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CASE NO.:

Appeal (civil) 5042 of 2000

PETITIONER:

Official Trustee of West Bengal \005Appellant

RESPONDENT:

Stephen Court Ltd. \005Responde

nt

DATE OF JUDGMENT: 14/12/2006

BENCH:

S.B. Sinha & Markandey Katju

JUDGMENT:

J U D G M E N T

S.B. SINHA, J :

Interpretation and application of the provisions of Sections 25 and 26

of the Official Trustees Act, 1913 (for short, 'the 1913 Act') as also Section

302 of the Indian Succession Act, 1925 (for short, 'the Succession Act') falls

for consideration in this appeal, which arises out of a judgment and order

dated 21.12.1999 passed by a Division Bench of the Calcutta High Court in

APD/T No.16 of 1999 in Appeal No.474 of 1999.

The said judgment was rendered in the following fact situation :

One Peter Charles Earnest Paul also known as 'Peter Paul' was the

owner of a piece of land, measuring 3 bighas 17 kottahs 8 chittackas 21 sq.

ft. equivalent to 5408.93 sq. metre located on the junction of Park Street and

Midleton Row, Kolkata having wide frontage on both the roads. He

executed a registered deed of lease in favour of one Francis Daniel

Augustus Larmour (for short, 'Larmour') in respect of the said premises for

a period of 99 years with effect from 01.06.1919 to 31.05.2018. He executed

a Will on 16.06.1920 appointing the Official Trustee as its Executor and

Trustee in respect of the said property. Beneficiaries of the said Will were

his wife and sister. He died on 01.08.1920. A probate was obtained by the

Official Trustee on 07.10.1920. Larmour executed a registered deed of

assignment in favour of one Arathoon Stephen, Stephen Court Limited

(hereinafter referred to as 'the Company') was constituted and incorporated

under the provisions of the Companies Act, 1913 on or about 04.12.1923.

Arathoon Stephen, who was a shareholder and first Managing Director of

the said Company entered into an agreement for acquiring the leasehold

rights of Arathoon Stephen. Arathoon Stephen and the Company thereafter

agreed to purchase the leasehold rights of the said premises for the balance

unexpired period under the said lease on 10.12.1923. On the same day a

registered Debenture Trust Deed was executed by Arathoon Stephen and the

Company and the three Trustees referred to in the said Deed, stating that the

Company was entitled to the said property for all the residue of the term of

1919 lease. As far back as in 1924, the Company constructed a five-storied

building. It continued to pay the rent to the Official Trustee who had issued

rent receipts to it. Sister of Peter Paul, Mrs. Hemingway, died leaving

behind a Will in terms whereof the public trustee of the Public Trust of

London took over her estate and started receiving her share of income. On

10.10.1965, widow of Peter Paul died, whereafter half share of the income

of the trust property was remitted to the Public Trustee of the Public Trust,

London by the Official Trustee till 18.05.1993. Permission of the Reserve

Bank of India for the later period is said to be awaited.

The Company by a letter dated 09.02.1984 requested the Official

Trustee for extension of the period of lease for a further period of sixty

years to which the Official Trustee by a letter dated 20.03.1984 suggested

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that it should apply to the High Court for obtaining grant of extension of the

said lease. An application was thereafter filed before the Calcutta High

Court by the said Company under Section 302 of the Succession Act read

with Section 26 of the 1913 Act. The said application was entertained. The

Official Trustee filed an affidavit in opposition wherein, inter alia, it was

stated :

"The Official Trustee as such Trustee can neither

consent nor object to grant by any lease or modification

of the terms and condition thereof. The Official Trustee,

however, in the ends of justice is duty bound to produce

all the facts and circumstances relating to the said

property before this Hon'ble Court. The Official Trustee

states and submits that the following proposal would be

beneficial to the Estate :

(a) Upon the lessee agreeing to enhance the

current monthly rent payable for the lease by at least

400% the head lease can be rectified by giving the lease

the option of renewal the lease on such terms and

condition as this Hon'ble Court may deem fit and proper

after expiry of the head lease on May 31, 2018 by efflux

of time.

(b) Competent valuer would be appointed by

this Hon'ble Court at the expenses of the petitioner for

ascertaining the market value of the property. The

probable market value of the property as on June 1, 2018

should be estimated on the basis of the present trend of

increase in the value of land in Calcutta as well as the

rate of inflation and the amount of rent to be paid by the

lessee for the extended period would be determined on

the basis of the said valuation."

