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Varkey v. Meenakshi Amma & Others

Kerala High Court
Jul 24, 1963
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Factual and Procedural Background

The appeals arise from the same decree involving disputes over certain properties originally obtained by the plaintiffs and their mother, the 1st defendant, under a gift from their father in 1937. The properties belonged equally to the 1st defendant and the plaintiffs under the Travancore Nayar Act. While the plaintiffs were minors, the 1st defendant sold the plaint A schedule properties to the 2nd defendant. With part of the sale consideration, plaint B schedule properties were purchased in the names of the 1st defendant and the plaintiffs. The plaintiffs disowned the acquisition of the plaint B schedule properties, challenged the sale as unnecessary, and sought to set aside the alienation and recover the plaint A schedule properties along with mesne profits and damages for removal of timber. The defence was that the sale by the mother bound the plaintiffs, that the sale proceeds were used to purchase other properties, and that the alienees had made substantial improvements on the properties. The Additional District Judge found the 1st defendant was not the legal guardian of the plaintiffs, declared the sale by her void, and decreed recovery of the plaintiffs’ three-fourths share with mesne profits, disallowing damages for waste.

Legal Issues Presented

  1. Whether the 1st defendant was the legal guardian of the plaintiffs capable of alienating their share in the property.
  2. Whether the sale of the plaint A schedule properties by the 1st defendant was valid or void.
  3. Whether the plaintiffs are entitled to recover the plaint A schedule properties along with mesne profits and damages.
  4. Whether the benefit conferred on the plaintiffs’ estate by the alienation (i.e., the plaint B schedule properties purchased with sale proceeds) must be surrendered to the alienee-defendants.
  5. Whether the alienee-defendants are entitled to compensation for improvements made on the properties.

Arguments of the Parties

Appellants' Arguments

  • The 1st defendant's marriage to Thiruvanatha Sevuka Pandia Thever was not a legal marriage under section 3 of the Nayar Act, hence she was the legal guardian competent to deal with the plaintiffs' properties.
  • Under customary Hindu law, a de facto guardian or manager can deal with minors' properties for necessities, relying on section 44 of the Travancore Nayar Act.
  • In cancelling the alienation, the benefit to the plaintiffs’ estate from the alienation should be surrendered to the alienee-defendants.

Respondents' Arguments

  • The sale by the mother bound the plaintiffs, as the 1st defendant was the legal guardian competent to alienate the properties.
  • The sale proceeds were used to purchase other properties, including the plaint B schedule properties and another property nearer home.
  • The alienee-defendants and sub-alienees had made large improvements on the properties, which should be compensated upon eviction.
  • The mesne profits claimed were excessive and should be limited.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vasu Pillai v. Prabhakaran Nair (1955 KLT 270) Statutory guardianship under section 10 of the Nayar Act overrides customary law regarding guardianship. The court held that customary law does not prevail over statutory provisions on guardianship; thus the 1st defendant was not the legal guardian.
Chinnaswamy Reddi v. Krishnaswami Reddi (ILR 42 Mad. 36) Section 64 of the Contract Act requires restoration of benefits received under a voidable contract. The court applied this principle to hold that lands purchased with sale proceeds are benefits that must be restored or conveyed to the aggrieved party.

Court's Reasoning and Analysis

The court analyzed the legal guardianship under section 10 of the Travancore Nayar Act and rejected the appellants' contention that the 1st defendant was the legal guardian due to an alleged invalid marriage, noting that this issue was not raised earlier and depended on evidence of custom. The court affirmed that statutory guardianship supersedes customary law, citing Vasu Pillai v. Prabhakaran Nair. Consequently, the sale by the 1st defendant of the plaintiffs’ share was void. The court then applied equitable principles from sections 41 of the Specific Relief Act, 35 of the Transfer of Property Act, and 64 of the Contract Act, as well as the precedent in Chinnaswamy Reddi v. Krishnaswami Reddi, to hold that the plaintiffs' estate must surrender the benefit (plaint B schedule properties) conferred by the alienation to the alienee-defendants. Regarding improvements, the court referred to the Kerala Compensation for Tenants’ Improvements Act, entitling the alienee-defendants to compensation for bona fide improvements before eviction. The court upheld the mesne profits rate fixed below but left the accrual date to be decided in the final decree. The decree was modified to grant the alienee-defendants recovery of the plaint B schedule properties with compensation for improvements and mesne profits from eviction.

