Holding

The plaintiff is entitled to a 2/19th share in the joint family property, the valuation date is the date of the final decree, non‑availability of securities does not defeat that share, and parties in possession must account for income from 11 July 1940 to the final decree.

Summary

The Supreme Court considered a long‑running partition suit concerning the movable and immovable assets of the Setty family, whose joint family status was severed on 11 July 1940. The plaintiff was entitled to a 2/19th share in the joint family property, but the trial court had allotted only movable assets to him and immovable assets to the defendants, prompting appeals. The Court clarified that the phrase “present possession shall be respected as far as possible” does not preclude allocating immovable property to a co‑sharer who is out of possession, provided equalisation of value is achieved. It held that the appropriate date for valuing the parties’ shares is the date of the final decree, not the date of the suit or severance. Non‑availability of shares, bonds and securities does not deprive the plaintiff of his share if valuation shows entitlement, and parties in possession must account for rents, income, profits and dividends from 11 July 1940 until the final decree. Accordingly, the defendants’ appeal was dismissed and the trial court was directed to complete the final decree within six months.

Issues considered

Whether the plaintiff is entitled to a 2/19th share in the joint family property.
The appropriate date for valuation of the assets to determine the plaintiff’s share.
The effect of the non‑availability of shares, bonds and securities on the plaintiff’s entitlement.
Whether parties in possession of joint family property are liable to give account of rents, income, profits and dividends, and the period for such accounting.
The interpretation of the direction that ‘present possession shall be respected as far as possible’ in partition proceedings.

Legislation cited

Code of Civil Procedure, 1908s. Order 20 Rule 18, s. Order 26 Rule 13, s. Order 26 Rule 14
Indian Trust Act, 1882s. Section 90

Subjects

partitionjoint family propertyvaluationshare entitlementaccounting of incomeCode of Civil Procedureseverance of joint familyconstructive trusttenancy in common

Judgment

'
A M.L. SUBBARA YA SETTY (DEAD) BY LRS. AND ORS.
v.
•
M.L. NAGAPPA SETTY (DEAD) BY LRS. AND ORS.
--.--
APRIL 23, 2002

B [U.C. BANERJEE AND Y.K. SABHARWAL, JJ.]

Partition-Joint family property-Movable and immovable property-
Joint status severed in 1940-Suit for partition in 1948-Preliminary decree
C ascertaining plaintiff's share as 2/19th-Direction that present possession of
the parties shall be respected as far as possible-In proceedings for final
decree movable property allotted to plaintiffs and immovable property to
defendants-Appeal by ho.th parties-f>laintiff's appeal allowed and
defendant's appeal dismissed by High Court-On appeal-Held, plaintiff

D
entitled to 2/19th share ofjointfamily property including immovable property-
The non-availability of shares and bonds etc. by itself will not deprive the
plaintiff of his share if on valuation he is otherwise entitled thereto-The date
-
of determinatic 1 of their valuation would be date offinal decree-Parties in
possession ofjoint family properties liable to give account for rents, income,
profits and dividends in respect ofjoint family properties since the severance
E ofjoint family, Status-Code of Civil Procedure, 1908-0rder 20, Rule 18,
Order 26, Rules 13 and 14.

The Joint family property in question consisted of movable and
immovable property. The joint family status was severed on 11.7.1940
whereafter members of the joint family became tenants in common. Shares,
F bonds and other securities were in possession of respondents-plaintiffs.

Respondents-plaintiffs filed partition suit in 1948 the preliminary decree
that was finally passed by the court it was held holding that plaintiffs were
entitled to 2/19th share and they shall be put in separate possession of
properties coming to their share on partition by metes and bounds; and that
G the parties in possession of the joint family properties were liable to give
account for the rents, income, profits and dividends received after 11.7.1940
till the date of final partition. The court further directed that "present
possession of the party shall be respected as far as possible".

In the proceedings taken up before Trial Court for passing of the final
H 326
M.L. SUBBARA YA SETTY v. M.L. NAGAPPA SETTY 327
_.,,. decree, the Court in purported compliance of the directions in the preliminary A
decree and in view of the fact that respondents plaintiffs were in possession
of assets ofa value of more than 2/19th share on 11.7.1940, allotted movable
property to respondents-plaintiffs and immovable properties to appellant-
defendants. Respondents-plaintiffs were directed to deliver the excess of their
share to defendants and defendants-appellants were directed to pay plaintiffs
2/19th share out of the income derived from the properties of the joint family
B
from 11.7.1940.
<'

~ Plaintiffs-respondents challenged the order of the trial court in appeal
• before the High Court on the ground that it denied to them any share in the
immovable property and the Appellants-defendants challenged the order to
the extent it directed that out of income derived from the properties of joint
c
family from 11.7.1940, the respondents-plaintiffs should be paid 2/19th share
of the income. The appeal of the plaintiffs and that of the appellant-defendants
were dismissed by High Court

Most of the shares, bonds and securities which were in possession of
D
the family were not available at the time of the present appeal. In appeal to
this Court the questions for consideration were:
~
~
I. Whether the plaintiff was entitled to 2/19th share in the joint family
properties? If yes, the relevant date for determining the value of the assets
so as to ascertain the separate 2/19th share of the plaintiff. E
2. The effect of non-availability of shares, bonds and securities.

