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Kailasam Pillai Vs. Sivabagyammal - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1943Mad373; (1943)1MLJ203
AppellantKailasam Pillai
- .....judgment of lord kingsdown in the following passage: if a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a court of equity will compel the landlord to give effect to such promise or expectation. this was the principle of the decision in gregory v. mighell (1811) 18 ves. 328 : 34 e.r. 341 and, as i conceive, is open to no doubt. if at the hearing of the cause there appears to be such uncertainty as to the particular.....

Krishnaswamy Ayyangar, J.

1. This appeal arises out of a suit instituted by the respondent for the recovery of possession of a house situated in the village of Athur in the Salem District together with mesne profits. The appellant is the son of one Nathamuni Pillai who died on 26th April, 1935. The respondent is the widowed sister of Nathamuni. The house in dispute stands on a site purchased in parcels on four different occasions. The first purchase was under Ex. I, a sale deed, dated 22nd May, 1903, executed in favour of the respondent for Rs. 72-8-0. The second purchase was under Ex. I-A, dated 14th August, 1904, for Rs. 100 and this sale deed was taken not only in the name of the respondent but also of her deceased husband Velayudham. The third purchase was under Ex. I-A, dated 12th October, 1925. Here again the sale was in favour of the respondent alone, the consideration amount being Rs. 400. It is common ground that at the severa dates when the purchases were made there were some thatched structures on the sites. A creditor of Velayudham brought up for sale in Court auction a half share in the site purchased under Ex. I-A on the footing that Velayudham was a part owner along with the respondent, and bought it himself. But this share was bought back in the name of the respondent under a sale deed Ex. I-E, dated 16th January. 1926, for Rs. 75. It is thus clear that the entire site on which the suit house stands was purchased in the name of the respondent and would prima facie belong to her unless it is satisfactorily made out that the purchases were effected benami in her name, the real purchaser being Nathamuni himself. The appellant's case is that Nathamuni was the real owner not only of the sites purchased in the name of the respondent, but that it was with his own monies that a costly building was put up on them. The Subordinate Judge who tried the suit came to the conclusion that the appellant's case that the respondent was merely a benamidar for Nathamuni had not been established; but he also found that it was Nathamuni who constructed the building with his own funds. He expressly negatived the contention of the respondent that she it was who found the money for the construction and that Nathamuni merely supervised. But all the same, he was of opinion, that the intention of Nathamuni in putting up the building was that it should be and remain the property of the respondent. In this view he decreed the suit in its entirety. The defendant has appealed and on his behalf the findings of the learned Subordinate Judge have all been contested, more particularly his conclusion that Nathamuni when he spent large sums of his own money in the construction of the house intended to make a gift of it to his sister, the respondent.

2. The appellant's learned advocate has entirely failed to convince us that the purchases of the several house sites were made with monies supplied by Nathamuni. It was not till 1906 or 1907 that Nathamuni started his toddy business and there is little evidence on the record to show that he was in possession of funds with which he could have made the first two purchases under Exs. I and I-A. On the contrary, it; is much more likely that the respondent Sivabagyammal had scrapped together some monies out of her earnings as a school mistress and utilised them for the purchases. No satisfactory reasons have been adduced to show why Nathamuni considered it necessary or expedient to have recourse to a benami transaction at the time. There is much less reason for the inclusion of the respondent's husband's; name as a purchaser in Ex. I-A. The burden of proving the benami nature of the transactions is heavily on the appellant and he has not discharged it and .we must accordingly uphold the finding of the learned Judge on this point.

3. Nor are we satisfied that there is any substance in the respondent's contention that it was with her monies that the constructions were put up. The learned Judge was justified in declining to accept her fantastic evidence that she had secreted 80 or 85 sovereigns in the store room of the house besides a considerable amount of cash and jewels kept in a box, when she left on a pilgrimage to Benares, in 1925 or 1926. Her case is at complete variance with the picture as presented by herself in her letter Ex. II-A, dated 17th March, 1927. It shows beyond doubt that she had no monies of her own, and that she had to depend upon Nathamuni for her own maintenance and support. In this letter she asks, " Can you be so cruel to me because cloth and food are given to me? You may find fault with me by saying to the lay people that you have enquired of me as to what I needed, that you have helped me very much and that I have spoken like this." After this it is idle for her to contend that her monies were utilised for the building, which was in fact started while she was on a pilgrimage tour. On the contrary, not only was Nathamuni doing a business as an abkari contractor at the time, but had sold his immovable property and it is therefore probable that he had sufficient money in his hands. We are of opinion that the learned Judge's findings on this point also cannot be disturbed.

