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369 paragraphs · 8,941 wordsS. Ramachandra Iyer, C.J.—This appeal which arises from the judgment of Balakrishna Ayyar, J., granting a decree in favour of the
respondent on the foot of two mortgages, dated 4th March, 1950 and 31st May, 1950, has been placed before us on account of conflict between
the decisions in Venkataswami v. Veeranna (1921) 42 M.L.J. 333 : ILR Mad. 429 and R.M. Raman Chettiar Vs. Tirugnanasambandam Pillai and
Others, . Before considering the correctness or otherwise of the decisions referred to above, it is necessary to set out the relevant facts which have
given rise to this appeal.
One Gopalakrishna Raju, who owned substantial properties died on 13th November, 1941, leaving behind him two widows, Lakshmi and
Manorama, and three children born of the latter,--a son, who is the appellant in this appeal, and two daughters. A few months before his death,
Gopalakrishna Raju executed, and duly registered, a will, bequeathing his properties substantially to the appellant. Lakshmi was given a life interest
in a few immovable properties in Tirunelveli District. Manorama, the second wife, was appointed the executrix under the will. The will made it clear
that Manorama should have no power to sell, mortgage or otherwise alienate the Immovable properties left by the deceased. The executrix was
not given any beneficial interest in the properties beyond a right to be maintained befitting her dignity and status. No probate or letters of
administration were taken of the will. Manorama who was in possession of the properties asserted that she, as the widow of the deceased, was
entitled to half of the properties left by him, and that she as the natural guardian of the minor son, was entitled to remain in possession of the
properties. On 7th June, 1948, she mortgaged certain properties to raise a loan of Rs. 7,000 for the purpose of the marriage of her first daughter.
About two months thereafter, she filed O.P. No. 269 of 1948 on the Original Side of this Court, praying that she might be appointed as the
guardian of her minor children and seeking permission of the Court to raise a loan of Rs. 20,000 for discharging the debts till then incurred and for
the celebration of the marriage of her second daughter. She suppressed in the petition the existence of the will stating that Gopalakrishna Raju died
intestate and that the loan was necessary for purposes binding on her son. Along with the petition, she also filed Application No. 2595 of 1948,
seeking permission to raise the loan on the mortgage of the properties. Subba Rao, J., passed an order on 9th September, 1948, appointing
Manorama as the guardian of the person and properties of the minors. The learned Judge passed another order in the accompanying application,
giving leave to her to raise a loan of Rs. 7,000 on mortgages of two houses belonging to minors. Armed with the order, she executed a mortgage
and borrowed a sum of Rs. 7,000 on 24th September, 1948, from one Rajalakshmi Ammal. Within a short time thereafter she filed Application
No. 4689 of 1949, seeking the sanction of the Court to raise a loan of Rs. 40,000; but, in the affidavit that followed the application, the amount
was restricted to Rs. 30,000. On 23rd January, 1950, Rajagopalan, J., granted leave to her to raise a loan of Rs. 30,000 on the security of two
houses. The loan was intended to discharge the two earlier mortgages and pay off the other liabilities said to have been incurred by her. The
learned Judge, while granting the sanction, observed that there were debts contracted by the guardian which would bind the estate of the minor.
On the strength of the order, Manorama borrowed on 4th March, 1950, a sum of Rs. 30,000 from the respondent, the Trustee of Sri Chandra
Prabbuji Jain, Temple, after executing a mortgage of the two items of properties referred to earlier. Manorama''s need for money was evidently
insatiable. Within a few days after borrowing this large sum of money, she applied to this Court again in Application No. 754 of 1950 for raising a
further loan of Rs. 15,000 stating that she still had pressing debts to the extent of Rs. 12,000. The application was filed on 24th April, 1950. On
the following day, Krishnaswami Nayudu, J., granted her leave to raise a loan of Rs. 10,000 on the same set of properties. This order enabled
Manorama to obtain a further loan of Rs. 10,000 from the respondent. This was done by executing a second mortgage in favour of the latter on
31st May, 1950, over the same properties. Towards the end of that year, the appellant''s mother filed yet another application to sell one of the
houses with a view to enable her to discharge the amounts due to the respondent under the two mortgages and for paying the debts subsequently
incurred by her. A sale was ordered, and the Indian Bank Limited, purchased one of the properties for a sum of Rs. 41,500. But before the sale
was confirmed, the Bank appears to have obtained information about the will left by Gopalakrishna Raju; it thereupon applied to have the sale in its
favour set aside. This was done on 8th February, 1952. Sometime earlier that is immediately on the existence of Gopalakrishna Raju''s will being
brought to the knowledge of this Court, Krishnaswami Nayudu, J., had directed the Administrator-General to take immediate possession of the
estate of the deceased and to apply for Letters of Administration. The Administrator-General obtained Letters of Administration and took
possession of the estate. In the course of the administration, the Administrator-General, after obtaining the sanction of the Court, put up for sale the
same property. The Indian Bank purchased it for Rs. 39,200. The net sale proceeds have been retained by the Administrator-General. The
respondents thereupon instituted the suit, out of which this appeal arises, to recover the moneys due to them in respect of the two mortgages
executed by Manorama in their favour on 4th March, 1950 and 31st May, 1950, in pursuance of the leave granted by the Court in Applications
Nos. 4689 of 1949 and 1754 of 1950. The suit was contested on behalf of the minor on the ground that Manorama had no authority to execute
the mortgages and that the creation of the mortgages was the result of a fraud practised by her on the Court. Balakrishna Aiyar, J., held that
Manorama deliberately suppressed all information about the will of her husband to the Court and that the orders authorising her to raise loans on
mortgage over the property of the appellant were procured by fraud. But the learned Judge held that the respondents were, however, not parties
to the fraud, that they were acting bona fide, that, under the circumstances, the lender could not be required to go behind the orders of the Court
granting sanction to the guardian to raise a loan, and that the mortgages would therefore bind the interests of the appellant. On these findings, a
preliminary decree followed.