3. Whether parties in possession of joint family properties were liable
to give account for rents, income, profits and dividends in respect of joint
family properties to the others and if so the period thereof?
-( F
" Dismissing the appeals, the Court

HELD : I.I. The plaintiff is entitled 2/19th share in joint family
properties. It cannot be said that the plaintiff is not entitled to a share in the
joint family immovable property. Observation of the High Court that the
plaintiff is entitled to share in each of the joint family property does not mean
G
the actual partition of all such properties by metes and bounds. The direction
that the present possession of the parties shall be respected as far as possible
... ~
also does not mean that if the plaintiff is not in possession of any immovable
property and the same are in possession of the defendants, he could not be
allotted the immovable property even though he is so entitled as per his share. H
328 SUPREME COURT REPORTS (2002] 3 S.C.R.

A If that was so, the words "as far as possible" in the said direction would
become redundant. When the Court directs that the present possession of the
parties shall be respected, it means that if partition of the property is to be
affected, then as far as possible the person in possession should be allowed to
retain it by equalisation of share but it does not mean that a person out of
B possession of all immovable properties should not be allotted any part of the
immovable property whatsoever. [344-B; 343-F, G, H; 344-A]

2.1. The date of valuation of shares is date of the final decree. In the
present case, suit was filed in the year 1948, preliminary decree proceedings
were finalised in 1971 by decision of this Court. Thereafter more than 30 years
C have lapsed, the parties are still no way near the final partition. It would be
absurd if it was to be held that the valuation of 1940 or 1948 should be taken.
[344-B; 340-D-E]

2.2. It would not be impracticable to value the assets as on the date of
the final decree as there would be time gap between the report of the
D Commissioner submitted pursuant to the directions in the preliminary decree
and passing of the final decree. Ordinarily, though it is the date of the final
decree but in reality the date of valuation which the Commissioner takes into
view in the report, that is taken into consideration by the Court. But that
would again depend on the facts of each case. In a given case, there may be
E gap of years between the date of the report of the Commissioner and the date
of the final partition. In the meanwhile, there may have been a sharp increase
or decrease in the value of the property or properties. In such event, the Court
may have to balance the equities and pass other directions in order to partitiOn
the properties between the parties as per their respective shares. The
preliminary decree declares the shares of the parties and the properties which
F are joint and are required to be divided between the co-sharers. Regarding r ._
valuation, reference may also be made to Order 20 Rule 18 and Order 26
Rule 13 and 14 of the Code of Civil Procedure, 1908. [341-E, F, G, HJ

2.3. The value of the property is to be ascertained as on the date of the
partition and then alone the question as to whether the value of the shares
G said to have been dissipated by the plaintiff was more than the value of the
share in the hands of the defendants to which he may be entitled or not, would
arise. [343-D]
'.....( ...
Khatoon Bibi v. Abdul Wahab Sahib and Ors., AIR (1939) Mad, 306,
referred to.
H
M.L. SUBBARA YA SETTYv. M.L. NAGAPPA SETTY 329
3.1. The effect of non-availability of shares, bonds and securities by itself A
is not to deprive the plaintiff of his 2/19th share if on valuation he is otherwise
entitled thereto. [340-G, HJ

3.2. It cannot be said that the status of the plaintiff was that of a trustee
and on that ground, the allotment of shares to him in terms of the judgment
of that trial court was justified. [339-CJ B
"f John Kennedy v. Mary Annettee Dr. Trafford and Ors., (1897) AC 180,
.. referred to.

3.3. If the plaintiff has dissipated the shares, then he is required to C
account for it. The value of those shares said to have been dissipated may
have to be worked out. )340-G]

4.1. Parties in possession of joint family properties are liable to give
accounts for the rents, income, profits and dividends in respect of the joint
family property to others from the 11th July, 1940 up to passing of the final D
decree. The effect of the plaintiff holding excess of2/19th share would be that
the plaintiff would be accountable for the value of those shares as on the date
of the final decree. [337-F; 341-E]

4.2. On mere severance of status of joint family, the character of any
joint family property does not change with such severance. It retains the E
character of joint family property till partition. [341-C]

Bhagwant P. Sulakhe v. Digambar Gopa/ Sulakhe and Ors., AIR [1976) •
SC 79, relied on.
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2892 of
2002.

From the Judgment and Order dated 3.4.2000 of the Kamataka High
Court in R.F.A. No. 518 of 1999.
G
Shanti Bhushan, Rama Jois, P. Krishnamurthy, Amit Dhingra, Gopal
Jaoin, Mrs,. Yugandhar Jha, Sanjay Pathak P.H. Parekh, P.R. Ramasesh,
K.G. Raghavan, Shiraz Contractor Patodia, Dhanyam Chinnappa, Anirudh,
Ms. Priyanjali Yadav, for the appearing parties.
The Judgment of the Court was delivered by H
I
330 SUPREME COURT REPORTS [2002] 3 S.C.R.

A Y.K. SABHARWAL, J. Leave granted.

Applications for substitution allowed.

