Official Trustee, West Bengal & Ors. v. Sachindra Nath Chatterjee & Anr.
Hegde J. Two important questions of law arise for decision in
this appeal, by certificate. It will be convenient to formulate those
questions after we set out the material facts.
One Aswini Kumar Chatterjee (since deceased) executed the
Trust deed Exh. 1 on December 6, 1930 in respect of some of
the properties owned by him. It is provided therein (a) that the
settlor would be the trustee of the Trust Estate and would enjoy
the income and profits of the trust praperties during his lifetime,
(b) after his death his wife Sm. Santtmoyee Devee and/ or his
SOill5 as soon as they or any of them attain the age of majority
sh·:>uld be the sole Trustee or Joint Trustees and ( c) from and
after his death the said Trust Estate should be held to the use
and for the benefit of the said Sm. Santimoyee Devee and the
said sons. Santimoyee Devee to be paid from the income and the
profits of the said estate Rs. 50 monthly and the balance of the
income and profits of the Trust Estate to be held for the use imd
benefit of each of the sons in equal shares and after the death
of the said Santimoyee Devee to make over the whole of the
Trust Estate to each of the sons in: equal shares. He reserved to
OFFICIAL TRUSTEE v. SACHINDRA NATH (Hegde, J.) 95
A himself the .power to vary the terms and conditions of the Trust
so far as they relate to the quantum of interest given to each of
the beneficiaries after the death of the settlor "by his instrument
by will alone and in no other way or act".
The settlor administered the trust property for sometime and
B thereafter thought of effecting by deed inter vivos certain
changes in the trust. To enable him to do so he took out an
originating summO!ls on the original side of the Calcutta High
Court under Chapter XIII of the Original Side Rules of that
Court seeking primarily two r~liefs viz., ( 1) to have the Official
Trustee, Bengal appointed as the Trustee in his place and (2) to
empower him to ·alter the clause relating to variation of the
C ituantum of interest given to each of the beneficiaries by a deed
inter vivos. From the averments made in the application,
it is clear that relief was sought under the provisions of
the Indian Trusts Act (Central Act 2 of 18 8 2) and the Official
Trustees Act (Central Act 2 of 1913). In the body of the petition
the settlor -definitely prayed for permission to revoke the clause in
I> the trust deed relating to his power to vary the quantum of
interest of the beneficiaries by will alone and in its place authorise
him to make that variation "by deed inter vivos and not by will
alooe". The relevant reliefs asked for in the petition read as
follows:
( 1 ) "that the provisions contained in the Deed of
settlement dated the 6th December 1930 whereby the
persons therein named were appointed Trustees of the
said Trust Estate and whereby power was reserved to
petitioner to alter the said quantum of interest by will
alone and in no other way be revoked and . . .
(2) that the petitioner be empowered to alter the
said quantum of interest in such manner as he may
think proper, by deed inter vivas and not by will
alone."
The: aforementioned originating summons was tak~n out on
August 20, 1937. The matter came up for hearing before
G Ramfry J. evidently after service of notices on the respondents
on August 25, 1937. On that date the learned Judge passed the
following -order :
"It is ordered that the provisions cQ!lllained in the
said Deed of Trust whereby the persons therein named
were appointed Trustees of the said Trust Estate and
whereby power was reserved to the said applicant to
alter the quantum of interest of the beneficiaries by
will and in no other way be and they are hereby
96 SUPREME COURT REPORTS [1969) 3 S.C.R.
revoked and it is further ordered that the said appli
cant as such settlor as aforesaid be at liberty to alter
the said quaintum of interest in such manner as he may
think proper by deed inter vivos and not ~ will and
it is further ordered th!!_t the said applicant the
present sole trustee under the said Deed of Trust be
and is hereby discharged from further acting as such
Trustee and the Official Trustee of Bengal be and is
hereby appointed the sole trustee of the said Deed of
Trust. And it is further ordered that the stocks and
shares llilld securities· 'cboth movable and lliimovable)
now comprised in the Trust Estate. . . do vest in the
said Official Trustee of Bengal as such Trustee as
aforesaid."
