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Sailendra Nath Palit Vs. Syed Hade Kaza - Court Judgment

LegalCrystal Citation
Subjectcivil
CourtKolkata
Decided On
Reported inAIR1932Cal356
AppellantSailendra Nath Palit
RespondentSyed Hade Kaza
Cases ReferredGanga Pershad Sahu v. Maharani Bibi
Excerpt:
- 1. this is an appeal by the plaintiff from a decree dismissing his suit. the suit was described in the plaint as a suit for recovery of money, rs. 15,000 odd, with declaration of a charge in respect of it on a certain trust estate. there were also other reliefs claimed in the plaint which will be presently stated.2. the plaintiffs' case shortly put was as follows: one nawab nazir sidee nazir ali khan by a will dated 25th february 1873 created a trust of his estate, and appointed one mir mohamed kazim jawahiri as trustee thereof. after the death of mir mohamed kazim jawahiri, other persons came in succession as trustees, till at last defendants 3 and 4 became such trustees. one of the properties of the trust was lot no. 79, appertaining to sunderbans, bearing tauzi no. 143 of the.....
Judgment:

1. This is an appeal by the plaintiff from a decree dismissing his suit. The suit was described in the plaint as a suit for recovery of money, Rs. 15,000 odd, with declaration of a charge in respect of it on a certain trust estate. There were also other reliefs claimed in the plaint which will be presently stated.

2. The plaintiffs' case shortly put was as follows: One Nawab Nazir Sidee Nazir Ali Khan by a will dated 25th February 1873 created a trust of his estate, and appointed one Mir Mohamed Kazim Jawahiri as trustee thereof. After the death of Mir Mohamed Kazim Jawahiri, other persons came in succession as trustees, till at last defendants 3 and 4 became such trustees. One of the properties of the trust was lot No. 79, appertaining to Sunderbans, bearing tauzi No. 143 of the 24-Pargannas Collectorate, which goes by the name of Abad Uchildaha. On 9th April 1923, defendants 1 and 5, as such trustees and for legal necessity of the trust estate, borrowed from the plaintiffs Rs. 5,000 at an interest of 15 per cent per annum, on a handnote and by deposit of title-deeds of the said lot No. 79 and they also assigned to the plaintiff the sum of Rs. 6,575-5.6 being the rent for the year 1331 B.S. payable by the Port Canning Company to the said estate in respect of the said lot.

3. The plaintiff was able to realize only Rs. 2,676-10-0 out of the said amount and not the balance. Defendants 4 and 5 obtained from the Court permission to sell the said lot and by showing the said permission to the plaintiff led him to believe that there was legal necessity for the sale and prevailed upon him to agree to purchase the said lot for Rs. 33,000 odd free from all encumbrances and charges, and on that an agreement of sale was executed on 23rd October 1923 and the plaintiff paid Rs. 5,000 as earnest money. The plaintiff did all that he had to do to perform his part of the contract, but defendants 4 and 5 assured the plaintiff from time to time that they were trying to free and remove the charges and encumbrances, but really did nothing and only put off their part of the performance upon false pretexts. On 1st April 1924 defendants 1 and 5 executed another handnote as trustees for Rupees 3,000 at interest at the rate of 12 per cent per annum from loans taken on different occasions for paying Government revenue due on the estate and for defraying other necessary expenses. Defendants 1,2 and 3 thereafter instituted a suit for removal of defendants 4 and 5 and managed to get a consent decree passed therein as a consequence of which they got themselves appointed as trustees in their place.

4. The substantial prayers in the plaint were: that the plaintiff was not bound to purchase lot No. 79 as the deed of sale was not executed through the fault and laches of the defendants, a prayer which need not concern us any longer as there is no apprehension of any attempt from any quarter to enforce the agreement of sale; and that a decree for all sums lent or advanced together with interest thereon might be passed in plaintiff's favour on declaration of a charge therefor on the trust estate. Other incidental reliefs asked for need not be specifically mentioned except one only which was worded thus:

That if in the decision of the Court, the plaintiff be held entitled to a decree for getting a deed of sale in respect of the properties mentioned in Schedule Kha below (meaning lot No. 79), free of all encumbrances and defects, in terms of the above Bianapatra, then the plaintiff prays to get the same, on his getting the plaint properly mended by inserting the proper claims and prayers about it and on his paying proper court-fees for the same.

