K. Subbaroya Chetty vs Nagappa Chetti and Others

Venkatasubba Rao, J.—This is a suit for partition. The plaintiff is the elder brother of the 1st defendant who was adjudicated an insolvent

and whose estate the 2nd defendant the Official Assignee represents. The suit is withdrawn against the 4th defendant. The other defendants are

alienees of various items of immovable properties, claiming on the strength of alienations made by or on behalf of the 1st defendant. The defendants

9, 10 and 11 were on their application removed from the record, the plaintiff not objecting to that course.

The plaintiff and the 1st defendant are the sons of one Ratnavelu Chetti who died on the 29th of December, 1913. His father is Ramaswami

Chetti who died in 1895. A deed of release (also termed partition deed) was executed on the 30th of August, 1911 by the plaintiff. The joint family

properties were valued at Rs. 12,900 and for the plaintiff''s one-third share amounting to Rs. 4,300, he was given houses Nos. 15 and 16,

Ramanan Street, Madras. On the same date, the plaintiff was made to execute a deed of gift conveying these properties to his wife who was a

minor.. The plaintiff alleges that this partition deed was a sham and make believe and was not intended to take effect. At the time this release deed

was executed the plaintiff had just attained majority. As I have said, Ratnavelu died on 29th December, 1913, that is about two years after the

execution of this deed. Nagappa his other son was then a minor. He attained majority on 25th July, 1918. An agreement was then executed on the

9th December, 1918 between the two brothers who agreed notwithstanding the release deed to treat the whole property as joint family property.

In pursuance of this agreement, a trust deed was executed on the 22nd of December, 1918 in favour of their maternal uncle one Singaram Chetti

(now dead) who was requested to take possession of the properties and sell such of them as were necessary, pay off the debts and divide the

residue in accordance with the agreement I have referred to, in equal shares between the two brothers, the plaintiff and the 1st defendant. If these

two documents of the 9th and 27th December 1918 are valid and genuine, the plaintiff''s case is unanswerable, but it is urged for the 1st defendant

that he did not execute them of his own free will and should therefore be disregarded.

From what I have said, it will appear that while the plaintiff attacks the deed of 30th August, 1911 as a sham and a pretence, the 1st defendant

impeaches the agreement and the trust deed of 1918 as inoperative and of no force. To start with, we find that the release deed of 1911 was by

mutual consent treated by the later documents of 1918 as a transaction not binding on the plaintiff.

Having made these preliminary observations, 1 shall proceed to state and discuss the facts.

Ramaswami Chetti, the plaintiff''s grandfather, was carrying on a trade in rice and died possessed of properties of some value. The trade was

continued by Ratnavelu, his son. who apparently prospered. The plaintiff on the eve of his attaining majority showed himself a dissolute young boy.

He began to execute bonds for large sums for petty amounts received. The father thought that his son would meet with the fate, which so often

overtakes boys of rich families in this City, and accordingly he became disturbed and tried to find means to avert the disaster. A suit had already

been filed against the boy in the Court of Small Causes and a plea was taken on his behalf that he was a minor at the time he passed the bond. The

Judge upheld that plea and dismissed the suit. This was not a solitary instance, for Mariappa Naicker, the old clerk of the family, has deposed that

the plaintiff had executed bonds in favour of about five other persons at that time. The father was no doubt able to circumvent one money-lender

but it was impossible to take a hopeful view in respect of other claims which might be forthcoming. The plaintiff had become a major and the plea

of minority could not safely be relied on. In these circumstances, the father desired that the property should be put out of the reach of the plaintiff''s

creditors and the release deed of 1911 was accordingly brought into existence. But the plaintiff could not be trusted even with a fraction of the

family property and it was therefore resolved to settle even the little that was allotted to him upon his young wife. In fact, it was necessary to save

the plaintiff from himself and this step was in the circumstances considered desirable and prudent. These facts are spoken to by the plaintiff (pp. 2

and 19) and by Mariappa Naicker (p. 99).

[Here as elsewhere in this judgment I shall economise space by merely giving reference to the pages of the transcript of the oral evidence.]

