PEDDAKKA Vs. AGASTHESWARA SWAMI
LAWS(APH)-1955-12-19
HIGH COURT OF ANDHRA PRADESH
Decided on December 19,1955

BHEEMAGOUNI PEDDAKKA Appellant
VERSUS
TEMPLES OF SRI AGASTHESWARA SWAMI Respondents

JUDGEMENT

- (1.)Defendant is the appellant in this second appeal. Her husband B. Venkataramaiah, was the trustee of certain temples till 29-8-1948 when the plaintiffs were appointed trustees by the Hindu Religious Endowment Board. The institutions represented by the plaintiffs are eight in number. Venkataramaiah the ex-trustee of these institutions died on 13-9-1948. The plaintiffs who took charge of the management of the religious institutions brought the suit from which this second appeal has arisen for taking accounts of the receipts and disbursements relating to the trust property, during the period Venkataramaiah was a trustee and for recovery of the amount that might be found due on the taking of accounts from the assets of the deceased Venkataramaiah in the hands of his widow, the defendant in the trial court, and the appellant in this second appeal. The learned Subordinate Judge of Kurnool dismissed the suit on the ground that the defendant as the legal representative of a deceased trustee was not liable to account to the present trustees. He purported to follow a decision of the Calcutta High Court in Amiya Krishna Khan v. Debendralal Khan and of the Patna High Court in Rameshwar Singh v. Narendranath Das. On appeal by the plaintiffs, the learned District Judge reversed the decision of the Subordinate Judge and remanded the suit for trial on the merits.
(2.)In this second appeal preferred by the defendant it is argued by the learned Advocate that the decision of the lower appellate court is erroneous in law and opposed to authority. I have been taken through a large number of decisions of the Calcutta High Court and some decisons of the Madras High Court in which there is a discussion of the liability of the legal representatives of a deceased agent or trustee to render an account in respect of the management of the affairs of the principal or of the affairs of the trust by the deceased agent or trustee. The decisions of the Calcutta High Court do not speak with one voice. Some of the cases draw a distinction between the liability of a trustee to account to his cestui que trust and the liability of a deceased trustee's legal representative to render accounts. Other decisions proceed on the basis that if a suit is brought by the cestui que trust against a trustee for rendition of accounts and the trustee happens to die after the institution of the suit, the liability of the legal representatives would be similar to that of the deceased trustee but not in a case where the suit itself was laid against the legal representative. There are observations in other cases to the effect that the liability of a trustee and the liability of the legal representative of a deceased trustee to account to the cestui que trust in respect of the receipts and disbursements pertaining to the trust estate would be substantially of the same character though the mode of taking accounts may be different and the legal representative of the deceased trustee would not have to bear the same burden of explaining and vouching the accounts as the trustee himself, if he were alive. It is clear that the legal representatives of a deceased trustee are liable to account to the cestui que trust in respect of funds of the trust estate received by the deceased trustee and not expended by him for the trust. Sec. 306 of the Indian Succession Act provides that all demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease survive to and against his executors or administrators. The exceptions to the general rule are not relevant for our present purpose. Under Sec. 10 of the Limitation 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 for an account of such property or proceeds, shall be barred by any length of time." For the purpose of Sec. 10, property comprised in a Hindu Religious endowment is deemed to be property vested in a trust for a specific purpose and the manager of such property is deemed to be the trustee thereof. If these statutory provisions are kept in view, there is, in my opinion, no insuperable difficulty in arriving at a solution of the problem which appears to vex the courts in Calcutta. The legal relationship between a trustee and the beneficiary is a fiduciary one and there is a liability on the part of.the trustee to render a true and proper account of the funds and property of the trust under his management. In a suit for accounts by a cestui que trust against a trustee or his legal representative, it is incumbent upon the trustee or ihe legal representative to produce all the books of accounts, documents and vouchers kept by the trustee. If the trustee is alive and is sought to be made accountable by the cestui que trust he must explain the accounts or vouch for them. In the case of a legal representative, however, he cannot be compelled to explain or vouch for them because he was not directly concerned with the receipt of the funds or their disbursements. If, however, the legal representative of a deceased trustee is in a position to explain the account or any part thereof or vouch for the same he should do so. If the trustee does not produce books of account, vouchers or documents relating to the transactions entered into by him as a trustee, every presumption will be made aginst him. If the legal representative does not produce the books, accounts or vouchers or documents relating to the trust estate the court should determine whether the legal representative is deliberately withholding the same or whether the accounts, vouchers and other papers did not pass into his custody. If there is a wilful withholding of the relevant books, accounts, vouchers and documents by the legal representative, then the court might draw such adverse inference as it thinks proper from such default. If the accout-books, vouchers, and other papers relating to the management of the trust by the deceased trustee are produced by the legal representative, the plaintiff