5. Defendants 4 and 5 did not appear in the suit. Defendants 1, 2 and 3 contended inter alia that defendants 4 and 5 had misappropriated trust properties and trust funds and committed various acts of bad faith in connexion therewith, that they consequently sued for the removal of those defendants from trusteeship, and the latter finding no way out of the charges that were made against them, consented to be removed, and on that other trustees were appointed in their place. They pleaded that defendants 4 and 5 in collusion with the plaintiff, fraudulently and by misrepresentation of facts, obtained permission of the Court for the sale of lot No. 79. They averred that there was no necessity to sell the property or to borrow any money, that no money was in fact paid or taken, and that even if any money was borrowed it did not benefit the estate.

6. It is necessary before dealing with the questions which arise for consideration in this appeal, to state in a few words, some of the events antecedent to or connected with this litigation. In 1916 when defendants 4 and 5 (who for the sake of convenience, will hereafter be called the old trustees to distinguish them from those who came in their place) were acting as trustees there was a suit on the original side of this Court under the provisions of Section 92 of the Code asking for their removal, for appointment of new trustees, for the framing of a scheme and for accounts and inquiries. By a judgment dated 26th January 1917, Greaves, J., after construing some of the more' important provisions of the will of Nawab Nazir Sidee Nazir Ali Khan of 1873 by which the trust was created held that the will purported to give a very wide discretion to the trustees in the matter of the administration of the trust and applying to it the dictum of Cairns, C. C. P. in the case of Gisborne v. Gis-borne [1877] 2 A.C. 300 that in such a case the Court cannot interfere unless the plaintiffs can show that the trustees are not acting bona fide, held that the plaintiffs had adduced no evidence to show that there had not been a bona fide compliance with the terms of the testator's will. On the other hand the learned Judge held that he was satisfied on the evidence before him that there had been considerable application of the funds of the trust estate for purposes connected with the trust. In this view of the matter the learned Judge dismissed the suit, and gave certain directions to the trustees which do not concern us at the moment. The learned Judge however made one distinct and definite pronouncement, which is important. He said:

It is clear that whatever may be the rights of the trustees with regard to the income they have no right to dispose of the corpus of the estate.

7. From the materials oral and documentary on the record and upon the evidence of one Abdul Huda who served in the estate as Superintendent from 1911 to October 1924 when he was dismissed for misconduct and who has been examined as a witness on behalf of the plaintiff, the following facts appear: There were six abads and 1 imambara in No. 33 Ismail Madan Lane belonging to the trust estate, and the net income of the estate was about Rs. 15,000 or Rupees 16,000. Before 1916 there were practically no debts of the estate, but as a result of the litigation in that year to which reference has just been made the estate ran -into debts to the extent of nearly Rs. 30,000. In 1919 one of the abads was sold for Rs. 33,000 or so on a permission obtained from the Court on the representation that premises No. 32 Ismail Madan Lane would be purchased out of the sale-proceeds, but this purchase was not made as the vendor's title was defective. Two other abads were sold in 1921 for Rs. 1,10,000 on a permission obtained on the allegation that premises Nos. 34 and 35 Ismail Madan Lane, a bare plot of land, would be purchased for Rs. 60,000 and money would have to be spent for erecting buildings. As far as appears the object of the transaction was substantially if not entirely carried out, there was a debt left of Rs. 24,000 to the vendors, the Improvement Trust, carrying interest at 7 per cent per annum and if not punctually paid, at 9 per cent per annum. In 1923 another abad was sold for Rs. 35,000 on a permission obtained on the representation that No. 27 Eden Hospital Lane would be purchased, but the purchase was not made on the ground that the vendor's title was defective. Along with the permission to sell the abad last mentioned, permission was obtained for sale of Abad Uchiladha (lot No. 79) but this matter will be separately dealt with hereafter. As the result of these transactions the properties left to the estate were Abad Uchildaha (i.e., lot No. 79), Abad Par Bhawanipore (including Abad Bheria) the imambara and buildings at 33 Ismail Madan Lane and premises Nos. 34 and 35 Ismail Madan' Lane. By this time the net income had dwindled down to Rs. 4,000 or so and there wore debts.

8. The permissions for the sales made as above wore taken from this Court on the original side. Then for some reason or other presumably for the reason that by this time their conduct in relation to the trust had already acquired some notoriety in this Court, the old trustees went to the District Judge of 24 Pargannas for raising a loan of Rs. 70,000 on a mortgage of Abad Bhawanipore and premises Nos. 34 and 35 Ismail Madan Lane in order to discharge the debt due to the Improvement Trust, i. e., of Rs. 24,000 and interest, and to repair the imambara at No. 33 Ismail Madan Lane which would cost about Rs. 20,000. The District Judge granted the permission as Kazi on 13th September 1924. The petition on which this permission was obtained made no mention of the previous sales and relied on the fact that the will of 1873 had given the trustees ''absolute power to deal with the properties as to them seemed best to carry on the work,' and contented itself with making out a case of present necessity without any reference to the past. Two members of the public, of whom defendant 3 was one at this moment instituted a suit on the original side of this Court on 18th September 1924 under Section 92 of the Code for appropriate reliefs and took out an injunction restraining the old trustees from mortgaging or selling the remaining properties and thereafter the permission which the District Judge had given was vacated. In that suit on 17th Novem. 1924 a receiver was appointed. On 23rd February 1925 the suit ended in a decree passed upon certain terms of settlement by which the old trustees vacated, and new trustees were appointed and the Official Receiver was to take accounts from the old trustees of their dealings with the estate. Defts. 1, 2 and 3 are the present trustees in respect of the estate.

