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Vembu Iyer Alias Ramanadha Iyer Vs. Srinivasa Iyengar and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtChennai
Decided On
Reported in17Ind.Cas.609; (1912)23MLJ638
AppellantVembu Iyer Alias Ramanadha Iyer
RespondentSrinivasa Iyengar and ors.
Cases ReferredMuthu Subbiah Chettiar v. Rungiah Gounden
Excerpt:
.....caprice and extravagance but in the best interests of the minor, sometimes because it was 'for the minor's benefit' and so on. that a widow managing for her infant son (like any other manager when minors are interested as co-parceners) can deal with the property only to meet existing necessities but the other party, is protected by good faith and reasonable enquiry. held that where a guardian has acted in the interests of the minors after consideration of the circumstances then in existence, his act was binding on the minors though it was afterwards found that the act was really injurious to the minors (as the minors got only 4 acres through the said guardian's act while they were really entitled, as afterwards found, to 7 acres of land). this case shows that where a guardian acts..........namely that, if he acts bona fide and after due enqniry believes that the transaction is for the minor's benefit, or necessary, it must be upheld as against him though a ward may have good reason to complain of conduct of the guardian. prior to the enunciation of the law by the privy council, there appears sometimes to have been an idea in india that the creditors of a minor had no right to demand their debts during his minority and that they must wait till the minor attained age. this would of course, affect the guardian's power to deal with the estate for the discharge of the minor's father's debts. see mcnaughten's ' principles of hindu law' chapter vii, page 105; trevelyan's ' law relating to minors ' page 183; dagdu bin ishad pershad v. sheik sahib valid bandarkar (1865) 2.....
Judgment:

Sundara Aiyar, J.

1. This is a suit for setting aside a sale made by the plaintiff's guardian in the year 1889. The suit was instituted on the '28th October 1908. The plaintiff was born on the 28th October 1887. He delayed the suit until the last day on which it was open to him to institute it. The sale was admittedly made for the discharge of certain debts due by the plaintiff's father.

2. Both Courts have upheld the sale. The District Munsif found that the sale was necessary in the interests of the minor. On appeal the Subordinate Judge seems to have confirmed the decree with some hesitation. He observed 'I am unable to hold that with prudent management the debts could not have been cleared from out of the income.' He also held that there was no clear necessity to support the sale. With respect to a plea of the defendants that the guardian had to take into account at the time of the sale the fact that two sisters of the plaintiff had shortly to be married, the Sub-Judge says 'The prospective marriages of daughters of the family and the consequent fear of not being able to clear off debts are too speculative reasons to justify a sale by a mother during the son's minority.' He however confirmed the Munsif's decree on the ground that he was unable to say that the trustee did not act with due care and prudence in selling the properties and that the discretion vested in the mother as a guardian cannot be said to have been misused. He observed, ' The case falls within the discretion of a trustee and the discretion cannot be said to have been misused.' He held that 'the case did not fall within the words of the decisions supporting sales by a guardian.' He continues, ' But the logical extension of the ideas on the subject does not exclude the present sale from the category of legally valid sales.' It is not surprising that the plaintiff considered that there were good grounds for an appeal from a judgment pronounced with so much doubt. I confess I have not felt any difficulty in confirming the decree of the Subordinate Judge. I am of opinion that the circumstances show that the sale was necessary. The decision of the case must depend on the general powers and duties of a guardian under the Hindu Law, apart from any provisions of the Guardian and Wards Act. There are numerous cases in the Indian Courts which have dealt with the position of a guardian, but hardly any one in which the precise question for determination in this case was the subject of judicial pronouncement. In England, it would appear, a guardian has no power to sell or mortgage the real estate of his ward. Infants came very early under the jurisdiction of the Court of Chancery in that country. All power to sell or to mortgage a ward's estate was vested in the Court and the guardian could not exercise it without the consent of the Court. See the matter discussed in Dagdn Bin Ishad Persha v. Sheik Sahib Valid Bandarhar (1865) 2 B.H.C.R. 369. In this country, on the other hand, only a guardian appointed or declared as such by a court is under the supervision of the Court. The powers and duties of other guardians are governed by considerations, primarily, of what would be for the welfare of the minor. During the arguments the learned vakils on both sides cited various cases relating to the powers of a natural guardian, a guardian appointed by Court, the manager of a Hindu family and a trustee. And it was contended by Mr. Seshagiri Aiyar that the powers of a natural guardian were of the narrowest kind as compared with the others. I do not propose to enter on a comparison of the powers of these different classes of persons. It is true that the manager of a Hindu family is one possessing an estate in the property that he deals with, while a guardian has no estate