AI Structured Summary
Not yet generated for this judgment
Judgment
Chandra Reddi, J.—The plaintiffs in O.S. No. 250 of 1945 are the appellants. The suit which has given rise to this second appeal was
instituted by them for the recovery of 1 acre and 34 cents of wet lands comprised in s. No. 347 of Vaddaku Viravanallur, Tirunelvell District, and
for past and future mesne profits. The first plaintiff is the muppidari and Moonnu Ugamkonda Amman Temple situated in the village of Vadakku
Viravanallur and plaintiffs 2 to 4 are the trustees thereof. The facts leading upto this appeal may be briefly; stated.
The first plaintiff is a communal temple and owned the suit property. This temple was being managed by three trustees of Illathu Pillaimar
community by name Picnandia Pillai, Ramaswami Pillai and Sankaralingam Pillai. A promissory note was executed by them in favour of one
Kandaswami Pillai who was no other than the sister''s husband of cue of the executants, Ramaswarai Pillai. Kandaswami Pillai assigned this
promissory note to one Shanmughasundaram Pallai who was another brother-in-law of Ramaswami Pillai. This Shanmughasundaram Pillai filed a
suit in the Court of the District Munsif of Ambasamudram in S. C. No. 116 of 1932 on the foot of this promissory note and obtained an ex parte
decree. Sometime thereafter, the decree-holder assigned the decree to the first defendant who brought the suit property to sale in execution of the
decree and purchased it himself. Having obtained the usual sale certificate he took delivery of the property on 25-2-1937. Subsequently he settled
a portion of the property on the 2nd defendant temple and retained the other portion to himself. It is to recover possession of this property that the
plaintiffs have filed the suit.
The suit was contested on several grounds, the chief of them being that as the debt was incurred by the then trustees for purposes binding upon
the temple and had ended in a decree, it was not open to the present trustees to challenge the validity of the decree or of the sale proceedings and
that in any event, the suit as framed was not competent as a suit to recover possession of the property without having the decree and the
consequent sale being set aside and lastly that it was also barred by limitation.
The trial Court decreed the suit holding that though the three trustees may be assumed to be ''de jure'' trustees and therefore competent both to
borrow money on behalf of the institution for purposes binding upon the temple and to represent the temple in various proceedings referred to
above, the debt borrowed under the promissory note was not for purposes binding upon the trust, and that the then trustees were guilty of fraud
and collusion in allowing a decree to be passed ex parte and in allowing the suit properties to be sold for a grossly inadequate price of Rs. 1200. In
the opinion of the trial Court, there was no necessity to borrow any money at the time when the suit promissory note was executed as the temple
was deriving annually an income of Rs. 600 and the expenditure did not exceed Rs. 250 and that even if there was such a necessity and the
promissory note executed was binding upon the temple there was no justification to allow the properties to be sold when the trustees could have
easily satisfied it out of the income of the temple and that further the property which was worth at least Rs. 2500 was allowed to be sold for a very
low price.
On appeal, the lower appellate Court disagreed with all the findings of the trial Court except on the question of the capacity of the then trustees
either to borrow moneys or to represent the temple in the various proceedings referred to above and dismissed the suit. The appellate Judge
thought that the plaintiffs were not able to establish that there was no justifying necessity for the borrowing and that at any rate, as the suit was not
brought for setting aside the decree and the sale within the time prescribed either under Article 12 or under Article 95, Limitation Act, the suit
should fail.
In this second appeal filed by the aggrieved plaintiffs the reasoning of the lower appellate Court in support of its conclusions is canvassed.
Several contentions have been raised by Mr. Ramamurthi on behalf of the appellants in support of the appeal and I shall now deal with them
seriatim.
