Indian Kanoon - Search engine for Indian Law

7. The contention that the settlement is void is based on this. As I have mentioned, the settlor and all the trustees and other parties were Mahomedans of the Shia sect, and under the Mussalman Wakf Validating Act of 1930 the reservation of a life interest in favour of the settlor under a wakf made by a Shia Mahomedan is impliedly prohibited. It is not disputed in this case that the effect of reserving a life interest to the settlor was to render the deed of settlement, regarded as a wakf, Wholly void. It was, however, contended in the lower Court that, although void as a wakf, the settlement might be good as a declaration of trust; but I agree with the view taken by the learned Judge that if the deed falls within the definition of "wakf", given in the Act of 1913, (as it does), and if the effect of the Act be to render the wakf void because of the reservation to the settlor of a life interest, it cannot be rendered valid by calling it by another name. It seems to me that the deed, being void as a wakf, is void altogether, and I base my judgment on the footing that the settlement of 1895 was wholly void.

9. In England, in the case of a conveyance of real estate to or for the benefit of any charitable use, various conditions are imposed by Section 4 of the Mortmain and Charitable Uses Act, 1888. The deed, for instance, must take effect in possession; it must not reserve any interest to the grantor; it must be executed in the presence of two witnesses, and it must be enrolled in the Central Office of the Supreme Court. It sometimes happens that some of those requirements are overlooked, and the deed in the result is void. The position arising from that state of affairs has been considered in several cases and it is, I think, clear from Churcher v. Martin (1889) 42 Ch. D. 312 and Lacy, In re : Royal General Theatrical Fund Association v. Kydd [1899] 2 Ch. 149 that trustees in possession under such a void deed can acquire a good title by adverse possession as against the settlor and those claiming under him; that is to say, the trustees acquire a possessory title against these claiming under the trust resulting from the invalidity of the charitable trust, since a claim under such resulting trust is a claim adverse to the deed. In both those cases, as far as I can see, the trustees did not claim the property for themselves. In Churcher v. Martin (supra) the report notices that they did not. In the case of In re Lacy (supra), a note in "Tudor on Charities," Fifth ed., at p. 240, states that the Judge directed the executor to convey the property to charity, but that was probably done with the consent of the trustees. There is nothing in the report to suggest that the question whether the trustees could claim for themselves any beneficial interest was considered by the Court. As far as I know, there is no case in England or India in which it has been held that trustees, who enter into possession of property ostensibly on trusts subsequently ascertained to be void can retain the property for themselves when the claim of the settlor and his heirs has become statute-barred. I can imagine cases in which such a claim might be supported by powerful arguments, but, in my view, this is not such a case.

13. I think on both those grounds the judgment of the learned Judge was wrong. The appeal must be allowed.

Kania, J.

14. The questions raised in this appeal are important and likely to have a far-reaching effect. The points involved are also liable to be presented in different aspects in different circumstances. I shall therefore briefly express my views on the questions argued before us.

15. The relevant documents have been referred to in the judgment of the learned Chief Justice and the effect of the original trust deed of 1895 is fully set out in the judgment of the trial Court. I shall only add that on July 22, 1918, Abdoolhoosein Hyderalli, who was then the sole trustee, and who had no beneficial interest in the trust premises appointed the father of defendant No. 1 as his co-trustee. Therefore long before the present trustees were appointed, trustees who had no beneficial interest in the deed of settlement had declared and agreed that the properties were held by them on the trusts mentioned in the deed of settlement. It was first argued that the deed being a wakf was void on two grounds : (1) because the settlor had reserved to himself a life interest, and (2) because the possession of the trust property was not transferred to the trustees as required by Mahomedan law. Proceeding further it was contended that as the plaintiffs had filed this suit under Section 92 of the Civil Procedure Code, 1908, they must satisfy the Court that there was a valid charitable settlement, and if they failed to do so, the suit must fail. In my opinion this line of reasoning is not correct in a case of this kind as the defendants have admitted that they are trustees. The next question to be considered is, "Have they obtained and are they in possession of the property as trustees?" The documents exhibited in the case clearly show that since 1918 at least the persons appointed as trustees under different deeds of appointment have held the property and managed the same in their capacity as trustees of the deed of settlement. It is therefore futile to argue that the defendants were not in possession as trustees. The next question to be considered is, if so, what is the result of their possession for more than twelve years ? It is now recognised that trustees can acquire title by adverse possession against either the settlor or the heirs of the settlor if the trust deed is void ab initio. Lacy, In re : Royal General Theatrical Fund Association v. Kydd [1899] 2 Ch. 149 and Churcher v. Martin (1889) 42 Ch. D. 312 are instances in which the English Courts have affirmed the principle. In our Court Cowasji N. Pochkhanawalla v. R.D. Setna (1895) I.L.R. 20 Bom. 511 which follows and accepts the decision in Ardeshir v. Sirinbai (1899) 1 Bom. L.R. 721, is an instance where such title was recognised. I may point out that in Churcher v. Martin, one of the trustees was himself a beneficiary, but it was held that his possession was not in his capacity as the beneficial owner, and as the possession of the trustees was joint, it must be considered that his possession was also in his capacity as a trustee. In Ardeshir v. Sirinbai it was further held that if a trust deed was void ab initio and the trustees acquired a title by lapse of time, the Court cannot allow the trustees to set up a beneficiary title in themselves. The result therefore is that in this case it must be held that the trustees had acquired a title by adverse possession against the settlor and his heirs at law. Indeed in suit No. 459 of 1939, which was filed by an heir at law, the trustees contended that the trust deed was valid and the plaintiff's suit was barred by the law of limitation. On that contention being upheld that suit was dismissed. The result therefore is that the defendants have acquired possession in their capacity as trustees and have perfected their title by adverse possession against the settlor and his successors in title.

20. The other ground on which the plaintiff's case can be supported is pointed out in the recent case of Lala Hem Chand v. Lala Pearey Lal (1942) L.R. 69 I.A. 137, S.c. 45 Bom. L.R. 275. It is there pointed out that although an original dedication may be defective, a subsequent dedication, if proved, by the holders of the property, and acted upon, would create a valid title in the trustees so as to give the benefit thereof to charity. That in my opinion is briefly the effect of that decision. In the present case since 1918 by virtue of their deeds of appointment the trustees have agreed to and under their signature undertaken to carry out the trusts mentioned in the original deed of settlement. In the last deed of appointment to which defendant No. 1 is a party it is stated that he and the trustees agree to hold the property upon trusts as are subsisting and capable of taking effect. If the trustees have acquired possession of the property which has got vested in them on these terms, in my opinion, as a rule of law, and not necessarily of evidence only, the trustees are debarred from contending that they do not hold the property on the trusts mentioned in the deed of settlement and are bound to carry out the trusts for the beneficiaries named in the deed. On these two grounds in my opinion the learned Judge's judgment cannot be supported and the plaintiffs' suit should succeed. I repeat that I am not concerned with the question whether the original trust deed was ab initio void or not. In my opinion that is beside the point in deciding this appeal.