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Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

This opinion addresses whether a permanent lease granted by the trustee (shebait) of a temple of a building site belonging to the temple for a muzzer or a premium is valid. The appellant contended that such a lease was a breach of trust and therefore invalid. The Subordinate Judge in appeal upheld the lease, finding that it was made in the proper and reasonable exercise of the trustee's powers and in accordance with local usage, characterising it as an act of prudent management. The higher Court (author of this opinion) reviews those findings, examines relevant authorities, and disposes of the appeal by reference to precedent and analysis of the trustee's powers. The Court ultimately sets aside the Subordinate Judge's decree and restores that of the Munsif. The opinion also notes that no claim for the value of improvements was made in the written statement and declines to permit the defendants to raise that claim at this stage. Costs are awarded against the defendants in favour of the plaintiff in this Court and in the lower appellate Court.

Legal Issues Presented

  1. Whether a permanent lease by a trustee (shebait) of temple property (specifically a building site) at an unvarying/fixed rent or for a fixed premium (muzzer) is valid or constitutes a breach of trust.
  2. Whether local usage (evidence of similar leases in the locality) can justify or validate such a permanent lease as an act of prudent management by the trustee.
  3. Whether the fact that the property is a building site, and allegedly not producing income before alienation, justifies leasing it at an unvarying rent.
  4. What are the limits of a trustee's power to alienate temple corpus: is permanent alienation always invalid, or can it be justified by necessity or special circumstances?

Arguments of the Parties

Appellant's Arguments

  • The permanent lease granted by the trustee was a breach of trust and therefore invalid.
  • Counsel for the appellant (Mr. S. Srinivasa Iyengar) argued the broader proposition that a permanent alienation or creation of a permanent tenure is under all circumstances invalid, relying on several precedents (including Nullayappa Pillai v. Ambalavana Pandara Sannadhi and Vidyapurna Thirtha Swami v. Vidyanidhi Thirtha Swami).

