IN THE HIGH COURT OF MADRAS
Alfred Henry Lionel Leach, C.J.
Kausalai Ammal
Versus
Sankaramuthiah Pillai
Decided On : 11.12.1940
Transfer of Property Act - Priority of Charge for Maintenance - The court considered the provisions of Section 39 of the Transfer of Property Act and its interpretation regarding the priority of charge for maintenance in the case of a mortgage. The court held that the transferee could not be postponed to a person entitled to maintenance unless the transfer was made with the intention of defeating the right and the transferee had notice, and that the omission to make inquiries was not sufficient to constitute constructive notice within the meaning of the section.
Fact of the Case:
The appellant, widow of a member of a joint Hindu family, filed a suit to recover maintenance from the surviving member of the family. The respondent, who held a mortgage on the properties, claimed priority over the appellant's charge for maintenance.
Finding of the Court:
The court found that the respondent's mortgage took priority over the appellant's charge for maintenance as there was no wilful abstention or gross negligence on the part of the respondent, and the mortgage was created for a necessary purpose.
Issues: The issues involved the priority of charge for maintenance under Section 39 of the Transfer of Property Act and the interpretation of 'wilful abstention from an inquiry or search' as per the Act.
Ratio Decidendi: The court held that the transferee could not be postponed to a person entitled to maintenance unless the transfer was made with the intention of defeating the right and the transferee had notice, and that the omission to make inquiries was not sufficient to constitute constructive notice within the meaning of the section.
Final Decision: The appeal failed and was dismissed with costs in favor of the respondent.
Alfred Henry Lionel Leach, C.J.
1. The appellant is the widow of a person who was a member of a joint Hindu family. Her husband died some time before 1926, but the actual date does not appear in the record. On the 18th October, 1926, the appellant filed a suit to recover from Murugesam Pillai, the surviving member of the joint Hindu family, money by way of maintenance. She succeeded and the Court made the sums awarded to her under the decree a charge on certain immovable properties. On the 25th July, 1926, Murugesam Pillai mortgaged these properties to the respondent, who in 1931 filed in the Court of the District -Munsif of Cuddalore the suit out of which this appeal arises to enforce the mortgage. The appellant was made a party and she pleaded that her charge for maintenance took priority of the respondents mortgage. The District Munsif and the Subordinate Judge of Cuddalore on appeal upheld the appellants contention, but the respondent appealed to this Court and Krishnaswami Aiyangar, J., allowed his appeal. This appeal has been filed under Clause 15 of the Letters Patent, Krishnaswami Aiyangar, J., having given the necessary certificate.
2. Stated shortly the appellant case is that the respondent was placed on inquiry whether a Hindu widow had a claim on : the properties, and as he failed to make any inquiries he is postponed to the appellant. Section 39 of the Transfer of Property Act, as it stood at the time of the mortgage, read as follows:
Where a third person has a right to receive maintenance or a provision for advancement or marriage from the profits of immovable property, and such property is transferred with the intention of defeating such right, the right may be enforced against the transferee if he has notice of such intention or if the transfer is gratuitous; but not against a transferee for consideration and without notice of the right, nor against such property in his hands.
3. Therefore, under this section in order that a transferee should be postponed to a person entitled to maintenance or a provision for advancement or marriage the transfer had to be made with the intention of defeating the right and the transferee had to have notice unless he accepted the transfer without giving consideration.
4. In 1929 the section was amended to read as follows:
Where a third person has a right to receive maintenance or a provision for advancement or marriage from the profits of immovable property, and such property is transferred the right may be enforced against the transferee, if he has notice thereof or if the transfer is gratuitous; but not against a transferee for consideration and without notice of the right, nor against such property in his hands.
5. It is said by the learned advocate for the appellant that the section as amended has retrospective effect. It is not necessary to embark upon a discussion of this question, because it is obvious that the respondent could not by reason of the amendment be required to do more than he was required to do by the law as it stood when the property was mortgaged to him.
6. In 1926 the definition of notice given in Section 3 of the Transfer of Property Act read as follows:
A person is said to have notice of a fact when he actually knows that fact or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it, or when information of the fact is given to or obtained by his agent under the circumstances mentioned in the Indian Contract Act, 1872, Section 229.
7. Krishnaswami Aiyangar, J., considered that the use of the word "wilful" in the definition made it clear that the abstention from inquiry should be designed, and due to a desire to avoid an inquiry which would lead him to ultimate knowledge, and that an omission to make inquiries was not to be regarded as sufficient to constitute constructive notice within the meaning of the section. The learned Judge pointed out that no authority dealing with Section 3
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