Case BriefsHigh Courts

Kerala High Court: A Full Bench of A.M. Shaffique, Sunil Thomas and Gopinath, JJ., held that there is no limitation period for wife/divorced wife to claim her property entrusted to husband/in-laws given in the form of dowry or otherwise.

Questions involved was:

Whether trust created by a wife entrusting her property to her husband gets extinguished after the dissolution of marriage and whether she can initiate proceedings invoking Section 10 of the Limitation Act, 1963 without any limitation of time?

For the above-stated question, reference was made to the decision of Bindu K.P. v. Surendran C.K., [2018 (2) KHC 1] wherein it was held that claim of the wife or ex-wife for a dowry is not barred by any length of time.

Counsel for the appellant Sri S.K. Balachandran placed the following decision before the Court:

    • Swapna v. Thankavelu, 1990 SCC OnLine Ker 168: – In the above case, a Single Judge of this Court held that when valuable articles are entrusted by the wife to the husband for safe custody, the husband remains in the position as a trustee who is bound to account to the wife all her properties at any time when she demands. The aforesaid judgment was delivered following the Supreme Court judgment in Pratibha Rani v. Surajkumar, (1985) 2 SCC 370. It was further held that if the husband is a trustee, the wife is entitled to follow the property in the possession of the trustee, and Section 10 of the Limitation Act would apply.
  • Chacko v. Annamma, (1985) 2 SCC 370: – In this case, the Division Bench of this Court approved Swapna’s case stated above. In the above case, on a detailed analysis of the relevant provisions including Section 10 of the Limitation Act and the provisions of the Trusts Act, overruling an earlier judgment in Annamma v. Thressiamma, 1971 SCC OnLine Ker 86, it was held that there is a creation of trust in respect of stridhanam property and therefore Section 10 applies.
  • In Bhatacharjee v. Sarathi Choudhury, 1993 SCC OnLine Ker 13, while considering the impact of Section 12 of the Protection of Women from Domestic Violence Act, 2005, the Supreme Court held that as long as the status of the aggrieved person remains, and the stridhanam remains in the custody of the husband, the wife can put forth a claim under Section 12 of the Act.

Question involved in the above reference was the following:

When there is a change in circumstances between the spouses, especially when there is a dissolution of marriage and substantial time had elapsed, whether the trust created between them would be extinguished?

Section 10 of the Limitation Act states as follows:

“10. Suits against trustees and their representatives- Notwithstanding anything contained in the foregoing provisions of this 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 (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof, or for an account of such property or proceeds, shall be barred by any length of time.

Explanation.-For the purposes of this section any property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose and the manager of the property shall be deemed to be the trustee thereof.”

In view of the decisions referred above, it is settled that,

when the wife entrusts with the husband any property belonging to her, a trust is created and the husband is bound to return the same to his wife. If the same is not returned, the wife has a right to demand the same by filing a suit or as in the present case, file an application before the Family Court or take other necessary steps under the relevant statutes in force.

When Section 10 of the Limitation Act indicates that there is no limitation for initiating any such action, in the absence of any other statute providing for a limitation, the trustee cannot take a contention that he shall not return the trust property on account of any period of limitation. The question posed is, when the relationship between the parties gets deranged and results in divorce, whether the trust gets extinguished and the divorced wife would be entitled to invoke Section 10 of the Limitation Act and file a suit at her will and pleasure at any point in time. In such an event, the questions to be considered are (i) whether a trust had been created at any point of time, (ii) if a trust has been created and the husband remains in the position of a trustee, whether it gets extinguished on the dissolution of marriage or under any other circumstances.

Under Section 77 of the Indian Trusts Act, 1882, a trust gets extinguished only under certain circumstances. Section 77 reads as under:

“77. Trust how extinguished.— A trust is extinguished—
(a) when its purpose is completely fulfilled; or
(b) when its purpose becomes unlawful; or
(c) when the fulfilment of its purpose becomes impossible by the destruction of the trust-property or otherwise; or
(d) when the trust, being revocable, is expressly revoked.”

Hence, unless any of the above-stated eventualities as mentioned take place, which is a question of fact to be decided on a case to case basis and once a trust is created, it continues to operate, even though marriage is dissolved. However, in an instance where there is an agreement between the parties settling the obligations arising from the trust, it gets fulfilled in terms of Section 77(a).