in his ward's property. He is in management of the property solely belonging to another. But at the same time, it may be said that it is open to a manager to obtain the consent of all adult co-parceners to any transaction which he thinks proper to undertake; and that a guardian who has no so such means open to him ought to be invested with a larger discretion than a manager. Again in some respects, the powers of a guardian must be taken to be inferior to those of a trustee, for a trustee has the legal ownership vested in him and, although his obligations to the beneficiary are no less than those of a guardian, persons who deal bona fide with him would receive larger protection on the ground that they are dealing with a person who is regarded by law as the owner of the property notwithstanding that he is under obligations to another. On this ground it was held in Muthu Subbiah Chettiar v. Rungiah Gounden : (1897)7MLJ191 that a guardian's powers were less extensive than those of a trustee. It was assumed in that case that a natural guardian's powers would be inferior to those of one appointed by court. This seems to me to be not quite correct. The latter class of guardian is under the supervision of the court. The powers of guardianship, are in large part, exercised by the court itself and the appointed guardian can only act subject to its supervision--and control. Definite restraints are put upon an appointed guardian by statute. Those restraints would not be applicable to a natural guardian. There is no provision in Indian Law for a natural guardian, not declared as such by the court to take the opinion of the court as to the propriety of any transaction he may have to enter into on behalf of his ward. His duties must be regulated by considerations of what should be regarded as bast for the interests of the minor. The leading case on the subject is Hanuman Pershad Panday v. Musammal Baboon Muraj Kunwar (1856) 9 M.L.A. 393. The following passage to be found at page 423, may be regarded as the text on which the subsequent decisions of the Indian Courts have been based. ' The power of the manager for an infant heir to charge an estate not his own, is, under the Hindu Law a limited and qualified power. It can only be exercised rightly in a case of need, or for the benefit of the estate.' The question then would be whether any alienation or other transaction is for the benefit of the minor or necessary, so as to satisfy the phrase ' in a case of need.' There is, of course, another rule based on considerations of equity to the person dealing with the guardian, namely that, if he acts bona fide and after due enqniry believes that the transaction is for the minor's benefit, or necessary, it must be upheld as against him though a ward may have good reason to complain of conduct of the guardian. Prior to the enunciation of the law by the Privy Council, there appears sometimes to have been an idea in India that the creditors of a minor had no right to demand their debts during his minority and that they must wait till the minor attained age. This would of course, affect the guardian's power to deal with the estate for the discharge of the minor's father's debts. See Mcnaughten's ' Principles of Hindu Law' Chapter VII, page 105; Trevelyan's ' Law Relating to Minors ' page 183; Dagdu Bin Ishad Pershad v. Sheik Sahib Valid Bandarkar (1865) 2 B.H.C.R. 369. This view was however, subsequently given up and Mcnaughten himself in his 'Precedents' cites a case decided in pages 120, 121 where it was held that the discharge of debts would be regarded as a ' necessity.' The word ' necessity' appears, at first sight, not to be calculated to give a clear idea of the scope of the cases coming within it. Necessity and benefit were not properly distinguished. Thus Trevelyan observes ' apart from necessity it is not easy to say what is for the benefit, of a minor's estate,' and in an early case in Calcutta, Sudder Dewani Adlawt Eeports, 1856, page, 980, benefit to a minor seems to have been regarded as making the alienation necessary. The Court, observed ' It is enough for us now to say that we hold that a mortgage entered into by the mother of a minor of a portion of the minor's property for the benefit of the minor is valid under the Hindu Law, that benefit being the cause of, or creating the necessity which has arisen.' This confusion induced me to say. In re Krishnaswami Das Reddi (1912) M.W.N. 167 that it might be desirable to avoid the use of the words 'necessary' and 'necessity' and to substitute 'reasonable' and 'probable.' I am convinced however necessity and 'benefit' really import two different ideas and that it is desirable to keep in view the distinction batween them. ' Necessity' seems to connote the idea of warding off an evil or the doing of something that cannot be avoided or of something which it is one's legal duty to do. To avoid the sale of a minor's property for a debt would be warding off an evil; conducting necessary repairs would also be an act of the same class. The maintenance of the minor would be a necessity as something which cannot be avoided. Performing his father's funerals would be a necessity as an act which it is his duty to perform. But over and above all these acts that are necessary there may be acts which are positively beneficial to the minor and an alienation which would conduce positively to the benefit of the minor would be uphold apart from any necessity unless of course it is accompanied by other evil. Mr. Seshagiri Aiyar's main contention was that the discharge of debts cannot be regarded as a necessity unless the creditors pressed for the debt or at least demanded payment. The Sub-Judge has found that there was no demand in this case. It