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(Chodavarapn) Subba Rao v. Veeranjaneyaswami
Factual and Procedural Background
These appeals arise from the same original suit (O.S. No. 61 of 23) in the Principal Sub-ordinate Judge's Court of Masulipatam. The plaintiff sues as trustee of the Sri Veeranjaneyaswamuluvaru temple at Gudivada to recover four distinct items/sites. The four items are in the possession of four defendants: defendant 1 (item 1), defendant 2 (item 2), and defendants 3 and 4 (items 3 and 4).
Historical background in the record: Kameswara Pakayya (the plaintiff's adoptive father) and his father Brahmaraju endowed lands in Gudivada for the temple and built the temple in 1886. In 1889 they executed a gift deed (Ex. A) endowing the suit land to the temple and making themselves dharmakarthas. Various houses/sites were built on the items at different dates (item 1 — thatched 1893, tiled 1905; item 2 — house 1892; item 3 — house constructed with a rent letter/exhibit in 1913; item 4 — placed in possession by letter in March 1910).
There was an earlier "scheme suit" relating to the temple. After that suit was disposed of, the present suit was filed (in 1923) to recover the items from the defendants in possession. The lower court granted a decree against the defendants. Each defendant filed a separate appeal: Appeal 33 (defendant 2), Appeal 34 (defendant 3), Appeal 35 (defendant 4) and Appeal 36 (defendant 1).
Legal Issues Presented
- Whether the various transfers or possessions of the four items constituted valid transfers operative against the temple trust such that the claims of the plaintiff (trustee) are barred by limitation (in particular whether Article 134 of the Limitation Act applies and, if not, whether Article 144 applies).
- Whether small reserved rents (e.g., 8 annas per year) constitute "valuable consideration" within the meaning of Article 134 (and thus whether purported leases/gifts were substantive transfers or mere cloaks for gifts to private parties).
- Whether defendants who built improvements (a house on item 3) are entitled to be paid the present value of those improvements before being ejected — in particular how Section 51 of the Transfer of Property Act and associated authorities bearing on a belief of an "absolute" interest apply.
- Whether the doctrine of part performance can be invoked to complete unregistered transfers against third parties such as a temple trust or other cestui que trust.
- Whether the appellants established adverse possession or prescription in respect of any of the items (including whether oral evidence or unregistered letters effect transfer or possession sufficient to defeat the trustee's claim).
Arguments of the Parties
Appellants' Arguments
- Counsel for the appellants (Mr. Ganapathi Iyer) urged that if Article 134 of the Limitation Act does not apply, then Article 144 might apply in respect of the transfers (i.e., different limitation provision could support the appellants' position).
- Counsel for the appellants (Mr. Ganapathi Ayyar) argued that in respect of items where there was possession but no registered instrument (items 1, 3 and 4), the doctrine of part performance (as laid down in the Full Bench decision in Vizagapatam Sugar Development Co. v. Muthurama Reddy) could be applied to complete intended transfers.
- The appellants relied on documentary and oral evidence (accounts, letters and rent-letters) to show expenditure, transfer, or possession in their favor (for example Ex. 8 for item 3; Ex. C and rent reservation for item 2; Ex. 1(b) for item 1; Exs. V(b)/V(c) for items 3 and 4).
Respondent's Arguments
- The plaintiff/respondent maintained that the lands were held under a specific trust (Ex. A) for the temple and that the alleged transfers were ineffective against the trust.
- The respondent relied on the Vidya Varuthi v. Baluswami Ayyar decision to argue that Article 134 might not apply to temples (or at least to challenge the sufficiency of the consideration reserved), and more generally contended that small nominal rents could not constitute valuable consideration to complete a transfer out of the temple's trust.
- The respondent attacked the genuineness of certain account-books and other documents relied upon by the appellants (for example in relation to expenditure claimed on item 2 and item 3), although the court noted it was unnecessary to determine genuineness in some respects.
