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Nagammal and ors. Vs. Varada Kandar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Case NumberAppeal No. 441 of 1946
Judge
Reported inAIR1950Mad606
ActsTransfer of Property Act, 1882 - Sections 38
AppellantNagammal and ors.
RespondentVarada Kandar and ors.
Appellant AdvocateK.S. Desikan and ; T.S. Rangarajan, Advs.
Respondent AdvocateK.V. Srinivasan, Adv.
DispositionAppeal allowed
Cases ReferredVembu Iyer v. Srinivasa
Excerpt:
.....said alienation not result of legal necessity - defendant paid consideration by way of discharging debts binding on plaintiff also - no possibility of discharging debts from surplus income from property - held, alienation effected for discharging debts binding on plaintiff valid. - - we are not also satisfied with his finding as regards items 4 and 7 of consideration, but we do not think it necessary to give a definite finding as regards these two items, because, in our opinion the appeal can be disposed of on the finding that the amount left after excluding the three items which according to the learned judge did not represent true loans was paid towards real and binding debts. 609: it (the court) will not get aside his act on the ground that years after the act has been done it..........was paid and though a major portion of the consideration was utilised for the payment of debts-binding on the plaintiff, nevertheless, the sale was not binding on the plaintiff, because there was no legal necessity and there were no circumstances to justify the alienation by the plaintiff's guardian. he therefore granted a decree in favour of the plaintiff for possession of the properties but directed the plaintiff to pay defendant 2 out of those properties rs. 2225-9-0 with interest at six per cent, per annum from the date on which the plaintiff takes possession of the properties. hence the appeal by defendant 2 and lessees from her, defendants 8 and 10. 2. we do not think that the learned judge was justified in completely leaving out of account item 5 of consideration,.....
Judgment:

Rajamannar, C.J.

1. Defendants 2, 8 and 10 in O. S. No. 96 of 1945 on the file of the Court of the Subordinate Judge of Trichiropoly are the appellants before us. On 9th March 1939, properties described in Schedule B to the plaint which belonged to plaintiff-respondent 1 who was then a minor were sold by defendant 6 his mother as his guardian along with her co-widows defendants 5 and 7 to appellant 1 (defendant 2) for Rs. 2900/-. The plaintiff two years after attaining his majority filed the above suit to recover possession of the properties after setting aside the alienation. The consideration of Rs. 2900/- was made up of 11 items, all set out in the sale deed. The extent of the lands old was 2 acres 48 cents. The learned Subordinate Judge found that the sale deed was true and the entire sum of Rs. 2900/- recited as its consideration was paid by defendant 2 in cash or by adjustment or paid by her husband, D. W. l on her behalf to the persons named as creditors in the sale deed or to the persons mentioned therein. The learned Judge also held that the price was fair and not far below the prevailing market value. Of the-11 items of consideration he found that three items did not represent real debts, namely, an alleged hand loan due to the plaintiff's maternal grandfather, a debt due to the Karur Vaisya Bank and a hand loan due to D. W. 2. As regards the other items, he held that though item 5 represented a real debt, it was not proved that any amount was payable to the creditor in respect of it, because of Madras Act IV [4] of 1938 and therefore this item should be left wholly out of account. A sum of Rs. 50/- was paid in cash on the date of the sale and it must be taken that the learned Judge had found that this amount was paid as mentioned. He, however, held that the amounts which would in law be due to the creditors after applying Madras Act IV [4] of 1938 would be a little less than the amounts mentioned in the sale deed and he arrived at the figure of Rs. 2225-9-0 as the amount which may be said to be lawfully binding on the plaintiff. The learned Judge then held that though the entire consideration was paid and though a major portion of the consideration was utilised for the payment of debts-binding on the plaintiff, nevertheless, the sale was not binding on the plaintiff, because there was no legal necessity and there were no circumstances to justify the alienation by the plaintiff's guardian. He therefore granted a decree in favour of the plaintiff for possession of the properties but directed the plaintiff to pay defendant 2 out of those properties Rs. 2225-9-0 with interest at six per cent, per annum from the date on which the plaintiff takes possession of the properties. Hence the appeal by defendant 2 and lessees from her, defendants 8 and 10. 2. We do not think that the learned Judge was justified in completely leaving out of account item 5 of consideration, namely, the debt due to one Vellaiyyppa Chettiar. On the record there was no proof whatever that that debt had been or would be discharged under Act IV [4] of 1938 and that was the only reason why the learned Judge thought he should leave it out of account. We are not also satisfied with his finding as regards items 4 and 7 of consideration, but we do not think it necessary to give a definite finding as regards these two items, because, in our opinion the appeal can be disposed of on the finding that the amount left after excluding the three items which according to the learned Judge did not represent true loans was paid towards real and binding debts.

2. The conclusion of the learned trial Judge appears to our mind to have been largely based on two considerations. One of them was the sudden and steep rise in prices after 1942 con-sequent on the outbreak of the Great War. The learned Judge expressly says in para. 14 as follows :

'If the plaintiff's guardian and others in management of his affairs had waited till the beginning of 1940, they would have had the benefit of the steady rise in prices consequent on the outbreak of World War No. 2.'