was contended that therefore it cannot be held that there was any necessity. No case has been cited, nor have we been able to find any, which has laid down that a demand is necessary to justify an alienation to discharge a debt. It is impossible to lay down any such broad proposition, The creditors may be quite content to allow their debts to run on if they carry heavy interest. They might wait until the whole estate might be swallowed up by their debts. It would be unreasonable to say that a guardian in such circumstances cannot sell a portion of the estate so that the remainder may be saved for the minor's benefit. There can be no doubt that it is the duty of a guardian to pay off debts incurred by the ward's father. In England where as I have already observed, a guardian cannot mortgage or sell a ward's estate of his own accord, the discharge of the debts binding on the minor has been recognised to be a duty. There, no doubt, in order to fulfil that duty the guardian should apply to the Court for permission to mortgage or sell and the Court may make an order for either according to the circumstances of the case. But as a natural guardian, not declared as guardian, has in this country no right to ask for the advice of the Court, the discretion as to how the duty of discharging the debts binding on the minor should be performed must rest with him. I do not mean to lay down that if there is an estate earning a large income and the debts could be discharged in a short time out of the usufruct, a sale by the, guardian for the discharge of the debt would be always upheld. The question in each case would be whether the discretion vested in a guardian has been exercised properly. He would be taken to have done so if he acted with due prudence and caution. Mr. Seshagiri Aiyar contended that the prudence which a man would exercise in the management of his own affairs would not necessarily be sufficient in the administration of property of a ward and relied on the observations contained in Subbia Chetty v. Rimgiah Gonden : (1897)7MLJ191 to that effect with respect to a trustee. I agree with him to a considerable extent. It is true that it would not be enough for the Court to say that if an adult had acted in the management of own property in the way in which a guardian has dealt with his ward's property, the adult owner's action would not be pronounced imprudent. There are risks which an owner may take that might be consistent with the conduct of a prudent man. A trustee or a guardian has no right to take the same risk in dealing with the property of another. This is the rule which has been applied in the English Courts with respect to the acts of a trustee. At the same time the Court has certainly to judge of the act of a guardian as it would appear to a prudent man at the time that the act was done_ It will not set aside his acts on the ground that years after the act has been done it appears to the Court that the guardian might have acted better. If the guardian consulted proper advisers, that 'would be a good test as to whether the act was prudent, for it would show that other disinterested persons took the same view of the propriety of the act as he himself did. The right view to lay down appears to me to be to consider, whether in the circumstances that existed at the time of the alienation, the act would be regarded as a prudent one by men of ordinary prudence in dealing with the property of a ward. No hard and fast distinction can be made between a sale and a mortgage. See Mohamed Mandul v. Nafur Mandul I.L.R. (1899) C. 820 where an act is sought to be supported, not on the ground that it was 'necessary' but on the ground that it was calculated to procure some difference in the application of the test to determine the validity of the guardian's act. There might also be a difference in applying this rule that a bona fide purchaser would be protected. If the act which was calculated to procure benefit for the minor was of a risky or speculative character, it would not be supported by the court. And it may be that the court would apply a rather strict test in deciding what should be regarded as speculative in a such a case. It may also be that a bona fide purchaser would find it difficult to obtain protection on the ground that a speculative transaction appeared to be beneficial to a minor. But in deciding whether an act which came within the purview of' 'necessity' should be upheld, I think considerable latitude should be allowed for the exercise of the guardian's discretion. See Babaji Mahadaji v. Kristnaji Devaji I L.R. (1878) B. 666. In Arunachala Reddy v. Chidambara Reddy 13 M.L.J. 223 an alienaticn which was made partly for the discharge of debts binding on the minor was upheld. In the cases bearing on the question there was, generally, no doubt some circumstance beyond the mere existence of a debt relied on to justify the alienation. Thus in Sacaram Morarji v. Kalidas Kanhayi I.L.R. (1894) B. 631 there were no other assets left out of which the debt could be discharged. In Dagdu Bin Ishad Per shad v. Sheik Sahib Bandarkar I.L.R. (1865) B.H.C.R. 369 the Court found that the alienation was for the discharge of debts. But it added ' and it was absolutely necessary,' but no other circumstance relied on is mentioned as supporting the necessity for sale. In Kaihur Singh v. Roop Singh (1871) 3. N.W.P.H.C.R. 4 it was observed that no immediate pressure or suit need be proved in order to support a sale for discharging a debt. In Balaji Mahadaji v. Krishnajee Devaji I.L.R. (1878) B. 666 it appears that the debt had not become due at the time of the alienation. The language of the Privy council in Hanooman Persaud Pandey 8 does not in my opinion, support the