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Hari Krishna Chettiar () v. Govindarajulu Naicker (Petitioner)

Madras High Court
Nov 13, 1925
Judgment
Subsequent
References
CaseIQ
Case Information
CITATION CODES
citation codes
CASE NO.

Appeal Against Order No. 228 of 1924.

Attorney(S)

Mr. V. Narasimha Aiyangar for the Appellant.

Messrs. Muthiah Mudaliar and M. Krishna Bharati for the Respondent.

JUDGES

Venkatasubba Rao

Madhavan Nair, JJ.

ACTS

Section 35 or Section 36

Section 34(d).

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Structured Summary of the Provided Opinion

Factual and Procedural Background

The appellant was appointed guardian of his nephew's property in 1912. On an application made in 1923 by a relation of the ward (the respondent in the appeal), the District Judge directed the guardian (the appellant) to file his accounts into the Court. The accounts were filed and scrutinised by the District Judge, who found that the sum actually due by the guardian to the minor's estate was Rs. 2,180 — a sum considerably greater than that admitted in the accounts. The appellant appealed, challenging the correctness of the District Judge's finding.

Legal Issues Presented

  1. Whether an appeal lies from the order under Section 34(d) of the Guardians and Wards Act (the respondent contends it does not, relying on the list of appealable orders in Section 47).
  2. Whether the particular order made by the District Judge falls within the scope of Section 34(d) (i.e., whether Section 34(d) authorises the Court to compel a guardian to pay into Court amounts in excess of those shown in the accounts filed by the guardian).
  3. Whether the Act (and, if so, which provision) gives the Court power to make an order directing the guardian to pay amounts not shown in the guardian's accounts, or whether such disputes about the true measure of liability must be determined in a regular suit (for which Sections 35 and 36 are relevant).
  4. On the merits, whether the District Judge was correct to include specific items in the account and whether the District Judge was justified in awarding compound interest at 12% with yearly rests.

Arguments of the Parties

Respondent's (Applicant in the Lower Court) Arguments

  • Preliminary objection (advanced by Mr. Muthiah Mudaliar): no appeal lies from the impugned order because it was made under Section 34(d), and orders under Section 34(d) do not fall within the list of appealable orders in Section 47 of the Act.
  • Implicit in the objection: the proceedings under Section 34(d) are disciplinary/non-contentious in nature and thus not intended to be the subject of an appeal under the Act's scheme.

Appellant's Arguments

  • The appellant questions the correctness of the District Judge's finding that Rs. 2,180 was due to the ward's estate (i.e., he appeals against the substantive accounting determination).
  • On particulars: the appellant objects to the inclusion by the District Judge of two items amounting to Rs. 125-1-0 and Rs. 225-10-0.
  • The appellant objects to the District Judge's award of compound interest at 12% with yearly rests and seeks a modification of interest and other calculations.
  • The appellant sought time for payment until 14 December 1925.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Radha Kishen v. Khushi Ram (1927) 67 IC 309 Held (at the lower instance) that a similar order fell under Section 34(d); the learned Judge expressed surprise that such an important order would not be appealable. The court noted this view and observed that the absence of an appeal under the Act is an additional reason for concluding the impugned order does not properly fall within Section 34(d); the court refused to accept the surprise as justifying reading Section 34(d) to cover the present order.
Jagannath v. Makesh (1916) 25 CLJ 149 at 153 Involved a lower court order under Section 34(d) directing a guardian to bring into Court a sum not shown in the accounts filed; the Calcutta High Court held that the original order was not rightly made under Section 34(d) and therefore could not be enforced under Section 45. The court relied on this decision as support for the proposition that an order compelling payment of amounts not shown in the guardian's exhibited accounts cannot properly be made under Section 34(d).
Sita Ram v. Musammat Govindi (1924) ILR 46 All 458 The judges there observed that denying the Court power to make such an order would lead to inconvenience and injustice, and sought to find that power within Section 34(d). The present court disagreed with that reasoning but acknowledged the decision as representing a line of authority that assumed the Court could make such orders; this citation prompted the court to consider whether power might instead be found in Section 43.

