M SELVAM Vs. T P KUPPANNA MUDALIAR

JUDGEMENT

(1.) THE plaintiffs in O. S. No. 110 of 1963, Sub Court, Cuddalore , which was later transferred to the Sub Court, Villupuram , and renumbered as O. S. No. 9 of 1982, are the appellants in this second appeal. THE appellants are the children of Manicka Mudaliar , who died on 17. 11. 1959, and Kuppulakshmi Ammal , who figured as the first defendant in the suit. Manicka Mudaliar was carrying on cloth trade in Bazar Street, Villupuram , and at the time of his death, he had incurred certain debts and had also outstandings due to him as well as stock in-trade in his business. At the time of death of Manick a Mudaliar , the appellants were young children and Kuppulakshmi Ammal was also in an advanced state of pregnancy and the creditors of deceased Manicka Mudaliar wanted some arrangements to be made for the discharge of the debts due to them. THEreupon, Kuppulakshmi Ammal , on behalf of the appellants and herself, executed a deed of trust in favour of the respondent herein and defendants 3 to 8 in the suit on 28. 11. 1959 appointing the respondents and six others as trustees and aggreeing to handover the entire stock-in-trade and outstandings of deceased Manicka Mudaliar to the respondent and others in order to enable the realisation of the amounts due to Manicka Mudaliar and for the payment of the debts due by him to others. Yet another document was also executed on 23. 12. 1959 by Kuppulakshmi Ammal for herself and on behalf of the appellants as well as other trustees appointed under the deed of trust dated 28. 11. 1959 in favour of the respondent herein constituting him the managing trustee of the trust. Prusuant to the documents so executed, the respondent herein took over the stock-in-trade of deceased Manicka Mudaliar as well as his outstandings and realised large amounts, but did not carry out the objects of the trust deed by clearing off the debts of Manicka , Mudaliar. owing to that, several suits came to be filed against the appellants in o. S. Nos. 474, 23 and 97 of 1960 by the creditors of deceased Manicka Mudaliar and* the only residential property was also attached by the creditors, which necessitated the discharge of the decree debts by the appellants and that, according to the appellants, was clear breach of trust by the respondent. Besides, the appellants also claimed that a co-operative Urban Bank also attempted to bring for sale the property owing to the non-discharge of its debt by the respondent herein. Charging the respondent with breach of trust and the unjust retention of the trust funds in his hands, the appellants instituted O. S. No. 110 of 1963, Sub Court, Cuddalore , praying for a preliminary decree against the respondent herein for rendition of accounts among other reliefs. In the written statement filed by the respondent herein, several defences were raised and it is unnecessary for purpose of this second appeal to notice the same. Suffice it to say that on 30-6-1976, a preliminary decree for rendition of accounts was passed in favour of the appellants and against the respondent herein and certain other directions were also given. An appeal against that preliminary decree in A. S. No. 474 of 1976, district Court, Cuddalore , was dismissed on 5. 9. 1980 and a further Second appeal in S. A. No. 214 of 1981 was also dismissed by me on

(2.) 3. 1981. Subsequently, an Advocate-Commissioner was appointed and after taking accounts, he submitted a report according to which, the liability of the respondent herein as on 12. 4. 1960 was fixed at Rs. 41 ,31 2 -31. At the instance of the respondent, a second commissioner was also appointed and he submitted a report. Considering the reports so submitted as well as the several objections raised by the respondent herein to the reports, on 18. 10. 1983, the Sub Court, Villupuram , to which the suit had by then stood transferred, passed a final decree in favour of the appellants and against the rrespondent herein for Rs. 41 ,31 2 -31 with compound interest thereon at 12% p. a from 12. 4. 1960 onwards with half-yearly rests. Thereupon, the respondent herein preferred A. S. No. 246 of 1983, District Court, South Arcot Cuddalore. In the course of the appeal, the respondent agitated only the award of compound interest and the lower appellate court took the view that section 23 (e) and (f) of the Indian trusts Act, 1882 (hereinafter referred to as'the Act' ; ) would govern this case and in the absence of the incorporation therein of the expression,'unless the court otherwise directs' ; , the maximum rate of compound interest that could be awarded is only 6% p. a. The award of interest at that rate was also stated to be justified on the merits of the case. Ultimately, the lower appellate court modified the decree passed by the trial court by directing the payment of compound interest at 6% p. a. instead of 12% p. a. with half-yearly rests and in other respects, the decree of the trial court was confirmed. While in the second appeal the appellants have questioned the modification made by the lower appellate court with reference to the rate of compound interest payable, the respondent, in his Memorandum of cross-objections, has challenged the award of compound intereest at 6% p. a. with half-yearly rests on the ground that the granting of 6% p. a. simple interest would suffice. 2. Mr. M. R. Narayanaswami , learned counsel for the appellants inviting attention to S. 23 (e)and (f) of the Act, submitted that even in cases falling under S. 23 (e) and (f)of the Act, a trustee found guilty of breach of trust would be liable to account for compound interest at rates in excess of 6% p. a. , though the expression, 'unless the court otherwise directs' does not occur in S. 23 (e) and (f) of the act. Learned counsel further submitted that a disrection was vested in the court to award a higher rate of compound interest depending upon the facts and circumstances of the case and referred in this connection to the decisions reported in Syed Abdul Wajid Sahib v. Oosman Abdul Rubb , 56 L. W. 42 and Jagannath Sowcar v. Sripathi Babu Naidu , (1945)1 M. L. J. 478. On the other hand, Mr. G. Subramaniam , learned counsel for the respondent/cross Objector, contended that on a proper interpretation of se. 23 (e) and (f) of the Act, the award of 6% p. a. compound interest by the Court below was itself excessive and that the award of simple interest at6% p. a. would meet the ends of justice.