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P.S. Ranga Iyer Vs. Chidambara Iyer and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1956)1MLJ503
AppellantP.S. Ranga Iyer
RespondentChidambara Iyer and ors.
Cases ReferredSubba Rao v. Mahalakshmamma
Excerpt:
- - 31,000 secured under the mortgage the mortgagee was to remain in possession of the properties, pay the jenmi's purapad and assessment on the items and thereafter enjoy the balance of the usufruct. 4. instead of settling the disputes referred to in the power of attorney, dated 4th march, 1937, we looked into the mode of division and became satisfied that there are certain inequalities and differences in value and patam in the division already effected before and equalisation of shares by certain adjustments was absolutely necessary. it contemplates an absolute severance of the individual interests of each joint owner and after partition each has the right to enjoy his estate without supervision, let or hindrance from the other. there is no doubt that so far as the mortgage in.....govinda menon, j.1. o.p. no. 43 of 1949 on the file of the court of the subordinate judge, south malabar at palghat was a petition under sections 9-a and 19-a of the madras agriculturists relief act (iv of 1938) for scaling down the amount due under a usufructuary mortgage exhibit a-1 dated 18th august, 1930, executed in favour of narayana iyer, the manager of the joint family by sivarama iyer, family manager and 15 others who constituted members of a joint family, for rs. 31,000 charging various items of properties. executants 4 and 13 to the document are the petitioners who applied for the scaling down of the mortgage amount and executants 1, 8, 9, 10, 11, 3, 12, 5, 14, 15, 6, 7, and 16 were respectively respondents 2 to 14 in the court below. the first respondent was the mortgagee who.....
Judgment:

Govinda Menon, J.

1. O.P. No. 43 of 1949 on the file of the Court of the Subordinate Judge, South Malabar at Palghat was a petition under Sections 9-A and 19-A of the Madras Agriculturists Relief Act (IV of 1938) for scaling down the amount due under a usufructuary mortgage Exhibit A-1 dated 18th August, 1930, executed in favour of Narayana Iyer, the manager of the joint family by Sivarama Iyer, family manager and 15 others who constituted members of a joint family, for Rs. 31,000 charging various items of properties. Executants 4 and 13 to the document are the petitioners who applied for the scaling down of the mortgage amount and executants 1, 8, 9, 10, 11, 3, 12, 5, 14, 15, 6, 7, and 16 were respectively respondents 2 to 14 in the Court below. The first respondent was the mortgagee who died pending suit and his legal representative the 17th respondent in the Court below, is the appellant before us.

2. It was stated in the petition that Exhibit A-1 fell within the ambit of Section 9-A, Sub-clause (10)(ii) of the Madras Agriculturists Relief Act and as such the mortgage amount was liable to be scaled down in accordance, with the provisions of Section 19-A of the said statute. Though it was contended in the Court below that the petitioner and the other members of his family were not agriculturists at the time the Madras Agriculturists Relief Act came into force or on the date of the application, that question ceases to be of any importance in view of the fact that the matter has been decided against the contesting respondents who had not chosen to canvass that finding in appeal. We, therefore, proceed on the footing that the family of the mortgagors and at least some of the members thereof are agriculturists entitled to the benefits of the Act. The next contention put forward was that as the mortgage in question was not a pure usufructuary mortgage but an anomalous one with a personal covenant, the provisions of Section 9-A of the Act would not be applicable. There was a further contention that since there has been a partition in the family of the mortgagees in 1939 under which the properties comprised under the mortgage were set apart to charity, new rights have come into existence after 1938 and as such Section 9-A cannot be made applicable to the mortgage in question. There was a still further contention raised in the Court below that since the father of the first petitioner and others in the Court below was adjudged an insolvent and the family properties came to be vested in the Official Receiver, they cannot be deemed to be agriculturists under the Act. These contentions were also overruled by the learned Subordinate Judge and nothing has been urged against the correctness of that decision.