Court's Reasoning and Analysis

The court's analytical path can be summarised in series of discrete steps reflecting statutory construction and practical consequences:

  1. Textual interpretation of Section 34:
    • The court reproduced and summarized Section 34 clauses (a)–(e), and reproduced Clauses (c) and (d) verbatim.
    • Clause (c) requires the guardian, if so required, to exhibit his accounts. Clause (d) permits the Court to require the guardian, if so required, to "pay into the Court the balance due from him on those accounts or so much thereof as the Court directs."
  2. Meaning of the phrase "on those accounts":
    • The court placed decisive significance on the words "on those accounts," reasoning that they limit Clause (d) to payments that arise from the accounts exhibited by the guardian (i.e., amounts admitted or shown in those accounts), not amounts subsequently found to be due after independent scrutiny.
    • If the legislature had intended the Court to compel payment of the actual amount found due after inquiry, the court reasoned, the words "on those accounts" would not have been used; they must be given effect rather than treated as superfluous.
  3. Contextual interpretation:
    • The court considered the nature of proceedings under Section 34 to be disciplinary/non-contentious (executing a bond, filing an inventory, exhibiting accounts, applying income for support), not adjudications of substantive disputed rights.
    • It took into account the placement of Section 34 adjacent to Sections 35 and 36—provisions that specifically provide for suits against guardians where administration bonds are taken or not taken—indicating that where the measure of liability is in issue, a regular suit is the proper course.
  4. Reinforcement from related provisions:
    • Section 45 (penalty for disobedience) repeats the phrase "on those accounts"; the court treated that repetition as confirming the restricted meaning of Clause (d).
  5. Consideration of existing decisions:
    • The court surveyed precedents showing a variety of approaches: some decisions assumed or held that courts could make orders requiring payment of amounts not shown in the guardian's accounts under Section 34(d) (e.g., Sita Ram). Others (e.g., Jagannath) held such orders were not properly made under Section 34(d).
    • Although the court felt a rigid reading of the Act would disallow orders compelling payment beyond the exhibited accounts (which would render the present order a nullity), neither party sought that relief; instead the court examined whether some other provision could support competency to make the order.
  6. Finding potential statutory basis in Section 43:
    • Section 43 authorises the Court "on the application of any person interested or of its own motion [to] make an order regulating the conduct or proceedings of any guardian appointed or declared by the Court."
    • The court accepted that by construing "regulating the conduct or proceedings" in a fairly wide sense, one can find justification within the Act for holding that the Court has competency to make an order of the kind under discussion, and further noted that such an order would be appealable when founded on Section 43.
    • Consequently, the court rejected the respondent's preliminary objection that no appeal lay from the impugned order because the objection presumed the order was a pure Section 34(d) order.
  7. Application to the present case (factual accounting and interest):
    • On the disputed specific items (Rs. 125-1-0 and Rs. 225-10-0), the court declined to disturb the District Judge's decision and was not persuaded the inclusion of these items was wrong.
    • The court struck down the District Judge's award of compound interest at 12% with yearly rests as unsupported: while the guardian is accountable from the date he realised the moneys and commingled funds, there was no evidence that the sums had continuously been lent out, that interest was repeatedly realised and reinvested, or that profits earned justified compound interest on yearly rests.
    • Instead, the court directed that 12% simple interest (not compound with yearly rests) would meet the ends of justice, because the evidentiary foundation for compounding was absent.
    • On the memorandum of objections, the court held that while the guardian was in possession before disposing of the minor's properties and therefore accountable for profits, a fair estimate of those profits was Rs. 500; after deducting Rs. 60 for costs, the court fixed liability under this head at Rs. 440.
    • Combining the District Judge's allowed amount (Rs. 2,180) with the Rs. 440, the court computed the principal sum due as Rs. 2,620. It ordered simple interest at 12% per annum from 1 November 1913 to the date of the judgment, with specified annual allowances of Rs. 60 for maintenance from 15 May 1914 to 30 June 1919 when calculating interest.
    • Counter interest to the appellant was to be allowed on the sum Rs. 1,010-15-3 from 11 October 1923 (the date when that amount was paid into Court), at 6% per annum from that date on the aggregate amount found due.
  8. Disposition on procedural relief and costs:
    • The court modified the order of the District Judge in accordance with the calculations and directions above.
    • Each party was ordered to bear their own costs.
    • The appellant was granted time to pay until 14 December 1925 (the respondent did not object), and was directed to pay the amount into the District Court of Coimbatore on or before that date.

Holding and Implications

Primary Holding: The court concluded that the impugned order must be treated as not properly falling within the narrow operation of Section 34(d) (which permits payment only "on those accounts" exhibited by the guardian). However, by construing Section 43 broadly as authorising orders "regulating the conduct or proceedings" of a guardian, the Court held that it had competency to entertain an order of the kind challenged, and consequently the preliminary objection that no appeal lay under the Act failed. The court therefore proceeded to modify the District Judge's order on the accounting and interest issues.

