w w w . L a w y e r S e r v i c e s . i n



Narendra Prasad & Others v/s Indian Express Limited & Others


Company & Directors' Information:- THE INDIAN EXPRESS PRIVATE LIMITED [Active] CIN = U22120MH2003PTC142983

Company & Directors' Information:- NARENDRA AND COMPANY PRIVATE LIMITED [Active] CIN = U74899DL1997PTC087549

Company & Directors' Information:- A T EXPRESS INDIA LIMITED [Strike Off] CIN = U93030DL2009PLC193660

Company & Directors' Information:- N R EXPRESS PRIVATE LIMITED [Active] CIN = U63040WB1999PTC089271

Company & Directors' Information:- NARENDRA CO PRIVATE LIMITED [Active] CIN = U05190KA1980PTC003946

Company & Directors' Information:- NARENDRA AND NARENDRA (INDIA) LIMITED [Active] CIN = U74992RJ1997PLC013721

Company & Directors' Information:- P J EXPRESS PRIVATE LIMITED [Strike Off] CIN = U63040WB1995PTC075515

Company & Directors' Information:- G M S EXPRESS PRIVATE LIMITED [Active] CIN = U64120KA2006PTC040159

Company & Directors' Information:- U C EXPRESS PRIVATE LIMITED [Strike Off] CIN = U64120MH2004PTC148038

Company & Directors' Information:- R R EXPRESS PRIVATE LIMITED [Active] CIN = U97000DL2014PTC267284

Company & Directors' Information:- S F EXPRESS PRIVATE LIMITED [Active] CIN = U64120DL2015PTC279322

Company & Directors' Information:- J. K. EXPRESS PRIVATE LIMITED [Strike Off] CIN = U63090GJ2012PTC070288

Company & Directors' Information:- D K G EXPRESS PRIVATE LIMITED [Strike Off] CIN = U15499UP1982PTC005721

Company & Directors' Information:- P AND G EXPRESS PRIVATE LIMITED [Strike Off] CIN = U64120MH2003PTC139461

    C.S. No. 410 of 1982 & OA No. 180 of 2017

    Decided On, 09 March 2018

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE R. SUBRAMANIAN

    For the Plaintiffs: P.C. Harikumar for M/s. P.C. Harikumar, Associates Advocates. For the Defendants: Hema Sampath, Senior Counsel, R25, R26 & R29, for M/s. T.N. Seetharaman, Advocate.



Judgment Text

(Prayer: Defendants 24 to 29 brought on record as legal representatives of deceased 1st defendant as per order dated 22.06.1992 in Application No.764/1992 amendment carried out as per order dated 6.7.92 in Application No.2932/92 and being amendment further extended as per order dated 23.7.1992.

Defendants 30, 31 brought on record as legal representatives of deceased 25th defendant as per order dated 07.11.2016 in Application No.841 of 2016 to 843 of 2016.

Plaint filed under Order VII Rule 1 of the Civil Procedure Code, read with Order IV Rule 1 of the O.S. Rules praying to grant

(a)(i). for a declaration that the suit properties were/are properties held in trust for the benefit of the plaintiffs by the first defendant and that he had no right to alienate the same that defendants 2 to 23 having no right or title or interest to or in or upon the suit properties on the strength of alienations made by the first defendant in their favour and for possession of the suit properties after directing them to admit the same as trust property;

(ii) against the first defendant and such other defendant or defendants as may be liable, jointly and severally, for accounts and for the payment to the plaintiffs all such sums as he and they may be found to be liable to pay to the plaintiffs as a result of such taking of accounts as follows; for possession of all the trust properties after necessary declarations as mentioned herein for full and correct accounts from the first defendant of the management of the plaintiffs' father's business at Madras from 1925 till date.

Alternatively:

should this Hon'ble court come to the conclusion that all or any of the defendants 1 to 23 is or are bona fide purchasers for value without notice of the Trust, then and in that event, for a tracing order of the sale consideration of such properties into the hands of the 1st defendant or his agents or representatives and follow the same into whatever form it has taken with the same or nearly the same rights as the beneficiary/beneficiaries had in the original trust property including properties assets or business/businesses which have been acquired by the first defendant either with such funds or with the funds blended with other moneys with a charge thereon;

(b) for a full and correct account in respect of properties and assets declared by the first defendant and to be held in trust by him for the benefit of the plaintiffs' father from 04.03.1936 or 04.01.1937 till date;

(c) consequentially for a decree against the first defendant and such other defendants as may be found to be liable for a tracing order in respect of the properties sold by the first defendant to defendants 6 to 23;

(d) for an account of the realisations investments and other properties or assets into which the realisation by the sale of these properties were converted;

(e) for a decree against the first defendant and defendants 2 to 5 for an account from the date the said Newspapers and companies were formed or otherwise from the date on which they came into existence till date of the plaint or such further date as this Hon'ble Court may determine, of the profits, accumulations, accretions and additions arising out of the said business since they are part of the nucleus of the Free Press of India (Madras) Ltd., whose shares and debentures the first defendant held for the benefit of the Plaintiffs father;

(f) for a declaration that the first defendant held the suit properties and assets for the benefit of the plaintiffs' father from 04.03.1936 and 04.01.1937;

(g) for a decree directing the first defendant and other defendants as may be found liable to deliver to the plaintiffs all documents title deeds, promissory notes, books of accounts, valuable securities and other pronotes and writings belonging to the plaintiffs' Trust Estate and relating to, arising out of or in connection with properties declared as trust properties in the documents dated 4.3.1936 and 4.1.1937 and to have the same compulsorily registered and the trusts therein mentioned specifically performed by the first defendant or any of the other defendants as may be found liable;

(h) for such further or other reliefs as the plaintiffs may be found entitled to by this Hon'ble Court in this suit for accounts, for interest that a Trustee is bound to pay in respect of trust moneys not otherwise utilised for the purpose of acquisition of other properties or not otherwise employed in any business by the first defendant and

(i) for costs of this suit.)

The plaint averments briefly stated are as follows:

1. The plaintiffs 1 to 3 are the sons and the 4th plaintiff is the daughter of one Raja Mohan Prasad. According to the plaintiffs, their ancestors were Bankers and Financiers were possessed of large wealth. They had settled down in Hyderabad having migrated from Rajasthan about 120 years before the filing of the present suit. It is also claimed that they had established flourishing business and acquired properties both movable and immovable in Hyderabad, Bombay, Madras, Indore, Malwa etc. They had several partnership firms in various names like Muraliprasad Mohanprasad, Chunilal Muraliprasad, Papamal Chunilal, Chunilal Naradprasad etc.

2. In a partition that took place in 1925, Raja Mohan Prasad was allotted the firm Murliprasad Hardayal at Madras besides other firms at Hyderabad, Bombay, Indore and Malwa together with all assets like stock-in-trade etc. Apart from the shares in the firms and other assets, Raja Mohan Prasad was also allotted share in jewellery, cash, bonds, diamonds, promissory notes securities, vessels of gold and silver, clothes, motor cars, garages, bungalows, gardens etc. The said allotment included debts due to the family from M/s.T.R.Tawker & Sons, Madras, as evidenced by a pronote dated 20.06.1922. The said debt was secured by jewels and the jewels contained in four sealed trunks were kept in safe custody with the Imperial Bank of India in Madras in the name of Naradaprasad. Having taken charge of the properties after the partition, Raja Mohan Prasad carried on the family business in Hyderabad and other places with the assistance of agents and employees, who had been family retainers having been in the service of the joint family from the time of his grandfather and his paternal uncle.

3. Raja Mohan Prasad had also executed certain Powers of Attorney in favour of various people to carry out his instructions as regard the conduct of business in various parts of British India. One such Power of Attorney was executed in favour of one Chandanmull Mundhadha, who has been a family retainer at Madras for the family. He also enjoyed the confidence of Raja Mohan Prasad. The agent, viz. Chandanmull Mundhadha not being well versed in English and with an object of facilitating negotiation with the Imperial Bank of India at Madras, which was mostly managed by Britishers in those days, had introduced the 1st defendant in the suit (Late Mr.Ramnath Goenka) to Mr.Raja Mohan Prasad. Mr.Mundhadha had impressed upon Raja Mohan Prasad that Ramnath Goenka could speak English fluently, he is also closed to the officers of the Imperial Bank of India as well as members of the European Community at Madras. Thus Ramnath Goenka and Raja Mohan Prasad met during the middle of the year 1925.

4. It is also claimed by the plaintiffs that Late Ramnath Goenka projected himself as a person who is very familiar with who is who of Madras in those days, which included Englishmen, Bada Sahibs of important English Companies and he would be of very great help to Raja Mohan Prasad, who was keen on developing his business interest in Madras. On the persuasion of Mr.Ramnath Goenka, Raja Mohan Prasad got interested in what was called a Dubash agreement with Bombay Company Limited, which was a famous British Company carrying on business in import and export, cloth piece merchants and dealers in yellow metal. The late Ramnath Goenka had impressed upon Raja Mohan Prasad, that an impressive commission of % to 1% of the turnover to be guaranteed by the Bombay Company in favour of the Dubashes, who hold a Dubhash agreement for the said Company.

5. On the said promise a Partnership Firm was commenced with effect from 18.01.1926 and a formal deed of partnership was drawn up on 30.06.1926. Under the agreement the profit was to be shared as follows:

Mohan Prasad is to get 8 annas per rupee

Ramnath Goenka is to get 6 annas per rupee

Chandanmal is to get 2 annas per rupee

after setting apart one anna for charity. As per the partnership deed, Mohan Prasad would be the ‘Capitalist Partner’ and Ramnath Goenka would be the ‘Managing Partner’ and the net profits of the partnership would be divided after setting apart one anna per rupee for charity. The boarding and lodging of the partners residing at Madras and attending the working of the firm and the family members would be borne by the firm. Late Mr.Ramnath Goenka, the 1st defendant was put in charge of the business in Madras. Contemporaneously along with said partnership agreement, the Dubash agreement was entered into with the Bombay Company Limited on 30.06.1926 withretrospective effect from 14.06.1926. The Dubhash agreement covered trade in yarn, piece goods, yellow metal and sundries. As per the said agreement dated 30.06.1926, the responsibility of the Dubashes was to act as guarantors to the Bombay Company Limited for all goods sold by them to various parties. As per the said agreement, the transactions of Bombay Company with locals are to be carried out through the Dubhashes and it shall be the primary duty and responsibility of the Dubhashes to collect the money due to the company and in the event of failure on the part of the Dubhashes to collect the money from the traders the Dubhashes will have to pay the same.

6. The sum and substance of the agreement was actually an indemnity provided by the Dubhashes in favour of the Bombay Company Limited. Having won the confidence of Raja Mohan Prasad as well as Chandanmal Mudhadha, who were not acquainted with English, according to the plaintiffs, the late Mr.Ramnath Goenka (1st defendant) had started extracting monies from the Firmat the cost of the partnership business. The plaintiffs would allege that late Mr.Ramnath Goenka, cleverly introduced a few parties, who bought goods from the Bombay Company Limited on credit. These parties were his close relations and dummies having no means of their own.Several firms were created by a permutation and combination of the first names of his close relations and dummies. He made it appear as though the goods were drawn from the Bombay Company Limited, which were delivered to the fictitious persons and firms created by him, and the names that were given were the first names of his father’s cousins, cousin’s children and other friends of his own. It is also claimed that goods were also drawn in the names of non-existing persons with false addresses. He had drawn goods in various names and the monies were not paid to the Bombay Company. In view of the indemnity clause found in the Dubhash agreement the Firm Murali Prasad Mohan Prasad, which had entered into the Dubhash agreement with the Bombay Company had to pay up those monies. It is also claimed that nearly about 8 persons, whose names are shown in the plaint, are somewhere related to Late Ramnath Goenka or they were his close friends.