The dispute in these appeals relates to the partition of the estate of the
family of one Lachiah Setty - one of the wealthiest families in the erstwhile
B Mysore State. The family had extensive business in Coffee and other
commodities. The family possessed considerable movable and immovable
properties including Coffee estates. Lachiah Setty died in the year 1936.
Despite the desire expressed by him that even after his death, his children
should live in harmony, united and without any difference as he felt that the
vast properties had been acquired on account of the family remaining united,
C the disputes started between brothers within about two years of his death, i.e.,
in 1938.

The disputes were referred to three arbitrators for division of the family
properties. The arbitrators entered upon reference on l~t April, 1940. The
D arbitration proceedings were, however, not very smooth. Differences arose
with regard to the management of the family properties business. The elder
brother Nagappa Setty was disinclined to remain in the family house aloog ~
with other brothers. He was on one side and other brothers and mother on the )o.

other.

E On I Ith July, 1940, the arbitrators made a special provision, in
agreement with the parties, with regard to the business. Securities of the
value of Rs. 1,49,833 were found in the hands of Nagappa Setty and of the
value about Rs. 1,45,616 in the hands of his other brothers. The stock-in-
trade was valued at Rs. 1,32,495. There was no partition as such of the
securities and stock-in-trade, but, on an ad hoc basis, the arbitrators directed
F that Nagappa Setty should retain with him securities of the value of
Rs. 55,337 and hand over the rest to other brothers. The other brothers, on
the other hand, were directed to make over to Nagappa Setty stock-in-trade,
worth Rs. 24,840. The parties, however, failed to carry out those directions
although, in the first instance, they had agreed to the arrangement. During
G arbitration proceedings, one of the arbitrator died. The other co-arbitrators
were requested to continue with the arbitration, but they could not make
much progress. Allegations were made about the partiality against one or the
other of the arbitrator and since the arbitration was not completed by certain
date, all attempts at arbitration aborted.

H In the year 1948, Nagappa Setty filed against his brothers and mother
M.L. SUBBARA YA SETTY'· M.L. NAGAPPA SETTY [Y.K. SABHARWAL, J.] 33 J

a suit for partition of his share and the income of the joint family properties. A
He claimed in that suit I /4th share on the basis of will of Lachiah Setty. The
will was challenged by other brothers being inoperative either as a valid will
or a valid family arrangement. According to them, the properties were ancestral
joint family properties which Lachiah Setty was incapable of disposing of by
will. There was no occasion also for execution of a family arrangement and, B
hence, it was pleaded that will could not be regarded as a family arrangement.

Jn the aforesaid suit, it was held that the suit properties were the
.. ancestral joint family properties which could not be disposed of by Lachiah
Setty by will and that there was no family arrangement and even if it were
to be deemed to be a family arrangement, it was void. The High Court C
disagreeing with the District Court on the question of Nagappa Setty share
being I/19th held that he was entitled to 2/l 9th share in the properties and
not I/19th share as held by the Trial court. Nagappa Setty 1ied on 20th
February, 1949. His heirs and legal representatives have been prosecuting the
suits and the appeals. The members of the branch of Nagappa Setty are
respondents in these appeals. Defendants to the suit filed in 1948 are also D
represented by their heirs and legal representatives on account of deaths from
J.. time to time. They are appellants in these appeals.

The suit was decided in the year 1956. The appeals therefrom were
decided by the High Court on 9th July, 1962 and finally by this Court on
20th September, 1971 holding the findings of the High Court to be quite E
unexceptional and dismissing the appeals preferred by Nagappa Setty branch.
The judgment is rep9rted in MN. Aryamurthy and Anr. v. MD. Subbaraya
Setty (dead) through LR. and Ors., [1972] 4 SCC I.

It was represented to this Court that the wording of the decree as passed
F
by the High Court is likely to be misinterpreted and misconstrued at the time
of execution, and, hence the same should be properly clarified. Therefore,
this Court substituted for the decree ·passed by the High Court, a decree as
under :

"(!) It is declared that the original plaintiff Nagappa (now his heirs G
brought on record) was entitled to a 2119th share in the joint family
properties and liable for a similar share in the joint family liabilities.

(2) The joint family properties, as mentioned in the suit, shall comprise
all the movable and immovable properties including stocks, shares
and valuable securities in the possession and control of th~ plaintiff H
332 SUPREME COURT REPORTS [2002] 3 S.C.R.

A and defendants I to 9 as, on July 11, 1940. The family liabilities as
on that date shall be ascertained with a view to determine the net
assets. The plaintiff shall have 2/l 9th share in the same.

(3) The parties are liable to account for the rents, income, profits and
dividends received by them after July l l, 1940 till the date of final
B partition in respect of the joint family properties in their respective
possession on and after July 11, 1~40. If, on taking accounts, the
plaintiffs are found to have received less for their 2/l 9th share in
such rents, income, profits and dividends, the deficiency shall be
made good by the defendants.

c It is, however, clarified that the parties are not accountable for the
profits or acquisitions made in the course of the separate business or
business carried on by the parties after July 11, 1940. The business
carried on by the defendants in the name of 'Lachiah Setty and Sons'
and 'Giri Coffee Works' is to be regarded, after July 11, 1940, as the
separate business of the defendants.
D
(4) The plaintiffs shall be put in separate possession of the properties
coming to their share on partition by metes and booods. The partition
shall be effected by a commissioner appointed by the Court in respect
of all properties not required under the law to be partitioned by the
Deputy Commissioner. In respect of properties, partition of which is
E
required under the law to be effected by the Deputy Commissioner,
the partition shall be effected by the Deputy Commissioner or his
Subordinate Gazetted Officer. The present possession of the parties
shall be respected as far as possible.