In this appeal, the appellant challenges the correctness of the view taken by Balakrishna Ayyar, J., in regard to the binding nature of the
mortgages. One of the main points that arise for consideration in this appeal relates to the extent to which the mortgagee can rely on the two orders
in order to support the mortgages executed in his favour by the guardian. The order directing this appeal to be heard by a Full Bench does not
formulate any specific question for decision--the entire appeal has been and is before us. But, having regard to the arguments before us, we
considered that it would be better to specify the question for decision and dispose of the appeal in the light of the answer thereto. We have
therefore framed the following question:
Whether the existence of an order u/s 31 of the Guardians and Wards Act, granting leave to the guardian for alienating the property of the ward, is
conclusive proof that the alienation made in pursuance thereof is supported by necessity or benefit to the minor. If the answer to the question is in
the negative, what is the value of that order in any subsequent litigation, wherein the minor impugns the validity of the alienation?
The Guardians and Wards Act is enacted with a view to protect the person and property of the minor. If a guardian is appointed under the Act,
the control of the person and property of the minor is vested in the Court, the guardian being only its nominee. In England, infants have been
treated as under the special protection of the sovereign, who, as parens patria had the charge of such persons. The jurisdiction over the infants was
delegated by the sovereign formerly to be exercised by Lord Chenceller, and from him, it passed to the Court of Chancery, and ultimately, it is
now vested in the Chancery Division of the High Court of Justice. In The Rajah of Vizianagaram Vs. The Secretary of State for India in Council
and Others, , the learned Judges while considering the protection afforded by law in our country held that the jurisdiction exercisable in England by
the Lord Chancellor, who was acting for the soverign as parens patria, was vested originally in the Supreme Court in Madras, and later, inherited
by the High Court and that High Court had under clause 17 of the Letters Patent, jurisdiction in regard to minors more extensive than those
conferred on the Court under the Guardians and Wards Act. The Guardians and Wards Act, 1890, (which will be referred to as the Act) provides
a procedure for appointing guardians of minors similar to the procedure adopted by the High Courts. As stated in Trevelyan''s Law Relating to
Minors, the Act has brought the law on the subject more into line with the law as administered in England. Section 4 (3) of the Act defines a ward
as a minor for whose person or property or both there is a guardian. Section 7 provides for the appointment of a guardian. Therefore; when a
guardian is appointed by the Court for a minor, the minor would become a ward of Court. A ward of Court has been defined in Simpsons''s Law
Relating to Infants, 4th edition, page 165, as a person under the care of a guardian appointed by Court. Thus, a ward of Court is an infant, over
whose person and property the Court exercises a jurisdiction which should obviously be in the nature of a parental and administrative one.
Viscount Haldane, L.C., speaking of the nature of the jurisdiction of the Court over infants, observed in Scott v. Scott L.R. (1913) A.C. 417 :
The case of wards of Court and lunatics stands on a different footing. These, the Judge who is administering their affairs, in the exercise of what has
been called a paternal jurisdiction delegated to him from the Crown through the Lord Chancellor, is not sitting merely to decide a contested
question. His position as an administrator as well as Judge, may require the application of another and overriding principle to regulate his procedure
in the interest of those whose affairs are in his charge.
Stating the proposition in another form, the Lord Chancellor observed:
In the two cases of wards of Court and of lunatics, the Court is really sitting primarily to guard the interests of the ward or the lunatic. Its
jurisdiction in this respect parental and administrative, and the disposal of controverted questions is an incident only in the jurisdiction.
It will be relevant to consider then the nature of the jurisdiction exercised by the Court in granting leave to a guardian to sell the property of the
minor. Section 29 states that a person other than a Collector who has been declared guardian by the Court shall not mortgage or otherwise
transfer the Immovable property belonging to a minor without the previous permission of the Court. Section 30 declares any disposition of the
Immovable property in contravention of the previous section as voidable at the instance of the minor. Section 31 states:
(1) Permission to the guardian to do any of the acts mentioned in Section 29 shall not be granted by the Court except in case of necessity or for an
evident advantage to the ward.