There is some little variation between the plaintiff and Mariappa Naicker, but, in my opinion, it is immaterial. The evidence stands uncontradicted

and there can be no doubt that the release deed was executed in the circumstances I have mentioned. A few months after the release deed the

father Ratnavelu wanted to raise a loan from the 3rd defendant the Mylapore Fund. On the 10th of May, 1912 he executed a mortgage in its

favour both for himself and as guardian of his minor son the 1st defendant and raised a sum of Rs. 12,000. The Fund, of course, would not lend

the money unless satisfied that the plaintiff had no interest in the properties. He was therefore made to pass a letter to the Fund dated the 11th

May, 1912 in which he referred to the partition with his father and stated he had no claim to the latter''s property.

The question that has to be decided is was it intended to send the plaintiff out, stripped of all property or was the object to ward off trouble and

to save the estate from the inroads of creditors?

His Lordship next discusses the evidence and continues thus:

I have come to the clear conclusion that the plaintiff is entitled as a member of the joint family to a half share in the suit properties. As the claim of

the defendants 5, 6 and 7 is against what may be found to be the 1st defendant''s interest only, it follows that in this suit for partition they can get no

relief as they do not profess that their debts are binding on the family. On my finding, this position is conceded and I further understand that there is

another suit in which they or some of them are pursuing their remedy against the 1st defendant. This disposes of defendants 5, 6, 7 and the absent

defendant No. 8. As I have stated in the opening paragraph of my judgment the suit is withdrawn against the 4th defendant and is dismissed as

against him without costs, as no costs are claimed. The only defendant whose case, it now remains to deal with, is the 3rd defendant (the Mylapore

Fund) . So far as its case is concerned, it requires a separate treatment in view of the case put forward and contentions urged for it. As in the

course of the argument the expression ''equitable considerations'' was freely used and as there is nothing more misleading than this term when its

precise connotation with reference to proved facts is not kept in view, I shall try to analyse and set forth the facts bearing upon this portion of the

case. As I have already said. the plaintiff executed a release deed in favour of his father on the 30th of August, 1911 and the latter on the 10th of

May, 1912 borrowed money from the Mylapore Fund executing a mortgage in its favour. At the time of this mortgage the plaintiff, as I have said,

passed a letter to the Fund dated the 11th May, 1912 disclaiming any interest in the property. After the death of Ratnavelu, Subbaroya took

possession of the family properties and managed them as if there had been no release at all. I have referred to these various acts of management

and it is not necessary to refer to them again. In 1916 the plaintiff wrote to the Mylapore Fund requesting it to transfer in his favour the shares

standing in the name of his father. The Fund in reply called upon the plaintiff to produce the partition deed of 1911. At that juncture Subbaroya

wrote to the Fund a letter the contents of which are very important. He wrote to say that the partition with his father was effected for ulterior

purposes and that it was not binding upon him and requested the Fund to recognise him and his brother as persons legitimately entitled to the

shares in question. The Fund on the 7th of September, 1916 replied stating that Subbaroya''s'' request could not be complied with as he had

become divided from his father. The matter was allowed to drop at this stage and nothing further was done.

In the meantime it was found that there were various debts due from the estate which had to be paid off. Monies were due on promissory notes

executed by Ratnavelu to one Seshadri Aiyangar to whom I have already referred, whose debts were kept alive by payments of interest by

Subbaroya in the course of his management. Now, this Seshadri Aiyangar filed a suit in the High Court against the plaintiff as well as Nagappa. An

amount was also due to one Venkatesam Chetti (already referred to) in whose favour the father had executed a promissory note. Towards this

debt also Subbaroya had made a payment and there was still a balance due. There was a third creditor, Ammakannu Ammal, from whom also the

father had borrowed an amount. These were the various sums then due, not to speak of some amount which was owing to the Mylapore Fund

itself. It became imperative to pay off these debts. The question was, how was the money to be found? The title put forward by Subbaroya, the