Pursuant to or in furtherance of the said suggestions of the Official

Trustee, the Company was directed to pay rent @ Rs.8,000/- per month to

the Official Trustee for the residuary period of the existing lease by the High

Court in terms of an order dated 17.04.1984. A valuer was appointed. The

valuer submitted its report recommending :

"Having regard to the results obtained under the above

two method of calculations, it is perhaps, fair to fix up

the proper monthly ground rent payable for a period of

60 years lease after the expiry of present lease as given

below :

Rs.2,38,056 + Rs.2,21,933 = Rs.2,29,995 per annum

2

= Rs. 19,166 per month

Say Rs. 19,000 per month

Rupees Nineteen thousand Per month"

No objection thereto was field. The court, thus, acting on the basis of

the recommendations of the said valuer, by an order dated 30.05.1984,

opined :

"After reading the original report of Mr. A.K. De,

the valuer and upon hearing the parties it appears to the

Court that the rent of the lease is reasonable and

beneficial to the Trust Estate. There will be an order in

terms of prayer (a). The rent payable under the proposed

lease will be Rs.19,000/- (Rupees nineteen thousand) per

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month. Regarding the current lease the petitioner will

pay rent at the rate of Rs.8,000/- (Rupees eight thousand)

per month w.e.f. 01.06.,1984."

The said order of the Calcutta High Court was accepted and acted

upon by the Official Trustee and it executed a deed of lease in favour of the

Company for a period of sixty years on a monthly rent of Rs.19,000/-. The

monthly enhanced rent paid by the Company in favour of the Official

Trustee @ Rs.8,000/- in terms of the High Court's order had all along been

accepted wherefor the Official Trustee had been issuing due receipts. An

Originating Summons was, however, taken out by the Official Trustee

before the Calcutta High Court on or about 21.07.1997 for determination of

the following questions :

"a) Determination of the relation between the

Official Trustee and Messers Stephen Court Limited prior

to 31.5.2018 AD, as the relation between them was not

determined.

b) On the basis of such determination of relation,

is M/s Stephen Court Limited entitled to execute any lease

deed with any party in respect of premises No. 18 Park

Street, Calcutta or any part thereof prior to 31.5.2019 AD.

If not then in that event, what will be the fate of such lease,

if any made prior to 31.5.2018 AD?

c) Is the order dated 30th May, 1984 passed in

Matter No. 432 of 1984 null and void?

d) Is the Deed of Lease executed by Official

Trustee on 25th July 1984 valid and binding?

e) Whether any leasehold right in respect of the

premises No. 18, Park Street, Calcutta has legally vested in

Messers Steph Court Limited in the absence of any

registered deed conveying, transferring and/or assigning

the unexpired period of lease by Mr. Aratoon Stephen in

favour of Messers Stephen Court Limited and whether

Messers Stephen Court Limited had any legal right to

make application before this Hon'ble Court in 1986

praying for extension of the period of Head Lease of

13.9.1919.

f) Whether the High Court at Calcutta had

jurisdiction to pass the order 30th May, 1984 in Matter No.

432 of 1984 directing the Official Trustee to execute the

Indenture of lease for renewal/extension of the Head Lease

dated 13.9.1919 in favour of Messrs Stephen Court

Limited, who was not the lessee. Besides that, the Head

Lease did not contain any covenant for extension/renewal."

Inter alia, a prayer was also made that the said deed of renewal of

lease dated 25.07.1984 be directed to be delivered upon cancellation.

A learned Single Judge of the High Court by an order dated

28.06.1999, opined that the order dated 30.05.1984 was passed without

jurisdiction. It also recorded other findings wherewith we are not concerned.

An appeal preferred thereagainst in terms of clause 15 of the Letters Patent

of the said Court was accepted by reason of the impugned Judgment.

A large number of issues fell for consideration before the Division

Bench of the High Court. It, inter alia, opined : (i) the High Court had

jurisdiction to entertain the said application under Section 302 of the

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Succession Act; (ii) The Company had the requisite locus standi to maintain

the application; (iii) The Official Trustee having accepted the said judgment

and the deed of lease having been executed in favour of the Company, it was

estopped and precluded from raising the question of the Court's jurisdiction

in subsequent proceedings; (iv) The jurisdiction of the High Court was not

excluded by reason of the provisions of City Civil Court; and (v) The

Official Trustee having received rent from the Company, its possession was

protected under Section 53-A of the Transfer of Property Act.

