1 s.c.R. SUPREME OOURT REPORTS paying all the costs incurred by the respondent up· to date irrespective of the result of the suit. We therefore allow the appeal and remand the case to the trial· court for considering only the
question of limitation on the basis of the Displ~ced Persons (Institution of Suit"s) Act, (No. XLVII of 1948) as amended by the Displaced Persons (Insti- tution of suits an~ legal proceedings) Amendment
Act (No. LXVIII of 1950)" after giving· parties a chance to laa.d evidence in this connection, if neces- sary. If the ·court comes to the conclusion that the suit is within time on the basis of these two Acts, a.
decree for the amount claimed minus the costs incurred upto ..this date by the respondent will be passed in favour of the appellant. If on the other hand the court comes to tho conclusion tha.t·the suit
is not within limitation even under these two acts the suit will be finally dismissed. Costs incurred hereinafter will be in the discretion of the court. Appeal allowed . . :: I \VALIER L J. IYYAPP,AN & ANOTHER
v. THE DHARMODA.YAM COMPANY (J. L. KAPUR; K. C. DAs GUPTA and RAGHUBAR DAYAL, JJ., O~mfKI.ny-Di,.eetor a truBtee and in a fiduciary pos"ion- 'frwt if could bt. created on anothera hand-Ucen_se-()f imtJo. ('..a/)le where there ll4!J been change of purpose -In-iian Basements. Act 1882 (5 of1882), ~~. 60 (b), 62(/ ).
The t«!$pondent, a Company with charitable objects . owned certain Jands and the appellant who was the Chairman of the Board of Directors, was asked to construct a building on the ~aid .land. It was !lubsequently found that the cost would be more . than the estimated am.ount, which probably the
Company was not prepared to spend.. At t~t stage the J96Z Boottm'141 v. Union D} India Wanchoo J. —- Cllat1Nlt.r I. /, lytJ~ v. Tf!, Dbnm•y1111 c., .. , appellant made an offer that he would finish the construction of the building at his own cost and hand it over to the Com- pany as trust property of which rhe Directors of the Company would be the trustees and the Company will manage the
affairs in accordance with the conditions laid down in his off(r. The offer was accepted, but for some reason or other certain members of the Company were not prepared to stick to the original arrangement and some of the memben filed a suit and obtained an injunction against the appellant and the company not to execute the trust deed as proposed by the
appellant. Thereafter the appellant resigned from Chairman· ship and also ceased to be a Director, two days before his resig- nation the appellant registered a trust deed and made himself the first trustee with powers to appoirrt other trustees. The trust deed inter alia, recited that a rent of Rs. 88/- per annum was to be paid t• the Company for the compound where the
building had been erected. Thus the appeJJant created a trust by which the trust b(came a tenant of the respondent Company without any transfer from the Company to the trust. The respondent Company called upon the appel1ant to hand over the building 😮 the Company and filed a suit for possession of properties, damages and mesne profit.
The respondent Company's case was that the appellant had wilfully contravened· the terms of his offer, and the right of the appellant therefore was only to recover the money from the Company to the extent to which he may be entitled in
equity and the trust deed was inoperative. The defence of the appellant inter alia was that the respondent company was estop~d from claiming the building after having accepted the aforesaid offer pursuant to which the appellant had invested a large sum of money in construct·· in~ the building; and that as the offer of the trusteeship of the property in dispute made by the appellant and accepted by the Board of Directors had afterwards been cancelled as a result of the resolution pauC(fby the general body of members, the appelhLnt could not ~onstitute the respondent. company as trustee and therefore he was entitled to implement his 'original intention by executing the deed of trust. In the Supreme
Court, the appellant relied on the plea that he had been granted a license and acting upon the license he had executed a work of permanent character and incu~ed expenses in the execution thereof and therefore under s. 60(b) of the Indian Easements Act, t882, the license was irrevocable.
Hild, That a Director is also a Trustee of the assets of the company and is ·in a fiduciary relationship with th e ~tnp~ny; therefore he CO\~ld not do .. nyt.hing in fC8&f ~ 1 S.C.R.