Fund refused to recognise and it was obvious that Subbaroya could raise no money from that source. But money was wanted. The mother of the

plaintiff and Nagappa had died and their nearest relation was their maternal uncle, Singaram. This man now came forward professing to be the

natural guardian of the minor Nagappa. We must look at the position of affairs as they appeared to be at that time. The title set up by the plaintiff

was adverse to that of Nagappa and in the latter''s interests an independent and disinterested guardian was necessary. There can be no question

that Singaram answered this description. He wrote to the Fund on 3rd June, 1917 setting up the exclusive right of Nagappa and asking for the

transfer of shares in his name. The Fund informed Singaram on 25th June, 1917 that the transfer was accordingly effected. Now, Singaram

negotiated with the Fund for a loan and as under the rules of the Fund the borrower must take a certain number of shares, 170 shares were taken

and an application was made for a loan of Rs. 17,000. The shares were taken in the name of the minor, the application was made in his name and

eventually a mortgage deed was executed on the 9th of October, 1917 by Singaram acting as the guardian of Nagappa. To the extent to which it is

proved that the money borrowed was applied for the minor''s purposes, the transaction would be clearly binding on him. It signifies little whether

Singaram was his de facto or de jure guardian. Subbaroya as I have said was incompetent to act for the minor. What was presumably the minor''s

exclusive property was threatened and it was highly necessary that some steps should be taken to preserve that property. Those interested in the

minor would be failing in their duty if they allowed Subbaroya to act upon the footing that the minor was entitled only to a moiety. In these

circumstances I regard that Nagappa is bound by the act of Singaram and the only question is, how much of the Rs. 17,000 raised from the Fund

was really utilised for purposes connected with this estate? So far I find no difficulty, but the really important question is, is the plaintiff bound by

this transaction? It is idle to suggest as against him that he was not really managing the property but he found himself in a position of great difficulty.

He did not wish to abandon his right based on a status of non-division. But how was the money to be raised? Singaram came forward and was

prepared to get an advance by putting forward Nagappa''s exclusive title. Subbaroya was equally anxious to get the money and if it could be got

without his sacrifice of his own interests he was prepared to take it and benefit by it. He was careful not to make any statement which would

jeopardise his own right and I may state in this connection that the argument that the facts raise an estoppel as against him is absolutely untenable.

Every, element requisite for estoppel was wanting. Far from misleading the Fund, he stated to it in unequivocal terms that he claimed a right in the

property. To return to the main point, I entertain not the slightest doubt that Subbaroya was aware of these negotiations, that he, took an active

part in them, that he utilised the money when it was actually raised and in every possible way recognised and adopted the transaction after it was

entered into. We must for this purpose look at the act of Singaram as if it was the act of Nagappa himself. One part owner then having in truth a

joint interest but believing himself to be solely entitled, makes disbursements for the preservation of the estate. The other part owner acquiesces in

the laying out of the money and in the creation of the charge knowing full well that these acts were necessary for the preservation of the estate. On

a careful consideration of the evidence I am prepared to record this finding on the facts proved, nay more; I am even prepared to infer from the

circumstances a request (expressed request is quite as good as an implied request) by Subbaroya that the loan should be raised and the charge

created. The Fund paid to the various creditors of the estate the amounts due to them. The debt due to Seshadri Aiyangar was inter alia paid off

and his suit was withdrawn. It is unnecessary to refer to the exhibits bearing on this question as these facts are not disputed. There is, however, a

very important fact which must be noticed. (I say important, because this is brought home to the plaintiff by a writing signed by him.) When the

Fund paid off the debt due to Venkatesam Chetti soon after the mortgage in question, he made an endorsement on the back of his promissory note

stating that he received the sum from the Fund and that the promissory note was thus cancelled. This endorsement, the plaintiff himself attested and

this fact of course must be emphasised in this connection. What is even more, from the date of the mortgage onwards Subbaroya recognised and

adopted the transaction. He made several payments to the Fund not only towards the mortgage but toward share monies. In 1919 he paid three

sums of Rs. 600, Rs. 246-6-3 and Rs. 261-12-0 and again in 1922 he paid three sums each of Rs. 500. These are by no means the only

payments made by him, for from almost the date of the mortgage, several sums were paid for interest to the Fund and it is not pretended that

anybody else was interested in making these payments. Nagappa was not in a position to make, for he was a minor and further never attended to

business. Singaram did not make them, for he really never managed the property and never got into his hands monies of the estate. The payments

to which I have referred are proved by the book''s of the plaintiff himself who has not been able to produce all the books relating to the business or

the estate and if they had been produced, for every payment appearing in the books of the Fund, there would be found (I have not the slightest

doubt) a corresponding entry in the books of Subbaroya.