Mr. Tapas Ray, the learned Senior Counsel appearing on behalf of the

appellant, in support of this appeal would contend :

i) The company being not a person beneficially interested in the trust

property, an application under Section 302 of the Succession Act was

not maintainable.

ii) The High Court in its order dated 30.05.1984 having not taken into

consideration the objections filed by the Official Trustee, the Division

Bench of the High Court must be held to have failed/or neglected

to apply its mind in regard thereto and, thus, the same being a nullity

the impugned judgment cannot be sustained.

iii) The Division Bench failed to notice that it was obligatory on the

part of the High Court while entertaining an application under Section

302 of the Succession Act to satisfy itself : (a) as to who had come

with the application for directions; (b) and in what capacity; and (c)

what right or interest is claimed in respect of the direction; and (d)

whether the court would have jurisdiction to entertain the same.

iv) An application for renewal of lease, 34 years prior to the expiry of

the original lease, for a period of sixty years was not bona fide and

no directions, thus, could have been issued by the High Court.

v) The judgment of the High Court being wholly without jurisdiction

and, thus, being a nullity, the principles of estoppel and res judicata

would have no application;

vi) If the judgment dated 30.05.1984 was a nullity and non est in the eye

of law, an appeal thereagainst was not necessary to be filed.

vii) The deed of assignment executed by Larmour in favour of Arathoon

Stephen being not a registered document, the same was wholly

inadmissible in evidence.

Mr. Jaideep Gupta, the learned Senior Counsel appearing on behalf of

the respondent, on the other hand, would submit :

i) The Official Trustee never raised any objection as regards the

purported inherent lack of jurisdiction of the Calcutta High Court

under Section 302 of the Succession Act and, thus, at this distant time

cannot be permitted to turn around and raise the said question.

ii) The judgment of the High Court having been acted upon and the

Official Trustee being bound thereby, it cannot now be permitted to

approbate and reprobate at the same time.

iii) The order dated 30.05.1984 being an appellable one and no appeal

having been preferred therefrom, it attained finality and, thus, a clear

case of estoppel and acquiescence has been made out.

iv) Issues raised in the Originating Summons were barred by the

principle of constructive res judicata.

v) Unregistered deed of assignment having been followed by the

registered Debenture Trust Deed, the title to the lessee passed on to

the company on the basis thereof.

vi) Assuming that the said registered assignment deed was not valid in

law, the Official Trustee having accepted rent from the Company

from 1923-1924 onwards, a fresh monthly tenancy had come into

being and, thus, on that premise, the High Court's judgment cannot be

said to be a nullity or void, specially when the same was passed in

accordance with law and on the terms and conditions suggested by the

Official Trustee.

vii) The originating summons for the reliefs claimed was not

maintainable in law.

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The principal questions which in view of the rival contentions of the

parties arise for consideration are :

a) Whether the application made by the respondent under the

Official Trustee Act, 1925 to the Calcutta High Court was

maintainable?

b) Whether the defect of unregistered document assigning lease of

immovable property stood cured by registration of subsequent

document i.e. Debenture Trust Deed?

c) Whether the Originating Summons filed by the appellant was

maintainable?

The 1913 Act was enacted to consolidate and amend the law

constituting the office of Official Trustee. An Official Trustee is appointed

by the Government. Rights, powers, duties and liabilities of the Official

Trustee are governed by Part III of the 1913 Act. Under Section 10 of the

said Act, the High Court has power to appoint an Official Trustee to be

trustee of property. In this case, he was, however, appointed by a Will.

The accounts of the Official Trustee is liable to be audited once

annually. It exercises powers under the Code of Civil Procedure.

Section 22 of the Act enables every beneficiary under a trust to make

inspection and take copies of the accounts. Section 23 provides for transfer

to Government of accumulations in the hands of Official Trustee, while any

moneys payable to a beneficiary under a trust have been in the hands of any

Official Trustee for a period of twelve years or upwards. Section 25

empowers the High Court to make such orders as it thinks fit respecting any

trust property vested in the Official Trustee, or the income or produce

therefrom. Section 26 authorizes filing of an application for an order under

the said Act by any person beneficially interested in any trust property or of

any trustee thereof.

Section 302 of the Succession Act empowers the High Court on an

application made to it to give to the executor or administrator any general or

special directions in regard to the administration thereof, where probate or

letters of administration in respect of any estate has or have been granted

thereunder.

Peter Paul owned merely a piece of land. It executed a deed of lease

for a period of 99 years. The lessor, therefore, was entitled to the only rent

payable in terms of the said 1919 deed of lease.