contention that unless there was a demand by the creditor, a sale for the discharge of his debt would not be justified. Their Lordships say ' The actual pressure on the estate, the danger to be averted or the benefit to be conferred on it in the particular instance is the thing to be regarded. The words ' actual pressure' are relied onto support the argument that the person in possession as guardian must have been pressed by the creditor to pay the debt. I do not think that the language ' pressure on the estate' necessarily signifies this. A debt may be a pressure on the estate even though the creditor has not yet demanded payment of it. Whether it is so in any particular case would depend on the circumstances. In this case it is found that there were other debts at the time of the death of the minor's father. Three sales were made in 1888 for the discharge of a portion of them. Apparently soon after the death of the father, the guardian considered it desirable to take measures to discharge all debts. The sale which is called in question here took place shortly after the previous sales. All were probably parts of one single scheme that the debts should be discharged if possible. The Sub-Judge is, in my opinion, not justified in holding that the guardian acted in a speculative spirit in having regard to the fact of the prospective expenditure on account of the minor's sister's marriage. The District Munsif's judgment shows that about Rs. 1000 was required for the current expenditure of the family. After making provision for Government kist and this expenditure, there was apparently very little to save for the discharge of debts and the prospect of having to incur further debts for the marriages of two girls would certainly influence a prudent guardian in deciding what steps should be taken for the discharge of the debts. I am of opinion that the discharge of the debts was necessary in the circumstances of the case and that the defendants need not rely solely on the fact that the alienation was an act done by the guardian honestly and after taking advice from others. The mere consultation of others would not always be a ground for upholding a transaction if the Court is convinced that both those consulted and the guardian made a grave mistake. The conclusion arrived at by the Subordinate Judge is right and this second appeal must be dismissed with costs.

3. The respondent has preferred a memo of objections against the Subordinate Judge's disallowance of his costs in the appeal. I do not think that the fact that the questions of law raised in the case were not easy of solution was a good ground for disallowing the costs of the successful litigant. The order as to costs must be set aside. The respondent will have his costs in this Court and in the Lower Appellate Courts.

Sadasiva Aiyar, J.

4. The important question of law argued in this case relates to the power of the natural guardian of a minor Hindu to effect an alienation of the. minor's property so as to bind the Minor. Numerous cases have been quoted on both sides in which the disputed alienation has been upheld sometimes on the ground of legal necessity, sometimes because it was reasonable and proper, again because the guardian did not act through caprice and extravagance but in the best interests of the minor, sometimes because it was '' for the minor's benefit' and so on. In a few cases, the alienation has been upheld because the alienee acted bonafide in obtaining the alienation from the guardian after making proper enquiries as to the actual necessity or as to the alienation being for the minor's benefit or as to the existence of pressure from creditors. In Mayne's Hindu Law, paragraph 218 it is said ' He will also be bound by the act of his guardian in the management of his estates, when bona-fide and for his interest and when it is such as the infant might reasonably and prudently have done for himself, if he had been of full age. But not where the act appears not to have been for his benefit and the person who so deals with the guardian is bound to enquire into the propriety of his act. And where the act is done by a person who is not his guardian but who is the manager of the estate in which he has an interest he will equally be bound, if under the circumstances the step taken was necessary, proper or prudent.' In Sucaram Morarji v. Kalidas Kanhaji I.L.R. (1894) B. 631 it was said quoting from West and Buhler, JJ. that a widow managing for her infant son (like any other manager when minors are interested as co-parceners) can deal with the property only to meet existing necessities but the other party, is protected by good faith and reasonable enquiry. In Mahammad Mundal v. Najur Mundal I.L.R. (1899) C. 820 it was held that the principle of the decision in Hanuman Prasad Pandaxj v. Mussammat Bhoobee Kimwar (1856) 6 M.I. A. 412 was applicable also to the bona fide manager of an infant's estate, (in that case the grandmother of the plaintiff) that an alienation by sale stands on the same footing as an alienation by mortgage and that Mr. Mayne's opinion in his Hindu Law Section 196 is correct that when the act is done by the person who is not his guardian but who is the manager of the estate in which he has an interest, the minor will equally be bound, if under the circumstances the step taken was necessary, proper or prudent. In Kaihur Sing v. Roopsing (1871) 3 N.W.P.H.C.R. 4 it was held that even without actual pressure npon the minor's estate an act of the guardian which at the time of the alienation appeard on the reasonable grounds to be dictated by prudence and for the minor's benefit is binding on the minor. In Tejpal v. Anaga I.L.R. (1901) A. 59 the learned Judges say ' We think that the