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Case Number

L.P.A No. 156 of 1985

Advocates

For the Appellant: G.Dharma Rao, Advocate.

Judges

M.N Rao
P. Ramakrishnam Raju, JJ.

Acts

Article 91 of the Indian Limitation Act, 1887
Article 59 of the Indian Limitation Act,
2: Article 59 of the Limitation Act, 1963
Article 59 of the Limitation Act
Article 91 of the Limitation Act

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Smart Summary

Structured Summary of the Opinion (Ramakrishnam Raju, J.)

Factual and Procedural Background

The action concerns Rathi Matham (Stone Matham), a religious institution founded by the ancestors of the first plaintiff's husband. After her husband's death the first plaintiff managed the Matham. The Matham had four mulgies attached. On 10-6-1964 the first plaintiff executed a registered settlement deed (Ex. B-1) transferring the entire property of the Math in favour of Defendants 1 to 4. Although Ex. B-1 recited delivery of possession to D-1 to D-4, actual possession remained with the plaintiffs.

On 30-6-1964 defendants 1 to 4 executed an agreement (Ex. A-6) agreeing that if the first plaintiff nominated a successor they would not object to transfer of management. The first plaintiff later executed a registered Will (Ex. A-5) dated 4-2-1971 bequeathing her properties to Umapathi Swami, referring to such properties as her personal properties rather than Math properties.

The first plaintiff filed OS 26 of 79 seeking a declaration that Ex. B-1 is void and a permanent injunction restraining defendants from interfering with her possession and enjoyment. The first plaintiff died on 15-9-1973; the second plaintiff was subsequently brought on record and later died; plaintiffs 3 to 6 were brought on record as legal representatives. Defendants 1 to 4 pleaded that they were not claiming ownership but that the institution was a public charitable trust and that Ex. B-1 was valid and not obtained by fraud or coercion; they asserted rights to management under Ex. B-1.

The trial court (after framing issues) held: the property was not a public charitable trust; Ex. A-6 and Ex. A-5 were true and binding; plaintiffs were in possession; but the court dismissed the suit, concluding defendants alone had the right to management and that the suit was barred by limitation under Article 59 of the Indian Limitation Act because the plaintiffs ought to have filed within three years from knowledge of Ex. B-1.

Defendants 1 to 4 preferred Appeal A.S. 111 of 1979 to the single judge, who dismissed that appeal and confirmed the trial court's decree. Plaintiffs 3 to 6 then filed the Letters Patent Appeal that is the subject of this opinion.

Legal Issues Presented

Whether the trustee of a religious endowment is entitled to transfer the trust properties by way of a gift or settlement deed?
Whether Article 59 of the Limitation Act applies to the present suit?

Arguments of the Parties

Appellants' Arguments (as presented)

Ex. B-1 is a void document because it transfers the entire Math properties in favour of defendants 1 to 4.
Article 59 of the Limitation Act has no application to the facts of this case (i.e., the suit is not barred under Article 59).

Respondents' Arguments (as presented)

Article 59 of the Limitation Act applies; the suit to set aside Ex. B-1 should have been filed within three years from the date of knowledge of the execution of Ex. B-1.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Raja Vurmah v. Ravi Vurmah (1876-1877) 4 Ind. App. 76 (PC)	Assignment of religious office for pecuniary benefit of the holder is against public policy; the trustee cannot sell, lease or otherwise alienate the right of management; the shebait right is not saleable in execution.	The court relied on this principle to hold that an alienation of Math properties by the trustee for pecuniary consideration is illegal; the alienation under Ex. B-1 is therefore void.
K.K. Ganguly v. P. Banerjee, (1974) 2 SCC 563; AIR 1974 SC 1932	Following Raja Vurmah: neither temple/deities nor the shebait right can be transferred for pecuniary consideration; transfer by sale is void ab initio.	The court invoked this Supreme Court authority to reinforce that transfer of shebait/Math management for pecuniary benefit is void, supporting the conclusion that Ex. B-1 is inoperative.
Narayanan v. Lakshmanan, 39 ILR 456 (Madras, 1916)	Under the corresponding limitation provision (Article 91, Limitation Act, 1887), where a transfer by trustees is void, there is no occasion to set it aside by a suit and Article 91 does not apply to such a case.	The court followed this holding to conclude that since Ex. B-1 is void, Article 59 (the corresponding present provision) does not bar the suit; a suit to obtain declaration of invalidity is not time-barred by Article 59 where transfer is void ab initio.
Appanna v. Venkatappadu, AIR 1953 Madras 611	The prayer to set aside a deed which is void may be ancillary to the substantive possession claim and such ancillary relief does not necessarily attract the limitation bar under the corresponding article (Article 91 in the older Act).	The court relied on this authority to hold that prayers to declare Ex. B-1 invalid do not render the suit barred by Article 59; such prayers could be regarded as ancillary and the suit remains maintainable within twelve years.