It may be true that a registered deed of assignment was executed in

favour of the said Arathoon Stephen, but the defect in the said agreement of

sale between Arathoon Stephen and the respondents stood cured by reason

of the Supplementary Agreement, namely, Debenture Trust Deed which was

duly registered. In the Debenture Trust Deed Arathoon Stephen was

referred to as 'The Transferor', Respondent was referred to as 'The

Company' and the three others referred to as "the Present Trustees". It was

stipulated :

"a) WHEREAS the Company is entitled to the

property set forth and described in the first Schedule

hereto for all the residue of the term of 99 years from the

first day of June 1919 granted by an indenture of lease

dated 13rd day of September, 1919 made between Peter

Charles Ernest Paul of the one part and Francis Daniel

Larmour of the other part and registered at Calcutta in

Book I Vol. III being no.; 4493 for 1919 subject to an

Indenture dated the 15th day of August 1923 made

between the Official Trustee of Bengal of the one part

and as such the sole executor and Trustee of the will of

the said Peter Chales Ernest Paul of the one part and the

Transferor of the other part and registered at Calcutta in

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Book I Vol. 102 being No. 9712 for 1923 being an

Indenture of Rectification of the terms of the said

Indenture of lease regarding payment of the owner's

share of taxes in respect of the said demised premises

AND WHEREAS the said property is at present vested in

the Transferor and Trustee for and on behalf of the

company and he has agreed at the request of the company

to join in these presents in manner hereinafter appearing

AND WHEREAS the company being duly empowered in

that behalf has determine to raise a sum not exceeding

Rs.7,00,000/- (Rupees Seven Lacs) by the issue of

Debentures for that amount bearing interest of the rate of

5 = per cent per annum and frame in accordance with the

form set forth in the second schedule hereto and has

agreed to secure the principal moneys together with

interest for the time being payable in respect of such

Debentures in manner hereinafter provided AND

WHEREAS the present Trustees have consented to act as

Trustees of this Indenture upon the terms herein

contained.

b) For the purpose of further securing the principal

money and interest and all costs and other moneys

payable under the Debentures or these presents the

Transferor by the direction of the company hereby

transfer and assigns and the company hereby transfers

assigns and confirms unto the Trustees and singular the

hereditaments land and premises specified and referred to

in the first Schedule hereto and all buildings erected on

the land or any part thereof and all easements privileges

and on the tenancies whatsoever to the same and

therewith held used occupied and enjoyed and all the

estate right title interest property claim and demand

whatsoever of the Transferor and the Company and to the

same to have and to hold the same unto the present

Trustees as joint tenants with right of survivorship for all

the residue now to come and unexpired of the term of

ninety nine years granted by the said lease upon and for

the trusts intents and purposes hereinafter expressed of

land concerning the same."

Broadly speaking the Supplementary deed provided for the issuance

of debentures by the appellant in favour of Aratoon Stephen. Until and

unless the appellant had paid off the debentures the scheme of turst was to

continue but :

"Upon proof being given to the reasonable

satisfaction of the Trustees that all the debentures entitled

to the benefit of the trusts herein contained\005have been

paid off or satisfied and upon payment of all costs

charges and expenses incurred by the Trustees in relation

to those presents the Trustees shall at the request and cost

of the Company\005.release the charged premises from this

security."

The effect of such an unregistered deed vis-`-vis a Supplementary

Deed by way of Debenture Trust Deed came up for consideration before the

Privy Council in Mitchell v. Mathura Dass and Another [12 Indian Appeals

150], wherein it was opined :

"\005The Registration Act was not passed to avoid the

mischief of allowing a man to be in possession of real

property without having a registered deed but as a check

against the production of forged documents, and in order

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that subsequent purchasers, or persons to whom

subsequent conveyances of property were made, should

not be affected by previous conveyances unless those

previous conveyances were registered\005"

In that case William Mitchell was indebted to Mathura Dass. The

latter sought to attach a property on the basis that it belonged to the former.

William's father Alexander, claimed that the property belonged to him. In

the proceeding, two documents came to be filed, namely : one purporting to

be a deed of conveyance of the property to himself and the other a

confirmation bond executed by the same parties as the conveyance in the

subsequent deed.

The Judicial Committee held that the second deed being registered

was a valid conveyance of the property to Alexander.