9. Before discussing the law to be applied it is necessary to arrive at findings upon certain questions of fact as regards which there was considerable controversy in the Court below and some dispute also in this Court. In dealing with these questions it will be convenient to keep the transactions, viz., those relating to the loan of Rs. 5,000, the advance of Rs. 5,000 as earnest money and the loan of Rs. 3,000 separate.

10. The documents relating to the first transactions are the hand-note (Ex. 6) the collateral security bond (Ex. 5-f) and the letter of assignment (Ex. 5-e) all dated 9th April 1923. The documents bear the signature of the old trustees and below their signatures appear the words trustees to the estate of the late Nawab Nazir Ali Khan Bahadur.' Similar words appear below their signatures in the hand-note for Rs. 3,000 dated 1st April 1924 (Ex. 6-a). The Subordinate Judge was of opinion that these words were a subsequent interpolation, made by Abdul Huda, the ex-Superintendent of the estate who was examined as a witness on behalf of the plaintiff, made either with or without the knowledge of the old trustees. It cannot be disputed that the ink in which these words appear in these documents and the fact that the executants themselves did not write out these words give rise to a certain amount of suspicion. But the materials on the record are wholly insufficient to enable us to pronounce against their genuineness with anything approaching certainty, We therefore hold that the transactions which these documents evidence were entered into by defendants 4 and 5 in their capacity as trustees.

11. The next question is whether the moneys which formed the subject-matter of these three transactions were actually paid to the old trustees. The Subordinate Judge has held that ' the evidence of payment is practically ex parte.' So far as the first two transactions is concerned there is satisfactory documentary evidence in the shape of Ex. 3 a cheque for Rs. 5,000 dated 9th April 1923, and Ex.3 (b) and Ex. 3 (a) cheques for Rs. 500 and Rs. 4,500, dated respectively 22nd and 23rd October 1923 As regards the third transaction payments appear to have been made of different amounts on different dates, and though the documents showing such payments do not cover the entire amount we are satisfied upon the evidence adduced on behalf of the plaintiff that the amount of Rs. 3,000 was in fact paid in full.

12. Then comes the question, on what representations were the moneys taken, On the evidence that we have before us we think it must be held that Rs. 5,020 which formed the subject-matter of the first transaction was taken by the old trustees on the representation that Government Revenue, Cess and Malikana and interest due to the Improvement Trust had to be paid for the estate and that the said trustees were short of funds for the purpose. As regards the third transaction, it would appear that Lot No. 79 had been put up to auction from time to time for arrears of revenue and cess and as the Maliks did not agree to clear the charge unless the Malikana was paid to them and therefore the property was not being conveyed in accordance with the agreement of sale, the money was paid in order to enable the old trustees to make payments on these heads. It further appears that the old trustees promised to repay this last mentioned amount separately from the trust estate and also said that if they could not do so, the plaintiff would deduct it from the unpaid consideration money of Lot No. 79. As regards the second transaction there is no definite evidence of any representation. Being a payment made as earnest money the question of representation in connexion with this transaction does not arise and need not be considered. But the amount paid was unusually large, and if on that ground any question arises as to why such a large amount was paid, it is not unreasonable to suppose that it was for the purposes of the estate that such payment was asked for and made.

13. Then arises the question as to whether any and if so what inquiries were made by the plaintiff or on his behalf before the payments were made. This question is important in. view of the charge of collusion that has been preferred against the plaintiff and also in connexion with the protection which the plaintiff claims on the ground of his having been a lender after bona fide inquiry. The suggestion of collusion was specifically put to the plaintiff's brother in cross-examination and was repudiated by him. The plaintiff says that the first transaction was brought about by his brother and says further:

My brother made all the inquiries. The negotiation of all the transactions were done by my brother Nagendra....I know nothing about the previous history of this property. I depended upon what my brother had informed me. Regarding it my brother was satisfied that the trustees had power to sell and so I was. I did not make any inquiry personally regarding the property in any matter.