4. But we are unable to accept the finding that it was Nathamuni's intention to make the respondent the owner of the building which he put up at considerable cost. There is, in fact, no material on which such a finding can legitimately be arrived at. The only circumstance on which the learned Judge relies is the knowledge of Nathamuni that the sites were not his but his sister's. But the sister was a childless widow with an ascetic turn of mind, who was bringing up his only son, the appellant. For a long time she had been without employment, and during that period she must have been supported by Nathamuni, though later the position appears to have been reversed. At the time when the constructions were made, Nathamuni had according to the respondent already sold away the major portion of his properties. She says that the sale was in 1922 whereas another witness, D.W. 6 has deposed that it was in 1927. In either view it is unlikely that he would have given away a considerable portion of his monies to his sister, leaving his only son to depend on the whim and fancy of a woman who on her own showing was inclined to attach more value to the founding of a mutt and the feeding of Sadhus therein than to the earthly needs of her brother and nephew. We think it more likely that Nathamuni thought that she would not assert her ownership of the site to the detriment of the appellant to whom she stood in the position of a foster mother. The subsequent conduct of the respondent, while it shows that she did not abandon her right to the sites, exhibits the consciousness that she was not entitled to the whole of the property, the site and the superstructure. Early in 1933, she objected to the transfer of registry in respect of the house by the Union Board to the name of Nathamuni. But later in the years after the registry was effected there are a number of letters written by her in which she besought her brother to recognise her right to a half share only in the house and to no more. Reference was also made by her advocate to certain mortgages executed by the respondent over the property in dispute. But it is satisfactorily established that the money was really taken by Nathamuni and applied for the construction of a well in the premises. There is also the fact that after the completion of the house, it was Nathamuni who lived in it, and let a portion out to a tenant and enjoyed the rental income. The only conclusion possible in all the circumstances is that the buildings were erected by Nathamuni in the belief that the respondent would not assert her right to the site, against himself and his son, the appellant, but that he never intended to make a gift of the superstructure to her to the detriment of his only son. In fact, she did not assert her right till 1933 by which time the building had been long completed.

5. The question then arises as to what are the respective rights of the parties in a case where as here, the site belongs to one, and the superstructure is put by the other. We should add that in this case the superstructure was raised with the knowledge of the respondent and without the slightest protest on her part. In fact, she made suggestions as to how the construction should be made, by giving the advice that the roof should be terraced and not tiled. Her conduct while the building was in progress raises the inference that she did in fact encourage Nathamuni to lay out his own money on the construction. On these facts which are very similar to those which existed in the Unity Bank v. King (1858) 25 Beav. 72 : 53 E.R. 563, an equity arises in favour of Nathamuni who expended his money on his sister's land. In the case quoted, a father had allowed his sons the use or occupation of his premises without any arrangement as to the terms on which they should hold the property. The whole transaction was one of mutual confidence, and subject to future arrangement, but the father never made over or relinquished the property in the premises, but on the contrary, intended to reserve it for himself. The sons erected, and the father allowed them to erect, buildings at great expense. The question arose as to what were the respective rights of the parties in a suit instituted by a mortgagee of the premises from the sons. The Master of the Rolls, Sir John Romilly, after stating the facts observed as follows:

I am of opinion that he (the father) could not have taken posssession of that land again, without allowing to his sons the amount of the money they had laid out upon it. Without therefore coming to the conclusion, which, upon the evidence, I have not come to, that he had intended to make or that he had made over to his sons his interest in the property, I am of opinion that the money laid out by the sons was a lien and charge upon it, as against the father.

