CHANDRE PRABHUJI JAIN TEMPLE Vs. HARIKRISHNA

JUDGEMENT

(1.) One Gopalakrishna Raju (hereinafter called Raju) died in Madras an or about November 13, 1941, leaving behind him his widow Manorama, one minor son and two minor daughters. On March 25, 1941, Raju had executed a will whereby he appointed Manorama the executor of the will and the guardian of his minor son and. daughters and bequeathed all his properties to the minor son with directions as regards the maintenance and marriage of his daughters. On June 7, 1948, Manorama mortgaged certain properties to raise a loan of Rs. 7,000/- for the purpose of meeting the marriage expenses of her elder daughter. Thereafter, she filed an application under Sections 7 and 10 of the Guardians and Wards Act, 1890, hereinafter called the Act, on August 26, 1943, before the High Court of Madras to appoint her as the guardian of her minor children. In that petition she did not disclose that Raju died after executing a will, but said that Raju died leaving two houses Nos. 18 and 18A in Egmore, Madras and that she was the owner of one half of the houses and that her minor son was the owner of the other half. She also said that no guardian had been appointed of the person or the property of the minors. Along with the petition for appointing her as guardian, she also filed an application seeking permission of the court to raise a loan of Rs. 7,000/- by mortgaging the two houses. On September 9, 1948, the Court passed an order appointing Manorama as the guardian of the person and property of the minor son and daughter and, by another order, granted her permission to raise a loan of Rs. 7,000/- by mortgaging the two houses. On the basis of these orders, she borrowed a sum of Rs. 7,000/- on September 24, 1948, by mortgaging the two houses. Thereafter, she filed another application on January lg. 1950, seeking permission of the High Court to raise a loan of Rs. 40,000/- on the security of the two houses. On January 23, 1950, the application was allowed under S. 29 of the Act permitting her to raise a loan of Rs. 30,000/- on the security of the two houses belonging to the minor. On the strength of this order, Manorama borrowed on March 4, 1950, a sum of Rs. 30,000/- from the trustees of Shri Chandra Prabhuji Jain Temple, the appellants before this Court, by executing a mortgage of the two houses. She again applied on April 24, 1950, to the Court for raising a further loan of Rs. 15,000/- on the security of these two houses but sanction was accorded to raise a loan of only Rs. 10,000/-. On the basis of this order she borrowed a further sum of Rs. 10,000/from the appellants by executing a mortgage on May 31, 1950, of the same properties. Manorama filed yet another application praying for permission to sell one of the houses with a view to enable her to discharge the amount due to the appellants under the two mortgages. The permission was granted and the Indian Bank Limited purchased one of the house properties for a sum of Rs 41,500/-. It would appear that subsequent to the execution of the sale, the bank came to know that Raju had executed a will. So the bank applied to the High Court to have the sale set aside. This was done. When the existence of the will executed by Raju was brought to the notice of the Court, Krishnaswami Nayudu, 1 directed the Administrator-General to take immediate possession of the estate of Raju and to apply for Letters of Administration. The Administrator-General obtained Letters of Administration and took possession of the estate. In the course of the administration, the Administrator-General, after obtaining the sanction of the Court, put up for sale one of the houses in question. The Indian Bank purchased it for Rs. 39,200/-. The sale proceeds are being retained by the Administrator-General.

(2.) The appellants filed the suit on the original side of the High Court out of which this appeal arises, to recover the money due under the two mortgages executed in favour of the appellants by Manorama as guardian.

(3.) The respondents, namely, the Administrator-General and the minor son, contended that Manorama had no authority to execute the mortgages and that she obtained the sanctions to execute the mortgages by practising fraud upon the court. They also contended that the appellants had not acted with due care, that the sanctions to mortgage given by the court were only prima facie evidence that the transactions were beneficial to the minors but that they would not cure any inherent defect that existed in the transactions, that the enquiry conducted by a court in granting sanction was of a summary character. and that as the existence of the will has not been brought to the notice of the court, the sanctions to raise the loans were invalid and did not bind the minor.