The law of limitation is embodied in a statute which is based on the principles of repose or peace, as held by Supreme Court in Pundlik Jalam Patil v Executive Engineer, Jalgoan Medium Project[1]:
“An unlimited and perpetual threat of limitation creates insecurity and uncertainty; some kind of limitation is essential for public order…”
The applicability of the provisions of the Limitation Act cannot be extended by analogy or implication. The right to claim in perpetuity is embodied in a specific situation which is referred to in Section 10 and the ambit of the provision cannot be extended as a matter of implication.
Before 1929, Section 10 was cast in the following terms:
“10. Suits against trustees and their representatives.
-Notwithstanding anything contained in the foregoing provisions of this Act, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof or for an account of such property or proceeds, shall be barred by any length of time.”
Section 10 was amended by the introduction of an explanation by the Indian Limitation (Amendment) Act 1929 (1 of 1929).
As amended, the provision came to read as follows:
“10. Suits against express trustees and their representatives.
– Notwithstanding anything hereinbefore contained, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof or for an account of such property or proceeds, shall be barred by any length of time.
Explanation: For the purposes of this section any property comprised in Hindu, Mohammedan, Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose, and the manager of any such property shall be deemed to be the trustee thereof.”
The background of the amendment is understood by considering the decision of the Privy Council in Vidya Varuthi Thirtha v Balusami Ayyar[2]. Dealing with the alienation of property, the decision had wider implications which led to the statutory changes which were brought in 1929. The Privy Council held:
“From the above review of the general law relating to Hindu and Mahommedan pious institutions it would prima facie follow that an alienation by a manager or superior by whatever name called cannot be treated as the act of a ‘trustee’ to whom property has been ‘conveyed in trust’ and who by virtue thereof has the capacity vested in him which is possessed by a ‘trustee’ in the English law.
Of course, a Hindu or a Mahommedan may ‘convey in trust’ a specific property to a particular individual for a specific and definite purpose, and place himself expressly under the English law when the person to whom the legal ownership is transferred would become a trustee in the specific sense of the term.”
Alienation by a manager was held not to constitute an act of a trustee to whom property had been conveyed in trust in the same sense in which the expression was used in English law. As a result of the amendment of 1929, a deeming fiction was introduced consequent upon which property comprised in a Hindu, Mohammedan or Buddhist religious or charitable endowments was deemed to be property vested in trust for a specific purpose.
Section 10 applies to suits filed against:
(i) A person in whom property has become vested in trust for a specific purpose; and
(ii) Legal representatives and assigns of such a trustee.
However, it does not cover assigns of such a trustee for valuable consideration. The suit can be filed for the purpose of:
(i) Following in the hands of the trustee such property;
(ii) Following in the hands of the trustee the proceeds of such property; and
(iii) For an account of such property or proceeds.
Significant in the opening words of Section 10 is the absence of the words ‘by or against’. The Section, in other words, does not apply to suits by a trustee against third parties. (See also in this context, the decision of a Division Bench of the Madras High Court in Palaniandi Gramani Manickammal v V Murugappa Gramani[3]).
[1] (2008) 17 SCC 448
[2] AIR 1922 PC 123
[3] AIR 1935 Mad 483