7. The goods that were drawn in the name of those persons were sold in the market by Late Ramnath Goenka and monies were secreted by him. Whenever Bombay Company demanded payment from the Dubhashes namely Murali Prasad Mohan Prasad, Late Ramnath Goenka used to write to Raja Mohan Prasad asking him to send monies from Hyderabad. The letters written by Ramnath Goenka would cite bad market conditions and poor realizations apart from insisting that the payments due to the Bombay Company must be made within the stipulated time span failing which the Englishmen may even cancel the Dubhash agreement, which would result in heavy loss to the firm.

8. It is also claimed that Late Ramnath Goenka also persuaded Raja Mohan Prasad to enter into the field of Real Estate and also purchase lands in partnership with others. He also entered into arrangements with M/s. Kotnis, Vasu Naidu and Rambax Jaichand. With the monies provided by Raja Mohan Prasad, Late Ramnath Goenka also purchased a number of houses and land measuring about 12 acres in Ennore a suburb of Madras, which was known by the Europeans as the Ennore Club used by Europeans for boating and yachting purposes.

9. During the year 1930, upon realizing that he had landed the Dubash Firm, namely Murali Prasad Mohan Prasad in a perfect debt trap, the first defendant planned a scheme to cheat Raja Mohan Prasad. During the beginning of 1931, he suggested that the name Murali Prasad Mohan Prasad was not auspicious for the firm and therefore a second Dubhash Agreement should be entered into with a different firm name with the Bombay Company Limited. On the one hand, he had successfully persuaded Raja Mohan Prasad to enter into a second agreement with Bombay Company Limited, on the other hand he had also successfully persuaded Bombay Company to take him as an employee, and thus he had become an employee of the Bombay Company Ltd., in August 1931. He had also taken care to ensure that Raja Mohan Prasad did not reveal to the Bombay Company that Late Ramnath Goenka was a partner in the second firm, namely Chunilal Murliprasad & Co. He had also assured Raja Mohan Prasad that he is taking up employment with the Bombay Company only to ensure that the firm namely the Dubhashes were benefited by the transactions with the Bombay Company Limited. The Partnership agreement also provided that the salary earned by him from Bombay Company Limited would be treated as the income of the firm. A new partnership deed was thus drawn up on 22nd June 1932 with effect from 22.10.1930. Under the new partnership Chandamul Mundhadha retired from the firm. Since the 1st defendant was serving the Bombay Company also at that point of time and he wanted to retain the dual capacity he impressed upon Raja Mohan Prasad to depute another person to take care of Raja Mohan Prasad at Madras. Therefore, one Sumatmul Acharya was sent to Madras by Raja Mohan Prasad. The said Sumatmul Acharya was to take care of the interest of Raja Mohan Prasad and be his watch dog and report to him about the happenings at Madras.

10. According to the plaintiffs, Late Ramnath Goenka somehow came to know that the alleged watch dog viz. Sumatmul Acharya had been charged with some misappropriation in his native State by the Prince and having incurred the displeasure of the Prince, Sumatmul Acharya had left his native State and taken shelter in Madras as the agent of Raja Mohan Prasad. Having obtained this information, the Late Ramnath Goenka blackmailed and completely dominated Sumatmul Acharya and made him sign whatever letters he dictated and fed false information to Raja Mohan Prasad about the happenings in Madras regarding the affairs of the partnership firm viz. Mohan Prasad Murali Prasad & Co. or Chunilal Murliprasad. It is also claimed that Late Ramnath Goenka by paying the gambling bills of the European Officers of the Bombay Company had made puppets of the representatives of Raja Mohan Prasad as well as the European Officers of the Bombay Company Ltd. He had misappropriated huge sums and purchased properties in his name. It is also contended that he used the Boycott of foreign goods and the spreading Nationalist Movement, to claim that the business has suffered and constantly presented a depressive picture of the money market in Madras and impressed upon Raja Mohan Prasad that the only way that they could get out of the mess is to keep the Englishmen happy by paying them the monies due irrespective of whether those monies were realised from the traders or not.

11. The plaintiffs would allege that the misappropriations of Late Ramnath Goenka had reached an extent of Rs.2.5 lakhs to Rs.3 lakhs by the year 1932. With a view to create more avenues for milking Raja Mohan Prasad, persuaded him to take over a business that was run by the Bombay Company in the name of Vishnu Lakhmi Depot as their own. The said business was taken over by the firm Chunilal Murliprasad from the Bombay Company. The main business of the firm was dealing in piece goods particularly textiles. Here also, according to the plaintiffs, the 1st defendant managed to create bogus purchases and make supplies to persons, who are either is close relatives or dummies with the monies thus misappropriated, it is stated that Late Ramnath Goenka acquired various properties including debentures in Free Press of India and various other properties in Madras and Ennore. These properties are shown as items 1 to 7 in the suit schedule.

12. Having made the representative of Raja Mohan Prasad viz., Sumathmul Acharya as his stooge by blackmailing and also by promising to get the complaint against him at Rajasthan withdrawn by the intervention of the European Officers, he made Sumathmul Acharya to write letters to Raja Mohan Prasad. Those letters were in fact dictated by Late Ramnath Goenka and signed by Sumathmul Acharya. Often Late Ramnath Goenka kept writing letters to Raja Mohan Prasad assuring him that he would recover the monies payable by the local traders to the Bombay Company as well as the Vishnu Lakshmi Depot. He would also assure Mohan Prasad to handle all correspondence with Bombay Company Ltd., and ensure that nothing went wrong. Raja Mohan Prasad believed these representations of Late Ramnath Goenka, since he was also employed in Bombay Company at the relevant point of time.

13. During the year 1936, the European Officers and the Managing Director of Bombay Company Ltd., started writing letters to Raja Mohan Prasad seeking payment of the monies due. Suspecting something very seriously wrong Raja Mohan Prasad visited Madras in April 1936. He had assured the Bombay Company of his honourable intention to resolve the matter and requested the Bombay Company Ltd., to assist him in realizing the monies from the parties, who have bought the goods on credit. However, by end of 1936, the Bombay Company Ltd, started pressing for repayment of the monies due as the European officers though amenable to Late Ramnath Goenka could not wait any longer,in view of the tough stand taken by their superior in London. Realizing that things have come to point where, he cannot continue the double game Late Ramnath Goenka rushed to Hyderabad to reassure Raja Mohan Prasad and also prepare him for any action by the Company. Claiming that his intentions were bona fide and in order to prove his bona fide he gave a pronote for Rs.5,00,000/- stating that no action would be taken against Raja Mohan Prasad by Bombay company and in the event of suffering any loss because of the actions of Bombay company, he would always use Ramnath Goenka’s promissory note as an escrow and sue upon it. He also handed over a deed of declaration of Trust dated 04.03.1936 and a Trust letter dated 04.01.1937 in favour of Raja Mohan Prasad for the Madras and Ennore properties and the investment in shares and debentures acquired out of the monies of Raja Mohan Prasad. Within a few days of the above happenings the Bombay Company instituted a Suit in CS No.255 of 1936 on the Original Side of this Court against Raja Mohan Prasad as a Sole Proprietor of Murliprasad Mohanprasad & Co. and Chunilal Murliprasad & Co., and several other parties who owed monies to the Bombay Company Ltd., for the goods bought by them from Bombay Company Ltd.

15. It is also contended that the 1st defendant Late Ramnath Goenka had manoeuvred the matters in such way preventing Raja Mohan Prasad from realizing the seriousness and also prevented him from putting up proper defence in the said suit. He also had assured Raja Mohan Prasad that nothing would happen in the suit and saw to it that Raja Mohan Prasad remained ex-parte in the suit. Eventually Raja Mohan Prasad was set ex-parte and the suit was decreed for a sum of Rs.6,41,052-3-2 on 25.01.1931 by this Court. The Bombay Company got the decree transferred to Hyderabad and filed a suit upon the said decree at the Nizam’s Court in Hyderabad.

16. The plaintiffs would claim that their father met all the debts and inspite of his calling upon Late Ramnath Goyenka to perform his duties as a trustee or as a person standing in a fiduciary capacity, the 1st defendant Late Ramnath Goenka evaded and prevented Raja Mohan Prasad for visiting Madras on one pretext or the other. One of the reasons that was given by Ramnath Goenka was that if Raja Mohan Prasad would visit Madras, there is a possibility of him being arrested in execution of the decree obtained by the Bombay Company. And because of the fear created by late Ramnath Goenka, Raja Mohan Prasad desisted from visiting Madras and he took ill in 1941 and eventually passed away in 1947. It is claimed by the plaintiffs that they were minors at that time and they have no knowledge about the involvement of the plaintiffs’ father with Late Ramnath Goenka or the proceedings that went on against their father in the Nizam’s High Court on the basis of the decree obtained in Madras High Court in CS No.255 of 1936. It is also stated that Raja Mohan Prasad placed all the materials before the Nizam’s Court by way of defence and the suit which dragged on for several years and in 1944, the decree was purchased by one Bankatlal Badruka and the said assignee was settled by the plaintiffs’ father by paying him in installments. Compromise was entered into the said suit in the Nizam’s Court on 11.1.1945 and the full satisfaction of the decree was entered between Raja Mohan Prasad and Bankatlal Badruka.

17. It is also the claim of the plaintiffs’ that their mother died on 19.04.1976. After the death of the mother, when the plaintiffs were going through the records of the mother, they found the copy of the promissory note for Rs.5,00,000/- executed by Late Ramnath Goenka in the year 1932. It is only thereafter the plaintiffs launched a investigation and found that the materials regarding the proceedings that had taken place in the Nizam’s Court at Hyderabad. Since by the time the Nizam’s territory of Hyderabad had became a part of the Indian Union and the Nizam’s Court had become the Andhra Paradesh High Court. The documents were not readily available and after much difficulty they retrieved all the documents and the 1st plaintiff consulted the elders in the family and he had informed Late Ramnath Goenka was just an agent and servant of his father and he had misappropriated his father’s funds cheated him and never visited Hyderabad after his father became ill and the 1st plaintiff was informed that all the wealth Ramnath Goenka possessed he owed to the plaintiffs’ father and that Goenka was indebted to the plaintiffs’ father not only figuratively but also literally.

18. On 19.01.1979, Mr. Bhagwandas son of Ramnath Goenka died in Bombay and the body was brought to Madras on the same day, though the 1st plaintiff met Late Ramnath Goenka for the condolence. He did not wish to open the topic on the trust since he thought it was not the appropriate time for him to seek repayment of the monies that Goenka owed his father. Though the 1st plaintiff met Late Ramnath Goenka at Bangalore twice, Ramnath Goenka would however evade the topic citing one reason of the other. Thereafter despite several attempts met by the 1st plaintiff to meet the 1st defendant, the 1st defendant was not ready to meet the 1st plaintiff and he would avoid meeting him on some pretext or the other. Sensing the unwillingness on the part of the 1st defendant to meet him, the 1st plaintiff wrote a letter on 06.05.1981. There was no response for the said letter and it become obvious, where the 1st defendant had no intention of meeting the 1st plaintiff to discuss the matter. Therefore, the plaintiffs caused a notice to be sent to the 1st defendant on 24.08.1981 charging him with being a Trustee and calling upon him to transfer the properties held in Trust to them and render accounts.

19. On 10.11.1981 the counsel for Late Ramnath Goenka sent a reply stating that Mr.Goenka was in indifferent health and denying, baldly, the allegations in the notice and claiming that the matters complained were of antiquity and suitable reply would be sent, the letter also requires the plaintiff to desist from taking any hasty action. On 24.11.1981 the plaintiffs caused another notice to the Goenka’s counsel and sought for various particulars. On 02.12.1981 the plaintiffs’ counsel was informed that since Ramnath Goenka was undergoing treatment in Switzerland, they were unable to reply for lack of instructions. However, inspection of some of the records was provided to the plaintiffs’ counsel, but though they were assured that a reply would be sent by first week of January 1982 after Goenka returned to India, no reply was received. Therefore, it is claimed by the plaintiffs that Late Ramnath Goenka, who was at all material times an agent and partner of the plaintiffs’ father stood in a fiduciary position and is liable to account for the monies that were received from the plaintiffs’ father.