Court's Reasoning and Analysis

The court proceeded in two stages corresponding to the two points raised.

(1) Concerning the power of a trustee to alienate Math property: the court examined the three documents on record (Ex. B-1, Ex. A-6 and Ex. A-5). It noted that Ex. B-1 purported to convey the plaintiff's absolute rights in the trust properties to defendants 1 to 4 and that Ex. B-1 was a conditional gift made subject to maintenance of the first plaintiff by the grantees — a transfer that the court characterized as being for pecuniary consideration.

The court relied on established authorities (Raja Vurmah v. Ravi Vurmah and K.K. Ganguly v. P. Banerjee) holding that assignment of a religious office or shebait right for pecuniary benefit is contrary to public policy and void; that neither the temple nor the shebait right can be sold for pecuniary consideration; and that an idol (deity) is a juristic person capable of owning property and its management/right cannot be alienated by the trustee. On this basis the court concluded that trustees of a religious endowment cannot alienate trust properties and that the alienation under Ex. B-1 is illegal, void, and inoperative.

(2) Concerning application of Article 59 of the Limitation Act: the court reproduced Article 59 (a three-year period to cancel or set aside an instrument from the time facts entitling the plaintiff to have it cancelled become known). It acknowledged the suit was filed beyond three years from the date of execution of Ex. B-1 but within twelve years and confronted the question whether Article 59 barred the suit.

The court reasoned that because the transfer effected by Ex. B-1 was void in law ab initio, there was no subsisting document that required to be set aside by a suit within three years; it followed Narayanan v. Lakshmanan which held the corresponding earlier limitation provision did not apply to suits attacking transfers void in law. The court also relied on Appanna v. Venkatappadu to observe that declaratory or ancillary relief to set aside a void deed may be ancillary to the substantive claim (for possession) and should not necessarily attract the limitation bar. On these precedents the court held that Article 59 did not bar the plaintiffs' suit, which was filed within twelve years.

Having held Ex. B-1 void and the suit not time-barred, the court addressed practical consequences for management and funds. It observed that Rs. 10,000 was deposited as profits from the mulgies and directed that interest on that deposit be utilized for maintenance and necessary religious rites. The court noted that tenants had incurred repair expenditure which would be adjusted against rents when paid; once payments were completed plaintiffs would be entitled to receive and expend such amounts for the Math. The court permitted defendants to collect donations and participate in repairs and improvements jointly with plaintiffs, and allowed defendants a right to periodically inspect the Math accounts maintained by the plaintiffs.

Holding and Implications

Holding: The court allowed the Letters Patent Appeal, set aside the decrees and judgments of the trial court and the learned single judge, and decreed the suit as prayed for. Each party was ordered to bear their own costs.

Immediate implications and consequences for the parties (as stated in the opinion):

Ex. B-1 (the registered settlement deed dated 10-6-1964 transferring the Math properties to defendants 1 to 4) is declared void and inoperative.
The plaintiffs are entitled to act as trustees and manage the Rathi Matham in accordance with the customs and religious practices of the Math.
The Rs. 10,000 deposit (profits from the mulgies) and the interest thereon may be used for maintenance and reasonable amounts necessary to carry on religious rites; plaintiffs may spend such amounts accordingly.
Tenants who incurred repair expenditure may adjust amounts against rents and plaintiffs will be entitled to receive such amounts when payments are completed and to expend them for the Math's purposes.
Defendants may collect donations and participate in repairs and improvements; plaintiffs should not object to such joint efforts. Defendants have the right to periodically inspect Math accounts which plaintiffs must maintain.

The court based its decision on existing authorities and did not purport to lay down any novel legal principle beyond applying those precedents to the facts. The opinion does not state that a new precedent was created.

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D. Krishna Murthy & Others v. Chandimi Ramanna & Others