F (5) The order of costs made by the High Court is confirmed and the
appellants shall pay the costs of the respondents in these appeals."

(Emphasis supplied by us)

The aforesaid judgment brought to an end the controversy regarding
G the share of the original plaintiff in the joint family properties. There is no
dispute now that the share of original plaintiff in the joint family properties
is 2/l 9th. There is also no dispute as to which are the joint family properties.
Despite this as also the aforesaid directions which were issued with a view .....( -
to obviate misinterpretation and misconstruction of the decree as passed by
the High Court, the litigation has continued for more than three decades after
H the aforenoticed reported decision between the parties. Litigation in courts is
M.L. SUBBARA YA SETTY v. M.L. NAGAPPA SETTY [Y.K. SABHARWAL, J.] 333
already more than half a century old. Commenced in the yea~ 1948, the end A
does not appear to be near as yet. One of the controversy now is the
construction and interpretation of the aforesaid underlined words 'The present
possession of the parties shall be respected as far as possible' in the decree
substituted by this Court.

In the proceedings that were taken up before the Trial court for passing B
of the final decree, after conclusion of preliminary decree proceedings on
passing of decree as aforenoticed, the Trial court framed 10 issues. One of
the issue relevant for our purpose is Issue No.6 which reads as under :

"If the Plaintiffs were found to have been in possession of the assets C
of the value of more than 2/19th share as on 11.7 .1940, are they not
entitled to the other reliefs of partition and accounting as alleged by
the Defendants."

The findings on issue No.6 are as under :
D
"The plaintiffs were in possession of assets of a value of more than
2/19th share as on 11.7.1940 and they are entitled to other reliefs of
partition and accounting."

The aforesaid findings are recorded in the order dated 3rd October,
1979 passed by the Trial court. The Trial court directed in view of the E
findings on issues 1 to 6 and also in view of the directions given by this
Court in Special Leave Petition (C) No. 3554178 (Civil Appeal No. 1198179),
it will determine the remaining issues and further proceed with the final
decree proceedings. The order passed in CA No. 1198179 reads as under:

"S.L.P. granted. F

The judgment of the High Court is suspended so far as the direction
relating to the Deputy Commissioners of Hassan and Chickmagalur
is concerned. The Deputy Commissioners will proceed to divide the
revenue paying lands in the suit and separate the 2/l 9th share of the G
Petitioner. There will be stay of delivery of possession. The parties
agree that the trial court will proceed with the final decree proceedings
to enable them ta effect a final decree in terms of the direction of this
Court. The parties agree and as direct that the Civil Court will proceed
as far as possible from day to day to work out the particulars as to
the assets of the family properties as directed by the Court to enable H
334 SUPREME COURT REPORTS [2002] 3 S.C.R.

A the Civil Court to pass a final decree. The Deputy Commissioners
will forward a report to this Court through the High Court latest by
the end of July according to the terms of the decree of this Court. The
Civil Court shall also send a report through the High Court with
regard to the progress of the proceedings before it by the end of July,
1979."
B
Before the matter was finally decided by the Trial court on 15th July,
1999, on various occasions, one or the other party approached the High Court
or this Court challenging one or the other order. The trial court by order
dated 15th July 1999 decided the remaining issue Nos. 7 to IO directing that
C the properties in possession of plaintiff can be conveniently allotted to the
plaintiff and the properties held by the plaintiff in excess of their share can
be ordered to be delivered to the defendants by the plaintiffs. It held that
since plaintiffs were in possession of the property of Rs. I ,92,496 as on I I th
July, I 940 as against the properties of their share valued at Rs. I ,68,390, the
plaintiffs being in possession of property in excess of the value of Rs. 24,085,
D he should hand over bond and securities worth that amount to the defendants.
The trial court held that this Court had observed that the present possession
of the parties shall be respected as far as possible and under these circumstances
the properties that are in possession of the plaintiff shall remain with them
and those in possession of defendants shall be retained by them. The value
E taken was as on I I th July, I 940. Since plaintiff was held to be in possession
of the property of more value than his share, as aforesaid, he was directed to
hand over to the defendants the property of the excess share. The effect of
the aforesaid direction of the trial court was that the Coffee estates in possession
of the defendants were allowed to be retained by them on partition representing
their share of I 7/19th. Regarding the accounting, it was directed that the
F parties should appear before a Chartered Accountant who was appointed as
a Commissioner and they shall submit the details of income derived from the
properties of the joint family in their possession from I I th July, I 940 till the
date of the judgment i.e., 15th July, 1999. The Commissioner was directed
to submit the report, determining the 2/l 9th share out of the said income
which should be allotted to the share of the plaintiff. The Commissioner was
G further directed to state as to what exact amount the plaintiff will be entitled
to receive on account of the said profits income after deducting the profits
and income that is received from the property in his possession. The order
of the Trial court also records that "The orders passed by my learned
predecessor on I.A. 2 on 3. I 0.1979 which has not been challenged by any of
H the parties so far, be read as part and parcel o'r this order".
•,

