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V. Packiria Pillai Vs. K.V. Subbiah Mudaliar - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in113Ind.Cas.554
AppellantV. Packiria Pillai
RespondentK.V. Subbiah Mudaliar
Cases ReferredBonnerji v. Sitanath Das
Excerpt:
religious endowment - trustee--power to contract debt--burden of proof of binding character--renewal of binding debt, effect of--power-of-attorney, construction of--agent under power-of-attorney from trustee, whether competent to borrow. - .....said to be made up of rs. 500 alleged to have been borrowed for temple purposes under a promissory note executed by the late manager on 21st march, 1912, and rs. 160 balance of interest due on it. the 2nd defendant is the present trustee of the temple. the prayer in the plaint is to have the amount paid by defendants nos. 1 and 3 and also from out of the temple funds.2. the plea of the contesting defendant (2nd defendant) was that under the terms of the 3rd defendant's father's appointment as trustee, he had no right to borrow money on behalf of the temple and that in the muchilika executed by the 3rd defendant's father to the devasthanam committee it was expressly stated that he should not borrow without the previous express authorization of the committee and that no such authority had.....
Judgment:

1. The plaintiff is the appellant in the second appeal. He sued to recover Rs. 961-3-0 being the principal and interest due on a promissory note dated 31st January, 1916, executed by the 1st defendant in his capacity as Keevalur temple manager. The allegation in the plaint was that the suit promissory note was executed by the 1st defendant as agent and manager of the suit temple for discharging the debt already incurred in connection with the temple expenses and for benefit of the temple. The 3rd defendant's deceased father was the trustee of the temple and it was alleged that the 1st defendant was managing the temple affairs under a power-of-attorney executed by the 3rd defendant. The principal amount of the promissory note now sued upon is Rs. 660 which is said to be made up of Rs. 500 alleged to have been borrowed for temple purposes under a promissory note executed by the late manager on 21st March, 1912, and Rs. 160 balance of interest due on it. The 2nd defendant is the present trustee of the temple. The prayer in the plaint is to have the amount paid by defendants Nos. 1 and 3 and also from out of the temple funds.

2. The plea of the contesting defendant (2nd defendant) was that under the terms of the 3rd defendant's father's appointment as trustee, he had no right to borrow money on behalf of the temple and that in the muchilika executed by the 3rd defendant's father to the Devasthanam Committee it was expressly stated that he should not borrow without the previous express authorization of the Committee and that no such authority had been obtained in respect of the suit debt. The 2nd defendant also denied the 1st defendant's right under the power-of attorney executed in his favour to execute the promissory note on behalf of the temple. It was also stated that the temple owned extensive landed properties yielding enormous income, that Mohini allowances were granted by the Government, that the income of the temple would be more than sufficient to meet the expenses and that there was no necessity to borrow on behalf of the temple. The plaintiff was put to the proof of the truth and binding nature of the plaint debt. The District Munsif gave judgment for plaintiff for the amount sued for, against the 1st defendant and dismissed the suit against the temple. The Subordinate Judge haying dismissed the plaintiff's appeal, this second appeal has been preferred by the plaintiff.

3. In discussing the question whether the plaint debt was binding on the temple both the lower Courts have discussed very largely the question whether on the date of the renewed promissory note Ex. A dated 31st January, 1916, there was necessity for the renewal of the earlier promissory note. They came to the conclusion that the renewal was not justified since the plaintiff (who was a lessee of certain temple lands) was himself in arrears to the temple in respect of rent due by him, and that while the income of the temple per year was about Rs. 20,000 the expenses would be only Rs. 16,000. The District Munsif remarked: 'Where then was the necessity to bind the temple for such sundry liability as the plaint debt unless it be that the 1st defendant who was temple manager was indulging in such reckless pastime as spending Rs. 12,000 towards Brahmotsavam out of the temple funds as sworn to by plaintiff's 2nd witness...the 1st defendant seems to have squandered the temple income and has unnecessarily tried to bind the temple.... I find that though the debt was incurred for temple purposes it was not for its benefit.' On appeal the learned Subordinate Judge while confirming the learned District Munsif's decree preferred to base his judgment upon quite a different ground. To quote the words of the learned Subordinate Judge: 'I would rest my conclusion not on the ground that the trustee spent large sums recklessly and thus denuded himself of trust funds and made it necessary for him to borrow. Brahmotsavam is a necessary festival and was evidently approved of by the Temple Committee. I would rest my conclusion on the ground that the income of the temple was ample and that the scale of expenditure even including the Brahmotsavam expenditure was below the income and that the mere fact that the daily cash balance was small on any particular day is no justification for borrowing.' The lower Appellate Court proceeded to say that the Devasthanam had on hand 204 kalams or paddy in the temple granary on 31st January, 1916, (the date of Ex. A) and that the plaintiff himself owed 118 kalams of paddy as arrears of rent to the temple and consequently there was no necessity to execute Ex. A in favour of the plaintiff on 31st January, 1916.