Mr. Radhakrishnaiya has argued that at the best Nagappa may have a personal right of contribution as against the plaintiff, but the charge on

the property cannot be supported so far as he is concerned. To deal with this argument properly, it has become necessary to review the facts at

some length. Now that I have discussed the evidence and stated my findings, I shall proceed to consider what the correct legal position is. There

are two cases which I regard as extremely valuable and instructive. The first of them is Leslie v. French (1883) 23 Ch. Dn. 552. In that case Fry,

L. J., dealing with the cases where a lien arises in favour of a person making a payment, observes that generally the right to contribution is a

personal right and the remedy is a personal remedy and mentions an exception to this general rule, that is, where a relief is sought by a party, he

cannot obtain that relief unless he accepts a lien in respect of his share of the disbursements made. Fry, L. J., had to recognise the exception on

account of the cases where a Court of Equity refused to grant partition to one co-tenant except upon the condition of his submitting to a lien for the

expenditure made by the other co-tenant in respect of the property. Swan v. Swan (1819) 8 Price, 518 cited in the judgment is an instance of this

kind. According to this principle, the plaintiff, who in the present case seeks partition, is bound to submit to the lien.

Apart from this, can a part-owner generally claim lien for payments made as against the other part-owner? Fry, L. J., thinks that except by

contract he cannot acquire such a right. It is unnecessary in the present case to consider whether this rule is absolute or subject to any qualification.

I shall content myself with saying that Story states the law somewhat differently in the following passage : ""Another species of lien is that which

results to one joint owner of a real estate, or other joint property, from repairs and improvements made upon such property for the joint benefit,

and for disbursements touching the same. This lien, as we shall presently see, sometimes arises from a contract, express or implied, between the

parties, and sometimes it is created by Courts of Equity, upon mere principles of general justice, especially where any relief is sought by the party

who ought to pay his proportion of the money expended in such repairs and improvements."" (Story on Equity, (1920) 3rd Eng. Edn. 521.)

This passage does not confine the lien as between joint owners to cases of a contract merely; on the other hand, it expressly recognises a lien

created upon principles of natural justice. In the present case I do not propose to base my judgment upon general equity adverted to by Story as

the plaintiff''s liability becomes established even upon the narrower ground recognised by Fry, L. J., and referred to in the last clause of the passage

which I have extracted from Story.

I have now dealt with one case where Courts of Equity support a claim to lien. There are other circumstances which may give rise to a lien.

Fry, L. J., in the case I have cited points out that a person may become entitled to a lien on the ground of the acquiescence of the other persons

interested in the property. This principle is amplified and stated with great lucidity in Falcke v. Scottish Imperial Insurance Company (1886) 34 Ch.

Dn. 234, this being the second of the two cases to which 1 have referred as throwing valuable light upon the subject. It is a decision of the Court of

Appeal and one of the judgments in that case again is that of Fry, L.J. Before a lien can be supported on the ground of acquiescence, two

ingredients must co-exist. First, it must be shown that the man making the payment was under a mistake with regard to the title which he had in the

property and believed himself to have a larger title than he had; and secondly, it must be shown that the real owner knowing his own title and also

knowing the other''s mistaken belief in his supposed title had lain by while the latter was laying out the money. This principle clearly applies to the

facts of the case as I have found. It may be noted that this is not a rule which is confined in its operation to joint owners but may be invoked in

favour of any stranger who expends labour or money with a view of saving or benefiting the property or the goods of another.

