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

One Manikka Sankaranarayana Iyer, father of defendants 1 and 3 and grandfather of plaintiffs 1 to 5 and defendants 2, 4 and 5 and father-in-law of plaintiff No. 6 constituted an Annadanam Trust and he and his sons executed a registered deed of settlement for that purpose on June 3, 1908. By that document Sankaranarayana Iyer became the first trustee for life, and it was provided that after him the senior-most member would be the trustee, by turns. Sankaranarayana died and defendant No. 1 became the managing trustee of the trust. There was a suit for partition of the family properties including house No. 48A, and it was settled by a compromise under which a preliminary decree dated September 12, 1956 was drawn up for the sale of the properties amongst the members of the family. Defendant No. 1 purchased the suit property for Rs. 21, 500/- for the aforesaid trust on April 19, 1959. A final decree was drawn up on November 29, 1959 in which house No. 48A was shown as the property of the trust. Defendant No. 1 however sold that property soon after, to his son defendant No. 2 on July 14, 1960, for Rs. 25, 000/- under sale deed Ex. B. 13. Chithambaram Chettiar (P.W. 2), who was a tenant of that property from 1949 onwards, came to know of the intended sale and sent a registered notice to defendant No. 1 on July 2 1, 1960, offering to purchase it for Rs. 35, 000/-. Defendant No. 1 however went ahead with the sale of the property to his son and registered the sale deed on July 22, 1960. The plaintiffs thereupon filed the present suit on September 15, 19 60, challenging that sale and asking for its restoration to the trust. The defendants resisted the claim in the suit on the ground that the sale price was fair and adequate and that the sale had to be made because of the disputes which had arisen between the second defendant as the owner of the adjacent house and the trust in regard to the easementary rights of drainage, light and air etc. The suit was decreed by the Subordinate Judge of Madurai on September 10, 1962. The High Court of Madras however allowed the appeal against that judgment and decree and dismissed the suit with costs of both the courts holding that Rs. 25, 000/- was quite adequate and fair price for the suit property and that defendant No. 1 acted with perfect bona fides and no ulterior motive can be attributed to him. That is why the plaintiffs have come up in appeal to this Court.

Court's reasoning:
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.