it now turned
out the plaintiff has benefited by the wrong step taken by
the settlor. The Official Trustee has merely carried out
the order of the court. It was not open to him to go behind
that order. That being so we see no _justification to treat
him as a trustee. deson-tort. Equity requires that he
should be made to account as if he was ‘a trustee. In other
words his liability should not be greater than that of a
trustee. It is also proper to permit him to reimburse
himself all the costs incurred by him in all the courts from
out of the trust funds in his hands.
We see no justification for allowing accounting in this case
from the date the official Trustee took charge of the trust
estate. Till the institution of the present suit from which
this appeal has arisen there was no knowing that the
plaintiff would challenge the second Trust deed executed by
his father. He did not challenge it during his father’s
life time. On the faith of the order of the High Court, the
Official Trustee must have been disbursing the trust income
to the various beneficiaries. It will be inequitable to,
reopen all those transactions. We think the end,,;
1 07
of justice will be met if accounting is ordered as from the
date of the institution of the present suit. The plaintiff-
respondent is entitled to his costs in all the courts. But
he shall get the same from out of the Trust Estate.
Subject to the modifications directed above in the decree of
the High Court this appeal is dismissed.
V.P.S. Appeal dismissed and decree modified.
108