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1916 Supreme(Mad) 320

IN THE HIGH COURT OF MARAS
Oldfield
Ayiroor Swaroopathinkal Ayiroor
Versus
Kannamkulath Madhathil
Decided On : 8 August, 1916

The main legal point established in the judgment is the necessity for good faith and due enquiry in compromises involving private religious trusts, as well as the rights of junior members to protect the trust's interests.

Headnote:

Mortgage - Private Religious Trust - Transfer of Property Act - Section 59, Section 62, Section 63 - The court discussed the validity of the mortgage and subsequent compromise, emphasizing the terms of the documents and the necessity for good faith and due enquiry. The court also considered the capacity of the trustees and the rights of the junior members of the tarwad. The judgment highlighted the legal provisions of the Transfer of Property Act and their interpretations in the context of private religious trusts.

Fact of the Case:

The suit was brought by the plaintiffs appellants to recover property on behalf of a Devaswom alleged to be the property or to be under the management of themselves and defendants Nos. 9 to 11. The main defence was that the property is held by the 1st defendant on a valid mortgage, which is still outstanding.

Finding of the Court:

The court found that the compromise between the 9th defendant and the 1st defendant was not adequately investigated for good faith and necessity. It also held that the plaintiffs, as junior members of their tarwad, had the right to bring the suit to protect the Devaswom against the mortgage and subsequent compromise.

Issues: The issues included the validity of the mortgage, the necessity for good faith and due enquiry, the capacity of the trustees, and the rights of the junior members of the tarwad.

Ratio Decidendi: The court emphasized the necessity for good faith and due enquiry in the compromise, the rights of junior members to protect the Devaswom, and the interpretation of the Transfer of Property Act in the context of private religious trusts.

Final Decision: The court set aside the Lower Appellate Court's decision and directed a rehearing on the validity of the compromise and the mortgage, as well as the rights of the plaintiffs as junior members of the tarwad.

JUDGMENT

Oldfield, J.

1. This suit was brought by the plaintiffs appellants, to recover property on behalf of a Devaswom alleged to be the property or to be under the management of themselves and defendants Nos. 9 to 11 ; and the main defence was that the property is held by the 1st defendant on a valid mortgage, which is still outstanding.

2. The facts are that the property was first mortgaged by the predecessor of the 9 th defendant, the present Karnavan of the Kovilagam, in 1905 under Exhibit I ; and that 9th defendant compromised a suit, which he brought in 1908 to set Exhibit I aside on obtaining modifications of certain of its terms, which are embodied in Exhibit L. The first contention before us is that Exhibit 1 superseded the original mortgage Exhibit I, but created no fresh mortgage relation and that the property, thus freed, should therefore be restored to plaintiffs.

3. Exhibit 1 is executed only by the 1st defendant, the mortgagee ; and, if it purported to supersede Exhibit I and were relied on as constituting the mortgage relation between the parties, Section 59 of the Transfer of Property Act would no doubt negative the possibility of its doing so. But its terms preclude that argument. For they do not provide explicitly or implicitly for the supersession of Exhibit I, either entirely or by modification of any of its essential conditions.

4. First as to total super session, some attempt has been made to show that the plaintiffs themselves assumed in their pleadings that Exhibit 1 was the only document, by which the suit property was bound. But this is unsustainable in view of the references to Exhibit I as well as Exhibit 1 in plaint paragraphs 5, 11 and 16. The arguments from the actual terms of Exhibit 1 rest on the verbatim translation of its recital that " the 1st defendant is now holding the mortgage properties, which he was holding under Exhibit I, " the implication suggested being that he has ceased to hold them under it. But there is no direct reference to his holding in future under any new document or under Exhibit L. On the contrary Exhibit 1 is hardly intelligible except on the assumption that some earlier document is still in force; and it refers expressly to Exhibit I in connection with an acknowledgment regarding the extent of the mortgage period, which has yet to run. The terms moreover of the compromise petition, Exhibit IV, filed contemporaneously with the execution of Exhibit L, included nothing regarding the cancellation of Exhibit I and provided for the dismissal of the suit for that relief. All this indicates that, consistently with the evident intention of the parties, the portion of Exhibit 1 quoted above really provides for the 1st defendant still holding the properties, which he was holding, under Exhibit I and involves no suggestion that he has begun to hold under any other document.

5. Then as to the particular terms modified, the plaintiffs argument fails because the modifications do not amount to changes in the obligations of the mortgagor, to which his consent would be necessary, but only to an agreement by the mortgagee not to insist on his original rights in their entirety, the case being one of remission under Section 63, not of novation under Section 62 of the Indian Contract Act. The modifications consist in (1) a reduction of the principal amount secured as repayable to the 1st defendant (2) a reduction in the share of the annual produce, which he is entitled to retain, the nachavaram payable to the mortgagor being enhanced, (3) the release of one item of the mortgaged property. The effect is therefore that the mortgagee foregoes rights for the mortgagors benefit, not that the latter cancels an old or makes a new mortgage. Plaintiffs therefore must fail on this contention.

6. Their next argument is that the Lower Appellate Court erred in dealing with their objections to the mortgage based on the absence of proved necessity for it and of good faith on the part of the 9 th defendant an





































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