The first point raised is that the decree is not valid and binding upon the trust as there was no legal necessity for the then trustees to have
borrowed any money under the promissory note and that this defence was not raised by the defendants in that suit. He also argued that the
defendants trustees were guilty of fraud and collusion in allowing an ex parte decree to be passed. The evidence in this case which is
uncontradicted is that the temple was in enjoyment of an annual income of Rs. 600, while its expenditure amounted only to about Rs. 250. This
evidence has been accepted by both the Courts and this concurrent finding is not shown to be in any way wrong. The point therefore, for
consideration, is whether on this material it can be said that there was any justifying necessity for the trustees to borrow money under the
promissory note.
It was maintained by the learned counsel for the respondents that the plaintiffs who attacked the validity of the decree have to establish that there
was no legal necessity for the borrowing and it is not for the defendants to show that there was legal necessity for the borrowing. I do not think I
can agree with this contention. It is now settled that when the validity of a transaction with a limited owner is in question, on the ground of want of
justifying necessity it is for the person relying on the transaction to allege that there was an actually special and unavoidable necessity and prove it.
This proposition has been well established by series of decisions. The leading case on this subject is -- ''Hanuman Persaud v. Mst. Baboee'', 6
Moo Ind App 393 (A). In this context, I may extract a passage from the ""Principles of Hindu law"" by Mulla at p. 188 (10th Edn.):
Those who deal with a person who has only a limited interest in the property and who propose to dispose of a larger interest, are prima facie
bound to make out the facts which authorise such a disposition. The power of a widow or other limited heir to sell or mortgage the estate inherited
by her is a limited and qualified power. If the sale or mortgage is impeached, the burden lies on him to prove (a) either that there was legal
necessity in fact; or (b) that he made proper and bona fide inquiry as to the existence of the necessity, and did all that was reasonable to satisfy
himself as to the existence of the necessity.
In -- Nalla Tirupatiraju and Others Vs. Nandikolla Venkayya alias Venkammanand Another, , a Full Bench of this Court took the view that the
burden of proving that the compromise with a widow was valid and binding upon the reversioners, was on the person who wanted to rely on the
compromise and that the interposition of a compromise decree would not make any difference as to the onus of proof in such eases. The principle
stated above governs equally the case of a person who deals with trustees ''of charitable or religious institutions.
In this connection the observations of Sir John Edge in dealing with the position of a shebait and the manager or a trustee of a temple in --
''Nainapillai Marakayar v. Ramanathan Chettiar'', AIR 1924 PC 65 (C) are apposite:
They can doubtless sell or mortgage the endowed lands of the temple, if there is an actual, special and unavoidable necessity of the temple to do
so, but that necessity would have to be proved by those who alleged that it existed.
It follows that it is for a person in the position of the defendant to urge and establish that the promissory note was supported by consideration
which was utilised for a justifying necessity.
But even otherwise, there is ample material on which a Court could come to a conclusion that there was absolutely no necessity for the then
trustees to borrow any money for any of the purposes of the temple. The established facts in this case are that the temple was in enjoyment of a
large income far in excess of its requirements and that there was no necessity to borrow any money for the purpose of the temple. Therefore the
trial Court was justified in finding that there was no necessity for the borrowing and that the then trustees were guilty of fraud and collusion in
allowing a decree to be passed.
The lower appellate Court, while agreeing with the trial Court, with regard to the income and the expenditure of the temple, took a different
view as regards the necessity, on the erroneous view that the plaintiffs had to prove that at the time when the promissory note was executed the
trustees had ready money in their hand which obviated the necessity to incur liability for the purpose of the temple. As supporting this view, it relied
upon a decision, of this Court in --'' Sukratendra Tirtha Swami Vs. N.N. Prabhu, . I do not think that that ruling lends any support to the view
taken by the lower appellate Court. In that case, it was found that large sums of money had come into the hands of the trustees in the normal
course of events. However, on account of misunderstandings amongst the trustees one of them withheld money of the temple without making it
available for the purpose connected with the worship of the temple. Therefore other trustees, in order to carry on the daily routine had to borrow
the money. That has no analogy to the facts of this case. There is nothing on record to show that any portion of the income was not available-for
spending on the temple. In those circumstances, I must give effect to the contention of Mr. Ramamurthi that the debt or the decree based thereon,
and the resulting sale are not valid and binding upon the temple.
