Andhra HC (Pre-Telangana)
Kondam Muthyam Reddy vs Jonnala Ganga Reddy And Ors. on 22 July, 1994
Equivalent citations: 1995(1)ALT328
JUDGMENT S.V. Maruthi, J.
1. This Second Appeal arises out of a judgment in A.S.No. 10 of 1986 on the file of the District Judge's Court, Karimnagar. D-3 is the appellant. The plaintiff filed a suit O.S.No. 80/79 against defendants 1 and 2 for partition of the suit schedule properties in Schedule 'A', Schedule 'B' and Schedule 'C' claiming 1/3rd share and separate possession of the same. 'A' Schedule property is agricultural land, 'D' Schedule property is dwelling house and 'C' Schedule properties are movables. The plaintiff is the son of defendant No. 1. Defendant No.2 is the other son. Defendant No.3 is the eldest son of D-1 who was given in adoption to the father-in-law of D-1 at the time when he was two years old. Within a year or two of the adoption, the adoptive father of D-3 died. The refore D-1 the natural father of D-3 lookes after the properties belonging to his branch and also his father-in-law. The suit was filed on the basis of the following pleadings:
2. Defendant No. 1 was the manager of the joint family and was looking after the agricultural land and other affairs of the family. Inspite of the repeated demands, D-1 had not given his share of the property therefore the plaintiff filed the suit for partition of 'A', 'B' and 'C Schedule properties. D-1 and D-2 filed a consent petition for decreeing the suit for partition. D-3 filed a written statement contending that on account of the death of the adoptive father within a year or two of his adoption, D-1 was looking after his property belonging to his adoptive father and Item (1), (2) and (3) of the 'B' Schedule properties were constructed with the joint funds, viz., the funds derived from the joint family property and the funds derived from the properties of the adoptive father of D-3. Therefore, these items, viz., Items (1), (2) and (3) of the 'B' Schedule are not available for partition. On the basis of these pleadings, the trial Court framed the following issues:
"Whether items 1 to 3 of plaint 'B' Schedule and house bearing No. 1-68 are the joint family properties of the family ofrwhether they are the separate properties of defendant No.3?"
3. On behalf of the plaintiff, two witnesses were examined and marked Exs.A-1 toA-9. On behalf of the defendants, four witnesses were examined and marked Exs.B-1 to B-4. On the basis of the evidence, the learned Subordinate Judge, Karimnagar decreed the suit holding that items 1 to 3 were constructed with the joint funds derived from the joint family properties of D-1 and also from the funds of the adoptive father of D-3. On an appeal, the learned District Judge agreed with the finding that the properties were acquired with the joint funds of D-1 and the adoptive father of D-3. However, the learned District Judge held that the position of D-1 is that of a trustee and therefore D-3 is only entitled for accounting of the funds. The learned District Judge further held that the income derived from the joint family lands of the 1st defendant was also utilised for these constructions. That being so, the remedy of the 3rd defendant against the natural father is elsewhere. Holding as above, he decreed the suit in terms of the compromise filed by D-1 and D-2 and allowed the appeal. Against which, D-3 filed the present Second Appeal.
4. Heard the learned Counsel for the appellant and the learned Counsel for the respondents.
5. The main argument that was advanced by the learned Counsel for the appellant is that D-1 holds the property as a trustee on behalf of D-3. Therefore, Under Sections 88 and 90 of the Indian Trust Act, 1882, he must hold the property for the benefit of the beneficiary. However, since the property was acquired from the joint funds derived from the property of D-1 and the funds derived from the property belonging to the natural father of D-3, D-3 is entitled for a half share in the property and the learned Judge is not right in decreeing the entire suit. The learned Counsel for the appellant relied on the judgment in Lingraj v. Ananta, and Mohd. Ismail v. Khadirsa Rowther, whereas the learned Counsel for the respondents contended that it is the exclusive property of the joint family of D-1, and therefore D-3 is not entitled .to any share. Counsel submits even assuming that the property is acquired / improved with the joint funds of D-1's property and property belonging to D-38's adoptive father. D-3 is entitled only to 1/3rd share and not 1/2 share, as there are no accounts available to ascertain how much money D-1 has spent to acquire / improve the property.