20. It is also claimed that he being the partner of the firms Murliprasad Mohan Prasad and Chunilal Murliprasad, it is also accountable to the plaintiffs’ father who is the capitalist partner. The plaintiffs charged the 1st defendant with fraud and claimed that he has no means to purchase any property. Therefore, according to the plaintiffs, all the properties which the 1st defendant had purchased, during the period from 1926 to 1932 were purchased by him out of the funds of Raja Mohan Prasad and therefore, the 1st defendant held them in trust for the benefit of the family of Raja Mohan Prasad. It is also claimed that any accretions to the property would also enure to the trust. In effect, the plaintiffs claimed the entire estate of Late Ramnath Goenka. It is also claimed that in view of the Section 10 of the Limitation Act, the suit is not barred by limitation and the plaintiffs have every right to file the suit seeking the reliefs prayed for in the suit.

21. The 1st defendant filed the written statement contending as follows:

The fact that the first defendant was taken as a partner with regard to the business carried on by the plaintiffs’ father as the Dubhash of Bombay Company is admitted. However, the other averments were denied by the 1st defendant. The claim of the plaintiffs that the 1st defendant extracted monies from the firm at the cost of the partnership business was stoutly denied.The further claim of the plaintiffs that certain parties to whom the goods were sold by the Bombay Company, were either dummies or binamies for the 1st defendant was also denied.

22. The 1st defendant would also deny the allegations to the effect that he has misappropriated monies belonging to the plaintiffs’ father to the tune of Rs.2.5 lakhs. According to the 1st defendant, the claim of the plaintiffs that the seven items of properties referred to in paragraph 14 of the plaint were purchased by him with the monies allegedly misappropriated from the plaintiffs father is false. The allegations to the effect that the 1st defendant had written letters to the plaintiffs’ father on various dates projecting a false picture about the business carried on at Madras was denied by the 1st defendant. It is also claimed by the 1st defendant from the year 1931, he was employed in the Bombay Company as its sales man, but the allegations that he had suppressed the fact that he was a partner in the Dubhash firm and Madras office of the Bombay Company had dealt with the parties, viz. Merchants at the instance of the 1st defendant was denied by him. The 1st defendant would also claim that certain letters were given to the plaintiffs’ father at the instance of plaintiffs’ father to enable him to obtain finance from various parties.

23. The claim of the plaintiffs with reference to the proceedings in CS No.255 of 1936 in this Court where also denied. It is also stated by the 1st defendant that the father of the plaintiffs Sri.Raja Mohan Prasad never claimed that the suit properties were purchased out of the monies sent by him from Hyderabad during the years 1926 to 1932. He also never claimed that the 1st defendant was either acting in a fiduciary capacity or as a trustee for himself. Though, according to the plaintiffs, the plaintiffs’ father discovered that the 1st defendant had misappropriated the monies even in 1937, he never choose to launch any action or proceeding against the 1st defendant till his death in 1947. This by itself according to the plaintiff would show that the claim of the plaintiffs is a complete after thought. The 1st defendant would also deny the claim that he effectively prevented the plaintiffs’ father from visiting Madras or the Madras Presidency.

24. The 1st defendant would also contend that besides the plaintiffs, there is another son by name Hari Prasad to Raja Mohan Prasad and being the eldest son, he was the Manager of the family consisting of descendants and the widow of Mohan Prasad. Therefore, the 1st defendant would contend that the suit is bad for non-joinder of Hari Prasad, who is the eldest son of Raja Mohan Prasad. It is also the contention of the 1st defendant that at least the widow of Mohan Prasad, who was of full-age when he died in 1947, should have been aware of all the happenings and the very fact that she did not take any action during her lifetime based on the claim made by the plaintiffs now would itself show that the claim of the plaintiffs is an after-thought and nothing but falsehood. It is also claimed that Raja Mohan Prasad even during his lifetime had settled the claims of the Bombay Company Limited for a paltry sum once proceedings were initiated at Hyderabad. The claim of the plaintiffs that the 1st defendant was at all material times an agent and partner of the plaintiffs' father and that he stood in the fiduciary position so far as the plaintiffs’ father is concerned in respect of the properties at Madras and the monies belonging to the firms Murli Prasad Mohan Prasad and Chunilal Murli Prasad is denied by the 1st defendant.

25. The 1st defendant would also claim that the letters attributed to Mr.Sumathmul Acharya have been created by the plaintiffs to suit their convenience. The claim of the plaintiffs that the 1st defendant is accountable to the firms Murliprasad Mohan Prasad or Chunilal Murliprasad, to the tune of Rs.6,48,146-12-5 or any other sum. It is also claimed that the promissory note for Rs.5,00,000/- referred to in the plaint was given only to enable Mohan Prasad to borrow monies on the strength of the same. The first defendant would also contend that the document dated 04.03.1936 was executed only to enable Raja Mohan Prasad to borrow monies from the Zamindar upon instructions of the lawyer of the Zamindar, Mr.Ramachandra Aiyar. It is also denied that the shares in Free Press India and other Newspapers were acquired by the 1st defendant out of the monies belonging to the father of the plaintiffs. The 1st defendant would also plead that the suit is barred by limitation and there is no plea or evidence for application of Section 17 (a) (b) (d) of the Limitation Act. The 1st defendant would also dub the suit as a delayed attempt by the plaintiffs to extract money from him considering his present status.

26. An additional written statement was filed by the 1st defendant, wherein it is claimed that his eldest son Hari Prasad though adopted, he having been adopted prior to the birth of the plaintiffs he was the Manager of the joint family and he had died only on 8.7.1987. It is also claimed that said Hari Prasad was fully aware of the circumstances under which the alleged deeds of declaration of trusts dated 04.03.1936 and 04.01.1937 came into existence. It is also pointed out by the 1st defendant that even from the year 1937 during the proceedings that took place in Bombay High Court,the 1st defendant has asserted his own title hostile to the act of the plaintiffs’ father and the plaintiffs’ father, who was alive upto 1947, did not initiate any action to recover possession of the properties. It is contended that in view of such failure on the part of Raja Mohan Prasad as well as Hari Prasad, even assuming that Mohan Prasad had some vested title, the same has been lost to the 1st defendant by adverse possession and limitation. It is also contended that the suit is basically one on the footing that the 1st defendant is benamidar of Raja Mohan Prasad and it is further contended that the suit is barred in view of the provisions of the Binami Transactions (Prohibition) Act, 1988. The claim of Trust has been brought about by the plaintiffs only to save the suit from the Law of Limitation. The circumstances under which the deeds of declaration of Trust dated 04.03.1936 and 04.01.1937 had come into being, are also explained by the 1st defendant and it is the claim of the 1st defendant that the document dated 04.01.1937 was executed by the 1st defendant at the instance of Sumathmul Acharya, who was the Power of Attorney Agent of Mohan Prasad, Venkatachalam and Gopilal who are the pleaders of Mohan Prasad to enable Mohan Prasad to borrow monies from a Zamindar who insisted upon some security situate within the Madras Presidency.

27. The 1st defendant would further contend that since the Zamindar was not interested in lending monies on the security of properties of Mohan Prasad situated Hyderabad, which was a foreign territory at that point of time. At the request of Sumathmul Acharya and others, the 1st defendant made the declaration and on the same day Sumathmul Acharya executed a contemporaneous document by which he had agreed to pay a sum of Rs.65,000/- and also discharge mortgage over the properties. Since the transaction did not go through and Sumathmul Acharya informed the 1st defendant that the loan could not be realized and therefore, he did not pay the consideration also. According to the 1st defendant, on 15.01.1937, Mohan Prasad had returned the document to the 1st defendant stating that he is not able to arrange the loan and hence he was returning the deed of declaration of Trust as cancelled. It is also contended that the trust deed being an unregistered one cannot operate to extinguish the title of the 1st defendant to immovable properties. He has also claimed that the plaintiffs’ suit based on the alleged deed of declaration deed of Trust dated 04.03.1936 is misconceived and not sustainable in law. The 1st defendant would also contend that the suit is hopelessly barred by limitation and the same cannot be brought within the scope of Section 10 of the Limitation Act. It is also claimed by the 1st defendant that when the creditors of Chunilal Murliprasad Firm, viz. Kasthur Chand Sadasukh attempted to execute the decree in suit No.1623 of 1935 against the 1st defendant’s property, Raja Mohan Prasad did not choose to make a claim to the properties nor did he use the alleged declaration of the Trust. Even after Raja Mohan Prasad fell out with the 1st defendant, he did not make a claim to the properties on the ground that they were held in Trust by the 1st defendant for himself or his legal representatives. This according to the 1st defendant to go to show that the Raja Mohan Prasad never claimed the suit properties as the properties that were acquired from and out of the funds belonging to him.28. The 2nd defendant filed a written statement contending that the plaintiffs claims against it are wholly vexatious. It is also claimed that there is no cause of action for the suit. The 2nd defendant would further point out that there were no allegations as against the 2nd defendant in the entire plaint, however the 2nd defendant would deny each and every one of the allegations in the plaint are false and misleading. It is also claimed that the suit is bad for non-joinder of parties. It is also stated that the plaintiffs have no cause of action to sue the 2nd defendant and the 2nd defendant is not even remotely connected with cause of action of the suit. On the above contentions the 2nd defendant sought for dismissal of the suit.

29. The 3rd defendant filed a separate written statement, containing similar allegations as that of 2nd defendant.

30. Defendants 4, 5, 6 and 11 also filed a separate written statements containing similar allegations as found in the written statement of defendants 2 and 3.

31. The 13th defendant filed a separate written statement, wherein it is claimed that the properties situate at 115 Mint Street, Madras 600 001, viz. item 2 of the plaint schedule properties were purchased by his father Inderchand Galada as early as on 20.05.1937, since the same was subject to a mortgaged with C.K.Samarapuri Chetty, the said mortgage was also discharged by the father of the 13th defendant, therefore the 13th defendant would claim that they are bona fide purchasers for value without notice and that the suit is barred by limitation.

32. The 15th defendant adopted the written statement of the 13th defendant.

33. The 26th defendant had filed the written statement in the year 1992. Apart from reiterating whatever has been stated by the 1st defendant in his original written statement as well as the additional written statement, the 26th defendant had not added anything substantial to the pleadings through her written statement. However the 26th defendant had filed an additional written statement on 7th December 1992. Pleading to refer to the interrogatories issued to the 1st defendant by the counsel for the plaintiffs, the 26th defendant would submit that the promissory note and a declaration of Trust came into the existence only under the circumstance narrated by the 1st defendant in his answers to the interrogatories. The26th defendant would also refer to various proceedings that took place in Bombay High Court in execution of the decree in suit No.1722 of 1935 filed by Kasthur Chand Sadasukh & Co., against the Chunilal Murliprasad and the application filed by the pleader, viz. Amarchand Mangaldas against Chunilal Murliprasad seeking payment of their fees and contend that the present suit is barred by limitation in view of the fact that the 1st defendant had asserted his title to the properties in question even in those proceedings in the year 1937.