At this stage it is necessary to emphasize that what the
•1lttlor asked for was the court's permission to revoke the clause
in the Trust deed empowering him to alter the quantum of
interest given to each of the beneficiaries "by will alone" and
in its place to confer upon him· power to make the said alteration D
by deed inter vivas. The court in specific terms ordered the
revocation and granted the authority sought for. Acting under
the power purported to have been given by the order of R:amfry
J., the settlor executed a second Trust deed on March 22, 1938.
Under that deed, in the. place of the Trustees nominated under
the original deed, the Official Trustee was constituted as the sole
trustee. Sac~dra, (the first respondent herein) one of the sons
of the settlor was deprived of all his interest as a bineficiary in
the corpus of the trust properties. He was given a meagre
allowance of Rs. 20 per month during his life-time. The settlor
died in 1946.
J!!
On December 18, 1950, the first respondent filed the suit F
out of which this appeal has arisen praying for following
declarations :
(a) that the power reserved by the settlor in the original
Trust deed for altering the quantum of interest of the bene·
ficiaries by wiM alone and by no other means was irrevocable;
. (b) that the order passed by Ramfry, J. on August 25, 1937 G
was null and void as having been made without jurisdiction; and
( c) the origi;nal Trust deed stood unaffected by the second
Trust deed and therefore he was entitled to the benefits provided
under the said deed. He also asked for a decree directing the
Official Trustee to pay him 1I4th of the income of the Trust
Estate, so long as Santimoyee Devee was alive and on her death H
to make over one.fourth of the corpus of the. Trust Estate to him
and further render accounts to him of the profits of the Trust
Estate since the time of the death of the settlor. The Official
OFFICIAL TRUSTEE v. SACHINDRA NATH (Hegde, /.) 97
Trustee as well as some of the other defendaints resisted the
suit. They contended that the settlor was entitled to execute the
second Trust deed in exercise of the power reserved by him
under the original Trust deed and in any event he could do so'
because of the order of Rarnfry, J.
The trial court decreed the suit as prayed for but the first
Appellate Court reversed the decree ot the trial court and dis
missed the suit upholding the contentions advanced on behalf
of. the contesting defendants. In second appeal the High Court
reversed the decree of the first Appellate Court and restored the
decree of the trial .court. '
Two questions that arise for decision in the appeal are :
(1) whether the settlor was entitled to execute the second Trust
deed in pursua;nce of the power reserved by him under the
original Trust deed and (2) whether in any event the validity
of the second Trust deed is not open to challenge in view of the
order made by Ramfry, J. on August 25, 1937.
Mr. B. Sen, learned Counsel for the appellant CQntended that
on a proper reading of the Trust deed it would be seen that the
settlor had reserved to himself the power to vary the terms of
the Trust in so far as they relate to the quantum of int.,rest
given to each of the beneficiaries after the death of the settlor.
According to him the recital in the deed that such a variation
can be done only by an instrument of will and not otherwise i&
not a matter of substance but only a form. Therefore we must
hold that the settlor had the power to make the variation in
question. He did not dispute the proposition that a settlor is
incompetent to vary any of the terms of a Trust settled by him
unless he had reserved for himself the power to make the
variation in question. The real questiqn for decision is whether
the stipulation in the Trust deed that the . variation in question
can only be made by will and not otherwise is binding condi
tion. If it is held to be a material condition then the settlor must
be held to have had no power to vary the same.
The law on the point is stated by Halsbury (') thus :
"Defects not of the essence. Equity relieves only
against defects which are not of the essence of the
power; relief will not be granted so as to defeat any
thing material to the intentio.n of the donor of the
power. Thus mere defects in the mode of execution
will be aided, and so will an appointment by will made
under a power to appoint only by deed. But no aid will
be given to an appointment by irrevocable deed made
. under_ a power to appoint only by will or to an
3rd Edn. Vol. 30 p. 272 Paragraph, 518.
SUPREME COURT REPORTS (1969) 3 S.C.R.
appointment which would result in a fraud on the
power or aid a breach of trust. Moreover, no aid will
~e given to ~e .e~ercise by will of a power of revoca
tion by deed If It Is clear that a deed is of the essence,
.lls where the original power of appo~tment was by
will or deed and on its exercise a power to revoke by
deed only was reserved. Nor will the court aid a lease
containing unusual covenants granted under a power
to lease with usual covenants, or a lease granted with
out conseint under a power to lease with consent, or a
• sale of land reserving timber made under a power
not authorising such a reservation, or a sale of land
reserving the minerals under a power not authorising
such a reservation."