(2) The order granting the permission shall recite the necessity or advantage, as the case may be, describe the property with respect to which the
act permitted is to be done, and specify such conditions, if any, as the Court may see fit to attach to the permission; and it shall be recorded, dated
and signed by the Judge of the Court with his own hand, or when from any cause, he is prevented from recording the order with his own hand,
shall be taken down in writing from his dictation and be dated and signed by him.
(4) Before granting permission to a guardian to do an act mentioned in Section 29, the Court may cause notice of the application for the permission
to be given to any relative or friend of the ward who should, in its opinion, receive notice thereof, and shall hear and record the statement of any
person who appears in opposition to the application.
No appeal lies from the order granting leave to the guardian to alienate the ward''s property. But an order refusing to grant such leave is made
appealable u/s 47(e) Section 48 enacts that, except as provided by Section 47 and Section 115, Civil Procedure Code, an order made under the
Act shall be final and shall not be liable to be contested by suit or otherwise. The result of these provisions is that an order granting leave to the
guardian to mortgage or sell a minor''s property cannot be challenged in appeal. A limited and restricted right of challenging such an order by way
of revision to the High Court, no doubt, exists : but such right can seldom be of any practical advantage to the minor where an unscrupulous or
incompetent guardian is in charge of his affairs. Although Section 31 (4) provides for hearing'' the objection of any third party who opposes the
application, rarely do persons come forward to place the true state of affairs before the Court. Normally, the guardian and possibly the alienee are
the only persons before the Court in such matters. Both being interested in the alienation neither would be interested in filing a revision to the High
Court against an order granting leave. It is no doubt true that it is the duty of the Court, to which an application is made u/s 29 for leave to transfer
the minor''s property to satisfy itself by enquiry that the transaction is so necessary or one for the evident benefit of the minor; a Court will not
normally grant such permission except in case of urgent necessity or for apparent benefit of the ward after a careful enquiry and presumably on
notice to such persons as are likely to be interested in the ward. But, from the nature of the machinery provided under the Act, it will not always be
possible to arrive at a correct conclusion as to whether or not the proposed transaction by the guardian is for the benefit etc., of the minor. For one
tiling, there will be no independent person conversant with the affairs of the minor to protect him against a guardian who wants to sell the minor''s
property for his own reasons. Secondly, the procedure in such cases would generally be ex parte. They are undoubtedly summary. There is no
provision, as stated earlier, for any right of appeal. There is undoubted force in the following observation of Kania, J., in In re Dattatraya Govind
Haldankar I.L.R.(1932) 56 Bom. 519 3:
The opportunities for testing the grounds on which the alleged necessity or benefit to the family have come into existence are, as compared with the
purchaser, few to the Court. In the application which is generally made either by the father of the manager, who is interested in the transaction
being, affected, ex parte statements are made and the Court has ordinarily no adequate machinery to enquire into the truth or otherwise of the
averments. The statements would, as I have pointed out above, be ordinarily made by a party who is interested, and therefore require to be very
carefully scrutinised especially if, on the footing of the order which the Court might pass, the purchaser considers that he is absolved from any
further liability to make enquiries on his own account.
The case before us itself furnishes a telling example of how imperfect the machinery provided by the Act is, to find out the true position regarding
the honesty and truth of the representations made to the Court by a guardian who moves it u/s 29. There is ample scope for misrepresentation and
fraud. It follows that the enquiry contemplated u/s 31 would not be sufficient to enable the Court to adjudicate upon the rights of the minor in
regard to the propriety of the sale. As we stated above, the jurisdiction of the Court under the various provisions of the Act is essentially parental
and administrative. No finality can therefore attach to the order sanctioning the proposed transfer by the guardian. There is nothing in Section 31
itself to suggest that the order thereunder is either conclusive or binding against the minor; the order can hardly amount to an adjudication of the
rights of the minor vis-a-vis the transfer, the minor''s interests not being independently represented before the Court, albeit the Court is itself in the
position of parens patria. We are therefore of opinion that, although a Court, while passing the order u/s 31 (2) of the Act, has to be satisfied that
the proposed alienation is for necessity or for an evident advantage of the ward, such order cannot be treated as res judicata, so as to bind the
minor, or be conclusive against him.
But the matter, however, does not rest there. Section 31 is intended for the protection of the minor. Circumstances may arise when the minor''s
interest itself requires an alienation of his property. To postpone the alienation till the minor attains the age of majority might spell disaster to him. A
sale or alienation at the proper time will therefore be a necessity. Justice and fairplay require that a purchaser who comes forward to purchase the
property in those circumstances should himself be assured that he is getting title to the property free from challenge by the minor. In the interests of
the minor himself, there should be some assurance as to title, as otherwise the property would not fetch a proper price. Section 31 is therefore
intended to secure to the minor an advantage by a disposition of his property in proper time for any compelling necessity or for evident advantage
to him; he should be enabled to get a proper price, by securing to the purchaser a full title. We shall consider the rule which achieves this double
purpose.