Holding and Implications

The appeals are partly allowed by modifying the decree of the court below.

The court held that the 1st defendant was not the legal guardian of the plaintiffs and that the sale of the plaint A schedule properties was void as to the plaintiffs’ shares. The alienee-defendants are entitled to retain the plaint B schedule properties purchased with the sale proceeds as the benefit conferred by the alienation and must be compensated for improvements before eviction. The mesne profits fixed by the lower court stand, with the date of accrual to be determined in the final decree. The present decree is preliminary, with partition, compensation assessment, and mesne profits date reserved for final determination. No order as to costs was made. No new precedent was established beyond the application of existing statutes and case law to the facts.

Show all summary ...

1. These appeals have arisen from the same decree, A. S. No. 967 being by defendants nos. 13 to 15,17 to 19,30, 31,34,35, 37, 40 and the assignees of defendants 7,17 to 19, 32 and 36, And a. S. No. 985 by defendants 8 to 11.

2. The plaint a schedule properties were obtained by the plaintiffs and their mother, The 1st defendant, Under a gift by their father as per ext. P - 1 dated 1110 1937 (1113 m. E.). Under s. 22 of the travancore nayar act, Ii of 1100, The properties belonged to the 1st defendant and the plaintiffs in equal shares. While the plaintiffs were minors, On 8 31118 the 1st defendant sold the plaint a schedule properties to the 2nd defendant as per ext. P - 2. With part of its consideration, The plaint b schedule properties were purchased the same day in the name of the 1st defendant and the plaintiffs. The plaintiffs disown the acquisition of plaint b schedule properties, Contend that the sale was for no necessity, And seek to set aside the alienation and recover the plaint a schedule properties, With mesne profits and damages for removal of timber - trees.

the defence was that the sale by the mother bound the plaintiffs, That with rs. 5400 received on the date of execution of the sale the 1st defendant had purchased the plaint b schedule properties and with rs. 7300 out of rs. 8850 paid under ext, D3 receipt dated 10th makaram 1118, Another property nearer home had also been purchased, That the latter had been sold away by the 1st defendant for rs. 14000 before the institution of the suit, That the alienees and sub - alienees, Being defendants 2 onwards, Have effected large improvements on the properties which have to be paid for on eviction, And that the mesne profits of the plaint a schedule properties were not above rs. 50 per annum.

the additional district judge found the 1st defendant not the legal guardian of the plaintiffs, And the sale executed by her of the plaintiffs' share in the property incompetent and void and decreed the suit in regard to the plaintiffs' 3/4 share in the plaint a schedule properties to be recovered by them with mesne profits at rs. 371/2 per annum, Disallowing the claim for damages for waste.

3. Counsel for the appellants in both the appeals contended that the 1st defendant's marriage with thiruvanatha sevuka pandia thever was not a legal marriage in accordance with the provisions of s. 3 of the nayar act, 1100, And therefore the 1st defendant, The mother, Was the legal guardian competent to deal with the plaintiffs' properties. No contention regarding the legality of the marriage of plaintiffs' mother with their father was taken in the pleadings or at any stage of the trial of the suit in the court below, And it being essentially dependent on evidence as to custom in the community, Cannot be allowed to be raised for the first time in appeal, To the surprise of the parties affected. The contention is therefore over - ruled.

4. The legality being assumed of the marriage of the plaintiffs' father with the 1st defendant, The legal guardianship of the plaintiffs must necessarily be found under s. 10 of the nayar act, 1100, With their father only. It was contended by counsel in both the appeals that under the customary hindu law a de facto guardian, Or defacto manager as the federal court has named him, Is competent to deal with the minor's properties for necessities, And relied on s. 44 of the travancore nayar act as continuing that customary law still in force among the nayars. The identical contention was once raised before a division bench of the travancore - cochin high court in vasu pillai v. Prabhakaran nair (1955 klt. 270). Sankaran j. (as he then was), Speaking for the bench, Has held that, In view of the statutory provision in s. 10 of the nayar act, No customary law, Even if that applicable to hindus be held applicable to marumakkathayees, Can avail; we are in respectful agreement with that proposition. When guardianship among nayars has been made subject of legislation, No customary law on that matter can prevail thereafter. The customary usages saved in s. 44 of the travancore nayar act are only in regard to matters not specifically dealt with in the act itself. The 1st defendant has therefore to be found not the legal guardian of the plaintiffs and incompetent to deal with their properties. The finding of the court below that the sale of the plaintiffs' share of the properties by the 1st defendant was void has to be accepted.