3. The main contention disputing the right of the petitioner to scale down the mortgage amount raised in the Court below and repeated here was with regard to the applicability of Section 9-A (10)(ii) of the Act, the relevant portions of which are as follows:

Nothing contained in this section except sub-sections (1) and (2) shall apply to any mortgage....

(ii) in respect of property situated in any other area in the cases mentioned below:

(a) Where during the period after the 30th September, 1937 and before the 30th January, 1949, the equity of redemption in, the property subject to the mortgage has devolved either wholly or in part on a person by or through a transfer inter vivos either from the original mortgagor or from a person deriving title from or through such mortgagor otherwise than by a transfer inter vivos, then to the whole or such part as the case may be;

(b) Where during the period aforesaid, the mortgagee, or any of his successors-in-interest has transferred either wholly or in part the mortgagee's rights in the property bona fide and for valuable consideration then to the whole or such part as the case may be; provided that the transferee of a mortgage shall not be entitled to recover in respect of such mortgage, anything more than the value of the consideration for the transfer; but nothing herein contained shall in cases where the property or portion thereof has been leased back to the mortgagor affect the right of the transferee to recover the rents, if any, due under the lease if such rents have not become barred by limitation under any law for the time being in force;

(c) Where the mortgagee's interest in the property subject to the mortgage or any part of such interest belonged to, or devolved on, two or more persons and during the period aforesaid, a partition has taken place among such persons, then, to the whole or such part of the interest, as the case may be.

4. It is on paragraphs (b) and (c) that reliance is placed by the appellant to induce us to hold that the relevant provisions of the section which provides for scaling down the mortgage amount, where the document was executed at any time before 30th September, 1937, by virtue of which the mortgagee is in possession of the property mortgaged to him or any portion thereof, where no rate of interest is stipulated for as due to the mortgagee or where a rate of interest is stipulated for as due to the mortgagee in respect of the particular amounts secured by the mortgage or any portion thereof in addition to the usufruct in the property or in respect of any other sum payable to the mortgagee by the mortgagor in his capacity as such are not applicable. In such a case the mortgage amount will not be scaled down in the manner provided for in the various sub-sections. Exhibit A-1 being admittedly executed before 30th September, 1937, by virtue of which the mortgagee was to be in possession of the mortgaged property and where no rate of interest is stipulated as due to the mortgagee complies with the requirements of the necessary provisions for the application regarding the scaling down but for the exception contained in Sub-section (10) if that is applicable to the case in question. A reading of Exhibit A-1 shows that there is no rate of interest fixed as due from the mortgagor to the mortgagee. What is stated is that for the sum of Rs. 31,000 secured under the mortgage the mortgagee was to remain in possession of the properties, pay the jenmi's purapad and assessment on the items and thereafter enjoy the balance of the usufruct. It is conceded in the court below and here that but for the exception provided in Sub-section (10) the mortgage amount will have to be scaled down in accordance with the provisions of the Act.

5. The appellant therefore contends that paragraph (b) of Sub-section (10)(ii) would apply because from the period after 30th September, 1937, and before January, 1948, the mortgagee has transferred the entire mortgagee's rights in the property bona fide for valuable consideration to the family trust which became the owner of the property and such being the case paragraph (b) applies. In the alternative paragraph (c) would apply because during the period aforesaid there has been a partition among the persons entitled to the mortgagee's interest and since the mortgage has been the subject-matter of that partition, it cannot be scaled down. The learned Subordinate Judge discussed the applicability of paragraph, (c) in extenso in paragraphs 20 to 30 of his judgment and negatived the contention. He also found that paragraph (b) would not apply for the transfer to the charity is not one for valuable consideration.