A Division Bench of the Bombay High Court followed the said

decision in Jamna Bai and Another v. Dharsey Takersey [1902 (IV) Bombay

Law Reporter 893], stating :

"The settlement between Ruttonbai and Tersey on

the terms on which the plaintiffs base their claim, is dated

the 3rd February 1869. It is a document which was drawn

up in Guzerati but I have not received it in evidence, as it

affected immovable property of the value of more than

Rs.100 but was not registered. Mr. Lowndes for the

plaintiff then rendered two indentures called releases,

dated the 13th and 16th September 1869 respectively, one

executed by Ruttonbai in favour of Tersey and the other

by Tersey in favour of Ruttonbai, in which, after reciting

the terms of the agreement of the 3rd February 1869, the

parties say that their claims against each other in respect

of the agreement are satisfied. These two indentures,

Exs. A and B, are registered. But Mr. Raikes for the

defendant objected to their admissibility on the ground

that they were merely secondary evidence of the contents

of the agreement on which the plaintiffs sue and that, if

the original agreement was inadmissible, these two

indentures could not supply its place. I have, however,

admitted them in evidence on the authority of the ruling

of the Judicial Committee of the Privy Council in

Mitchell v. Mathuradas and another\005"

Even the assignment was required to be made by reason of a

registered document, it is beyond any cavil of doubt that as the Official

Trustee had all along been receiving stipulated monthly rent from the

Company, it was, thus, admitted and acknowledged to be the lessee in

respect of the leasehold. The Official Trustee not only accepted the rent,

but also allowed the Company to raise a huge structure. It, therefore,

accepted the Company as the lessee in respect of the said property.

The Company, therefore, for all intent and purport became a lessee

under the Official Trustee. Although in a case of this nature, applicability of

Section 53-A of the Transfer of Property Act may not be of much

significance, but whether as an assignee of the leasehold or as a monthly

tenant, the Company was entitled to protect its possession. Rightly or

wrongly, the question of renewal of the said lease for a further period of

sixty years came to be mooted. The offer of the Company was that at the

end of the period of lease, the property would vest in the Official Trustee. It

is again beyond any doubt or dispute that the Official Trustee could have

granted a lease. It could have also extended the period of lease. It could

have furthermore entered into a new arrangement with the lessee in

possession. It was, therefore, within the province of the Official Trustee to

deal with the property in any manner, he thought it fit, subject, of course, to

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any direction which could be issued by the High Court in exercise of its

jurisdiction under Section 302 of the Succession Act and Section 13 of the

1913 Act. The Official Trustee being a statutory authority would be

presumed to be aware and understand the provisions of the said Act. It,

therefore, instead of dealing with the matter itself asked the Company to file

an appropriate application, pursuant whereto the application was filed, no

jurisdictional question was could be raised.

The Company's locus to maintain the application was not questioned.

True an affidavit in opposition had been filed, but it is equally true that

therein certain suggestions were made; one of them being enhancement in

the quantum of rent. The High Court passed an order enhancing the

quantum of rent, which was beneficial to the Officer Trustee. It accepted the

same without any demur. Benefit of the order was, thus, taken. It was only

at its suggestion, a valuer was appointed. The recommendations of the

valuer as regards the quantum of monthly rent which would be payable at

the end of the period of lease was not questioned. The High Court also

accepted the same. The order of the High Court dated 17.04.1984 must be

judged in the aforementioned factual backdrop. The High Court for all

intent and purport accepted the suggestions of the Official Trustee.

Indisputably, again no appeal was preferred therefrom. Mr. Ray made

a faint suggestion that the said order being not a judgment within the

meaning of Clause 15 of the Letters Patent of the Calcutta High Court was

not appealable. Even that be so, an application before this Court under

Article 136 of the Constitution of India would lie. No such application was

also filed. It was, thus, allowed to attain finality. The parties acted

thereupon. The Official Trustee accepted the said judgment and executed a

deed of lease strictly in terms thereof.

In the Originating Summons which was filed after 17 years of passing

of the said order, the Official Trustee sought to raise contentions which had

not been raised before it in the earlier proceeding. A plea of fraud was

raised, but the same was not pressed before us. As indicated hereinbefore,

the only contention, which had been raised therein was that the application

under Section 26 of the 1913 Act being not maintainable, the said order

dated 30.05.1984 was a nullity.

We may immediately notice the judgment of this Court in Committee

of Management of Pachaiyappa's Trust v. Official Trustee of Madras and

Another [(1994) 1 SCC 475], which is the sheet anchor of the submissions

advanced on behalf of the appellant. Therein, an application was filed by a

stranger to the property. The jurisdiction of the learned Single Judge as also

the Division Bench of the High Court was appealed against before this

Court. The High Court had come to the conclusion that it was beneficial

and in the best interest of the leasehold property; but no attempt was made to

find out as to what would be the best price available therefor. Although the

property vested in the Official Trustee, transparency in the transaction was

not maintained. The norms for distributing the largess of the estate had not

been followed. The fiduciary conduct expected of a trustee was found to

have not been maintained. It was in the aforementioned factual background,

an objection was filed by a person who was a tenant of the ground floor on

the building adjacent to the vacant plot of land. The said objection was

rejected by the learned Single Judge stating that he had no locus standi in the

matter. This Court disagreed therewith. It was noticed that the learned

Single Judge unjustly altered the conditions as suggested by the Official

Trustee in money matters. The Division Bench also took no note of the

infirmities contained in the said order. It was in the aforementioned fact

situation this Court opined :