14. (Their Lordships then considered the evidence and proceeded.) On the question whether the inquiries that were made were sufficient to bring the plaintiff within the category of a. bona fide lender, quite apart from the question whether he or his brother was a prudent man of business, it would be difficult to hold that he was not. So far as the agreement to sell is concerned, the plaintiff may rightly rest upon the permission of the Court, to the fraud or concealment connected with which he was no party: Ganga Pershad Sahu v. Maharani Bibi [1884] 11 Cal. 379. As regards the payments made, the trustees were impecunious, they were always in want in consequence of antecedent mismanagement, maladministration, misappropriation, and the estate was perpetually in arrears in respect of revenue, cesses, and malikana and also under a heavy burden as to interest payable half-yearly. Their Lordships of the Judicial Committee in the case of Niladri Sahu v. Mahant Chatur. bhuj Das A.I.R. 1926 P.C. 112 quoted from the judgment of the Board in the case of Prosunno Kumari Debya v. Golab Chand [1875] 2 I.A. 145=23 W.R. 253 the following proposition:

Notwithstanding that property devoted to religious purposes, is as a rule, inalienable it is in their Lordships' opinion, competent for the shebait of the property dedicated to the worship of an idol, in the capacity as shebait and manager of the estate, to incur debts and borrow money for the purposes of the expenses in keeping up the religious worship, repairing the temples or other possessions of the idol, defending hostile litigious attacks, and other like objects. The power however to incur debts must be measured by an existing necessity for incurring them.

15. Their Lordships then said:

The importance of this case in its application to the present consists in this, that it was the immediate not the remote cause, the causa causans, of the borrowing which has to be considered. The immediate cause of the borrowing was the math's need to carry on and pay for its services. The remote cause of the math's need was due to the profligate expenditure of the she-bait. It would have been no answer to the creditor's suit to say: your money was only borrowed because the income of the math was spent by a profligate shebait and there was no money available to carry on the services of the math.

16. The two cases just referred to were oases of shebaits and not of mutawallis, but assuming that the principles enunciated in the propositions quoted above are principles applicable to all lenders and borrowers so far as the question of necessity and the question of inquiry are concerned, it is clear, in our opinion, that while in the absence of the accounts for the period for which the loans were taken it is not possible to say whether the exercise of the power to borrow was commensurate with the needs of the estate, the plaintiff was under no obligation to go beyond the immediate cause for the loans, viz., the pressure that was on the estate and the impending danger with which it was threatened.

17. Some argument has been addressed to us to make out the position that the present trustees defendants 1, 2 and 3, are responsible for the nonproduction of the account-books of the estate of the period to which the transactions relate and to ask us to hold that from the fact that they have been not produced we should infer that if produced they would have shown that the moneys taken by the old trustees were used for the purposes of the estate. It has been argued also that the suit of 1924 was a collusive suit and that it was brought about to get rid of the liability of the estate incurred by the old trustees and that although one of the? terms of the settlement in that suit was that the official referee would go into the accounts of the old trustees, no serious move has been made by the present trustees in that direction. Some comment has been made upon the fact that one of the trustees appointed under the said terms of settlement is now an officer of the estate on a pay. We have considered these arguments in the light of the evidence before us and we have no hesitation in saying that these insinuations and criticisms are entirely unfounded. The present trustees are men of the highest integrity. The suit was launched at a moment when the trust was about to-be annihilated. The settlement was a bona fide one; the old trustees did not contest as they had really nothing to say in their defence. The plaintiff's witness Abul Huda has deposed that some attempt was made to get the accounts from the old trustees but the latter replied that they had none, and that the old trustees had no personal properties of their own. They would not produce their accounts, assuming that they had any,, and the present trustees were fully justified in not wasting money over a fruitless attempt to get at the accounts. We have carefully examined all the proceedings of 1924 [Ex. D (1), P and 9 (b)] and we can. see nothing in thorn to suggest any collusion or bad faith. The charges levelled against the present trustees really bear no examination.

18. On the question whether the moneys borrowed were applied for the purposes of the estate the Subordinate Judge has said in his judgment:

The learned vakil for the plaintiff did not even try to show that it did benefit the estate.

19. There is no doubt evidence that payments were made for the purposes of the estate at or about the time that these moneys were taken, but there is really nothing to connect the two. The plaintiff's witness Abul Huda has given evidence to the effect that these moneys were used for such purposes, but the evidence is and must necessarily be very unconvincing.