There is a further and a third ground on which a claim to lien may be successfully based. That is referred to in the judgments of Cotton, L. J.,

and Bowen, L. J., in Falcke v. Scottish Imperial Insurance Company (1886)34 Ch. Dn. 234 which I have already cited. If a stranger does work

upon, or makes a payment in respect of, a property belonging to another without request, he gets no lien on the property for the work done or

money expended. But a claim may be based upon a contract to repay or to give a lien. Under the Common Law, without such a contract being

found, no claim can be successfully advanced. Cotton, L.J., says in his judgment:

If here, there had been circumstances to lead to the conclusion that there was a request by Falcke that this premium should be paid by Emanuel,

then there would be a claim against Falcke or his representative for the money, and I do not say that there might not be a lien on the policy.

This right to lien, apart from the personal right, is referred to both in the judgments of Cotton, L. J., and Bowen, L.J. Then what 1 consider to

be of the utmost importance as having a bearing on the present case is enunciated in the same judgments. The principle may be put in the words of

Cotton, L.J.:

I think that in a case of this sort, when money is paid in order to keep alive property which belongs to another, a request to make that payment

might be implied from slight circumstances.

This is after all not a rule of law but a valuable rule of guidance in approaching and valuing the evidence in a case. This is based upon natural

justice and the reason of the thing and the present case is eminently one where this rule may be usefully applied. I shall now sum up the three

grounds in law, which I find are material in the circumstances, on which a claim to lien may be supported.

(1) A joint owner who comes to Court seeking a relief cannot obtain that relief unless he submits to a lien for his share of the money expended,

which sum, the other owner has a right to recover, by way of contribution.

(2) Independent of joint ownership, a stranger expending labour or money upon the property of another is entitled to repayment as well as a lien,

provided circumstances exist from which, what is known as acquiescence in law, can be inferred. In this connection I may quote another passage

from the judgment of Cotton, L.J. (3):

It is very true that if a man who has a title to property sees another expending money upon it in the erroneous belief that he has a title to it when in

fact he has no title to it, there is an important doctrine of Equity which will prevent the real owner from insisting on his title so as to deprive the

person who was acting on the supposition of his own title of the benefit of his expenditure.

(3) Independent again of joint ownership, when a stranger expends money or labour upon the property of another, a claim to repayment as well as

lien will be supported, provided there are circumstances to lead to the conclusion that there was a request, and in this connection it must be

remembered that such a request, as a question of evidence, will be implied or inferred from circumstances however slight.

On the facts of this case I am satisfied that the charge can be supported on all the three grounds I have mentioned. If Nagappa can enforce the

charge against the plaintiff, the Fund by subrogation to that right can equally enforce it. This right of subrogation is generally recognised. The real

difficulty is in deciding whether the party who made the disbursements can create a lien, or is entitled to it. If the question is answered in his favour,

the right of the man who advanced the moneys to stand in the shoes of the former clearly and necessarily follows.

I may mention that, in the course of the trial, I gave ruling disallowing questions directed to show that Subbaroya ratified the transaction. For,

on the facts of this case, it is impossible even to conceive of a case of ratification. As Bowen, L.J., observes in Falcke v. Scottish Imperial

Insurance Company (1886) 34 Ch.D 234 already referred to:

There is no such thing in law as adopting or ratifying anything except where there is the sanctioning of an act professedly done on your behalf in

such a sense as to make you liable for it. A man can ratify that which purports to be done for him, but he cannot ratify a thing which purports to be

done for somebody else. Ratification only takes effect in law from its being equivalent to a previous authority.

In the view I have taken it is unnecessary to refer in any detail to the various cases cited to me in the very learned and elaborate arguments on

this point of Mr. Radhakrishnayya for the plaintiff and of Mr. Venkataramana Rao for the Fund. I may however briefly notice three of the several

cases which were cited for the plaintiff.

In Nathu Piraji v. Balwantrao ILR (1903) B 390 and Ammani Ammal v. Ramaswami Naidu (1918) 37 MLJ 113 there was no question of

joint ownership, or of acquiescence, or of implied request. These authorities cannot be of much assistance in deciding on the facts of the present

case. Next, Balwant Singh v. Clancy ILR (1912) A 296 : 23 MLJ 18 has been strongly relied on for the plaintiff. I have very carefully read the

judgment of the Privy Council and I cannot say that the question that is now raised was considered by their Lordships.

