Case: Far Pavilions Tours &amp; Travels Private Limited Through Its Director, S.N. Gupta &amp; Another Vs. Manish Pratik &amp; Another

the respondent had permitted to construct a house in the graveyard for performing Fateha at the tombs and providing hukka tobacco to Fakirs gathering thereat. Subsequently, father of the respondent donated the said house to the respondent. Mutawalli of the graveyard and tombs had sued the respondent for recovery of the possession of the said house. The Apex Court held that in view of the explanation to Section 10 of the Limitation Act, the respondents father, who was managing the property, has to be deemed to be a trustee in whom the properties vested specifically and in as much as respondent was a Company and was not a transferee for valuable consideration. It was held that Section 10 of the Limitation Act applied and possession could be recovered from the defendant without any limitation as to time.21. Mr. Lawande, learned Counsel for the plaintiff has not disputed the position that if the Directors are trustees, then Section 10 is applicable. According to him, however, the Directors of a Company can never be termed as trustees within the meaning of Section 10 of the Limitation Act. Learned Counsel submitted that the Judgment in the case of Nanalal Zaver (supra), cannot be applied to the present case. He submitted that in the case of Nanalal Zaver (supra), the position of Directors was considered with regard to the provision of Section 105-C of the Indian Companies Act whereas in the present case the position of the Directors with regard to Section 10 of the Limitation Act is in question. In the case of Bangalore Turf Club Limited (supra), relied upon by the learned Counsel for the plaintiff, in this regard, the Apex Court has held thus:7. Under various labour laws different definitions have been given to the words industry or factory, etc. and we cannot apply the definition in one Act to that in another Act (unless the statute specifically says so). It is only where the language used in the definition is in pari material that this may be possible. Hence, we are of the opinion that the decision of this Court in .Hyderabad Race Club should be reconsidered by a larger Bench. In the meantime, the respondents shall not raise any demand against the appellant-Club.22. In the case of V. Narsimha Aiyangar, official (supra), one of the questions was whether the Directors of Companies under the Indian Companies Act are trustees for the purpose of Section 10 of the Limitation Act. It has been held that it is now well settled that the Directors of Company are not trustees, but they are no doubt trustees of assets which have come into their hands or which are under their control, but they are not trustees of a debt due to the Company. It has been further held that generally speaking, a person, who is not the appointed trustee and whom it is sought to affect with a trust by reason of his conduct is not a trustee at all although he may be liable as if he were, which is commonly expressed by saying that he is not an express but constructive trustee.23. The Judgment in the case of Bangalore Turf Club Limited (supra), in our view is not applicable to the present cases, since there is no question of any definition of any words involved here. The interpretation of the expression director of Company is involved here. Considering the above judgments, more particularly, the Judgment in the case of Wali Mohammed (dead) by LRs (supra) and in the case of V. Narsimha Aiyangar, official (supra), we are of the view that the trial Court will have to determine whether the defendants were constructive trustees. It is not possible to say at this stage that the defendant no. 1 does not have an arguable case at all. In paragraph 22 of the counter claim, the defendant no. 1 has specifically pleaded that the plaintiff in law holds the suit property in trust for the defendant no. 1 and has prayed for declaration that the suit property is held in trust by the plaintiff on behalf of the defendant no. 1. The defendant no. 1 has also specifically pleaded in the counter claims that the cause of action for the suit is covered by the provisions of Section 10 of the Limitation Act and the reliefs, therefore, are not barred by limitation. The defendant no. 1 in the counter claims has pleaded for a direction that the plaintiff holds the suit property, more particularly described in schedule, in trust for the defendant no. 1 and it has prayed for a direction to the plaintiff to execute a conveyance in respect of the suit property in favour of the defendant no. 1 and to do all acts, deeds and things that may be necessary to perfect the defendant no. 1s title in respect of the suit property. The Court cannot take into account any material beyond the counter claims. In view of the above, the counter claims, at this stage, do not appear to be barred by any law from the statements made therein. The learned trial Court held that Section 10 of the Limitation Act is not applicable to the case. The trial Court ought to have directed the plaintiff to file written statement to the counter claims and to take all the objections and ought to have framed the issues and if necessary could have directed that the question of limitation ought to be decided as a preliminary issue. In our view, the learned trial Court has committed error in rejecting the counter claims, at this stage only.24. we are, therefore, of the considered view that the impugned order of rejection of the counter claims is not sustainable and, therefore, deserves to be dismissed. The point of application of Section 10 of the Limitation Act and the point whether the counter claims are barred by limitation, ought to be decided after framing of the issues and leading evidence on the said points.