There is another ground on which the validity of the decree and the resultant sale are assailed. It is argued that even if money was really
borrowed for the purpose binding upon the temple no decree could be passed against the temple. In support of this contention Mr. Ramamurthi
cited to me a number of decisions. It is not necessary for me to refer to all of them. Suffice it to refer to a few of them. In -- ''Sriramulu v.
Pundarikakshayya'', AIR 1949 PC 218 (E) it is remarked at p. 226 as follows:
It has been held in a series of cases that an executor or a trustee cannot by borrowing money from a person make him creditor of the estate in his
hands, even though the money was applied for the purposes of the estate.
Their Lordships pointed out in the same paragraph that the general rule is subject to certain exceptions & in proper case the executor or trustee
could indemnify himself out of the estate in his hands.
In -- ''Swaminatha Aiyar v. Srinivasa Aiyar'', AIR 1918 Mad 533 (P), it was decided that a creditor from whom money was borrowed by the
trustees for purposes of trust by executing a promissory note is not entitled to a decree against trust property. To a similar effect is the ruling of this
court in -- ''Palaniappa Chettiar v. Shanmugham Chettiar'', AIR 1919 Mad 316 (G). In that case it was laid down that unless there was any
indication in the hundi that the executant, who was the trustee of a charity, did not intend to incur personal liability, the executant was personally
liable.
Different considerations will arise if it was specifically stipulated that the creditor should be paid out of the trust funds. The distinction between
such a case and a case where the document does not show the personal liability of the executants is excluded and the creditor is mack; to look to
the trust funds for repayments, is well drawn in -- ''Sri Ekambareswaraswami and Dhandayuthapaniswami Temples v. Veerappa Goundar'', AIR
1942 Mad 198 (H). The question that arose there was whether, in a suit on a promissory note executed by the manager of the temple for money
borrowed for the expenses connected with the temple and which did not contain any stipulation that the creditor should look to the temple
property for the repayment, a decree could be legally passed against the temple. While dealing with that point the learned Judge referred to cases
which laid down that a decree could be passed against the estates of the temple and pointed out that they were all cases where the trustees had
stipulated with the creditors that the repayments would be paid out of the temple funds. Then the learned Judge stated that, having regard to the
fact that there was no such stipulation in that case and the personal liability of the executants of the promissory note was not excluded, a decree
against the temple could not be validly granted.
This aspect of the matter is discussed elaborately by Viswanatha Sastri J. in -- The Chikkottil Rama Variar, Sammadayi of Nhuralath
Devaswom Vs. Ananthanarayana Pattar and Others, . The learned Judge laid down that when there was no indication in the promissory note that
the trustees intended not to incur any personal liability but to pay it out of the funds of the temple, a decree could not be passed against
dewaswom. In this state of law it is clear that the decree passed by the Court in S. C. No. 116 of 1932 is not valid and binding upon the trust. As
I have already pointed out, the trustees in suffering a decree against the temple, were, acting fraudulently and in collusion with the creditor.
This leads me to the next question namely whether the present suit is barred by res judicata by reason of the decree in S. C. No. 116 of 1932
which ultimately resulted in the sale of the suit properties and whether it is open to the present plaintiffs to show that the decree is not binding upon
the trust without having the decree set aside by appropriate proceedings. In considering this point it has to be borne in mind that either the question
of Justifying necessity or the question whether a decree could be passed against the assets of the estate were not put in issue in S. C. No. 116 of
1932, in fact the trustees allowed the suit to be decreed ex parte; so necessary issues were not raised and determined by the Court.