SUPREME OOURT REPORTS !O t~e assets of the Company which would prejudicially rurect 1ts nghts. A person cannot create a trust in regard to land which belonged to another person nor could he by an unilateral act create a lease in his own favour in regard to the land over which he has raised a super-structure.
The offer and the acceptapce of the terms of the trust deed being wholly different from what had been executed by the appellant and from ·the manner in which the new trust had been constituted into a lessee of the company without the company's agreement it was not possible for a Court in equity to ac~pt the new trust as
a bar to . the respondent's claim for possession and there are no equities in the appellant's favour which he is entitled to enforce by way of defence to the suit. Held, further, that no case of license really arises but if it does, the license was to construct the building and hand it over to the respondent compan}' as trust property. There was no license to create another kind of trust which has been
sought to be created. It cannot be said, therefore, that there was an irrevocable license which fall under s. 60(b) of the Indian Easements Act. Even such a license is deemed to be
revoked under s. 62(f) of the Act where the license is I!Tanted for a specific purpose and the purpose is attained or abando- ned or becomes impracticable. G. E. By. v. Burner (1872) L.R . 8 Ch, App. 159, Manzoor
Ahmad v. Mukammad. Abdul Jamil, (1933) I. L. R. 56 All. 207 and Dominion of India v. B. B. Bohan Lal, A. 1. R. 1950 E. P. 40, referred to. CiviL APPELLATE JURISDIOTION: Civil Appeal
No. 565 of 1960. Appeal from the judgment and decree dated September 26, 1956, of the former Travancore- Cochin -High Court in A. S. No. 57 of 1954. A. V. V i.twanatha Bastri, P. K. 8uhramania
lyer, R. Ganapathy Iyer, 0. 8. AnanthakriBhna Iyer and G. Gopalakrishnan,. for the Appellants. M •. K. Nambiyar, Ramuhwar Natk, S. N. Andley and P. L. Vokra, for the respondent. 1962. March ·27. The Judgmen,t of the Collft
w~ delivered by 0/kval~r /.1. l.»tJPJum TIN Dharmcd4_,.m Company . · ~961 cA.,•Iw r.r. 1.71¥1411 y, Dltef7Ntlll.Jtllll c.mpu_, SUPREME OOURT REPORTS [1963] KAPUR, J.-This is an appeal against the
Judgment and decree of the High Court of Tra- vancore Coohin modifying the decree of the District Judge, Trichur. The appellant was defendant No. 1 in his personal capacity and defendant No.2 in the capacity of a trustee of
a trust. Defendal)'t; No. 5 was a. tenant of the building which is the subject matter of dispute between the parties, defendant No.lO was its successor. in-interest and the present respondent
was the pJaintHf in the suit. The suit out of which this appeal ba.s aris~n was filed in the Court of the District Judge, Trichur, on October 31, 1945, The suit wa.s for possession of properties described in schedules A· &
B and for damages and mesne profits with inter· est. The defence was that the appellant wa.s not liable to restore possession on the basis of a docu- ment Exhibit X which. was a deed of trust
executed by. the appellant creating a trust and constituting himself the trustee of the trust. The 5th defendant claimed Rs.20,000 and Rs.l019 as value of improvements and extensions made on
the building. A large number of issues were framed by the tria] court and it pa~ed a decree of which. the most important part was as follows:- (a.) The plaintiff is allowed to recover
possession of A & B schedule items from the defendants in poSBession and to utilise the income from the- B schedule item according to the terms mentioned in Exhibit II. (b) The 5th &1Oth defendants are permitted
to remove within a. period of 2 months from today the constructions and addition~ made in the A and B schedule items by them .with· out causing any damage to tl_J.e plaint properties.