As per the Dowry Prohibition Act, 1961, when a statutory trust is created in respect of dowry, the principle aforestated shall apply.

Further, the Court added that, in the case of ornaments which are given in the form of dowry, definitely, a statutory trust is created. Even otherwise, if the ornaments owned by the wife do not form part of the dowry and if there is an entrustment of gold ornaments by the wife to the husband or his parents, a trust gets created, in which event, the trustee or trustees, as the case may be, are liable to return the same and there is no limitation for claiming the same by the wife/divorced wife.

In light of the above, the Court agreed with the law laid down in Chacko v. Annamma, (1993) 1 KLT 675 and upheld the view expressed in Bindu K.P. v. Surendran C.K., [2018 (2) KHC 1]. [Sheela K.K. v. N.G. Suresh, 2020 SCC OnLine Ker 4240, decided on 24-09-2020]

Case BriefsHigh Courts

Uttaranchal High Court: Lok Pal Singh, J., addressed an application that sought to quash criminal proceedings under Sections 420, 468, 471 of Penal Code, 1860 and Section 66(D) of Information Technology Act pending in Judicial Magistrate Court.

In the present matter, a complaint was lodged against the applicant that he committed forgery for purpose of cheating by using as genuine the forged and fraudulent document with the intention to cause damage to the Trust and hacked the information stored in the computer.

A charge-sheet was submitted by against the applicant in respect of selfsame offences. Further, Magistrate took cognizance and summoned the applicant to face the trial in respect to the mentioned offences.

Siddhartha Singh, applicant for the counsel submitted that the applicant was an old trustee and was appointed as the President of Kailashanand Mission Trust. He submitted that proceedings against the applicant are nothing but the outcome of the revengeful activity of the complainant and his associates. Complainant concealed the fact of the applicant being the President of the Trust and went on to lodging an FIR against him in the name of him being an “Unknown Hacker”.

According to the applicant’s counsel, the entire proceedings are nothing but an abuse of process of law and Court.

Senior Advocate, Rakesh Thapliyal on behalf of the complainant due to nefarious activities of the applicant, Swami Kailashanand was annoyed with him and by way of a resolution of trust, he cancelled all rights of the applicant and even removed him from the post of Manager of Trust.

He further submitted that various complaints were filed against the applicant for forging Trust’s letter pad, seals and receipt book and resolutions.

Applicant’s Counsel while relying on the Supreme Court case in, International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) v Nimra Cerglass Technics (P) Ltd., (2016) 1 SCC 348, argued that in order to bring a case for offence of cheating, it is not merely sufficient to prove that a false representation was made, but it is further necessary to prove that the representation was false to the knowledge of accused and was made in order to deceive complainant.

According to the ruling in Supreme Court case of Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460, in which certain principles in respect of exercise of jurisdiction under Section 482 CrPC are laid down, one of the principles which hold significance in the present matter is following:

“…Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not.”

Thus, in the present matter, High Court stated that in view of the above, a bare perusal of FIR as well as the charge sheet, it is apparent that foundation of criminal offence is laid against the applicant. Jurisdiction under Section 482 CrPC should not be exercised to stifle or scuttle the legitimate prosecution. Court stated that in the present case, this is not the stage to quash the charge sheet.

Hence, Since, prima facie case is made out against the applicant, the Magistrate has rightly taken cognizance and summoned the applicant to face the trial in respect of the offences complained of against him. [Vijay Kumar Gupta v. State of Uttarakhand, Criminal Misc. Application No. (C-482) No. 1087 of 2016, decided on 18-12-2019]

Case BriefsHigh Courts

Kerala High Court: B Sudheendra Kumar, J. allowed the petition and quashed the complaint and further proceedings against the petitioners which were filed by the Respondent 2.

In the instant case, Respondent 2, Branch Manager, had filed a complaint against the petitioners, trustees of a trust, alleging offence under Section 138 of the Negotiable Instruments Act, 1881. Hence, the instant criminal cases had been filed by petitioners, praying for quashing the complaint and further proceedings against them. The Court appointed Advocate Jamshed Hafiz as amicus curiae.