- The respondent cited authorities interpreting Section 51 of the Transfer of Property Act to show that an entrant claiming compensation for improvements must have believed that he had an absolute interest in the land (i.e., the word "absolutely" sets a threshold of belief in a full title).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Vidya Varuthi v. Baluswami Ayyar, A.I.R. 1922 P.C. 123 | Illustration that a small annual rent (example Rs. 24 in that case) cannot be regarded as a valuable consideration sufficient to constitute a substantive transfer. | The court relied on this authority to hold that an annual rent of 8 annas reserved in Ex. C was not a valuable consideration and was a cloak for a gift; thus the terms of Article 134 were not satisfied for item 2. |
| Perumal Gramani v. Mahamad Kasim Sahib [1915] 28 I.C. 840 | Interpreting the word "absolutely" in Section 51 of the Transfer of Property Act — that the person seeking compensation must show he believed he had an absolute (not limited) interest. | Invoked by respondent; the court discussed this line of cases and used the principle to inform its approach to compensation for improvements, while ultimately directing payment of present cost to defendants 3 and 4. |
| Govindsivami v. Ellinajammal [1916] 1 M.W.N. 180 | Support for the interpretation of "absolutely" in Section 51 and related principles on entitlement to compensation for improvements. | Considered by the court in weighing entitlement to improvement-value; the court compared authorities and concluded defendants 3 and 4 should be paid present cost of improvements before ejectment. |
| Venkatappier v. Ramaswami Iyer [1919] M.W.N. 548 | Another authority on the meaning of "absolutely" in Section 51 and related consequences for claims to improvements. | Relied upon by respondent; the court considered it among the authorities but preferred the line of cases supporting payment for improvements in equity. |
| Attorney General v. Davey [1854] 19 Beav. 521 | English authority supporting that tenants/entrants may be entitled to compensation for improvements where they acted in belief of entitlement (used as part of comparative jurisprudence). | Cited as an English precedent on which the court relied (subject to subsequent reversals on other points) to support the proposition that persons who improve land in belief of entitlement may be entitled to claim for improvements. |
| Attorney General v. Prattyaman [1854] 19 Beav. 538 | An English case holding that a lessee or entrant may be entitled to improvements even where the lease was not completed. | Used to illustrate the a fortiori position that a lease-holder or someone who believed in a lease-like right might claim improvements; informed the court's equitable direction to pay for improvements on item 3. |
| Mahalatchmi Ammal v. Palani Chetti, 6 M.H.C.R. 245 | Authority holding a tenant is entitled to compensation for improvements. | Adopted among other cases to support the court's conclusion that improvements on item 3 should be valued and paid before ejectment. |
| Kunhammad v. Narayanan Mussad [1889] 12 Mad. 320 | Held that tenants are entitled to improvements. | Relied on as part of the line of cases favoring compensation for improvements; aided the court's direction to require payment to defendants 3 and 4. |
| Dattatraya Rayaji v. Shridhar Naraijan [1892] 17 Bom. 736 | Supportive authority that an entrant/tenant may recover value of improvements. | Counted among cases the court preferred to those limiting recovery; contributed to the decision to require payment for improvements on item 3. |
| Dattaji v. Kalha [1897] 21 Bom. 749 | Similar principle regarding entitlement to improvements. | Included in the series of authorities forming the basis for ordering payment for improvements. |
| Gopalakrishna Ayyar v. Suhirtha Theenathara [1914] 24 I.C. 790 | High Court authority supporting entitlement to compensation for improvements. | Preferred by the court among competing authorities and used to justify ordering payment of present cost of improvements to defendants 3 and 4. |
| Thavasi Ammal v. Solai Ammal [1918] 35 M.L.J. 281 | Another decision of the court pointing to entitlement to improvements. | Also relied on in preferring the line of decisions that grant value of improvements to entrants/tenants; helped the court conclude payment should be made. |
| Vizagapatam Sugar Development Co. v. Muthurama Reddy, A.I.R. 1924 Mad. 271 (Full Bench) | Exposition of the doctrine of part performance to complete intended transfers between transferrer and transferee where appropriate. | The court held that the doctrine of part performance cannot be invoked to complete a transfer as against third parties such as the idol of a temple, a cestui que trust, or a minor; thus the appellants could not rely on part performance to defeat the temple's title. |
| Section 51, Transfer of Property Act | Statutory provision (as interpreted) concerning an entrant's right to compensation for improvements where he acted in belief of an absolute interest. | The court discussed the meaning of "absolutely" and the line of cases interpreting it and ultimately directed that defendants 3 and 4 be paid the present cost of improvements before the plaintiff could take possession of item 3. |
Court's Reasoning and Analysis
The court analyzed each of the four items separately, applying documentary evidence, limitation principles, trust law concepts and equitable rules on improvements and part performance.