Similar are the views expressed in Hanbury's book o,n,
Modern Equity (7th Edn. p. 56). Referring to the decision in
Toilet v.Tollet(') the learned author observes :
"The case brin~ out another important point. The
power was exercised by will, whereas it should have
been exercised by deed. Now a Will is revocable at any
time during the testator's life time, and so the defect is
treated as one of forni only, and relief wi!J be granted.
But the defect constituted by the converse process, the
attempted exercise by irrevocable deed of a power
which should have been exercised by will is treated
as a matter of substance, and, in .Reid v. Shergold(')
as fatal to the objects of the power."
The law is similarly stated in M olineux v. Evered(').
From the above discussion it also follows that the settlor
had no power to appoint new trustees during his life time nor
designate persons other than those already designated in the
original Trust deed to act as trustees after his life time.
Considerable arguments were advanced before us as to the
effect of the o;der made by Ramfry, J. on August 25, 1937. On
behalf of the appellant it was urged that Ramfry, J. had juris
diction over the parties to the application in question as well as
on the subject matter. Hence the validity of the order made
by him cannot be challenged even if it is held that that order is
not m accordance with law. To put it differently it ~as. ~q~ed
that what could be complained of is not the lack of 1unsd1c!lon
on the part of the court to make the order in question but ain
illeg"l exercise of that juris.diction; but such an .attack cannot
be made against that order m a collateral proceedn;gs. On the
other hand it was urged by Mr. N. C. Chatteriee, learned
(1) (1728) 24 E. R. 828. (2) [1805] 10, Yes. 370.
(3) [1910] 2 Ch. 147.
11
G.
OFFICIAL TRUSTBB v. SACHINDRA NATH (Hegde, J.) 99
Counsel for the respondents that Ramfry, J. had no jurisdiction
to pass the order in question. His grievance was not that
Ramfry, J. exercised his undoubted jurisdiction illegally but that
he had no jurisdiction at all to make the order in question.
It is plain that if the learned judge had no jurisdicti~ to pass
the order in question then the order is null and v01d. It 1s
equally plain that if he had jurisdiction to pronounce on the
plea put forward before him the fact that he made an incorrect
order or even ain illegal '>rder cannot affect its validity .. T~e~e
fore all that we have to see is whether Ramfry, J. had 1unsd1c
tion to entertain the application made by the settlor.
What is meant by jurisdiction? This question is answered by
Mukherjee, Acting C. J. speaking for the Full Bench of the
Calcutta High Court in Hirday Nath Roy v. Ramachandra Barna
Sarma.(') At page 146 of the report the learned judge explai4ted
what exactly is meant by jurisdiction. We can do no better than
to quote his words :
A "ln the order of Reference to a Full Bench in
the case of Sukhlal v. Tara Chand(') it was stated
that jurisdiction may be defined to be the power of
a Court to hear and determine a cause, to adjudicate
and exercise any judicial power in relation to it : in
other words, by jurisdiction is meant the authority
which a Court has to decide matters that are litigated
before it or to take cognizance of matters presented in
a formal way for its decision. An examination of the
cases in the books discloses numerous attempts to
define the term 'jurisdiction', which has been stated to
be 'the power to hear and determine issues of law
and fact', 'the authority by which the judicial officer
take cognizance of and decide causes'; 'the authority
to hear and decide a legal controversy', 'the power
to hear and determine the subject matter in contro
versy between parties to a suit and to adjudicate or
exercise any judicial power over them;' 'the power
~ hear, determine and pronounce judgment on the
1ss~es ~efore the Court'; 'the power or authority
which 1s conferred upon a Court by the Legislature to
hear and determine causes between parties and to
.carry the judgments into effect'; 'the power to enquire
1.nto the facts, to apply the law, to pronounce the
Judgment and to carry it into execution'. (emphasis supplied).