6. The question therefore is whether D-3 is entitled to half share in plaint 'B' Schedule property. Both the Courts below found that items (1), (2) and (3) of the 'B' Schedule properties were acquired by the funds of the joint family of D-1 and the funds of the property of D-3's natural father. This is a finding of fact which cannot be disturbed in a Second Appeal, Therefore, the question that arises for consideration is whether D-3 is entitled to a half share in items (1), (2) and (3) of the 'B' Schedule property.
7. Under Section 88 of the Indian Trusts Act, 1882, where a trustee, executor, partner, agent, director of a company, legal advisor, or other person bound in a fiduciary character to protect the interests of another person, by availing himself of his character, gains for himself any pecuniary advantage, or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained.
8. Under Section 90 of the Indian Trusts Act, 1882 where a tenant for hire, co-owner, mortagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage.
9. From a reading of Section 88 and Section 90 it is clear that any person bound in a fiduciary character to protect the interests of another person or a qualified owner by availing himself of his character gains for himself any pecuniary advantage he holds the said advantage for the benefit of such "another person". The position of D-1 is not only that of a person bound in a fiduciary character to protect the interest of D-3, but he is also a qualified owner within the meaning of Sections 88 and 90. Therefore, he holds the property for the benefit of the other members. In this cotext, I may refer to the judgment of the Orissa High Court in Lingraj v. Atlanta's case (I supra) the facts in brief are as follows:
"One Gopinath Misra had three sons, Pandabo, Bacho and Agadhu. Plaintiff Lingaraj is the son of Agadhu. His younger brother Banarnali died sometime in the year 1938-39, Ananta who was the natural born son of Agadhu, was adopted by Pandabo. There is no dispute about this a option. Bacho died leaving behind two sons Mukunda and Madano defendants 6 and 7. Defendants 2 to 5 are the sons of defendant No. 1 Defendants 6 and 7 and 8 to 11 are impleaded in the suit as they have got interests in the properties described in Schs. D and E only. The other defendants are subsequent alienees in respect of some items of properties in suit. The main contest in the suit is as between Plaintiff Lingaraj and defendant 1 Ananta. Even though Defendants 6 & 7 separated completely from the plaintiff's father and defendant 1 and separately enjoyed the properties allotted to them, the plaintiff's father Agadhu, plaintiff Lingaraj, his younger brother Bonamali, and defendant 1 Ananta were living together and jointly enjoyed the properties in accordance with the terms of the deed During the time when the plaintiff, defendant 1 and Bonamaii were living together and enjoying the properties jointly, defendant 1 Ananta was the Karta in-charge of the management of the properties and several items of properties were also acquired from out of the joint funds and with the joint efforts of both plaintiff and defendant 1. These subsequently acquired properties, therefore, according to the plaintiff, are joint family properties liable to be partitioned along with other properties.
It was held that-
"The properties were jointly possessed and enjoyed and were under a common management. There was not even any division of the usufruct of the properties. There were no separate accounts kept and there were no separate accounts kept and there were no separate funds available to the two brothers. Under these circumstances, the irresistible inference is that they are the common properties of both plaintiff and defendant 1 which are liable to be partitioned".
It was also held as under:
"Defendant 1 while he was the defacto manager of the properties and under whose direction and guidance for some period the properties were managed also by the plaintiff, stands in a fiduciary relation to the plaintiff for the entire period".
10. Holding as above, the Orissa High Court held that the properties which were acquired by the common funds or common properties are liable for partition.
11. The next decision to be referred is Mohd. Ismail v. Khadirsa Rowther (2nd cited supra) wherein it was held that where some of the members of the Muslim Joint family who were in possession of certain property made subsequent acquisitions, additional acquisitions would belong to all the members of the joint family in view of Section 90 unless and until it is proved that the subsequent acquisitions were made by members in possession out of their independent income.
12. From the above decisions it is clear that if the property is acquired with the joint funds of the joint family belonging to D-1 and the funds out of the property of the adoptive father of D-3, the properties thus acquired are common properties and no accounts are maintained as to how much money was spent from out of the funds of joint family property of D-1 and the funds available from the property of D-3's adoptive father. Therefore the funds since belong to two branches, one that of D-1 and the other that of D-3's adoptive father, the acquisitions have to be divided into two equal shares, one share should be allotted to D-1's branch and the other to the branch of D-3. I have also referred to the finding of both the Courts below. The finding is that the properties were acquired with the joint funds belonging to the adoptive father of D-3 and D-1. Therefore they are liable for partition and D-3 is entitled for half share. The second Appeal is accordingly allowed and the judgment of the appellate Court is set aside with costs.