Under the Hindu Law, the guardian of a minor is authorised under certain circumstances to sell the property of the minor. The existence of those
circumstances (for example, necessity or benefit) will always justify the sale. But it is not necessary in all cases to furnish actual proof of necessity
to justify the sale by the guardian. If the purchaser acts upon a representation that there was such necessity or benefit and he acts honestly and
makes proper enquiries to satisfy himself as to the existence of such necessity, the alienation would be valid. This principle was laid down in the
leading case of Hunoomanpersaud Panday v. Mussumat Babooee Munraj Koonweree (1856) 6 M.I.A. 393 , and is embodied in Section 38 of
the Transfer of Property Act. In Hunoomanpersaud Panday''s case (1856) 6 M.I.A. 393 , Lord Justice Knight Bruce observed at page 423:
The power of the Manager for an infant heir to charge an estate not his own, is, under the Hindu law, a limited and qualified power. It can only be
exercised rightly in a case of need, or for the benefit of the estate... The actual pressure on the estate, the danger to be averted, or the benefit to be
conferred upon it, in the particular instance, is the thing to be regarded. . . . Their Lordships think that the lender is bound to inquire in the
necessities for the loan, and to satisfy himself as well as he can, with reference to the parties with whom he is dealing, that the Manager is acting in
the particular instance for the benefit of the estate. But they think that, if he does so inquire, and acts honestly, the real existence of an alleged
sufficient and reasonably credited necessity is not a condition precedent to the validity of his charge, and they do not think that, under such
circumstances he is bound to see to the application of the money.
An alienation by a guardian after obtaining sanction of the Court u/s 31 can in proper cases be supported on the principle of enquiry laid down in
above case. u/s 31 of the Guardians and Wards Act the Court will always make as full an enquiry as is possible as to the existence of necessity or
benefit to the ward. An order u/s 31 (2) will be the result of such an enquiry by the Court. A bona fide purchaser can therefore rely on the order,
and prima facie, such an order should be available to him to take the place of enquiry as to the existence of necessity or benefit. It was on this
principle that the cases, which we shall refer to presently, uphold an alienation of a guardian after obtaining sanction u/s 31.
In Sikher Chund v. Dulputty Singh (1879) ILR 5 Cal. 363, Sir Richard Garth, C.J., observes that it is unreasonable to say that a party
purchasing under an order will be bound to make the same enquiry which the Judge made and to determine for himself whether the Judge had
done his duty properly and come to a right conclusion. It was this principle of honest enquiry as to existence of necessity, etc., by the alienee that
the Privy Council had in mind when it observed in Gangapershad Sahu v. Maharani Bibi L.R. (1884) 12 IndAp 47 : ILR 11 Cal. 379 (P.C), that,
Their Lordships think that when an order of the Court has been made authorising 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 as to 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; but, apart from
any charge of that kind, their Lordships think he is entitled to rest upon the order.
In AIR 1931 136 (Privy Council) there was a suit on a mortgage executed by the manager of a joint Hindu family. A guardian had been appointed
for the minor. Although the appointment was irregular, the guardian obtained the sanction of the Court for effecting the mortgage over family
property in which the minor was interested. The Privy Council referred to Hunooman persaud Panday''s case (1856) 6 M.I.A. 393 in regard to the
justification of the alienation on the ground of enquiry, and upheld the alienation against the minor on the ground that the creditor had by necessary
enquiry satisfied himself as to the existence of necessity. Dealing with the matter in regard to the obtaining of the sanction from Court to mortgage
the property of the minor, their Lordships observed:
Ramlal (Creditor) was informed that Gulab Chand was guardian of Ratan Chand.; he asked Gulab Chand for the certificate of guardianship. Gulab
Chand produced the certificate of guardianship, as well as the order of the Court granting Gulab Chand permission to mortgage the minor''s share
in the property as well as his own share. Ram Lal was informed that the debts were not the personal debts of Gulab Chand, but that they had been
incurred in connection with the business carried on in the name of Hardeodas Gulab Chand. Ram Lal made inquiries personally from some of the
alleged creditors, and he found that money was owing to them as stated by Gulab Chand.
After referring, again, to the appointment of Gulab Chand as a guardian and to the permission granted by the Court for alienation, the Privy Council
observed again:
These were matters which Ram Lal was entitled to take into consideration when deciding whether he would advance the money. Though it turns
out afterwards that the orders of the Court may have been irregular, there is no suggestion that Ram Lal had at the date of the mortgage any
knowledge of such irregularity. Ram Lal, however, according to the evidence, did not rely solely upon the abovementioned orders of the Court,
for, as already indicated, he made inquiries not only from Gulab Chand and the broker who was acting for him, but also from some of the creditors
of the firm of Hardeo Pas Gulab Chand, whose names were given to him by Gulab Chand and the broker.
These observations indicate that the true basis on which an order of Court u/s 31 of the Guardians and Wards Act is held to sustain an alienation of
minor''s property, is on the footing of an honest enquiry. It will follow that, if there are certain circumstances to the knowledge of the alienee
exciting suspicion as to whether the order of Court was obtained on a correct representation, it would be his duty to make further enquiries; but, if
there be no circumstances to arouse such suspicion, it would be reasonable for the alienee to rest on the order itself as amounting to an enquiry
made by him.