6. Mr. K.V. Venkatasubramania Ayyar appearing for the appellant disputed the correctness of the decision of the lower Court on both these points and in order to appreciate his contention it is necessary to state a few more facts and then see how far his contentions can be accepted. Firstly we shall ascertain whether paragraph (c) applies because a large part of the judgment of the learned Subordinate Judge has dealt with that topic. Exhibit B-1 is an unregistered document, dated 22nd August, 1934, executed by the members of the E.N.A.S. family purporting to effect a partition of the joint family properties and the mortgage in question is one among the various items dealt with thereunder. Paragraph 1 of the document states that for the purpose of dividing the joint family properties certain mediators, were appointed who prepared three schedules for allotting the properties to the three main branches of which Samu Bhattar's branch was one. The schedule intended to be allotted to Samu Bhattar's branch was again sub-divided into five schedules and thereafter on account of inconvenience in dividing all the properties certain properties were kept in common and some belonging to Samu Bhattar's branch and the family business were also kept undivided. Further it is stated that instead of completing the partition by the award the parties accepted the schedules prepared by the mediators and in respect of the properties comprised in these schedules division has become complete and the other properties are kept in common. Paragraph 7 provides that 'the undivided properties which are kept in common are described in one schedule and the properties to which Samu Bhattar's branch alone is entitled are described in another schedule '. Paragraph 8 deals with the charity and recites that for the prosperity of the common family, the members have set apart six items of properties for charity out of their own free will and consent. It is also set out that out of the income of the said properties certain charities have to be conducted. Paragraph 9 deals with the manner in which the properties set apart for charity have to be managed. It is provided that the management of these properties has to be carried on by the senior-most member of each branch for each year by rotation commencing from first kanni, 1110, and that at the end of the year, he has to render account to the other branches. Paragraph 10 deals with properties kept in common and which were to be divided in future. D Schedule relates to such common properties and item 4 of that schedule is the mortgage in question. No dispute has arisen that at the time of the agreement, Exhibit B-1 the mortgage in question was either set apart for any charitable purpose or was divided among the members of the family, but it is admitted that it was kept as a common asset for the benefit of the entire family. It need hardly be stated that the parties conducted themselves thereafter according to the tenor of Exhibit B-1.

7. The items of properties impressed with the character of charity in Exhibit B-1 are the following:

* * * * * * *

8. From Exhibit B-1 it is evident that six items of properties have been set apart for charities from the income of which the senior-most member of each branch for each year by rotation was to conduct the various charities specified. Exhibit B-2, dated 3rd September, 1939, refers to the schedules of partition, allotted to the members of the E.N.A.S. family. This is also an unregistered document. The first schedule to this deals with properties set apart for charity from out of the joint family.

9. They are:

* * * * * * *

10. Exhibit B-3, dated 9th September, 1939, is a registered copy of the partition, deed by the members of the family and paragraphs a and 4 of that document make provision with regard to the matter in question which run as follows:

2. ' While we were living as members of a joint Hindu family, we decided to become divided and three schedules, namely A, B and C were prepared through the mediation of Messrs. T.G. Ramaswami Ayyar, P.R. Ramakrishna Ayyar, V.V. Subramania Ayyar and T.S. Narayana Ayyar and all of us signed those schedules. A schedule properties were taken by Nos. 1 to 4, B. schedule by Nos. 5 to 9, C. schedule by No. 10. The B schedule set apart to Nos. 5 to 9 were sub-divided into 5 schedules, viz., B-1 to B-5. Nos. 5 to 9 took each a schedule. Evidencing the said division and for the purpose of managing the common properties and winding up the money-lending business an agreement was entered into between us on 22nd August, 1934. Therefore for the purpose of winding up the said business and completing the partition by adjusting the differences in the schedules already prepared and taken by the sharers we gave a power of attorney dated 9th March, 1937, to Mr. T.G. Ramaswami Ayyar but none of those things materialised. Later on for the purpose of paying off certain depositors, winding up the hundi business and managing the common affairs until the partition is completed, we entered into a registered agreement No. 391 of 1939, S.R.O. Palghat.