"40. Notable among the other modifications which have

been permitted are : (i) the period of the lease has been

Raised from 30 years to 50 years with an option to renew

for another 50 years, and (ii) deletion of the prohibition

relating to sub-lease. It would thus appear that on the

pretext of modification Respondent 2 has secured

substantial alteration in the terms and conditions as

contained in the original order dated May 2, 1986 passed

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by the learned Single Judge which had been upheld in

appeal by the Division Bench. In other words under the

guise of modification Respondent 2 have obtained review

of the order which had become final. This was

impermissible in law. The order passed by the Division

Bench does not give any indication as to why it became

necessary to give these concessions to Respondent 2. It

has not been shown that nobody else was prepared to

take the lease on the terms and conditions laid down in

the order dated May 2, 1986 and that without making

those modifications the plot of land could not be given on

lease. On the other hand we find that there was another

offer by Md. Ummer Sheriff offering to take the lease on

the same terms and conditions with a higher rent of Rs.

3000 per month. The order dated October 28, 1987

passed by the Division Bench on the application for

modification (CMP No. 14618/87) cannot, therefore, be

upheld and C.A. 4168 of 1988 filed against the said order

also deserves to be allowed."

It is true, as was submitted by Mr. Ray, that this Court therein

observed that the Official Trustees Act does not envisage any application

moved by a person other than the one who was beneficially interested in any

trust property or any trustee thereof, but no occasion arose therein for

consideration as to what would be the true meaning and purport of the

expression "beneficially interested" in the trust property.

We have noticed hereinbefore that this Court opined that an objector

who was a tenant on the ground floor of the said building adjacent to the

vacant plot of land of appellant trust had locus standi to Raise an objection.

In the 1913 Act two different expressions, namely, "beneficiary under

a trust" and "person beneficially interested in any trust property" have been

used. A distinction has, thus, been made in the statute itself between a

"beneficiary" and a "person beneficially interested.

In 'Advanced Law Lexicon' \0263rd Edn 2005 - by P. Ramanatha Aiyar,

the two expressions have been defined in the following terms :

"Beneficiary" Beneficiaries are persons for whose

benefit property is held by trustees, executors, etc."

persons named in insurance policies to whom the

insurance is payable upon the happening of the event

insured against (Bouvier).

"Beneficiary" is one who is beneficially entitled to,

or interested in property; that is, entitled to it for his own

benefit, and not merely as trustee or executor holding it

for others. The word is nearly equivalent to the term

cestui que trust. Where property is dedicated to an idol,

it would be a "beneficiary", (Ranjit Singh v. Jaganath

Prosad, 12 Cal 375. But See 16 CWN 798"

"Beneficiary", defined, Indian Trusts Act (2 of

1882), S. 3 as 'the person for whose benefit the

confidence of the author of the trust is accepted by the

trustee."

"Beneficial interest" has been defined to mean :

"Beneficial interest" of the beneficiary is his right

against the trustee as owner of the trust property [Indian

Trust Act (2 of 1882), S. 3] Interest of a beneficial

owner or a beneficiary the interest in an unadministered

estate, of a person who dies before taking possession or

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applying for a grant of administration, is not a 'beneficial

interest' within the meaning of S. 4 of the Succession and

Probate Duties Act 1892 to 1955 (Queensland)

[Commissioner of Stamp Duties (Queensland) v.

Lingston (1965) AC 694."

In 'Bouvier's Law Dictionary And Concise Encclopedia' \026 Third

Revisionby John Bouvier, the expressions "Beneficiary" and "Beneficial

Interest" have been defined as under :

"Beneficiary".- A term suggested by Judge Story as a

substitute for cestui que trust, and adopted to some

extent. I Story, Eq. Jur. ' 321.

The person named in a policy of insurance to

whom the insurance is payable upon the happening of the

event insured against.

The beneficiary of a contract is not a cestui que

trust; 12 Harv. L. Rev. 564"

"Beneficial Interest".-Profit, benefit, or advantage

resulting from a contract, or the ownership of an estate as

distinct from the legal ownership or control.

A cestui que trust has the beneficial interest in

trust estate while the trustee has the legal estate. If A

makes as contract with B to pay C a sum of money, C has

the beneficial interest in the contract."