would be at liberty to prove that they are not true or correct. The burden of proving that the accounts and vouchers do not reflect the truth of the transactions would be upon the plaintiff and if the plaintiff adduces evidence in suppors of his case, the legal representative can let in evidence in rebuttal. If the account books, vouchers and other relevant papers are not produced by the legal representative, it is open to the plaintiff to prove by other evidence what sums the deceased should have realised or expended and the balance that would remain due and payable by him. The legal representative would be liable to the extent of the assets of the deceased trustee in his hands for payment of such sums as might be due by the deceased trustee on a scrutiny of the amounts, vouchers and other relevant papers and of such evidence as the plaintiff eestui que trust might adduce in his suit for accounts. Merely because the trustee, who is an accounting party, dies, the liability for accounting for his management is not at an end, nor do his books of account and vouchers gain an immunity from scrutiny or attack which they would not have enjoyed if he had been alive. If the trustee is alive, he has to explain and vouch for every item of debit and credit in his books, but if he is dead it might be difficult for the legal representative of the deceased trustee to explain the entries in the accounts in respect of transactions of which he had no knowledge. The mere fact that the trustee is dead does not mean that the accounts and vouchers kept by him should be accepted at their facevalue and not subjected to scrutiny or criticism in a suit for accounts by the eestui que trust. If the legal representative of the .trustee is a pardanashin lady or an ignorant or illiterate woman who is not acquainted with her husband's affairs and had nothing to do with them, the court will make due allowance and will not insist upon strict proof of the correctness of the accounts, or of the vouchers by the legal representative. All that I am pointing out is that it will be both possible for a legal representative to account for the management of a deceased trustee by producing the account kept by the deceased trustee to the extent to which the legal representative has personal knowledge or information. It follows, from what I have said, that a suit for the recovery of a specific sum of money is not the only remedy available to the eestui que trust against the legal representative of a deceased trustee and that a suit for accounts which, in substance, is really a suit for the recovery of the amount that might be found due to the eestui gut trust on taking the accounts of the trust estate would be maintainable. The only difference between a suit for accounts against a trustee and a suit for accounts against the legal representative of the deceased trustee is as regards the mode of accounting by such legal representative and as regards the onus of proving the truth and propriety of the several transactions to which the accounts and vouchers relate.
(3.)I have carefully read the numerous decisions which the industry of counsel for the appellant has enabled him to place before me. I have endeavoured to state in my own words what I consider to be the correct principle gatherable from the statutory provisions to which I have referred and from the decisions which are in conformity with the principle that a legal representative who takes the assets of a deceased person should also discharge the liabilities of the deceased to the extent of the assets in his hands. I may state that the following decisions were cited before me. The decision in Kumeda Charan Bala v. Asutosh Chattopadhyaya is the starting point of the discussion about the difference between the liability of a trustee and, that of the legal representative of a deceased trustee in the matter of renderidg accounts to the cestui que trust. All that the learned Judges decided was that the legal representatives of an agent could not be called upon to render accounts to the principal in the same sense as the agent himself for they cannot be required to explain matters of which they have no personal knowledge and to assist the principal in the investigation of the management of his estate of which they are ignorant. The learned Judges also observed that the remedy of the principal was to sue the representative for any loss he might have suffered by reason of the negligence or misconduct, malfeasance or misfeasance of the agent. Pausing here, I may say it may not be possible in many cases for a principal or the beneficiary to know before-hand and without an examination of the accounts kept by the agent or the trustee, the several items in respect of which the agent or trustee would be liable to account on the ground of misfeasance, misconduct or malfeasance. There, are some decisions of the Calcutta High Court which draw a distinction between a case where the trustee dies pending the suit and cases where the trustee had died before the institution of the suit Profulla Kumar v. Firoza Sundari, Kanailal Ghoshlal v. Purendu Nath Tagore , Brij Kishore Singh v. Nazuk Bai. It is difficult to make any distinction in principle between a case where the trustee dies a day before the institution of the suit and a case where he dies a day after. The liability of the legal representative of the deceased trustee , ought to be the same in both cases. There is one case, however, on which considerable reliance was placed and to which I should refer. In Amiya Krishna Khan v. Debendralalkhan, a Bench of the Calcutta High Court held that a suit for account was not maintainable against the legal representatives of a deceased trustee and that the only suit against him should be one for the recovery of money misappropriated by the trustee. They also observed that when account papers were examined in such a suit the defendant was under no obligation to explain any item and the burden lay entirely on the plaintiff to substantiate his case in regard to particular items when those are challenged.
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