' Agai~ this decree three appeals were filed one by the appellant, the other by the lOth defendant 1 S.C.R. SUPREME OOURT REPORTS anu the third by the plaintiff-respondent. '.rhe High Court in appeal modified the decree of the
trial court and hold that the only claim which the appellant could put forward was for compe.nsation for the structure he had erected. The amount qf Com- pensation was &.46,686-2-0. The High Court also
held .that the respondent was entitled to recover m~sne profits as against the appellant at the rate of Rs.88/- per annum till the recovers . of property mentioned in schedule A and B at the rate of
Rs.l500/~ per annum. "in · regard to schedule B · buildings. It is against this decree that · the appellant has come in appeal to this court by special leave. In order to UT)derstand the points in contro-
versy it will be helpful to give certain facta which led up to this litigation. The respondent is a non- profit sharing company, the main objec~ of which seems to be to provide pecuniary assistance to the
poor for. educational. and other charitable purpose. The respondent company owned survf'y No. 465 in the revenue estate of the village Trichur abutting on the public road in 1944-45. It was 55 cents in
area. The r.espondent company erected buildings on the South and which had be~n rented t.o the then Imperial Bank of India, now the State Bank of India, and in the middle portion there waR a
building which has been leased out to the Post Office. In the North there was a vacant plot measuring 20 cents which has been described as sch~dule A. A building was sought to be put up
and was ultimately put up on about 7 or 8 cents out of this area which has been described in sche- dule B. Schedul~ A is the whole of the land.niea.sur- ing 20 cents with the building on it on an area of
7 or ·8 cents which is schedule B. In 1942 the appellant became the Chairman of the Board of Directors of .the respondent company and w~ entrusted with the construction of the building
wl:lich the resp-9ndent company . wanted to put up l !IGZ Chavalier (. I. f»II/J/JIIII v. The Dhmt11()1/•yt~• Ctnllp!JIIy Ka~UrJ. 191lt — Ciulu.U, /, /. l.»tJ?JI•n v. Tit, Dtt.nnOil,,_
Cof'l,tm.1 Ir-JJurJ. on 7 or 8 cents out of schedule A property which the appellant agreed to construct. The . cost of the building at that time was estimated to oo Rs.l2,000. It was also resolved to entrust to the
appellant the construction of a latrine, a kitQben gate, compound and partition wall of schedule A property which was constructed at a cost or Rs.2,000 expended by the respondent company.
At the meeting of the Board of Directors of January 9, 1944 the_ dir~ctors of the respondent company were told· by the appellant that .Rs.l2,000 was insufficient for the completion of the building.
On April 1944t the appellant made an offer to the Directors of the respondent company that he would meet the entire cost of the oonstruction of the building and hand over the building to the res-
pondent company which would be a trust. This ofFer is contained in Exhibit AB. Tn this offer he stated that the estimated expenditure of the new building will be about Rs.30,000 and that he
would meet the expenses and then he stated:- "! shall entrust this building with the company as my trust property in accordance with . the conditions mention~d below. and the company shall ta.ke over the above trust
property and manage the affairs in accordance with three conditions mentioned below''. One of the conditions was that the minimum in- come of the property shall be oa.loulated at Rs.l5()0/- per annum whioh would be spent for the
eduo&tion of poor students according to the rules framed by the oompany and then he set out certain rules. He also stated what the name of the trust would be. The dooument ended as
follows. •'I shall execute at my own expen1e a trust ·deed and sip and give the same to the company, entenng therein, all the above mentioned parti g Ian and oonditiODI. n. 1 S.C.R. SUPREME OOURT REPORTS
company shall aecept the same and shall mention the fact of acceptance in the deed in writing and shall get the same registered". On the same day the directors seem to have re- solved as follows:-·
41lt is decided to accept this trust pro- perty in accordance with the conditions, mentioned in . it. Copies of this resolution and the application, may be sent to the applica-nt".
The company agreed to accept the trust and a sum of Rs.7672-7-3 which had been given to the appel- lant by the respondent company was returned on April 30,, 1944. On July 2, 1944, the appellant
placed before the Board of Directors a draft of the truat deed which is Exhibit II. The draft of the trust deed was approved by the company as follows:- ••The compa.ny has accepted the properties
a.s 'TruBt' with all the above conditions. To this eft'eot, the Directors (Trustees) who have been authorised as per the _qecision of the Director Board, on behalf of the Dharmo~ d~yam Company.
The draft o.f the •Trust deed' has bet>n perused and accepted. Four 'Trustees have been empowered to prepare the original deed and present it in the Registrar's Office". It appears that at a meeting of the General
Body of the Members of the. Company this trust deed was approved. Later on February 25, 1945 another meeting was held and certa.in changes were suggested in the trust deed. On October 7,
1944, certain members of the respondent oampany filed a suit in the court of District Munsif of Trichur and obt~ined an injunction both again~tt Clutvoli~r f, I. I.»#JP., v. TAID~wa
c~ Ef~~UrJ. KopUf' J. SUPREME OOURT REPORTS fl963] the appellant and the company uot to execute the trust deed as had been proposed by the appellant as contained in the draft (Exhibit II).