The other is the lack of evidence of actual demand from the creditors to whom moneys were paid by D. W. 1. There can be no doubt, whatever, that it was not permissible to the learned Judge to have taken either consideration into account. The validity of the transaction must be judged on the circumstances obtaining on the date of the transaction and not on events which subsequently happened, events which Could not have been even thought of at the time of the transaction. It is of course clear to us that this suit would never have been brought but for the steep rise in prices consequent on the war, but this circumstance cannot enter into the discussion of the issue as to the validity of the sale. The learned Judge also erred in assuming that it was necessary to prove that the creditors were actually making demands before it could be found that there was a pressure on the estate. In Vembu lyer v. Srinivasa, lyengar, 23 M. L. J. 638 : 17 I.C. 609, the learned Judge says as follows :

''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. Vide also Ponnaria Rao v. Lakshmi Narasamma, : (1938)1MLJ154 .'

4. What we have therefore to do is to judge the act of the guardian as it would appear to a prudent man at the time when the act was done. As Sundara Aiyar J. says in Vembu Iyer v. Srinivasa lyengar, 23 M. L. J. 638 : 17 I. C. 609:

'It (the Court) will not get aside his act on the ground that years after the act has been done it appears to the Court that the guardian might have acted better.'

The only question to be considered is whether in the circumstances that existed at the time of the alienation, the act would be regarded as a proper one by men of ordinary prudence. In dealing with the property of a ward, considerable latitude should be allowed for the exercise of the guardian's discretion, though if the act was of a speculative character, it cannot be supported by the Court. Now what are the facts in this case? Admittedly there was this usufructuary mortgage for Rs. 1600/-. It is true that the money under it was not payable until 22nd December 1939 and the alienation was in March 1939. But it is not pretended that this large amount of Rs. 1600/- could have been raised by the guardian except by a sale of the property. Mr. K.V. Srinivasa Ayyar learned counsel for plaintiff relied upon the fact that besides the property covered by the mortgage, the minor had 1 acre of nanjah land and 3 acres dry laud. According to him the acre of nanjah land would yield 32 kalams of paddy out of which 20 kalams would suffice for the maintenance and other expenses of the plaintiff. But it is not clear, however, from the evidence of D. W. 2 on which this estimate is based whether 32 kalams would be the net yield or the gross yield. Assuming that there would be a surplus, it is clear that having regard to the rate at which paddy was selling in those days, anything more than about Rs. 50/- or Rs. 60/- would have been left. From his Punjab land the income would only be Rs. 20/- to 25 (See D. W. 2'S evidence). It is impossible to understand how with this income of Rs. 70/- or Rs. 75/- a year, the large amount of Rs. 1600/- due under the usufructuary mortgage could be discharged. But the mortgage debt, however, was not the only debt. Even according to the findings of the learned Judge which were not attacked by Mr. Srinivasa Ayyar there were other debts to be discharged to the tune of over Rs. 600/-. We have, therefore, not only the existence of binding debts but also the important circumstance that there was no possibility of discharging the debts from the surplus income from the property.

5. Mr. Srinivasa Ayyar, learned counsel for the plaintiff-respondent, strenuously contended that there is no evidence in this case of deliberation by the guardian of the pros and cons of the transaction and there is no evidence that the act of the guardian was the moat prudent in the circumstances. We fail to see what evidence the alienee can adduce except to prove the debts discharged by him and the binding nature of such debts, and the resources of the plaintiff at the time of the sale. It is not suggested that there was any fraud or collusion between the vendee and her husband and the plaintiff's guardian. Much was sought to be made by Mr. Srinivasa Ayyar of the statement in the evidence of D. W. 2 that the plaintiff's grandfather who was very old wanted to see the plaintiff freed from debts before he died. He contended that this was a mere sentimental desire which could not be treated as legal necessity to justify this sale. In our opinion, there is nothing in that statement to render the sale invalid. If the plaintiff's old grandfather wanted to see the binding debts of the plaintiff discharged, the wish was certainly a commendable one. What we have to determine is whether in the circumstances obtaining at the time of the transaction, the sale could be held to be an imprudent or unjustified act of the guardian. It was also urged that D. W. 1 (the husband of defendant 2) was well-known to the family and the defendant who had confided in him, but we are unable to see how this circumstance has any bearing on the question in issue in the absence of any allegation of fraud or collusion. It is quite likely that D. W. 1 put through the sale, because he knew the circumstances of the plaintiff, his resources and his liabilities. Mr. Srinivasa Ayyar also relied upon the statement of P. W. 1 that things were in a state of confusion so far the management of the plaintiff's affairs were concerned. But there is nothing in the evidence to suggest that on account of that confusion, the plaintiff was in any way injured or that the mismanagement, if any, was the cause of the indebtedness or that it led directly or indirectly to the sale in favour of defendant 2.

6. In our opinion, the sale in question must be held to be valid and binding on the plaintiff. We set aside the decree of the lower Court and dismiss the suit with costs here and in the Court below so far as defendant 2 is concerned.


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