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In the present appeals, along with Vakalatnama of the Advocate, the defendants have filed before this Court, a certified true copy of the resolution dated 20/04/2011, passed by the Board of Directors of the defendant no. 1 thereby authorising said Shri Manuel Paully DSouza to appear for and on behalf of the Company before police or other authority or before any Court, criminal or civil, including without limitation, courts of first instance or appellate courts and revisional courts, in order to initiate or prosecute criminal and civil cases (including ancillary, incidental or consequential proceedings) againstof Far Pavilion Tours and Travels Private limited named therein for offences mentioned therein and also against other known or unknown persons involved in the said offences and in this regard to sign, verify and file criminal complaints, FIRs, claims, plaints, writ petitions, written statements, rejoinders, replications. Vakalatnamas, affidavits, papers and documents as may be necessary, in the name of and on behalf of the Company and generally to do all acts, deeds or things as may be necessary or proper for the purpose mentioned above. A notarised true copy of the letter of authority dated 21/04/2010 given to said Manuel Paully DSouza by the defendant no. 2 and accepted by him has also been produced. Still, if any irregularity is there, then the same can be rectified. Hence, it would not be proper to say that the appeals are not maintainable for want of resolution ofshould be kept in mind that the power to reject the plaint should be exercised in exceptional circumstances and the Court cannot take into account any material beyond the plaint. In the case of T. Arivandandam V/s T. V. Satyapal and Anr., reported in (1997) 4 SCC 467, the Apex Court has held that if on a meaningful, not formal, reading of the plaint it is manifestly vexatious and merit less, in the sense of not disclosing a clear right to sue, the Court should exercise its power under Order VII Rule 11 of the Code taking care to see that the ground mentioned therein isthe present case, the defendants have pleaded that the cause of action for the counter claim is covered by Section 10 of the Limitation Act and, therefore, the reliefs are not barred by time.The Judgment in the case of Bangalore Turf Club Limited (supra), in our view is not applicable to the present cases, since there is no question of any definition of any words involved here. The interpretation of the expression director of Company is involved here. Considering the above judgments, more particularly, the Judgment in the case of Wali Mohammed (dead) by LRs (supra) and in the case of V. Narsimha Aiyangar, official (supra), we are of the view that the trial Court will have to determine whether the defendants were constructive trustees. It is not possible to say at this stage that the defendant no. 1 does not have an arguable case at all. In paragraph 22 of the counter claim, the defendant no. 1 has specifically pleaded that the plaintiff in law holds the suit property in trust for the defendant no. 1 and has prayed for declaration that the suit property is held in trust by the plaintiff on behalf of the defendant no. 1. The defendant no. 1 has also specifically pleaded in the counter claims that the cause of action for the suit is covered by the provisions of Section 10 of the Limitation Act and the reliefs, therefore, are not barred by limitation. The defendant no. 1 in the counter claims has pleaded for a direction that the plaintiff holds the suit property, more particularly described in schedule, in trust for the defendant no. 1 and it has prayed for a direction to the plaintiff to execute a conveyance in respect of the suit property in favour of the defendant no. 1 and to do all acts, deeds and things that may be necessary to perfect the defendant no. 1s title in respect of the suit property. The Court cannot take into account any material beyond the counter claims. In view of the above, the counter claims, at this stage, do not appear to be barred by any law from the statements made therein. The learned trial Court held that Section 10 of the Limitation Act is not applicable to the case. The trial Court ought to have directed the plaintiff to file written statement to the counter claims and to take all the objections and ought to have framed the issues and if necessary could have directed that the question of limitation ought to be decided as a preliminary issue. In our view, the learned trial Court has committed error in rejecting the counter claims, at this stage only.24. we are, therefore, of the considered view that the impugned order of rejection of the counter claims is not sustainable and, therefore, deserves to be dismissed. The point of application of Section 10 of the Limitation Act and the point whether the counter claims are barred by limitation, ought to be decided after framing of the issues and leading evidence on the said points.