Thereafter the appellant resigned his Chairmanship of the respondent company on May 25, 1945 and also ceased to be a Director on May 28, 194:5. Two days before i.e. on May 23; 1945 the appellant
registered a trust deed in regard to the property which is Exhibit X. It is there stated that he had constructed the building at his own expense at a cost of Rs 75,000/·and it was to be named
Dharmodayam Company S~lver Jubilee I. I. Iyyappan Trust Building. The first trustee was the appellant with power to appoint other trustee or trustees. The estimated income of the property
was Rs. 3600/- out of which a rent of Rs 88/- :ver annum was to be paid to the appellant company for the compound where the building had been erected and then provision was made in regard to
the income and how it was to be spent. This was registered and thus a trust was created of the properties in schedule A & B in which the trust became a tenant of the respondent company without .
any transfer from the respondent Company to the trust. The suit for injunction which had been filed by Rome of the members was dismissed for default on March 25, 1946, 1'he respondent company on
August 13, 1945, calJed upon tho appellant to hand over the building to the respondent company and it is stated that on August 22, 1945, during some holid&ys the appellant inducteu the 5th defendant
as a tenant. The respondent thereupon filed the suit out of which this appeal has arisen. The plaintiff in his plaint, after reciting the facta which have been above set out, statE-d that.
the appellant as an agent of the respondent company had misconducted himself by tho breach ofhis duties and hf0 thereby lost any right hu had regardi,ng the building described ·in schedule B ·
I S.C.R. that he ha.d wilfully contravened t.he terms of his offer ; that the right of the appellant therefore was only to recov<"r the money from the company .to the extent to whjch he may be entitled in equity and
the trust deed (Exhibit X) was inoperative. The respondent further stated that it ·was ready and willing to pay such s.um of money as the court may find the_ appellant to be entitled to.
The defence of the appellant was that the offer df the appellant to construct the build~ng and to constitute the company as trustee to carry out the trust according to the terms and conditions
detailed in his offer dated 2, 1944 having been accepted by the Board of Directors, it put an end . to any previous t"elationship which might have exis- ted between the appellant and the respondent
company and could not therefore be enquired into. It was also submitted that the respondent com:. pany was estopped from claiming the building after having accepted the afore~id offer
pursuant to which the appellant had inves- ted a large sum of money in constructing the building; that as the offer of the trusteeship of the property in dispute made by the appellant and
accepted by the Board of Directors of the respon- dent company had afterwards been 9ancel1ed as a result of the resolution. passed by the General Body of Memb~rs the appellant could not constitute the
respondent company as trustee and therefore he was entitled to implement his original intention by exe- cuting the deed of trust (Exhibit X.). He therefore pleaded that the deed of trust was perfectly valid:
that the rental value of the site in schedule A was not even Rs. 10/- a year and that he ha.d not be- come a tenant and the word "verumpp.ttom" had been used for the want of a better word and that
the trust had undertaken the liability to pay to the respondent company Rs. 88/- a year. On· these grounds it was submitteg that the respondent com· . pa.ny was not entitled to allY relief. These then are
the Iaot. of the eue. 11162 Ch«oalifr I. /, 1-qoppan TM DhamtiXIay•m Complln.J 11~1 Cl!.lllfilier I. J, l:J.J4PPilll v. T/1, Dhrllfl1tl•,.m Comp•raJ KtJ/1111 J, SUPREME OOURT REPORTS {196aJ
The appellant in this Court has mainly relied on the plea that he had been granted a licence and acting upon the license he had executed a work of a permanent character and incurred expenses in
the execution thereof and therefore under s. 60{b) of the Indian Easements Act, 1882 (5 of 1882), hereinafter referred to as the #Act', which W!!.B applicable to the area where the property is situate
and therefore the license was irrevocable. Now in the trial court no plea of licens~ or its irrevooability was raised but what was pleaded was the validity of the trust in Exhibit X. In the judgment of
the trial court no such question was discussed. In the grounds of appeal in his appeal to the High Court which the appellant took against the decree of the trial court the relevant grounds are 9 to 13.