5. Counsel for the appellants pleaded that in cancelling the alienation as regards the plaintiffs' share, The benefit conferred on the plaintiffs' estate by that alienation should be directed to be surrendered to the alienee - defendants. We think that has to be allowed.

s. 41, Specific relief act. 1877, Provides:

"on adjudging the cancellation of an instrument, The court may require the patty to whom such relief is granted to make any compensation to the other which justice may require."

s. 35, Transfer of property act, Is also pertinent here. It enacts:

"where a person professes to transfer property which he has no right to transfer, And as part of the same transaction confers any benefit on the owner of the property, Such owner must elect either to confirm such transfer or to dissent from it; and in the utter case he shall relinquish the benefit so conferred, And the benefit so relinquished shall revert to the transferor."

much the same principle is enacted in s. 64, Contract act, Which says:

". The party rescinding a voidable contract shall if, He has received any benefit thereunder from another party to such contract, Restore such benefit, So far as he may be, To the person from whom it was received."

6. In chinnaswamy reddi v. Krishnaswami reddi (ilr. 42 mad. 36), The contention was that it was not open to the quondam minors to keep the lands purchased with the sale proceeds and to repudiate the sale by their mother made with the object of purchasing those lands. Kumaraswami sastri j. Applied s. 64 of the contract act to the case and observed:

"there can be little doubt that under s. 64 of the contract act a party seeking to avoid a voidable transaction is bound to restore any benefit he has received from the other party and the question is whether in the present case lands actually purchased in sriperumbudur can be said to be the benefit which the defendants nos. 1 and 2 received in respect of the sale by their mother as their guardian.

ordinarily, The benefit which a party receives when he sells the property is the price which the vendee pays. Any profits which the vendor might make with the moneys would be too remote in estimating what he has to return in case he is entitled to avoid the sale and elects to do so. Where however for the protection of a purchaser contracting with a guardian or a qualified owner, A particular dealing with the money was in the direct contemplation of the parties such as the purchase of other lands with the consideration and the money is so applied, The benefit which the other party obtains will be the land or other property acquired with the consideration. There can de little doubt that if the purchase of the land at sriperumbudur was the benefit contemplated by the parties and arose in connection with the same transaction as the sale of ancestral properties by the minors' mother, The plaintiff would be entitled to a conveyance of the properties so purchased. " we think the identical relief might well have followed s. 41 of the specific relief act, 1877.

7. Applying the equitable principle embodied in the 3 sections quoted above to the instant case, The plaint b schedule properties, The purchase of which has been mentioned as an item of consideration in the impugned alienation and was made the same day, Have to be held as the benefit that accrued to the estate of the plaintiffs under the impugned alienation; and therefore they must be directed to be given to the disappointed alienees, Defendants 2 onwards. It may be noted here that the plaintiffs have in the plaint disowned the acquisition of plaint b schedule properties in their names.

8. Under s. 2 (d) (iii) of the kerala compensation for tenants' improvements act, Xxix of 1958,'a person who comes into possession of land belonging to another person and makes improvements thereon in the bona fide belief that he is entitled to make such improvements' is a tenant entitled to compensation on eviction for his improvements on the property. The alienees who have effected improvements on the land purchased from the plaintiffs' mother must therefore be given compensation for their improvements before they are sent out of the property. S. 4 of that act allows a 'tenant' to continue in lawful possession of the property until the compensation due for his improvements is paid to him. As the question of improvements has yet to be decided, It is too early to decide if the alienees' possession has been wrongful and hold them liable for mesne profits. However, The rate of mesne profits, Fixed by the court below, Not being objected to here, Will stand; but the date from which it will accrue to the plaintiffs is left open for decision in the final decree.

9. In the result, The decree of the court below is modified as follows: the alienees, Defendants 2 onwards, Are held entitled to recover 3/4 of the plaint b schedule properties with mesne profits from the date of their eviction from the property decreed to the plaintiffs; they will be paid compensation for their improvements on the property where from they are ousted. The present decree will be a preliminary decree in the case, And partition of plaintiffs' 3/4 shares by metes and bounds, The assessment of compensation payable to the defendants, And the date from which mesne profits will be due to the plaintiffs, Will be determined in the final decree in the case. In the circumstances of this case, There will be no order as to costs in these appeals.