In -- ''Prosunna Kumari v. Golab Chand'', 4 Beng. L.R. 450 (J), it was laid down that the decree against the shebait of the temple would be
binding upon the succeeding shebaits if the necessary and proper issues were raised, tried and decided in the suits which resulted in the decrees
and was not tainted by fraud and collusion. In -- ''Great North West Central Railway Co. v. Charlebois'', (1899) A. C. 114, the view taken by the
House of Lords was that a consent judgment declaring plaintiff''s lien on a company railway and other property and obtained on a contract entered
into between the company and the plaintiff was not of a higher value than the contract, if the question as to the competency of the company to enter
into the contract to incur such a liability, was not raised in the suit either in the pleadings or on the facts stated.
In -- ''Ramachandra v. Venkatalakshminarayana'', AIR 1919 Mad 429 (L), a suit on a mortgage against the Zamindar of Tarla, an impartible
Zamindari was compromised on the basis of the mortgage debt being a valid and binding one. Under the compromise decree the Zamindar had to
pay the agreed sums in instalments. On default being committed, an application under Order 34, Rule 5, C. P. C., for a final decree and for sale of
mortgaged property was filed. The question arose whether by reason of the Zamindar being a party to the suit and the Razinama decree and of his
admission that the debt was for a proper purpose, the succeeding Zamindar was precluded from raising the question as to the validity and binding
nature of the mortgage. The Bench, that heard the case answered it in the negative. It is stated therein that, apart from the compromise decree, the
mortgagee had to establish the necessity and binding character of the mortgage, in order to obtain a mortgage decree directing the sale of the
property in an impartible estate and if there is no enquiry and a decision about the binding character of the debt, the compromise or the statements
therein are not entitled to a higher value than the mortgage and the succeeding Zamindar can show that the mortgage is not such as would bind an
impartible estate.
In -- ''Srinivasa Aiyar v. Thiruvengada Maistry'', AIR 1920 Mad 489 (M), another Bench expressed the opinion that a compromise decree
between a Hindu widow and an alienee of her husband''s property from her, did not stand on a higher footing than a private alienation by the
widow and, therefore, the reversioner could show that the decree was not binding on the reversioner.
Mr. Veeraraghavan, for the respondents, urged that, as in this case the decree was not a consent decree or the result of a compromise, but
was an ex parte decree, it was on a better footing and could not be ignored and unless it was set aside the trust was not entitled to any relief. I do
not think it makes any difference in principle, even if the decree obtained against the trust is an ex parte decree. See -- Tej Singh and Others Vs.
Chaudhari Hannu Prasad and Others, . The principle deduced from the decisions referred to above is that a decree obtained against a limited
owner or a shebait of a mutt or a manager or a trustee of a temple or charity, without the necessary and appropriate issues raised, tried and
decided, could not bind the reversioner or the succeeding shebait or manager or trustee and it could be reopened in a subsequent suit, it follows
that the plaintiffs could establish in this suit that the decree in S.C. No. 116 of 1932 is not valid and binding on the temple for the reasons already
stated.
There remains the point for consideration whether this suit for recovering possession of the property sold in execution of a decree is
maintainable without instituting a suit to set aside a sale either under Article 12 or 95, Limitation Act. In my opinion, this question does not present
much difficulty. It was laid down in -- ''Tallapragada Sundarappa v. Boorugapalli Sriramulu'', 30 Mad 402 (O), that Article 95, Limitation Act,
applies to a case where fraud is practised upon a party to the decree and does not give a case where a reversioner impeaches the decree brought
about by fraud of a qualified owner. In -- ''Bijoy Gopal Mukerjee v. Krishna Mahishi Debi'', 34 Cal 329 (P) the Privy Council expressed the view
that a reversioner can file a suit to recover Immovable property within 12 years, ignoring the alienation made by the widow. It was also pointed by
their Lordships that in such a case, the reversioner need not have to set aside the alienation and the intervention of the Court was unnecessary. He
could elect to treat it a nullity and very fact that the suit was filed indicated that he exercised such an election. In -- ''Bupa Jagashet v. Krishnaji
Govind'', 9 Bom 169 (Q), it was laid down that a suit to recover trust property which was sold in execution of a decree not properly obtained
could be filed within 12 years.