(I) LLR. l.XVIII Cal.138. (2) [1905) J.L.R. 33 Cal. 68.
100 SUPREME COURT REPORTS (19691 3 s.c.R.
Proceeding further the learned judge observed : A
"This jurisdiction of the Court may be ':bialified or
restricted by a variety of circumstances. us, the
jurisdiction may have to be considered with reference
to place, value and nature of the subject matter. The
power of a tribunal may be exercised within defioed .. territorial limits. Its cognizance may be restricted
to subject-matters of prescribed value. It may be
competent to deal with controversies of a specified
character, for instance, testamentary or matnmonial
causes, acquisition of lands for publi~ purposes, record
of rights as between landlords and tenMlts. This
classification into territorial jurisdiction, pecuniary c:
jurisdiction and jurisdiction of the subject matter is
obviously of a fundamental character. GivQR such
jurisdiction, we must be careful to distinguish exercise
of jurisdiction from existence of jurisdiction : for
fundamentally different are the consequences of
failure to comply with statutory requirements in the
assumption and in the exercise of jurisdiction. The D-authority to decide a cause at all and not the decision
rendered therein is what makes up jurisdiction; and
when there is jurisdiction of the person and subject
matter, the decision of all other questions arising ill the
case is but an exercise of that jurisdiction. The extent E to which the conditions essential for creating and
raising the jurisdiction of a Court or . the restraints
attaching to the mode of exercise of that jurisdiction,
should be included in the conception of jurisdiction
itself, is sometimes a question of great nicety, as is
illustrated by the decisions reviewed in the order of
reference ~n Sukhlal v. Tara Chand(') and Khosh Maha- I'
med v. Nazir Mahomed(2) see also the obser-
vation of. Lord Parkar in Raghunath v. Sundar Das(')
.... We must not thus overlook the cardinal position
that in order that jurisdiction mav be exercised, there
must be a case legally before the Court and a hearing
as well as a determination. A judgment pronounced G J,
by a court without jurisdiction is void, subject to the
well-known reservation that, when the jurisdiction of
a Court is challenged, the Court is competent to deter-
mine the question of jurisdiction, though the result of
the enquiry may be that it has no jurisdiction to deal
with the matter brought before it : Rashmoni v. H Ganada. (')" (emphasis supplied).
(I) [1905] I.LR. 33 Cal. 68. (2) (1905) I.LR. 33 Cal. 352.
(3) [1914] l.L.R.42Cal. 72. (4) [19141 20 C.L.J. 213.
OFFICIAL TRUSTEE v. SACHINDRA NATH (Hegde, J.) 101
Finally the learned judge quoted with approval the decision
of Srinivas Aiyangar, J. in Tuljaram v. Gopala(') wherein
Aiyangar, J. laid down that "if a Court has jurisdiction to
try a suit and has authority to pass orders of a particular
kin/!, the fact that it has passed an order which it should not
have made in the circumstances of the litigation, does not indi
cate total want or loss of jurisdiction so as to render the order
a nullity". (emphasis supplied) .
From the above discussion it is clear that before a Court can
be held to have jurisdiction to decide a particular matter it must
not only have jurisdiction to try the suit brought but must also
have the authopty to pass the orders sought for. It is not suffi
cient that it has some jurisdiction in relation to the subject
matter· of the suit. Its jurisdiction must include the power to
hear and decide the questions at issue, the authority to hear and
decide the particular controversy that has arisen between the par
ties. Therefore the fact that Ramfry, J. had jurisdiction to pass
certain orders either under the Indian Trust Act, 1882
or under the Official Trustees Act, 1913 or under the
Trustees and Mortgages Powers Act, 1866 or under his inherent
power is not conclusive of the matter. What is relevant is
whether he had the power to grant the relief asked for in the
application made by the settlor. That we thillk is the essence of
the matter. It cannot be disputed that if it is held that the learned
judge had competence to pronounce on the issue presented for
Iris decision then the fact that he decided that issue illegally or
incorrectly is wholly beside the point. See lttavira Mathai v.