In Mahanth Mahabir Das v. Jamuna Prasad Saku I.L.R.(1928) Pat. 48, Das, J., observed that the existence of an order u/s 31 would be
conclusive on the question of due enquiry which was all that would be necessary to be made by a creditor, unless it was shown that the creditor
was party to a fraudulent misrepresentation to the Court. That was also the view of the Lahore High Court in Brij Raj Saran v. Alliance Bank of
Simla ILR (1936) Lah. 686. While we agree respectfully with the two judgments aforesaid as to the true principle, we must not however be taken
as sharing the view of Das, J., that an order u/s 31 (2) of the Act can always be regarded as conclusive evidence of enquiry.
We shall now consider the two cases which have occasioned this reference.
In Venkataswami v. Veeranna (1931) 42 M.L.J : 333 : ILR Mad. 429, it was held that the sanction of the Court to an alienation of a minor''s
property by a guardian was only prima facie evidence that the transaction was a good one, but would not cure any inherent defect that might exist
in it, and that it would be open to the minor to show that it was not supported by necessity or benefit and that the only effect of the order u/s 31
would be to cast the burden of proof on the minor to show that the transaction was not binding on him. The learned Judges in. that case did not
consider the question of supporting the guardian''s alienation on the basis of any bona fide enquiry by the guardian. The actual decision in the case
can, however, be supported on the facts found. The minors in that case, who were boys were aged 3 and 6 years; a representation was made to
the Court that money was to be raised on a mortgage of the minor''s property for the purpose of their marriage,--an obvious lie. No marriage took
place for 15 years thereafter, and, even then only one was married. The learned Judges themselves found that the alienee was the clerk of the
guardian and there was a great deal of suspicion about the transaction, which suggested a conspiracy between the guardian and his clerk. No
question of honest enquiry could at all have arisen in the case. Spencer, J., took the view that an order u/s 31 would not cure the inherent defect in
the sale itself and it would amount to nothing more than prima facie evidence that the transaction was good and that it was open to the minor to
show that the sale was fraudulent or improper. Ramesam, J., held that the effect of an order u/s 31 was nothing more than to place the burden of
proof on the minor. The learned Judge distinguished the observations in (1884) L.R. 12 I.A. 47 (Privy Council) as applicable to a case of
mortgage a distinction which we are unable to accept. With great respect to the learned Judges who decided Venkataswami v. Veeranna (1921)
42 M.L.J. 333 : ILR Mad. 429. we are of opinion that the effect of an order u/s 31 of the Guardians and Wards Act will not merely be to shift the
burden of proof from the alienee to the minor, but, in the absence of other circumstances putting the alienee on notice of infirmities attaching to the
transaction will support the alienation on the basis of the alienee having made proper enquiries before obtaining the transfer.
In R.M. Raman Chettiar Vs. Tirugnanasambandam Pillai and Others, Venkatasubba Rao and Reilly, JJ., did not accept the decision in
Venkataswami v. Veeranna (1921) 42 M.L.J. 333 : ILR Mad. 429 as laying down the correct law. Venkatasubba Rao, J., referred in the course
of his judgment to the principle, of supporting a guardian''s alienation on the basis of a reasonable enquiry made by him observing that where an
alienation had been made with the sanction of the Court, the alienee could rely upon it and that the alienation must be upheld unless. the alienee had
been a party to a fraud or collusion or had been guilty of any underhand'' dealing. In the course of his judgment, the learned Judge has referred to
the fact that a Court would not grant sanction unless it was satisfied that the transaction was beneficial to the minor and such an order would be
sufficient to protect the alienee in the absence of fraud. Some of the observations in the Judgment of the learned Judge and of Reilly, J., no doubt,
lend support to the argument that the order of the Court u/s 31 is conclusive on the question of the existence of necessity or benefit. But on a close
reading of the judgment, we are satisfied that the learned Judges never intended to lay down any such proposition. The existence of necessity or
benefit is a fact which has got to be established by evidence and once it is held that an order u/s 31 (2) is not res judicata on that question, it should
be competent to the Court to investigate it where the alienation is challenged by the minor. If neither necessity nor benefit exist the only ground on
which the alienation could be supported is that of bona fide enquiry on the part of the alienee. On a careful reading of the judgment of
Venkatasubba Rao and Reilly, JJ. we are of opinion that the learned Judges viewed an order u/s 31 only as a substitute for a due enquiry by the
alienee, and where the alienee was honest, it would afford him complete protection with regard to the propriety of the sale in his favour.
Reference may be made at this stage to the decision of the Bombay High Court in Balajee Vasudeo v. Sadashiv Kasinath ILR (1937) Bom. 1.