34. The Plaintiffs have filed a rejoinder contending as follows:

The plaintiffs would contend that their claim is based on the partnership agreement and the deed of declaration of Trust dated 04.03.1936 and 04.01.1937. Inasmuch as the suit is based on a Trust and the fact that the 1st defendant stood in a fiduciary capacity to the father of the plaintiffs as well as the plaintiffs,there is no question of the suit being barred by limitation. It is also contended that the cause of action for the suit would arise only on the date when the plaintiffs obtained the copy of the promissory note from the Hyderabad High Court on 19.07.1979 and as such the suit filed within 3 years from the said date, cannot be said to be barred by limitation. It is also claimed that the promissory note was executed by the 1st defendant to prevent Raja Mohan Prasad from sending consent letters to Bombay Company to enable it to proceed against the defaulters inasmuch as those defaulters were dummies or benamis of the 1st plaintiff. In the rejoinder, the plaintiffs would deny the claim of the 1st defendant that the promissory note dated 01.09.1936 as well as deeds of declaration of trust were given by him only in order to enable Raja Mohan Prasad to secure loans in Hyderabad and Madras. It is also stated that all the plaintiffs were minors, when Raja Mohan Prasad died and he was forced to sell his huge Bungalow to discharge his liabilities,many of the documents, that could have been available with the plaintiffs, were destroyed at the time of shifting to a smaller house. Therefore, according to the plaintiffs, the suit is not barred by limitation.

35. The 1st defendant died pending suit. Defendants 24 to 29 were brought on record as the legal representatives of the deceased 1st defendant. The 25th defendant also died pending suit and defendants 30 and 31 were brought on record as her legal representatives. The 2nd defendant's name was amended as Indian Express Limited as per the order dated 02.03.2016 in Application No.1007 of 2016. Defendants 30 and 31 though served have not entered appearance through counsel.

36. At trial, the 1st plaintiff was examined as P.W.1 and Exhibits Nos.P1 to P446 were marked on the side of the plaintiffs. None was examined on the side of the defendants, however Exhibits Nos.D1 to D222 were marked on the side of the defendants during Cross-examination of the 1st plaintiff as P.W.1.

37. Apart from the above Exhibits, interrogatories were issued to the 1st defendant and he has also answered the interrogatories.

38. I have heard Mr.P.C.Hari Kumar, learned counsel appearing for M/s.P.C.Hari kumar Associates, for the plaintiffs, Mrs.Hema Sampath, Senior Counsel appearing for Mr.T.N.Sitharaman, learned counsel appearing for the defendants 24, 25, 26 and 29.

39. On the rival contentions, this Court has framed the following issues on 30.10.1986:

1. Whether the suit properties are trust properties for the benefit of the plaintiffs?

2. Whether the first defendant is the trustee of suit properties for the benefit of the plaintiffs?

3. Whether the alienation made by the first defendant in favour of defendants 2 to 23 are valid and binding on the plaintiffs?

4. Since the learned counsel for the plaintiffs has stated that he is not going to let in evidence about the benami nature or of the nominal nature of transaction, but only interested in proving that the transaction is not a bonafide transaction the issue will be whether the alienation made by the first defendant in favour of defendants 2 to 23 are bonafide transactions and not binding on the plaintiffs?

5. Whether the first defendant is liable to account to the plaintiffs as a trustee?

6. Whether the assets belonging to defendants 2 to 6 were obtained by the first defendant from and out of the alleged nucleus furnished by the father of the plaintiffs?

7. Whether the shares and debentures of the Free Press of India (Madras) Ltd., to an extent of Rs.95,000/- form part of the nucleus of the plaintiffs’ father?

8. Whether the first defendant is a partner of Raja Mohan Prasad under deeds of partnership dated 30th June 1926 and 22nd June 1932?

9. Whether the first defendant was a servant of Sukhdev Prasad Ramprasad firm before joining the firm of Raja Mohan Prasad under deeds of partnership dated 30th June 1926 and 22nd June 1932?

10. Whether the first defendant is guilty of fraud and whether he syphoned off funds from Murali Prasad and Mohan Prasad Firm and Chunilal Murali Prasad Firm for payment of the goods belonging to Bombay Company and sold to third parties as alleged by the plaintiff in paragraphs 9 to 13 of the plaint?

11. Whether Chandanmull Mudhadha introduced the first defendant to Raja Mohan Prasad representing that the first defendant would be helpful in recovering the debts due from Tawker & Sons and also in obtaining custody of the four trunks of jewels alleged to have been deposited with the then Imperial Bank of India at Madras as stated in paragraph 3(i) of the plaint?

12. Whether the first defendant represented to Raja Mohan Prasad that the first defendant knew the entire business community at Madras including all Englishmen who had business interest in Madras and claimed familiarity with 'Bada Sahibs' of important English Companies and that the first defendant would achieve a lot in expanding the business at Madras by having business connection with the English Companies as stated in paragraph 4 of the plaint?

13. Whether the first defendant persuaded Raja Mohan Prasad to get interested in any business enterprises and in particular in any Dubash arrangement with the Bombay company Limited and in the manner alleged in para 5 of the plaint?

14. Whether the first defendant represented to the plaintiffs’ father that the first defendant had no means of his own and that he has to approach the plaintiffs’ father for a large deposit for business arrangement?

15. Whether the first defendant gave any assurance to Raja Mohan Prasad as alleged in para 7 of the plaint and agreed to work as his servant or agent and be his confident and suggested that he should be made a working partner at Madras and put in charge of the business?

16. Whether Raja Mohanprasad agreed to invest a sum of Rupees One lakh and a partnership deed dated 30th June 1926 was executed to take effect from 18.01.1926 as alleged in paragraph 8 of the plaint?

17. Whether the first defendant persuaded Raja Mohan Prasad to take on Vishnu Lakshmi Depot and whether huge liabilities were created by the first defendant as alleged in paragraph 14 of the plaint and whether the properties were acquired by the 1st defendant as alleged in the plaint?

18. Whether letters were written by the 1st defendant to Mohan Prasad as alleged in para 15 of the plaint?

19. Whether the first defendant executed the following documents: namely, 1) Promissory note dated 01.09.1936 for a sum of Rupees five lakhs; (2) Deed of declaration of Trust dated 4.3.1936; and (3) trust letter dated 4.1.1937 for the reasons and in the circumstances stated in paragraph 16 of the plaint in respect of the properties and shares and debentures described in the schedule to the plaint?

20. Whether the first defendant executed a promissory note dated 1.9.1936 and a deed of declaration of trust dated 4.3.1936 and the trust letter dated 4.1.1937 at the request of the plaintiffs’ father for the purpose of securing finance to the plaintiffs’ father as alleged by the first defendant?

21. Whether the 1st defendant prevented the plaintiffs’ father Raja Mohan Prasad from visiting Madras for the alleged reasons in paragraph 18 of the plaint?

22. Whether the averments contained in paragraph 19 of the plaint are true?

23. Whether there is any cause of action for the suit?

24. Whether the claim of the Bombay Company Limited were not settled by the plaintiffs’ father?

25. Whether the plaintiffs are entitled to trace the alleged original funds allegedly drawn by the first defendant from the alleged account of Murali Prasad Mohan Prasad and/or Chunilal Murali Prasad and Company to the extent of Rs.6,48,146.12 or any other sum?

26. Whether the suit is barred by limitation?

27. Whether the suit is not maintainable as contended by the first defendant?

28. Whether the suit is not maintainable as against defendants 2 to 6 and 11 as contended by them?

29. Whether the plaintiffs are entitled to trace the Trust property, if any, in the hands of all or any of the defendants?

30. Whether the plaintiffs are entitled to any relief from defendants 2 to 6 and 11?

31. What relief the plaintiffs are entitled?

On 16.10.1985, the following additional issues were framed by this Court:

1. Whether the suit is hit by non-joinder of Hariprasad, the eldest member of the Hindu undivided family of the plaintiffs and whether the suit is hit by Section 6 of the Limitation act?

2. Whether the suit is barred by Section 2 of the Benami Transactions (and prohibition of the Right to recover property) Act, 1988?

3. Whether the plaintiffs have lost title by the defendants’ prescribing title by adverse possession?

4. Whether the documents dated 4.3.36, 1.9.36 and 4.1.37 are not valid in law for want of compliance with the Stamp Act and Registration Act?

5. Whether the plaintiffs ought to have valued the alternative relief and whether the Court fees paid is correct?

6. Whether in the absence of obtaining leave under Clause XIV of the Letters of Patent, the suit as filed is liable to be dismissed?

7. Whether the plaintiffs are disentitled to any relief by reason of acquiescence and laches?

8. Whether the plaintiffs are not estopped from setting up title when their father did not question D-1’s title in various court proceedings?

9. Whether the suit is barred by the principles of res judicata?

10. Whether the counter letter dated 5.1.37 was executed under the circumstances set out in the rejoinder of the plaintiffs?

11. Whether it is open to the plaintiffs to say that the 1st defendant was holding the properties in trust for Mohanaprasad under an alleged deed of trust when their case is that the properties were acquired by the 1st defendant with the moneys of Mohan prasad?

12. Whether the plaintiffs have failed to plead the particulars of the alleged fraud and if so whether the plea of fraud can be canvassed by the plaintiffs?

13. Whether there has been any fraud or concealment of fraud or any mistake as referred to in Section 17 of the Limitation Act?

14. Whether the various court proceedings show that Mohanprasad was well versed in court proceedings and litigation and that he did not act on the instructions of the first defendant?

15. Whether the 1st defendant kept Mohanprasad away from appearing in various courts?

16. Whether the plaintiffs are entitled to the relief of accounts when the alleged partnership ceased with the death of Mohanprasad?

17. Whether the plaintiffs have established, fraud, coercion blackmail and misdemeanor of the 1st defendant?

18. Whether it is open to the plaintiffs to contend that the counter letter dated 5.1.37 is a got up document despite its authenticity having been accepted by Bombay High Court in C.S.No.1623 of 1935?

40. Upon hearing the learned counsel for the parties, the issues are recast as follows:

1. Whether the claim of the plaintiffs that the suit properties were purchased by the 1st defendant out of funds belonging to Raja Mohan Prasad or the partnership firms, viz. Murli Prasad Mohan Prasad and Chunilal Murli Prasad is true?

2. Whether the 1st defendant was holding the properties in trust for the heirs of Raja Mohan Prasad?

3. Whether the alienations made by the 1st defendant of the suit properties in favour of defendants 2 and 3 are bona fide transactions binding on the plaintiffs?

4. Whether the 1st defendant is liable to account to the plaintiffs as a trustee?

5. Whether the 1st defendant is guilty of fraud and whether he had syphoned off funds from the two partnership firms, viz., Murli Prasad Mohan Prasad and Chunilal Murli Prasad, thus unjustly enriching himself?

6. Whether the promissory note dated 01.09.36, the deed of Trust dated 04.03.1936 and the Trust letter dated 04.01.1937 were executed by the 1st defendant under the circumstances alleged by him?

7. Whether the 1st defendant prevented Raja Mohan Prasad from visiting Madras for the reasons alleged in para 18 of the plaint?

8. Whether the suit is barred under the provisions of Benami Transactions (Prohibition ) Act, 1988?

9. Whether the suit is barred by limitation?

10. Whether the suit is bad for non-joinder of Hari Prasad the eldest member of the Hindu Undivided Family?

11. Whether the documents dated 04.03.1936 and 04.01.1937 are not valid in law for want of compliance with the Stamp Act and Registration Act?

12. Whether the plaintiffs have established coercion and misdemeanor on the part of the 1st defendant?

13. Whether the suit is barred by Principles of res judicata?

14. Whether the plaintiffs are not estopped from setting up title in themselves when their father Raja Mohan Prasad did not question the title of the 1st defendant in various Court proceedings during his life time?

15. Whether the plaintiffs are entitled to relief of accounting as the alleged partnership ceased with the death of Raja Mohan Prasad in 1947?

