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1926 Supreme(SC) 34
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT DUNEDIN, LORD ATKINSON, AND MR. AMEER ALI.
NILADRI SAHU - Appellant
Versus
MAHANT CHATURBHUJ DAS (DEFENDANTS) - Respondents
On Appeal from the High Court at Patna.
Decided On : July 6. 1926.
Solicitors for appellant:Watkins & Hunter. Solicitors for respondents: W. W. Box & Co.
The power of a manager of debottar property to borrow is measured by existing necessity. The immediate cause (causa causans) of borrowing, such as liquidating oppressive debts to preserve the estate, constitutes legal necessity, regardless of whether the remote cause of the original debt was reckless.
Headnote:(A) Hindu Law - Debottar Property - Power of manager to alienate or mortgage property - Legal Necessity - The power of a manager of property dedicated to the worship of an idol to incur debts and borrow money is measured by an existing necessity for incurring them, such as expenses for keeping up religious worship, repairing temples, or defending hostile litigious attacks.
(B) Legal Necessity - Causa Causans - When determining if a loan is for legal necessity, the immediate cause (causa causans) of the borrowing must be considered rather than the remote cause. The procurement of a loan on easy terms to liquidate antecedent loans obtained on oppressive terms constitutes a necessary proceeding to relieve the estate of an oppressive burden, even if the remote cause of the original debt was an unsound or reckless expenditure.
(C) Procedure - Necessary Parties - Where a manager of a religious trust is sued in a representative capacity, the deity is not a necessary party to the suit.
Facts of the case:
The manager of a religious trust executed a mortgage of trust properties to secure a loan intended to liquidate previous high-interest debts. These previous debts had been incurred for the construction of buildings to accommodate devotees and for the performance of religious services. The manager later contended that the loans were not for legal necessity and that the suit was defective for non-joinder of the deity.
Findings of Court:
The court found that the immediate cause of the borrowing was the need to pay off oppressive debts, which constituted a legal necessity. The buildings constructed were functioning for the benefit of the trust, attracting more worshippers.
Issues: Whether the deity was a necessary party to the suit and whether the borrowing of money to pay off previous high-interest loans constituted a legal necessity sufficient to bind the trust property.
Ratio Decidendi: The court held that the immediate cause of the borrowing is the decisive factor. Even if the remote cause of the debt was a reckless building project, the immediate necessity to escape oppressive interest rates justifies the loan. The manager's power to borrow is measured by the existing necessity to maintain the religious services and the estate.
Result: Appeal allowed.
Appeal (No. 154 of 1924) from a decree of the High Court (March 17, 1923) affirming a judgment of the Subordinate Judge of Cuttack.
The first respondent, the mahant of a math, executed on November 6, 1906, a mortgage to the appellant of certain properties of the math to secure a loan of Rs. 25,000 and interest at 1 per cent, per mensem ; he also covenanted by the deed to pay personally the sum due.
The present suit was brought by the appellant to enforce the mortgage. The first defendant (the mahant), by his written statement, pleaded that the money was not borrowed for necessity or for the benefit of the thakurs, and that the suit was bad for want of necessary parties, as the thakurs had not been joined.
The Subordinate Judge held that the thakurs were necessary parties in order to enforce the mortgage against the property; he was also of opinion that the money was not borrowed for legal necessity. He accordingly made only a personal decree against the respondents.
The High Court (Jwala Prasad and Foster JJ.) held that the thakurs were not necessary parties, but they agreed with the finding of the trial judge as to the absence of legal necessity. The decree of the trial judge was therefore affirmed.
The facts of the case and the grounds of the decisions in India appear fully from the judgment of the Judicial Committee.
1926. May 20. De Gruyther K.C. and E. B. Raikes for the appellant.
Wallach for the respondents.
[The arguments were mainly as to the facts, but reference was made, on behalf of the appellant, to Prosunno Kumari Debya v. Golab Chand (( 1875) L. R. 2 I. A. 145.) ; Konwur Doorganath Roy v. Ram Chunder Sen (( 1876) L. R. 4 I. A. 52.); Murugesam Pillai v. Manickavasaka Pillai . (( 1917) I. L. R. 44 I. A. 98.)]
July 6. The judgment of their Lordships was delivered by
LORD ATKINSON. This is an appeal from a decree of the High Court of Judicature at Patna, dated March 17, 1923, dismissing an appeal from a decree of the Subordinate Judge of Cuttack, dated February 28, 1922, who in a suit for sale on a mortgage had passed a money decree only against defendant No. 1, but had, in other respects, dismissed the plaintiffs claim.
The defendant, the mortgagor, is the mahant of the math of a thakur or deity of the Vaishnavites called Sri Jagannath Mahaprobhu at Puri. It includes a temple with idols in it. The defendant, with, as it is alleged, the view of increasing the income of the math, built as an addition to it a lodging house, where rajas and other rich devotees visiting the math might obtain during their visit comfortable lodgings, and built in addition a large hall where food might be supplied to those devotees who might visit the math and worship at it.
The revenue of the math, though sufficient to meet the ordinary expenses of the worship in it, was insufficient to meet in addition the cost of the construction, maintenance, and management of these new buildings. The defendant was accordingly, from the year 1891 downwards, obliged to borrow from time to time from moneylenders on notes of hand, setting forth the purpose of the loans, various sums of money, bearing interest at Rs. 2 per mensem or more. The actual sum expended on the construction of these pakka buildings, as they were styled, only amounted to Rs. 9337, so that the outlay could not be considered to have been of an extravagant character. Owing, however, to the very high rate of interest charged by the lenders, the defendants indebtedness to these latter amounted by November, 1906, to the large sum of Rs. 25,000. To meet this indebtedness, the defendant, the mahant, on November 6, 1906, borrowed from the plaintiff the sum of Rs. 25,000, bearing interest at a rate only equal to one-half the rate he had been paying on the loans obtained from moneylenders—namely, 1 per cent, per mensem, and in order to secure the repayment of this loan and the interest accruing upon it, he gave to the plaintiff a mortgage of certain properties which were at the time,