Direct consequences for the parties:

  • The District Judge's order was modified in these specific respects:
    • The principal amount payable by the guardian was fixed at Rs. 2,620 (Rs. 2,180 allowed by the District Judge plus Rs. 440 derived from the profit estimate after costs).
    • Simple interest at 12% per annum was directed on the principal from 1 November 1913 to the date of the judgment (with Rs. 60 annually allowed for maintenance from 15 May 1914 to 30 June 1919 in calculating interest).
    • Counter interest at 6% per annum was allowed to the appellant on Rs. 1,010-15-3 from 11 October 1923 (the date of payment into Court) on the aggregate amount found due.
    • Each party was ordered to bear their own costs.
    • The appellant was granted time to pay the amount into the District Court of Coimbatore on or before 14 December 1925 (a date to which the respondent did not object).
  • No final pronouncement was made that Section 34(d) authorises compulsion to pay amounts in excess of those shown in the guardian's exhibited accounts; rather, where liability beyond the exhibited accounts is in issue, the statutory scheme suggests resort to Sections 35/36 and a regular suit, unless the Court acts under Section 43 construed broadly.

Note: This summary is based exclusively on the material contained in the provided opinion and does not introduce facts or inferences beyond that text.

Show all summary ...

1. The question of law that is raised is one of some difficulty. The appellant was appointed guardian of the property of his nephew in 1912. On an application in 1923 made by a relation of the ward, the District Judge directed the guardian-the appellantto file his accounts into Court.They were filed; acccordingly and scrutinised by the District Judge who found that the sum actually due by the guardian to the minor's estate was Rs. 2,180, a sum considerably more than that admitted in the accounts.

2. The appellant questions in this appeal the correctness of the finding. Mr. Muthiah Mudaliar for the respondent, the applicant in the Lower Court, takes a preliminary objection that no appeal lies from the order in question. His contention is shortly this. The order of the Lower Court is made under Section 34(d) and this does not fall under Section 47 which specifies the orders that are appealable. It is doubtless true that under the Act an appeal does not lie from an order made under Section 34(d).

3. The real question, however, is, does the present order come within the terms of Section 34(d)? Section 34 may be thus summarized: "Where a guardian of the property of a ward has been appointed or declared by the court, he shall (a) if so required by the court, give a bond engaging to duly account for what he may receive; (b) if so required by the Court, deliver to the Court within such time as the Court directs a statement of the property of the ward received by him and of the debts due by the estate; (c) if so required by, the Court, exhibit his accounts in the Court at such times and in such form as the Court from time to time directs; (d) if so required by the Court, pay into the Court at such time as the Court directs the balance due from him on those accounts or so much thereof as the Court directs; and (e) apply for the maintenance of the ward such portion of the income of his property as the Court directs and if the Court so directs the whole or part of that property.

4. We have given a summary of the section, but so far as Clauses (c) and (d) are concerned we have reproduced them verbatim.

5. Can it be said that the order made falls under Clause (d)? There is not even as much as a hint in the section that what are dealt with by it are questions of a contentious nature. On the contrary it seems to refer to proceedings where there can possibly be no conflict, between the guardian and his ward, that is, matters which may. be regulated by the Court in the exercise of its disciplinary jurisdiction. Executing a bond, filing an inventory, exhibiting accounts and applying the income or corpus for the support of the wardall these surely come under this category. In the light of this, now let us examine the section. Under Clause (c) the guardian if required by the Court is bound to exhibit his accounts. Clause, (d) says that if required he shall pay into the Court "the balance due on those accounts or so much thereof as the Court directs." This means that he can be called on to pay into Court only either the whole or a portion of what is admitted by himself. The use of the words "on those accounts" is significant. He cannot be required to pay the amount actually found to be due from him but only the amount due " on those accounts," that is the accounts exhibited by him. If the intention of the legislature was that the Court should have the power under this section to compel the guardian to pay the actual amount found due, the clause would not have contained these words. If the clause is read deleting these words, then there can be no question that the guardian can be called on to pay the actual amount due. These words must not be treated as merely superfluous but full effect must be given to them. As a question of construction, we are clearly of the opinion that this clause does not empower the Court to direct the guardian to pay into Court more than the amount shown to be due in the accounts exhibited by him.

6. We must construe the clause having regard to the scope of the whole section and to the place where the section occurs.

7. Can it be said that what is contemplated is a decision of substantive rights of the parties? In this connection we may also notice Section 45 which prescribes, inter alia, the penalty for disobedience of the order made under Section 34(d). There again the words " on those accounts " are repeated. We cannot lightly disregard the repetition of these words.

8. In Radha Kishen v. Khushi Ram (1927) 67 IC 309 the learned Judge having held that a similar order fell under Section 34(d), felt surprised that under the Act an order of such importance is not appealable. In our opinion the fact that there is no appeal is an additional reason for holding that the order does not really corne under Section 34(d). We are not prepared to impute to the legislature an intention which leads' to such a drastic result.