M.L. SUBBARAYA SETTY v. M.L. NAGAPPA SETTY [YK. SABHARWAL, I.] 335

Both the parties challenged the order of the trial court dated 15th July, A
1999 by preferring first appeals before the High Court. The plaintiffs
challenged the order since it denied to them any share in the coffee estate on
the ground that value of property with them as on 11th July, 1940 was more
than 2/19th of their share, The defendants challenged the order to the extent
it directed that out of the income derived from the properties of joint family B
from I Ith July, 1940, the plaintiff should be paid 2/19th share from the said
income. By the impugned judgment both the appeals have been decided, the
appeal of the. plaintiff has been allowed whereas that of the defendants has
• been dismissed. The defendants are in appeal before us,

Few admitted/established facts be first noticed as under :
c
l, The share of the plaintiff in joint family properties is 2/l 9th.
2 The joint family properties shall comprise all the movable and

- immovable properties, as mentioned in the suit, including stocks,
shares and valuable securities in possession of the parties on 1 lth
July, 1940. D
3 The liability of the parties to account for the rents, income, profits
and dividends received by them would be from I Ith July, 1940
till the date of fmal partition in respect of joint family properties
in their respective possession on and after 11th July, 1940.
E
4 On 11th July, 1940, the value of shares and bonds and other
securities in possession of the plaintiff was more than 2/19th
share in the joint movable and immovable properties.
5. Most of the share, bonds and securities which were in possession
of the family are not now available. The original plaintiffNagappa F
Setty had made a statement on 31st December, 1940 before the
arbitrators that shares, bonds and other securities which were in
his possession may be allotted to his share according to the
valuation arrived at by both the parties on 10th July, 1940,

Having noticed the facts as aforesaid, the questions to be determined in G
these appeals are :

I. Is the plaintiff entitled to 2/i 9th share in the joint family properties?
2. If the answer to the aforesaid question be in affirmative, what is
the relevant date for determining the valuation of the assets so as
to ascertain and separate 2/19th share of the plaintiff? H
I

336 SUPREME COURT REPORTS [2002] 3 S.C.R.

A 3. What is the effect of the non-availability of most of the shares,
bonds and securities which were in possession of the plaintiff in
the year 1940?
4. Are the parties in possession of joint family properties liable to
give account for the rents, income, profits, and dividends in respect
B of the joint family properties to the others and, if so, the period
thereof?

The aforesaid questions are to be decided while bearing in mind that
the parties are bound and governed by the earlier decision of this Court inter 't'
,.
se parties as referred to above while finally deciding the partition suit up to
c the stage of the preliminary decree as substituted by this Court. The present
litigation arises out of the final decree proceedings. The parties in these
proceedings are governed and bound by the terms of the preliminary decree.
The matters decided up to that stage cannot be reopened and readjudicated.

In view of the eariier decision, it stands settled that there was severance
D of joint status from 11th July, 1940 and the members of the joint family
became tenants in common of the family property from I Ith July, 1940. The
-..
~

parties were not liable to give account to each other for the profits earned by ..\_
them respectively in their own business or for the acquisitions made by them
"""
in that business. Property acquired by a member of the joint family after
•l
severance of the joint status had to be treated as his individual property and
E
the said property could not be regarded as one acquired for' the family.

Regarding joint family properties, it has been directed that where rents
and profits are received by members from joint family property in his
possession, he would be liable to account for such rents and profits received
F by him. Regarding acquisition of property after severance of joint status, it
was directed that if a member acquired some property with the funds in his
possession, the other members could claim no share in that property. It is
clear that the liability to account to each other for the income derived from
the joint family would continue. The parties are liable to account for the
family assets in their possession is apparent from para 20 of the earlier
G decision reported in M.N. Aryamurthy's case which reads as under :

"That being the position, the question arises whether the defendants
would, in law, be liable to account to the plaintiff for the profits
earned by the defendants in their own business or for the acquisitions
made by them in that business. We agree with the High Court that
H
M.L. SUBBARA YA SETTY v. M.L. NAGAPPA SETTY [Y.K. SABHARWAL, J .] 33 7

they were not so liable. On a partition by severance of the joint A
status, the members of the family become tenants-in-common of the
family property. If one of the members remains in possession of the
entire properties of the family, there is no presumption that the
property, which as acquired by him after severance of the status,
must be regarded as acquired for the family. See Gu/abrao Fakirrao B
v. Baburao Fakirrao and Anr., AIR (1960) Born. 159. Where rents
and profits are received by the member in possession, he would be
liable to account for the rents and profits received by him. But the
funds in the hands of that member do not become impressed with any
trust in favour of the other members. See John Kennedy v. Mary
Annette De Trafford and Ors., (1897) AC 180. Therefore, if such a C
member acquired some property with the funds in his possession, the
other members could claim no share in that property. Hence we agree
with the High Court that the business carried on by the defendants on
and after July 11, 1940 should be considered as the exclusive business
of the defendants, and the plaintiffs would have no right to claim any
-;,are in the profits or the acquisitions made out of that business. D
What is true about this business carried on by the defendants is also
true of the business carried on by the plaintiff. The defendants have
not claimed and cannot claim any share in the business run by plaintiff
after July 11, 1940 or in the profits and acquisitions made by him in
that business. This finding, however, is not to be understood to mean E
that the securities and stock-in-trade already referred to are not to be
taken into account as family assets for the purpose of partition, nor
can the parties decline the liability to account to each other for the
income derived by them from the family assets in their possession."