16. To what relief of the plaintiffs are entitled to?

Issue No.1:

41. The sum and substance of the case of the plaintiffs is that the 1st defendant, who became a partner with Raja Mohan Prasad in the Firm Murliprasad Mohanprasad during the year 1926, had impressed upon Raja Mohan Prasad that entering into a Dubhash agreement with the Bombay Company Ltd, would be profitable for the Firm, as the Firm would earn substantial commission by selling the products of the Bombay Company Ltd., to various parties. The plaintiffs would also contend that in the process of the business, he had introduced certain persons as parties, who bought goods from Bombay Company Ltd., on credit. According to the plaintiffs, these parties were either his close relatives or dummies having no means of their own.

41.1. According to the plaintiffs, the 1st defendant created several firms and several fictitious persons using a combination of the first name of his close relatives and used their identity to draw goods from the Bombay Company Ltd., the goods were also drawn in the names of several non existant persons with false addresses. He also ensured that those persons/dummies did not pay the dues to the Bombay Company Ltd., which resulted in the amounts payable by them being debited to the Dubhash Firms, viz. Murliprasad Mohanprasad & Co. or Chunilal Murliprasad. Factually, these goods which were shown to have been sold to such fictitious or dummy persons, were drawn by Late Ramnath Goenka himself and the monies realized by sale of these goods were secreted by him. It was the money, thus secreted by the 1st defendant, that was used for the purchase of various properties in the name of the 1st defendant. The 1st defendant also ensured that whenever the Bombay Company Ltd., demanded payment of monies due, he projected various reasons such as bad market conditions, non realization of monies from parties, who had purchased the goods of Bombay Company and insisted that unless the money due to Bombay Company were paid the Dubhash agreement may be terminated tarnishing the reputation of the Firm. Assuring that he would be able to make good the monies, once the market situation improves and collections were made from the traders, the 1st defendant extracted more and more money from Raja Mohan Prasad.

41.2. It is also the claim of the plaintiffs that the 1st defendant had involved Raja Mohan Prasad in several business transactions with a view to mask his own questionable transactions. Thus, by the year 1930, the 1st defendant had made the Firm Murliprasad Mohanprasad indebted to the Bombay Company and in order to get out of the mess, he had hatched a perfect plan by which he had persuaded Raja Mohan Prasad to change the name of the Firm from Murliprasad Mohanprasad to some other name and enter into the 2nd Dubhash agreement with the Bombay Company Ltd. While he successfully persuaded Raja Mohan Prasad, to enter into the second agreement with Bombay Company, he also negotiated with Bombay Company Ltd, to take him as an employee, he thus became an employee of Bombay company by August 1931. He had also prevailed upon Raja Mohan Prasad not to disclose the fact that he was a partner in the Dubhash firm since he had taken up the employment with the Bombay company Ltd. He had also assured Raja Mohan Prasad whatever salary he received from Bombay Company would be credited to the Income of the firm. He also ensured that Chandanmull Mundhadha, who had introduced the 1st defendant to Raja Mohan Prasad is removed from the scene so that he could achieve his purpose easily. When one Sumatmul Acharya, was sent to Madras by Raja Mohan Prasad to look after his interests in the business and to be his watched dog and report to him about the happenings at Madras, the 1st defendant somehow came to know that Sumatmul Acharya had some dispute in his native State and was charged by the Prince of that State for misappropriation of funds. In fact, Sumatmul Acharya had left his native State, as he could not safely reside in the State or meet the trumped-up charges of the misappropriation levelled against him by the Prince of that State. Taking advantage of the said information, the 1st defendant had made Sumatmul Acharya to dance to his tunes and write letters to Raja Mohan Prasad to his dictates. He also presented a depressing picture of the money market in Madras and projected the necessity of maintaining one's merit with the European Company and he managed to make Raja Mohan Prasad send large sums of money from Hyderabad, in order to pay up the debts due to the Bombay Company, which had been agreed to be paid by the Firm Murliprasad Mohanprasad as the Dubhases of the Bombay Company Limited. On the above allegations, the plaintiffs would claim that the 1st defendant had, with the money so siphoned off by him from the partnership Firms, purchased the suit properties.

41.3. In order to prove the above claims, the plaintiffs have chosen to produce the copies of series of letters allegedly written by the 1st defendant to Raja Mohan Prasad asking him to send monies to enable the Firm to present the picture of clear solvency to the Bombay Company Limited and to ensure that the Dubhash agreement is not cancelled or terminated by the Bombay Company on the ground of non-payment of money due by the traders, which had been guaranteed by the Dubhashes. The plaintiffs would allege that the 1st defendant has persuaded Raja Mohan Prasad to pay a sum of Rs.5,00,000/- between 1926 to 1932. By year 1932, the misappropriation of the 1st defendant has reached an extent of Rs. 2.5 lakh to 3 lakh.

41.4. During the year 1936, Raja Mohan Prasad sensed that there was something seriously amissed at Madras, therefore he visited Madras and assured the officers of the Bombay Company of his intention to find a honourable solution and to resolve matters. He had requested the Bombay company to assist him to realise the monies from parties, who had bought goods on credit. When things came to a position where the Bombay Company had threatened legal action against the Firm, viz. Murliprasad Mohanprasad in the capacity of Dubhash, the 1st defendant had visited to Hyderabad to reassure Raja Mohan Prasad and also prepare him for any action by the Bombay Company Ltd. It is also claimed that the 1st defendant had executed a promissory note for Rs.5,00,000/- to prove his bona fides and deposited the same with Raja Mohan Prasad assuring him that he could use the promissory note to recover the monies from him, if he is put to any loss because of the non reliasation of the debts due to the Firm at Madras. It is also claimed that the 1st defendant also executed a deed of declaration of Trust on 04.03.1936 as well as the Trust letter dated 04.01.1937 in favour of Raja Mohan Prasad assuring him that the properties at Madras and Ennore and the investments in shares and debentures were acquired out of the monies of Raja Mohan Prasad and that he remained as trustee.

41.5. It is the further claim of the plaintiffs that within a few days, after the visit of the 1st defendant to Hyderabad, the Bombay Company filed a suit in CS No.255 of 1936 on the file of the Original Side of this Court against Raja Mohan Prasad as sole proprietor of Murliprasad Mohanprasad & Co. and Chunilal Murliprasad & Co as well as several other parties, who owed monies to the Bombay Company, for the goods that were bought by them from the Bombay Company. It is also claimed that the 1st defendant persuaded Raja Mohan Prasad to remain ex-parte in the said suit, on the pretext that the decree passed by this Court would not be effective against Raja Mohan Prasad, who was the resident of Hyderabad, which was not a part of British India. In the above circumstances, Raja Mohan Prasad remained ex-parte in the said suit in CS No.255 of 1936 and the said suit came to be decreed ex-parte for recovery of a sum of Rs.6,41,052-3-2 on 25.01.1937, by this Court. It is also claimed that the 1st defendant manoeuvred to see that the names of the other parties, viz. the persons, who are shown to have purchased the goods from Bombay Company Limited were struck off from those proceedings on the ground that most of them did not exist at the addresses given therein. This is also cited as an important circumstance to buttress the claim of the plaintiffs that those persons were either stooges or dummies of the 1st defendant and it was the 1st defendant who carried out the transactions in the names of those persons.

41.6. The plaintiff would also contend that Bombay company sued Raja Mohan Prasad on the basis of the decree in CS No.255 of 1936 before the Nizam’s High Court in Hyderabad. Raja Mohan Prasad, who became seriously ill in the year 1941, could not defend the said suit and the same dragged on several years and the decree in the suit was purchased by one Bankatlal Badruka, from Bombay Company Limited and Raja Mohan Prasad paid the assignee in installments and settled the claim, which resulted in a compromise being effected on 11.01.1945, between the transferee decree holder, viz. Bankatlal Badruka and Raja Mohan Prasad in the Nizam’s High Court at Hyderabad. It is also the claim of the plaintiffs that they discovered the entire facts as to the relationship between the 1st defendant and Raja Mohan Prasad only after the death of their mother in 1976, when they found the copy of the promissory note executed by late Ramnath Goenka for a sum of Rs.5,00,000/-. According to the plaintiffs, it is only after they are obtained the copies of the documents relating to the suit filed by the Bombay Company in the Nizam’s High Court, they came to know that the 1st defendant was an agent and servant of Raja Mohan Prasad and he had misappropriated the funds of Raja Mohan Prasad and unjustly enriched himself by playing fraud on Raja Mohan Prasad. It is thereafter the plaintiffs had issued a notice on 24.08.1981 to which a reply was sent by the counsel for the 1st defendant on 10.11.1991 and they followed it up with the present suit.

41.7. Mr.P.C.Harikumar, learned counsel appearing for the plaintiffs, invites my attention to the partnership deed dated 30.06.1926 (Ex.P1) particularly the ratio of profit sharing agreed between the parties, the fact that the entire capital was provided by Raja Mohan Prasad and the fact that Ramnath Goenka, as the Manager of the business was prohibited from entering into any wagering or gambling transactions in businesses. He would also point out that all servants and kumasthas of the firm are to be appointed by him and they will have to work under his supervision and orders. Pointing out that the control of the entire business at Madras was in the hands of Ramanath Goenka as per the partnership deed and it was Ramanath Goenka, who was responsible for the transactions of the firm at Madras, Mr.P.C.Harikumar, would contend that it was his position as a Managing Partner that was misused by Ramnath Goenka to his own advantage and to secret monies from the firm. He would also point out that in the partnership deed dated 22.06.1932, which has been marked as Ex.P266, entered into between Raja Mohan Prasad and Ramnath Goenka, there is a clear prohibition restraining Ramnath Goenka from engaging in wagering or gambling transactions. He would also point out that under Clause 15 of the said instrument the parties there to agreed that whatever monthly salary or perquisites or other sums of money by way of commission, brokerage and remuneration received by Ramnath Goenka should be credited to this partnership firm alone. Relying heavily on the above two documents, Mr.P.C.Harikumar, learned counsel would contend that the Ramnath Goenka had no independent source of income except the income from the partnership firm to have enabled him to purchase the properties that are the subject matter of the present suit. He would also further contend that the properties were purchased during the subsistence of the said partnership firm and hence, it should be presumed that the source of the funds for purchase of the properties was from the funds of Raja Mohan Prasad that fell in the hands of the 1st defendant Ramnath Goenka during the course of the business in partnership.

41.8. Mr.P.C.Harikumar would also invite my attention to Clauses 10 and 11 of the partnership agreement dated 30.06.1926 which discloses that buying and selling of properties is also a business of the firm. Thus the sum and substance of the contentions of the learned counsel for the plaintiffs is that in as much as the properties have been purchased by Ramnath Goenka during the subsistence of the partnership it should be presumed that these properties were purchased out of the monies belonging to Raja Mohan Prasad. In order to buttress the submission regarding the source of the funds he would refer to various letters written by Ramnath Goenka to Raja Mohan Prasad, wherein it is seen that Ramnath Goenka always projected that the business is running in loss and money is required to keep up the solvency levels of the firm. The series of letters which have been marked as Exs.P368 to 391 and 393 to 396 are referred to contend that all these letters would go to show that the 1st defendant Ramnath Goenka had always presented a depressing picture of the business in Madras and always required Raja Mohan Prasad to send monies. While it is true in most of the letters the 1st defendant had claimed that the business in Madras is not flourishing and he had required Raja Mohan Prasad to send monies. There is no evidence to show that Raja Mohan Prasad had actually sent the monies based on these request made by Ramnath Goenka. In the absence of any concrete proof to the effect that monies were in fact sent by Raja Mohan Prasad pursuant to the request made by Ramnath Goenka under these letters there cannot be a presumption that properties were purchased out of the monies belonging to Raja Mohan Prasad.