Ramakrishnam Raju, J.:— Plaintiffs 3 to 6 are the appellants in this appeal which is directed against the decree and judgment of a leanred single judge of this Court in As. 111/79. The facts of the case in brief are: there is a religious institution by name Rathi Matham (Stone Matham) which is founded by the ancestors of the first plaintiff's husband. After the death of her husband the first plaintiff was in management of the said Matham. The Matham has four mulgis attached to it. The first plaintiff executed a registered settlement deed Ex. B-1 dated 10-6-64 whereunder she transferred the entire property belonging to the Math in favour of D-1 to D-4. Although it was recited in Ex. B-1 that possession was delivered to D-1 to D-4, it is not in dispute that the possession of the property still remained with the plaintiffs. D-1 to D-4 executed an agreement Ex. A-6 dated 30-6-64 whereunder they agreed that if the first plaintiff nominates her successor they will not have any objection to transfer the a management. While so the plaintiff also executed a registered Will Ex. A-5 dated 4-2-71 whereunder she bequeathed her entire properties in favour of one Umapathi Swami. She then filed OS 26 of 79 for a declaration that the registered gift deed Ex. B-1 is void and also for a permanent injunction restraining the defendants from interfering with her possession and enjoyment. She died on 15-9-73 and after her death the second plaintiff was brought on record who also later died and plaintiffs 3 to 6 were brought on record as LRs of the second defendant. The Defendants 1 to 4 contended that they are not claiming any ownership rights in the said property but they stated that it is a public charitable trust. They also contended that the gift deed Ex. B-1 was not executed on account of fraud or coercion and it is a valid document. They pleaded that they are entitled to be in management of the property by virtue of Ex. B-1. The trial Court after framing necessary issues held that the property is not a public charitable trust; that the agreement Ex. A-6 is true and binding; that the registered Will Ex. A-5 is true and valid and that plaintiffs alone are in possession. However, the trial Court dismissed the suit recording a finding that the defendants alone have the right to management. It also held that under Article 59 of the Indian Limitation Act, the plaintiffs ought to have filed the suit within three years from the date of knowledge of the execution of B-1 and, therefore, the suit is barred by limitation. Aggrieved by the said decree and judgment, the defendants 1 to 4 preferred A.S 111 of 1979. The learned single judge also dismissed the appeal confirming the decree of the trial court. Challenging this decree and judgment, plaintiffs 3 to 6 filed the above Letters Patent Appeal.

2. Shri Subba Reddy, learned counsel for the appellants contended that Ex. B-1 is a void document inasmuch as it transfers the entire Math properties in favour of the defendants 1 to 4. He also contended that Article 59 of the Limitation Act has no application to the facts of this case. Shri Dharma Rao, learned Counsel for the respondents countered these arguments submitting that Article 59 of the Limitation Act will apply to the case on hand since the suit which was filed to set aside Ex. B-1 should have been filed within a period of three years from the date of knowledge of the execution of Ex. B-1.

3. The points that arise for consideration in this appeal are:

(1) Whether the trustee of a religious endowment is entitled to transfer the trust properties by way of a gift or settlement deed?

(2) Whether Article 59 of the Limitation Act applies?

4. Point No. 1:— It may be relevant to notice the three documents Exs. B-1, A-5 and A-6 which are placed on record. Under Ex. B-1 the plaintiff transferred the entire Math property in favour of defendants 1 to 4. Under A-6 Agreement, defendants 1 to 4 consented to transfer the management in favour of a person nominated by the first plaintiff. Under A-5 registered will, the plaintiff bequeathed all a her properties in favour of one Umapathi Swamy. In this will the properties are referred to as the personal properties of first plaintiff but not as the Math properties. The recitals in Ex. B-1 clearly state that the first plaintiff has conveyed her absolute rights in the trust properties in favour of defendants 1 to 4. The first plaintiff was a Mathadhipathi or a Shebait in respect of the Rathimatham both in respect of secular and religious aspects. She had transferred the entire properties in favour of defendants 1 to 4. Ex. B-1 is a conditional gift. The gift is made subject to the maintenance of the first plaintiff by the defendants 1 to 4. The transfer is, therefore, undoubtedly for pecuniary consideration.

5. The Privy Council in Raja Vurmah v. Ravi Vurmah (1) (1876-1877) 4 Ind. App. 76 (PC) held that an assignment of religious office for the pecuniary benefit of the holder of the office is against public policy. But this rule has certain exceptions:

(1) Where transfer is not for any pecuniary benefit and the transferee is the next heir of the transferor or stands in the line of succession of shebaits and suffers from no disqualification; (2) When the transfer is made in the interest of the deity itself and to meet some pressing necessity; and

(3) When a valid custom is proved sanctioning alienation of shebait right within a limited circle of purchasers.

6. The Supreme Court in K.K Ganguly v. P. Banerjee (2) (1974) 2 SCC 563 : AIR 1974 SC 1932 following the decision of the Privy Council in Raja Vurma (1 supra) held that neither the temple nor the deities nor the shebait right can be transferred by sale for pecuniary consideration and the transfer by sale is void in its inception. According to Mayne (3) Mayne's Hindu Law, 13th Edn. 1159:

“Maths are in the main religious institutions. Their primary purpose is the maintenance of a competent line of religious teachers for the advancement of religion and piety, for the promotion of religious knowledge, the imparting of spiritual instruction to the diciples and followers of the math and the maintenance of the doctrines of particular schools of religion or philosophy.”