In Stroud's Judicial Dictionary, 4th Edn., the terms "Beneficiary" and

"Beneficially Interested" have been defined in the following terms :

"Beneficiary" .(1) A beneficiary is "one who is

beneficially entitled to, or interested in, property; i.e.

entitled to it for his own benefit, and not merely as

TRUSTEE, or executor, holding it for others. The word

is nearly equivalent to 'CESTUI QUE TRUST', which,

on account of its cumbersomeness and inexpressiveness,

'beneficiary' has begun to supersede in modern law' (2

Ency. 58).

(2) "Beneficiary entitled in possession" is one who

is entitled to the actual receipt of the income under the

terms of a trust (Doody v. Commissioner of Taxes (1941)

N.Z.L.R. 452)."

"Beneficially Interested". - A person having a

contingent interest in real estate (Re Sheppard, 4 D.G.F.

& J. 423) is a person 'beneficially interested' within

Trustee Act 1850 (c. 60), s. 37; and so is a creditor who

has obtained a decree for administration and sale of real

estate (Re Wragg, I D.G.J. & S. 356); and also it seems, a

purchaser under a decree who has paid his purchase

money into Court (Ayles v. Cox, 17 Bea. 584). The

committee of lunatic cestui que trust is not a person

'beneficially interested' within this section (Re Bourke, 2

D.G.J. & S. 426)"; Dan. Ch. Pr. 1787."

The decision in Committee of Management of Pachaiyappa's Trust

(supra) therefore, in our opinion, does not assist the appellant. In that case,

the order of the High Court did not attain finality and had not been accepted.

The principles of estoppel, waiver, acquiescence or res judicata

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provide to procedural matter. The said provisions are applied to put an end

to a subsequent litigation. As would appear from the decisions made

thereafter, if the order of the 1984 order of the High Court was not a nullity,

the same would apply.

A distinction indisputably exists between an order which is wrong or

void on the one hand, and which having been passed by a court lacking

inherent jurisdiction and, thus, being a nullity on the other.

The law in this behalf has succinctly been stated by this Court in

Chief Justice of Andhra Pradesh and Another etc. v. L.V.A. Dilshitulu and

Others etc. [AIR 1979 SC 193], observing :

"\005If the argument holds good, it will make the decision

of the Tribunal as having been given by an authority

suffering from inherent lack of jurisdiction. Such a

decision cannot be sustained merely by the doctrine of

res judicata or estoppel as urged in this case."

Mr. Ray placed strong reliance in Balvant N. Viswamitra and Others

v. Yadav Sadashiv Mule (Dead) Through LRs. [(2004) 8 SCC 706].

Therein, this Court stated the law in the following terms :

"9. The main question which arises for our consideration

is whether the decree passed by the trial court can be said

to be 'null' and 'void'. In our opinion, the law on the point

is well settled. The distinction between a decree which is

void and a decree which is wrong, incorrect irregular or

not in accordance with law cannot be overlooked or

ignored. Where a court lacks inherent jurisdiction in

passing a decree or making an order, a decree or order

passed by such court would be without jurisdiction, non

est and void ab initio. A defect of jurisdiction of the court

goes to the root of the matter and strikes at the very

authority of the court to pass a decree or make an order.

Such detect has always been treated as basic and

fundamental and a decree or order passed by a court or an

authority having no jurisdiction is nullity. Validity of

such decree or order can be challenged at any stage, even

in execution or collateral proceedings."

This Court referred to its earlier decision in Rafique Bibi v. Sayed

Waliuddin [(2004) 1 SCC 287], wherein it was held :

"\005A decree passed by a court of competent jurisdiction

cannot be denuded of its efficacy by any collateral attack

or in incidental proceedings."

To the said effect is a decision of this Court in Harshad Chiman Lal

Modi v. DLF Universal Ltd. and Another [(2005) 7 SCC 791].

In our opinion, the application under Section 302 of the Succession

Act by the Company was maintainable and, thus, the High Court was

competent to entertain the same.

An Originating Summons is maintainable under certain situations, as

provided for in Chapter XIII of the Calcutta High Court Original Side Rules.

The High Court in exercise of the said jurisdiction could not adjudicate as to

whether an earlier order passed by it was null and void and was, thus, liable

to be set aside. What was questioned by the Official Trustee by taking out

an Originating Summons was in effect and substance not only the order

passed by the High Court itself but also its own act which had attained

finality.

We have noticed hereinbefore that the Official Trustee dealt with the

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property in exercise of its jurisdiction to administer the trust property, in

respect whereof the High Court could issue directions from time to time.