Respondent/Trustee and Lower Court Position

  • The Subordinate Judge (in the appellate court below) upheld the lease, finding it to be a proper and reasonable exercise of the trustee's powers and in accordance with local usage, characterising the act as prudent management.
  • It was argued (by those defending the lease) that local usage and the charitable/public nature of the alienation were relevant and supportive of the lease's validity.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Maharanee Shibessouree Debia v. Mathooranath Acharjo, 13 M.I.A. 270; 13 W.R. 18 (P.C.) The shebait (trustee) cannot alienate the property though she may create proper derivative tenures conformable to usage; creating a new and fixed rent for all time is a breach of duty and not presumable. The Court treats this as a leading authority: a permanent lease at a fixed/unvarying rent is prima facie in excess of a shebait's powers unless necessity or special circumstances justify it.
Mayandi Chettyar v. Chockalingam Pillay, 27 M. 291; 14 M.L.J. 200; 8 C.W.N. 545; 31 I.A. 83 (P.C.) The creation of a permanent right of occupancy/fixed rent for all time would be a breach of duty in the trustee unless there were special circumstances of necessity to justify it. Quoted and applied to support the proposition that permanent fixed-tenure leases are invalid except on proof of necessity.
Abhiram Goswami v. Shyama Charan Nandi, 30 C. 1003; (multiple reports) Reiterates the general rule as in Maharanee Shibessouree Debia; held that a mokurari or permanent patta by a shebait is invalid. Relied upon as the Privy Council's latest pronouncement reinforcing that permanent tenure by a shebait is invalid.
Mahomed Meera Usain Rowthen v. Nizurali Sahib, 19 M.L.J. 208; 5 M.L.T. 220; 4 Ind. Cas. 1129 Held that a permanent lease at a fixed rent is invalid; trustee has no power to create a perpetual tenure except on special grounds or necessity. Followed by this Court as consistent with Privy Council authority; cited to support invalidity of the lease.
Narasimha Chari v. Gopala Aiyungar, 28 M. 391 Supportive authority that permanent lease at fixed rent is invalid. Cited by this Court as part of the line of decisions supporting the conclusion reached.
Nullayappa Pillai v. Ambalavana Pandara Sannadhi, 27 M. 465; 14 M.L.J. 81 Statements that, under Indian common law relating to Hindu religious institutions, landed endowments are inalienable; derivative tenures conformable to custom may be created but cannot be permanently leased at fixed rent, sold or mortgaged; revenues may be pledged for necessities. Cited by appellant; the Court recognises its supportive observations but notes the language may be expressed too widely and examines it in light of Privy Council authority and the possibility of necessity-based exceptions.
Vidyapurna Thirtha Swami v. Vidyanidhi Thirtha Swami, 27 M. 435; 14 M.L.J. 105 Observations in identical vein to Nullayappa Pillai regarding inalienability of religious endowments. Cited by appellant; the Court acknowledges the observations but qualifies their breadth, stressing the Privy Council's formulations about necessity.
Narayan v. Chintaman, 5 B. 393 Chief Justice Westropp: religious endowments in this country are not alienable though annual revenues may be occasionally pledged for essential purposes. Referenced as supporting authority; the Court states nothing in that judgment turned on certain distinctions and uses it as part of the background of authority.
Collector of Thana v. Hari Sita Ram, 6 B. 546 "A Hindu religious endowment cannot be sold, or permanently alienated, though its income may be temporarily pledged for necessary purposes." Cited as consistent case law supporting restrictions on permanent alienation of religious endowments.
Manohar Ganesh Tambekar v. Lakshmiram Govindram, 12 B. 247 No distinction between a temple dedicated to an idol and a charitable foundation for purposes of the rule on alienation. Invoked to show lack of meaningful legal distinction between types of charitable/religious endowments in this context.
Prosunno Kumari Debya v. Golab Chund Baboo, 2 I.A. 145; 14 B.L.R. 450; 28 W.R. 253 The authority of the shebait of an idol's estate is analogous to that of the manager of an infant heir; manager's powers of alienation may extend to alienation of corpus in cases of necessity. Used by the Court to support the analogy between a trustee of temple property and a manager of an infant's estate, and to explain when alienation may be justified.
Hanooman v. Musammat Babooee (Hanooman Persaud's case), 6 M.I.A. 393; 18 W.R. 81 Discusses a manager's powers of alienation; supports that a manager/guardian may alienate corpus when necessary for the benefit of the estate. Quoted to support the analogy and the proposition that a shebait's powers may in some cases extend to alienation if necessary for preservation/benefit of the temple property.
Doorganath Roy v. Ram Chunder Sen, 4 I.A. 52; 2 C. 341 Reiterated the analogy of a shebait to manager of an infant heir; recognised alienation of debutter property could be justified where bona fides and representation of necessity existed. Cited to show circumstances in which alienation of corpus has been accepted where bona fide purchaser relied on representations and the alleged necessity to repair the temple.
Suraj Bunsi Koer v. Sheo Persaud Singh, 6 I.A. 88 Privy Council spoke of "need and necessity" in Hanooman Persaud's case as legitimate family purposes. Referenced as further authority on the characterisation of necessities that can justify alienation in related contexts.
William Charles Quinn v. Thomas William Hungerford, 6 E.R. 1189 English decision cited concerning the strict application of the rule as to validity of alienations of charity property; English courts have been stringent and permanent leases at unvarying rent would have little chance of approval. Invoked for comparative law context to show English courts' stringent approach to permanent leases of charity property; used illustratively rather than as binding precedent for Hindu temple law.

Court's Reasoning and Analysis

The Court proceeds in stages, applying precedent and fact-driven analysis as presented in the opinion:

  1. On local usage: The Court considered the Subordinate Judge's finding that the lease conformed to local usage, but found the evidence of customary practice insufficient. The earliest example relied on dated from 1870 and other examples were few in number and not uniformly permanent tenures; the Court could not hold that a binding custom was proved.
  2. On the charitable/public character of the alienation: The Court rejected the argument that the fact that the alienation was in favour of a charitable institution or for the public good could validate an otherwise unlawful alienation. The Court treated such considerations as irrelevant where the action was not otherwise in accordance with law.
  3. On the central legal question (permanent lease at fixed rent/premium): The Court relied on a line of Privy Council and other authorities (chiefly Maharanee Shibessouree Debia and subsequent decisions) establishing that a shebait lacks general power to alienate corpus by creating a permanent fixed rent tenancy for all time. Creating a fixed/unvarying rent for all time deprives the endowment of the benefit of prospective augmentation and is prima facie a breach of duty.
  4. The Court explained the proper interpretive stance: the precedents do not lay down an absolute prohibition against all permanent alienations in every circumstance; rather, a permanent alienation is prima facie beyond a shebait's powers and is only justifiable in special circumstances of necessity. The Court emphasised the manager-of-an-infant-heir analogy used in Privy Council decisions: a trustee's powers are analogous to such a manager, who may in cases of necessity alienate corpus for the benefit of the estate, but the threshold for such necessity is high.
  5. On the specific factual posture (building site not producing income): The Court rejected the submission that the fact the land was a building-site and not producing income prior to alienation justified leasing it at an unvarying rent; building sites are typically susceptible to future and continuing increases in value, so fixing a permanent rent forecloses the endowment's future benefit.
  6. Conclusion from analysis: Applying those authorities and the insufficiency of evidence of custom/necessity, the Court concluded that the particular lease could not be upheld.
  7. Procedural/ancillary matter: The Court noted that no claim for the value of improvements was made in the written statement and no issue was joined on that subject; therefore it declined to allow the defendants to raise such a claim at this late stage.

Holding and Implications

CORE RULING: The Court holds that the lease in question "cannot be upheld" and, on the authority of the Privy Council decisions cited, sets aside the decree of the Subordinate Judge and restores the decree of the Munsif.

Consequences and direct implications for the parties:

  • The Subordinate Judge's decree upholding the permanent lease is set aside; the earlier decree of the Munsif (which the Court restores) stands.
  • The defendants are not permitted to raise a claim for the value of improvements because no such claim or issue was made in the written statement.
  • The defendants are ordered to pay the plaintiff's costs in this case and in the lower appellate Court.

Broader legal implication as applied by the Court: the opinion applies and endorses the established precedent that permanent leases or creation of perpetual tenures by a shebait at an unvarying rent are prima facie invalid, subject to narrowly defined exceptions where special necessity is proved.

    Sreemuth Devasigamani Pandarasannadhi Alias Nataraja Desikar v. Palaniappa Chettiar And Anr.

    1. The question is raised whether a permanent lease by the trustee of a temple of a building site belonging to the temple for a muzzer or a premium is valid. It is argued for the appellant that such a lease constitutes a breach of trust and is, therefore, invalid. The Subordinate Judge in appeal has upheld the lease on the ground that it was made in the proper and reasonable exercise of the powers of the trustee and in accordance with local usage and was, therefore, an act of prudent management on his part. Assuming that local usage would, at all events, be an element in the determination of the question whether the lease was an act of prudent management, it is difficult to uphold the finding in its favour. The earliest instance on record of such a lease was as late as 1870 and the other instances in evidence are only a few in number and not all of them permanent tenures. We are unable to hold that the evidence is sufficient to support a custom. That the alienation in question was in favour of a charitable institution or for the supposed good of the public is, in our judgment, no ground for upholding it if it is otherwise not in accordance with law. Putting aside then these considerations as irrelevant we are face to face with the problem whether an alienation of temple property or a permanent lease at an unvarying rent or a fixed premium is sustainable because it is a house site and was not producing any income before the date of the alienation. This question must be answered in the negative in the light of the definite pronouncements of the Privy Council in Maharanee Shibessouree Debia v. Mathooranath Acharjo 13 M.I.A. 270 : 13 W.R. 18 (P.C.); Mayandi Chettyar v. Chockalingam Pillay 27 M. 291 : 14 M.L.J. 200 : 8 C.W.N. 545 : 31 I.A. 83 (P.C.) and Abhiram Goswami: v. Shyama Charan Nandi 30 C. 1003 : 10 C.L.J. 284 : 6 A.L.J. 857 : 11 Bom. L.R. 1234 : 19 M.L.J. 530 : 14 C.W.N. 1 : 4 Ind. Cas. 449.