Item 1
Facts: A thatched house was built in 1893 and replaced by a tiled house in 1905. In 1913 Kameswara Rao applied to the chairman of the union to transfer the house to defendant 1; the chairman endorsed the change of name by Ex. 1(b) on 26 January 1914. There was no registered instrument transferring the right to the house.
Analysis: The court concluded that, under Article 134 of the Limitation Act (assuming it applies to temples), limitation runs from the date of a valid transfer, which must involve at least a valid transfer between transferrer and transferee. Here there was no registered transfer and possession prior to 1913 could not be regarded as adverse to Brahmaraju or Kameswara Rao. The transfer evidenced by the chairman's endorsement did not amount to a valid transfer terminating the trust rights. The present suit (filed in 1923) was within 12 years from Ex. 1(b). The court found no necessity binding the trust to justify the transfer. Conclusion: the appeal in respect of item 1 must fail (i.e., the defendant's appeal fails; the plaintiff's decree stands for item 1).
Item 2
Facts: Account-books showed that defendant 2's father and grandmother contributed money towards construction and upkeep; a claim petition by Kameswara Rao had earlier been filed and allowed defeating creditors who had attached the house. In 1906 Ex. C (a registered document) purported to transfer the house to defendant 2, reserving a rent of 8 annas a year payable to the temple and requiring the transferee to pay government revenue.
Analysis: The court observed changes in Gudivada town and compared the reserved rent (8 annas) to the Vidya Varuthi case where a small annual rent was held not to be valuable consideration. On that footing, the court held that the 8-annas rent was a mere cloak for a gift and did not satisfy Article 134's terms. Although the respondent argued Article 134 may not apply to temples, the court declined to decide that general question in this appeal; instead it found that, even assuming Article 134 applies, the other conditions (notably valuable consideration) were not satisfied. Mr. Ganapathi Iyer's submission that Article 144 might apply was considered but the court held that if Article 134 conditions were satisfied that would be the proper article; if not, no limitation applied.
Conclusion: The appeal in respect of item 2 fails (i.e., the defendant's appeal fails; the plaintiff's decree stands for item 2).
Item 3
Facts: A house was built on item 3; Ex. 8 (account book) showed Rs. 1,470-15-0 spent in building the house. Evidence indicated defendants 3 and 4 were together able to incur that expense.
Analysis: The court found that title in favour of defendants 3 and 4 was not completed by prescription. The court addressed whether the plaintiff could eject defendants 3 and 4 without paying them for improvements. After reviewing authorities on Section 51 of the Transfer of Property Act and a number of cases (both English and Indian) on entitlement to compensation for improvements, the court preferred the line of cases holding that a person who in good faith erects a building or makes improvements believing they have a right may be entitled to recover the value of improvements. The court concluded that before the plaintiff can eject defendants 3 and 4 he must pay the present cost of the improvements. The court directed the lower court to estimate the present cost of the then-existing house on item 3.
Conclusion: Defendants 3 and 4 are entitled to the present value of the improvements; plaintiff must pay that amount before taking possession. The appeals by defendants 3 and 4 were not allowed to result in immediate ejectment without payment.
Item 4
Facts: Item 4 was placed in appellants' possession in March 1910 by a letter (Ex. 5(b)) which was not registered. There was no evidence of improvements or acts constituting adverse possession.
Analysis: There being no registered deed and no evidence of acts or improvements constituting adverse possession, Article 144 could not assist the appellants. The court found insufficient basis to treat the oral/unregistered evidence as effecting a transfer or establishing adverse possession.
Conclusion: The appeal fails in respect of item 4 (i.e., the defendant's appeal fails; the plaintiff's decree stands for item 4).
Doctrine of Part Performance
The court considered the appellants' contention that the doctrine of part performance (Vizagapatam Sugar Development Co. v. Muthurama Reddy) might complete otherwise imperfect transfers where there was possession but no registered instrument. The court held that the doctrine is used to complete intended transfers between transferrer and transferee where there is no other objection; it has never been used to complete a transaction against a third person such as the idol of a temple, a cestui que trust or a minor. Accordingly, part performance cannot be used to defeat the temple's rights in this case.