Another question has been raised by the defence, namely, that the suit is barred by limitation. The argument was put in this way : Subbaroya

ought to have brought a suit to set aside the document of 1911 within the period allowed by the law. He did not do so and, therefore, this suit is

barred. There are two obvious answers. In the first place, there was no need to get the document set aside by a Court, as, by mutual consent and

act of parties, that document was treated as cancelled. In supersession of that document, an agreement to divide the property and a trust deed

were executed in 1917. When a party obtaining an advantage under a document voluntarily chooses to treat it as inoperative and of no effect, it is

wholly unnecessary to come to a Court seeking an idle relief. Secondly, the case cited by Mr. Radhakrishnayya., Petherperumal Chetty v.

Muniandy Servai ILR (1908) C 551 : 18 MLJ 277 directly applies. The transaction was from the very start a sham and a pretence and there is no

need to get such a transaction formally set aside. I may point out that there is no evidence that any creditor was defeated as a result of this release

deed. Even a contention to this effect has not been advanced. This objection is therefore overruled.

Then it is said that the plaintiff has included in his plaint a prayer for a declaration that the various alienations made by Nagappa are not binding

upon the plaintiff''s interest. It is contended that the suit is barred by limitation as the relief claimed is such a declaration. This objection is again

untenable. If the plaintiff seeks to get rid of his own acts, no doubt he must first get the transactions set aside. But the plaintiff was no party to these

alienations, and it is indifferent to him whether the deeds are cancelled or not. The prayer regarding declaration is, in the circumstances, absolutely

meaningless and may be disregarded. It must be noted that the alienations complained against were not only made by a junior member of the family

but were made by him in denial of the plaintiff''s right. The suit is really and substantially one for partition of joint family property and the rules of

this Court make it incumbent upon the plaintiff in such an action to implead the alienees where the alienations are not admitted by him to be binding

upon the family. (See Rule 421 of the Original Side Rules.) It cannot be disputed that the suit regarded as a suit for partition, which in truth it is, is

not barred by limitation. This ground also fails. I must therefore hold that the suit is not barred.

Lastly remains the question out of the Rs. 17,000 raised from the Fund, how much was utilised for family purposes? The following valid

payments have been proved:

Rs. 2,653 5 2, balance due to the Fund on the old

debt of 1912.

"" 6,400 0 0 paid to Seshadri Aiyangar.

"" 3,764 8 3 paid to Venkatesam Chetti.

"" 3,030 0 0 paid to Ammakannu Animal.

__________________

Rs. 15,847 13 5.

__________________

The balance of Rs. 1,152-7-0 was paid by the Fund in cash to Singaram. It has not been shown that this sum was utilised for the benefit either

of the plaintiff or the 1st defendant. Indeed, no attempt has been made to show as to what was done with this balance. I must therefore hold the

Fund to be entitled to Rs. 15,847-13-5 and interest thereon less payments made.

What then is the decree to be passed in the case? On my findings, the plaintiff will be entitled to a preliminary decree for partition and I pass

that decree accordingly. I make a declaration that the only debt binding upon the family is that due to the Mylapore Fund, the 3rd defendant.

Before the properties are partitioned I direct that this debt shall be paid off. There is no dispute that the plaintiff and the 1st defendant are each

entitled to a half.

As regards costs, my decision is that the plaintiff shall recover the full costs of the suit (less the hearing fee paid for the last five days of hearing)

from the 1st, the 2nd, the 5th, the 6th, and the 7th defendants in the following proportion : From the 7th defendant 1/8, from the 1st and 2nd

defendants 1|3 of the balance, from the 5th defendant similarly 1/3 and from the 6th defendant also 1|3. I allow the plaintiff two vakils'' fees. I do

not propose to award costs to the Fund although it has substantially succeeded in the suit. My reason is, that much of my time has been wasted by

necessary contentions on its behalf being raised only at a late stage of the trial. As a matter of indulgence I allowed Mr. Venkataramana Rao to

appear at that stage and argue the points.

The case is referred to the Official Referee for effecting a division of the properties in accordance with this judgment.