In view of the above, the trial court has rightly decided that the parties F
are liable to give account to others in respect of profits earned from the joint
properties in their possession. Accordingly, the High Court correctly dismissed
the appeal of the appellants/defendants. There is, thus, no merit in the
submission of Mr. Shanti Bhushan, learned counsel for the appellants, that
the defendants are not liable to account for the rents, income, profits and
dividends received by them after 11th July, 1940 till the date of the final G
partition in respect of the joint family properties in their respective possession.
This is also clear from direction No. 1 in para 21 of the earlier judgment
reproduced above.

Learned counsel for the appellants also submitted that the status of the H
338 SUPREME COURT REPORTS [2002] 3 S.C.R.

A plaintiff was that of a trustee and, thus, the principle of trust would be Y--
applicable. The contention is that the plaintiff as a trustee had been given
custody and possession of the valuable securities, on behalf of the members
of the family and as a trustee, he had no right to deal with those assets
treating them as his own and misappropriating the share of the other members
of the family in those assets and such a situation is governed by Section 90
B of the Indian Trust Act. Relying upon the factum of non-availability of most
of the shares, bonds and securities which were with the plaintiff, it is contended
that the plaintiff committed a breach of trust by disposing of those valuable
assets and appropriating the entire sale proceeds to himself. In support reliance
has been placed on Section 90 of the Trust Act and a passage from Hanbury
C and Maudsl_ey on Modem Equity, 13th Edition (1989) in Chapter XII dealing
with "Constructive Trusts" which read as under :

"90. Where a tenant for life, co-owner, mortgagee or other qualified

D
owner of any property, by availing himself of his position as such
gains an advantage in derogation of the rights of the other persons
interested in the property, or where any such owner, as representing
all persons interested in such property, gains any advantage, he must
-
hold, for the benefit of all persons so interested, the advantage so
gained ....
(H) Constructive Trusts ofa New Model: Justice and Good Conscience.
E Some modem developments indicate a wide extension of the operation
of constructive trusts by the introduction of what Lord Denning M.R.
has called 'a constructive trust of a new model'. The broad principle
is that a constructive trust may be imposed, regardless of established
legal rules in order to reach the result required by equity, justice and
good conscience. The principle was thus articulated in Hussery v.
F
Palmer. It is a trust imposed by law whenever justice and good
conscience require it. It is a liberal process, founded on large prin°ciples
of equity ...... It is an equitable remedy by which the Court can enable
an aggrieved party to obtain restitution".

G The submission of Mr. Shanti Bhushan is that the disposal of the joint
properties in possession of the plaintiff as a trustee and appropriation of the
sale proceeds shall be regarded as final acceptance by him of the allotment
of those properties for which he himself had made a prayer in the arbitration ~ _.
proceedings and, therefore, he had no right to claim any share in the remaining
properties. On this basis, the allotment of the shares and securities to the
H plaintiff by judgment of the trial court dated 15th July, 1999 was sought to
M.L. SUBBARAYA SETTYv. M.L. NAGAPPA SETTY [Y.K. SABHARWAL, J.] 339
- .... be supported. A
More than a century ago, House of Lords in John Kennedy v. Mary
Annette De Trafford and Ors., (1897) AC 180 held that there is no fiduciary
relation between tenants-in-common. A tenant-in-common by leaving the
management of the property in the hands of his co-tenant cannot impose
upon him an obligation of a fiduciary character. This judgment has been cited B
with approval in the earlier decision inter se parties. The contention of being
a trustee was rejected. It is a different matter that at that stage, the contention
of a co-ten~t being trustee was urged on behalf of the plaintiff to claim a
• share in the properties acquired by the members of joint family with the
funds in their possession after severance of the joint family status. We are, C
therefore, unable to accept the contention that the status of the plaintiff was
that of a trustee and on that ground, the allotment of shares to him in tenns
of the judgment of the trial court dated 15th July, 1999 was justified.

- The trial court for allotting the Coffee estate and other immovable
properties only to the defendants relied upon the underlined sentence in D
direction No.4 of the earlier decision. The direction has been misconstrued
and misinterpreted by the trial court. It is true, as contended by Mr. Shanti
Bhushan, that the direction that the plaintiff is entitled to 2/19th share in the
joint family property and that he shall be put in separate possession of the
properties giving him share by metes and bounds does not mean that every
item of the property is to be divided between co-sharers. It is correct that the E
only requirement is that property allotted to each co-sharer should bear
approximately the same value as corresponds to his share. It may also not be
necessary that if the properties consist of movable and immovable properties
then each party must necessarily be given a share in all movable and
immovable properties. While effecting partition of joint family properties, it F
may not be possible to divide every property by metes and bounds. The
allocation of properties of unequal value may come to the share of a member
of a joint family at the time of effecting partition but for that necessary
adjustments have to be made. It can also happen that some of the co-sharer
on partition may not get any share in immovable property. No hard and fast
rule can be laid. It depends upon the facts of each case. It depends upon the G
nature of the immovable property and number of such properties as also the
number of members to whom it is required to be divided. Properties of a
larger value may go to one member. Property of lesser value may go to
another. What is necessary, however, is the adjustment of the value by
providing for payment by one who gets property of higher value. In short, H
340 SUPREME COURT REPORTS (2002] 3 S.C.R.