Once it is held that the Official Trustee either on its own or under the

directions of the High Court could grant extension of lease, its action can be

subjected to challenge only in an appropriate proceeding. The Official

Trustee no doubt holds a position of trust but no finding of fact has been

arrived that it had misused its position. The High Court in passing its order

took all precautions, which were required of it. The High Court accepted all

the contentions of the Official Trustee not only by enhancing the quantum of

rent payable by the Company, but also appointing a valuer for the purpose of

arriving at a reasonable quantum of rent, which might become payable on

the expiry of the period of lease.

It has not been suggested that the Official Trustee was not bound by

the said order. It could only take a different stand in the said proceeding. It

could not initiate a fresh proceeding provided it was maintainable. Such

proceedings would have been maintainable, inter alia, if the dealings by and

between the Company and the Official Trustee was founded on or otherwise

vitiated by fraud. Even a suit for setting aside an order passed by a court

having competent jurisdiction would be maintainable on limited grounds.

Only because the order passed by a court is otherwise erroneous or causes a

hardship, the same by itself may not be a ground to set aside an order that

was validly passed by a court of competent jurisdiction.

Even otherwise the Official Trustee could not have altered its

position. It could not have prevaricated its stand from time to time. It was

estopped and precluded from filing a fresh application.

In Cooke v. Rickman [(1911) 2 KB 1125] , it was held that the rule of

estoppel could not be restricted to a matter in issue, stating :

"\005The rule laid down in Hawlett v. Tarte (10 C.B.

(N.S.) 813 \026 was that if the defendant in a second action

attempts to put on the, record a plea which is inconsistent

with any traversable allegation in a former action

between the same parties there is an estoppel\005"

[See also Humphries v. Humphries 1910 (2) KB 531]

In Jai Narain Parasrampura (Dead) and Others v. Pushpa Devi Saraf

and Others [(2006) 7 SCC 756], this Court held :

"While applying the procedural law like principle

of estoppel or acquiescence, the court would be

concerned with the conduct of a party for determination

as to whether he can be permitted to take a different stand

in a subsequent proceeding, unless there exists a statutory

interdict."

It was further held :

"The doctrine of estoppel by acquiescence was not

restricted to cases where the representor was aware both

of what his strict rights were and that the representee was

acting on the belief that those rights would not be

enforced against him. Instead, the court was required to

ascertain whether in the particular circumstances, it

would be unconscionable for a party to be permitted to

deny that which, knowingly or unknowingly, he had

allowed or encouraged another to assume to his

detriment. Accordingly, the principle would apply if at

the time the expectation was encouraged. [See also

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Taylor Fashions Ltd. v. Liverpool Victoria Trustees

Co. Ltd. (1981) 1 All ER 897.]"

Mr. Ray contended that the learned Single Judge did not assign any

reason in support of its order. Even if no reason has been assigned, it could

have been set aside only by an appellate court. When an order attained

finality, it cannot be set aside on the premise that no reason had therefor

been assigned.

It was also not a case where the parties were at issue in strict sense of

the term. The Official Trustee in his affidavit in opposition filed before the

High Court of Calcutta might have raised several contentions. Presumption,

however, would be that those contentions which had been accepted by the

High Court were put forward by it. If that be so, it does not lie in the mouth

of the Official Trustee now to contend that it had raised other contentions

also. If it had raised any other contention, which had not been considered by

the High Court, the remedy of the Official Trustee was to move the said

court itself for appropriate directions.

Not only no such contention was raised, it will bear repetition to state,

that the order has been acted upon. The principles of res judicata and in

particular that of constructive res judicata shall apply in the aforementioned

fact situation.

In Pawan Kumar Gupta v. Rochi Ram Nag Deo [(1999) 4 SCC 243],

it is stated :

"The rule of res judicata incorporated in Section 11

of the Code of Civil Procedure (CPC) prohibits the court

from trying an issue which "has been directly and

substantially in issue in a former suit between the same

parties", and has been heard and finally decided by that

court. It is the decision on an issue, and not a mere

finding on any incidental question to reach such decision,

which operates as res judicata."

[See also Ferro Alloys Corporation Limited and Another v. Union of India

and Others (1999) 4 SCC 149].

It has not been seriously disputed before us that the High Court,

despite City Civil Courts Act, could exercise its jurisdiction under Section

302 of the Succession Act read with Section 25 of the 1913 Act.

For the reasons aforementioned, we do not find any merit in this

appeal. It is dismissed accordingly with costs. Counsel's fee is quantified at

Rs.25,000/-