4. Instead of settling the disputes referred to in the power of attorney, dated 4th March, 1937, we looked into the mode of division and became satisfied that there are certain inequalities and differences in value and patam in the division already effected before and equalisation of shares by certain adjustments was absolutely necessary. Then we took for the common family, the assets and liabilities in respect of the kuris conducted in the name of Samu Battar and sons for Rs. 32,000 and Rs. 21,000 and all the assets and liabilities pertaining to the same have been taken over by the common family with the consent of all of us. Out of the properties which had already been divided as mentioned in paragraph 2 above and other properties then kept in common and subsequently acquired, the properties in I schedule has been set apart for private trust created by the common family and the said schedules have been signed by all of us.'

What is urged on behalf of the appellant to attract the application of paragraph (c) of Section 9-A (10)(ii) is that Exhibit B-1 being only an agreement to divide has not finally put an end to the joint family relationship between the parties which has been cut asunder, only by Exhibits B-2 and B-3 with the result that it was only during the period between 30th September, 1937, and before 30th January, 1948, that the partition has come to be effected between the members of the family. In other words, Exhibit B-1 cannot be considered as effecting any partition at all. Learned Counsel for the appellant contends that Exhibit B-1 did not bring about a complete partition between the parties and that the properties covered by the mortgage under reference and some other properties were kept in common to be divided later on by metes and bounds and that those properties were later on divided amongst the parties under Exhibit B-3 as per Exhibit B-2 which disclosed that the mortgage right was set apart for charity. The argument put forward in the Court below that the word ' partition ' in Section 9-A (10)(ii)(c) of the Act being applicable to the entire population of the State of Madras irrespective of creed, community or faith, it should be interpreted as meaning complete division by metes and bounds and not a division in status as applied to joint Hindu families did not appeal to the learned Subordinate Judge who held that the word ' partition ' has to be construed with regard to the particular family in which it takes place and has bearing on the personal law by which the parties to the partition are governed. According to him when applying Section 9-A (10)(ii)(c) to a Hindu joint family the word partition must refer either to an agreement by which severance in status is created or a unilateral declaration of intention by any member of the family communicated to others by which the same result is created because according to the learned Judge when once severance in status comes into existence then what further remains is merely the mechanical process of cutting up of the properties in accordance with the ascertained interests to which each member or branch becomes entitled to. The result of this view would be that the word partition has to be understood as referring to different circumstances when it is applied to persons governed by different systems of law. The learned Subordinate Judge was of the view that on or after the date of Exhibit B-1 the members of the family ceased to be joint though with regard to some of the properties there was no actual division by metes and bounds. The learned Judge also noticed the fact that with regard to the mortgage in question there was no division whatever by metes and bounds between the members of the family.

11. The question then is whether partition has taken place among the persons in whom the mortgagee's interest has vested and whether the mortgage in question has ceased to be joint family property as a result of such partition. We cannot agree with the learned Subordinate Judge that in the context of things the word ' partition ' should have different meanings as and when applied to persons following different systems of law. An unequivocal declaration of intention by one member of a joint Hindu family to get his share in the joint family properties ascertained and divided, communicated to other members of the family, though effecting a severance in status, so far as the family is concerned, cannot be considered to effect a partition so as to bring the exception in Section 9-A (10)(ii)(c) into play. We have, therefore, to find out what exactly is the meaning of the word ' partition '. It is difficult to hold that the word ' partition ' in paragraph (c) applies to a state of circumstances where what was once a joint co-parcenary or joint tenancy is disrupted by a unilateral act of one of the parties so far as he is concerned and converted into tenancy in common without portions of the property which each one is entitled to, ascertained and divided by metes and bounds. In Bouvier's Law Dictionary Volume II at page 585 the meaning of the word ' partition' is given as follows:-

The division which is made between the several persons of lands, tenements, or hereditaments or of goods and chattels which belong to them as co-proprietors. The term is more technically applied to the division of real estate made between co-parceners, tenants-in-common or joint tenants.

At page 586 the learned author observes as follows:

A partition in equity is effected by first ascertaining the rights of the several parties interested and then issuing a commission to make the partition required; and finally on returning of the commissioners and confirmation thereof by decreeing mutual conveyances between the parties. Where the titles of the parties are legal titles, the decree in the partition has been held to vest the titles in the purparts without conveyances.