20. These being the facts, we have to consider the law to be applied to determine the rights and liabilities of the parties. Considerable argument has been addressed to us in order to make out first of all that the trust is invalid being a wakf created by a Shiah Mahomedan which was not accompanied by delivery of possession, and in which the settlor retained some benefit for himself under it by making provision for his debts and also because the objects for which the devise for charitable and religious purposes have been made are too vague and uncertain for the administration of them to he under any control. The validity of the trust was never in question in this suit before, and indeed the whole case of the plaintiff has till now proceeded on the footing that the old trustees took the moneys as trustees and it is the trust estate and the present trustees who are [liable. We are not prepared to allow such a radical change of case on the part of the plaintiff, even if we were satisfied that such a contention would benefit him, a point on which we entertain grave misgivings.

21. Secondly, it has been argued that the discretion conferred by the deed upon the trustees is exceedingly wide and it gives them an unlimited power of sale and an undefined authority to incur expenditures for the benefit of the trust and an unrestricted liberty to appropriate the residue, and that in such a case it should be held that the trustee has rights analogous to those of a proprietor, so far at any rate as the residue is concerned, and that debts incurred by the trustees in such circumstances are binding on the estate. We have read the will with care and we find that the unlimited power of sale that has been given is exercisable only for the purpose of converting the estate to money and for the purpose of investing the same to be held in trust, that although a very wide discretion was given as regards the trusts to be carried out and in that sense the trusts were discretionary, the residue that would be left would also be held by the trustees in trust and that the trustee would not take even the unconsumed income absolutely, but would only be entitled to enjoy the same. The will was construed by Piggot, J., in 1884: vide Amir Ali's Mahomedan Law, Vol. 1, Edn. 4, p. 494, et seq, when he interpreted it in substantially the same way. Whether a creditor cannot in these circumstances attach any surplus that may be in the hands of the debtor trustee for realisation of his dues from him is not the question that we have to consider. But he may refer on this point to the decision of this Court, in a case, which eventually went up to the Judicial Committee, reported in Bishen Chand v, Nadir Hos. sein [1887] 15 Cal. 329. The High Court had observed:

There might have been in Mahomed Ali's (i. e., the old trustee's) time a margin of profit and that margin might possibly have been attached in execution of a personal decree against the trustee. But that was not the question in hand which was whether Mahomed Ali's creditor was entitled to attach the property in the hands of the plaintiff (the succeeding trustee). * * * If the trust deed be good, the plaintiff is entitled to hold the property subject to the charges of the trust, and to the claims of his creditors to any margin of profit, if there be one which can be shown to be his personal property. But the creditor of Mahomed Ali has, it appears to us, no right to attach the property in the hands of the present trustee in order to enforce a money decree against a former trustee which could never have been enforced, except against the margin of profit which after the performance of the trust remained in his hands.

22. This decision was affirmed by the Judicial Committee who held

that the corpus of the estate could not be sold nor could any specific portion of the corpus of the estate taken out of the hands of the trustees because there may be a margin of profit coming to him after the performance of all the religious duties.

23. The fact that the old trustees might enjoy the residue of the income in any way they liked cannot therefore help the plaintiffs in his attempt to realize his dues from the present trustees unless it is held in his favour that the debts bindi the estate. Thirdly, it has been argued' that treating the deed as a wakf and the trustees acting under it as muttawalis, it should be held that the estate is bound and that the plaintiff has his remedies against the present trustees. At first sight it might seem somewhat strange that such an argument should be advanced the logical consequence of which would be to give the go-by to the deed so far as the powers and duties of the trustees acting under it are concerned. The effect of the deed such as it is, though the word wakf or the word muttawali is not used anywhere in it, is to vest the wakf property in the trustees, whereas if the old trustees are regarded merely as muttawalis of the wakf they would be more like receivers appointed over the property than trustees and they would have no estate or interest in it. Muhammad Rustamali v. Mushtaq Hossein A.I.R. 1921 P.C. 105 Narain Das v. Haji Abdur Rahim [1920] 47 Cal. 866 and Vidyabharati v. Balusami A.I.R. 1922 P.C. 123. But the argument really advanced is this that the will in this particular case has created a wakf and the trustee acting under it is virtually a muttawali that so far as alienation of endowed property is concerned the power of a shebait or mohunt are very similar to those of a muttawali: and that consequently a muttawali is as much competent to alienate or incur debts on security of such property in case of necessity as a shebait or a mohunt and a bona fide lender to a muttawali is as much protected, irrespective of antecedent mismanagement of the endowment or subsequent misapplication of the money borrowed as a lender to a shebait or mohunt would be. To establish this analogy reliance has been placed upon the decision of the Judicial Committee in the case of Muhammad Muzaffar Ali Musavi v. Jabeda Khatun . That case however is only an authority for the proposition that the principle of the decisions in Bawa Mag. niram Sitaram v. Kasturbhai Manibhai A.I.R. 1922 P.C. 163; Chockalingam Pillai v. Mayandi Chettiar [1896] 19 Mad. 485 and Murugesam Pillai v. Manicka Vasaga Pandara A.I.R. 1917 P.C. 6 namely., that after long possession it could be assumed that a permanent tenancy of debutter property had been created by the shebait for necessity is applicable to a tenancy created by a muttawali and that in such a case it is not unreasonable to presume some leave given by the kazi, of which no record exists. The analogy contended for on behalf of the plaintiff, in our judgment, is neither supported by precedent nor founded on principle, and is by no means perfect.