4. The learned Vakil for the appellant contended that the lower Courts were wrong in holding that execution of the promissory note in favour of the plaintiff on 31st January, 1916, was not binding on the temple on the ground that there was some paddy in the temple granary and also because the plaintiff himself was in arrears to the temple and that the two together would have been more than enough to pay off the plaintiff's debt. The learned Vakil argued that if the original debt was binding on the temple, the circumstances that a renewed document was executed to the creditor when, as a matter of fact, the temple had funds to pay him off is no ground for holding the renewed bond not binding; since the creditor could not go and himself take possession of the paddy from the temple granary or take any money from the temple chest and if the temple authorities did not care to utilise available funds to pay off the creditor but elected to renew the document, it is no answer to the creditor's suit on the renewed documents. We are of opinion that there is much force in his contention of the appellant. If it is once proved that a debt is binding on the temple, the creditor is entitled to enforce the payment of the same from temple funds and the circumstances that the temple authorities wrongfully delayed or withheld payment is no ground for not allowing the cerditor to enforce his debt against the temple properties. The real question then is whether the original debt advanced by the plaintiff was advanced by him under circumstances which made it binding on the temple. The burden of proving the existence of such circumstances is, it is not denied on the plaintiff. As observed by the Privy Council in Prosunno Kumari Debya v. Golab Chand 2 I.A. 145 : 14 B.L.R. 450 : 'The power of a shebait to incur debts must be measured by an existing necessity for incurring them'. No doubt, it is the immediate not the remote cause, the causa, causans, of the borrowing that has to be considered:' Niladri Sahu v. Chaturbhuj Das : (1926)28BOMLR1418 . We have to examine the evidence adduced in this case in the light of the above principles and we find that besides examining himself as the first witness the plaintiff examined only one other witness on his side. This is what the plaintiff said in his deposition before the Court: 'I have dealings with the temple for the past 10 or 12 years. Exhibit A was executed on renewal of a prior promissory note executed by Venkatasubbalyer Venkatasubba Iyer had executed two promissory notes. One was discharged. For the balance of the other Ex. A was executed. Venkatasubba Iyer executed for the purpose of the temple.... The temple owns 250 veils. I have not maintained any accounts. Exhibit A was executed for the balance of Rs. 500-promissory note executed by Venkatasubba Iyer. That was taken for cash paid and supply of seed paddy. I do not remember what for the each was received. I remember that it was taken for temple purpose.' Plaintiff's 2nd witness only stated that Ex. A was executed in respect of the balance due on a prior promissory note, that he was the writer of Ex. A and that he did not remember money having been paid by plaintiff on the prior promissory note. It was mentioned to us that the plaintiff had summoned the temple trustee (2nd defendant) to produce the temple accounts and that the same were not produced by the 2nd defendant in time before the plaintiff's witnesses were examined. It, no doubt, appears to be true that the account books of the temple were produced only after the plaintiff's witnesses Nos. 1 and 2 were examined; but after the production of the account books the plaintiff's 2nd witness was re-called and examined with reference to the temple accounts; as he seems to have been employed under the 3rd defendant's father--the then trustee--; but no circumstances necessitating the raising of any loan have been elicited from P. W. No. 2, and curiously enough the plaintiff has not further examined himself after the account books of the temple were produced. All that the appellant is in a position to make out is that the temple accounts contain entries or receipt of money and paddy from the plaintiff prior to 1912 and that on 21st March, 1912, a promissory note was executed to the plaintiff for Rs. 500. The mere circumstance that the temple accounts contain entries of receipt of money from the plaintiff would not show that there was any necessity at the time to borrow, though the absence of such entries in the temple accounts would prima facie lead to an inference against the plaintiff. Having regard to the facts found by the learned Subordinate Judge that the plaintiff had 'a lease of the temple lands and lived near the village Keevalur and was certainly well aware of the temple income and expenditure and that the trustee had executed in 1903 a muchilika to the Temple Committee that he would not borrow without its sanction.' We are of opinion that the plaintiff has not discharged the burden of proving circumstances which rendered it necessary for the temple to raise the loan. In this view the second appeal should fail.