    2. In the first of these cases where a permanent lease by a shebait was in question the Judicial Committee observed, in the exercise of that office, she (the shebait) could not alienate the property though she might create proper derivative tenures and estates conformable to usage (p. 273). Again at page 275 their Lordships said "There is no satisfactory proof in the cause that these were ever held at a fixed invariable rent. One important element in this enquiry has been wholly lost sight of, viz., the nature of the shebait title and its legal inability to be the source of such a derivative title. To create a new and fixed rent for all time though adequate at the time, in lieu of giving the endowment the benefit of an augmentation of a variable rent; from time to time, would be a breach of duty in a shebait, and is not, therefore, presumable." What follows from the above is not that a permanent, lease is under all circumstances absolutely invalid but that it is prima facie in excess of the powers of a shebait. See Prannath Sarasvati's Tagore Lectures on the Hindu Law of Endowments, page 146. In the next case which dealt with the creation of a permanent right of occupancy Mayandi Chettyar v. Chockalingam Pillay 27 M. 291 : 14 M.L.J. 200 : 8 C.W.N. 545 : 31 I.A. 83 (P.C.) the Privy Council observed at p. 295 quoting the decision in Maharanee Shibessouree Debia v. Mathooranath Acharjo 13 M.I.A. 270 : 13 W.R. 18 (P.C.) the creation of a new and fixed rent for all time would be a breach of duty in the trustee unless there were special circumstances of necessity to justify it. In their latest pronouncement already referred to, their Lordships of the Privy Council say Abhiram Goswami v. Shyama Charon Nandi 30 C. 1003 : 10 C.L.J. 284 : 6 A.L.J. 857 : 11 Bom. L.R. 1234 : 19 M.L.J. 530 : 14 C.W.N. 1 : 4 Ind. Cas. 449 "that the general rule as regards a trustee's power to alienate debutter property is that laid down in Maharanee Shibessouree Debia v. Mathooranath Acharjo 13 M.I.A. 270 : 13 W.R. 18 (P.C.)" and held that a mokurari or permanent patta by a shebait mas invalid. It has also been held in this Court following the decisions of the Privy Council that a permanent lease at a fixed rent is invalid and that a trustee has no power to create a perpetual tenure exception special grounds or circumstances of necessity, Mahomed Meera Usain Rowthen v. Nizurali Sahib 19 M.L.J. 208 : 5 M.L.T. 220 : 4 Ind. Cas. 1129 and Narasimha Chari v. Gopala Aiyungar 28 M. 391. The fact that in the present case the property leased is a building site does not appear to be any justification for leasing the properly at an unvarying rent. Building sites of all lands are particularly susceptible of a continuous rise in value where the locality increases in propriety or there are increased facilities of communication or there is an increase in population. The foregoing observations are sufficient for the disposal of this case. They lead to the conclusion that the lease in question in the present case cannot be upheld. The question, however, has been argued as regards the limits of the power of a trustee of a temple properly. Mr. S. Srinivasa Iyengar in his able argument contended the broad proposition that a permanent alienation or the creation of a permanent tenure is under all circumstances invalid and he relied on the decision of Subramania Iyer, Officiating Chief Justice and Russell, J., in Nullayappa Pillai v. Ambalavana Pandara Sannadhi 27 M. 465 : 14 M.L.J. 81 and the observations of Subramania Iyer and Bhashyam Iyengar, JJ., in Vidyapurna Thirthaswami v. Vidyanidhi Thirtha Swami 27 M. 435 : 14 M.L.J. 105. The former of these cases proceeds upon the Privy Council decision in Maharanee Shibessouree Debia v. Mathooranath Acharjo 13 M.I.A. 270 : 13 W.R. 18 (P.C.), and on the decision of the Bombay High Court in Narayan v. Chintaman 5 B. 393 and The Collector of Thana v. Hari Sita Ram 6 B.546. There are observations in all these cases which go far to support the appellant's contention. Sir Subramania Iyer observed in Nullayappa Pillia v. Ambalavana Pandara Sannadhi 27 M. 465 : 14 M.L.J. 81 according to the Indian Common Law relating to Hindu religious institutions such as the present, the landed endowments thereof are inalienable. Though proper derivative tenures conformable to custom may be created with reference to such endowment, they cannot be transferred by way of permanent lease at a fixed rent, nor can they be sold or mortgaged. The revenues thereof may alone be pledged for the necessities of the institutions. Chief Justice