24. As a general rule of Hindu law property dedicated to religious uses is inalienable, but the shebait or mohunt may in a case of need or for the benefit of the institution, sell or mortgage debutter property or grant a permanent lease thereof. A muttawali on the other hand has no power, without the permission of the Court, to mortgage, sale or exchange wakf property, unless he is expressly authorized by the deed of wakf to do so; and his power to grant leases is much more restricted, so that he may not grant leases for more than three years in case of agricultural lands or for more than a year in the case of nonagricultural lands unless he is expressly authorised to do so by the deed of wakf or unless he has obtained the leave of the Court for the purpose. To introduce the doctrine of protection of a bona fide lender would be to infringe upon these limitations of the muttawali's powers.

25. Where an executor borrows money in his capacity as executor (the will of the testator not expressly authorizing him to do so) without creating a charge on the property and the estate under his management is enriched or benefited by the money so borrowed, the right that the creditor may claim as against the estate is a right to be indemnified out of the estate to the necessary extent and unless the right of the executor to the indemnity is established the creditor has none against the estate: Manindra Chandra Nandi v. Sudhir Krishna Banerjee : AIR1932Cal182 . The principles relating to the rights of executors and trustees in this respect and the leading cases of Farhall v. Farhall [1872] 7 Ch. 123; In re. Johnson Shearman [1881] 15 Ch. D. 548 and Strickland v. Symons [1884] 26 Ch. D. 245 and other authorities English and Indian have been discussed in that case and no useful purpose would be served by repeating that discussion here.

26. As a considerable body of arguments has been addressed to us on the analogy of the transactions with shebaits or mohunts some reference therefore is necessary to be made here as to how the law, so far as they are concerned stands. As regards the power of a shebait to bind the idol's estate the Judicial Committee in the case of Prosunno Kumar Debya v. Golap Chand Baboo [1875] 2 I.A. 145 in which the question arose whether two decrees directing that two items of money borrowed by a shebait, one upon a simple bond and the other upon a, simple bond accompanied by a pledge, should be paid by the Shebait personally or else realized from the profits of the debutter lands could be realized by attachment of the same in the hands of a succeeding she-bait, held that the authority of the she-bait of an idol's estate was in this respect analogous to that of the manager for an infant heir as defined in the case of Hunooman Pershad Pandey v. Mt. Babooee Munraj Koonwari [1883] 6 M.I.A. 393. Their Lordships held that if the debts satisfied the requirements of that decision, judgments obtained against a former shebait in respect of debts so incurred should be binding upon succeeding shebaits, who in fact, form a continuing representation of the idol's property.

27. It should be observed however that their Lordships expressly dealt with the decrees as they stood and did not go into the question whether in the absence of a charge having been created by the previous shebait, a decree for realization of the money from the profits of the debutter lands was justified: see Niladri Sahu v. Mohant Chaturbhuj Das A.I.R. 1926 P.C. 112 at p. 266 (of 53 I. A.) Though it is not competent for a shebait to alienate endowed property by way of mortgage or sale for satisfaction of his debts, yet ho is authorized to deal with endowed property for its benefit and preservation and for the purpose of defending it from hostile litigious attacks: Hoosein Ali Khan v. Bhagaban Das [1906] 34 Cal. 249. And his power in this respect has sometimes been compared with that of a Hindu widow in possession of her husband's estate: Juggessur Butobyal v. Rajah Roodranarain Hoy [1869] 12 W.R. 299 and at others, it has been regarded as analogous to that of the manager of the property of an infant: Prosunno Kumari Debya v. Golab Chand Baboo [1875] 2 I.A. 145 Koniour Doorga Nath Roy v. Ram Chunder Sen [1876] 2 Cal. 341 Sheo Sunker Gir v. Ram Shewak Chowdhuri [1896] 24 Cal. 77 and Purushottam Gir v. Dat Gir [1903] 25 All. 296. As regards heads of religious endowments the authorities are not uniform. In the ease of Shankar Bharati Swami v. Venkapa Naik [1885] 9 Bom. 422 it was held that the swami of a mutt presumably has no property and must be pledging the credit of the mutt when he borrows money for the purposes of the mutt. In that case, the bond was a mere money bond and did not, in terms, make the loan a charge on the savasthan of the mutt, although the loan may have been for the purpose of the mutt, and the question was whether it could only be executed against the Swami personally or whether it could also be enforced against the savasthan. Sargent, C. J., observed:

The case was said to be similar to that of an executor contracting a loan for the purposes of the estate by English law: see Farhall v. Farhall [1872] 7 Ch. 123 and that of the manager of a charitable institution incurring liability for the purposes of the institution: Strickland v. Symons [1884] 26 Ch. D. 548. It is sufficient for the present case to say that those decisions are, in our opinion, inapplicable to the case of the Swami of a mutt, who presumably has no private property and must therefore be assumed to be pledging the credit of the mutt when he borrows money for the purposes of the mutt.

28. In Srimath Daiva Sikamani v. Nataraja [1908] 31 Mad. 47 relying on Koniour Doorga Nath Roy v. Ram Chunder Sen [1876] 2 Cal. 341 it was held that where debts are contradicted by the head of a mutt for purposes binding on the mutt, a decree in respect of such debts may be passed against his. successor charging the income of the mutt property, though such debts were not expressly charged on the income of the mutt. A similar view was taken in Pandara, Sannathi v. Karulha Ravuthan [1911] 9 I.C. 150. In the case of Swaminatha Aiyar v. Srinivasa Aiyar [1917] 38 I.C. 172 however the correctness of the decision last mentioned was questioned. In the Pull Bench decision in the case of Kailasam Pillai v. Nataraja Thambiran [1910] 33 Mad. 265 it was held that it cannot be predicated of the head of a mutt as such that he holds the mutt properties as a life tenant or trustee, and that the question must be determined in each case upon the conditions on which they were given or which may be inferred from the long-established usage and custom of the institution. It is unnecessary to pursue in detail the judicial decisions which have been subsequently pronounced describing or defining the interest of heads of mutts in mutt properties. But in two of the more recent decisions of the Madras High Court it has been held that in a suit to recover a simple money debt incurred by the head of a mutt for necessary purposes of the mutt, the creditor is entitled not only to a personal decree against the head, but a decree charging the mutt property though no charge was created by the head of the mutt himself on that property; Lakshmindrathirtha v. Ragavendra [1920] 43 Mad. 795 and Sundaresan v. Viswanada A.I.R. 1922 Mad. 402. It was however never doubted in any of these cases that if the position of the borrower was wholly analogous to that of an executor or an administrator or a lay trustee of a charitable or religious institution, the trust itself cannot be made liable. The principle has never been doubted in any of these cases that where a trustee or a person in the position of a trustee has got his personal credit to pledge and has incurred a debt without charging the trust properties, the creditor should be taken as having lent the money on such personal credit and can look to that credit alone and to the principle of subrogation for recovery of his loan, and that the same principle would apply even to an ordinary trustee of a temple who is not a sanyasi. No case has been cited before us and we are not aware of any in which a muttawali has been permitted to claim any higher powers in this respect that an ordinary lay trustee.

29. The Court below has made a decree decreeing the suit against defendants 4 and 5 for the amounts claimed in respect of the three transactions and dismissing it against defendants 1, 2 and 3. The plaintiff was also entitled to be subrogated to the indemnity which defendants 4 and 5 might have against the estate now in the hands of defendants 1, 2 and 3, but the Court below has not made such a decree, presumably because it is obvious that no such right of indemnity existed. Defendants 4. and 5 are now dead and as their heirs have not been substituted in the appeal, it is not possible to modify the decree by inserting such a clause in the decree, even if such a clause had been of any use to the plaintiff. We shall have to consider now whether the plaintiff is entitled to any other reliefs

30. As regards the first transaction we think the Subordinate Judge was right in holding that the equitable mortgage created by the letter or memorandum Ex. 5 (f) cannot be enforced. The said letter or memorandum, in view of what it says, must be regarded as constituting the bargain between the parties and accordingly it requires registration in order to create the charge that it purports to create; Subramanian v. Lutchman A.I.R. 1923 P.C. 50. In Pranjivandas v. Chan Ma Phee A.I.R. 1916 P.C. 115 their Lordships said:

Where titles are handed over accompanied by a bargain, that bargain must rule, and 'when the bargain is a written bargain it and it alone, must determine what is the extent and scope of the authority.