In this context, I may refer to a decision of the Judicial Committee in -- AIR 1950 44 (Privy Council) , where the point that arose for decision
was whether a suit for declaration by the succeeding Mahanth of a mutt, that the sale of mutt properties in execution of a decree which was not
binding upon the mutt for the reason that the debt was not incurred for purposes binding upon it, was governed either under Article 134-B or
Article 144, Limitation Act. How the question arose in that case was this. The head of a mutt called Pokrauni asthal borrowed some grain from the
Mahanth of neighbouring mutt called Birpur asthal. As it was not repaid by the borrower, the head of the Birpur asthal instituted a suit for recovery
of money equivalent of the grain borrowed, obtained a decree and in execution thereof purchased a portion of the property belonging to the
Pokrauni asthal and obtained the necessary court-certificates. Sometime thereafter, he instituted a suit for partition and separate possession of the
property purchased by him alleging that his possession was disturbed by the Pokrauni mutt, while the Pokrauni mutt filed a suit for declaration of
the title of that mutt to the property purchased by the head of the Birpur asthal on the ground that the debt incurred by the head of the Pokrauni
mutt was not for justifying necessity. It must be mentioned here that the title suit by the Pokrauni mutt was instituted 12 years after possession was
taken by the Birpur mutt, the Courts in India dismissed the suit for partition on the ground that the decree and the sale resulting therefrom were not
binding upon the Pokrauni mutt, as the grain borrowed by the head of the mutt was not for a purpose binding upon the mutt. They decreed the title
suit brought by the Pokrauni mutt, despite the defence of the Birpur mutt that the suit was barred by limitation not having been brought within 12
years of the Court sale as in their view the Article of the Limitation Act applicable was 134-B. On appeal by the head of the Birpur mutt, the Privy
Council held that the title suit though filed within 12 years of the death of Damodar Das, the head of the Pokrauni mutt, was barred by limitation,
since it was beyond 12 years of the date of the sale. In the opinion of their Lordships, it was Article 144, Limitation Act that governed execution
sales of the trust properties, and not Article 134B, which applies only to private alienations. Though the question did not arise for consideration in
the form in which it is now raised this decision may, by implication be taken as laying down that a succeeding trustee need not set aside an invalid
decree but seek to recover possession of the property affected thereby by an appropriate suit.
In -- ''Subbayya Pandaram v. Muhamad Mustapha Maracayar'', AIR 1923 P. C. 175 (S), the Judicial Committee of the Privy Council held
that a suit for possession of Immovable property dedicated to charitable endowments and which was sold at a Court sale in execution of a decree
against the trustee for his personal debts, should be instituted within 12 years of the execution of sale. Here again the defence was not raised that
the suit for mere recovery of possession was not competent without asking for the sale to be set aside. These two decisions may be taken as
authorities for the proposition that a suit to recover possession of trust properties could be maintained without a specific prayer for avoiding either
the decree or the consequent sales that followed them. In these circumstances, I hold that the suit was properly brought for recovering possession
of the property and it was unnecessary for the plaintiffs to ask for setting aside the sale, and that the suit is not barred by limitation either by virtue
of Article 12 or Article 95, Limitation Act.
It follows that the appeal should be allowed and the judgment of the lower appellate Court should be set aside.
Though in this case the first defendant purchased the property for Rs. 1200 in view of my finding that the debt was not incurred by the then
trustees for a binding purpose, the temple is not liable to pay up this amount. But, so far as the balance is concerned as the temple had the use and
benefit of it, the first defendant is entitled to the return of the same. But, in view of the fact that he is to pay mesne profits to the plaintiffs at least
from 1942, and the plaintiffs are entitled to have the mesne profits set off against the amount payable to the first defendant, I think the ends of
justice will be met by directing the first defendant to deliver possession of the property without liability on either side to pay each other. If the
defendant defaults delivery of property forthwith he will be liable to pay future mesne profits at the rate claimed in the plaint.
This is a fit case in which I should direct each party to bear its own costs throughout. No leave.