Westropp makes use of similar language in Narayan v. Chintaman 5 B. 393. He says at page 396 "Religious endowments in this country are not alienable though the annual revenues of such endowments as distinguished from the corpus, may, for purposes essential to the temple or other institution endowed, be occasionally pledged." The lands dealt with in that case had been dedicated for the support of a temple and not for a mere family idol. But nothing in that judgment appears to have turned on that distinction. The same eminent Judge Says in The Collector of Thana v. Hari Sita Ram 6 B.546 "A Hindu religious endowment cannot be sold, or permanently alienated, though its income may be temporarily pledged for necessary purposes such as the repair etc., of the temple." Observations to the same effect are to be found in the judgment of Sir V. Bhashyam Iyengar, J., at pp. 450 and 451 in Vidyapurna Thirtha Swami v.Vidyanidhi Thirtha Swami 27 M. 435 : 14 M.L.J. 105. With all respect to these very learned Judges it appears to me that the language employed in these cases is a little too wide. I know no text of the Hindu law that absolutely prohibits the alienation of the corpus of the temple property where there are sufficient circumstances of necessity requiring it. What would amount to such necessity may be a question not easy of solution in the circumstances of each case, But if a proper necessity is made out, I feel no doubt that the alienation ought to be upheld. It seems to me that the authority of the Privy Council is distinctly in favour of the view that the alienation should be upheld if the necessity is made out. There appears to be no distinction in this matter as shown by Mr. Justice West in his very learned judgment in Manohar Ganesh Tambekar v. Lakshmiram Govindram 12 B. 247 between a religious institution like a temple dedicated to an idol and a charitable foundation. In the most recent case on the subject to which reference has already been made the Privy Council likened the power of the shebait of an idol to that of the manager of an infant heir. See Abhiram Goswami v. Shyama Charan Nandi 30 C. 1003 : 10 C.L.J. 284 : 6 A.L.J. 857 : 11 Bom. L.R. 1234 : 19 M.L.J. 530 : 14 C.W.N. 1 : 4 Ind. Cas. 449. In Prosunno Kumari Debya v. Golab Chund Baboo 2 I.A. 145 : 14 B.L.R. 450 : 28 W.R. 253 also, which appears to have been somewhat misunderstood their Lordships made the same observation that the authority of the shebait of an idol's estate was analogous to that of the manager of an infant heir and cited Lord Justice Knight Brace in Hanooman v. Musammat Babooee 6 M.I.A. 393 : 18 W.R. 81 as regards a manager's powers of alienation. The remarks of their Lordships in that case, which was one to set aside a prior decree against the preceding trustee that that decree had been rightly made against the rents and profits of debutter lands (see page 153) and that no question was raised whether the lands themselves could be sold under the decree, have been taken to imply that a decree could not he passed against the corpus of the temple property. I cannot agree that there is any warrant for placing such a construction on, the decision of their Lordships in the face of the express statement that the powers of a shebait were those of the manager of an infant heir which undoubtedly extend to the alienation of the corpus and the quotation from Hanooman Persaud's case 6 M.I.A. 393 : 18 W.R. 81 of the passage which upholds the validity of an alienation in favour of a bona fide lender after due enquiry notwithstanding the manager's wrong application of the money borrowed. Their Lordships expressly assert (page 152) "it would seem to follow that the persons so entrusted must of necessity be empowered to do whatever may be required for the service of the idol, and for the benefit and preservation of its property, at least in as great a degree as the manager of an infant heir. If this were not so, the estate of the idol might be destroyed or wasted and its worship discontinued, for want of the necessary funds to preserve and maintain them." Language more precise it is difficult to employ to define the powers of the trustee of a temple or the shebait of an idol. See also Prannath Saraswati's Tagore Lectures on the Hindu Law of Endowments page 152. Their Lordships commended the prior decree against rents and profits only as proper, because necessity which may be sufficient for the charging of the rents and pr ofits is not sufficient for the al ienation of the corpus. If there should still be any possibility of a misconception