5. There is also a further obstacle in the way of the plaintiff obtaining a decree against the temple funds. The promissory note Ex. A as already remarked, was executed by the 1st defendant as 'manager' who had a power-of-attorney from the trustee. The 2nd defendant raised the contention that the 1st defendant had no right to borrow under the terms of the said power of attorney so as to bind the trust. The District Munsif stated as follows in para 6 of his judgment: 'Exhibit III is the copy of the power of-attorney executed by 3rd defendants father to the 1st defendant under which the 1st defendant has not been expressly authorised to borrow.' The lower Appellate Court was also of the same opinion. It remarked that the power-of-attorney executed by the 3rd defendant's ' father to 1st defendant, Ex. III does not confer upon him any authority to borrow.' It must be remembered in this connection that the present is not a case of a power of-attorney given by a money-lending firm (such as that of a Nattukottai Chetty) to its agent to carry on the money-lending business, in which case as was decided in Bank of Bengal v. Ramanathan Chetty 32 Ind. Cas. 419 : 43 C. 527 : 30 M.L.J. 232 : 20 C.W.N. 329 : 3 L.W. 210 : 19 M.L.T. 176 : (1916) 1 M.W.N. 150 : 14 A.L.J. 217 : 23 C.L.J. 348 : 18 Bom. L.R. 387 : 9 Bur. L.T. 1 : 8 L.B.R. 536 : 43 I.A. 48 it may properly be urged that 'without any such authority (authority to borrow) it would hardly have been possible to carry on the business of a money-lender and financier.' In the case of temples, a trustee could hardly claim the right to borrow as a matter of course. His right to borrow would arise only in cases of financial necessity, and he would have to use his discretion whether, even in such circumstances he should borrow or not. It cannot be assumed in the absence of words to that effect that by executing a power of-attorney to a person to manage the temple affairs by collecting the debts and amounts due to the temple and meeting the necessary expenses, that the trustee authorized the manager to bind the temple by borrowing. As was laid down by the Privy Council in the case reported as Bryant v. La Banque Lu Peuple (1893) A.C. 170 : 62 L.J.P.C. 68 : 1 R. 336 : 68 L.T. 546 : 41 W.R 600 ''Powers of-attorney are to be construed strictly--that is to say, that where an act purporting to be done under a power-of attorney is challenged as being in excess of the authority conferred by the power, it is necessary to show that on a fair construction of the whole instrument the authority in question is to be found within the four corners of the instrument, either in express terms or by necessary implication.' In this case we have the further fact that the trustee had executed a muchilika to the Temple Committee undertaking not to borrow without the Committee's sanction. We are, therefore, inclined to agree with the lower Courts that the 1st defendant had no authority to bind the temple by executing Ex.A in favour of the plaintiff. We need not consider the argument urged on behalf of the appellant that an agent' authorized to pay a debt could execute a renewed document in respect of a debt so as to bind the principal, since we hold that the terms of the power of-attorney in question do not authorise the 1st defendant to discharge any debt.

6. We accordingly hold that the plaintiff has not proved circumstances which would make the debt binding on the temple. We also hold that the 1st defendant had no authority to execute the promissory note, sued on by the plaintiff so as to bind the temple. Mr. Muthia Mudaliar on behalf of the respondent raised a further contention that it is a matter of discretion with the trustee whether in the particular circumstances he should raise a loan on behalf of the temple, or somehow manage with the existing resources--making retrenchments wherever possible--and that such a right to borrow is personal to the trustee and that the same could not be delegated to any person appointed by him. The decision of the Privy Council in the case reported as Bonnerji v. Sitanath Das : (1922)24BOMLR565 is relied on as authority for the proposition; but having regard to the conclusions arrived at by us as regards the other questions raised in the case, it is unnecessary for us to express any opinion on this point.

7. The second appeal is accordingly dismissed with costs.


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