41.9. Apart from the above, the most of the letters the 1st defendant had requested Raja Mohan Prasad to send monies pointing out that they will have pay monies to Bombay Company. Therefore, when a claim is made to the effect that the properties that stand in the name of an individual are held in trust for another person on the ground that the sale consideration for purchase of the property was paid from and out of the monies belonging to the other person, there should be concrete evidence of entrustment of monies. Unfortunately for the plaintiffs, we only have the requests made by the 1st defendant to Raja Mohan Prasad asking him to send monies for the business. It should also be pointed out that some of the letters the 1st defendant had referred to certain payments that have been sought for by Raja Mohan Prasad, it is also seen from the letters that Raja Mohan Prasad had directed the 1st defendant to send monies to Bombay, Calcutta and Hyderabad. Therefore, the contention of the learned counsel Mr.P.C.Harikumar, that monies had been in fact sent by Raja Mohan Prasad to the 1st defendant and utilizing the said monies, the 1st defendant had purchased the suit properties and hence they should be treated as properties held in trust for the family of Raja Mohan Prasad in the hands of the 1st defendant cannot be countenanced.

41.10. Yet another circumstance, which militates against the claim of the plaintiffs, is the dates of the purchase of properties by Ramanath Goenka. It is seen from Exs.P71 and P80 that Ramnath Goenka had purchased certain properties during the year 1927 and 1929. Exs.P82, P83, P84 and P85 are all sale deeds executed by Mukunddas Mundhada in favour of Ramnath Goenka in respect of some of the suit properties on 07.09.1935. Insofar as these purchases are concerned the sale consideration for these purchases has been paid by Ramnath Goenka by mortgaging the said properties in favour of C.K.Samarpuri Chetty for a sum of Rs.75,000/- on 07.09.1935 itself. In fact Ramnath Goenka had sold those properties purchased by him from Mukundas Mundhada in 1935 even during the year 1937 and 1940 to various persons.

41.11. Of course the plaintiffs are able to establish the fact that Ramnath Goenka was doing business in partnership with Raja Mohan Prasad and the fact that he has been requesting Raja Mohan Prasad to send monies. But those requests made under Ex.P368 to P391, P393 to P396. All these letters have been written during the years 1929 to 1932. But the purchase of properties have been made either prior to these letters or much later than these letters, viz. 1927 and 1935. As already stated the fact that the sale consideration for the sale deeds of the year 1935 has been paid by Ramnath Goenka by mortgaging the property with one C.K.Samarpuri Chetty, in a way destabilizes the case of the plaintiffs that these properties have been purchased out of the funds belonging to Raja Mohan Prasad or the partnership firms, viz. Murliprasad Mohanprasad & Co. and Chunilal Murliprasad.

41.12. Mr.P.C.Harikumar, learned counsel appearing for the plaintiffs would submit that the financial statement of the firms would show that Ramnath Goenka was not in possession of funds, in order to enable him to purchase these properties and therefore, it should be presumed that these properties were purchased out of the funds of Raja Mohan Prasad or the two partnership firms, I am afraid such a conclusion cannot be drawn based on assumption. It is also in evidence that Ramnath Goenka was a prominent figure in Madras even during that period and he was nominated to the Madras Legislative Council. Therefore, it cannot be presumed that he was a penniless person depending upon the income from the partnership firm or the monies sent by Raja Mohan Prasad from Hyderabad alone for his sustenance. Drawing such an inference at this distance point of time, in my considered opinion, may not be proper and legal. The oral evidence of the 1st plaintiff as P.W.1 cannot be relied upon in as much as whatever he has deposed is only hearsay or based on the letters.

41.13. Mr.P.C.Harikumar, learned counsel appearing for the plaintiffs would however attempt to press in to service the letters written by Sumatmul Acharya to Raja Mohan Prasad, which have been marked as Exs.P398 to P410 of these letters, Ex.398 and Ex.P400 alone are of the year 1932, the other letters are written sometime in July to December 1937, i.e., during the period when proceedings were going on in the Bombay High Court, wherein Ramnath Goenka had asserted his title to the properties in question before the Bombay High Court. In Exs.P398 and P399, which are dated 01.09.1932 and 01.12.1932, Sumatmul Acharya had not made any allegations against Ramnath Goenka, in Ex.P398 which is dated 01.09.1932, Sumatmul Acharya had only reproduced certain events that had happened and I do not find any accusation against Ramnath Goenka made in the said letter. In Ex.P399 which is 01.12.1932 also does not make any accusation against Ramnath Goenka. In fact it is found that the said letter looks like a statement of the happenings in Madras made by Sumatmul Acharya to Raja Mohan Prasad. He also narrates how he had been visiting various debtors of the firm to collect the monies due by them to the firm. Ex.P400 is a letter dated 03.06.1935 again written by Sumatmul Acharya to Raja Mohan Prasad, of course in Ex.P400 there is a reference to the transaction between Mukunddas Mundadha for sale of the property at door No.114, even there Sumatmul Acharya had pointed out to Raja Mohan Prasad that the agreement for the property has been entered into in the name of Ramnath Goenka and after the documents are executed, he would inform him as to in whose name the document has been executed. The Sale Deeds with reference to those properties were executed on 07.09.1935, therefore it could be reasonably presumed that Raja Mohan Prasad was aware of the fact that the sale deeds executed by Mukunddas Mundadha or in favour of Ramnath Goenka. It is also seen that a mortgage has been created by Ramnath Goenka in respect of those properties with C.K.Samarpuri Chetty on the same day and even in 1937 Ramnath Goenka has dealt with the said property by mortgaging the same with one Munderchand Galeda under Ex.P88, however, Raja Mohan Prasad, who was alive at that time has not chosen to question such exercise of rights by Ramnath Goenka.

41.14. The other letters, viz. Exs.P401 to P410 are all of the year 1937 when there was a dispute between Ramnath Goenka and Raja Mohan Prasad before the Bombay High Court, where legal proceedings were pending. Therefore much credence cannot be given to the letters written by Sumatmul Acharya, during the said period. It should be also pointed out that at this juncture some of these letters are unsigned and the plaintiffs have not explained the actual source of these letters properly. P.W.1 would claim that these letters were available with one of his uncles. A perusal of these letters would show that all these letters have not been written by one and the same person. Though all the letters are in Hindi, it could be seen that there is vast difference in the hand writing of the author of those letters. In fact Exs.P401, the contents of the letter is written in blue ink but the date alone is written in black ink. The same is dated 04.08.1937, similarly, the hand writing in Exs.P402, P403 and P410 are vastly different from the hand writing found in the other letters, viz., Exs.P398, 399, 400, 401, 404 to 409. I had already pointed out that these letters alone cannot be safely relied upon to conclude that the suit properties have been purchased by Ramnath Goenka from and out of the funds belonging to Raja Mohan Prasad or the partnership firms viz. Murliprasad Mohanprasad & Co. and Chunilal Murliprasad. Hence the issue No.1 is answered against the plaintiffs and in favour of the defendants.

Issue Nos.2, 4 and 11:

42. These issues are taken up together as they are interlinked and they relate to the claim of the plaintiffs that the 1st defendant was holding the property in trust for the heirs of Raja Mohan Prasad. In order to establish their claim that a trust was created in favour of the heirs of Raja Mohan Prasad, the plaintiffs would rely upon three documents, viz., Deed of Trust dated 04.03.1936, said to have been executed by Ramnath Goenka, acknowledging the fact that the properties purchased by him are held in trust for the benefit of heirs of Raja Mohan Prasad. The letter dated 04.01.1937 and the declaration dated 05.01.1937 made by Ramnath Goenka acknowledging the fact that he is only a nominal owner of the properties and the real owner is the beneficiary himself. Insofar as the Trust Deed dated 04.03.1936 is concerned, this Court, by an order dated 02.04.1996, held that the said document is inadmissible in evidence for want of registration by the very same order this Court had held that letter dated 04.01.1937 does not purport to create any right or interest in immovable property, it has been held that the letter dated 04.01.1937 is only a letter containing information and hence, it is admissible in evidence.

42.1. The letter dated 04.01.1937 is followed by the document dated 05.01.1937, which is styled as a release deed executed by Ramnath Goenka in favour of Raja Mohan Prasad. The said document has been produced as Ex.P127, while letter dated 04.01.1937 has been produced and marked as Ex.P436. It has been written in the letter head of one A.Ramachandra Iyer, Advocate, addressed to Sumatmul Acharya. It reads that Ramnath Goenka agrees to execute a release deed in favour of Raja Mohan Prasad confirming his title and disclaiming all interests therein and it also says the documents shall be executed early this week and authorizes Sumatmul Acharya to arrange for loan based on the security of these properties of any amount that he may require on behalf of his principal of Mr.Raja Mohan Prasad. This is followed by Ex.P127 dated 05.01.1937. The explanation that is given by the 1st defendant for execution of these letters as well as the document styled as a release deed dated 05.01.1937 is that Raja Mohan Prasad wanted to borrow monies from a Zamindar, who had insisted on certain security in Madras, as he was unwilling to advance money from the security of properties of Raja Mohan Prasad in Hyderabad. Therefore, in order to enable Raja Mohan Prasad to borrow money, this document was executed. He also claimed in Ex.P145 dated 23.07.1937, Sumatmul Acharya had given a counter letter affirming the fact that the release deed dated 05.01.1937, marked as Ex.P127 had been given by Ramnath Goenka only to enable Raja Mohan Prasad to borrow money on the strength of the securities. The counter letter has been produced along with Ex.P145 before the Bombay High Court and a certified copy of the affidavit and the annexures has been marked as Ex.P145.

42.2. The document dated 05.01.1937, which is styled as a relinquishment deed has not been registered, what applies to the document dated 04.03.1936 would equally apply to the document dated 05.01.1937, produced as Ex.P127. The recitals of Ex.P127 would go to show that the document is one purporting to relinquish interest in immovable property and creating of the interest in favour of the beneficiary. Therefore, the same requires to be registered under Section 17(c) of the Registration Act. Having not been registered the same cannot be looked into for the purpose of the main transaction, viz., creation in trust in favour of Raja Mohan Prasad or his heirs. What is more important is the letter that accompanied this document written by Sumatmul Acharya dated 05.01.1937. The transactions that took place on 04.01.1937 and 05.01.1937 have been spoken to by Venkatachalam, a pleader of Raja Mohan Prasad in the proceedings in Suit No.1623 of 1935 before the Bombay High Court.

42.3. The deposition of said Venkatachalam in the said suit has been marked as Ex.P148 in the said evidence the said Venkatachalam, had spoken to transactions that took place. In fact the said witness had deposed Ramachandra Iyer was engaged by the Zamindar. He also states that he along with Ramanath Goenka and Sumatmul Acharya visited Ramachandra Iyer’s office at about 8.30 in the evening after putting several questions to Ramnath Goenka, ultimately Ramachandra Iyer had said that since the properties stood in the name of Ramnath Goenka and the Zamindar would not advance monies to Raja Mohan Prasad unless the properties were transferred to Raja Mohan Prasad and to which suggestion Ramnath Goenka agreed and it is also stated by him that the 1st defendant in the suit viz., Ramnath Goenka gave the particulars of the properties to Ramachandra Iyer for preparing the documents. On the next day i.e., on 05.01.1937, Ramnath Goenka signed the document, which is marked as Ex.P127 in this proceeding. The document was attested by himself, Sumatmul Acharya and Gopilal. He had also added the transaction was not completed and it fell through.