The leading case on the subject is Ramsden v. Dyson (1865) L.R. 1 H.L. 129, in which the principle is stated in the classic judgment of Lord Kingsdown in the following passage:

If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation created or encouraged by the landlord that he shall have a certain interest, takes possession of such land with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord and without objection by him, lays out money upon the land, a Court of Equity will compel the landlord to give effect to such promise or expectation. This was the principle of the decision in Gregory v. Mighell (1811) 18 Ves. 328 : 34 E.R. 341 and, as I conceive, is open to no doubt. If at the hearing of the cause there appears to be such uncertainty as to the particular terms of the contract as might prevent a Court of Equity from giving relief if the contract had been in writing but there had been no expenditure, a Court of Equity will nevertheless, in the case which is about stated, interfere in order to prevent fraud, though there has been a difference of opinion amongst great Judges as to the nature of the relief to be granted. Lord Thurlow seems to have thought that the Court would ascertain the terms by reference to the Master, and if they could not be ascertained would itself fix reasonable terms. Lord Alvanlcy, and Lord Redesdale, and perhaps Lord Eldon, thought this was going too far; but I do not understand any doubt to have been entertained by any of them that, either in the form of a specific interest in the land, or in the shape of compensation for the expenditure, a Court of Equity would give relief, and protect in the meantime the possession of the tenant. If, on the other hand, a tenant being in possession of land, and knowing the nature and extent of his interest, lays out money upon it in the hope or expectation of an extended term or an allowance for expenditure, then, if such hope or expectation has not been created or encouraged by the landlord, the tenant has no claim which any Court of Law or Equity can enforce. This was the principle of the decision in Philling v. Armitage (1805) 12 Ves. 78 : 33 E.R. 31 and, like the decision in Gregory v. Mighell (1811) 18 Ves. 328 : 34 E.R. 341, seems founded on plain rules of reason and justice.

The determining factor is whether the owner of the land by his conduct or otherwise created or encouraged the hope or expectation referred to in this passage. The equity which arises in favour of the person who has expended his own money will not fail merely on the ground that there was no definite understanding as to the nature of the right which he is to have in the property. This was expressly stated by Sir Arthur Hobhouse in delivering the judgment of the Privy Council in Plimner v. Mayor of Wellington (1884) 9 A.C. 699. The equity will of course vary according to the particular circumstances proved. This is clearly indicated in the following passage in the judgment where their Lordships approved of the decision in the Unity Bank v. King (1862) 4 D.F. and J. 517 : 45 E.R. 1285 already referred to:

Referring again to the passage quoted from Lord Kingsdown's judgment, there is good authority for saying what appears to their Lordships to be quite sound in principle, that the equity arising from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated.

In such a ease as Ramsden v. Dyson (1865) L.R. 1 H.L. 129, the evidence (according to Lord Kingsdown's . view) shewed that the tenant expected a particular kind of lease, which Vice-Chancellor Sluart decreed to him, though it docs not appear what form of relief Lord Kingsdown himself would have given. In such a case as the Duke of Beaufort v. Patrick (1853) 17 Beav. 60 : 51 E.R. 954, nothing but perpetual retention of the land would satisfy the equity raised in favour of those who spent their money on it, and it was secured to them at a valuation. In such a case as Dillwyn v. Llewelyn (1862) 4 D.F. and J. 517 : 45 E.R. 1285, nothing but a grant of the fee simple would satisfy the equity which the Lord Chancellor held to have been raised by the son's expenditure on his father's land. In such a case as that of the Unity Bank v. King (1862) 4 D.F. and J. 517 : 45 E.R. 1285, the Master of the Rolls, holding that the father did not intend to part with his land to his sons who built on it, considered that their equity, would be satisfied by recouping their expenditure to them. In fact, the Court must look at the circumstances in each case to decide in what way the equity can be satisfied.

We are clearly of opinion that the present case falls within the principle of these decisions. We must accordingly hold that the appellant is entitled to a charge on the property in respect of the monies expended by Nathamuni. The Subordinate Judge has found, and it has not been disputed before us, that the value of the construction is Rs. 4,000. He has also held that the appellant is entitled in any event to no more than this amount, if his claim should be upheld. In the view we have taken we hold that the decree of the Court should be modified by deleting clauses 2 to 5 of the decree of the lower Court and adding at the end of clause I the following words, namely, " on her paying to him the sum of Rs. 4,000 representing the value of the improvements effected by Nathamuni."

6. We direct that each party should bear his own costs both here and in the Court below in view of the fact that both sides have been guilty of putting forward false cases and adducing false evidence. The direction on the lower Court's decree that the respondent should pay the court-fee due to Government shall stand.

(This appeal coming on for being mentioned, the Court made the following)


7. Instead of the words " and this sum shall be a first charge on the suit house " in Clause 6 of the decree of the lower Court the following words shall be substituted " and this sum shall be a first charge on the plaintiff's interest in the suit house as decreed to her."

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