of their Lordships' view of the limits of a trustee's power of alienation, that is completely removed by the decision in konwar Doorganath Roy v. Ram Chunder Sen 4 I.A. 52 : 2 C. 341. In that case also, dealing with the powers of the shebait of an idol their Lordships at page 63 repeat the analogy of the manager of an infant heir and cite the well-known observations in Hanooman Persaud's case 6 M.I.A. 393 : 18 W.R. 81. The question there related to the sale of debutter property. At page 56, they say: "She (the shebait) had as the manager of the estate, power, if it were debutter dedicated to the idol, to alienate so much of it as was necessary to keep up the temple and worship of the idol." At page 63, they repeat "She as the manager of this estate had the same right or an analogous right to that of the manager of an infant heir." Their Lordships indeed proceeded so far as to hold the alienation justifiable on the ground of bona fide inquiry by the purchaser and a representation by the alienor that the sale was made for the purpose of the repair of the temple. It is unnecessary to point out that the manager of an infant heir may absolutely alienate his property in a case of need of benefit to the estate that in a case of honest inquiry by the alienee the real existence of an alleged sufficient and reasonably credited necessity is not a condition precedent to the validity of his charge and that under such circumstances he is not bound to see to the application of the money." The Privy Council spoke of the need and necessity referred to in Hanooman Persaud's case 6 M.I.A. 393 : 18 W.R. 81 as legitimate family purposes in Suraj Bunsi Koer v. Sheo Persaud Singh 6 I.A. 88 at p. 101 : 4 C.L.B. 226 : 5 C. 148. Of course, in the case of an idol the inherent difference in its character from a human infant must create differences in the Circumstances constituting necessity sufficient to validate the alienation. The physical and moral requirements of a human infant are, of course, different from the requirements of an idol or an object of public worship suited to the faith and rituals and religious traditions of the community for whose spiritual ministration it has been set up. The requirements of daily worship, of buildings suitable for the carrying on of such worship and even of the essential festivals intended to cultivate the religious emotions of the section of the public for whose benefit the temple is dedicated may afford grounds for the alienation of part of the corpus of the property of the temple. That such alienations ought only to be resorted to as extreme measures in the absence of their reasonable means of providing for the needs of, the temple may well be accepted as the canon of judgment in regard to the validity of particular alienation. I have thought it necessary to make these observations to guard us from being supposed to accept without qualification some of the language employed in Nallayappa Pillai v. Ambalavana Pandara Sannadhi 27 M. 465 : 14 M.L.J. 81 and Vidyapurna Thirtha Swami v. Vidyanidhi Thirtha Swami 27 M. 435 : 14 M.L.J. 105. Certain English cases were referred to in the course of the argument. The law in England is at the present day embodied in Statutes. Before their enactment it will be found that a similar test has been laid down in England with regard to the validity of alienations of charity property. See Tudor's Charitable Trust, IV Edition, pages 271, 272; also the decision in William, Charles Quinn v. Thomas William Hungerford 6 E.R. 1189 and the cases cited by the Lord Chancellor in his judgment and by the eminent counsel who argued the case on both sides. There seems to be no doubt that in the actual application of the rule as to necessity the English Courts have been very stringent. A permanent lease at an unvarying rent would have little chance of approval by them. It is unnecessary, however, to pursue this matter.

    3. As regards the present case we must, on the authority of the Privy Council cases cited in the earlier part of the judgment, set aside the decree of the Subordinate Judge and restore that of the Munsif. No claim was made in the written statement for the value of improvements and no issue was raised as to whether the defendants were entitled to it. We must decline to allow the defendants to raise it now. They will pay the plaintiff's costs in this case and in the lower appellate Court.

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    Sreemuth Devasigamani Pandarasannadhi Alias Nataraja Desikar v. Palaniappa Chettiar And Anr.
    (Oct 18, 1910)