Holding and Implications
Core Ruling: Appeals concerning items 1, 2 and 4 fail; the plaintiff's decree in respect of those items is sustained. As to item 3, the court held that defendants 3 and 4 are entitled to have the present cost/value of the improvements on the site paid to them before the plaintiff can take possession.
More specifically (as the court ordered):
- Appeals Nos. 33 (defendant 2, item 2) and 36 (defendant 1, item 1) are dismissed with costs. In the lower court those appellants will be liable only for the plaintiff's costs referable to the items separately.
- Appeals Nos. 34 and 35 (defendants 3 and 4, item 3) are not allowed to result in immediate ejectment; the lower court is directed to determine the present cost of the improvements and the plaintiff must pay that value before taking possession. The court called for a finding from the lower court as to present cost and allowed two months and ten days for that process.
Implications: The decision enforces the temple's trust rights in respect of items 1, 2 and 4 where there was no valid registered transfer or sufficient consideration; the court also applies equitable principles to protect bona fide entrants who have effected substantial improvements (item 3) by requiring compensation before ejectment. The opinion does not purport to lay down a general rule on whether Article 134 applies to all temples; the court expressly declined to decide that broader question in this appeal.
No new legal precedent was announced on the general applicability of Article 134 to temples; the court relied upon and distinguished existing authorities and applied established equitable principles concerning compensation for improvements and limits on the doctrine of part performance.
Ramesam, J.:— These appeals arise out of the same original suit, O.S No. 61 of 23, on the file of the Principal Sub-ordinate Judge's Court of Masulipatam. The plaintiff sues as the trustee of Sri Veeranjaneyaswamuluvaru temple at Gudivada. Defendant 1 is in possession of item 1, defendant 2 is in possession of item 2 and defendants 3 and 4 are in possession of items 3 and 4, these being the four items which are the subject matter of the suit. The plaintiff's adoptive father Kameswara Pakayya and his father one Brahmaraju, endowed certain lands belonging to them in Gudivada for the purposes of the temple. They built the temple in 1886 and conducted it for three years. In 1889 they executed a gift deed Ex. A, by which they endowed the suit land for the purposes of the temple, making themselves dharmakarthas. The document shows that some portions were intended to be built upon. A thatched house was built upon item 1 in 1893. Afterwards, some time in 1905 it was replaced by a filed house: vide D.W 1. The evidence shows that from the beginning there was an intention on the part of Brahmaraju and Kameswara Rao to give item 1 to defendant 1 who is the brother's daughter of Kameswara Rao. A house was built upon item 2 in 1892. The evidence shows that it was intended originally for a sister of Brahmaraju, defendant 2 being her grandson. Item 3 was given to defendants 3 and 4 by means of a rent letter Ex. V(c), which purports to grant a perpetual lease of that item reserving an annual rent of Rs. 2. This was in March 1913. Item 4 is a vacant site placed in the possession of defendants 3 and 4 by a letter Exs. V(b), dated March 1910. It appears that there was a scheme suit in respect of the temple, and after that suit was disposed of the present plaintiff filed this suit to recover the various items from the respective defendants in possession. The lower Court granted a decree against the defendants and each of the defendants has filed a separate appeal. Appeal 33 is by defendant 2, Appeal 34, is by defendant 3, Appeal 35 is by defendant 4 and Appeal 36 is by defendant 1.
2. Each of the items will now be taken up for consideration. In the case of item 1, as I have already stated, a tiled house was built upon it in 1905. In 1913 Kameswara Rio applied to the chairman of the union to transfer the house to the name of defendant 1. In that document he says:
“It had been assigned by my father himself to my sister's son Boddapati Ponniah (husband of the said Ambamma)… The said house and site stand nominally in my name in the accounts and the tax is being paid through ma and the entry in the accounts stands in my name but neither I nor my heirs, have any right in respect to it. It belongs to the said Boddapathi Ambamma herself.”