Varkey Varkey and Anr.( 2 ). Therefore we have now to see
whether the learned judge had jurisdiction to decide the issue
presqnted for his determination. The relief prayed for as seen
earlier, was to permit the settlor to revoke particular' clauses
in the Trust deed and to authorise him to alter the quantum
of inerest given to each of the beneficiaries by a deed inter
vivos. Had the learned judge jurisdiction to entertain those
pleas?
Reliance was placed on s. 34 of the Indian Trusts Act,
1882 as conferrinl!: power on the judge to make the order in
question. That section reads :
"Any trustee may, without instituting a suit, apply
by petition to a principal Civil Court of original juris
diction for its opinion, advice or direction on any
present questions respecting the management or
administration of the trust property other than ques
?ons of ~~tail, difficulty or importance, not proper
m the opmmn of the Court for summary disposal."
(I) (1916) 32 M.L.J., 434. (2) [1964) I S.C.R. 495.
·-.
Under this provision the court could have only given
"opinion, advice or direction on any presented question respect
ing the management or administration of the trust property"
and not on any other matters. The relief prayed for by the
settlor did not relate to the management or administration of the
trust property but on the other hand it asked for authority to
alter 1he quantum of interest given to each of the beneficiaries
by a deed inter vivas. Th~ jurisdiction conferred on the court
under s. 34 is a limited jurisdiction. Under that provision, the
court has not been conferred with overall jurisdiction in matters
arising under a Trust deed. The statute has prescribed what the
court cam do and inferentially what it cannot do. From the fact
that the court has been conferred power to grant only certain
reliefs it follows as a matter of law that the court has been prohi
bited from granting any other relief. The jurisdiction of the court
is circumscribed by the provisions of s. 34 of the Trusis Act. The
court had no jurisdiction to pronounce on the pleas put forward
by the settlor. From the facts stated in the petition lnd from
the relief asked for, it was obvious that the case did not come
within the scope of s. 34 of the Trust Act. Therefore when the
learned judge granted the relief asked for, he did something
which he wJs not competent to do under s. 34 of the Trusts Act.
Next we were told the learned judge had jurisdiction to pass
the order in question under s. 10 (1) of the Official Trustees
Act, 1913 which reads :
"If any property is subject to trust other thain a
trust which the Offi.;ial Trustee is prohibited from
accepting under the provisions of this Act, and there
is no trustee within the local limits of the ordinal)' or
extraordinary original civil jurisdiction of the High
Court willing or capable to act in the trust, the High
Court may on application make an order for the
appointment of the Official Trustee by that name with
his consent to be the trustee of such property."
This provision has no relevance as regards the controversy
with which we are dealing. That provision might have
empowered the court to appoint the Official Trustee in the place
of the settlor as the settlor was not willing to continue --as the
trustee. But it could not have granted the other reliefs asked
for.
Reliance was next placed on s. 43 of the Trustees and
Mortgagees Powers Act, 1866. There is no reference to this Act
in the application made by the settlor. Obviously he did not rely
on any of the provisions in that Act. But then if the court couM
A'
I
I
Ill
OFFICIAL TRUSTEE v. SACHINDRA NATH (Hegde, I.) I 03
A have acted on the basis of a11y of the provisions in that Act, the
fact that it did not purport to act under that provfaion is
immaterial. Therefore we have to see whether the court could
have acted on the basis of any of the provisions in the said Act.
The only provision of that Act on which reliance was placed on
behalf of the appellants is s. 43 ( 1). The portion cf that section
B relevu.nt for our present purpose reads :
"Any trustee, executor or administrator shalJ be at
liberty, without the institution of a suit, to apply by
petition to any Judge of the High Court for the
opinion, advice or direction of such Judge on any
question respecting the management or administration
c of the trust property or the assets of any testator or .
intestate ... "
This provision is more or less similar to s. 34 of the Trust
Act. Under that provision a judge of a High Court could have
only given opinion, advice or direction on ainy question respect··
ing the management or administration of the trust property.
Therefore the order made by Ramfry, J. cannot be justified on
the basis of s. 43 of the Trustees and Mortgagees Powers Act,
1866.