A there has to be equalization of shares. But that is not what has been done by
the trial court in the present case. The trial court going by the valuation of
July, 1940 has allotted shares and bonds to the plaintiff and immovable
property to the defendants and for this partition support was also sought to

B
be drawn from the aforequoted sentence from direction No.4. That was
·certainly not the intention. It was a case of a total misinterpretation and
--
misconstruction of the decree passed by this Court which has been set right
by the High Court in judgment under appeal. It was not the direction of this
Court that in each and every survey number of the Coffee estate, the plaintiff
should be given 2/19th share by metes and bounds. We do not tl!ink that the
impugned judgment of the High Court also directs that.
c
Another question to be determined is as to the date of valuation of the
properties in a suit for partition. Ordinarily, it has to be the date of the
passing of the final decree and not the date of filing of the suit for partition.

D
In a given case, however, there may be exception of this general rule. It is
a matter of common knowledge that such suits for partition take considerable
time for disposal. There is a big time lag between date of filing of the suit
...
and date of the decision thereof. There is also considerable lapse of time
between passing of preliminary decree and passing of final decree. Take the
present case, suit was filed in the year 1948, preliminary decree proceedings
were finalized in 1971 by decision of this Court. Thereafter more than 30
E years have lapsed, the parties are still no way near the final partition. It would
be absurd if it was to be held that the valuation of 1940 or 1948 should be
taken. It is also possible that in a given case, the value of one property may
appreciate drastically while not so in the case of other properties or it may
even decline and some of the parties may be in possession of those properties.
It has been the endeavour of the Courts in such suits to protect, preserve and
F respect the possession of the parties as far as possible. While so protecting,
there has to be equalization of shares which has been recognized in law "by
making a provision for payment of Owelty".

Reverting to the present case, regarding the shares etc. in possession of
G the plaintiff, it already stands settled between the parties that it was an ad hoc
arrangement. If the plaintiff has dissipated those shares, then he is required
to account for it. The value of those s~ares said to have been dissipated may
have to be worked out. It is not possible, at this stage, to hold that such
valuation is not practicable. Assuming the plaintiff has dissipated those shares
that cannot result in denial of 2/19th shares to him in the joint family properties
H in terms of the decree finally passed by this Court as referred to herein before.
M.L. SUBBARA YA SETTY v. M.L. NAGAPPA SETTY [Y.K. SABHARWAL, J.] 34 J

If that had been so, it would have resulted in dismissal of plaintiff's suit for A
partition instead of passing of partition decree as substituted by this Court.
The question of sending the case for effecting partition of Coffee estate being
revenue paying land to the Deputy Commissioner would arise after the Court
has come to the conclusion on the basis of principles laid in this judgment
that the plaintiff is entitled to a share in the said estate which may in turn B
depend upon the valuation of the shares, bonds and securities which are said
to have been dissipated by the plaintiff. We are expressing no opinion upon
the alleged dissipation.

The legal position is well settled that on mere severance of status of
joint family, the character of any joint family property does not change with C
such severance. It retains the character of joint family property till partition.
In Bhagwant P. Sulakhe v. Digambar Gopal Sulakhe and Ors., AIR (1976)
SC 79 (para 14) this Court held that the character of any joint family property

-- does not change with the severance of status of the joint family and a joint
family property continues to retain its joint family character so long as the
joint family property is in existence and is not partitioned amongst the co- D
sharers.

The effect of the plaintiff holding excess of 2119th share would be that
the plaintiff would be accountable for the value of those shares as on the date
of the final decree.
E
A contention was also urged that there is generally a time gap between
the report of the Commissioner submitted pursuant to the directions in the
preliminary decree and passing of the fmal decree and it would not be

, .. practicable to value the assets as on the date of the fmal decree. There is no
impractibility. Ordinarily, though it is the date of the final decree but in F
reality the date of valuation which the Commissioner takes into view in the
report, that is taken into consideration by the Court. But that would again
depend on the facts of each case; In a given case, there may be gap of years
between the date of the report of the Commissioner and the date of the final
partition. In the meanwhile, there may have been a sharp increase or decrease G
in the value of the property or properties. In such event, the Court may have
to balance the equities and pass other directions in order to partition the
~,a.. properties between the parties as per their respective shares. The preliminary
decree declares the shares of the parties and the properties which are joint
and are required to be divided between the co-sharers. Regarding valuation,
reference may also be made to Order 20 Rule 18 and Order 26 Rule 13 and H
342 SUPREME COURT REPORTS [2002) 3 S.C.R.