Broomfield, J., expressed the view that a sale by a guardian sanctioned by Court prima facie conveyed good title to the purchaser, and unless it
was shown that the sanction was obtained fraudulently or by underhand dealing, it would be valid. With great respect, the rule has been too
broadly stated to be accepted. While we agree with the learned Judge that there is no ''Obligation on the part of the alienee to go beyond the order
of Court and make further enquiries, we must point out that the very principle of the rule,--that of protecting an alienee who makes an honest
enquiry--would require that the protection given by it should not be available to a person who, for example, knows other facts casting doubts on
the existence of necessity, etc. Secondly, from the point of view of the alienee, it is not every fraud that will vitiate the transaction : he should be a
party to it before it can be set aside. We cannot agree with Tyabji, J., when the learned Judge stated : *
The decision of the Court entrusted with the duty of deciding whether or not to permit the guardian to enter into the sale has already been given. It
cannot be treated, as having some effect other than that laid down in the Act, under which the permission is given; nor is there any ground"" shown
why it should be ignored.
If the learned Judge intended to lay down that the order is conclusive on the existence of necessity or benefit, we respectfully disagree.
We are, therefore, of opinion that Venkataswami v. Veeranna (1921) 42 M.L.J. 333 : ILR Mad. 429, has not been correctly decided and that
the decision in R.M. Raman Chettiar Vs. Tirugnanasambandam Pillai and Others, , can be accepted to this extent, namely, that an order u/s 31 (2)
of the Guardians and Wards Act can be relied on by the alienee as a substitute for an honest enquiry by him; but that it will be open to the minor
who is challenging the alienation to show that the alienee was put on notice at the time of the alienation of matters which would show defects in the
transaction or that he did not act bona fide. Where there is no evidence to show that there existed circumstances exciting suspicion as to the way in
which an order u/s 31 (2) was obtained, the alienee would be entitled to rely on it to support his title. It follows that an order u/s 31 (2) cannot be
treated always as conclusive on the question as to the existence of necessity or benefit : even as to the sufficiency of the enquiry made by the
alienee, it would be competent for the minor to prove that the alieenee did have sufficient reason not to rest on the mere existence of the order of
Court. This does not, however, mean that, where the guardian is guilty of misrepresentation or fraud in procuring the order from Court, the alienee
should suspect it and start an enquiry. So long as he has no knowledge of the guardian''s misrepresentation or fraud, he will be entitled to rely on
the order of the Court as affording evidence of his honest enquiry. IF the minor proves that the alienee knew more or did not himself rely on it but
made independent enquiries, the onus being on the minor to prove it, the order of Court will not afford conclusive evidence on the question of
enquiry; burden will then shift to the alienee to prove due enquiry. Even if he fails in that, he can sustain the alienation on the ground that it was for
the necessity or benefit of the minor. Under the general law, the onus of proving justifying circumstances will be on the alienee; but the existence of
an order u/s 31 (2) of the Act which was passed after an enquiry as to there being necessity, etc., though not res judicata wilt shift the onus on the
minor, who will have to prove that the alienation was not for necessity, etc. This is because the alienation is one sanctioned by Court, albeit after a
summary enquiry. It is needless to point out,--and all the cases are unanimous on that point--that, where the guardian is guilty of misrepresentation
or fraud and the alienee is a party to it, or, is even aware of it, the alienation in his favour will not be protected. But, where the latter is not a party
to such fraud or has no knowledge of the same, the mere fact that the guardian was guilty thereof will not disentitle him to rely on the order of
Court as proving an honest enquiry by him.
The appeal will be posted for hearing on the merits to 6th November, 1961.
S. Ramachandra Iyer, J.
When the appeal came up before us after the expression of the foregoing opinion two further contentions were raised in support of it. The first
related to the validity of the permission granted by the Court for the two mortgages and the second to the extent to which such permission even if
valid would operate. The former aspect of the contention was put thus :--Manorama Bai was not a mere natural guardian of the minor : she had
been appointed as the executrix under the will of her husband which prohibited her from alienating the property bequeathed to the appellant. There
beings prohibition against alienation under the will the mortgages would be valid only if the Court sanctioned them under; Section 28 of the
Guardians and Wards Act. In the present case it cannot be held that there was such a Sanction as the Court was never made aware of the
existence of the will and it would never have applied its mind to the question whether having regard to the prohibition in the will there was a need
for the mortgages.
The argument proceeds on a misapprehension of the true position. Implicit in it is the assumption that the authority of the Court depends on the
correctness of the representations made to it by the guardian. The Court on the other hand acts on its own authority being in loco parentis while
permitting the alienations of the property of the ward. The jurisdiction of the Court to grant the permission depends on its finding whether the sale
was necessary or for evident benefit of the ward, and therefore would exist irrespective of the limitations imposed on the guardian in the matter of
alienation by any deed or will granting the property to the minor. Section 28 makes it clear that the Court can sanction an alienation even when
there is a prohibition against it by a testator. The jurisdiction of the Court is determined therefore by the occasion, that is, the existence of a present
necessity or benefit and not by the extent of the powers possessed by the guardian. As the Court can sanction a proposed alienation whether the
guardian is vested with power or not under the terms of the will, the circumstance that the guardian suppressed all information about the limitation
of her own power to sell by the will is wholly immaterial. This, as stated earlier, is of course, subject to the qualification that if the alienee is a party
to the fraud or misrepresentation by the guardian he would not be protected. Secondly the principle on which an alienation of the minor''s property
is supported when it has been sanctioned by the Court, is as we have pointed out, based not so much on the correctness of the conclusion arrived
at by the Court but on the ground that the alienation is supportable by reason of the bona fide enquiry made by the alienee. If the alienee trusts to
the order of the Court whether such order was obtained after a full disclosure of facts by the guardian or not, he would be deemed to have made a
bona fide enquiry and satisfied him- self as to the necessity for the alienation. What is necessary, therefore, is the existence of an order of Court
sanctioning the alienation and not whether it was correctly proved. That implies that non-disclosure to the Court of a will or instrument curtailing the
guardian''s powers cannot affect the validity of the alienee''s title. We, therefore, reject the first contention.