42.4. During his cross-examination in the proceedings before the Bombay High Court, the said witness had further deposed that the letter dated 05.01.1937 is in the hand writing of Sumatmul Acharya, but he would claim ignorance as to how the letter was handed over to Ramnath Goenka on 05.01.1937. This letter dated 05.01.1937 has been produced in the proceedings in suit No.1623 of 1935 before the Bombay High Court, the affidavit of Ramnath Goenka filed in those proceedings has been marked as Ex.P145. In paragraph 6 of the said affidavit Ramnath Goenkahas narrated the events that led to the execution of Ex.P127 and Ex.P436 by him. The counter letter dated 05.01.1937 executed by Sumatmul Acharya, recording the arrangement was produced and marked as Annexure A. In the said affidavit, he also stated that Raja Mohan Prasad had returned the original of Ex.P127 along with covering letter dated 15.01.1937 stating that since they are not able to arrange the loan as expected, he was returning the deed of declaration, cancelled. The letter dated 15.01.1937 has been filed as annexure to the said affidavit and It is marked as (c). A certified copy of the said affidavit along with the annexures has been produced as Ex.P145 in this proceeding. In the letter dated 05.01.1937 executed by Sumatmul Acharya, it is clearly stated that the contents of the deed are entirely incorrect and to avoid payment of very large sum of money as Stamp Duty on a regular Sale Deed, Ramnath Goenka has been good enough, he execute the document as suggested by their lawyer, who drafted the declaration, on the definite understanding that immediately in a day or two he should be able to arrange large amount of loan on the properties he would pay a sum of Rs.65,000/- in consideration of Ramnath Goenka transferring the properties to Raja Mohan Prasad by the said deed. The said letter also states as follows:

'If however I am not able to pay a sum of Rs.65,000/-, I shall return the deed back to you. The deed in the meantime shall remain with me only in confidence and shall be shown only to the person or his lawyer, who has promised to give me a loan'

42.5. The letter dated 15.01.1937 has been produced as annexure (c) to be said affidavit, it is signed by Raja Mohan Prasad addressed to Ramnath Goenka, the said letter reads as follows:

'Dear Sir,

With reference to your letter of the 12th instant, I beg to inform you that I have not yet been able to arrange a loan as promised by me in my agent’s letter to you of the 5th instant and therefore, returning the deed as cancelled. If, however, I am able to raise the substantial loan in near future you shall no doubt oblige me again.

Yours faithfully

s/d.

Raja Mohan Prasad"

42.6. It is also seen from the notes of the evidence of Venkatachalam the lawyer, who was examined before the Bombay High Court in CS No.1623 of 1935 that the original letter dated 15.01.1937 along with the original of the deed dated 05.01.1937 (a copy of which has been marked as Ex.P127) was produced by Mr.Jinnah, counsel for Ramnath Goenka. Of course, Venakachalam would claim that the original deed dated 05.01.1937 was in the custody of Sumatmul Acharya, till February 1937. But the documentary evidence that is available belies the said statement. P.W.1 in his cross-examination has in fact admitted the signature of Sumatmul Acharya, and Mohan Prasad in the letters dated 04.01.1937 and 15.01.1937. The effect of these documents have been considered by the Division Bench of the Bombay High in its judgment in Appeal No.55 of 1952, which has been marked as Ex.P177 in this suit. After referring to the document that was drawn up on 05.01.1937 as well as the letter dated 05.01.1937 executed by Sumatmul Acharya, and the letter dated 15.01.1937 executed by Raja Mohan Prasad, the Bombay High Court had concluded as follows:

'All that this letter goes to show that the transaction evidenced by the document of 5th January 1937 was not a real transaction but really a nominal transaction'

42.7. Of course the Division Bench had de hors the statements come to the conclusion that Ramnath Goenka was a partner in Chunilal Murliprasad firm. The question that is raised in this suit is whether these documents, viz. the letter dated 04.01.1937 addressed by Ramnath Goenka to Sumatmul Acharya, and the declaration dated 05.01.1937 marked as Ex.P127 would amount a declaration of trust in favour of Raja Mohan Prasad and his heirs. The answer to this question can only in the negative. The letter dated 05.01.1937 executed by Sumatmul Acharya very clearly states that Ramnath Goenka had in fact obliged him and his principal to enable them to raise the loan on the security of the property situate at Madras. In and by the said letter Sumatmul Acharya also undertakes to return the document cancelled, if he is not able to succeed in raising the loan. The letter dated 15.01.1937 written by Raja Mohan Prasad, enclosing the document, viz., the original of Ex.P127, would also show that he had returned the document as cancelled because the loan transaction did not go through. These documents would atleast show that Raja Mohan Prasad has conceded the title of Ramnath Goenka to the properties covered by the said deed of declaration those are the properties which are now the subject matter of this suit also. As already pointed out P.W.1 in his evidence has admitted the signatures of Sumatmul Acharya as well as his father Raja Mohan Prasad in letters dated 05.01.1937 and 15.01.1937. Though, he would claim that those letters were given only after 06.07.1937, when Sivakaran filed an affidavit before the Bombay High Court. Therefore, the irresistible conclusion is that the documents dated 04.03.1936, 04.01.1937 and 05.01.1937 do not and cannot operate to create a trust over the properties in favour of Raja Mohan Prasad or his heirs.

42.8. Mr.P.C.Harikumar, learned counsel appearing for the plaintiffs would rely upon the judgments in Soar v. Ashwell: CA 1893, reported in [1893] 2 QB 390, to contend that a trust would stand created, if a person had assumed either with or without consent to act as a trustee of money or other property i.e. to act in a fudiciary relation with regard to it and has in consequence been in possession or has exercised command or control over such money or property, the Court of equity will impose upon him all liabilities of an express trustee and will class him with and will call him an express trustee of an express trust. The principal liability of such trustee is that he must discharge himself by accounting to his cestui que trusts for all such money and property without regard of lapse of time.

42.9. He would also invite my attention to Rochefoucauld v. Boustead, reported in [1897] 1 CH 196, wherein it was held that if the real transaction is in the nature of a cestui que trust, then the person, who is in possession of the property would be liable to account for the real owner and the bar created by the statutes of limitation will not apply to such transaction. Mr.P.C.Harikumar, would also invite my attention to the judgment of the Division Bench of this Court in Krishtappa Chetty v. Lakshmi Ammal, reported in XVII Vol LW 467, wherein the Division Bench relying upon Soar v. Ashwell, reported in [1893] 2 QB 390, concluded that the law of limitation will not stand in the way of relief being claimed against the trustee under either express trust or trust arising by implication of law.

42.10. Mrs.Hema Sampath, learned Senior Counsel appearing for the defendants would invite my attention to the judgment of this Court in The Official Receiver of South Arcot v. V.Rm.K.M.M.Kulandaivelan Chettiar, reported in (1946) 59 LW 725, wherein, the judgment of the Division Bench of this Court in Krishtappa Chetty, was held to be no longer good law. The Division Bench after referring to another Division Bench of this Court in Sri Silambani Chidambara Vinayagar Devasthanam, Devakottai v V.R.L.S.T.R.M. Chidambaram Chettiar, reported in (1943) 56 LW 479, concluded that the decision of the Division Bench, which is based on English decision cannot be applied in India and the Division Bench had observed as follows:

'In view of this ruling the decision of Gentle J in Palaniappa Chettiar v. Nachiappa Chettiar which was based on English decisions and the view expressed in Krishtappa Chetty v. Lakshmi Ammal, reported in XVII Vol LW 467, cannot be considered to be good law.'

42.11. In Sri Silambani Chidambara Vinayagar Devasthanam, Devakottai v V.R.L.S.T.R.M. Chidambaram Chettiar, reported in (1943) 56 LW 479, yet another Division Bench of this Court had held that the English equitable rules cannot be safely applied to the extend plain meaning of the provisions of the Indian Limitation Act. Therefore, the concept of trust cannot be extended beyond the enactments viz., The Indian Trust Act as well as Indian Limitation Act. From the evidence that is available in the form of Exs.127, P145, P148 and P177, the annexure to Ex.C145 and the oral evidence of P.W.1, I am unable to conclude that that there was in fact a trust created in favour of either Raja Mohan Prasad or his heirs and Ramnath Goenka was a trustee and he was in possession of the property in his capacity as a trustee of the properties purchased by him. In view of the above, I am constrained to conclude that there was no valid trust created and the 1st defendant was not holding the properties in trust for the heirs of Raja Mohan Prasad, therefore issues Nos.2, 4 and 11 are answered against the plaintiffs.

Issue No.6:

43. A Copy of the promissory note dated 01.09.1936 said to have been executed by the 1st defendant Ramnath Goenka has been produced by the plaintiffs along with the Trust Deed dated 04.03.1936 and Trust letter dated 04.01.1937, the 1st defendant would allege that these documents were executed by him, upon the request of Raja Mohan Prasad to show that somebody else owed money to him and that he was possessed of the properties in Madras. Insofar as the document dated 04.03.1936 is concerned this Court held that the said document is not admissible in evidence for want of Stamp Duty and Registration. Therefore, the question whether the document was executed under the circumstances alleged by the 1st defendant need not be gone into. Insofar as the letter dated 04.01.1937, I have already held while deciding the issues 2, 4 and 11 that the trust letter as well as the declaration dated 05.01.1937 have been executed by Ramnath Goenka, at the insistence of the lawyer of the Zamindar from whom Raja Mohan Prasad has sought for a loan in order to show that Raja Mohan Prasad owns certain properties in Madras. I have also concluded that the original deed of declaration dated 05.01.1937 was in fact returned to Ramnath Goenka by Raja Mohan Prasad under cover of the letter dated 15.01.1937. I have also held that these documents will not operate to create a trust in favour of Raja Mohan Prasad or his heirs.

43.1. Admittedly, Raja Mohan Prasad had not sued upon the promissory note dated 01.09.1936. In fact, the relationship between Raja Mohan Prasad and Ramnath Goenka became strained even during the later half of 1937, when Ramnath Goenka asserted his title to the properties in question before the Bombay High Court. In spite of such strained the relationship Raja Mohan Prasad, who was alive and active did not choose to sue upon the promissory note dated 01.09.1936, it is during the said period the suit filed by the Bombay Company against Raja Mohan Prasad was decreed ex-parte by this Court and the Bombay Company had filed a suit before the Nizam High Court at Hyderabad, seeking recovery of money from Raja Mohan Prasad based on the ex-parte decree granted by this Court in CS No.255 of 1936. It is seen from the Exhibits P320, P321, P322 etc. the proceedings before Nizam High Court in Hyderabad that Mohan Prasad had filed his written statement as early as on 03.03.1938, therefore, it is clear that despite strained relationship between the parties Raja Mohan Prasad had not chosen to sue the 1st defendant Ramnath Goenka based on the Promissory Note dated 01.09.1936, this would undoubtedly go to show that these documents were executed by Ramnath Goenka only under the circumstances claimed by him. Hence, issue No.6 is also answered against the plaintiffs.

Issue Nos.5 and 12:

44. While discussing issue No.1, it has been held that the plaintiffs have not established that the suit property were purchased by Ramnath Goenka out of the funds belonging to either Raja Mohan Prasad or the partnership firm viz. Murliprasad Mohanprasad & Co. and Chunilal Murliprasad. Therefore, the question whether the 1st defendant Ramnath Goenka is guilty of fraud and whether he had syphoned off funds from the partnership firm and had unjustly enriched himself do not really arise. The plaintiffs would also contend that the 1st defendant had coerced Sumatmul Acharya to act according to his own dictates. I do not find any evidence except the oral testimony of P.W.1 and some of the letters written by Sumatmul Acharya, which had emanated after the 1st defendant Ramnath Goenka had asserted title in himself over the properties at Madras, to establish that coercion or misdemeanor on the part of the 1st defendant. Therefore in view of the finding on issue No.1 as well as the total lack of evidence on the side of the plaintiffs these issues are also answered against the plaintiffs.

Issue No.3:

45. This issue has been framed regarding the binding nature of the alienations made by the 1st defendant in favour of defendants 2 and 3, I have already concluded while answering Issue Nos.1 and 2 that suit the properties were not purchased by Ramnath Goenka out of the funds belonging to Raja Mohan Prasad or the partnership firms. While answering the issue No.2, it had been concluded that there is no trust created in favour of the plaintiffs or Raja Mohan Prasad and Ramnath Goenka was never a trustee nor was he holding the property in a fudiciary capacity. Therefore, the plaintiffs cannot question the alienations made by the 1st defendant in favour of defendants 2 and 3. Hence this issue is answered against the plaintiffs to the effect that the alienations of the properties by Ramnath Goenka are bona fide transactions and the plaintiffs cannot question the same.