3. The chairman ordered the change of name by an endorsement Ex. 1(b), on 26th January 1914. There was no registered instrument transferring the right to the house to defendant 1 nor is it possible to regard such possession as defendant 1 and her husband had up to 1913 as adverse to Brahmararaju or his son Kameswava Rao. Under Article 134, Lim Act, assuming for the present that the article applies to the case of a temple, there must be a transfer and time runs only from the date of transfer. This means that there must at least be a valid transfer between the transferrer and the transferee though it might not be operative as against a trust or any other person. Here we have nothing of the kind. The present suit which was filed in 1923 is within 12 years from Ex. 1(b). It cannot be said that the transfer was made for any necessity binding upon the trust. The result is this appeal must fail so far as item 1 is concerned. Taking up item 2, we find from the account books Exs. 3 and 3(a) that some money was spent on the construction of a house by defendant 2's father who was then employed elsewhere and used to remit money to Brahmararaju and Kameswara Rao. The genuineness of these accounts is attacked by the respondents but we think it is unnecessary to say anything on this question. Assuming they are genuine and assuming, that some money was spent by defendant 2's father and by defendant 2's grandmother: vide Ex. 4 series, on the construction and upkeep of the house we find that some time prior to 1906 the house was attached by certain creditors of defendant 2 and then a claim petition was filed by Kameswara Rao claiming that the site belongs to him and the house was constructed by him and that defendant 2's father had nothing to do with the house. This claim petition was allowed. Obviously, the claim petition was instigated by defendant 2 himself. The creditors having been successfully defeated, it does not lie in the mouth of defendant 2 to say now that he possessed any kind of interest in the house after the order on the claim petition. He cannot claim either the ownership in the whole house and site or the equitable interest to the extent of the sums spent in building the house. In 1906 Ex. C was executed by Kameswara Rao in favour of defendant 2 in which these facts are set forth, and the house was purported to be transferred by the document. This document is registered and therefore there is no question of there being a valid transfer as between the transferrer and the transferee. The document reserves a rent of 8 annas a year-payable to Sri Veeranjaneyaswamuluvaru and the transferee is to pay the Government revenue himself which comes to about 7 annas proportionately to the area of the site.
4. Now, by 1906 the town of Gudivada had altered. In 1886 it was a mere village. Some time about 1892 the District Munsiff's Court was opened and other public offices also have been existing there. A number of houses were built. As I have already said there was already a tiled house on item 2. It cannot be said that the only rent of 8 annas reserved in favour of the idol of the temple is a valuable consideration within the meaning of Article 134. In Vidya Varuthi v. Baluswami Ayyar . A.I.R 1922 P.C 123 it was observed by the Judicial Committee in respect of lands which were the subject matter of that case that an annual rent of us 24 could not be regarded as a valuable consideration. In that case the land was six kulis in extent and the rent reserved was Rs. 24 at the rate of Rs. 4 a kuli. The permanent lessee afterwards sub-leased them for Rs. 1,250. In the present case on the footing that by the date of Ex. C the whole of the items belonged to the temple it cannot be said that a rent of 8 annas a year is other than a mere cloak to cover what was really intended to be a gift to defendant 2. Therefore, the terms of Article 134 of the Act are not satisfied. The respondent argued that Article 134 does not apply to a temple at all relying on the decision in Vidya Varuthi v. Baluswami Ayyar. That question has been very elaborately argued before us but we do not think it necessary to decide in this appeal whether Article 134 applies generally to temples. The plaintiff's case is that there is a specific trust under Ex. A. It is argued that Article 134 would apply. Though Article 134 may apply to a specific trust for a temple, the other conditions are not satisfied here. Mr. Ganapathi Iyer appearing for the appellant argued at the end of the case that if Article 134 does not apply Article 144 may apply. But we think if the conditions were satisfied, Article 134 is the proper article because we find there is a specific trust and if the conditions are not satisfied there is no limitation at all. On this ground the appeal in respect of item 2 fails.
