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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/-