It was then said that the order -n question could have been
made by Ramfry, J. in the exercise of his i,nherent powers as a
judge sitting on the original side of the Calcutta High Court. It
was argued that a judge sitting on the original side of the High
Court of Judicature at Calcutta has all the powers of a Chancery
.T udge in England as that power has been conferred on him by the
Letters Patent granted to that High Court. We shall assume it
to be so. We may note that the settlor did not invoke th~ inherent
jurisdiction of the Court nor did the .iudge purport to exercise that
power. But, still, that cannot invalidate the order made i;f the
court had the inherent jurisdiction to make that order. Hence
the real question is had he that inherent jurisdiction? Chapter
XIII of the Calcutta High Court Rules prescribes what orders
can be obtained in an originating summons proceedings. The
jurisdiction of the judge acting under that Chapter is a s1immary
jurisdiction. Rule I of that Chapter empowers the judge to
entertain an application in respect of matters enumerated in
clauses (a) to ( g) of that rule. Admittedly els. (a) (b), ( f) and
( g) are not rele'fant for our pre5ent purpose. Under cl. ( c)
the tourt could only decide ab~ut furni!hing of any particular
accounts by trustees and vouchmg (where !necessary) oi such
accounts. Under cl. ( c) it could direct the trustees to pav into
court any monies in his hands and under cl. ( e) direct him to
file an account and vouch the same to do or abstain from dok1g
any particular acr in h;s character as a trustee. The orders under ·
1-04 SUPREME COURT REPORTS (1969] 3 S.C.R.
Ch. XIII are made in chambers. As mentioned earlier the pro- A
ceedings under that Chapter are summary proceedings. No rule
in that Chapter was brought to our notice under which the !.•
order ~n question could have been made.
Different questions might have arisen for consideration if an
application under rule 9 of Chapter XIII had been made ' B
requesting the High Court to interpret the original Trust deed in
a particular manner. Such a plea was not takqn in the applica
tion filed by the settlor before Ramfry, J. Further it was not the
case of the appellant either in the High Court or in the courts · . ,
below or even in this Court that Ramfry, J. merely purported to
interpret the original Trust deed whether his interpretation is c
<:orrect or not.
Let us now proceed to the questio.n whether the Chancery
Court in England had jurisdiction (o pass an order similar to
that made by Ramfry, J. This question was elaborately
considered by the House of Lords in Chapman and Ors. v.
Chapman and Ors.('). The leading judgment in that case was
delivered by Lord Morton of Henryton. In his speech he elabo
rately considered the various decisions rendered by the English
courts. The broad question that he posed for decision was
whether the court could permit the settlor to alter the terms of
a trust and if so in what respect. It was urged before him on
behalf of the. appellants in that case that the court had jurisdic:
tion to permit the alteration of any of the terms of a trust.
Negativing that contention his Loi:dship observed at p. 456 :
"Striking instances of cases which negative the
existence of the alleged, unlimited jurisdiction are In
re Crawshay,(2 ) In re Morrison(') (Buckley, J.) and
Jrt re Montagu(') (Court of Appeal). In the first of
these cases North, J. said: 'I should not be administer
ing the trusts created by the testator if I consented to
this scheme. I should be altering his trusts and substi
tu1 ing something quite outside the will. On the
assumption that the scheme would be beneficial to the
estate I cannot decide that I have jurisdiction to
authorise it.' In the last mentioned case the Court of
Appeal held that it had no jurisdiction to allow the
tru>tees of a settlement to raise money by mort
gage of the settled estate and to apply it in pulling
down and rebuilding some of the houses on the
property. Lindley, L. J. said : 'We none of us see our
'(l) [1954] A.C. 429.
·(3) (1901] I Ch. 101.
(2) 60L.T.357.
. (4) [1897) 2 Ch. 8.
OFFICIAL TRUSTEE v. SACHINDRA NATH (Hegde, I.) 105
way to hold that there is jurisdiction to make an order
in this case. It is very desirable that the court should
have jurisdiction to deal with such a case; but Parlia
ment has never gone so far as to give it that jurisdic
tion. No doubt it would be a judicious thing to do
what is wanted in this case, and if the persons
interested were all ascertained ailld Otf age, they would
probably concur, and then it might be done; but they
are not all ascertained nor of full age; and unless the
court can authorize the trustees to do it, it cannot be
done.' Lopes, L.J. said: 'I have no doubt that what is
proposed is berieficial and would increase both the
income and the capital value of the property. The
question is whether the court has jurisdiction to sanc
tion it. There is no provision in the settlement which
would authorize the works in question, nor do they
fal! within any of the improvements sanctioned by the
Settled Land~ Act.''