5. The next item is item 3. A house was built upon this item and an account book was produced as Ex. 8 in respect of this item by defendant 3's husband. The evidence including even the plaintiff's evidence shows that defendant 3 was not a poor woman and however much Kameswara Rao wanted to help his daughters it does not follow that we must assume that defendant 3 as unable to incur the expense of building a house. We have no reason to suspect the genuineness of Ex. 8. It is true that defendant 4 does not appear to be a well-to-do lady; but defendants 3 and 4 were acting together, their interests were never separated except in filing the appeals and even if one of them is not well-to-do we must find that defendants 3 and 4 were together able to incur the expenses of building a house on item 3. Ex. 8 shows that a sum of Rs. 1,470-15-0 was spent in building the house. There is no question of the title of defendants 3 and 4 in respect of this item being completed by prescription. The only question is whether we should nob allow the value of the building in favour of the appellants before the plaintiff can get a decree. The respondent relied on three decisions of this Court Perumal Gramani…Defendant v. Mahamad Kasim Sahib…Plaintiff . . [1915] 28 I.C 840., Govindsivami v. Ellinajammal . [1916] 1 M.W.N 180 and Venkatappier v. Ramaswami Iyer . [1919] M.W.N 548, in which it has been held that the word “absolutely” in Section 51 of the Transfer of Property Act shows that the person entitled to the equity under that section must show that he believes be has absolute and not limited interest in the property. In the of course of the argument it was pointed out by my learned brother (Jackson, J.) that this section was based upon Act 11 of 1855 which applied only to cases governed by English Law. In that Act the words used are:
“If any pa-eon shall erect any building or make an improvement upon any lands held by him bona fide in the belief that he had an estate in fee simple or other absolute estate.”
6. This shows that the main principle of this section is that a person must show that he believed that he was entitled to the land in such a way that he is not to be disturbed, whether it is a sale or perpetual lease he claims under. There are a number of English cases referred to before us in which tenants were held entitled to such improvements. I will only refer to one decision in Attorney General v. Davey . [1854] 19 Beav. 521, though this decision was reversed by the House of Lords on another point. Another is Attorney General v. Prattyaman . [1854] 19 Beav. 538., in which it was held that the lessee was entitled to the improvements though the lease was not actually completed. The case of a lease is therefore an a fortiori case. In Mahalatchmi Ammal v. Palani Chetti . 6 M.H C.R 245., and Kunhammad v. Narayanan Mussad . [1889] 12 Mad. 320., it was held that a tenant was entitled to improvements. A similar view was taken in Dattatraya Rayaji v. Shridhar Naraijan . [1892] 17 Bom. 736, and Dattaji v. Kalha . [1897] 21 Bom. 749., and two decisions of this Court, namely, Gopalakrishna Ayyar v. Suhirtha Theenathara . [1914] 24 I.C 790., and Thavasi Ammal v. Solai Ammal . [1918] 35 M.L.J 281, also take the same view. We prefer these cases to the other cases relied on by the respondant and hold that before the plaintiff can eject defendant 3 he should pay to defendants 3 and 4 the present cost of the improvements effected on the site by way of the construction of the house. We direct the lower Court to estimate the cost of building the house now existing on the item. The plaintiff must pay the value of the improvements before taking possession of the house.
7. We now come to item 4. This item was placed in the possession of the appellants in March 1910; but there was no deed of transfer beyond Ex. 5(b) which is a mere letter and was not registered. Even Article 144 cannot help, the appellants so far as this item is concerned because the whole oral evidence does not show that anything was done upon this item so that there is not even adverse possession so far as this item is concerned. The appeal therefore fails in respect of item 4 also.
8. One argument is addressed by Mr. Ganapathi Ayyar, namely, that in the case of items 1, 3 and 4 though there is no registered instrument, as possession, was given the doctrine of part performance as has been laid down in the Full Bench case in Vizagapatam Sugar Development Co. v. Muthurama Reddy . A.I.R 1924 Mad. 271 might be applied. But that doctrine is only used to complete an intended transfer between the transferrer and the transferee, where there is no other objection to complete the transaction. It has nover been used to complete a transaction against a third person such as the idol of a temple or a cestui que trust or a minor against whom it could not be regarded as operative. The result is Appeals Nos. 33 and 36 are dismissed with costs. In the lower Court, they will be liable only for the plaintiff's costs referable to the items-separately. In Appeals Nos. 34 and 35 we call for a finding from the lower Court as to the present cost of the improvements in the house on the site. Two months and ten days.
P.R.S/V.S
9. Order accordingly.
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