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1917 Supreme(SC) 3
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCKMASTER, LORD SHAW OF DUNFERMLINE, LORD WRENBURY, AND MR. AMEER ALI
MURUGESAM PILLAI - Appellant
Versus
MANICKAVASAKA PANDARA - Respondents
On Appeal From The High Court at Madras.
Decided On : January 23, 1917.
Solicitor for appellant:Douglas Grant. Solicitors for respondents: T. L. Wilson & Co.
In mortgages of religious institutions, while the mortgagee must prove necessity, long-term recognition of the debt by successive heads and the failure to produce institutional records create a strong presumption that the debt was a necessary expense binding on the institution.
Headnote:(A) Mortgages of Religious Institutions - Burden of Proof - Necessity - In the case of mortgages granted over the security of a religious institution by its head, the onus lies upon the mortgagee to prove that the debt was a necessary expense of the institution itself. However, where holder after holder of the headship recognizes and deals with the debt on that basis over a significant period, such recognition becomes a substantial element of proof regarding the necessity of the debt.
(B) Evidence - Withholding of Documents - Adverse Inference - When parties in possession of institutional records, such as day-books and ledgers, fail to produce them to refute a claim that expenses were necessary for the institution, the court may conclude that the entries in those documents would have been confirmatory of the opposing party's view.
Facts of the case:
A loan was obtained by the head of a religious institution for litigation expenses. This debt was recognized and serviced by three successive heads over approximately twenty-five years, including the execution of a fresh mortgage to consolidate the balance. The current heads of the institution disputed the necessity of the loan and denied that the debt was binding upon the institution. Despite possessing the institution's financial records, the defendants did not produce them in court.
Findings of Court:
The court found that the long-term recognition of the debt by successive heads and the failure to produce the institution's books of account supported the claim that the loan was a necessary expense incurred in the interests of the institution.
Issues: Whether a debt incurred for litigation by the head of a religious institution is binding upon the institution, and whether the continued recognition of such debt by successive heads, coupled with the failure to produce institutional records, constitutes sufficient proof of necessity.
Ratio Decidendi: While the primary onus is on the mortgagee to prove necessity, the consistent recognition of a debt by successive heads over a long period is a significant element of proof, especially as original evidence disappears over time. Furthermore, the failure of the party in possession of institutional records to produce them leads to an adverse inference that the records would not have supported their contention.
Result: Appeal allowed.
Legal Category Hierarchy
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religious endowments
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math and adhinam
- alienation of property
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math and adhinam
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practice and procedure
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evidence
- onus of proof
- adverse inference
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evidence
Judgement
Appeal from a judgment and decree of the High Court (January 18, 1910) reversing a judgment and decree of the Subordinate Judge of Mayavaram (November 6, 1907).
The suit was instituted in October, 1906, by the appellant upon a hypothecation bond dated November 4, 1897, granted by the pandara of a math over part of its property. The defendants were the senior pandara who had executed the hypothecation bond sued on, the junior pandara in whose favour the first defendant had by deed surrendered his rights, and other persons asserting claims upon the math property. Upon the death of the first defendant in November, 1906, the seventh respondent, who claimed to succeed as senior pandara, was added as seventh defendant. The second and seventh defendants filed written statements denying that the debt was incurred for a necessary expense of the math, or that there was any necessity in the circumstances of. the math for incurring the debt. The facts appear from the judgment of their Lordships.
The Subordinate Judge found upon the evidence, and from the failure to produce the books of the math, that the debt was incurred for the purposes of the litigation in 1881, and had been recognized as a debt binding upon the institution. He said that in his view a loan taken for litigation for the purpose of asserting and vindicating the rights of the math came within the exceptional circumstances which would render it binding upon the institution. The decision in Saminatha Pandaram
v. Sellappa Chetti (( 1879) I. L. R. 2 Madr. 175.) was authority for so holding, and to that extent had not been dissented from in Kashim Saiba v. Suhhindra Thirihaswami . (( 1891) I. L. R. 18 Madr. 359.) The debt might be con sidered as incurred for the maintenance of the math. He made a decree in the appellants favour.
Upon appeal the High Court (Sir Charles Arnold White C.J. and Munro J.) reversed the decision. The learned judges upon an examination of the evidence considered that the surplus income of the math was sufficient for the purposes of the litigation and that necessity had not been proved. The plaintiffs father and the plaintiff had been managers of a temple connected with the math, and it was conceivable that the pandaras in dealing with them had been careless of the interests of the institution.
1916. Nov. 14, 16. Sir R. Finlay, K.C., De Gruyther, K.C., and OGorman, for the appellant. The evidence establishes that the loan was made for the purposes of the litigation in which the math was involved. From the whole of the circumstances it should be inferred that the debt was necessarily incurred in the interests of the institution. Having regard to the lapse of time since the original loan, less specific evidence of necessity was required than in the case of a debt recently incurred Banga Chandra Dhur Biswas v. Jagat Kishore Chowdhuri . (( 1916) L. R. 43 Ind. Ap. 249.)
Sir Erle Richards, K.C., and Kenworthy Brown, for the seventh respondent. The onus was upon the plaintiff to prove strictly that there was necessity Abhiram Goswami v, Shyama Char an Nandi (( 1909) L. R. 36 Ind. Ap. 148.); as in the case of an alienation by a manager for a minor Hunooman Persauds Case . (( 1856) 6 Moo. Ind. Ap. 393.) The evidence did not prove necessity. The judgment of the Subordinate Judge applied the wrong test, namely, whether the debt was incurred for the purposes of the institution. For the reasons given by the High Court little weight attaches to the recognition of the debt by subsequent pandaras. This respondent was claiming to succeed to the headship adversely to the first and second respondents. There was no obligation upon the respondents to produce the books of the math.
1917. Jan. 23. The judgment of their Lordships was delivered by
LORD SHAW OF DUNFERMLINE. This is an appeal from a decree of the High Court of Judicature at Madras, dated January 18, 1910, which reversed a decree of the Court of the Subordinate Judge of Mayavaram, dated November 6, 190
