Wife's Right To Reclaim Assets Entrusted With Husband Not Hit By Limitation, Survives Even After Divorce: Kerala High Court

The Kerala High Court held that the matrimonial entrustment of property creates a trust which is not extinguished by the dissolution of marriage unless specific conditions under section 77 of the Indian Trusts Act, 1882, are met.

The bench comprising Justice Satish Ninan and Justice P Krishna Kumar was delivering judgment on a matrimonial appeal.

Relying on Sheela K.K. v. Suresh N.G [ ILR 2020 (4) Ker 486] , the Court clarified that “Even when the marriage was dissolved by a decree of divorce, it does not result in the extinguishment of the trust.”

The Court held that when one spouse entrusts money or gold to the other during the marriage, it creates a trust relationship under the Indian Trusts Act. Unless the trust is extinguished by fulfilling its purpose, becoming unlawful, or any of the conditions laid out in section 77 of the Act, the right to reclaim such property survives, even after a decree of divorce.

The Court also observed that section 10 of the Limitation Act, which contains a non-obstante clause, governs such situations. This prevails over the limitation rules and allows the beneficiary to recover property held in trust without being bound by ordinary limitation periods.

It was contended that the gold ornaments have been converted into immovable property, and the remedy of the wife is only to proceed against the property so converted. The Court held that the wife could seek monetary recovery and was not limited to tracing the converted property. Citing L. Janakirama Iyer v. Nilakanta Iyer [ AIR 1962 SC 633], the bench noted that remedies under Section 63 of the Trusts Act are not exhaustive, and monetary recovery remains a viable option.

“It has to be borne in mind that there would be instances where the converted property is of lesser value. It cannot be said that the beneficiary will have to be satisfied with the same,” the court remarked.

The court thus upheld the trial court's decree of divorce and award and the appeals were dismissed.

Case Title - Beatrice v Babu Louis

Case No - Mat. Appeal 864/2015

Counsel for Appellant - Tom Jose, Geetha Job

Counsel for Respondent - Arun V G, R Ram Mohan, Anoop Bhaskar.

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