It is next contended that the suit mortgages can be enforced only against one half share in the property and not against the entirety, as that
alone was represented as the minor''s property and sanction of Court obtained. From what we have stated at the beginning, it will be apparent that
Manorama Bai purported to execute the mortgage in her own right as well as on behalf of her minor son. The permission to sell was also obtained
on the representation that she and her son were entitled to the property as co-owners. From this circumstance it is contended that if the alienation
were to be supported purely on grounds of a bona fide enquiry by the first respondent, the latter could not obtain security over a greater extent
than what was represented in the order of the Court as forming the minor''s property which should also be deemed to be what the alienee
bargained for. In other words it is said that while the order of the Court can be used to support the alienee in regard to proof of enquiry, it can also
be relied on by the ward to show the extent of the property covered by such enquiry. In the present case the alienee can enforce its mortgage right
over one half of the mortgage property; the other half of the property being charged as the property of Manorama Bai no title to it could be
secured by the enquiry. . We were not at first inclined to permit this contention to be raised in the appeal as the same had not been raised at the
trial of the suit; but later we felt persuaded that the question would arise as a logical result of the conclusion come to by us and on the proper
application of the very principle on which the alienation is now supported. Further in the grounds of appeal objection has been raised as to the
propriety of the enquiry made by the first respondent before it advanced monies to the guardian. We have, therefore, permitted the appellant to
raise the contention.
Learned Counsel appearing for the first respondent attempted to meet the contention stating that although the proceedings for getting sanction
of the Court were initiated on the footing that Manorama Bai had one half interest in the property and permission was sought only in regard to the
other half as the interest owned by the appellant, she later conceded that the entire property belonged to her son and the sanction of the Court
should be regarded as authorising the mortgage of the entire property as that belonging to the ward. In support of this argument reference was
made to paragraph 13 of the affidavit filed by Manorama Bait in Application No. 4991 of 1956 wherein she stated:
There is a certain amount of hesitancy on the part of persons who offer to buy the house as it belongs to the minor ward of the Court and I submit
that if orders of this Hon''ble Court are obtained for the sale of the house better offers are likely to be made
(italics not in the original).
This sentence has, however, got to be read with the earlier statement made in the affidavit in paragraph 3 whereby the depondent definitely stated
that the house belonged to the estate of her deceased husband. She later reiterated that assertion in paragraph 10. The affidavit itself referred to
and incorporated an affidavit filed in the earlier Application (Application No. 4689 of 1948) which categorically stated that the properties belonged
to her and her minor son who were the heirs of her deceased husband. The orders passed in the applications sanctioning the mortgages in favour of
the first respondent based as they are on these affidavits, can only be taken as permitting the raising of loans on the one half share of the property
on the footing that that alone belonged to the minor. That the representation made to the alienee was that the minor had only a half share in the
property and that the Court sanction covered only that half, is supported by the terms of the mortgage deeds executed in favour of the first
respondent which recited in the preamble portion thereof that the properties sought to be secured under the mortgage devolved upon Manorama
Bai and her minor son on the death of her husband as his heirs. On this evidence, there can be no doubt that Manorama Bai asserted her own
independent title as the heir of her husband with respect to one half of the property offered for mortgage and that she purported to act on behalf of
the minor only in regard to the other half which she represented as the minor''s share. It can also be taken that the first respondent advanced
moneys under the mortgage only on that footing. The question then is whether in these circumstances the first respondent can enforce his security
against the entire property which is now accepted as having belonged to and belonging to the minor or whether the alienee''s rights should be
confined only to one half thereof.