12. In Ballentine's Law Dictionary (2nd edition) the word 'partition' is defined in the following terms:

A proceeding the object of which is to enable those who own property as joint tenants or coparceners or tenants-in-common to put an end to the tenancy so as to vest in each sole estate in specific property or an allotment of the lands and tenements. It contemplates an absolute severance of the individual interests of each joint owner and after partition each has the right to enjoy his estate without supervision, let or hindrance from the other. Unless this can be accomplished the joint estate ought to be sold and proceeds divided.

13. It is clear from these meanings of the word that partition contemplates vesting in one of the erstwhile coparceners or tenants in common specific property by allotment. Thus it is clear that the conversion of a coparcenary into a tenancy-in-common cannot be considered as partition within the meaning of the word partition in paragraph (c) of Section 9-A (10)(ii) of the Act. There is no doubt that so far as the mortgage in question is concerned there was no division of the same by Exhibit B-1 for it is included in B schedule among the properties kept in common to be enjoyed by all the members. The final allotment for charity comes into existence only as a result of the registration of Exhibit B-3 which accepted and embodied the lists contained in Exhibit B-2. We are definitely of opinion that under Exhibit B-1 there has been no partition so as to attract the application of paragraph (c). The question then is whether under Exhibits B-2 and B-3 there was a partition so as to bring the case within the aforesaid paragraph. If the allotment of a specific item of property after its ownership of more than one individual in it is extinguished and the ownership is vested in one of the erstwhile co-owners then in the present case there is no partition affected at all because the mortgage in question is not set apart towards the share of any one of the individuals but the ownership is transferred to the family charity which is to be managed by the senior-most individual among the members for the time being. But it is contended by Mr. Venkatasubramania Ayyar, that in the case of a joint Hindu family in partition provision has to be made for the debts and where a liability binding on the family is extinguished by the transfer of certain family properties even if there is no allotment in such a case, still the provisions of paragraph (c) would be satisfied. In other words, what the learned Counsel argues is that at the time of the partition if a property is sold to a third party in lieu of debts due to him still paragraph (c) can be applied. All that is necessary is the division of the joint family properties among the members and there is no pre-requisite of the allotment of any share to any individual in order to attract the application of paragraph (c). Learned Counsel relies upon the passages, at pages 514 and 515 of Mayne's Hindu Law, paragraph 415.

14. We do not think that this contention can be accepted. It is implicit in the words of the paragraph that the mortgagee's interest in the property should be the subject of partition and the whole or portion of it should be allotted to one of the erstwhile co-owners. Otherwise there can be no partition and we have no doubt whatever that when the expression used is ' a partition has taken place among such persons ' it can refer to an actual division and allotment to one of the co-owners. Though, therefore, we cannot agree with the learned Judge that Exhibit B-1 effects a partition, still, in our opinion, by Exhibits B-2 and B-3 there has been a division of properties but as there is no allotment to any one of the individuals, paragraph (c) cannot be called in aid in favour of the appellant. Mr. Ramachandra Ayyar for the respondents contends that paragraph (c) can apply only when the mortgage interest is owned by two or more persons and there is a partition among them and since according to Section 3, Sub-section 1, of the Madras Agriculturists Relief Act, a 'person' includes an undivided Hindu family, in the present case if the ownership of the mortgage vested in the undivided family that would mean only one person and as such there is no ownership of mortgage in two or more persons with the result that paragraph (c) cannot apply. The learned Counsel's argument is that in the case of a joint family owning a mortgage since there is no plurality of persons in ownership as a joint Hindu family it must be deemed to be one person for the purpose of this section, and therefore it is difficult to apply paragraph (c).

