Case: M. V. Ramasubbier And Others Vs. Manicka Narasimhachari And Others

capacity as the trustee of the Annandanam Trust for Rs. 21, 500/- on April 19, 1959, at a family sale. It appears from the statement of defendant No. 2 that the property was capable of, or could fetch a rent of about Rs. 190/- per mensem, amounting to Rs. 2, 280/- per annum. It has also been admitted that the sum of Rs. 25, 000/- was not utilised by the trustee (defendant No. 1) for purchasing any other better property, but was invested in fixed deposit with a bank at 3 1/2 per cent interest per annum. That could yield an income of only Rs. 875/- per annum. The trust therefore lost heavily in the bargain. What is worse, defendant No. 1 has not been able to explain how the sale could be said to be beneficial to the trust and how he could possibly contend that he acted as a man of ordinary prudence in slashing down the income of the trust by making the sale.The further fact that stands out from the evidence on the record is that when Chithambaram Chettiar (P.W. 2), who was a tenant in the suit property from 1949 onwards, learnt about the intended sale, he sent a notice to defendants Nos. 1 and 3 offering to purchase it for Rs. 35, 000/-. That notice was issued on July 21, 1960. The receipt of the notice has been admitted by defendant No. 1 in his statement in the trial court, and he has further admitted that Chithambaram Chettiar offered to purchase the property for Rs. 35, 000/- and that he sold it to his son for Rs. 25, 000/- without even informing him that he had received the offer of Rs. 35, 00 0/-. Defendant No. 1 in fact proceeded to register the sale deed of the property in favour of his son, the second defendant, on July 22, 1960. It is therefore quite clear that he did not care to act in accordance with the law in the discharge of his fiduciary relationship with the trust and executed the sale deed in his sons favour in disregard of his statutory duty, for no man of ordinary prudence would possibly have sold his property for Rs. 25, 000/- when he had an offer of Rs. 35, 000/-. That offer could not be said to be from a man of no substance because Chithambaram Chettiar (P.W. 2) who made it, was known to the defendants and he has stated that he was a man of means and was worth rupees four lakhs. It may be that the so n-in-law of plaintiff No. 2 was employed in his shop, but that could not detract from the basic fact that a much higher offer had been made by a man of substance. 5. Instead of examining the appeal with due regard to the above mentioned evidence, the High Court was obsessed by a consideration of the evidence which had been led for the purpose of showing that while defendant No. 1 had purchased the property for himself on April 19, 1959, for Rs. 21, 500/- , he gave up that advantage in favour of the trust. The evidence on the point is not unequivocal, for it may well be that defendant No. 1 did not want to obtain a sale deed in his own name for other reasons, but even if it were assumed that he made a gesture of goodwill in favour of the trust on April 19, 1959, he could not possibly absolve himself from what he did in selling it off, after it had become the property of the trust, to his own son a few months thereafter for Rs. 25, 000/- when he had a genuine offer of Rs. 35, 000/-.Another consideration which prevailed with the High Court in setting aside the finding of fact of the trial court was that, according to it, the evidence on the record showed that some difficulties had cropped up after the property had been purchased as his son, defendant No. 2, began to give trouble and that he resolved that trouble on the advice of his family lawyer Shri V. Rajagopala Iyengar (D. W. 3) by selling the property to his son. This view was obviously incorrect, for even it were assumed that there was some difficulty in respect of some common rights of easement, that could well have been a lever in the hands of the trustee to make a bargain for Rs. 35, 000/- or more with his son who was equally interested in those easementary rights. A man of prudence would not have sold his property for a considerably lesser amount than that offered to him by another person and agreed to sell it just because a co- sharer in the easementary right was causing trouble and was offering a far lesser price. 6. We have gone through the statement of V. Rajagopala Iyengar (D.W. 3) on whose advice defendant No. 1 claims to have sold the property for Rs. 25, 000/-. He has admitted in his statement that he had not even seen the suit property, and he knew nothing about the so called trouble in regard to the easementary rights between defendant No. 1 and his son. On the other hand, we find that he was indebted to the family of defendants Nos. 1 and 2 and he did not even care to ascertain what rent the suit property was fetching when he advised its sale for Rs. 25, 000/- to the son of defendant No. 1. The High Court therefore did not even read the evidence correctly while placing reliance on his testimony. 7. For the reasons mentioned above, we have no doubt that the High Court did not examine the controversy in its proper legal perspective and with due regard to the salient facts which had been established by the evidence on the record and it was not therefore justified in setting aside the finding of the trial court.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]Instead of examining the appeal with due regard to the above mentioned evidence, the High Court was obsessed by a consideration of the evidence which had been led for the purpose of showing that while defendant No. 1 had purchased the property for himself on April 19, 1959, for Rs. 21, 500/- , he gave up that advantage in favour of the trust. The evidence on the point is not unequivocal, for it may well be that defendant No. 1 did not want to obtain a sale deed in his own name for other reasons, but even if it were assumed that he made a gesture of goodwill in favour of the trust on April 19, 1959, he could not possibly absolve himself from what he did in selling it off, after it had become the property of the trust, to his own son a few months thereafter for Rs. 25, 000/- when he had a genuine offer of Rs. 35, 000/-.Another consideration which prevailed with the High Court in setting aside the finding of fact of the trial court was that, according to it, the evidence on the record showed that some difficulties had cropped up after the property had been purchased as his son, defendant No. 2, began to give trouble and that he resolved that trouble on the advice of his family lawyer Shri V. Rajagopala Iyengar (D. W. 3) by selling the property to his son. This view was obviously incorrect, for even it were assumed that there was some difficulty in respect of some common rights of easement, that could well have been a lever in the hands of the trustee to make a bargain for Rs. 35, 000/- or more with his son who was equally interested in those easementary rights. A man of prudence would not have sold his property for a considerably lesser amount than that offered to him by another person and agreed to sell it just because a co- sharer in the easementary right was causing trouble and was offering a far lesser priceWe have gone through the statement of V. Rajagopala Iyengar (D.W. 3) on whose advice defendant No. 1 claims to have sold the property for Rs. 25, 000/-. He has admitted in his statement that he had not even seen the suit property, and he knew nothing about the so called trouble in regard to the easementary rights between defendant No. 1 and his son. On the other hand, we find that he was indebted to the family of defendants Nos. 1 and 2 and he did not even care to ascertain what rent the suit property was fetching when he advised its sale for Rs. 25, 000/- to the son of defendant No. 1. The High Court therefore did not even read the evidence correctly while placing reliance on his testimonyFor the reasons mentioned above, we have no doubt that the High Court did not examine the controversy in its proper legal perspective and with due regard to the salient facts which had been established by the evidence on the record and it was not therefore justified in setting aside the finding of the trial court.