In 16 CWN 577 (Privy Council) of the two brothers, who were members of a joint Hindu family, the elder among them created a mortgage
over a property of the family, asserting that the property descended to him as ah impartible estate over Which he had an absolute power of
disposition.. The mortgage, was no doubt, executed for purposes binding on his brother as well. The younger brother who was a minor also joined
in the execution of the mortgage. '' In the suit filed by the mortgagee to enforce the mortgage, his contention that the minor brother would be bound
by reason of joining in the mortgage failed as the'' signature of the latter was made while still a minor and as that would be insufficient to prove his
assent to the transaction. The mortgagee then raised the contention that in executing the mortgage the elder brother must be deemed to have acted
as the manager of the family in that the money was raised for the benefit of the minor as well, the latter''s share in the family properties being
therefore bound by the mortgage. This contention was repelled by the Privy Council for the reason that the elder brother could not be held in the
circumstances of the case to have acted as the manager of the family consisting of himself and his minor brother as he expressly purported to
mortgage the property by alleging exclusive title in himself. This decision of the Privy Council has been the subject-matter of consideration in more
than one case before our Court. In Sabapathy Chetty v. Ponnuswamy Chetty 28 Ind.Cas. 365, that case was distinguished as one where the elder
brother repudiated any claim to act in the transaction on behalf of his minor brother and merely got him to execute the document only to evidence
his assent thereto. In that case the document recited that the subject-matter of alienation (a gift) was acquired out of the donor''s earnings. It was
held that the recital was made with a view to strengthen the title of the donee and not to exclude an intention to execute it on behalf of the joint
family to Which the property belonged. Again in K.M. Ramakrishna Mudaliar Vs. V.S.V. Manikka Mudaliar (deceased) and Others, , the same
principle was accepted by holding that the mere fact that the properties were described by a member of the family as acquired out of his earnings
while alienating the same for the purposes binding on the family, would not amount to an assertion of such a hostile claim as against the interests of
the family or an indication that it was his own personal transaction so as to, preclude the application of the principle that if the purpose was one
binding on the family the transferor might still be regarded as having entered into the transaction in the capacity in which he could bind the family.
Practically the same view was adopted in Muthiah Chettiar Vs. N.M. Rayalu Ayyar, Nagaswami Ayyar and Co. and Others, .
The distinctive feature present in the cases cited above is that in alienating the property for the purposes of the family, the manager did not
repudiate any claim to act on behalf of the family or assert a hostile title to the property against the other members of the family, thus making the
transaction his own and not as -representing the family.
A different principle must necessarily apply when a person executing a sale or mortgage clearly asserts title in himself adversely to the other
members of the family. In such a case it cannot be said that there was any representation by the alienor of the interest of the other persons in the
property either expressly or impliedly. In Such a case the principle to be applied will be that recognised in Babu alias Govinddoss Krishnadoss Vs.
Gokuldoss Govardhandoss and Others, , where a question arose whether a party dealing with a surviving partner of a dissolved partnership could
rely upon the latter''s apparent authority if he did not profess to deal with him as such. That question was answered in the negative. Venkatasubba
Rao, J., cited with approval the following passage from In re Queale''s estate L.R. 17 Ir.361.
The bank dealt with him (mortgagor) as and in his capacity of an individual owner, not as an executor but a person pledging his own property for
his own debt giving as security his own interest for his own purposes. In such circumstances the bank can, in my opinion, have no better title than
that which its debtor really had in the capacity in which he was dealt with namely, as beneficial owner, i.e. as residiary legatee.
The rule laid down in 16 CWN 577 (Privy Council) was applied in the two following cases to alienations by a guardian asserting his own title,
though the purpose of such alienations was to benefit the minor''s estate. In Ammant Ammal v. Ramaswami Naidu (1918) 37 M.L.J. 113, the
guardian of a minor purported to sell the property of the latter as her own for the purpose of discharging certain debts binding on the minor out of
the sale consideration. It was held that the minor could repudiate the alienation and that he would not even be liable to pay the amount which went
to discharge the debt binding on him. That was a case in which the guardian of the minor acted on the basis of her being the full owner and not at
all as representing the minor. The same principle has been applied in Nanda Prasad v. Abdul Aziz I.L.R.(1923) All. 497, where the mother of the
minors claiming title under an alleged will of her husband purported to create a mortgage over the family property, not as guardian of her minor son
but as the full owner of the property. It was held that although the money raised by the mortgage was utilised for the benefit of the sons, the
mortgagee could not obtain any decree so as to bind the interests of the sons who were minors.
In the present case Manorama Bai purported expressly to execute the impugned mortgages as a co-sharer of the property along with the
minor. To the extent of one half of the property she asserted her title adversely to the minor : in the context of her suppression of the will which
gave the entire property to the minor, such assertion of intestacy and consequent inheritance can only amount to a repudiation to the extent of one
half of the minor''s title to the property. It is true that she also acted as the guardian of the minor but in doing so she declared that his interest was
only to a moiety of the property. She cannot therefore be deemed to have represented the minor in regard to the other moiety of the property of
which she claimed title in herself. That was included in the mortgage purely as her property and the first respondent would have no better title in
regard thereto than what Manorama Bai herself could give in the capacity in which she dealt with it : admittedly Manorama Bai had no interest of
her own in the suit property. It would follow that the mortgagee can enforce the security only in regard to an undivided one half share of the
property covered by the mortgage. The appeal will, therefore, stand allowed to this extent namely, that the mortgagee would be declared entitled
to recover the money due under the suit mortgages on the security of a moiety of the properties mortgaged; the other share not being bound by the
mortgage. There would be no order as to costs here and before the learned Judge. The Court-fee, due to the Government on the Memorandum of
Appeal will be borne in equal shares by the appellant and the first respondent. Time for redemption two months.