15. We do not think that, ingenious as this argument may be, it is possible to accept the same. When the paragraph speaks of the mortgage interest having belonged to or devolved on two or more persons, we have to take the meaning of the word persons in the natural and literal way and not confine the term as defined by which a joint family is brought within the confines of that definition. We have no doubt whatever that where the mortgage belonged to a joint family and there is a division among the members of that joint family by which the whole or part of it is set apart to one of the erstwhile coparceners then in such a case the provisions of paragraph (c) can be attracted but, in the present case, as stated already, there is no allotment to one individual as at the partition, what is done is there is a transfer of the ownership in the mortgage to a different entity, namely, to the trust and, therefore, paragraph (c) cannot be applied. It seems to us, therefore, that the appellant is not entitled to ask for the application of paragraph (c).

16. How far paragraph (b) can be applied has next to be considered and the answer to that question will depend upon whether the mortgagee has transferred either wholly or in part the mortgagee's rights in the property bona fide and for. valuable consideration. That there was a transfer of ownership, by Exhibit B-3 from the erstwhile joint family to the trust belonging to the joint family on which the senior-most member for the time being was to be the trustee cannot be disputed. The last sentence in paragraph 4 of Exhibit B-3 is clear on the point. It says that

the properties in I schedule were set apart for private trust created by the common family and the said schedules have been signed by all of us.

Therefore by Exhibit B-1, setting apart for charity is effected and the transfer of ownership to the trustee, is completed by the registration of Exhibit B-3. The question of transfer is, therefore, satisfied. It is nobody's case that the partition deed Exhibit B-3 or any of its provisions are not bona fide. Such being the case we have to take it that there has been a transfer of the mortgagee's rights in the property bona fide in favour of the trust. Then the only point for consideration is whether such a transfer is for valuable consideration. But Mr. Ramachandra Iyer contended that there has been no transfer because in the first instance the mortgage right belonged to the joint family and after the partition it still remained a joint family asset though in the character of trust property. This argument is unsound because the legal persons constituting the joint family is entirely different from the trust and none of the members of the joint family can be said to have any beneficial interest in the mortgage right after it has assumed the shape of trust property. Though according to Exhibit B-3 it is the senior-most member of the groups constituting the family that has to manage the trust property for the time being, there is a change of ownership from the joint family to the trust. The last sentence in paragraph 4 of Exhibit B-3 leaves no room for doubt about the character of the trust impressed upon the mortgagee's interest. Assuming, therefore, that the first two requisites for the application of paragraph (6), namely, the transfer of the mortgagee's right in the property and the same being bona fide, are established, the next point for consideration is whether such a transfer is for valuable consideration. On this aspect of the case learned Counsel for the respondents strenuously contended that on a reading of Section 9-A (to)(ii) along with Section 19-A of the Madras Agriculturists Relief Act there can be no room for any doubt that the proviso enacted to paragraph (b) that the transferee of the mortgage is not entitled to recover in respect of such mortgage anything more than the value of the consideration for the transfer shows that there must be a valid transfer for consideration. Otherwise the proviso is otiose for the reason that in the case of a transfer without valuable consideration it does not come into play. It is also urged that the transfer should be to a person recognised in the eye of the law prior to the transfer but in this case as the trust was created by the partition deed for the first time in 1934, this paragraph cannot be made applicable. It is urged further that there is no dedication of the property as such for the trust but that it has been mentioned that certain specific items of charity were to be conducted with the income from the properties and that being the case there is no disposition of the corpus but only a charge on the income. On a perusal of the various items of charity to be conducted it is seen that though specific amounts have been fixed for each one of the items, one cannot say that such amounts are fixed because the expenses in many cases would be fluctuating but the ceremonies to be conducted are fixed and since there is no disposal of the surplus, if any, left after meeting the charity expenses we have to take it that the intention was to create a trust over the corpus itself and not as contended for by the learned Counsel to have a charge on the income from the properties alone. For the performance of ceremonies, viz-, 1. 3, 9, 11. etc., as and when the prices of the pooja materials fluctuate the expenses would also be increasing and not be constant. The trustee for the time being is enjoined to have these rituals performed but it cannot be said that the amount of expenditure for each item should also be fixed. In our view they have to change with altered conditions.