From the above observations it is clear that the learned
judge proceeded on the basis that the court has no jurisdiction
to permit the alteration of any of the terms in a trust deed
excepting as regards the following matters :
(a) Changes in the nature of an infant's property e.g.
by directing investment of his personalty in the
purchase of freeholds;
(b) Allowing the trustees of settled property to enter
into some business transaction which was not autho
rized by the settlement;
( c) Allowing maintenance out of income which the
settlor or testator directed to be accumulated; and
( d) Approving a compromise on behalf of infants and
possible after-born beneficiaries.
It wilI be noticed that the power given under those four
heads are those relating to management and administration of
trust property. That power is similar to the power cont erred on
courts by s. 34 of the Trusts Act and 43 of the Trustees and
Mortgagees Powers Act, 1866. In fact in this country we have
codified the very powers that were exercised by the Chancery
Courts in England under their equitable jurisdiction. The Court
of Appeal in Chapman's case(') Evershed, M.R. and Romer
L.JJ., Denning, L.J. dissenting stated the law on the point thus :
(0 [1953] Ch. I 218.
L 7 Sup. Cl/69-8
106 SUPREME COURT REPORTS [ 1969] 3 S.C.R.
The inherent jurisdiction of the Court of Chancery is of a A
limited character. It is a jurisdiction to confer upon the trustee,.
quoad items of trust property vested in them, administrative
powers to be exercised by them where a situation has arisen in
regard to the property creating what may be fairly called an
'emergency'. The inherent jurisdiction does not extend to sanc
tioning generally the modification or remoulding of the ben~- B
ficial trusts of a settlement.
Hence we are not persuaded that the Chancery Court ~n
England had jurisdiction to pass orders similar to that passed
by Ramfry, J.
From whatever angle we may examine the validity of the
order made by Ram fry, J ., it appears clear to us, that the said
order was outside the jurisdiction of the learned judge. It was
not merely a wrong order, or an illegal order, it was an order
which he had no competence to make. It is not merely an order
that he should not have passed but it is an order that he could
not have passed and therefore a void order.
The circumstances of the case call for certain modifications
in the decree of the High Court. On the facts of this case we see
no justification for treating the Official Trustee as a trustee de
son-tort and to require him to account as such. Jn the proceed
ings before Ramfry, J. the plaintiff did not choose to appear and
contest. It is not his case that he was not served in that proceed
ding. But for the order of Ramfry, J. the settlor would have
certainly altered the quantum of interest given to the plaintiff
under the original Trust deed by means of a will. As it now
turned out the plaintiff has benefited by the wrong step taken by
the settlor. The Official Trustee has merely carried out the order
of the court. It was not open to him to go behind that order
That being so we see no justification to treat him as a trustee de·
son-tort. Equity requires that he should be made to account as
if he was a trustee. In other words his liability should not be
greater than that of a trustee. It is also proper to permit him to
reimburse himself all the costs incurred by him in all the courts
from out of the trust funds in his hands.
We see no justification for allowing accounting in this case
from the date the official Trustee took charge of the trust estate.
Till the institution of the present suit from which this appeal has
arisen there was no knowing that the plaintiff would challenge
the second Trust deed executed by his father. He did not
challenge it during his father's life time. On the faith of the order
of the High Court, the Official Trustee must have been disburs
ing the trust income to the various beneficiaries. It will be
inequitable to reopen all those transactions. We think the ends
OFFICIAL TRUSTEE v. SACHINDRA NATH (Hegde, J.) IO'i
A of 1ustice will be met if accounting is ordered as from the date of
the institution of the present suit. The plaintiff-respondent i'
entitled to his costs in all the courts. But he shall get the same
from out of the Trust Estate.
Subject to the modifications directed above in the decree of
B the High Court this appeal is dismissed.
V.P.S. Appeal dismissed and decree modified.