Issue No.8:

46. This issue relates to the bar created under the provisions of the Binami Transactions (Prohibition) Act, 1988, in view of the judgment of the Hon’ble Supreme Court in R. Rajagopal Reddy (Died) And Ors. vs Padmini Chandrasekaran (Died) reported in (1995)1 L.W. 428, the provisions of the Benami Transactions (Prohibition) Act, 1988, have been held to be only prospective in nature, since the suit has been instituted even in 1982, even prior to the coming into force of the Benami Transactions (Prohibition) Act, I do not think the suit can be said to be barred under the provisions of the said Act. What is barred, is only a claim that is either made by way of a plaint or by way of a written statement after coming into force of the Act. Therefore, this issue is answered in favour of the plaintiffs to the effect that the suit is not barred by the provisions of the Benami Transactions (Prohibition) Act, 1988.

Issue No.7:

47. The plaintiffs would claim that the 1st defendant had prevented Raja Mohan Prasad from visiting Madras to defend the suit in CS No.255 of 1936 holding out that he may be arrested at the instance of the Bombay Company for not having paid their debts. It is not as if Raja Mohan Prasad was an illiterate person. From the proceedings in Bombay as well as the evidence of Venkatachalam, the Advocate from Hyderabad, which has been marked as Ex.P148, it is seen that Raja Mohan Prasad had assistance of a battery of lawyers and therefore, the claim made in para 18 of the plaint that he was in fact threatened by Ramnath Goenka and prevented from coming to Madras is wholly unbelievable. Hence, the issue No.7 is answered against the plaintiffs.

Issue No.9:

48. This issue relates to question of limitation. Mr.P.C.Harikumar, learned counsel appearing for the plaintiff would rely upon Section 10 of the Limitation of Act to contend that the suit is not barred by limitation in as much as there is a trust that has been created in favour of Raja Mohan Prasad of his heirs. Section 10 of the Limitation Act reads as follows:

'10. Suits against trustees and their representatives.-Notwithstanding anything contained in the foregoing provisions of this Act, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof, or for an account of such property or proceeds, shall be barred by any length of time.

Explanation.-For the purposes of this section any property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose and the manage

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r of the property shall be deemed to be the trustee thereof.' 48.1. Mr.P.C.Harikumar, learned counsel appearing for the plaintiffs would rely upon the judgments of this Court in Krishtappa Chetty v. Lakshmi Ammal reported in XVII LW 467, S.R.Varadarajulu Naidu v. The Papansasam Labour Union, Ambasamudram and others, reported in 81 LW 630, Aiyapillai v. Shenbaga Nadar Reported in 76 LW 690, and the judgment of Division Bench of this Court in Arulmighu Kallalagar Thirukoil, Alagar Koil by its Executive Officer v. Government of Tamil Nadu by its Collector, Anna District, Dindigul, reported in 2004 (1) LW 647, Insofar the judgment in Krishnappa Chetty is concerned, I have already adverted to the fact that this Court in subsequent decisions in The Official Receiver of South Arcot v. V.Rm.K.M.M.Kulandaivelan Chettiar, reported in (1946) 59 LW 725 and in Sri Silambani Chidambara Vinayagar Devasthanam, Devakottai v V.R.L.S.T.R.M. Chidambaram Chettiar, reported in (1943) 56 LW 479, have held that the English principles of trust cannot be imported and the language of Section 10 must be strictly construed. 48.2. In The Official Receiver of South Arcot, this court has specifically held that Krishnappa Chetty v. Lakshmi Ammal cannot be considered to be good law. In fact Sri Silambani Chidambara Vinayagar Devasthanam, a Division Bench of this Court has specifically held that the word Trust cannot be given an expanded meaning as in English Law and the Limitation Act drawn after the Indian Trust Act does not give an expanded meaning to the word. In Venkatrama Naidu and another v. Jayamal and another, reported in 76 LW 619, it was held that the person in possession as a trustee and who has acquired property in that capacity cannot be permitted to assert an adverse title on his own behalf. In S.R.Varadarajulu Naidu v. The Papansasam Labour Union, Ambasamudram and others, reported in 81 LW 630, a Division Bench of this Court held that Section 10 would apply if persons who had collected monies from the public by a way of subscription for a specific purpose had misappropriated it. A Division Bench had held that an implied trust is created and the beneficiary can sue the trustees for refund of the money. In Arulmighu Kallalagar Thirukoil, Alagar Koil by its Executive Officer v. Government of Tamil Nadu by its Collector, Anna District, Dindigul, reported in 2004 (1) LW 647, a Division Bench of this Court had held that provisions of Section 10 would apply to the case where the Government which was put in possession of the property for a specific purpose issued a notification purporting to convert the temple property into the reserved property, it will not cease to be a trustee or that the property is ceased to be held for the benefit of the temple. 48.3. The position of law relating to trust is clear, if a person is found to be holding the property belonging to another as a trustee or in a fudiciary capacity for the benefit of the other, Section 10 enables the beneficiaries to recover the property de hors the law of limitation. Whether the present suit is barred by limitation or not definitely hinges upon the answer to the question as to whether the 1st defendant held the properties as trustee on behalf of the Raja Mohan Prasad or his heirs. This question has been answered in the negative. Therefore, the suit only could be treated as suit for recovery of property on the ground that property belongs to the plaintiff or on the ground that the properties belong to the firm and the plaintiffs are entitled to seek recovery of the properties. 48.4. In either case the suit will be barred by limitation. Admittedly, the 1st defendant had asserted his title to these properties, even during the year 1937 before the Bombay High Court and Raja Mohan Prasad, who has alive till 1947 did not take any action for recovery of the properties from the 1st defendant, the firm also stood dissolve on the death of Raja Mohan Prasad in 1947. If the suit is treated as a suit based on the claim that the properties belonged to the partnership firm, it should have been filed within 3 years of the dissolution of the firm. Admittedly, Raja Mohan Prasad died in 1947 and the suit came to be filed only in 1982 i.e, nearly after 35 years. Therefore, once the plaintiffs have failed to prove the creation of a trust the irresistible conclusion is that the suit is hopelessly barred by limitation. Issue No.10: 49. The defendants have raised the plea that the suit is bad for non-joinder of ond Hari Prasad, who being an adopted son of Raja Mohan Prasad, is the eldest member of the Hindu Undivided Family. P.W.1 in his evidence has admitted that Hari Prasad is the eldest member of the Hindu Undivided Family. It is also seen from the judgment of the Andhra Pradesh High court made in Appeal No.1358 (F) dated 19.06.1951, Hari Prasad has figured as the 1st appellant while challenging the decree of the City Civil Court, Hyderabad, made in First Appeal No.52/1 of 1350 (F) on the file of that Court. When once the existence of Hari Prasad is proved and the fact that he is the adopted son of Raja Mohan Prasad and he is treated to be the eldest son of Raja Mohan Prasad, he is a necessary party to the present suit. The suit itself has been filed on the primary contention that the 1st defendant held the properties in question in trust for the benefit of the heirs of Raja Mohan Prasad. Therefore, the non impleading of the said Hari Prasad in the present suit is fatal to the suit. Despite this issue having been raised by the defendants, the plaintiffs have not come forward to implead the said Hari Prasad or his heirs in the present suit. This issue is answered in favour of the defendants. Issue No.13: 50. The defendants would contend that the suit is barred by principle of res judicata as the Bombay High Court had decided the question regarding the alleged trust created in favour of Raja Mohan Prasad and his heirs. The judgment of the Division Bench of the Bombay High Court has been marked as Ex.P177, of course there is a discussion regarding the document dated 05.01.1937 in the said judgment, but the decision of the Court confined only the question as to whether Ramnath Goenka was a partner of the firm Chunilal Murliprasad. The Bombay High Court was not concerned with the question as to whether there was a trust created in favour of heirs of Raja Mohan Prasad. The issue raised in the suit before Bomaby High Court was whether Ramnath Goenka as the partner has been liable to the debts of firm called Chunilal MurliPrasad. Therefore, I do not think the present suit can be said to be barred by res judicata, hence this issue is answered in favour of the plaintiffs to the effect that the suit is not barred by res judicata. Issue No.14: 51.1. It is seen from the evidence on record that Ramnath Goenka had asserted his title to the properties even in the year 1937 in the proceedings in suit No.1632 of 1936 before the High Court of Bombay. From the affidavit in reply of Ramnath Goenka filed in the said suit marked as Ex.P145 dated 20.03.1937, it is clear that Ramnath Goenka has asserted his independent title over the suit properties disputing the claim based on the alleged declaration of trust dated 05.01.1937 executed by him. Therefore, the cause of action to sue for recovery of the properties arose atleast on 23.07.1937. Raja Mohan Prasad was alive till 1947 for nearly 10 years from the date of said assertion of title. He also defended the suit filed by the Bombay Company in the Nizam's High Court at Hyderabad during the said period. Unfortunately, for the plaintiffs Raja Mohan Prasad never chose to initiate any proceedings against Ramnath Goenka for recovery of the properties/monies. In fact the letter dated 15.01.1937, which has been produced before the Bombay High Court along with affidavit dated 23.07.1937, Raja Mohan Prasad while returning the deed of declaration dated 05.01.1937 had acknowledged the title of Ramnath Goenka over the properties. Therefore, the plaintiffs, who are the heirs of Raja Mohan Prasad cannot now set up title in them over the properties based on the declaration dated 05.01.1937. I find that the plaintiffs are really estopped questioning the title of Ramnath Goenka. 51.2. Mr.P.C.Harikumar, learned counsel appearing for the plaintiffs would however contend that the set of interrogatories have been served on Ramnath Goenka and he also answered the same, relying upon certain answers therein, Mr.P.C.Hari Kumar, would contend that the plaintiffs entitled to claim title over the properties. When the plaintiffs, on their own showing, failed to establish their claim that Ramnath Goenka held the properties in trust for the benefit of Raja Mohan Prasad and his heirs, they cannot rely upon certain answers made to the interrogatories to strengthen and buttress their claim. Therefore, this issue is answered against the plaintiff. Issue No.15: 53. The plaintiffs sought for accounts. The relief of accounting would arise only if it is found that the properties were held in trust by the 1st defendant for the benefit of the plaintiffs. The question as to whether the 1st defendant held the properties in trust for the plaintiffs have been answered against the plaintiff. Therefore, the plaintiffs are not entitled to the relief of accounting. The plaintiffs have also sought for accounts from the 1st defendant for the management of plaintiffs’ father business at Madras from 1925 till date. Admittedly, the Raja Mohan Prasad died on 26.03.1947, the firm stood dissolved as on the date. Under Article 5 of the Limitation Act, the limitation for suit for accounts and share of dissolved partnership firm is three years from the date of the dissolution. The firm should dissolved on 26.03.1947, the cause of action to sue for accounts of the dissolved firm arose on that date. Therefore, the suit for accounts of the dissolved firm should have been brought within 3 years from the date i.e. on or before 26.03.1950. 54. Admittedly, the suit is filed only in 1982 and all the plaintiffs in the present suit have become majors by the year 1959. Therefore, the plaintiffs claim for accounts of the dissolved firm is hopelessly barred by limitation. Hence, issue No.15 is also answered against the plaintiffs to the effect that the plaintiffs are not entitled to the relief of accounting. 55. In fine, the plaintiffs are not entitled to any relief in the suit and the suit will stand dismissed. Considering the fact that the litigation has been pending for nearly 35 years, I do not want to burden the plaintiffs with costs of the litigation also. In fine the suit is dismissed without costs. Consequently, the connected miscellaneous petition is closed.
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