7. Idol is a juristic person capable of owning properties. The trustee cannot sell, lease or otherwise alienate the right of management nor is the right saleable in execution under a decree (Vide Raja Vurmah v. Ravi Vurmah (1 Supra)).

8. In view of the authorities referred to supra, it is clear that the trustee of a religious endowment cannot alienate the trust properties. Consequently the alienation made under Ex. B-1 is illegal. The document Ex. B-1 is void and the alienation under it is inoperative.

9. Point No. 2:— Article 59 of the Limitation Act, 1963 reads as follows:—

Description of suit Period of limitation Time from which period begins to run PART IV-SUITS RELATING TO DECREES AND INSTRUMENTS 59 To cancel or set aside an Three Years instrument or decree or for the rescission of a contract. Three Years When the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first become known to him.”

10. The suit was admittedly filed beyond three years from the date of execution of Ex. B-1 but within twelve years. Therefore, the question is whether the suit is barred by limitation.

11. We have already stated that the alienation of Rathi Matham properties binder Ex. B-1 is void in law. When once the transfer itself is void, there is no question of filing a suit, to set aside such a document, within three year. In Narayanan v. Lakshmanan (4) 39 ILR 456 (1916) Madras the question was whether a document under which the trustees transferred the management of a temple could be questioned by way of a suit after expiry of three years from the date of knowledge of the instrument? Under Article 91 of the Indian Limitation Act, 1887 corresponding to the present Article 59, the period of limitation was three years for filing a suit to set aside the alienation from the date of knowledge. The Division Bench of the Madras High Court held that since the transfer in favour of the defendants being void, it does not require to be set aside and that Article 91 of the Limitation Act does not apply to such a suit and, therefore, the suit which was not filed within three years is not barred by limitation.

12. It is contended by the learned counsel for the respondents that since the plaintiff prayed for a declaration to set aside the document, the suit must have been filed within a period of three years. This aspect has been considered by a Division Bench of Madras High Court in Appanna v. Venkatappadu (5) AIR 1953 Madras 611 at 615. Venkatarama Aiyar, J. (as he then was) speaking for the Division Bench held:

“The fact that the deed is void or that it should be set aside does not affect the position, such prayers being ancillary to the substantive prayer for possession. As observed in the decisions already cited, such prayers might be regarded as mere surplusage. We accordingly hold on issue No. 3 differing from the lower court that the suit is not barred by limitation under Art. 91.”

13. In view of the said authority we are of the opinion that the suit though filed for seeking a declaration that Ex. B-1 is invalid and void is not barred by limitation since it is filed within twelve years. It is also brought to our notice a that a sum of Rs. 10,000/- is lying in deposit being profits that accrued on the mulgies belonging to the Matham in question and the said amount was kept in bank deposit by the lower court. Since we have taken the view that the plaintiffs suit is within the time and they are entitled to a declaration that Ex. B-1 is invalid, we are of the view that the plaintiffs are entitled to act as trustees and manage the Math in question in accordance with the customs and religious practices of the Math. So far as the amount of Rs. 10,000/- in deposit is concerned, we are of the opinion that the interest accrued thereon can be utilized for the maintenance. Such reasonable amounts that are absolutely necessary for the purpose of carrying on religious rites in the Math, the plaintiffs are entitled to spend, out of the amount now in deposit. We are told that the four mulgies, belonging to the Math are in dilapidated condition and the tenants have incurred considerable expenditure towards repairs of the mulgies and they are adjusting the amounts spent by them from out of the rents payable to the math. As and when the payments are completed, the plaintiffs will be entitled to receive the amounts and expend the same for the purpose of the Math. On behalf of the defendants it is represented before us that they are willing to collect donations and effect improvements to the Math. There should be no objection for this from any quarter including plaintiffs in the suit. As and when amounts are collected by way of donations and defendants came forward for purpose of effecting repairs to the Math the plaintiffs should not object and the repairs or improvement should be carried on jointly by both the plaintiffs and the defendants. Defendants will also have a right to inspect the accounts of the Math periodically which the plaintiffs are duty-bound to maintain.

14. In view of the above discussion, we allow the L.P.A, and set aside the decree and judgments of the trial court and the learned single judge of this court and decree the suit as prayed for. Each party will bear their own costs.

D. Krishna Murthy & Others v. Chandimi Ramanna & Others

Structured Summary of the Opinion (Ramakrishnam Raju, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments (as presented)

Respondents' Arguments (as presented)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

D. Krishna Murthy & Others v. Chandimi Ramanna & Others

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