PRIA NATH CHATTERJEE Vs. LAKSHMI NARAYAN BHATTACHARJYA

JUDGEMENT

(1.) The facts upon Which the present suit was brought by the plaintiffs-respondents are these: On the 18 September 1896 and 1 July 1899 one Sashi Bhusan Bhattacharjee husband and father of the plaintiffs borrowed certain sums on notes of hand from defendants Nos. 1 and 2. On the 5 December 1902 Sashi Bhusan Bhattacharjee and his co-sharers including defendant No. 2 executed a deed of trust in favour of two co-sharers one of whom was defendant No. 1 Priya Nath Chatterjee. Under the deed the trustees took upon themselves the charge of all necessary duties for the management and protection of the joint estate. In December 1903 Sashi Bhusan died leaving a widow plaintiff No. 2 and two sons plaintiff No. 1 and one Haladhar. Haladhar subsequently died childless leaving his mother the 2nd plaintiff as heir. On the 3 April 1904 the defendants Nos. 1 and 2 sued the two sons of Sashi Bhusan on the hand-notes and on the 23 August obtained a decree against them as representing the estate of Sashi Bhusan for Rs. 4,348. This decree was subsequently executed and Sashi Bhusan's share in the property described in the Schedules ka and kha of the plaint were sold in auction and purchased by defendants Nos. 1 and 2 (appellants) for Rs. 1,200. On the 31st March 1905 an application made by plaintiff No. 1 and Haladhar under Secs.244 and 311 of the Code of 1882 was dismissed. The present suit was brought on the 12 September 1918 by the plaintiffs for setting aside the decree and the sale in execution thereof as fraudulently obtained and for recovery of, or in the alternative, for confirmation of possession of the property in suit. Both the Courts below have agreed in decreeing the plaintiff's suit and setting aside the decree and the execution sale held on the 18 of December 1904, not on the ground that the sale was bad under the O.P.C. but on the ground that defendant No. 1 being a trustee was not competent to purchase the property. The learned Additional District Judge on appeal found that defendant No. 2 never acted as trustee to the properties in question. But relying on a certain decision of their Lordships of the Privy Council the learned Judge held that the entire sale was bad and ought to be set aside.

(2.) The defendants Nos. 1 and 2 have appealed and on their behalf several points have been taken. It is first contended that the trust deed of 1902 did not create such a valid trust as to constitute defendant No. 1 a trustee in law and make the purchase by him invalid. This point was not taken in any of the Courts below and we do not think that we should allow the appellants to raise it for the first time in this Court. It is a violation of the fundamental principle of estoppel and equity to allow the trustee to raise it after he has taken possession of the properties as trustee and dealt with them in the capacity of a trustee.

(3.) The next point taken is that the purchase by defendant No. 1 is not necessarily illegal as he was charged with the management of the properties only and was not a trustee for sale. The law on this point is hardly open to controversy due to the decisions of the English Courts and of the Privy Council. In the case of Manohar Mookerjee V/s. Peary Mohan Mookerjee 62 Ind. Cas. 76 : 48 C. 1019 : 34 C.L.J. 86 : 41 M.L.J. 68 : 14 L.W. 104 : 23 Bom. L.R. 913 : (1921) M.W.N.554 : 19 A.L.J. 773 : 2 P.L.T. 725 : 26 C.W.N. 133 : 30 M.L.T. 24 : (1922) A.I.R. (P.C.) 235 : 48 I.A. 258 (P.C.), it is observed: "It is equally well-settled that a trustee for other purposes than for sale cannot purchase the property where the purchase would conflict with his duty respecting it, or his position in regard to it; but in this class of cases there is no absolute rule against his purchasing the trust property from his cestui que trust, although Courts of Equity always regard such transactions with the utmost jealousy and, will not hesitate to set them aside if their fairness is not conclusively established". This case of Peary Mohan Mukerjee V/s. Manohar Mookerje 62 Ind. Cas. 76 : 48 C. 1019 : 34 C.L.J. 86 : 41 M.L.J. 68 : 14 L.W. 104 : 23 Bom. L.R. 913 : (1921) M.W.N.554 : 19 A.L.J. 773 : 2 P.L.T. 725 : 26 C.W.N. 133 : 30 M.L.T. 24 : (1922) A.I.R. (P.C.) 235 : 48 I.A. 258 (P.C.) was taken to the Privy Council and their Lordships in affirming the judgment of this Court remarked thus: "A trustee for sale cannot purchase; he cannot purchase because the same person cannot be both vendor and purchaser, and he who acts for another cannot also act for himself. But; even if he be, not a trustee for sale, if in any capacity he is trustee of the estate, although his incapacity to buy is not absolute and is subject to different limitations it is equally well- settled". In the present case the finding of fact of the Courts below is that the property was purchased at a wholly inadequate price. In consideration of the fiduciary relation existing between the parties and of the fact that the properties were sold at such an inadequate price and the other circumstances I think that the decision of the Courts below with regard to the purchase by the defendant No. 1 is correct and must be upheld.