17. It was next contended that assuming that the family is the trustee under Exhibit B-1 there is no valid transfer under Exhibits B-2 and B-3 because there was no consciousness of a valid endowment under Exhibit B-1 and there was no specific mention of the reiteration of the same in Exhibits B-2 and B-3. We are unable to accept the arguments for the reasons stated already. It is clear as we have referred to already that for the amounts entered as credit in the family business account which was a liability payable by the family from and out of the interest under Exhibit B-1 the religious functions have to be performed and that there was a substitution of the mortgage amount under Exhibit B-3. Mr. Ramachandra Ayyar contends that there is no oral evidence about that substitution; nor is it possible to conclude from the meagre and scanty documentary evidence let in that there has been any such substitution. The answer to this argument is that the credit account in favour of Kolathu Iyer is only a ledger entry making the liability on he family with regard to a sum of money out of which certain charities have to be performed. In Exhibit B-3 we do not find any credit entry in the name of Kolathu Iyer as well as patasala account. Those liabilities must be deemed to have been discharged by item 1 in Exhibit B-2, namely, the mortgage amount. The result is the discharge of one liability by another and we are unable to see that such a state of things would not amount to a transfer.

18. We have next to consider whether the transfer is for valuable consideration. The argument of the learned Counsel is that the expression ' valuable consideration ' connotes payment of money or its equivalent in kind and not the discharge of a liability. The expression ' valuable consideration ' has been defined by various authors.

19. In Bouvier's Law Dictionary, Volume I at page 402, we find the following discussion:

Valuable considerations are either some benefit conferred upon the party by whom the promise is made, or upon a third party at his instance or request; or some detriment sustained at the instance of the party promising by the party in whose favour the promise is made. Chit. Contr. 7 Doct. and Stud. 179, a. Pet. 182; 5 Cra. 142, 150, 1 Litt. 183, 3. Johns. 100; 8 N.Y. 207; 6 Mass 58; 2 Bibb 30; 2 J.J. Marsh 222 : 2. N.H. 97.... The detriment to the promisee must be a detriment into the contract and not from the breach of it. 2 Miss. Rep. 293. ' A valuable consideration may consist either in some right interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other '. L.R. 10 Ex. 162, See 5 Bick. 380. A valuable consideration is usually in some way pecuniary or convertible into money; and a very slight consideration, provided it be valuable and free from fraud, will support a contract, 2 How 426, 12 Mass 365; 12 Vt. 259; 29. Ala N.S. 188.... Valuable considerations are divided by the civilians into four classes which are given with literal translations, Do ut des (I give that you may give) Facto ut facias (I do that you may do) Facto ut des (I do that you may give) Do ut facias (I give that you may do).

In Law Dictionary (second edition) by Ballentine the meaning given to the expression 'valuable consideration' is as follows:

A consideration which may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given suffered, or undertaken by the other party to the contract (7 Am. Jur. 925).

To constitute a sufficient conveyance by way of bargain and sale, there must be a valuable consideration expressed in the deed or proved independently of it, that is, a consideration founded on something valuable as distinguished from good consideration which is founded on natural love and affection; and a good consideration is personal, whereas a valuable consideration may be paid to the bargainer for and on account of another. See 16 Am. Jur. 475.

In Stroud's Judicial Dictionary (3rd edition), Vol. IV, page 3196, the expression ' valuable consideration ' with regard to the various statutes is considered. In ' Words and Phrases Judicially defined ' Vol. V by Roland Burrows at page 413 : it is stated as follows:-

A valuable consideration, in the sense of the law may consist either in some right interest, profit or benefit accruing to the one party or some forbearance, determent, loss or responsibility given, suffered or undertaken by the other. Currie v. Misa (1875) L.R. 10 affirmed sub nom Misa v. Currie. (1876) LR 1 A.C. 554

From these passages it is abundantly clear that valuable consideration does not necessarily mean the payment of money or in kind. Cases where this expression has been defined have also been brought to our notice. In Currie v. Misa (1875) L.R. 10 Exch. 153, Lush, J., defines the expression ' valuable consideration ' thus:-

A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other.