preponderance of authority is in favour of the proposition that a Hindu mother as the natural guardian of her minor son has a right to deal with and dispose of her minor son's estate for his benefit.' It will be seen that the learned Judges say nothing about ' pressure' and do not use the phrase ' necessity ' or 'legal necessity' which vague phrase has been interpreted in various ways in different decisions. In Subba Reddy v. Kotamna : (1904)14MLJ442 Davies and Sankaran Nair JJ. held that where a guardian has acted in the interests of the minors after consideration of the circumstances then in existence, his act was binding on the minors though it was afterwards found that the act was really injurious to the minors (as the minors got only 4 acres through the said guardian's act while they were really entitled, as afterwards found, to 7 acres of land). This case shows that where a guardian acts according to his best lights for the minor's benefit and his act was what an ordinary man of prudence would do where his own property was concerned, such act is binding on the minor. In the case in Arunachala Reddy v. Chidambam Reddy (1902) 13 M.L.J. 223 it was held that alienations made in part for the purpose of discharging the liability incurred by the father of the minor and in part in connection with litigation in which the question of the validity of the minor's adoption was involved, was binding on the minor if there was nothing to suggest that in making the alienation, even though the alienees were her relations, the minor's mother was acting otherwise than in the interests of the minor's estate. I think the only safe and convenient rule is (a) that if the guardian of a Hindu minor alienates the minor's property because he considers it after weighing all the then existing circumstances, to be in the best interests of the minor to make that alienation, the minor is clearly bound by that act of alienation : (b) that even if the guardian acted wrongly, the alienee is protected if he acts in good faith after making due enquiry and if he is satisfied on the representations of the guardian and on his own independent enquiry that the guardian's act appears then to be clearly for the minor's benefit (I think that any comparison between the powers of a natural guardian and of guardian to whom the Guardian and Wards act applies as was done in the case of Muthu Subbiah Chettiar v. Rungiah Gounden (1897) 1 M.L.J. 191 is of very little utility in deciding as to the powers of a natural guardian under the Hindu Law. The legislature is not bound to follow the common law and can give powers and impose restrictions on certain kinds of guardians according to pleasure). In the present case I understand both Courts to find that the alienee (the 6th defendant) acted bona fide and that he did not want to make any profit at the expense of the minor in obtaining the alienation of 1889 from the minor's mother acting as the minor's guardian. Though no specific issue as to the alienee's good faith and the enquiries made by him was raised in the suit, the first issue is generally worded as to the binding character of the alienation on plaintiff and the. cross-examination of the 6th defendant (defendant's witness No. 15) by the plaintiff's vakil was directed to the question whether 6th defindant did make proper enquiries as to the debts due by the minor's deceased father and as to whether there was pressure upon the estate and so on The plaintiff was therefore not taken by surprise and I do not think it necessary that a specific issue should now be raised on the question of the alienee's good faith or that an opportunity should be given to the parties to adduce further evidence in this case. I am also clear on the evidence that (as found by both Courts), the plaintiff's mother after consulting her husband's relations and friends considered it the most prudent course and for the clear benefit of the minor to make the sale of the property to the 6th defendant who offered the highest price then available for it. I might state that the learned Subordinate Judge was not justified in his findings on three questions of fact, his findings being at variance with those come to by the learned Munsif. The Subordinate Judge held that a debt of only Rs. 4,000 remained due on the date of the plaintiff's father's death whereas plaintiff's own 16th witness admitted the existence of a debt of Rs. 7,000 at the father's death. The Subordinate Judge also ignored the documents Exhibits I and II which show the existence of debts to the extent of about Rs. 3,500 in addition to the Rs. 4,000 due under Exhibits III V, VI, VIII, IX and X. The learned Subordinate Judge also disbelieved the genuineness of documents Exhibits XI and XIII, while even the plaintiff' in the ground of appeal before him (see ground 8) did not deny the genuineness of those Exhibits but only stated that they should not have been admitted in evidence as they were produced too late and that importance should not have been attached to them. On the question of pressure by creditors also the Subordinate Judge ignored the fact that some properties had already been sold to discharge debts and erred in differing from the Munsif by brushing aside the circumstantial evidence indicating the pressure of creditors on the guardian and in practically requiring direct evidence to be given by the creditors themselves of such pressure after the lapse of twenty years. In the result I agree that this second appeal should be dismissed with costs, the memorandum of objections put in by the respondents 1, 3, 4, 5, 6 and 10 in respect of the costs disallowed by the Subordinate Judge must be allowed with costs.


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