31. In the present case it was a written bargain and if it was not registered it did not affect the property. In the case of Obla Sundara Chariar v. Narayanna A.I.R. 1931 P.C. 36 their Lordships referring to Section 17, Registration Act, said that no memorandum relating to deposit of title-deeds can be within the section unless it embodies all the particulars of the transaction of which the deposit forms part and unless on its face it embodies such terms and is signed and delivered at such time and place and in such circumstances as to lead legitimately to the conclusion that so far as the deposit is concerned it constitutes the agreement between the parties. We think that these requirements are satisfied and so the memorandum required registration. Moreover the documents that were deposited are not original documents but copies only and are not such substantial documents as may be regarded as documents of title to the property. Next as regards assignment of the rents for 1331. Regarded as a lease for one year, the transaction would not require the sanction of the kazi. It is admitted on all hands that this assignment was acted upon, inasmuch as three instalments of rent aggregating Rs. 2,676-10-0 were paid by the Port Canning Co. to the plaintiff. The old trustees not only assigned over the rents to the plaintiff by the letter Ex. 5 (c), but also wrote a letter [copy Ex. 5 (b)] to the Port Canning Co. requesting them to pay the rents to the plaintiff which was forwarded by the plaintiff to the Port Canning Co. with a request to pay the rents to him and informing them that on such payment being made the old trustees would give them receipts. There is no question that this arrangement would have continued but for the fact that the receiver was appointed and the present trustees repudiated the assignment. On this repudiation the question that arises is whether this assignment is valid and binding on them, or, in other words, whether the assignment created an interest in the rents in plaintiff's favour. In our opinion there is, at this point, an insuperable difficulty in the plaintiff's way. Immovable property as defined in the Registration Act, Section 2, Clause (e) includes 'any other benefit to arise of land.' The assignment was of future rents, that is to say, of rents to arise in future and not of rents which had already accrued due: see Mangalaswami v. Subbia Pillai (at p. 66) and consequently registration of the assignment was compulsory. On the strength of the assignment, such as it was, the plaintiff, in our judgment, was not entitled to any relief as against the present trustees or the estate.

32. As regards the second transaction, by para. 3, sub-para jha of the agreement (Ex. 4) a charge was created. The words used are:

* * * We shall be bound to refund to you the whole amount including the sum of Rs. 5,000 paid today and all costs that you might have to incur in this connexion together with the interest thereon at one and half per cent per mensem and that so long as we do not refund the amount it shall be regarded as a charge upon the properties mentioned in the schedule and that unless it is paid amicably you shall be competent to recover it with the help of the Court.

33. No permission of the Court was taken and it was beyond the power of the trustees either under the will or as muttawali to create it. It is true that a mortgage though made by a muttawali without the previous sanction of the Court is not void;if made for a justifying necessity and may be retrospectively confirmed by the Court: Nimai Chand v. Golam Hossein [1911] 34 Mad. 64. But were we asked to grant such permission now the materials that we 'have before us would not, in our opinion, be sufficient for holding that there was justifying necessity for the loan. As regards the prayer for specific performance of the agreement, which was asked for only as an alternative form of relief in the Court below and has been pressed 'before us though somewhat faintly, it is, in our opinion, out of the question. The old trustees had committed fraud of the most daring character in obtaining the permission for the sale, and there neither was then nor is there now any necessity which can call for or justify an alienation of trust property in this way. As regards Section 55 (6) (b), T. P. Act, upon which reliance has been placed on behalf of the plaintiff for the contention that there is a statutory charge on the earnest money, it is sufficient to say that the sellers had no personal interest in the trust property. On the question as to who was responsible for the bargain falling through we are satisfied that it was the sellers who were at fault. Some argument has been addressed to us to make out that when the plaintiff entered into the bargain, he had the permission of the Court before him and that ought to be regarded as sufficient for his protection. The permission merely relieves the purchaser of the necessity to inquire. Their Lordships of the Judicial Committee in the case of Ganga Pershad Sahu v. Maharani Bibi [1884] 11 Cal. 379 said:

Their Lordships think that when an order of the Court has been made Authorizing the guardian of an infant to raise a loan on the security of the infant's estate the lender of the money is entitled to trust to that order and that he is not bound to inquire into the expediency or necessity of the loan for the benefit of the infant's estate. If any fraud or underhand dealing is brought home to him that would be a, different matter, hut, apart from any charge of that kind, their Lordships think he is entitled to rest upon that order.

34. The permission however in our judgment cannot mean that the Court guarantees repayment of the money, which the purchaser may have paid to the seller in case the bargain falls through.

35. So far as the third transaction is concerned there is nothing new that may be said about.

36. The result is that, in our opinion, the appeal cannot succeed. It is accordingly dismissed.

37. We will make no order for costs in this appeal.


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