In the 9th ground it was pleaded that the first de- fendant's case of lease should have been upheld; in any event s.60 of tbe Aot should have been applied. In Ground No. 10 it was stated that Rs. 88/- 'was a
reasonable compensation. GrouD.ds 11 to 13 dealt with the question of trust. Thus it is for the first time in his grounds of appeal that a. 60 of the Aot was sought to be raised as an alternative plea. At
the time of the argument before the High Court the appellant abandoned his ·case in regard to the lea.ae and relied on the irrevocability of the licenae and insisted that the trust deed (Exhibit X) was a. valid
document. Now it is not open to a. party to change his case at t4e appellate stage because at the most the oaae of the appellant in the tria.l court was what was contained in paragraph 11 of the Written State-
ment where the question of estoppel was raised and the plea taken was that the 'respondent company was estopped from clainting any right to the buil- ding after accepting the oft'er of the appellant pur-
suant to which the appellant had expended a large amount of money. That was not a. plea. of license at that stage. It is not for us to say what the cue of the pariies would have been U' the cue of
1 S.C.R. SuPREME OOtmT REPOR'fS license had been speoifioally raised but the fact re- mains that the plea. of license was not raised in the trial court nor was it adjudicated upon there.
The appellant was a Director of the company and it is now impossible to dispute the proposition . that the Directors are in some sense, trustees-a. pro- position which ha3 been established by a long series
of oases. See Palmer's Company Law p. 168, Ed. 19th. This two fold oha.raoter of directors is, per· haps, best expressed in Lord Belborne's words in G. E~ Ry. v. Rurner(1) where he said:-
The directors are the more trus~s or agents of the company-trusees of the company's money and property; ~gents in the transactions wbich they enter into on behalf of the company. And this is the way
in which it is put by Sir George J easel in the case of Re Forest of Dean etc., Oo. ( J 878) 10 Ch. D. 450. Directors are called trustees. They are no doubt trustees of assets which
have com& into their hands, or which are under their control". tl'hus when the appellant was making the offer for ore'l.ting a trust he was not ~erely an agent of the company; he was also a trustee of the assets of the
. company and was in-a fiduciary relationship with the respondent. "Therefore the appellant could not d<1 anything in regard to the assets of the company "hich would prejudicially aft"ect ita rights. '.rhe ap-
pellant made an oft'er that he would en·ect the bull· diJlg on the land belonging to the respondent which is in schedule A, the building being schedule B. He alao oft'ered that it would be a trust property i.e.
the super structure would be the trust propel'tJ. He could not oreate a trust in regard to land whioh belonged to the company nor could he by a unilate- r~~ol act oreate a leaee in his own favour in regard to
<•> (1172> L.a. a aa. App. 149, 152. CA4tlalt.T I. I. v. Til# Dllar1Mfill.1t~m ~:I CA•vali11 /, /. lyyaJ'f'rm v. '[Ire JJharmodaJam Compar!)l _..,…._ liafJu"' J. the land ,:vhich is in ~:~chedule A. Thus when a com-
plaint is made that the appellant ha.s unilatera1Jy aetcd to deprive the company of some of its right t.hc complaint is not wholly without foundation, although the company also may not be enthcJy
without blame. But the fact comes to this the ap· pellant was asked to construct the building at a cost of Rs. 12,000; it wa:s subsequently found that the cost would be more than the estimated amount
which probably the company was not prepared to spend. It is not that the building had not yet commenced, it had commenced and probably not completed. At that stage the appellant made an offer
which was accepted but the offer was that he would finish the construction of the building and hand it over to the respondent company as trust property of which the trustees would be the Directors of the
company. The transaction therefore was confined to the offer as contained in Exhibit AB and in Exhibit II. It is true that for some reason or another certain members of the company were
not prepared to stick to the original arrangement and wanted certain modifications but in spite of that it was not open to the appellant to ignore his offer altogether and create a wholly new trust
which he has done. His right, if any, if they could be enforced would only be in Exhibit II which the appellant himself has abandoned. He cannot now lJe heard to.say that because the com-
pany after accepting his offer had · refused to abide by the agreement, he was entitled to appropriate by means of the trust created by him the land in schedule A by constituMng the trust a tenant and
deprive the company of which he was at that time a. Director and therefore a trustee. In these circumstances it is impossible to say that there were any equities in his favour whic~ he is entitled
to enforce by way of defence· to the suit of the re•pondent. 1 S.C.R. SUPREME OOURT REPORTS In our opinion no case of license really arises but i( it does what is the license · which the appell-
ant obtained and what is the license, which he is seeking to plead as a. ba.r. The license, if it was a license, wd.s to construct the building and hand it over to the respondent company. as trust pro-
perty. There was no license to create another kind of trust which the appellant has sought to cre!lte, It cannot be said therefore that there was an irrevo- oa.ble license which falls under s. 60 (b) of the Act.