This definition has been approved and accepted by their Lordships of the Judicial Committee in Fleming v. Bank of hew Zealand L.R. (1900) A.C. 557. Lord Lindley delivering the Judgment of the Privy Council observed as follows:

In Currie v. Misa L.R. (1875) 10 Exch. 153 the question arose whether a cheque drawn by the defendant and made payable to Lizardi & Co. was given for consideration or not, and whether the plaintiffs were holders of the cheque for value. The case is an important authority on the meaning of consideration. Lush, J, giving the judgment of the Exchequer Chamber said ' A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to the one party or some forbearance detriment loss or responsibility given suffered or undertaken by the other: Com. Dig. Action on the case assumpsit B-1-15'. This definition has been constantly accepted as correct. Their Lordships so treat it; and if correct it covers this case so far as some consideration is concerned.

20. In Ramacharya Venkataramanacharya v. Srinivasacharya Venkatramanacharya 46 Ind.Cas. 19, Sir Stanley Batchelor Kt. Acting C.J. and Kemp, J., were of the opinion that setting apart of properties for the performance of religious ceremonies can be said to be for valuable consideration. Where the managers of a temple made a gift of the temple property to certain individuals in consideration of the latter performing certain religious services at the temple, it was held that the donees and their heirs were transferees for valuable consideration from express trustees, the performance of services being the consideration for the gift. The learned Judge (Batchelor, J.) observed as follows:

The only possible question raised upon the application of the Article turned upon the phrase for a valuable consideration

and there I am clear that the condition required by the Article is in this case satisfied. The transfer to the defendant's predecessors is expressed to have been in consideration that they shall accept the responsibility and discharge the duty of performing these recurrent religious ceremonies, which are regarded among Hindus as matters of transcendent importance. That being so I am of opinion that the consideration is a valuable consideration within the meaning of that phrase as recognised by the law. This meaning is explained in Currie v. Misa (1918) 46 Ind.Cas. 19 where Mr. Justice Lush in delivering the judgment of the Court says:

A valuable consideration in the sense of the law, may consist either in some right, interest profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. I cannot doubt that in this case the consideration recited by the deed of transfer falls within this comprehensive description.

These pronouncements leave no room for doubt that where the transferor has suffered some detriment or loss, or responsibility undertaken or forbears from doing a certain thing, it is valuable consideration; likewise where the transferee gets some interest, right, profit or benefit, then also it is valuable consideration. In the present case the joint family has lost the mortgage interest and the trust has gained that interest. Therefore the transfer under Exhibit B-3 must be deemed to be for valuable consideration. Such being the case all the essential requirements for the attraction of paragraph (b) of Section 9-A (10)(ii) have been fulfilled. Then Mr. Ramachandra Iyer contended that as Exhibit B-3 does not specifically deal with the transfer but has incorporated the statements in Exhibit B-2, it is not admissible in evidence according to the decision in Subba Rao v. Mahalakshmamma : AIR1930Mad883 and hence there has been no proper transfer.

21. Learned Counsel also referred to the fact that in ground No. 18 in the memorandum of appeal the appellant himself has questioned the admissibility of Exhibit B-2 though the same was filed in the Court below by him. But we have to remember that the actual transfer is created only by Exhibit B-3 which accepts Exhibit B-2 as its part and parcel. Reference is made to Exhibit B-2 in Exhibit B-3 and the parties assumed as if Exhibit B-2 has been incorporated entirely in Exhibit B-3. Moreover it is not as if Exhibit B-3 records a past transaction because Exhibit B-2 is only six days anterior to Exhibit B-3.

22. Learned Counsel for the appellant contended that both Exhibits B-2 and B-3 should be treated as one and the same document and we see no reason to negative that contention.

23. We are, therefore, of opinion that paragraph (b) of Section 9-A (10)(ii) applies to the facts of the present case, and, therefore, the mortgage under Exhibit A-1 is not liable to be scaled down. In the result the appeal is allowed and O.P. No. 43 : of 1949 on the file of the Sub-Court, Palghat, is dismissed.


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