9. The view we are disposed to take receives support from the judgment of Mookerjee, J., in Jagannath v. Makesh (1916) 25 CLJ 149 at 153 In that case, the Lower Court purported to make under Section 34(d) an order directing the guardian to bring into Court a sum of money not shown in the account filed by him under Clause (c). The guardian failed to comply with the order and the penal provision of section 45 was then put in force against him. The Calcutta High Court held that the original order was one not rightly made under Section 34(4) and consequently it could not be enforced under Section 45.

10. Then comes the question, has the Court power under the Act to make such an order at all? In Sita Ram v. Musam-mat Govindi (1924) ILR 46 A 458 the learned Judges observe that to deny to the Court this power would lead to grave inconvenience and possibly injustice and having said this, they seek to find the power in Section 34(d). We are unable to agree with this reasoning. Immediately following Section 34 are two sections, Section 35 dealing with suits against guardians where administration bond is taken and Section 36 suits where such bond is not taken. The juxtaposition of these three sections seems to indicate that when the measure of the guardian's liability is put in issue, the proper course seems to be to apply to the Court under Section 35 or Section 36 and then file a regular suit against the guardian.

11. The sections we have examined point to this, a guardian can be directed under the Act to pay into Court the amount admitted by him; but if it is sought to make him liable for a larger amount than is admitted, the question can be decided only in a regular suit. Were we to decide the point on a rigid interpretation of the sections of the Act, we should feel inclined to hold that it is not competent to the Court to make under the Act an order such as the one in question.

12. The present order would then be a nullity as" having been made without jurisdiction, but this is not the position for which either side has contended.

13. The cases cited to us show that in several instances it was assumed or decided that such a power is possessed by the Court. We have already referred to Sita Ram v. Musammat Govindi (1924) ILR 46 All 458 where considerations are urged in favour of holding that it is within the competency of a Court to make such an order. If it is absolutely necessary to find this power somewhere within the four corners of the Act, Section 43, by straining it somewhat, may be pressed into service. The first clause of that section reads thus:

The Court may on the application of any person interested or of its own motion make an order regulating the conduct or proceedings of any guardian appointed or declared by the Court.

14. It may not be quite the right thing to say that an order of the kind under discussion is " an order regulating the conduct of proceedings " of a guardian. But it is only by construing these words in this rather wide sense, that we can find justification in the Act for the view that has been uniformly adopted in the cases cited to us, that such an order as this is within the competency of a Court acting under the Guardians and Wards Act. There is, however, this much to be said for this view, that the order in that case is not final but is appealable. The preliminary objection thus fails.

15. Turning to the facts, Mr. Venkatachari objects to the inclusion of two items, namely, Rs, 125-1-0 and Rs. 225-10-0, but we are not prepared to hold that the District Judge's decision on this point is wrong.

16. His next objection is well founded. There is no sufficient reason given for awarding compound interest at 12 per cent, with yearly rests. The guardian no doubt is accountable for the moneys from the date he realised them. Although he failed to keep separate accounts and mixed his ward's moneys with his own, it has not been proved that the profit that he earned by the use of the ward's moneys was such as to justify the direction in question. It has not been shown that the moneys had throughout been lent out on interest. Noris there any evidence that when interest was realised it was again lent out. For what period any sums were lent out and how much moneys was, so invested, on these matters there is no evidence worth mentioning. There is no warrant for presuming that every pie of this money had throughout been invested, that the interest was annually received, and that it was forthwith from time to time again lent out., In the circumstances, a direction to pay 12 per cent, simple interest will meet the ends of justice.

17. In regard to the memorandum of objections there is only one point that arises. Before the guardian disposed of the minor's properties he was undoubtedly in possession and for this period he is accountable for the profit's. On the evidence we find that Rs. 500 would be, a fair estimate and deducting from this Rs. 60 for cist, the appellant will be liable to pay Rs. 440 on this head.

18. Adding Rs. 440 to Rs. 2,180, the amount allowed by the District Judge, the principal sum which the guardian is liable to pay amounts to Rs. 2,620. This will carry simple interest at 12 per cent from the 1st November,. 1913, to this date, and in calculating interest the guardian will be allowed Rs. 60 annually for maintenance expenses from 15 th May, 1914 to 30th June, 1919. Counter interest will be allowed to the appellant on Rs. 1,010-15-3 from nth October, 1923, the date when he paid that amount into Court. Interest will run at 6 per cent, per annum from this date on the aggregate amount found due. The order of the District Judge will be modified accordingly. Each party will bear his costs. The appellant wants time for payment till the 14th December, 1925, and the respondent does not object. The appellant shall pay the amount into the District Court of Coimbatore on or before the 14th December, 1925.

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