Even suoh a license is deemed to be revoked under tt. 62 (f) of t.hat Act where the license is granted for a speoifio purpose and the purpose is attainc d or abandoned or becomes impracticable.
In the present case the purpose for which the license wa.s granted has either been. abandoned or has become impracticable because of the action of the a.ppe– lla.nt. In these circumstances the oases which were
cited on behalf of the appellant are of little a.ssis- ta.noe. The appellant relied on M anzoor Ahmad v. Muhammad Abdul Jam!li1{1) which was a. case under •· 60 (b) of the EaHt'mente Act where. a. license had
become irrevocable under s. 60 (b) ana it was held that·it could not be revoked on ,·payment of com- pensation. The East Punjab case. Dominion of · India v. B . B. Sohan Lal C1) again is not of much
assistance of the appellant. It was there stated that in every case the terms of the license have t.o be examined and the law applied to such· terms. It ~as also observed by Das, C. J. (as he then was)
that in order to be irr~vooah}e under s. 60 the license has to be coupled with a transfer of property whereas under the. English law it was enough if it wu coupled with a. grant. or interest in the
' nature of profit and in every ease the irrevooa.bi- lity whether under the English law or under the. Indian statute w-ill give way to the special (l) (193$) I; L. R. 56 All.107,
(2} A.I.R. 19$0 E.P. 40, f7. 116! Chat~t~lief' I. I. IvoH~n v. Tk DhmnodaydiTI Compt~~~j Kt~ftur J. 196~ Ch••tMHtr ]. [. I;~yappan v. The DltatmorJO;Jall! Ct1nJpany – March zs. SUPREME COUR'r REPORTS [1963)
agreement if any of the parties but it is unnecessary to go into these cases because the offer which was originally ~ade by the appellant and accepted by the respondent company has not been adhered to
and the appellant is now proceeding on an entirely new basis. In our opinion the offer and the acoeptence of the terms of the trust deed being wholly diffe- rent from what has now been executed by the
appellant and from the manner in which the new trust has been constituted into a lessee of the com- pany without. the company's agreement it is not possible for a court in equity to accept the new
trust as a bar to t.he respondent's claim for posses· sion. In this case the appellant has suffered no loss. The amount which he has expended has been returned to him. In our opinion the judgment of the High
Court wM right and we therefore dismiss this appeal with costs. Appeal clismisstd. THE COLLECTOR OF MONGHYR AND OTHERS v. KE~HAV .PRASAD GOENKA AND OTHERS (And connected appeals) (B. P. SINHA, C.J., K. SuBBA R.Ao, N. RAJAGOP.ALA
AYYANG.AR~ J. R. MuDHOLKAR and T. L. VENXATARAMA AIYAB, JJ.) Privare Irrigation Work,_Repaira to WtWb-Notice to landlord-Collector's power to direct repairs willaout notice- Statute requiring reasons to be recorded by Oolkct!Jr-lf manda- tOT'!J-Demand on landlord for share of cosls-Ltgatity-Bikar Privale Irrigation Works Act, 1922(Bihar and Orissa 5 of1922), 88. 3, 4, 5, 5A, 5B, 11, 12-0onBtitvtion of India, Art. 226. The Bihar Private Irrigation Works Act, 1922, was
enacted to provide, inter alia, for the repairs and improvements