The learned counsel for the petitioners, Shaji Chirayath had argued that no successful prosecution against the petitioners, invoking the provisions under Section 141 of the NI Act, could be sustained, as the “Trust” was not an “association of individuals”. The learned counsel for the Respondent 2, Salil Narayanan K.A. argued that the “Trust” was an “association of individuals” and hence, the petitioners were vicariously liable under Section 141 of the NI Act. The learned amicus curiae, Jamshed Hafiz submitted that the “Trust” will not come within the ambit of “association of individuals” and hence, the provisions of Section 141 of the NI Act could not be made applicable to prosecute the petitioners under Section 138 of the NI Act.

The first issue involved in the instant case was that the “trust” was a body corporate or not. As per the Sections 3,11,13,47 and 48 of the NI Act, it was clear that the trustees were the owners of the property and were bound to maintain and defend all suits for the preservation of the trust. Thus it appeared that the “Trust” was not capable of suing and being sued in a Court of law. Therefore, a “Trust” was not a juristic person and was not like a body corporate, which had a legal existence of its own.

The second issue involved was that the “trust” was an “association of individuals” or not. For this, the Court placed reliance on Ramanlal Bhailal Patel v. State of Gujarat, (2008) 5 SCC 449, in which it was held that an “association of persons/body of individuals” was one in which two or more persons join in a common purpose and common action to achieve some common benefit. As per Section 3 of the NI Act, the trustees do not get benefit out of the trust. Therefore, it could not be said that the trustees were persons joined together for a common action to achieve some common benefit. Since, the common purpose of the “Trust” was not to achieve benefit to the trustees, the “Trust” could not be said to be an “association of persons/body of individuals”.

In view of the above, it was held that the “Trust” was neither a “body corporate” nor an “association of individuals” as provided in the explanation to Section 141 of the NI Act. Therefore, no prosecution against the petitioners, the trustees, invoking the provisions under Section 141 of the NI Act could be maintained. Consequently, no successful prosecution against the petitioners, invoking the provisions of Section 141 of the NI Act, could be sustained as the petitioners did not sign the cheque involved in the instant case. The complaint and further proceedings against the petitioners in the instant case were quashed.[N.M. Nabeesa v. State of Kerala, 2019 SCC OnLine Ker 2481, decided on 06-02-2019]

Case BriefsHigh Courts

Madras High Court: The Bench of M. Nimal Kumar, J. refused to quash proceedings pending on the file of Judicial Magistrate (III), Coimbatore.

The complainant filed a case against the petitioner for an offence punishable under Section 138 NI Act, 1881 (dishonour of cheque). Petitioner took a hand loan of Rs 6 lakhs from the complainant. The amount was agreed to be repaid within 6 months along with an interest at 18% per annum for which petitioner issued a cheque. However, petitioner defaulted in paying either the amount or the interest. Consequently, complainant presented the cheque on the bank but it was dishonoured. Hence, he instituted the case.

M. Prabhakaran, counsel for the petitioner submitted that the subject cheque was issued for collateral security for the loan secured by Sri Venkateswara Educational and Charitable Trust. It was contended that the case which was preferred against the petitioner in his individual capacity was not maintainable.

However, the High Court held the said contention to be not acceptable for the reason that the cheque was issued in the name of the petitioner for the loan availed. Further, the petitioner neither repaid the money nor replied to the statutory notice sent by the complainant. It was also held that the claim of “security cheque” was a matter of fact which had to be decided only in the trial. Resultantly, the present petition was dismissed.[K. Velu v. P. Damodharan, 2019 SCC OnLine Mad 315, dated 07-01-2019]

Case BriefsSupreme Court

Supreme Court: The bench of Madan B. Lokur and P.C. Pant, JJ held that a Trust cannot file a complaint under the provisions of the Consumer Protection Act, 1986 as a Trust is not a person and therefore not a consumer.

The bench took note of the various definition provisions under the Act to come to the conclusion that a Trust does not fall under the category of a ‘complainant’ as defined under Section 2(b) of the Act. The Court also considered the definition of ‘consumer’ under Section 2(d) of the Act which included the word ‘person’. The Court said that ‘person’ as per Section 2(m) of the Act includes a firm whether registered or not; a Hindu undivided family; a co-operative society; every other association of persons. However, it does not include ‘Trust’.

Hence, the Court held that based on a plain and simple reading of the provisions, a Trust cannot be a complainant and cannot file a consumer dispute under the provisions of the Act. [Pratibha Pratisthan v. Manager, Canara Bank, 2017 SCC OnLine SC 202, decided on 07.03.2017]