KRISHNADAS GOVARDHANDAS MADIVALE Vs. RATANBAI GOKULDAS LAXMANDAS

JUDGEMENT

(1.) THIS is an appeal under the Letters Patent against the decision of Mr. Justice Wassoodew in Second Appeal No.157 of 1937. The dispute arose in the insolvency proceedings of one Krishnadas Govardhan-das Madiwale. He was adjudicated insolvent in 1933 and a receiver was appointed of his property. Krishnadas was adopted in another family and his natural brother Gokuldas died in 1915 leaving a widow named Ratanbai. Ratanbai applied in the insolvency proceedings praying that she should be given a first charge over the property of the insolvent in respect of an amount of Rs. 10,000 which, according to her, was in possession of the insolvent as trust property on her behalf. The receiver opposed that application on the ground that the applicant Ratanbai was only an ordinary creditor and not a beneficiary under any trust, and that she was not, therefore, entitled to priority over other creditors. The trust on which Ratanbai relied and of which she herself was the main beneficiary was created by her in 1925. It is admitted by Krishnadas that, under an oral will of his brother, he held a sum of Rs. 11,000 which his brother had instructed him to pay to Ratanbai. Ratanbai's case is that under the trust deed made by her on October 20, 1925, a sum of Rs. 10,000 out of this amount was to be managed by several trustees of whom Krishnadas was one, that on that date there were three transactions under which Krishnadas formally handed over the amount of Rs. 11,000 to her for which she passed a receipt, and then she formally handed back Rs. 10,000 out of that amount to Krishnadas to be kept by him as a deposit, and she created the trust deed in respect of the same.

(2.) THE trust deed is a long document but its material provisions are these: THE amount of Rs. 10,000 had been handed by Krishnadas to her for which a receipt was passed. It was given back to Krishnadas to be kept as a deposit on taking a receipt from him, and it was to bear interest at eight annas per cent, per month. Certain beneficiaries are mentioned in the trust deed, the principal one being Ratanbai herself for the amount of Rs. 8,000 from the income of which she was to be maintained during her lifetime. With regard to the balance of Rs. 2,000, she was to be given it in two instalments if she' wanted to go on pilgrimage, and after her death the corpus was to be distributed to certain temples. It was further provided that the majority of the trustees, of whom Krishnadas was one, was empowered to invest the trust moneys either in authorised securities or with several reputed merchants.

(3.) THE trial Court held in favour of the applicant Ratanbai that the money was in the hands of the insolvent as trust money as alleged by her, and that, therefore, she was entitled to the priority claimed by her.