A 14 of the Code of Civil Procedure, which read as under :

"Order 20. Rule 18. Decree in suit for partition of property or separate
possession of a share therein.-Where the Court passes a decree for the
partition of property or for the separate possession of a share therein,
then,-
B
(I) if and in so far as the decree relates to an estate assessed to the
payment of revenue to the Government, the decree shall declare
the righ.s of the several parties interested in the property, but
shall direct such partition or separation to be made by the Collector,
or any gazetted subordinate of the Collector deputed by him in
c this behalf, in accordance with such declaration and with the
provisions of Section 54;
(2) if and in so far as such decree relates to any other immovable
property or to movable property, the Court may, if the partition
or separation cannot be conveniently made without further inquiry,
D pass a preliminary decree declaring the rights of the several parties •
interested in the property and giving such further directions as
may be required.
Order 26 Rule 13. Commission to make partition of immovable
property.-Where a preliminary decree for partition has been passed,
E the Court may, in any case not provided for by Section 54, issue a
commission to such person as it thinks fit to make the partition or
separation according to the rights as declared in such decree.

Rule 14. Procedure of Commissioner.-(!) The Commissioner shall;
after such inquiry as may be necessary, divide the property into as
F many shares as may be directed by the order under which the
commission was issued, and shall allot such shares to the parties, and
may, if authorized thereto by the said order, award .sums to be paid
for the purpose of equalizing the value of the shares.

(2) The Commissioner shall then prepare and sign a report or the
G Commissioners (where the commission was issued to more than one
person and they cannot agree) shall prepare and sign separate reports
appointing the share of each party and distinguishing each share (if
so directed by the said order) by metes and bounds. Such report or
reports shall be annexed to the commission and transmitted to the
Court; and the Court, after hearing any objections which the parties
H
,.
M.L. SUBBARAYA SETTY v. M.L. NAGAPPA SETTY [Y .K SABHARWAL, I.] 343

may make to the report or reports, shall confirm, vary or set aside the A
same.

(3) Where the Court confirms or varies the report or reports it shall
pass a decree in accordance with the same as confirmed or varied; but
where the Court sets aside the report or reports it shall either issue a
new commission or make such other order as it shall think fit." B
The actual partition is effected by passing of the final decree. The
1 valuation has, thus, to be as on the date of final decree .
•
Learned counsel for the appellants, however, strenuously relies upon
Khatoon Bibi v. Abdul Wahab Sahib and Ors., AIR (1939) Mad. 306. That C
was a case where the entire movable property had been dissipated by the
defendants whose value fer exceeded the value to which the defendants were
entitled. As such no properties were available for the purpose of partition.
Under these circumstances, it was held that the plaintiff was entitled to all the
immovable property though the value of immovable property was far less
than the value of plaintiffs share in the joint family properties. The said D
decision has no applicability in the present case. The value of the property
is to be ascertained as on the date of the partition and then alone the question
as to whether the value of the shares said to have been dissipated by the
plaintiff was more than the value of the share in the hands of the defendants
to which he may be entitled or not, would arise. Without ascertaining the E
value of the two, the principles laid in the Madras decision will have no
applicability to the present fact position.

The acceptance of the contention now sought to be raised would amount
to going behind the preliminary decree. That is not permissible. Before
concluJing, we wish to clarify that the observation of the High Court that the F
plaintiff is entitled to share in each of the joint family property does not mean
the actual partition of all such properties by metes and.,bounds. We may also
clarify that the direction that the present possession ot"the parties shall be
respected as far as possible also does not mean that if the plaintiff is not in
possession of any immovable property and the same are in possession of the G
defendants, he could not be allotted the immovable property even though he
is so entitled as per his share. If that was so, the words "as far as possible"
in the said direction would become redundant. When the Court directs that
the present possession of the parties shall be respected, it means that if
partition of the property is to be effected, then as far as possible the person
in possession of a property should be allowed to retain it by equalization of H
344 SUPREME COURT REPORTS [2002] 3 S.C.R.

A share but it does not mean that a person out of possession of all immovable
properties should not be allotted any part of the immovable property
whatsoever. In view of the earlier decision and aforesaid discussion, it is not
possible to accept the contention that the plaintiff is not entitled to a share
in the joint family immovable properties.

B In view of aforesaid discussion, our answers to the four questions
noticed in earlier part of the judgment are as under :

1. The plaintiff is entitled to 2/l 9th share in joint family properties.
2. The date of valuation of shares is date of the final decree in terms
C of law laid hereinbefore.
3. The effect of non-availability of shares, bonds and securities by
itself is not to deprive the plaintiff of his 2/I 9th share if on
valuation he is otherwise entitled thereto.
4. Parties in possession are liable to give accounts for the rents,
D income, profits and dividends in respect of the joint family property
to others from 11th July, 1940 up to passing of the final decree. .-4,_

Since more than 3oyears have passed since passing of the preliminary
decree and more than half a century since filing of the suit, the trial court will
do well to take up the matter, as far as possible, on day to day basis and
E conclude the final decree proceedings in the light of this judgment preferably
within a period of six months.

In view of the aforesaid, we find no infirmity in the impugned judgment
of the High Court and, thus, appeals are dismissed. Parties are left to bear
their own costs.
F
K.K.T. Appeals dismissed.